8-K 1 q3press.txt PRESS RELEASE 3RD QTR 2001. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) October 26, 2001 FirstFed Financial Corp. (Exact name of registrant as specified in its charter) Delaware 1-9566 95-4087449 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 401 Wilshire Boulevard, Santa Monica, California, 90401-1490 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 319-6000 Total number of pages is 8 Index to Exhibit is on Page 2. ITEM 5. Other Events. On October 26, 2001, the registrant, FirstFed Financial Corp., issued a press release. A copy of this press release is attached and incorporated herein as Exhibit 99. Item 99. Press release dated October 26, 2001. S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRSTFED FINANCIAL CORP. Dated: October 26, 2001 By: /S/ Babette E. Heimbuch President and Chief Executive Officer Contact: Douglas Goddard, Executive Vice President (310) 319-6014 FIRSTFED REPORTS RESULTS FOR THE THIRD QUARTER OF 2001 Santa Monica, California, October 26, 2001 --FirstFed Financial Corp. (NYSE-FED), parent company of First Federal Bank of California, today announced net earnings of $12.4 million or 70 cents per share of common stock for the third quarter of 2001, compared to $9.5 million or 54 cents per share of common stock for the third quarter of 2000. Net earnings for the first nine months of 2001 were $37.4 million or $2.12 per share, compared to $27.7 million or $1.58 per share for the first nine months of 2000. All per-share earnings are presented on a diluted basis. Net earnings improved during the third quarter and first nine months of 2001 due to increased net interest income resulting from growth in average interest-earning assets and higher interest rate spreads. Average interest-earning assets increased 9% over the third quarter of last year and 12% over the first nine months of last year. Asset growth was the result of record levels of loan originations. The interest rate spread improved to 2.70% for the third quarter of 2001 from 2.31% for the third quarter of last year. The Bank's cost of funds decreased 96 basis points compared to the third quarter of last year, while the yield on the loan portfolio decreased 56 basis points compared to the same period. In a decreasing rate environment, the Bank's cost of funds is impacted before the yield earned on its loan portfolio due to a three-month time lag before changes in the Federal Home Loan Bank Cost of Funds Index ("Index") can be implemented with respect to the Bank's loans. Due to the same factors, the interest rate spread improved to 2.67% for the first nine months of 2001 from 2.34% for the same period last year. The Company's general valuation allowance was $70.9 million or 1.67% of loans and real estate owned as of September 30, 2001, compared to $71.2 million or 1.81% as of December 31, 2000 and $71.7 million or 1.91% as of September 30, 2000. Non-performing assets were 0.23% of total assets as of September 30, 2001 compared to 0.19% as of December 31, 2000 and 0.25% of total assets as of September 30, 2000. The Company did not record a provision for loan losses during the first nine months of 2001 or the first nine months of 2000. Net loan loss recoveries of $55 thousand were recorded during the third quarter of 2001 and net loan charge-offs of $170 thousand were recorded for the first nine months of 2001. For the comparable periods of last year, the Company recorded net loan charge-offs of $181 thousand during the third quarter of 2000 and net loan loss recoveries of $605 thousand for first nine months of 2000. The loan portfolio (including mortgage-backed securities) increased by $35.2 million during the third quarter of 2001. The increase is attributable to loan originations of $415.9 million offset by principal amortization and loan payoffs. The loan portfolio (including mortgage-backed securities) increased by $253.5 million during the first nine months of 2001. The increase is attributable to loan originations and purchases of $1.2 billion offset by principal amortization and loan payoffs. On October 17, 2001, the Office of Thrift Supervision approved the Company's application to acquire Del Amo Savings Bank and Frontier Bancorp (parent of Frontier State Bank). Subject to satisfaction of all conditions, the transaction is expected to close in late November or early December, 2001. As previously announced, after consummation of the acquisition, Del Amo and Frontier State Bank will be merged into First Federal Bank of California. At September 30, 2001, First Federal Bank met the capital requirements necessary to be deemed "well-capitalized" for regulatory capital purposes. It has 25 full-service retail banking offices and 3 retail loan offices. KEY FINANCIAL RESULTS FOLLOW FIRSTFED FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share data) (Unaudited) September 30, December 31, ASSETS 2001 2000 Cash and cash equivalents $ 69,050 $ 77,677 Investment securities, available-for-sale (at fair value) 120,679 136,537 Mortgage-backed securities, available-for-sale (at fair value) 311,342 374,405 Loans receivable, held-for-sale (fair value of $3,920 and $2,246) 3,920 2,246 Loans receivable, net 3,941,950 3,627,038 Accrued interest and dividends receivable 25,201 28,488 Real estate 819 2,189 Office properties and equipment, net 9,615 10,651 Investment in Federal Home Loan Bank (FHLB) stock, at cost 88,891 80,885 Other assets 22,993 25,126 $4,594,460 $4,365,242 LIABILITIES Deposits $2,354,058 $2,165,047 FHLB advances 1,639,000 1,579,000 Securities sold under agreements to repurchase 228,716 294,110 Accrued expenses and other liabilities 60,463 59,643 4,282,237 4,097,800 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, par value $.01 per share; authorized 100,000,000 shares; issued 23,359,272 and 23,299,707 shares, outstanding 17,291,782 and 17,232,217 shares 233 233 Additional paid-in capital 33,588 32,540 Retained earnings - substantially restricted 350,803 313,411 Unreleased shares to employee stock ownership plan (210) (841) Treasury stock, at cost, 6,067,490 shares (75,743) (75,743) Accumulated other comprehensive earnings (loss), net of taxes 3,552 (2,158) 312,223 267,442 $4,594,460 $4,365,242
FIRSTFED FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (Dollars in thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Interest income: Interest on loans $73,457 $71,967 $229,328 $199,580 Interest on mortgage-backed securities 4,585 6,064 16,086 18,302 Interest and dividends on investments 3,795 3,949 11,883 11,655 Total interest income 81,837 81,980 257,297 229,537 Interest expense: Interest on deposits 22,889 25,832 74,690 73,470 Interest on borrowings 26,508 29,458 84,453 77,230 Total interest expense 49,397 55,290 159,143 150,700 Net interest income 32,440 26,690 98,154 78,837 Provision for loan losses - - - - Net interest income after provision for losses 32,440 26,690 98,154 78,837 Other income: Loan and other fees 1,003 886 2,478 2,418 Gain on sale of loans 291 19 501 22 Real estate operations, net 609 58 383 496 Other operating income 1,116 987 3,305 3,157 Total other income 3,019 1,950 6,667 6,093 Non-interest expense Compensation 7,595 6,775 22,325 20,214 Occupancy 2,201 2,022 6,180 5,999 Other expenses 3,942 3,479 10,961 10,878 Total non-interest expense 13,738 12,276 39,466 37,091 Earnings before income taxes 21,721 16,364 65,355 47,839 Income tax provision 9,294 6,867 27,963 20,156 Net earnings $12,427 $ 9,497 $ 37,392 $ 27,683 Other comprehensive earnings, net of taxes 2,826 3,049 5,710 496 Comprehensive earnings $15,253 $12,546 $ 43,102 $ 28,179 Earnings per share: Basic $ 0.72 $ 0.55 $ 2.17 $ 1.59 Diluted $ 0.70 $ 0.54 $ 2.12 $ 1.58 Weighted average shares outstanding: Basic 17,253,063 17,217,052 17,218,177 17,420,034 Diluted 17,677,749 17,441,026 17,651,674 17,566,316
KEY FINANCIAL RESULTS ARE HIGHLIGHTED BELOW Quarter Ended September 30, 2001 2000 (Dollars in thousands, except per share data) End of period: Total assets $4,594,460 $4,252,226 Cash and securities $ 189,729 $ 189,609 Mortgage-backed securities $ 311,342 $ 381,074 Loans $3,945,870 $3,538,328 Core deposit intangible asset $ 8,187 $ 10,445 Deposits $2,354,058 $2,159,879 Borrowings $1,867,716 $1,790,822 Stockholders' equity $ 312,223 $ 249,227 Book value per share $ 18.06 $ 14.47 Tangible book value per share $ 17.58 $ 13.86 Stock price (period-end) $ 26.00 $ 23.00 Total loan servicing portfolio $4,449,599 $4,325,125 Loans serviced for others $ 269,726 $ 337,780 % of Adjustable mortgages 74.69% 92.64% Other data: Employees (full-time equivalent) 462 444 Branches 25 25 Loan Offices 3 4 Quarter Ended September 30, 2001 2000 (Dollars in thousands) Asset quality: Real estate (foreclosed) $ 790 $ 1,998 Non-accrual loans $ 9,997 $ 8,456 Non-performing assets $ 10,787 $ 10,454 Non-performing assets to total assets 0.23% 0.25% General valuation allowance (GVA) $ 70,931 $ 71,713 GVA to assets with loss exposure * 1.67% 1.91% Loans sold with recourse $132,424 $155,047 GVA for loans sold with recourse $ 12,824 $ 12,824 GVA to loans sold with recourse 9.68% 8.27% Modified loans (not impaired) $ 934 $ 1,306 Impaired loans, net $ 10,081 $ 8,813 Allowance for impaired loans $ 1,850 $ 1,792 Capital ratios: Tangible capital ratio 6.41% 5.69% Core capital ratio 6.41 5.69 Risk-based capital ratio 12.71 11.30 Net worth to assets ratio 6.80 5.86 * Primarily the Bank's loans receivable Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 (Dollars in thousands) Selected ratios: Expense ratios: Efficiency ratio 39.06% 42.89% 37.83% 43.68% Expense-to-average-assets ratio 1.20 1.16 1.17 1.21 Return on average assets 1.08 0.90 1.10 0.90 Return on average equity 16.34 15.64 17.20 15.61 Yields earned and rates paid: Average yield on loans and mortgage-backed securities 7.38% 7.94% 7.85% 7.73% Average yield on investment portfolio ** 5.85 6.62 5.64 6.22 Average yield on all interest- earning assets ** 7.32 7.90 7.75 7.66 Average rate paid on deposits 3.89 4.79 4.38 4.63 Average rate paid on borrowings 5.54 6.55 5.92 6.22 Average rate paid on all interest- bearing liabilities 4.63 5.59 5.08 5.32 Interest rate spread 2.70 2.31 2.67 2.34 Effective net spread 2.89 2.48 2.88 2.52
Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 (Dollars in thousands) Averages: Average loans and mortgage-backed securities $4,237,617 $3,908,839 $4,166,834 $3,740,957 Average investments *** 174,266 148,535 191,132 163,052 Average interest-earning assets *** 4,411,883 4,057,374 4,357,966 3,904,009 Average deposits 2,335,125 2,146,262 2,279,646 2,121,575 Average borrowings 1,895,224 1,787,548 1,903,414 1,652,719 Average interest-bearing liabilities 4,230,349 3,933,810 4,183,060 3,774,294 Excess of interest-earning assets over interest-bearing liabilities $ 181,534 $ 123,564 $ 174,906 $ 129,715 Loan originations and purchases $ 415,862 $ 228,798 $1,230,597 $ 854,884
** Excludes FHLB stock dividends and other miscellaneous items. *** Excludes FHLB stock