FedFirst Financial Corporation Announces Record Year-to-Date 2012 Results

  FedFirst Financial Corporation Announces Record Year-to-Date 2012 Results

Business Wire

MONESSEN, Pa. -- January 31, 2013

FedFirst Financial Corporation (NASDAQ Capital: FFCO; the “Company”), the
parent company of First Federal Savings Bank (the “Bank”), today announced net
income of $556,000 for the three months ended December 31, 2012 compared to
$55,000 for the three months ended December 31, 2011, an increase of $501,000.
Basic and diluted earnings per share were $0.20 for the three months ended
December 31, 2012 compared to $0.02 for the three months ended December 31,
2011, an increase of $0.18 per share. The Company reported net income of $2.3
million for the year ended December 31, 2012 compared to $859,000 for the year
ended December 31, 2011, an increase of $1.4 million. Basic earnings per share
was $0.81 and diluted earnings per share was $0.80 for the year ended December
31, 2012 compared to basic and diluted earnings per share of $0.30 for the
year ended December 31, 2011, an increase of $0.51 and $0.50 per share,
respectively.

“We are extremely excited to announce these results to our stockholders,” said
Patrick G. O'Brien, President and CEO. “The record earnings that we are
reporting this year are built on the foundation that we laid last year to
improve our expense structure and position us for future growth. Also
contributing to our success this year were our ability to maintain our net
interest margin in the face of a very challenging interest rate environment,
reduced credit costs, which reflect improved stability in our local markets,
and growth in non-interest income accomplished without reliance on gains on
sales of securities. Our shareholders benefited from the operational success
that we had this year through an increase in our quarterly dividend, the
payment of a special dividend at last year’s lower tax rates, and the
successful completion of the repurchase of over 10% of our outstanding
shares.”

Fourth Quarter Results

Net interest income for the three months ended December 31, 2012 decreased
$83,000, or 3.1%, to $2.6 million compared to $2.7 million for the three
months ended December 31, 2011. Paydowns and payoffs of higher yielding loans
and securities resulted in a $443,000 decline in interest income. This was
partially offset by a $232,000 decrease in deposits expense due to interest
rate reductions on deposits and a $128,000 decrease in borrowings expense due
to payoffs of higher cost borrowings that were replaced with short-term,
lower-cost borrowings.

There was no provision for loan losses for the three months ended December 31,
2012 compared to $75,000 for the three months ended December 31, 2011. Net
charge-offs were $205,000 for the three months ended December 31, 2012
compared to $96,000 for the three months ended December 31, 2011. Despite an
increase in net charge-offs, the provision for loan losses in the current
period was positively influenced by lower current year charge-off results that
were incorporated into the loss history factors. In addition, a $714,000
substandard loan relationship was individually evaluated for impairment during
the quarter and it was determined a specific reserve was not necessary.

Noninterest income decreased $72,000, or 7.2%, to $932,000 for the three
months ended December 31, 2012 compared to $1.0 million for the three months
ended December 31, 2011. The Company recognized a $305,000 gain on the sale of
available-for-sale securities in the prior period which was partially offset
by a $259,000 increase in insurance commissions in the current period.

Noninterest expense decreased $903,000, or 25.5%, to $2.6 million for the
three months ended December 31, 2012 compared to $3.5 million for the three
months ended December 31, 2011. Compensation expense decreased $919,000
primarily due to the termination of the Company’s supplemental executive
retirement plan in the prior period. In addition, occupancy expense decreased
$88,000 as a result of fully depreciated assets and a decrease in rent due to
branch consolidation. This was partially offset by an $80,000 increase in
other miscellaneous expenses primarily due to a marketing agreement signed by
our insurance subsidiary.

Year-to-Date Results

Net interest income decreased $295,000 to $10.3 million for the year ended
December 31, 2012 compared to $10.6 million for the year ended December 31,
2011. Paydowns and payoffs of higher yielding loans and securities resulted in
a $1.6 million decline in interest income. This was partially offset by a
$769,000 decrease in deposits expense due to interest rate reductions on
deposits and a $519,000 decrease in borrowings expense due to payoffs of
higher cost borrowings that were replaced with short-term, lower-cost
borrowings.

The provision for loan losses was $310,000 for the year ended December 31,
2012 compared to $850,000 for the year ended December 31, 2011. In the prior
period, adjustments to the qualitative factors used in determining the
allowance for loan losses contributed to the larger provision amount. Net
charge-offs were $522,000 for the year ended December 31, 2012 compared to
$576,000 for the year ended December 31, 2011.

Noninterest income increased $140,000, or 4.2%, to $3.5 million for the year
ended December 31, 2012 compared to $3.3 million for the year ended December
31, 2011. In the current period, there was a $341,000 increase in insurance
commissions and a financed real estate owned property was paid off which
resulted in the recognition of $66,000 of income that had previously been
deferred. In addition, the death of a former director in the current period
resulted in the recognition of $33,000 in income from a bank-owned life
insurance policy and fees and service charge income increased $22,000
primarily due to changes in the Bank’s fee structure and related customer
activity. This was partially offset by the recognition of a $304,000 gain on
the sale of available-for-sale securities in the prior period.

Noninterest expense decreased $1.9 million, or 15.7%, to $9.9 million for the
year ended December 31, 2012 compared to $11.8 million for the year ended
December 31, 2011. Compensation expense decreased $1.5 million primarily due
to the termination of the Company’s supplemental executive retirement plan in
the prior period and a decrease in stock-based compensation expense due to the
final vesting of restricted stock awards and options. Occupancy expense
decreased $285,000 as a result of fully depreciated assets and a decrease in
rent due to a branch consolidation in the prior year. Federal Deposit
Insurance Corporation’s insurance premiums decreased $45,000 due to the
revised assessment methodology implemented in the second quarter of 2011.
Other miscellaneous expense decreased $18,000 primarily due to a decrease in
real estate owned expenses partially offset by an increase in advertising
expenses.

Balance Sheet Review

Total assets decreased $16.5 million to $318.8 million at December 31, 2012
compared to $335.3 million at December 31, 2011. Securities available-for-sale
decreased $9.9 million due to calls and paydowns, including a $2.0 million
call of a Government Sponsored Enterprise security and a $665,000 partial call
of a municipal bond, that was partially offset by the purchase of $10.9
million of securities. Net loans increased $4.3 million primarily as a result
of growth in home equity and commercial real estate loans partially offset by
payoffs and paydowns on one-to four- family mortgage and multi-family loans.
Deposits decreased $7.5 million principally in certificates of deposit and
money market accounts partially offset by an increase in noninterest-bearing
and interest-bearing demand deposits. Stockholders’ equity decreased $5.5
million primarily due to $6.7 million of repurchases of the Company’s common
stock and dividend payments of $1.1 million, which included a one-time special
dividend payment of $684,000, partially offset by $2.3 million of earnings.
Other liabilities decreased $3.0 million primarily due to the final payouts to
supplemental executive retirement plan participants. Borrowings decreased
$611,000 due to the payoff of $8.0 million of matured advances and paydowns on
amortizing advances partially offset by a $12.0 million short-term borrowing
advanced at the end of the year.

About FedFirst Financial Corporation

FedFirst Financial Corporation is the parent company of First Federal Savings
Bank, a community-oriented financial institution operating seven full-service
branch locations in southwestern Pennsylvania. First Federal offers a broad
array of retail and commercial lending and deposit services and provides
commercial and personal insurance services through Exchange Underwriters,
Inc., its 80% owned subsidiary. Financial highlights of the Company are
attached.

Statements contained in this news release that are not historical facts may
constitute forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995 and such forward-looking statements
are subject to significant risks and uncertainties. The Company intends such
forward-looking statements to be covered by the safe harbor provisions
contained in the Act. The Company’s ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse effect on the operations and future prospects of
the Company and its subsidiaries include, but are not limited to, changes in
market interest rates, general economic conditions, changes in federal and
state regulation, actions by our competitors, loan delinquency rates and our
ability to control costs and expenses and other factors that may be described
in the Company’s annual report on Form 10-K as filed with the Securities and
Exchange Commission. These risks and uncertainties should be considered in
evaluating forward-looking statements and undue reliance should not be placed
on such statements.

                                                                  
FEDFIRST FINANCIAL CORPORATION
SELECTED FINANCIAL INFORMATION
                                                 
                     (Unaudited)
(In thousands,
except share and     December 31,    December 31,
per share data)
                     2012            2011
Selected Financial
Condition Data:
Assets               $ 318,760       $ 335,274
Cash and cash          5,874           14,571
equivalents
Securities             42,582          52,448
available-for-sale
Loans receivable,      249,530         245,277
net
Deposits               214,057         221,540
Borrowings             48,678          49,289
Stockholders'          53,294          58,801
equity
                                                                     
                     (Unaudited)                     (Unaudited)
                     Three Months Ended              Year Ended
                     December 31,                    December 31,
                     2012            2011            2012            2011        
Selected
Operations Data:
Total interest       $ 3,340         $ 3,783         $ 13,949        $ 15,532
income
Total interest        761           1,121         3,632         4,920     
expense
Net interest           2,579           2,662           10,317          10,612
income
Provision for loan    -             75            310           850       
losses
Net interest
income after           2,579           2,587           10,007          9,762
provision for loan
losses
Noninterest income     932             1,004           3,475           3,335
Noninterest           2,644         3,547         9,944         11,794    
expense
Income before
income tax expense
and noncontrolling
interest in net
income of              867             44              3,538           1,303
consolidated
subsidiary
Income tax expense    305           -             1,251         432       
Net income before
noncontrolling
interest
in net income
(loss) of              562             44              2,287           871
consolidated
subsidiary
Noncontrolling
interest in net
income (loss) of      6             (11       )    32            12        
consolidated
subsidiary
Net income of
FedFirst Financial   $ 556          $ 55           $ 2,255        $ 859       
Corporation
                                                                     
Dividends per        $ 0.29          $ 0.03          $ 0.40          $ 0.12
share
Earnings per share     0.20            0.02            0.81            0.30
- basic
Earnings per share     0.20            0.02            0.80            0.30
- diluted
                                                                     
Weighted average
shares outstanding     2,773,814       2,910,262       2,799,765       2,908,639
- basic
Weighted average
shares outstanding     2,778,046       2,912,946       2,803,101       2,911,512
- diluted
                                                                     
                     Three Months Ended              Year Ended
                     December 31,                    December 31,
                     2012            2011            2012            2011
Selected Financial
Ratios^(1):
Return on average      0.70      %     0.06      %    0.68      %     0.25      %
assets
Return on average      3.92            0.37            3.84            1.43
equity
Average
interest-earning
assets to average      129.31          123.92          128.22          122.53
interest-bearing
liabilities
Average equity to      17.86           17.70           17.71           17.54
average assets
Interest rate          3.16            3.05            2.99            3.00
spread
Net interest           3.46            3.38            3.32            3.35
margin
                                                                     
                     Period Ended
                     December 31,    December 31,
                      2012           2011
Allowance for loan
losses to total        1.13      %     1.21      % 
loans
Allowance for loan
losses to              130.94          144.43
nonperforming
loans
Nonperforming
loans to total         0.86            0.84
loans
Nonperforming
assets to total        0.74            0.80
assets
Net charge-offs to     0.21            0.24
average loans
Tier 1 (core)
capital and            14.02           13.59
tangible equity
^(2)
Tier 1 risk-based      22.55           24.04
capital ^ (2)
Total risk-based       23.81           25.30
capital ^ (2)
Book value per       $ 20.98         $ 19.88
share
Outstanding shares     2,540,341       2,957,302
                                                                     
(1) Three months
ended ratios are
calculated on an
annualized basis.
(2) Capital ratios
are for First
Federal Savings
Bank only
                                                                     
Note:
Certain items previously reported may have been reclassified to conform with the
current reporting period’s format.
                                                                     

Contact:

FedFirst Financial Corporation
Patrick G. O’Brien, 724-684-6800
 
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