First Defiance Financial Corp. Announces 2014 First Quarter Earnings

  • Net Income of $5.2 million for 2014 first quarter compared to $5.6 million in the 2013 first quarter
  • First quarter 2014 includes $511,000 after tax cost due to the termination of merger agreement with First Community Bank
  • Loans increased $56.9 million, or 3.8% from the 2013 first quarter
  • Deposits up $104.3 million, or 6.3% from the 2013 first quarter
  • Provision for loan losses of $103,000, down from $425,000 in the 2013 first quarter
  • Net Interest Margin of 3.61%, down from 3.78% in the 2013 first quarter but even with the 2013 fourth quarter

DEFIANCE, Ohio--()--First Defiance Financial Corp. (NASDAQ: FDEF) announced today that net income for the first quarter ended March 31, 2014 totaled $5.2 million, or $0.51 per diluted common share, compared to $5.6 million or $0.55 per diluted common share for the quarter ended March 31, 2013.

The first quarter 2014 results were negatively impacted by $786,000 ($511,000 after tax), or $0.05 per diluted common share, for costs to terminate the merger agreement with First Community Bank.

“Our earnings performance in the first quarter was solid, despite the impact of terminating our merger agreement,” said Donald P. Hileman, President, and Chief Executive Officer of First Defiance Financial Corp. “Our strong focus on the fundamentals coupled with our new business strategies enabled us to overcome the impact of a significant reduction in mortgage banking this past quarter.”

Credit Quality

Non-performing loans totaled $26.8 million at March 31, 2014, a decrease from $35.3 million at March 31, 2013. In addition, First Defiance had $6.0 million of real estate owned at March 31, 2014 compared to $4.3 million at March 31, 2013. Accruing troubled debt restructured loans were $26.7 million at March 31, 2014 compared with $28.0 million at March 31, 2013. For the first quarter of 2014, First Defiance recorded net charge-offs of $270,000, down from $677,000 in the first quarter of 2013 and down from the fourth quarter level of $1.5 million. The allowance for loan loss as a percentage of total loans was 1.58% at March 31, 2014 compared with 1.76% at March 31, 2013.

The first quarter results include expense for provision for loan losses of $103,000, compared with $425,000 for the same period in 2013 and $475,000 in the fourth quarter of 2013.

“Asset quality measures showed continued improvement from the prior quarter and clearly compared to a year ago. The low levels of charge offs and provision expense were both contributing factors in our results,” said Hileman. “We expect our asset quality to maintain positive trends as we go forward despite the mixed indicators in the economy.”

Net Interest Income up compared to first quarter 2013

Net interest income of $16.8 million in the first quarter of 2014 was up from $16.5 million in the first quarter of 2013. Net interest margin was 3.61% for the first quarter of 2014, flat with the fourth quarter 2013, but down from 3.78% in the first quarter of 2013. Yield on interest earning assets declined by 26 basis points, to 3.96% in the first quarter of 2014 from 4.22% in the first quarter of 2013. The cost of interest-bearing liabilities decreased by 9 basis points in the first quarter of 2014 to 0.45% from 0.54% in the first quarter of 2013.

“Our disciplined pricing strategies enabled us to maintain our net interest margin,” said Hileman. “While loan demand reflected some seasonal decline this past quarter, we still have a positive outlook for growth this year.”

Non-Interest Income down from first quarter 2013

First Defiance’s non-interest income for the first quarter of 2014 was $7.3 million compared with $9.0 million in the first quarter of 2013. Mortgage banking income decreased to $1.2 million in the first quarter of 2014, down from $2.8 million in the first quarter of 2013. The combination of higher interest rates and harsher seasonal conditions in the first quarter significantly reduced mortgage banking activity, particularly refinance volumes, compared to the first quarter last year. Gains from the sale of mortgage loans decreased in the first quarter of 2014 to $641,000 from $2.2 million in the first quarter of 2013. Mortgage loan servicing revenue was $905,000 in the first quarter of 2014, which was up slightly from $870,000 in the first quarter of 2013. The Company had a negative change in the valuation adjustment in mortgage servicing assets (“MSR”) of $7,000 in the first quarter of 2014 compared with a positive adjustment of $473,000 in the first quarter of 2013.

Income from the sale of insurance and investment products was $3.0 million for the first quarter of 2014, even with the first quarter of 2013. The first quarter typically includes contingent revenues, bonuses paid by insurance carriers when the Company achieves certain loss ratios or growth targets. In the first quarter of 2014, First Defiance’s insurance subsidiary, First Insurance Group, earned $878,000 of contingent income, compared to $944,000 during the first quarter of 2013.

Service fees and other charges were $2.3 million in the first quarter of 2014, down slightly from $2.4 million in the first quarter of 2013 and Trust Income was $278,000 in the first quarter of 2014 up from $206,000 in first quarter last year.

While the slowdown in mortgage banking presented a challenge this past quarter, insurance and other fee income businesses performed well,” continued Mr. Hileman. “Importantly, we have seen a pickup in recent mortgage production which we foresee continuing into the second quarter.”

Non-Interest Expenses down from first quarter 2013

Total non-interest expense was $16.7 million in the first quarter of 2014, a decrease from $17.2 million in the first quarter of 2013.

Compensation and benefits decreased to $8.5 million in the first quarter of 2014 compared to $8.8 million in the first quarter of 2013. Accruals for bonus payments based on meeting performance targets were lower in the first quarter of 2014 compared to the first quarter of 2013. Other non-interest expense increased to $4.1 million in the first quarter of 2014 from $4.0 million in the first quarter of 2013. Included in the first quarter 2014 was a $786,000 cost of terminating the merger agreement with First Community Bank. Included in the first quarter of 2013 was an accrual for estimated secondary market buy-back losses of $581,000 compared to $25,000 in losses recorded in the first quarter of 2014.

Total Assets at $2.16 Billion

Total assets at March 31, 2014 were $2.16 billion compared to $2.14 billion at December 31, 2013 and $2.04 billion at March 31, 2013. Net loans receivable (excluding loans held for sale) were $1.54 billion at March 31, 2014 compared to $1.56 billion at December 31, 2013 and $1.48 billion at March 31, 2013. Total cash and cash equivalents were $211.2 million at March 31, 2014 compared with $179.3 million at December 31, 2013 and $156.3 million at March 31, 2013. Also, at March 31, 2014, goodwill and other intangible assets totaled $64.7 million compared to $65.0 million at December 31, 2013 and $65.9 million at March 31, 2013.

Total deposits at March 31, 2014 were $1.76 billion compared with $1.74 billion at December 31, 2013, and $1.66 billion at March 31, 2013. Non-interest bearing deposits at March 31, 2014 were $338.4 million compared to $348.9 million at December 31, 2013 and $291.8 million at March 31, 2013. Total stockholders’ equity was $274.9 million at March 31, 2014 compared to $272.1 million at December 31, 2013 and $262.6 million at March 31, 2013.

Termination of Merger Agreement

In a separate news release issued today, First Defiance and First Community Bank jointly announced the termination of the previously announced merger agreement. The companies mutually agreed to terminate the agreement after it became evident that completion of the merger would take significantly longer than originally expected.

First Defiance remains interested in expanding its business in adjacent markets and will explore mergers or acquisitions that meet its criteria.

Dividend to be Paid May 29

The Board of Directors declared a quarterly cash dividend of $0.15 per common share payable May 29, 2014 to shareholders of record at the close of business on May 22, 2014. The dividend represents an annual dividend of 2.20 percent based on the First Defiance common stock closing price on April 18, 2014. First Defiance has approximately 9,664,686 common shares outstanding.

Conference Call

First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 22, 2014 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-888-317-6016. A live webcast may be accessed at http://services.choruscall.com/links/fdef140422.html.

Audio replay of the Internet Webcast will be available at www.fdef.com until Monday, May 23, 2014 at 9:00 a.m.

Annual Meeting of Shareholders

First Defiance Financial Corp. will host its Annual Meeting of Shareholders at 2:00 p.m. on Tuesday, April 22, 2014 and this Annual Meeting will be an entirely virtual meeting meaning all shareholders will attend online. Following the meeting, the audio replay and transcript will be available at the Company’s Website at www.fdef.com.

First Defiance Financial Corp.

First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance Group. First Federal operates 32 full service branches and 42 ATM locations in northwest Ohio, southeast Michigan and northeast Indiana. First Insurance Group is a full-service insurance agency with six offices throughout northwest Ohio.

For more information, visit the company’s Web site at www.fdef.com.

Financial Statements and Highlights Follow-

Safe Harbor Statement

This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell real estate owned properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which the Company and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission (SEC) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2013. One or more of these factors have affected or could in the future affect the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.

         
   
Consolidated Balance Sheets (Unaudited)
First Defiance Financial Corp.
 
March 31, December 31,
(in thousands)   2014   2013
 
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions $ 42,183 $ 36,318
Interest-bearing deposits   169,000     143,000  
211,183

 

179,318
Securities

 

Available-for sale, carried at fair value 209,321 198,170
Held-to-maturity, carried at amortized cost   378     387  
209,699 198,557
 
Loans 1,563,953 1,580,448
Allowance for loan losses   (24,783 )   (24,950 )
Loans, net 1,539,170 1,555,498
Loans held for sale 8,771 9,120
Mortgage servicing rights 9,014 9,106
Accrued interest receivable 6,122 5,778
Federal Home Loan Bank stock 13,802 19,350
Bank Owned Life Insurance 46,934 42,715
Office properties and equipment 38,379 38,597
Real estate and other assets held for sale 6,028 5,859
Goodwill 61,525 61,525
Core deposit and other intangibles 3,208 3,497
Deferred taxes 92 565
Other assets   9,732     7,663  
Total Assets $ 2,163,659   $ 2,137,148  
 
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits $ 338,412 $ 348,943
Interest-bearing deposits   1,422,205     1,386,849  
Total deposits 1,760,617 1,735,792
Advances from Federal Home Loan Bank 22,278 22,520
Notes payable and other interest-bearing liabilities 48,939 51,919
Subordinated debentures 36,083 36,083
Advance payments by borrowers for tax and insurance 1,209 1,519
Other liabilities   19,656     17,168  
Total liabilities 1,888,782 1,865,001
Stockholders’ Equity
Preferred stock - -
Common stock, net 127 127
Common stock warrant 878 878
Additional paid-in-capital 136,142 136,403
Accumulated other comprehensive income 1,665 545
Retained earnings 186,001 182,290
Treasury stock, at cost   (49,936 )   (48,096 )
Total stockholders’ equity   274,877     272,147  
Total Liabilities and Stockholders’ Equity $ 2,163,659   $ 2,137,148  
 
         
Consolidated Statements of Income (Unaudited)
First Defiance Financial Corp.
  Three Months Ended
March 31,
(in thousands, except per share amounts)   2014   2013
Interest Income:  
Loans $ 16,651 $ 16,796
Investment securities 1,527 1,403
Interest-bearing deposits 101 58
FHLB stock dividends   195   219
Total interest income 18,474 18,476
Interest Expense:

 

Deposits 1,358 1,647
FHLB advances and other 133 90
Subordinated debentures 146 152
Notes Payable   41   60
Total interest expense   1,678   1,949
Net interest income 16,796 16,527
Provision for loan losses   103   425
Net interest income after provision for loan losses 16,693 16,102
Non-interest Income:
Service fees and other charges 2,324 2,385
Mortgage banking income 1,247 2,830
Gain on sale of non-mortgage loans 3 15
Gain on sale of securities - 53
Insurance and investment sales commissions 3,030 3,036
Trust income 278 206
Income from Bank Owned Life Insurance 219 229
Other non-interest income   225   251
Total Non-interest Income 7,326 9,005
Non-interest Expense:
Compensation and benefits 8,472 8,798
Occupancy 1,588 1,632
FDIC insurance premium 385 656

Financial Institutions tax

495 629
Data processing 1,365 1,181
Amortization of intangibles 289 336
Other non-interest expense   4,067   4,010
Total Non-interest Expense   16,661   17,242
Income before income taxes 7,358 7,865
Income taxes   2,179   2,306
Net Income $ 5,179 $ 5,559
 
 
Earnings per common share:
Basic $ 0.53 $ 0.57
Diluted $ 0.51 $ 0.55
 
Average Shares Outstanding:
Basic 9,681 9,736
Diluted 10,108 10,105
 

 

           
Financial Summary and Comparison (Unaudited)      
First Defiance Financial Corp.
Three Months Ended

March 31,

(dollars in thousands, except per share data)   2014   2013   % change
Summary of Operations
 
Tax-equivalent interest income (1) $ 18,900 $ 18,885 0.1 %
Interest expense 1,678 1,949 (13.9 )
Tax-equivalent net interest income (1) 17,222 16,936 1.7
Provision for loan losses 103 425 (75.8 )
Tax-equivalent NII after provision for loan loss (1) 17,119 16,511 3.7
Investment Securities gains - 53 (100.0 )
Non-interest income (excluding securities gains/losses) 7,326 8,952 (18.2 )
Non-interest expense 16,661 17,242 (3.4 )
Income taxes 2,179 2,306 (5.5 )
Net Income 5,179 5,559 (6.8 )
Tax equivalent adjustment (1)     426       409     4.2  
At Period End
Assets 2,163,659 2,039,411 6.1
Earning assets 1,965,225 1,858,747 5.7
Loans 1,563,953 1,507,008 3.8
Allowance for loan losses 24,783 26,459 (6.3 )
Deposits 1,760,617 1,656,348 6.3
Stockholders’ equity     274,877       262,643     4.7  
Average Balances
Assets 2,146,369 2,027,906 5.8
Earning assets 1,937,145 1,823,089 6.3
Loans 1,544,902 1,500,222 3.0
Deposits and interest-bearing liabilities 1,852,322 1,746,092 6.1
Deposits 1,741,237 1,650,772 5.5
Stockholders’ equity 273,745 259,625 5.4
Stockholders’ equity / assets     12.75 %     12.80 %   (0.4 )
Per Common Share Data
Net Income
Basic $ 0.53 $ 0.57 (7.0 )
Diluted 0.51 0.55 (7.3 )
Dividends 0.15 0.10 50.0
Market Value:
High $ 28.23 $ 23.75 18.9
Low 24.24 18.42 31.6
Close 27.12 23.32 16.3
Common Book Value 28.38 26.80 5.9
Tangible Common Book Value 21.68 20.05 8.1
Shares outstanding, end of period (000)     9,653       9,766     (1.2 )
Performance Ratios (annualized)
Tax-equivalent net interest margin (1) 3.61 % 3.78 % (4.5 )
Return on average assets 0.98 % 1.11 % (12.0 )
Return on average equity 7.67 % 8.68 % (11.6 )
Efficiency ratio (2) 67.87 % 66.55 % 2.0
Effective tax rate 29.61 % 29.32 % 1.0
Dividend payout ratio (basic)     28.30 %     17.54 %   61.3  

(1)

 

Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35%

(2)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.

NM

Percentage change not meaningful

 
         
Income from Mortgage Banking    
 
Revenue from sales and servicing of mortgage loans consisted of the following:
Three Months Ended

March 31,

(dollars in thousands)   2014   2013
 
Gain from sale of mortgage loans $ 641 $ 2,176
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue 905 870
Amortization of mortgage servicing rights (292 ) (689 )
Mortgage servicing rights valuation adjustments   (7 )     473  
  606       654  
Total revenue from sale and servicing of mortgage loans $ 1,247     $ 2,830  
 
                         
Yield Analysis            
First Defiance Financial Corp.
Three Months Ended March 31,
(dollars in thousands)
2014 2013
Average Yield Average Yield
Balance Interest(1) Rate(2) Balance Interest(1) Rate(2)
Interest-earning assets:
Loans receivable $ 1,544,902 $ 16,672 4.38% $ 1,500,222 $ 16,814 4.55%
Securities 202,275 1,932 3.93% 196,571 1,794 3.85%
Interest Bearing Deposits 172,666 101 0.24% 106,332 58 0.22%
FHLB stock 17,302 195 4.57% 19,964 219 4.45%
Total interest-earning assets 1,937,145 18,900 3.96% 1,823,089 18,885 4.22%
Non-interest-earning assets 209,224 204,817
Total assets $ 2,146,369 $ 2,027,906
Deposits and Interest-bearing liabilities:
Interest bearing deposits $ 1,399,951 $ 1,358 0.39% $ 1,356,547 $ 1,647 0.49%
FHLB advances and other 22,363 133 2.41% 12,788 90 2.85%
Subordinated debentures 36,134 146 1.64% 36,136 152 1.71%
Notes payable 52,588 41 0.32% 46,396 60 0.52%
Total interest-bearing liabilities 1,511,036 1,678 0.45% 1,451,867 1,949 0.54%
Non-interest bearing deposits 341,286 - - 294,225 - -
Total including non-interest-bearing demand deposits 1,852,322 1,678 0.37% 1,746,092 1,949 0.45%
Other non-interest-bearing liabilities 20,302 22,189
Total liabilities 1,872,624 1,768,281
Stockholders' equity 273,745 259,625
Total liabilities and stockholders' equity $ 2,146,369   $ 2,027,906  
Net interest income; interest rate spread $ 17,222 3.51% $ 16,936 3.68%
Net interest margin (3) 3.61% 3.78%
Average interest-earning assets to average interest bearing liabilities 128% 126%
 

(1)

 

Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%.

(2)

Annualized

(3)

Net interest margin is net interest income divided by average interest-earning assets.

 
                     

Selected Quarterly Information

         
First Defiance Financial Corp.
 
(dollars in thousands, except per share data)   1st Qtr 2014   4th Qtr 2013   3rd Qtr 2013   2nd Qtr 2013   1st Qtr 2013
Summary of Operations
Tax-equivalent interest income (1) $ 18,900 $ 19,143 $ 19,242 $ 19,143 $ 18,885
Interest expense 1,678 1,728 1,680 1,814 1,949
Tax-equivalent net interest income (1) 17,222 17,415 17,562 17,329 16,936
Provision for loan losses 103 475 476 448 425
Tax-equivalent NII after provision for loan losses (1) 17,119 16,940 17,086 16,881 16,511
Investment securities gains, net of impairment - (337 ) - 44 53
Non-interest income (excluding securities gains/losses) 7,326 6,869 7,344 7,854 8,952
Non-interest expense 16,661 15,987 16,100 15,724 17,242
Income taxes 2,179 1,991 2,445 2,535 2,306
Net income 5,179 5,087 5,479 6,109 5,559
Tax equivalent adjustment (1)     426       406       406       411       409  
At Period End
Total assets $ 2,163,659 $ 2,137,148 $ 2,058,430 $ 2,066,216 $ 2,039,411
Earning assets 1,965,225 1,950,475 1,863,546 1,873,351 1,858,747
Loans 1,563,953 1,580,448 1,561,279 1,562,666 1,507,008
Allowance for loan losses 24,783 24,950 25,964 26,270 26,459
Deposits 1,760,617 1,735,792 1,658,492 1,635,708 1,656,348
Stockholders’ equity 274,877 272,147 269,359 264,497 262,643
Stockholders’ equity / assets 12.70 % 12.73 % 13.09 % 12.80 % 12.88 %
Goodwill     61,525       61,525       61,525       61,525       61,525  
Average Balances
Total assets $ 2,146,369 $ 2,124,109 $ 2,026,277 $ 2,030,707 $ 2,027,906
Earning assets 1,937,145 1,915,508 1,816,626 1,825,730 1,823,089
Loans 1,544,902 1,543,057 1,548,718 1,520,708 1,500,222
Deposits and interest-bearing liabilities 1,852,322 1,833,291 1,741,850 1,745,084 1,746,092
Deposits 1,741,237 1,719,319 1,632,712 1,644,777 1,650,772
Stockholders’ equity 273,745 270,856 265,488 264,293 259,625
Stockholders’ equity / assets     12.75 %     12.75 %     13.10 %     13.01 %     12.80 %
Per Common Share Data
Net Income:
Basic $ 0.53 $ 0.52 $ 0.56 $ 0.63 $ 0.57
Diluted 0.51 0.50 0.54 0.60 0.55
Dividends 0.15 0.10 0.10 0.10 0.10
Market Value:
High $ 28.23 $ 27.25 $ 28.46 $ 23.75 $ 23.75
Low 24.24 23.31 22.49 20.80 18.42
Close 27.12 25.97 23.39 22.55 23.32
Common Book Value 28.38 27.91 27.44 26.97 26.80
Shares outstanding, end of period (in thousands)     9,653       9,720       9,785       9,776       9,766  
Performance Ratios (annualized)
Tax-equivalent net interest margin (1) 3.61 % 3.61 % 3.84 % 3.82 % 3.78 %
Return on average assets 0.98 % 0.95 % 1.07 % 1.21 % 1.11 %
Return on average equity 7.67 % 7.45 % 8.19 % 9.27 % 8.68 %
Efficiency ratio (2) 67.87 % 65.75 % 64.56 % 62.36 % 66.55 %
Effective tax rate 29.61 % 28.13 % 30.86 % 29.33 % 29.32 %
Common dividend payout ratio (basic)     28.30 %     19.23 %     17.86 %     15.87 %     17.54 %

(1)

 

Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35%

(2)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net.

 
                     
Selected Quarterly Information
First Defiance Financial Corp.
         
(dollars in thousands, except per share data)   1st Qtr 2014   4th Qtr 2013   3rd Qtr 2013   2nd Qtr 2013   1st Qtr 2013
Loan Portfolio Composition
One to four family residential real estate $ 196,940 $ 195,752 $ 191,984 $ 196,802 $ 197,675
Construction 82,049 86,058 59,567 41,519 33,398
Commercial real estate 809,071 819,618 821,115 820,412 802,098
Commercial 380,144 388,236 386,160 396,158 365,551
Consumer finance 16,346 16,902 16,659 16,817 15,549
Home equity and improvement   106,632       106,930       105,727       106,570       106,524  
Total loans 1,591,182 1,613,496 1,581,212 1,578,278 1,520,795
Less:
Loans in process 26,487 32,290 19,189 14,876 13,084
Deferred loan origination fees 742 758 744 736 703
Allowance for loan loss   24,783       24,950       25,964       26,270       26,459  
Net Loans $ 1,539,170     $ 1,555,498     $ 1,535,315     $ 1,536,396     $ 1,480,549  
                     
Allowance for loan loss activity
Beginning allowance $ 24,950 $ 25,964 $ 26,270 $ 26,459 $ 26,711
Provision for loan losses 103 475 476 448 425
Credit loss charge-offs:
One to four family residential real estate 228 175 78 184 206
Commercial real estate 228 1,097 829 283 266
Commercial 525 670 39 316 205
Consumer finance 11 7 33 8 46
Home equity and improvement   184       144       170       170       272  
Total charge-offs 1,176 2,093 1,149 961 995
Total recoveries   906       604       367       324       318  
Net charge-offs (recoveries)   270       1,489       782       637       677  
Ending allowance $ 24,783     $ 24,950     $ 25,964     $ 26,270     $ 26,459  
                     
Credit Quality
Total non-performing loans (1) $ 26,774 $ 27,847 $ 30,512 $ 28,650 $ 35,283
Real estate owned (REO)   6,028       5,859       5,518       6,546       4,313  
Total non-performing assets (2) $ 32,802     $ 33,706     $ 36,030     $ 35,196     $ 39,596  
Net charge-offs 270 1,489 782 637 677
 
Restructured loans, accruing (3) 26,654 27,630 28,010 28,732 27,981
 
Allowance for loan losses / loans 1.58 % 1.58 % 1.66 % 1.68 % 1.76 %
Allowance for loan losses / non-performing assets 75.55 % 74.02 % 72.06 % 74.64 % 66.82 %
Allowance for loan losses / non-performing loans 92.56 % 89.60 % 85.09 % 91.69 % 74.99 %
Non-performing assets / loans plus REO 2.09 % 2.12 % 2.30 % 2.24 % 2.62 %
Non-performing assets / total assets 1.52 % 1.58 % 1.75 % 1.70 % 1.94 %
Net charge-offs / average loans (annualized) 0.07 % 0.39 % 0.20 % 0.17 % 0.18 %
                     
Deposit Balances
Non-interest-bearing demand deposits $ 338,412 $ 348,943 $ 300,891 $ 301,742 $ 291,765
Interest-bearing demand deposits and money market 740,783 715,939 681,987 659,249 681,061
Savings deposits 199,361 185,121 182,271 182,784 177,336
Retail time deposits less than $100,000 309,758 313,335 318,317 321,422 330,870
Retail time deposits greater than $100,000 172,303 172,454 175,026 168,573 173,379
National/Brokered time deposits   -       -       -       1,938       1,937  
Total deposits $ 1,760,617     $ 1,735,792     $ 1,658,492     $ 1,635,708     $ 1,656,348  

(1)

 

Non-performing loans consist of non-accrual loans.

(2)

Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.

(3)

Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans.

 
                 
Loan Delinquency Information
First Defiance Financial Corp.
       
 
30 to 89 days Non Accrual
(dollars in thousands)   Total Balance   Current   past due   Loans
 
March 31, 2014                
One to four family residential real estate $ 196,940 $ 192,942 $ 1,024 $ 2,974
Construction 82,049 82,049 - -
Commercial real estate 809,071 792,289 1,100 15,682
Commercial 380,144 371,829 592 7,723
Consumer finance 16,346 16,300 46 -
Home equity and improvement   106,632     105,627     610     395
Total loans $ 1,591,182   $ 1,561,036   $ 3,372   $ 26,774
 
December 31, 2013                
One to four family residential real estate $ 195,752 $ 190,854 $ 1,625 $ 3,273
Construction 86,058 86,058 - -
Commercial real estate 819,618 803,218 566 15,834
Commercial 388,236 379,889 20 8,327
Consumer finance 16,902 16,771 131 -
Home equity and improvement   106,930     105,211     1,306     413
Total loans $ 1,613,496   $ 1,582,001   $ 3,648   $ 27,847
 
March 31, 2013                
One to four family residential real estate $ 197,675 $ 191,725 $ 1,787 $ 4,163
Construction 33,398 33,398 - -
Commercial real estate 802,098 776,138 1,076 24,884
Commercial 365,551 358,205 1,194 6,152
Consumer finance 15,549 15,429 120 -
Home equity and improvement   106,524     105,560     880     84
Total loans $ 1,520,795   $ 1,480,455   $ 5,057   $ 35,283

Contacts

First Defiance Financial Corp.
Donald P. Hileman, President and CEO, 419-782-5104
dhileman@first-fed.com

Release Summary

First Defiance Financial Corp. Announces 2014 First Quarter Earnings

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Contacts

First Defiance Financial Corp.
Donald P. Hileman, President and CEO, 419-782-5104
dhileman@first-fed.com