Cheviot Financial Corp. Reports Third-Quarter Earnings

Cheviot Financial Corp. Reports Third-Quarter Earnings

CINCINNATI, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Cheviot Financial Corp.
(Nasdaq:CHEV), the parent company of Cheviot Savings Bank, today reported net
earnings of $21,000, or less than $0.01 per share for the quarter ended
September 30, 2013, compared to net earnings of $499,000, or $0.07 per share
for the quarter ended September 30, 2012. Net earnings for the nine months
ended September 30, 2013 was $1.1 million, or $0.15 per share, compared to
$2.6 million, or $0.35 per share for the nine months ended September 30, 2012.

The decrease in earnings primarily reflects the effects of reduced loan
originations by the Bank. This resulted in shrinking loan balances in loans
held for investment, as well as lower levels of loan sales which reduced other
income. The decrease in loan originations occurred during a period when
mortgage rates increased quickly, dramatically reducing our mortgage loan
demand.

As a result of the reduced profits of the Bank and the decline in the mortgage
loan production during the third quarter ended September 30, 2013, the Bank
has restructured the mortgage operations department and made necessary changes
to reflect the current and anticipated mortgage lending environment. Despite
the decline in mortgage lending, the Bank has increased emphasis on commercial
lending resulting in commercial loan originations of approximately $8.9
million during the three months ended September 30, 2013. With these changes,
all operating expenses will continue to be reevaluated for cost reductions.

Commenting on the Company's performance, President and Chief Executive Officer
Thomas J. Linneman stated, "Although we are disappointed in the decline in our
net interest margin due to the current interest rate environment, we are
pleased our efforts to increase loan quality and reduce delinquencies have
continued to decrease the non-performing loans in our portfolio."
Non-performing loans as a percent of total loans decreased to 2.76% at
September 30, 2013 from 3.36% at September 30, 2012.

For the three months ended September 30, 2013:

Net earnings for the three months ended September 30, 2013 totaled $21,000, a
$478,000 decrease from the $499,000 earnings reported in the September 2012
period. The decrease in net earnings reflects a decrease in other income of
$625,000 and a decrease of $388,000 in net interest income, which was
partially offset by a decrease of $5,000 in the provision for losses on loans,
a decrease in general, administrative and other expenses of $280,000 and by a
decrease of $250,000 in the provision for federal income taxes.

Total interest income decreased $686,000, or 12.8%, to $4.7 million for the
three-months ended September 30, 2013, from the comparable quarter in 2012.
Interest income on loans decreased $583,000, or 13.2%, to $3.8 million during
the 2013 quarter from $4.4 million for the 2012 quarter. This decrease was due
primarily to a $18.6 million, or 5.3%, decrease in the average balance of
loans outstanding and by a 42 basis point decrease in the average yield on
loans to 4.55% for the 2013 quarter from 4.97% for the three months ended
September 30, 2012. Interest income on mortgage-backed securities increased
$5,000, or 10.2%, to $54,000 for the three months ended September 30, 2013,
from $49,000 for the comparable 2012 quarter, due primarily to a $2.1 million,
or 20.2% increase in the average balance of securities outstanding, which was
partially offset by a 16 basis point decrease in the average yield. Interest
income on investment securities decreased $99,000, or 12.2%, to $712,000 for
the three months ended September 30, 2013, compared to $811,000 for the same
quarter in 2012, due primarily to a decrease of $16.4 million, or 9.0% in the
average balance of investment securities outstanding and by a 6 basis point
decrease in the average yield to 1.73% in the 2013 quarter. Interest income on
other interest-earning deposits decreased $9,000, or 8.7% to $94,000 for the
three months ended September 30, 2013.

Interest expense decreased $298,000, or 21.9% to $1.1 million for the three
months ended September 30, 2013, from $1.4 million for the same quarter in
2012. Interest expense on deposits decreased by $249,000, or 21.8%, to
$894,000, from $1.1 million, due primarily to a 17 basis point decrease in the
average cost of deposits to 0.75% and a $21.7 million, or 4.4% decrease in the
average balance of deposits outstanding.The decrease in the average cost of
deposits is due to the overall changes in the deposit composition and lower
market rates for the period.Interest expense on borrowings decreased by
$49,000, or 22.3%, due primarily to a $5.5 million decrease in the average
balance outstanding, and due to a 5 basis point decrease in the average cost
of borrowings.

As a result of the foregoing changes in interest income and interest expense,
net interest income decreased by $388,000, or 9.7%, to $3.6 million for the
three months ended September 30, 2013, as compared to the same quarter in
2012.The average interest rate spread decreased to 2.75% for the three months
ended September 30, 2013 from 2.82% for the three months ended September 30,
2012.The net interest margin decreased to 2.79% for the three months ended
September 30, 2013 from 2.89% for the three months ended September 30, 2012.

For the three months ended September 30, 2013, the company recorded a
provision for losses on loans of $585,000, as compared to $590,000 for the
three months ended September 30, 2012.At September 30, 2013 non-performing
loans as a percent of net loans decreased to 2.8% from 3.4% at September 30,
2012.This decrease is a result of the overall decrease in non-performing
loans of $2.3 million from period to period.

Other income decreased $625,000, or 55.0%, to $511,000 for the three months
ended September 30, 2013, compared to the same quarter in 2012.The decrease
is due primarily to a decrease in the gain on sale of loans of $583,000.

General, administrative and other expense decreased $280,000, or 7.3%, to $3.6
million for of the three months ended September 30, 2013.This decrease is
primarily a result of a decrease in employee compensation and benefits of
$153,000, a decrease in real estate owned impairment of $161,000 and a
decrease in property, payroll and other taxes of $90,000, which was partially
offset by an increase in other operating expense of $234,000 as a result of
real estate tax expense for real estate acquired through foreclosure.

The provision for federal income taxes decreased $250,000, or 128.9%, for the
three months ended September 30, 2013. There was a tax benefit for the three
months ended September 30, 2013 totaling $56,000.

For the nine months ended September 30, 2013:

Net earnings for the nine months ended September 30, 2013 totaled $1.1
million, a $1.5 million decrease from the $2.6 million in net earnings
reported for the September 2012 period.The decrease in net earnings reflects
a decrease in net interest income of $772,000 and a decrease in other income
of $1.3 million and an increase in general, administrative and other expense
of $73,000, which were partially offset by a decrease of $65,000 in the
provision for losses on loans and a decrease in the provision for federal
income taxes of $559,000.

Total interest income decreased $1.8 million or 10.8%, to $14.6 million for
the nine-months ended September 30, 2013, from the comparable quarter in 2012.
Interest income on loans decreased $2.0 million, or 14.4%, to $11.8 million
during the 2013 period from $13.8 million for the 2012 period.This decrease
was due primarily to a $30.9 million decrease in the average balance of loans
outstanding and a 32 basis point decrease in the average yield to 4.71% from
5.03% in the 2013 nine month period.Interest income on mortgage-backed
securities decreased $22,000, or 13.9%, to $136,000 for the nine months ended
September 30, 2013, from $158,000 for the 2012 period, due primarily to a 16
basis point decrease in the average yield and a $650,000 decrease in the
average balance of securities outstanding period to period.Interest income on
investment securities increased $233,000, or 11.0%, to $2.4 million for the
nine months ended September 30, 2013, compared to $2.1 million for the same
period in 2012, due primarily to an increase of $21.6 million, or 14.1%, in
the average balance of investment securities outstanding, which was partially
offset by a 5 basis point decrease in the average yield to 1.79% for the 2013
period. Interest income on other interest-earning deposits decreased $1,000,
or 0.3%, to $290,000 for the nine months ended September 30, 2013, as compared
to the same period in 2012.

Interest expense decreased $1.0 million, or 23.1%, to $3.3 million for the
nine months ended September 30, 2013, from $4.3 million for the same period in
2012.Interest expense on deposits decreased by $841,000, or 23.2%, to $2.8
million from $3.6 million, due primarily to a $16.1 million decrease in the
average balance outstanding, which was partially offset by 20 basis point
decrease in the average cost of deposits to 0.77% during the 2013
period.Interest expense on borrowings decreased by $161,000, or 22.7%, due
primarily to a $6.1 million, or 21.6%, decrease in the average balance
outstanding and a 5 basis point decrease in the average cost of borrowings.

As a result of the foregoing changes in interest income and interest expense,
net interest income decreased by $772,000, or 6.4%, to $11.3 million for the
nine months ended September 30, 2013.The average interest rate spread
decreased 9 basis points to 2.81% for the nine months ended September 30, 2013
from 2.90% for the nine months ended September 30, 2012.The net interest
margin decreased to 2.85% for the nine months ended September 30, 2013 from
2.94% for the nine months ended September 30, 2012.

For the nine months ended September 30, 2013, the Corporation recorded a
provision for losses on loans of $925,000, as compared to $990,000 for the
nine months ended September 30, 2012.The decrease in the loan loss provision
reflects a decrease in the loan portfolio of $3.4 million and a decrease of
$2.3 million in non-performing originated loans from December 31, 2012.

Other income decreased $1.3 million, or 39.2%, to $2.0 million for the nine
months ended September 30, 2013, compared to the same period in 2012, due
primarily to a loss of $255,000 on sale of office premises and equipment, a
decrease in the gain on sale of loans of $710,000 and the absence during the
2013 period of a gain on death benefits from life insurance of
$492,000.During the second quarter of 2013, the Corporation sold the former
Franklin Savings headquarters.

General, administrative and other expense increased $73,000, or 0.7%, to $11.0
million for the nine months ended September 30, 2013, from $10.9 million for
the comparable period in 2012.The increase is a result of an increase of
$227,000 in other operating expense.The increase in other operating expense
is a result of real estate tax expense for real estate acquired through
foreclosure.

The provision for federal income taxes decreased $559,000, or 62.8%, for the
nine months ended September 30, 2013. The effective tax rate for the six
months ended June 30, 2013 was 23.5%.

Financial Condition Changes at September 30, 2013 and December 31, 2012:

At September 30, 2013, total assets were $591.7 million, compared with $632.0
million at December 31, 2012.Total assets decreased $40.2 million, or 6.4%,
primarily due to the decrease in investment securities of $31.5 million and a
decrease in loans receivable of $3.4 million.The decrease in investment
securities was a result of maturities of $106.2 million and a decrease in the
fair market value of securities designated as available for sale of $8.2
million, which was offset by purchases of investment securities designated as
available for sale totaling $80.9 million and purchases of corporate
securities of $1.9 million.The decrease in loans receivable resulted from the
sale of loans in the secondary market of $33.3 million and principal
repayments of $53.3 million, which was partially offset by loan originations
of $85.8 million. As a result of the current low interest rate environment and
to reduce interest rate risk, all 30 year fixed rate mortgage loans are sold
in the secondary market.

Total liabilities were $498.6 million at September 30, 2013, a decrease of
$25.5 million, or 4.9% compared to $524.1 million at December 31, 2012.The
decrease in total liabilities is a result of a decrease of $19.2 million, or
3.9% in total deposits which totaled $471.5 million at September 30, 2013, as
compared to $490.6 million at December31, 2012.Advances from the Federal
Home Loan Bank of Cincinnati decreased by $4.2 million, or 17.3%, to $20.1
million at September 30, 2013, from $24.3 million at December 31, 2012.The
decrease is a result of approximately $4.1 million in repayments during the
nine months ended September 30, 2013.

Shareholders' equity at September 30, 2013 was $93.1 million, a decrease of
$14.8 million, or 13.7%, from December 31, 2012.The decrease primarily
resulted from purchasing 759,654 shares at an average price of $11.22 per
share through the stock buyback program for a total cost of $8.6 million,
dividend payments on common stock of $1.9 million and an increase in the
unrealized loss on securities designated as available for sale of $5.4
million, which was partially offset by net income of $1.1 million.At
September 30, 2013, tangible book value per share was $11.95 as compared to
$12.68 at December 31, 2012.Tangible book value per share was affected by the
decrease in the fair market value of investment securities designated as
available for sale as other comprehensive loss increasedduring the 2013
period.Over time, the impact on tangible book value per share can improve as
investments are called or mature, however, a sudden increase in interest rates
can have an adverse effect, as increases in rates may increase accumulated
comprehensive loss.

Cheviot Financial Corp.
                                                         
SUMMARIZED
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION AND
CONSOLIDATED STATEMENTS OF INCOME
                                                                           
                                                                           
The following tables set forth selected financial and other data of
Cheviot Financial Corp. at the dates and for the periods presented.
                                                         
                                                         
                                         For the Nine Months Ended        
                                         (Unaudited)      (Unaudited)
                                         9/30/2013        9/30/2012
Selected Operating Data:                                  
Total interest income                     $14,623          $16,397
Total interest expense                    3,328            4,330
Net interest income                       11,295           12,067
Provision for losses on loans             925              990
Net interest income after provision for   10,370           11,077
losses on loans
Total other income                        1,999            3,290
Total general, administrative andother   10,961           10,888
expense
Earnings before income taxes              1,408            3,479
Federal income taxes                      331              890
Net earnings                              $1,077           $2,589
                                                         
Earnings per share – basic and diluted    $0.15            $0.35


                                                              
                   (Unaudited) (Unaudited) (Unaudited)           (Unaudited)
                   9/30/2013 6/30/2013   3/31/2013   12/31/2012 9/30/2012
ASSETS:             (In thousands)
Cash and cash       $15,873     $28,656     $48,588     $25,114    $35,357
equivalents
Investment
securities          164,483     164,450     167,583     195,963    191,039
available for sale
Mortgage-backed
securities          9,792       5,278       5,576       6,029      6,386
available for sale
Mortgage-backed
securities held to  3,221       3,363       3,479       3,581      3,730
maturity – at cost
Loans receivable,   337,048     333,983     333,447     340,414    343,836
net ^(1)
Other assets        61,324      62,564      61,577      60,881     53,086
Total Assets        $591,741    $598,294    $620,250    $631,982   $633,434
                                                              
LIABILITIES:                                                   
Deposits            $471,493    $477,381    $486,207    $490,646   $494,929
Advances from the
Federal Home Loan   20,108      21,197      22,331      24,314     25,399
Bank
Other liabilities   7,008       6,012       6,526       9,122      5,728
Total Liabilities   498,609     504,590     515,064     524,082    526,056
Total Shareholders' 93,132      93,704      105,186     107,900    107,378
equity
Total Liabilities &
Shareholders'       $591,741    $598,294    $620,250    $631,982   $633,434
equity


                  
                  For the Three Months Ended
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                 9/30/2013   6/30/2013   3/31/2013   12/31/2012  9/30/2012
                  (In thousands, except per share data)
                                                              
Total interest     $4,682      $4,860      $5,081      $5,292      $5,368
income
Total interest     1,065       1,103       1,160       1,271       1,363
expense
Net interest       3,617       3,757       3,921       4,021       4,005
income
Provision for      585         285         55          290         590
losses on loans
Net interest
income after
provision          3,032       3,472       3,866       3,731       3,415
forlosses on
loans
Total other        511         542         947         1,035       1,136
income
Total general,
administrative and 3,578       3,696       3,687       3,674       3,858
otherexpense
Earnings (loss)
before income      (35)        318         1,126       1,092       693
taxes
Federal income     (56)        53          335         327         194
taxes (benefit)
Net earnings      $21         $265        $791        $765        $499
                                                              
Earnings per share
– basic and        $0.00       $0.04       $0.11       $0.10       $0.07
diluted
                                                              
^(1) Includes loans held for sale, net of allowance for loan losses and
deferred loan costs.


Cheviot Financial Corp.
SELECTED FINANCIAL AND OTHER DATA
                                                                                
                                                                                
                For the Three Months Ended
                (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                9/30/2013   6/30/2013   3/31/2013   12/31/2012  9/30/2012
                                                            
Selected
Financial Ratios                                             
and Other
Data:^(1)
Performance                                                  
Ratios:
Return on        0.01%       0.17%       0.51%       0.48%       0.31%
average assets
Return on        0.09        1.02        2.93        2.83        1.84
average equity
Average equity
to average       15.81       16.87       17.30       17.09       17.03
assets
Net interest     2.79        2.86        2.91        2.88        2.89
margin ^(2)
Interest rate    2.75        2.82        2.86        2.82        2.82
spread ^(2)
Average
interest-earning
assets to        104.75      104.43      105.84      107.61      106.35
average
interest-bearing
liabilities
Total general,
administrative
and other        2.40        2.40        2.36        2.32        2.43
expenses to
average total
assets
Efficiency ratio 86.68       85.97       75.74       72.67       75.04
^(3)
                                                            
Other Financial                                              
Ratios:
Basic earnings   $0.00       $0.04       $0.11       $0.10       $0.07
per share
Diluted earnings $0.00       $0.04       $0.11       $0.10       $0.07
per share
Tangible book
value per common $11.95      $12.03      $12.72      $12.68      $12.67
share
Shares           6,836,903   6,836,903   7,363,326   7,596,557   7,596,557
outstanding
Weighted average 6,628,648   6,905,946   7,300,012   7,348,785   7,348,351
shares
Weighted average 6,635,467   6,913,638   7,306,700   7,354,823   7,355,046
diluted shares
                                                            
Asset Quality                                                
Ratios:
Nonperforming
loans as a       2.76%       2.88%       3.59%       3.14%       3.36%
percent of net
loans ^(4)
Nonperforming
assets as a      2.29        2.43        2.67        2.32        2.42
percent of total
assets ^(4)
Allowance for
loan losses as a 0.47        0.46        0.48        0.63        0.58
percent of net
loans
Allowance for
loan losses as a
percent of       11.61       10.52       9.71        14.73       13.05
nonperforming
assets ^(4)
Allowance for
loan losses as a
percent of net   0.56        0.55        0.59        0.81        0.79
originated loans
^(5)
Allowance for
loan losses as a
percent of net   0.44        0.43        0.45        0.54        0.41
purchased loans
^(5)
Allowance for
loan losses as a
percent of       17.79       15.21       14.23       19.41       17.75
originated
non-performing
assets ^(5)
Allowance for
loan losses as a
percent of       10.04       9.58        9.85        11.17       8.70
purchased
non-performing
assets ^(6)
Net charge-offs
to average       0.11        0.11        0.18        0.17        0.14
loans
                                                            
Regulatory                                                   
Capital Ratios:
Tangible         13.47%      13.31%      12.77%      12.39%      12.56%
capital
Core capital    13.47       13.31       12.77       12.39       12.56
Risk-based       25.50       25.67       25.30       25.60       26.31
capital
                                                            
Number of:                                                   
Banking offices 12          12          12          12          12
                                                            
(1) With the exception of end of period ratios, all ratios are based on
average monthly balances during the periods.
(2) Interest rate spread represents the difference between the
weighted-average yield on interest-earning assets and the weighted‑average
rate on interest-bearing liabilities.Net interest margin represents net
interest income as a percentage of average interest-earning assets.
(3) Efficiency ratio represents the ratio of general, administrative and
other expenses divided by the sum of net interest income and total other
income.
(4) Nonperforming loans consist of non-accrual loans and accruing loans
greater than 90 days delinquent, while nonperforming assets consist of
non-performing loans and real estate acquired through foreclosure.Includes
non-performing assets acquired from First Franklin Corporation.
(5) Ratios exclude the effects of loans and non-performing assets acquired
from First Franklin Corporation, as such purchased loans and assets are
recorded at fair value at the time of acquisition, and without the related
allowance for loan losses as reflected on the target entity's financial
statements.
(6) Net purchased loans and non-performing assets includes one-to-four
family residential loans without a credit quality discount applied only.

Cheviot Savings Bank was established in 1911 and currently has twelve
full-service offices in Hamilton County, Ohio.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this release which are not historical facts are
forward-looking and involve risks and uncertainties. The company undertakes no
obligation to update any forward-looking statement.

CONTACT: Thomas J. Linneman
         513-661-0457