Cheviot Financial Corp. Reports Second-Quarter Earnings

Cheviot Financial Corp. Reports Second-Quarter Earnings

CINCINNATI, Aug. 4, 2014 (GLOBE NEWSWIRE) -- Cheviot Financial Corp.
(Nasdaq:CHEV), the parent company of Cheviot Savings Bank, today reported net
earnings for the second fiscal quarter of 2014 of $527,000, or $0.08 cents per
share based upon 6,607,066 weighted average shares outstanding at June 30,
2014. Net earnings for the three months ended June 30, 2013 totaled $265,000
or $0.04 cents per share based upon 6,905,946 weighted average shares
outstanding at June 30, 2013.

For the three months ended June 30, 2014:

Net earnings for the three months ended June 30, 2014 totaled $527,000, a
$262,000 increase from the $265,000 earnings reported in the June 2013 period.
The increase in net earnings reflects an increase in other income of $415,000
and a decrease of $122,000 in general, administrative and other expenses,
which were partially offset by a decrease of $55,000 in net interest income,
an increase of $70,000 in the provision for losses on loans and an increase of
$150,000 in the provision for federal income taxes.

Total interest income decreased $254,000, or 5.2%, to $4.6 million for the
three months ended June 30, 2014, from the comparable quarter in 2013.
Interest income on loans decreased $276,000, or 7.0%, to $3.7 million during
the 2014 quarter from $3.9 million for the 2013 quarter. This decrease was due
primarily to a $2.8 million, or 0.8%, decrease in the average balance of loans
outstanding and a 29 basis point decrease in the average yield on loans to
4.44% for the 2014 quarter from 4.73% for the three months ended June 30,
2013. Interest income on mortgage-backed securities increased $11,000, or
26.8%, to $52,000 for the three months ended June 30, 2014, from $41,000 for
the comparable 2013 quarter, due primarily to a $3.0 million, or 34.1%
increase in the average balance of securities outstanding, which was partially
offset by a 10 basis point decrease in the average yield. Interest income on
investment securities increased $19,000, or 2.4%, to $796,000 for the three
months ended June 30, 2014, compared to $777,000 for the same quarter in 2013,
due primarily to a 40 basis point increase in the average yield to 2.16% in
the 2014 quarter, which was partially offset by a decrease of $29.3 million in
the average balance of investment securities outstanding. Interest income on
other interest-earning deposits decreased $8,000, or 8.2% to $90,000 for the
three months ended June 30, 2014.

Interest expense decreased $199,000, or 18.0% to $904,000 for the three months
ended June 30, 2014, from $1.1 million for the same quarter in 2013. Interest
expense on deposits decreased by $153,000, or 16.6%, to $767,000, from
$920,000, due primarily to a 10 basis point decrease in the average costs of
deposits to 0.66% and a $15.4 million, or 3.2% 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 $46,000, or 25.1%, due
primarily to a $5.0 million decrease in the average balance outstanding and
due to a 11 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 $55,000, or 1.5%, to $3.7 million for the
three months ended June 30, 2014, as compared to the same quarter in 2013. The
average interest rate spread increased to 2.95% for the three months ended
June 30, 2014 from 2.82% for the three months ended June 30, 2013. The net
interest margin increased to 2.98% for the three months ended June 30, 2014
from 2.86% for the three months ended June 30, 2013.

For the three months ended June 30, 2014, the company recorded a provision for
losses on loans of $355,000, as compared to $285,000 for the three months
ended June 30, 2013. At June 30, 2014 non-performing loans as a percent of net
loans decreased to 1.5% from 2.9% at June 30, 2013. This decrease is a result
of the overall decrease in non-performing loans of $4.8 million from period
end to period end.

Other income increased $415,000, or 76.6%, to $957,000 for the three months
ended June 30, 2014, compared to the same quarter in 2013, due primarily to
the gain on sale of investment securities designated as available-for-sale of
$281,000 and the absence during the 2014 period of a loss on sale of office
premises and equipment of $255,000. During the quarter ended June 30, 2013,
the Company sold the former Franklin Savings headquarters.

General, administrative and other expense decreased $122,000, or 3.3%, to $3.6
million for of the three months ended June 30, 2014. This decrease is a result
of a decrease in employee compensation and benefits of $232,000, a decrease in
occupancy and equipment of $74,000, a decrease of $83,000 in property, payroll
and other taxes, a decrease of $45,000 in legal and other professional
expenses, which was partially offset by a $142,000 increase in the impairment
of real estate owned expense.

The provision for federal income taxes increased $150,000 for the three months
ended June 30, 2013.The effective tax rate for the three months ended June
30, 2014 was 27.8%.

For the six months ended June 30, 2014:

Net earnings for the six months ended June 30, 2014 totaled $1.3 million, a
$286,000 increase from the $1.1 million in net earnings reported for the June
2013 period.The increase in net earnings reflects an increase in other income
of $522,000 and a decrease of $394,000 in general, administrative and other
expense, which were partially offset by a decrease in net interest income of
$252,000, an increase of $215,000 in the provision for losses on loans and an
increase in the provision for federal income taxes of $163,000.

Total interest income decreased $692,000, or 7.0%, to $9.2 million for the six
months ended June 30, 2014, from the comparable period in 2013.Interest
income on loans decreased $606,000, or 7.6%, to $7.4 million during the 2014
period from $8.0 million for the 2013 period.This decrease was due primarily
to a $3.3 million decrease in the average balance of loans outstanding and by
a 32 basis point decrease in the average yield to 4.47% from 4.79% in the 2013
period.Interest income on mortgage-backed securities increased $30,000, or
36.6%, to $112,000 for the six months ended June 30, 2014, from $82,000 for
the 2013 period, due primarily to an increase of $3.0 million in the average
balance of securities outstanding and by a five basis point increase in yield
period over period.Interest income on investment securities decreased
$98,000, or 6.0%, to $1.5 million for the six months ended June 30, 2014,
compared to $1.6 million for the same period in 2013, due primarily to a
decrease of $31.4 million, or 17.4%, in the average balance of investment
securities outstanding, which was partially offset by a 25 basis point
increase in the average yield to 2.07% for the 2014 period. Interest income on
other interest-earning deposits decreased $18,000, or 9.2%, to $178,000 for
the six months ended June 30, 2014, as compared to the same period in 2013.

Interest expense decreased $440,000, or 19.4%, to $1.8 million for the six
months ended June 30, 2014, from $2.3 million for the same period in
2013.Interest expense on deposits decreased by $349,000, or 18.5%, to $1.5
million from $1.9 million, due primarily to an $18.9 million decrease in the
average balance outstanding, which was partially offset by 12 basis point
decrease in the average costs of deposits to 0.66% during the 2013
period.Interest expense on borrowings decreased by $91,000, or 24.1%, due
primarily to a $4.9 million, or 21.5%, decrease in the average balance
outstanding and a 11 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 $252,000, or 3.3%, to $7.4 million for the
six months ended June 30, 2014.The average interest rate spread increased 10
basis points to 2.94% for the six months ended June 30, 2014 from 2.84% for
the six months ended June 30, 2013.The net interest margin increased to 2.97%
for the six months ended June 30, 2014 from 2.88% for the six months ended
June 30, 2013.

For the six months ended June 30, 2014, the company recorded a provision for
losses on loans of $555,000, as compared to $340,000 for the six months ended
June 30, 2013.

Other income increased $522,000, or 35.1%, to $2.0 million for the six months
ended June 30, 2014, compared to the same period in 2013, due primarily to the
gain on sale of investment securities designated as available for sale of
$722,000 and the absence during the 2014 period of a loss on sale of office
premises and equipment of $255,000, which were partially offset by a $258,000
decrease in the gain on sale of loans and a decrease of $163,000 in other
operating income. 

General, administrative and other expense decreased $394,000, or 5.3%, to $7.0
million for the six months ended June 30, 2014, from $7.4 million for the
comparable period in 2013.The decrease is a result of a decrease of $441,000
in employee compensation and benefits, a decrease of $100,000 in occupancy and
equipment, a decrease of $158,000 in property, payroll and other taxes, which
were partially offset by an increase of $237,000 in real estate owned loss
expense.

The provision for federal income taxes increased $163,000, or 42.1%, for the
six months ended June 30, 2014.The effective tax rate for the six months
ended June 30, 2013 was 29.1%.

Financial Condition Changes at June 30, 2014 and December 31, 2013:

At June 30, 2014, total assets were $581.0 million, compared with $587.1
million at December 31, 2013.Total assets decreased $6.1 million, or 1.0%,
primarily due to the decrease in investment securities of $9.8 million and a
decrease in loans receivable of $8.7 million.The decrease in investment
securities was a result of calls of $30.0 million and the sale of corporate
securities of $2.5 million, which were offset by an increase in the fair
market value of securities designated as available for sale of $7.0 million.
The decrease in loans receivable resulted from the sale of loans in the
secondary market of $11.0 million and principal repayments of $32.3 million,
which were partially offset by loan originations of $35.4 million.

Total liabilities were $486.7 million at June 30, 2014, a decrease of $9.5
million, or 1.9% compared to $496.2 million at December 31, 2013.The decrease
in total liabilities is a result of a decrease of $5.5 million, or 1.2% in
total deposits which totaled $463.9 million at June 30, 2014, as compared to
$469.4 million at December31, 2013.Advances from the Federal Home Loan Bank
of Cincinnati decreased by $3.1 million, or 16.0%, to $16.2 million at June
30, 2014, from $19.3 million at December 31, 2013.The decrease is a result of
approximately $3.0 million in repayments during the six months ended June 30,
2014.

Shareholders' equity at June 30, 2014 was $94.3 million, an increase of $3.4
million, or 3.8%, from December 31, 2013.The increase primarily resulted from
net income of $1.3 million and a decrease in the unrealized loss on securities
designated as available for sale of $4.7 million, which were partially offset
by repurchasing 127,000 shares at an average price of $11.37 per share through
the stock buyback program for a total cost of $1.5 million and dividend
payments on common stock of $1.2 million.At June 30, 2014, tangible book
value per share was $12.46 as compared to $11.72 at December 31,
2013.Tangible book value per share was affected by the increase in the fair
market value of investment securities designated as available for sale as
other comprehensive loss decreased during the 2014 period.At June 30, 2014,
other comprehensive loss was $2.5 million. 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 Six Months Ended
                                                     (Unaudited)  (Unaudited)
                                                     6/30/2014    6/30/2013
Selected Operating Data:                                          
Total interest income                                 $9,249       $9,941
Total interest expense                                1,824        2,264
Net interest income                                   7,425        7,677
Provision for losses on loans                         555          340
Net interest income afterprovision for losses on     6,870        7,337
loans
Total other income                                    2,011        1,489
Total general, administrative andother expense       6,989        7,383
Earnings before income taxes                          1,892        1,443
Federal income taxes                                  550          387
Net earnings                                          $1,342       $1,056
                                                                 
Earnings per share – basic and diluted                $0.20        $0.15
                                                                 

                                                              
                   (Unaudited) (Unaudited)           (Unaudited) (Unaudited)
                   6/30/2014   3/31/2014   12/31/2013 9/30/2013   6/30/2013
ASSETS:             (In thousands)
Cash and cash       $39,057     $39,816     $22,112    $15,873     $28,656
equivalents
Investment
securities          144,123     140,702     153,942    164,483     164,450
available for sale
Mortgage-backed
securities          8,667       9,130       9,361      9,792       5,278
available for sale
Mortgage-backed
securities held to  2,880       2,995       3,116      3,221       3,363
maturity – at cost
Loans receivable,   328,187     332,213     336,837    337,048     333,983
net ^(1)
Other assets        58,129      59,397      61,742     61,324      62,564
Total Assets        $581,043    $584,253    $587,110   $591,741    $598,294
                                                              
LIABILITIES:                                                   
Deposits            $463,889    $466,635    $469,387   $471,493    $477,381
Advances from the
Federal Home Loan   16,187      17,801      19,261     20,108      21,197
Bank
Other liabilities   6,626       7,122       7,535      7,008       6,012
Total Liabilities   486,702     491,558     496,183    498,609     504,590
Total Shareholders' 94,341      92,695      90,927     93,132      93,704
equity
Total Liabilities &
Shareholders'       $581,043    $584,253    $587,110   $591,741    $598,294
equity
                                                              
(1) Includes loans held for sale, net of allowance for loan losses and
deferred loan costs.


                  
                  For the Three Months Ended
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                  6/30/2014   3/31/2014   12/31/2013  9/30/2013   6/30/2013
                  (In thousands, except per share data)
                                                              
Total interest     $4,606      $4,642      $4,689      $4,682      $4,860
income
Total interest     904         919         1,003       1,065       1,103
expense
Net interest       3,702       3,723       3,686       3,617       3,757
income
Provision for      355         200         518         585         285
losses on loans
Net interest
income after       3,347       3,523       3,168       3,032       3,472
provision for
losses on loans
Total other income 957         1,054       701         511         542
Total general,
administrative and 3,574       3,416       3,425       3,578       3,696
other expense
Earnings (loss)
before income      730         1,161       444         (35)        318
taxes
Federal income     203         346         89          (56)        53
taxes (benefit)
Net earnings       $527        $815        $355        $21         $265
                                                              
Earnings per share
– basic and        $0.08       $0.12       $0.06       $0.00       $0.04
diluted



Cheviot Financial Corp.
SELECTED FINANCIAL AND OTHER DATA
                                                              
                  For the Three Months Ended
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                  6/30/2014   3/31/2014   12/31/2013  9/30/2013   6/30/2013
                                                              
Selected Financial
Ratios and Other                                               
Data:^(1)
Performance                                                    
Ratios:
Return on average  0.36%       0.56%       0.24%       0.01%       0.17%
assets
Return on average  2.26        3.56        1.52        0.09        1.02
equity
Average equity to  15.97       15.79       15.87       15.81       16.87
average assets
Net interest       2.98        2.96        2.86        2.79        2.86
margin ^(2)
Interest rate      2.95        2.93        2.82        2.75        2.82
spread ^(2)
Average
interest-earning
assets to average  102.92      104.43      105.33      104.75      104.43
interest-bearing
liabilities
Total general,
administrative and
other expenses to  2.45        2.35        2.32        2.40        2.40
average total
assets
Efficiency ratio   76.73       71.52       78.07       86.68       85.97
^(3)
                                                              
Other Financial                                                
Ratios:
Basic earnings per $0.08       $0.12       $0.06       $0.00       $0.04
share
Diluted earnings   $0.08       $0.12       $0.06       $0.00       $0.04
per share
Tangible book
value per common   $12.46      $12.05      $11.72      $12.02      $12.11
share
Shares outstanding 6,707,803   6,793,903   6,834,803   6,836,903   6,836,903
Weighted average   6,607,066   6,653,983   6,628,306   6,628,648   6,905,946
shares
Weighted average   6,612,977   6,658,492   6,633,549   6,635,467   6,913,638
diluted shares
                                                              
Asset Quality                                                  
Ratios:
Nonperforming
loans as a percent 1.47%       1.67%       2.20%       2.76%       2.88%
of net loans ^(4)
Nonperforming
assets as a        1.31        1.46        1.82        2.29        2.43
percent of total
assets ^(4)
Allowance for loan
losses as a        0.61        0.52        0.50        0.47        0.46
percent of net
loans
Allowance for loan
losses as a
percent of         26.14       20.25       15.88       11.61       10.52
nonperforming
assets ^(4)
Allowance for loan
losses as a
percent of net     0.61        0.59        0.58        0.56        0.55
originated loans
^(5)
Allowance for loan
losses as a        0.71        0.53        0.53        0.44        0.43
percent of net
purchased loans
Allowance for loan
losses as a
percent of         43.15       32.09       25.38       17.79       15.21
originated
non-performing
assets ^(5)
Allowance for loan
losses as a
percent of         14.39       11.50       9.64        10.04       9.58
purchased
non-performing
assets
Net charge-offs to 0.08        0.05        0.38        0.11        0.11
average loans
                                                              
Regulatory Capital                                             
Ratios:
Tangible capital   13.73%      13.59%      13.46%      13.47%      13.31%
Core capital       13.73       13.59       13.46       13.47       13.31
Risk-based capital 26.50       25.70       25.26       25.50       25.67
                                                              
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.
    Interest rate spread represents the difference between the
(2) 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.
    Nonperforming loans consist of non-accrual loans and accruing loans
(4) 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.

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
 
Press spacebar to pause and continue. Press esc to stop.