-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OcPW+Y/vf1ov5AnTf/py352Xr+vqOnLYfnNJzi2wCY0obxR0Qu+n1182cQL5VqQ1 7Dvf7dfxoh8LyXGWpmfpbQ== 0000810536-06-000031.txt : 20060426 0000810536-06-000031.hdr.sgml : 20060426 20060425212206 ACCESSION NUMBER: 0000810536-06-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060331 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060426 DATE AS OF CHANGE: 20060425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTFED FINANCIAL CORP CENTRAL INDEX KEY: 0000810536 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 954087449 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09566 FILM NUMBER: 06779409 BUSINESS ADDRESS: STREET 1: 401 WILSHIRE BOULEVARD CITY: SANTA MONICA STATE: CA ZIP: 90401-1490 BUSINESS PHONE: 3103196000 MAIL ADDRESS: STREET 1: 401 WILSHIRE BOULEVARD CITY: SANTA MONICA STATE: CA ZIP: 90401 8-K 1 er0306t.txt EARNINGS RELEASE 1ST QUARTER, 2006 UNITED STATES 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): April 26, 2006 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 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Actc (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On April 26, 2006, the registrant, FirstFed Financial Corp., issued a press release setting forth the Company's first quarter 2006 earnings. A copy of this release press release is attached and incorporated herein as Exhibit 99.1. Exhibit 9.01 Financial Statements and Exhibits (a) Financial Statements Not Applicable. (b) Pro Forma Financial Information Not Applicable. (c) Exhibits: Exhibit 99 - Press Release dated April 26, 2006, regarding results for the first quarter 2006. 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: April 26, 2006 By: /s/ Douglas J. Goddard ---------------------- Douglas J. Goddard Chief Financial Officer FIRSTFED REPORTS RESULTS FOR THE FIRST QUARTER OF 2006 Santa Monica, California, April 26, 2006 -- FirstFed Financial Corp. (NYSE-FED), parent company of First Federal Bank of California, today announced net income of $31.0 million or $1.83 per diluted share of common stock for the first quarter of 2006 compared to net income of $28.2 million or $1.67 per diluted share of common stock for the fourth quarter of 2005. Net income for the first quarter of 2005 was $18.5 million or $1.10 per diluted share of common stock. The increased earnings resulted from higher net interest income and loan prepayment fees. Net interest income increased to $67.1 million during the first quarter of 2006 from $60.3 million during the fourth quarter of 2005 and $50.1 million during the first quarter of 2005. Average interest-earning assets for the first quarter of 2006 grew 4% over the fourth quarter of 2005 and 32% over the first quarter of 2005. The interest rate spread increased to 2.41% for the first quarter of 2006 from 2.30% for the fourth quarter of 2005 and 2.44% for the first quarter of last year. Loan prepayment fees were $7.4 million for the first quarter of 2006, approximately the same as $7.6 million for the fourth quarter of 2005 and substantially higher than $2.6 million for the first quarter of 2005. An increasing number of the Bank's loans provide for prepayment fees in order to cover the cost of origination. The Company's total assets reached $10.6 billion at March 31, 2006 compared to $10.5 billion at December 31, 2005 and $8.4 billion at March 31, 2005. Loan originations during the first quarter of 2006 were $726 million compared to $1.1 billion during the fourth quarter of 2005 and $1.3 billion during the first quarter of 2005. Loan originations decreased due to a leveling off of real estate activity in the areas where the Bank lends. The loan portfolio was $9.7 billion at the end of the first quarter of 2006, consistent with the level at the end of the fourth quarter of 2005. Single family loans comprised 89% of loan originations during the first quarter of 2006, 93% of loan originations during the fourth quarter of 2005, and 88% of loan originations during the first quarter of 2005. Negative amortization, which results when unpaid interest earned by the Bank is added to borrowers' loan balances, totaled $98.5 million at March 31, 2006, $62.6 million at December 31, 2005, and $10.3 million at March 31, 2005. Negative amortization increased by $35.9 million during the first quarter of 2006. This compares to increases of $25.0 million during the fourth quarter of 2005, and $4.9 million during the first quarter of 2005. Negative amortization has increased over the last few quarters due to rising interest rates and an increasing number of single family loans that allow for fixed payment periods of one to five years. The portfolio of single family loans with a one-year fixed payment period totaled $4.7 billion at March 31, 2006, $4.6 billion at December 31, 2005 and $3.1 billion at March 31, 2005. The portfolio of single family loans with three-to-five year fixed payment periods totaled $2.5 billion at March 31, 2006 and $2.7 billion at December 31, 2005, and $2.1 billion at March 31, 2005. Negative amortization as a percentage of all single family loans with fixed payment periods in the Bank's portfolio was 1.32% at March 31, 2006 compared to 0.86% at December 31, 2005 and 0.19% at March 31, 2005. A $3.9 million loan loss provision was recorded during the first quarter of 2006. This compares to provisions of $4.0 million during the fourth quarter of 2005 and $3.8 million during the first quarter of 2005. Net loan charge-offs of $25 thousand were recorded during the first quarter of 2006. This compares to net loan charge-offs of $36 thousand during the fourth quarter of 2005 and net loan loss recoveries of $159 thousand during the first quarter of 2005. The ratios of non-performing assets to total assets were 0.07%, 0.05%, and 0.08% March 31, 2006, December 31, 2005 and March 31, 2005, respectively. Loan payoffs and principal reductions totaled $624.8 million for the quarter ended March 31, 2006 compared to $635 million for the fourth quarter of 2005, and $339.1 million for the first quarter of 2005. Loan sales of $15.1 million and $12.8 million are included in the above figures for the first quarter of 2006 and the fourth quarter of 2005, respectively. There were no loan sales during the first quarter of 2005. Loan originations during the first quarter of 2006 were primarily funded with deposits, which increased by $675.0 million. The deposit growth was primarily in brokered deposits which increased by $597.5 million during the quarter. FHLB Advances and borrowings under repurchase agreements decreased during the quarter by $400.5 million and $197.7 million, respectively. The Bank's risk-based capital ratio was 13.62% at March 31, 2006 and its core and tangible capital ratios were 6.48%. Non-interest expense was $19.9 million during the first quarter of 2006, $18.2 million during the fourth quarter of 2005 and $18.9 million during the first quarter of 2005. Expenses increased during the first quarter of 2006 due to higher compensation costs and the costs associated with implementing Statement of Financial Accounting Standards No. 123R (SFAS No. 123R). Starting with the first quarter of 2006, SFAS No. 123R requires the expensing of the value of stock options granted and vested during the period. Stock-based employee compensation expense totaled $403 thousand net of tax for the first quarter of 2006. Expenses increased during the first quarter of 2006 compared to the first quarter of 2005 due to increased OTS assessments and higher occupancy costs related to the opening of two new branches. Non-interest expense as a percentage of average total assets increased to 0.76% during the first quarter of 2006 compared to 0.72% during the fourth quarter of 2005 and 0.95% during the first quarter of 2005. There were no repurchases of common stock during 2006 or 2005. Shares eligible for repurchase under the Company's stock repurchase program totaled 1,472,079 as of April 26, 2006. First Federal Bank of California operates 31 retail banking offices in Southern California and 6 lending offices in both Southern and Northern California. This news release contains certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to various factors, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. Such factors include, but are not limited to, the general business environment, interest rate fluctuations that may affect operating margin, the California real estate market, branch openings, and competitive conditions in the business and geographic areas in which the Company conducts its business and regulatory actions. In addition, these forward-looking statements are subject to assumptions as to future business strategies and decisions that are subject to change. The Company makes no guarantees or promises regarding future results and assumes no responsibility to update such forward-looking statements. Contact: Douglas Goddard, Executive Vice President (310) 319-6014 KEY FINANCIAL RESULTS FOLLOW FIRSTFED FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except share data) (Unaudited) March 31, December 31, 2006 2005 ------------- ------------- ASSETS Cash and cash equivalents $ 57,899 $ 93,192 Investment securities, available-for-sale (at fair value) 338,143 294,017 Mortgage-backed securities, available-for-sale (at fair value) 69,296 74,254 Loans receivable, held-for-sale (fair value $97,208) 96,250 2,873 Loans receivable, net 9,680,194 9,678,260 Accrued interest and dividends receivable 50,990 48,973 Office properties and equipment, net 15,828 15,759 Investment in Federal Home Loan Bank (FHLB) stock, at cost 207,952 205,696 Other assets 52,736 43,925 ------------- ------------- $ 10, 569,288 $ 10, 456,949 ============= ============= LIABILITIES Deposits $ 5,046,661 $ 4,371,657 FHLB advances 3,755,000 4,155,500 Securities sold under agreements to repurchase 966,000 1,163,684 Senior debenture 100,000 100,000 Accrued expenses and other liabilities 98,377 95,269 ------------- ------------- 9,966,038 9,886,110 ------------- ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, par value $.01 per share; authorized 100,000,000 shares; issued 23,796,866 and 23,761,825 shares; outstanding 16,602,270 and 16,567,229 shares 238 238 Additional paid-in capital 46,581 44,147 Retained earnings 671,853 640,900 Unreleased shares to employee stock ownership plan (895) (1,104) Treasury stock, at cost 7,194,596 shares (113,776) (113,776) Accumulated other comprehensive (loss) income, net of taxes (751) 434 ------------- ------------- 603,250 570,839 ------------- ------------- $ 10,569,288 $ 10,456,949 ============= =============
FIRSTFED FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS (Dollars in thousands, except per share data) (Unaudited) Three months ended March 31, ----------------------------- 2006 2005 ------------- ----------- Interest income and dividend income: Interest on loans $ 154,884 $ 87,113 Interest on mortgage-backed securities 706 728 Interest and dividends on investments 6,506 3,816 ------------- ----------- Total interest income 162,096 91,657 ------------- ----------- Interest expense: Interest on deposits 38,914 17,354 Interest on borrowings 56,068 24,226 ------------- ----------- Total interest expense 94,982 41,580 ------------- ----------- Net interest income 67,114 50,077 Provision for loan losses 3,900 3,750 ------------- ----------- Net interest income after provision for loan losses 63,214 46,327 ------------- ----------- Other income: Loan servicing and other fees 8,414 2,828 Retail office fees 1,575 1,323 Gain on sale of loans 145 -- Real estate operations, net (108) 248 Other operating income 161 97 ------------- ----------- Total other income 10,187 4,496 ------------- ----------- Non-interest expense: Salaries and employee benefits 12,294 12,173 Occupancy 2,638 2,295 Advertising 164 92 Amortization of core deposit intangible 499 499 Federal deposit insurance 144 116 Legal 468 516 Other expense 3,709 3,176 ------------- ----------- Total non-interest expense 19,916 18,867 ------------- ----------- Income before income taxes 53,485 31,956 Income tax 22,532 13,464 ------------- ----------- Net income $ 30,953 $ 18,492 ============= =========== Net income $ 30,953 $ 18,492 Other comprehensive (loss), net of taxes (1,185) (324) ------------- ----------- Comprehensive income $ 29,768 $ 18,168 ============= =========== Earnings per share: Basic $ 1.87 $ 1.12 ============= =========== Diluted $ 1.83 $ 1.10 ============= =========== Weighted average shares outstanding: Basic 16,572,844 16,502,945 ============= =========== Diluted 16,895,022 16,885,898 ============= ===========
FIRSTFED FINANCIAL CORP. AND SUBSIDIARY KEY FINANCIAL RESULTS (Dollars in thousands, except per share data) (Unaudited) Quarter ended March 31, 2006 2005 ------------ ---------- End of period: Total assets $ 10,569,288 $ 8,420,703 Cash and securities $ 396,042 $ 268,704 Mortgage-backed securities $ 69,296 $ 90,597 Loans $ 9,776,444 $ 7,824,493 Core deposit intangible asset $ 2,839 $ 4,834 Deposits $ 5,046,661 $ 3,803,795 Borrowings $ 4,821,000 $ 4,058,513 Stockholders' equity $ 603,250 $ 495,333 Book value per share $ 36.34 $ 29.98 Tangible book value per share $ 36.16 $ 29.69 Stock price (period-end) $ 59.81 $ 51.01 Total loan servicing portfolio $ 9,968,279 $ 7,916,154 Loans serviced for others $ 85,431 $ 111,231 % of adjustable mortgages 96.37% 93.73% Other data: Employees (full-time equivalent) 610 638 Branches 31 29 Asset quality: Non-accrual loans $ 7,420 $ 6,851 Non-performing assets $ 7,420 $ 6,851 Non-performing assets to total assets 0.07% 0.08% General valuation allowance (GVA) $ 101,433 $ 82,579 Allowances for impaired loans -- -- ------------ ---------- Allowances for loan losses $ 101,433 82,579 Allowances for loan losses as a percent of gross loans receivable 1.03% 1.05% Loans sold with recourse $ 57,815 $ 73,545 Modified loans (not impaired) $ 1,959 $ 2,061 Impaired loans, net $ 4,315 $ 4,546 Capital ratios: Tangible capital ratio 6.48% 5.77% Core capital ratio 6.48 5.77 Risk-based capital ratio 13.62 11.75 Net worth to assets ratio 5.70 5.88
FIRSTFED FINANCIAL CORP. AND SUBSIDIARY KEY FINANCIAL RESULTS (continued) (Unaudited) Three months ended March 31, ---------------------------- 2006 2005 ------------ ------------ Selected ratios: Expense ratios: Efficiency ratio 25.76% 34.57% Expense-to-average-assets ratio 0.76 0.95 Return on average assets 1.18 0.93 Return on average equity 21.09 15.21 Yields earned and rates paid: Average yield on loans 6.34% 4.76% Average yield on securities portfolio 5.04 3.67 Average yield on all interest-earning assets 6.27 4.69 Average rate paid on deposits 3.34 1.82 Average rate paid on borrowings 4.33 2.71 Average rate paid on all interest-bearing 3.86 2.25 liabilities Interest rate spread 2.41 2.44 Effective net spread 2.59 2.56 Average balances: Average loans $ 9,763,063 $ 7,315,647 Average securities 584,985 494,652 ------------ ------------ Average interest-earning assets 10,348,048 7,810,299 ------------ ------------ Average deposits 4,657,604 3,816,761 Average borrowings 5,177,816 3,578,534 ------------ ------------ Average interest-bearing liabilities 9,835,420 7,395,295 ------------ ------------ Excess of interest-earning assets over interest-bearing liabilities $ 512,628 $ 415,004 ============ ============ Loan originations and purchases $ 725,766 $ 1,316,905
-----END PRIVACY-ENHANCED MESSAGE-----