Cheviot Financial Corp. Reports Fourth-Quarter and Annual Earnings

Cheviot Financial Corp. Reports Fourth-Quarter and Annual Earnings

CINCINNATI, Jan. 31, 2014 (GLOBE NEWSWIRE) -- Cheviot Financial Corp.
(Nasdaq:CHEV), the parent company of Cheviot Savings Bank, today reported net
earnings of $355,000, or $0.06 per share for the quarter ended December 31,
2013, compared to net earnings of $765,000, or $0.10 per share for the quarter
ended December 31, 2012. Net earnings for the year ended December 31, 2013 was
$1.4 million, or $0.21 per share, compared to $3.4 million, or $0.45 per share
for the year ended December 31, 2012.

Commenting on the Corporation's performance, President and Chief Executive
Officer Thomas J. Linneman stated, "While net income during 2013 was lower
than 2012, we have focused on positioning our company to take advantage of a
rising interest rate environment and an improving local economy. During the
fourth quarter of 2013, management continued to evaluate lending operations by
focusing on allocating resources to increase our commercial lending and
improving loan quality. Non-performing loans as a percent of total loans
decreased to 2.20% at December 31, 2013 from 3.14% at December 31, 2012."

For the three months ended December 31, 2013:

Net earnings for the three months ended December 31, 2013 totaled $355,000, a
$410,000 decrease from the $765,000 earnings reported in the December 2012
period.The decrease in net earnings reflects a decrease in other income of
$334,000, a decrease of $335,000 in net interest income and an increase in the
provision for losses on loans of $228,000, which was partially offset by a
decrease in general, administrative and other expenses of $249,000 and by a
decrease of $238,000 in the provision for federal income taxes.

Total interest income decreased $603,000, or 11.4%, to $4.7 million for the
three months ended December 31, 2013, from the comparable quarter in 2012.
Interest income on loans decreased $458,000, or 10.8%, to $3.8 million during
the 2013 quarter from $4.2 million for the 2012 quarter.This decrease was due
primarily to a $4.7 million, or 1.4%, decrease in the average balance of loans
outstanding and a 48 basis point decrease in the average yield on loans to
4.49% for the 2013 quarter from 4.97% for the three months ended December 31,
2012.Interest income on mortgage-backed securities increased $14,000, or
30.4%, to $60,000 for the three months ended December 31, 2013, from $46,000
for the comparable 2012 quarter, due primarily to a $2.9 million, or 28.7%
increase in the average balance of securities outstanding and by a 2 basis
point increase in the average yield.Interest income on investment securities
decreased $141,000, or 15.7%, to $757,000 for the three months ended December
31, 2013, compared to $898,000 for the same quarter in 2012, due primarily to
a decrease of $38.0 million, or 19.2% in the average balance of investment
securities outstanding, partially offset by an 8 basis point increase in the
average yield to 1.90% in the 2013 quarter.Interest income on other
interest-earning deposits decreased $17,000, or 15.7% to $91,000 for the three
months ended December 31, 2013.

Interest expense decreased $268,000, or 21.1% to $1.0 million for the three
months ended December 31, 2013, from $1.3 million for the same quarter in
2012.Interest expense on deposits decreased by $222,000, or 20.9%, to
$842,000, from $1.1 million, due primarily to a 14 basis point decrease in the
average cost of deposits to 0.72% and a $23.7 million, or 4.8% 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 as our core
deposits increased while we had a decrease in our time deposits, as well as,
lower market rates during the 2013 period as compared with the 2012
period.Interest expense on borrowings decreased by $47,000, or 22.6%, due
primarily to a $5.2 million decrease in the average balance outstanding, and
due to a 7 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 $335,000, or 8.3%, to $3.7 million for the
three months ended December 31, 2013, as compared to the same quarter in
2012.The average interest rate spread was 2.82% for both the three months
ended December 31, 2013 and December 31, 2012.The net interest margin
decreased to 2.86% for the three months ended December 31, 2013 from 2.88% for
the three months ended December 31, 2012.

For the three months ended December 31, 2013, the company recorded a provision
for losses on loans of $518,000, as compared to $290,000 for the three months
ended December 31, 2012.At December 31, 2013 non-performing loans as a
percent of net loans decreased to 2.20% from 3.14% at December 31, 2012.This
decrease is a result of the overall decrease in non-performing loans of $3.3
million from period to period.

Other income decreased $334,000, or 32.3%, to $701,000 for the three months
ended December 31, 2013, compared to the same quarter in 2012.The decrease is
due primarily to a decrease in the gain on sale of loans of $222,000.

General, administrative and other expense decreased $249,000, or 6.8%, to $3.4
million for of the three months ended December 31, 2013.This decrease is
primarily a result of a decrease in employee compensation and benefits of
$159,000 and a decrease of $119,000 in legal and professional expense, which
was partially offset by an increase of $67,000 in property, payroll and other
taxes.

The provision for federal income taxes decreased $238,000, or 72.8%, for the
three months ended December 31, 2013.

For the year ended December 31, 2013:

Cheviot Financial's net earnings totaled $1.4 million for the year ended
December 31, 2013, a decrease of $1.9 million, or 57.3%, compared to the net
earnings recorded for the year ended December 31, 2012.Our earnings for the
year were adversely affected by a significant slowdown in our mortgage banking
operation.The decrease in net earnings reflects a decrease in net interest
income of $1.1 million, an increase of $163,000 in the provision for losses on
loans, and a decrease in other income of $1.6 million, which was partially
offset by a decrease of $175,000 in general, administrative and other expense
and a decrease of $797,000 in the provision for federal income taxes.

Total interest income for the year ended December 31, 2013, totaled $19.3
million, a decrease of $2.4 million, or 11.0%, compared to the year ended
December 31, 2012.The decrease in interest income is a result of a 27 basis
point decrease in the average yield on interest-earning assets to 3.68% from
3.95%, and by a $25.1 million decrease in the average balance outstanding
during the year ended December 31, 2013 as compared to the year ended December
31, 2012.Interest income on loans decreased by $2.4 million, or 13.5%, for
the year ended December 31, 2013.The decrease in interest income on loans was
due primarily to a decrease of $24.3 million, or 6.8% in average loans
outstanding and by a 37 basis point decrease in the average yield on loans to
4.65% for the 2013 period from 5.02% for the 2012 period.Interest income on
mortgage-backed securities decreased by $8,000, or 3.9%, during the year ended
December 31, 2013, due primarily to a decrease in the average yield of 12
basis points from 2012, which was partially offset by a $235,000 increase in
the average balance outstanding. Interest income on investment securities
increased by $92,000, or 3.0%, during the year ended December 31, 2013, due to
an increase of $6.6 million, or 4.0%, increase in the average balance
outstanding which was partially offset by a decrease in the average yield of 1
basis point from 2012.Interest income on other interest-earning deposits
decreased by $19,000, or 4.8%, during the year ended December 31, 2013.

Interest expense totaled $4.3 million for the year ended December 31, 2013, a
decrease of $1.3 million, or 22.7%, compared to the year ended December 31,
2012.The average balance of interest-bearing liabilities outstanding
decreased by $23.9 million during 2013 and the average cost of liabilities
decreased by 20 basis points to 0.87% for the year ended December 31,
2013.Interest expense on deposits totaled $3.6 million for the year ended
December 31, 2013, a decrease of $1.1 million, or 22.7%, from the year ended
December 31, 2012.This decrease was a result of a 19 basis point decrease in
the average cost of deposits to 0.76%, and by a decrease in the average
balance outstanding of $18.0 million, or 3.6% during 2013.The decrease in the
average cost of deposits is due to the overall changes in our deposit
composition and lower market rates for the 2013 period.Interest expense on
borrowings totaled $709,000 for the year ended December 31, 2013, a decrease
of $208,000, or 22.7%, from the 2012 period.This decrease resulted from a
decrease of $5.9 million in the average balance of borrowings outstanding, and
by a 5 basis point decrease in the average costs of borrowings for the year
ended December 31, 2013.

As a result of the foregoing changes in interest income and interest expense,
net interest income decreased by $1.1 million, or 6.9%, during the year ended
December 31, 2013 from the year ended December 31, 2012. The average interest
rate spread decreased to 2.81% for the year ended December 31, 2013 from 2.88%
for the year ended December 31, 2012.The net interest margin decreased to
2.86% for the year ended December 31, 2013 from 2.93% for the year ended
December 31, 2012.

For the year ended December 31, 2013, the Corporation recorded a provision for
losses on loans of $1.4 million, as compared to $1.3 million for the year
ended December 31, 2012.The increase in the provision for losses on loans is
a result in approximately $1.9 million in loans charged-off during the year
ended December 31, 2013, as compared to $568,000 in loans charged-off during
the year ended December 31, 2012.

Other income decreased $1.6 million, or 37.6%, to $2.7 million for the year
ended December 31, 2013, compared to the same period in 2012, due to a loss of
$255,000 on sale of office premises and equipment comprised of the former
Franklin Savings headquarters, a decrease in the gain on sale of loans of
$933,000, which reflected the decrease in our mortgage banking operations and
the absence during the 2013 period of a gain on death benefits from life
insurance of $492,000.

General, administrative and other expense decreased $175,000, or 1.2%, to
$14.4 million for the year ended December 31, 2013, from $14.6 million for the
comparable period in 2012.The decrease is a result of $144,000 decrease in
employee compensation and benefits, a decrease of $116,000 in real estate
owned expense, a decrease of $115,000 in legal and professional expense and a
decrease of $63,000 in occupancy and equipment expense, which was partially
offset by an increase in other operating expense of $250,000. The increase in
other operating expense is the result of fair market value adjustments in real
estate properties acquired through foreclosure.

The provision for federal income taxes totaled $421,000 for the year ended
December 31, 2013, a decrease of $797,000, or 65.4%, compared to the provision
recorded for the 2012 period.The effective tax rates were 22.7% and 26.6% for
the years ended December 31, 2013 and 2012, respectively.

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

At December 31, 2013, total assets were $587.1 million, compared with $632.0
million at December 31, 2012.Total assets decreased $44.9 million, or 7.1%,
primarily due to the decrease in investment securities of $42.0 million and a
decrease in loans receivable of $3.6 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 $11.8
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 $39.6 million and principal
repayments of $67.7 million, which was partially offset by loan originations
of $103.1 million and loans purchased of $4.2 million.

Total liabilities were $496.2 million at December 31, 2013, a decrease of
$27.9 million, or 5.3% compared to $524.1 million at December 31, 2012.The
decrease in total liabilities is a result of a decrease of $21.3 million, or
4.3% in total deposits which totaled $469.4 million at December 31, 2013, as
compared to $490.6 million at December31, 2012.Advances from the Federal
Home Loan Bank of Cincinnati decreased by $5.1 million, or 20.8%, to $19.3
million at December 31, 2013, from $24.3 million at December 31, 2012.The
decrease is a result of approximately $5.0 million in repayments during the
year ended December 31, 2013.

Shareholders' equity at December 31, 2013 was $90.9 million, a decrease $17.0
million, or 15.7%, from December 31, 2012.The decrease primarily resulted
from purchasing 761,754 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 $2.4 million and an increase in the unrealized loss on
securities designated as available for sale of $7.8 million, which was
partially offset by net income of $1.4 million.At December 31, 2013, tangible
book value per share was $11.72 as compared to $12.75 at December 31,
2012.Tangible book value per share was adversely affected by the decrease in
the fair market value of investment securities designated as available for
sale as other comprehensive loss increased during the 2013 period.Over
time, the impact of the other comprehensive loss on our tangible book value
per share will decrease as investments are called or mature at par, 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 consolidated selected financial and other data
of Cheviot Financial Corp. at the dates and for the periods presented.
                                                          
                                                          
                                      For the Twelve Months Ended
                                      (Unaudited)
                                      12/31/2013           12/31/2012
Selected Operating Data:                                   
Total interest income                  $19,312              $21,689
Total interest expense                 4,331                5,601
Net interest income                    14,981               16,088
Provision for losses on loans          1,443                1,280
Net interest income after provision    13,538               14,808
for losses on loans
Total other income                     2,701                4,326
Total general, administrative          14,386               14,561
andother expense
Earnings before income taxes           1,853                4,573
Federal income taxes                   421                  1,218
Net earnings                           $1,432               $3,355
                                                          
Earnings per share – basic and diluted $0.21                $0.45

                                                               
                   (Unaudited) (Unaudited) (Unaudited) (Unaudited) 
                   12/31/2013  9/30/2013   6/30/2013   3/31/2013   12/31/2012
ASSETS:             (In thousands)
Cash and cash       $22,112     $15,873     $28,656     $48,588     $25,114
equivalents
Investment
securities          153,942     164,483     164,450     167,583     195,963
available for sale
Mortgage-backed
securities          9,361       9,792       5,278       5,576       6,029
available for sale
Mortgage-backed
securities held to  3,116       3,221       3,363       3,479       3,581
maturity – at cost
Loans receivable,   336,837     337,048     333,983     333,447     340,414
net ^(1)
Other assets        61,742      61,324      62,564      61,577      60,881
Total Assets        $587,110    $591,741    $598,294    $620,250    $631,982
                                                               
LIABILITIES:                                                    
Deposits            $469,387    $471,493    $477,381    $486,207    $490,646
Advances from the
Federal Home Loan   19,261      20,108      21,197      22,331      24,314
Bank
Other liabilities   7,535       7,008       6,012       6,526       9,122
Total Liabilities   496,183     498,609     504,590     515,064     524,082
Total Shareholders' 90,927      93,132      93,704      105,186     107,900
equity
Total Liabilities &
Shareholders'       $587,110    $591,741    $598,294    $620,250    $631,982
equity

                  
                  For the Three Months Ended
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                  12/31/2013  9/30/2013   6/30/2013   3/31/2013   12/31/2012
                  (In thousands, except per share data)
                                                              
Total interest     $4,689      $4,682      $4,860      $5,081      $5,292
income
Total interest     1,003       1,065       1,103       1,160       1,271
expense
Net interest       3,686       3,617       3,757       3,921       4,021
income
Provision for      518         585         285         55          290
losses on loans
Net interest
income after       3,168       3,032       3,472       3,866       3,731
provision for
losses on loans
Total other        701         511         542         947         1,035
income
Total general,
administrative and 3,425       3,578       3,696       3,687       3,674
other expense
Earnings (loss)
before income      444         (35)        318         1,126       1,092
taxes
Federal income     89          (56)        53          335         327
taxes (benefit)
Net earnings      $355        $21         $265        $791        $765
                                                              
Earnings per share
– basic and        $0.06       $0.00       $0.04       $0.11       $0.10
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)
                  12/31/2013  9/30/2013   6/30/2013   3/31/2013   12/31/2012
                                                              
Selected Financial
Ratios and Other                                               
Data:^(1)
Performance                                                    
Ratios:
Return on average  0.24%       0.01%       0.17%       0.51%       0.48%
assets
Return on average  1.52        0.09        1.02        2.93        2.83
equity
Average equity to  15.87       15.81       16.87       17.30       17.09
average assets
Net interest       2.86        2.79        2.86        2.91        2.88
margin ^(2)
Interest rate      2.82        2.75        2.82        2.86        2.82
spread ^(2)
Average
interest-earning
assets to average  105.33      104.75      104.43      105.84      107.61
interest-bearing
liabilities
Total general,
administrative and
other expenses to  2.32        2.40        2.40        2.36        2.32
average total
assets
Efficiency ratio   78.07       86.68       85.97       75.74       72.63
^(3)
                                                              
Other Financial                                                
Ratios:
Basic earnings per $0.06       $0.00       $0.04       $0.11       $0.10
share
Diluted earnings   $0.06       $0.00       $0.04       $0.11       $0.10
per share
Tangible book
value per common   $11.72      $12.02      $12.11      $12.79      $12.75
share
Shares             6,834,803   6,836,903   6,836,903   7,363,326   7,596,557
outstanding
Weighted average   6,628,306   6,628,648   6,905,946   7,300,012   7,348,785
shares
Weighted average   6,633,549   6,635,467   6,913,638   7,306,700   7,354,823
diluted shares
                                                              
Asset Quality                                                  
Ratios:
Nonperforming
loans as a percent 2.20%       2.76%       2.88%       3.59%       3.14%
of net loans ^(4)
Nonperforming
assets as a        1.82        2.29        2.43        2.67        2.32
percent of total
assets ^(4)
Allowance for loan
losses as a        0.50        0.47        0.46        0.48        0.63
percent of net
loans
Allowance for loan
losses as a
percent of         15.88       11.61       10.52       9.71        14.73
nonperforming
assets ^(4)
Allowance for loan
losses as a
percent of net     0.58        0.56        0.55        0.59        0.81
originated loans
^(5)
Allowance for loan
losses as a
percent of net     0.53        0.44        0.43        0.45        0.54
purchased loans
^(5)
Allowance for loan
losses as a
percent of         25.38       17.79       15.21       14.23       19.41
originated
non-performing
assets ^(5)
Allowance for loan
losses as a
percent of         9.64        10.04       9.58        9.85        11.17
purchased
non-performing
assets ^(6)
Net charge-offs to 0.38        0.11        0.11        0.18        0.17
average loans
                                                              
Regulatory Capital                                             
Ratios:
Tangible capital  13.46%      13.47%      13.31%      12.77%      12.39%
Core capital      13.46       13.47       13.31       12.77       12.39
Risk-based         25.26       25.50       25.67       25.30       25.60
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
 
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