Highlights
* Net loss for the second quarter of fiscal 2009 was $2.6 million
primarily driven by a high level of provision for loan losses,
along with losses in the fair value of securities and impairment
of mortgage loan servicing rights;
* Declining rates during the quarter resulted in an increase in
mortgage banking activity and gains of $2.1 million, an increase
of $1.0 million from the year ago quarter;
* The allowance for loan losses grew $2.1 million or 6.8% during
the current quarter to $33.6 million or 1.28% of loans, up from
1.19% of loans at September 30, 2008;
* Deposits increased $135 million or 5.6% during the current
quarter, including $125 million of organic growth;
* The Board of Directors declared their 40th consecutive quarterly
cash dividend. The dividend was $0.01 per share, a decrease from
the $0.085 per share paid the two previous quarters.
Summary
WARREN, Ohio, Jan. 20, 2009 (GLOBE NEWSWIRE) -- First Place Financial Corp. (Nasdaq:FPFC) reported a net loss of $2.6 million for the quarter ended December 31, 2008 compared with a net loss of $3.1 million for the quarter ended December 31, 2007. The change was primarily due to a decrease of $5.9 million in impairment of securities and a decrease of $1.4 million in income tax expense, partially offset by an increase of $4.0 million in the provision for loan losses and a $2.5 million charge for a decline in the fair value of securities. Net loss per share for the current quarter was $0.16 compared with a net loss per share of $0.20 for the same quarter in the prior year. Return on average equity and return on average tangible equity for the current quarter were -3.35% and -5.12% respectively, compared with -3.93% and -5.91% for the same quarter in the prior year.
The net loss of $2.6 million for the quarter ended December 31, 2008 represented an improvement of $3.6 million from a net loss of $6.2 million for the preceding quarter ended September 30, 2008. The decrease of $6.8 million in pre-tax charges for changes in the fair value of securities was the primary cause for this decrease. Net loss per share for the current quarter was $0.16 compared with a net loss per share of $0.37 for the preceding quarter ended September 30, 2008. Return on average equity and return on average tangible equity for the current quarter were -3.35% and -5.12% respectively, compared with -7.74% and -11.71% for the preceding quarter ended September 30, 2008.
For the six months ended December 31, 2008, the Company reported a net loss of $8.8 million compared with net income of $3.1 million for the same period in the prior year. The decrease was primarily due to an $11.9 million charge for a decline in the fair value of securities and an increase of $9.4 million in the provision for loan losses, partially offset by decreases of $5.9 million in impairment of securities and $5.5 million in income tax expense. Net loss per share was $0.53 for the first half of fiscal 2009 compared with diluted net earnings per share of $0.19 for the same period in the prior year. Return on average assets and return on average equity for the six months ended December 31, 2008 were -0.52% and -5.58% respectively, compared with 0.19% and 1.93% for the six months ended December 31, 2007.
Core earnings are a supplementary financial measure computed using methods other than generally accepted accounting principles (GAAP) that exclude certain unusual or nonrecurring items of revenue or expense. For the second quarter of fiscal 2009, the $1.1 million pre-tax charge for merger, integration and restructuring expenses relating to Camco Financial Corporation (Camco) has been excluded from core earnings. The agreement whereby the Company was to acquire Camco was terminated by mutual consent in November 2008. For the same quarter in the prior year, the $0.8 million pre-tax charge for merger, integration and restructuring expenses relating to the acquisition of HBLS Bank in Hicksville, Ohio has been excluded from core earnings. For the six months ended December 31, 2008, the $1.1 million pre-tax charge for merger, integration and restructuring expenses has been excluded from core earnings. For the six months ended December 31, 2007, the $0.8 million pre-tax charge for merger, integration and restructuring expenses has been excluded from core earnings. For additional information on core earnings, see the Explanation of Certain Non-GAAP Measures beginning on page five of this release and the Reconciliation of GAAP Net Income to Core Earnings on page nine.
The core net loss for the quarter ended December 31, 2008 was $1.9 million compared with a core net loss of $2.6 million for the quarter ended December 31, 2007. Core loss per share was $0.11 for the current quarter compared with a core loss per share of $0.16 for the same quarter in the prior year. Core return on average equity and core return on average tangible equity for the current quarter were -2.46% and -3.76% respectively, compared with -3.28% and -4.94% for the same quarter in the prior year.
The core net loss for the six months ended December 31, 2008 was $8.0 million compared with core net income of $3.6 million for the same period in the prior year. Core loss per share was $0.49 for the first six months of fiscal 2009 compare with diluted core net earnings per share of $0.22 for the first six months of fiscal 2008. Core return on average equity and core return on average tangible equity for the six months ended December 31, 2008 were -5.12% and -7.78% respectively, compared with 2.25% and 3.38% for the six months ended December 31, 2007.
Commenting on these results, Steven R. Lewis, President and CEO, stated, "For more than a year we have been dealing with economic challenges in our regional markets, particularly in the market for residential real estate in Michigan and Ohio. Through our loan charge-offs and provision for loan losses we have fully recognized the results of these current economic conditions. We have also recorded our final charges related to the Fannie Mae preferred stock, as we have sold all remaining shares in this quarter. The devaluation of this single holding has reduced pre-tax earnings $5.3 million in fiscal year 2008 and $9.1 million in the first six months of fiscal 2009. Despite these significant earnings challenges, First Place Bank remains a well-capitalized institution under all regulatory capital measures."
Revenue
Net interest income for the second quarter of fiscal 2009 was $21.3 million, a decrease of $0.3 million or 1.2% compared with $21.6 million in the second quarter of fiscal 2008. This decrease was the result of a decrease in the net interest margin of 11 basis points to 2.81% for the current quarter from 2.92% for the same quarter in the prior year, partially offset by a 2.5% increase in average earning assets in the current quarter compared with the same quarter in the prior year. Net interest income of $21.3 million for the quarter ended December 31, 2008 was a decrease of $1.7 million from net interest income of $23.0 million for the quarter ended September 30, 2008 while net interest margin of 2.81% for the current quarter decreased from net interest margin of 3.07% for the preceding quarter. The reason for the decrease in net interest margin from the September 2008 quarter was the increase in nonperforming loans and the interest rates on interest-earnings assets decreasing at a faster pace than the decline in interest rates paid on interest-bearing liabilities. The interest rates on interest-bearing liabilities declined at a slower pace due to liquidity disruptions in national markets which impacted local deposit pricing. Also in response to the liquidity disruption in the national market, balances in interest-bearing deposits in other banks were increased during the current quarter, further lowering the yield on interest-earning assets.
Noninterest income for the second quarter of fiscal 2009 was $4.5 million, an increase of $3.8 million or 536.3% compared with $0.7 million in the second quarter of fiscal 2008. This increase was primarily due to a charge of $5.9 million for impairment of securities in the second quarter of the prior year, an increase of $1.0 million in mortgage banking gains and a $0.4 million increase in service charges on deposit accounts, partially offset by a charge of $2.5 million for the decline in the fair value of securities in the current quarter and a decrease $0.8 million in loan servicing income. For the second quarter of fiscal 2008, the $5.9 million charge for other-than-temporary impairment of securities was composed of charges related to Fannie Mae and Freddie Mac preferred stocks and a mutual fund.
Effective July 1, 2008 management elected to account for Fannie Mae preferred stock and a mutual fund investment at fair value under Statement of Financial Accounting Standard No. 159, "The Fair Value Option for Assets and Financial Liabilities." As a result, the current quarter and year-to-date decreases, and future increases and decreases in the value of these securities will be recorded in earnings. Management took this action due to the recent volatility in the financial condition of Fannie Mae, volatility in the securities market in general, the subjective nature of determining other-than-temporary impairment and to more fully reflect both increases in value as well as declines in value through fair value accounting. The charge of $2.5 million for the change in the fair value of securities was due to a decline in the value of a mutual fund investment from $14.2 million at September 30, 2008 to $12.7 million at December 31, 2008 and a decline in the value of Fannie Mae preferred stock that the Company subsequently sold during the quarter. The decline in the value of the mutual fund was due to continued high rates of delinquency in the underlying mortgages and the lack of liquidity in the private mortgage-backed securities market. The Bank remains well capitalized under regulatory capital standards at December 31, 2008 after recording the fair value charges.
Mortgage banking gains were $2.1 million for the quarter ended December 31, 2008, a $1.0 million increase from the quarter ended December 31, 2007. The volume of loan sales in the current quarter was $243 million compared to $242 million for the same quarter in the prior year. The increase in mortgage banking gains was primarily due to higher margins on mortgage banking business due to the exit or contraction of certain competitors. The $0.8 million decrease in loan servicing income was primarily due to a $1.1 million impairment in loan servicing rights recorded in the current quarter compared with $0.3 million of impairment recorded in the same quarter in the prior year. Declining interest rates in November and December precipitated increased prepayment speeds, thereby devaluing the servicing rights portfolio.
Noninterest Expense
Noninterest expense for the second quarter of fiscal year 2009 was $22.9 million, an increase of $0.4 million or 1.8% compared with $22.5 million in the second quarter of fiscal year 2008. The increase in noninterest expense was primarily due to an increase of $0.9 million in other expenses, partially offset by a decrease of $0.5 million in salaries and employee benefits. The increase in other expenses was primarily due to an increase in FDIC premiums. This increase resulted from increases in premium rates and deposit balances along with the exhaustion of credits issued in 2006. Noninterest expense as a percent of average assets decreased to 2.71% for the quarter ended December 31, 2008 from 2.76% for the same quarter in the prior year. Real estate owned expense as a percent of average assets was 0.16% for the quarter ended December 31, 2008 compared with 0.21% for the quarter ended December 31, 2007. Therefore, the portion of noninterest expense not directly related to asset quality issues was 2.55% of average assets for the quarter ended December 31, 2008, unchanged from 2.55% for the quarter ended December 31, 2007.
Core noninterest expense excludes merger, integration and restructuring costs. Core noninterest expense for the quarter ended December 31, 2008 was $21.8 million, an increase of $0.1 million or 0.6% over core noninterest expense of $21.7 million in the same quarter in the prior year. Core noninterest expense as a percent of average assets decreased to 2.58% for the quarter ended December 31, 2008 from 2.66% for the same quarter in the prior year. For the six months ended December 31, 2008, core noninterest expense as a percent of average assets decreased to 2.57% from 2.61% for the same period in the prior year.
Noninterest expense for the second quarter of fiscal 2009 of $22.9 million increased $1.5 million or 7.0% from $21.4 million in the preceding quarter. The increase was primarily due to increases of $1.0 million in merger, integration and restructuring costs and $1.2 million in other expenses, partially offset by a decrease of $0.8 million in salaries and employee benefits. The increase in other expenses was primarily due to an increase in FDIC premiums. Noninterest expense as a percent of average assets increased to 2.71% in the current quarter compared with 2.56% in the preceding quarter.
Steven Lewis commented, "I am pleased that we have continued to maintain control of our expense base even with the additions of HBLS and OC Financial locations. Unlike economic conditions in our market, we have the ability to manage and control our overhead expenses. We remain dedicated to applying the same degree of efficiency to our real estate owned operations as we look to stabilize real estate owned balances over future quarters."
Asset Quality
Nonperforming assets, which are comprised of nonperforming loans and real estate owned, were $101.8 million at December 31, 2008, or 3.01% of total assets, up $12.4 million from $89.4 million or 2.70% of total assets at September 30, 2008. Nonperforming loans were $67.0 million at December 31, 2008, or 2.56% of total loans, up $4.1 million from $62.9 million or 2.39% of total loans at September 30, 2008. Real estate owned was $34.8 million at December 31, 2008, up $8.2 million from $26.6 million at September 30, 2008. First Place works with borrowers to avoid foreclosure if at all possible. Furthermore, if it becomes inevitable that a borrower will not be able to retain ownership of their property, First Place often seeks a deed in lieu of foreclosure in order to gain control of the property earlier in the recovery process. First Place has been pursuing deeds in lieu of foreclosure aggressively since January 1, 2008. This resulted in growing real estate owned more rapidly than nonperforming loans on a percentage basis. Over the long term, pursuing deeds in lieu of foreclosure should result in a significant reduction in the holding period for nonperforming assets and reduce economic losses. Single family residential properties represented $20.0 million of the $34.8 million balance of real estate owned at December 31, 2008.
Net charge-offs were $7.1 million in the current quarter which was an increase of $1.8 million over net charge-offs of $5.3 million in the prior year quarter and an increase of $3.0 million from net charge-offs of $4.1 million in the preceding quarter. Each quarter management performs a review of estimated probable incurred credit losses in the loan portfolio. Based on this analysis, a provision for loan losses of $9.2 million was recorded for the quarter ended December 31, 2008. That provision was a $4.0 million increase over the provision of $5.2 million recorded in the quarter ended December 31, 2007 and a $1.8 million increase from the provision of $7.4 million recorded in the preceding quarter. The allowance for loan losses increased to $33.6 million at December 31, 2008, from $31.4 million at September 30, 2008 and $26.4 million at December 31, 2007. The ratio of the allowance for loan losses to total loans was 1.28% at December 31, 2008, compared with 1.19% at September 30, 2008 and 1.00% at December 31, 2007. The allowance for loss on loans as a percent of nonperforming loans was 50.2% at December 31, 2008, up slightly from 50.0% at September 30, 2008. Another factor considered in determining the level of the allowance is the type of collateral. Of the total nonperforming loans at December 31, 2008, 98% were secured by real estate. Real estate loans are generally well secured and if these loans do default, the majority of the loan balance is recovered by liquidating the real estate.
Steven Lewis commented, "We have continued to experience unemployment and depressed real estate values in the markets where we lend, resulting in an unsatisfactory level of nonperforming loans. Our greatest exposure exists in our loans to builders to develop residential building lots and build new homes. Reducing our concentrations of credit in construction and development lending and the disposition of nonperforming assets remain our highest priorities. In the meantime, we continue to fully recognize the cost of our current delinquent and nonperforming loans through our provision for loan losses. We remain committed to reducing nonperforming assets in the coming months."
Balance Sheet Activity
Assets were $3.378 billion at December 31, 2008, compared with $3.316 billion at September 30, 2008, an increase of $62 million or 1.9%. The majority of this increase was in interest-bearing deposits in other banks funded by an increase in deposits, an intentional increase in liquidity. Total portfolio loans were $2.613 billion at December 31, 2008, a decrease of $17 million from September 30, 2008. Commercial loans increased $19 million during the current quarter, or 1.5%, to $1.265 billion. Commercial loans now account for 48.4% of the loan portfolio up from 47.4% at September 30, 2008. Mortgage and construction loans decreased $34 million during the current quarter and consumer loans decreased $2 million during the same period. Loans held for sale increased $31 million to $97 million at December 31, 2008 compared with $66 million at September 30, 2008.
Deposits totaled $2.541 billion at December 31, 2008, an increase of $135 million since September 30, 2008. The increase in deposits was primarily due to increases of $125 million in deposits generated through our retail branch deposit network and $10 million in certificates of deposit acquired through brokers and public funds of the state of Ohio. Total borrowings decreased $64 million to $507 million at December 31, 2008, compared with September 30, 2008.
Shareholders' equity remains strong; it was $309 million at December 31, 2008, down $2 million from September 30, 2008. The decline was primarily due to the net loss of $3 million and dividends paid of $1 million, partially offset by a $2 million reduction in unrealized losses on securities. Shareholders' equity as a percent of assets was 9.16% at December 31, 2008, down from 9.38% at September 30, 2008. Tangible equity to tangible assets decreased to 6.22% at December 31, 2008, down from 6.37% at September 30, 2008. First Place Bank remains well capitalized under regulatory capital standards.
Steven Lewis noted, "With the recent and dramatic disruption in the capital markets and the resulting tightening of credit nationwide, we have carefully monitored and maintained an appropriate level of liquidity. With today's environment forcing earnings to take a back seat, maintenance of both liquidity and capital adequacy are keys to weathering these trying times. Our growth in deposits not only strengthens our funding base, but also demonstrates the confidence which the public and our customers have in First Place."
Termination of Acquisition
Effective November 28, 2008, the Company and Camco announced that by mutual consent the definitive agreement executed on May 7, 2008 for the planned acquisition of Camco by the Company was terminated. Under the terms of the agreement, neither party will incur any termination fees due to the cancellation of the merger and the parties further agreed to mutually release one another from any claims of liability relating to the merger transaction.
Board Actions
At its regular meeting held on January 20, 2009, the Board of Directors declared a per share cash dividend of $0.01 payable on February 13, 2009, to shareholders of record as of the close of business on January 30, 2009. The reduction from the $0.085 per share paid the previous two quarters will permit the retention of $5 million of tangible equity annually and further strengthen the bank's capital ratios. "We understand the importance of our dividend to our common shareholders, and we did not take this decision lightly," said Steven R. Lewis. "Our Board and management believe this action is prudent and proactive given the near-term challenges in today's economic environment. We also believe this action is in the best interest of our shareholders. This additional capital will provide further flexibility for us to take action to resolve issues as they develop and to continue as a strong competitor in the financial services industry."
Conference Call
Steven R. Lewis, Chief Executive Officer of First Place Financial Corp., and David W. Gifford, Chief Financial Officer, along with members of the Company's executive team, will provide an overview of second quarter fiscal 2009 performance and business highlights in a conference call and simultaneous webcast to be held at 10 a.m. E.T. Wednesday, January 21. The conference call can be accessed by dialing 877-407-0783 or 201-689-8564. The webcast can be accessed live at the Company's website, www.firstplacebank.com, along with the release and supporting financial information. The event will be archived on the First Place website for one month. In addition, the recorded version of the conference call can be accessed by phone from 12 p.m. January 21, 2009 through midnight February 4, 2009 by dialing 877-660-6853 Account #286, ID #308584.
About First Place Financial Corp.
First Place Financial Corp. is a $3.4 billion financial services holding company based in Warren, Ohio. First Place Financial Corp. operates 44 retail locations, 2 business financial service centers and 18 loan production offices through the First Place Bank and the Franklin Bank divisions of First Place Bank. Additional affiliates of First Place Financial Corp. include First Place Holdings, Inc., the holding company for the Company's nonbank affiliates including First Place Insurance Agency, Ltd.; Coldwell Banker First Place Real Estate, Ltd.; TitleWorks Agency, LLC, APB Financial Group, Ltd. and American Pension Benefits, Inc. Information about First Place Financial Corp. may be found on the Company's web site: www.firstplacebank.com.
Explanation of Certain Non-GAAP Measures
This press release contains certain financial information determined by methods other than in accordance with Generally Accepted Accounting Principles (GAAP). Specifically, we have provided financial measures that are based on core earnings rather than net income. Ratios and other financial measures with the word "core" in their title were computed using core earnings rather than net income. Core earnings excludes merger, integration and restructuring expense; extraordinary income or expense; income or expense from discontinued operations; and income, expense, gains and losses that are not reflective of ongoing operations or that we do not expect to reoccur. Similarly, core noninterest expense or core noninterest income exclude the pre-tax impact of those same items that impact noninterest income or noninterest expense. We believe that this information is useful to both investors and to management and can aid them in understanding the Company's current performance, performance trends and financial condition. While core earnings can be useful in evaluating current performance and projecting current trends into the future, we do not believe that core earnings are a substitute for GAAP net income. We encourage investors and others to use core earnings as a supplemental tool for analysis and not as a substitute for GAAP net income. Our non-GAAP measures may not be comparable to the non-GAAP measures of other companies. In addition, future results of operations may include nonrecurring items that would not be included in core earnings. A reconciliation from GAAP net income to the non-GAAP measure of core earnings is shown in the consolidated financial highlights on page nine.
Forward-Looking Statements
When used in this press release, or future press releases or other public or shareholder communications, in filings by the Company with the Securities and Exchange Commission or in oral statements made with the approval of an authorized executive officer, the words or phrases such as "will likely result," "expect," "will continue," "anticipate," "estimate," "project," "believe," "should," "may," "will," "plan," or variations of such terms or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Company's actual results to be materially different from those indicated. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the market areas the Company conducts business, which could materially impact credit quality trends, changes in laws, regulations or policies of regulatory agencies, fluctuations in interest rates, demand for loans in the market areas the Company conducts business, and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
December 31,
------------------------
(Dollars in thousands, except Percent
share data) 2008 2007 Change
---------------------------------------------------------------------
Interest income $ 43,497 $ 48,884 (11.0)%
Interest expense 22,194 27,326 (18.8)
------------------------
Net interest income 21,303 21,558 (1.2)
Provision for loan losses 9,216 5,195 77.4
------------------------
Net interest income after provision
for loan losses 12,087 16,363 (26.1)
Noninterest income
Service charges on deposit accounts 2,461 2,064 19.2
Net gains (losses) on sale of
securities -- (4) N/M
Impairment of securities -- (5,900) N/M
Change in fair value of securities (2,544) -- N/M
Mortgage banking gains 2,106 1,065 97.7
Gain on sale of loan servicing
rights -- -- N/M
Loan servicing income (loss) (940) (146) (543.8)
Other income - bank 1,611 1,627 (1.0)
Insurance commission income 1,051 838 25.4
Other income - nonbank 798 1,170 (31.8)
------------------------
Total noninterest income 4,543 714 536.3
Noninterest expense
Salaries and employee benefits 9,809 10,270 (4.5)
Occupancy and equipment 3,383 3,081 9.8
Professional fees 817 731 11.6
Loan expenses 613 310 97.7
Marketing 577 877 (34.2)
Merger, integration & restructuring 1,064 790 34.7
Amortization of intangible assets 788 1,102 (28.5)
Real estate owned expense 1,392 1,736 (19.8)
Other expense 4,415 3,558 24.1
------------------------
Total noninterest expense 22,858 22,455 1.8
Income (loss) before income tax
expense (benefit) (6,228) (5,378) (15.8)
Income tax expense (benefit) (3,633) (2,231) (62.8)
------------------------
Net income (loss) $ (2,595) $ (3,147) 17.5
========================
SHARE DATA:
Basic earnings (loss) per share $ (0.16) $ (0.20) 20.0%
Diluted earnings (loss) per share $ (0.16) $ (0.20) 20.0
Cash dividends per share $ 0.085 $ 0.170 (50.0)
Average shares outstanding - basic 16,558,283 16,095,633 2.9
Average shares outstanding -
diluted 16,558,283 16,095,633 2.9
N/M - Not meaningful
Six months ended
December 31,
------------------------
(Dollars in thousands, except Percent
share data) 2008 2007 Change
---------------------------------------------------------------------
Interest income $ 87,957 $ 97,391 (9.7)%
Interest expense 43,699 54,461 (19.8)
------------------------
Net interest income 44,258 42,930 3.1
Provision for loan losses 16,567 7,156 131.5
------------------------
Net interest income after provision
for loan losses 27,691 35,774 (22.6)
Noninterest income
Service charges on deposit accounts 4,603 4,061 13.3
Net gains (losses) on sale of
securities 319 729 (56.2)
Impairment of securities -- (5,900) N/M
Change in fair value of securities (11,864) -- N/M
Mortgage banking gains 3,881 2,921 32.9
Gain on sale of loan servicing
rights -- 1,471 N/M
Loan servicing income (loss) (984) 144 (783.3)
Other income - bank 3,300 3,345 (1.3)
Insurance commission income 1,943 1,658 17.2
Other income - nonbank 1,747 2,476 (29.4)
------------------------
Total noninterest income 2,945 10,905 (73.0)
Noninterest expense
Salaries and employee benefits 20,436 20,636 (1.0)
Occupancy and equipment 6,782 6,168 10.0
Professional fees 1,662 1,505 10.4
Loan expenses 1,340 884 51.6
Marketing 1,155 1,673 (31.0)
Merger, integration & restructuring 1,109 790 40.4
Amortization of intangible assets 1,594 2,223 (28.3)
Real estate owned expense 2,472 2,140 15.5
Other expense 7,668 6,865 11.7
------------------------
Total noninterest expense 44,218 42,884 3.1
Income (loss) before income tax
expense (benefit) (13,582) 3,795 (457.9)
Income tax expense (benefit) (4,828) 688 (801.9)
------------------------
Net income (loss) $ (8,754) $ 3,107 (381.8)
========================
SHARE DATA:
Basic earnings (loss) per share $ (0.53) $ 0.19 (378.9)%
Diluted earnings (loss) per share $ (0.53) $ 0.19 (378.9)
Cash dividends per share $ 0.170 $ 0.325 (47.7)
Average shares outstanding - basic 16,552,722 16,285,119 1.6
Average shares outstanding -
diluted 16,552,722 16,383,088 1.0
N/M - Not meaningful
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
Dec. 31, Sept. 30, Mar. 31, Dec. 31,
(Dollars in 2008 2008 June 30, 2008 2007
thousands) (Unaudited)(Unaudited) 2008 (Unaudited)(Unaudited)
---------------------------------------------------------------------
ASSETS
Cash and due
from banks $ 38,647 $ 65,444 $ 59,483 $ 52,351 $ 47,268
Interest-
bearing
deposits in
other banks 74,494 5,992 4,151 5,049 13,583
Federal funds
sold -- 150 5,608 -- --
Securities, at
fair value 283,097 278,989 284,433 275,519 267,709
Loans held for
sale, at fair
value 96,851 66,039 72,341 85,372 72,547
Loans
Mortgage and
construction 954,660 989,003 1,015,010 1,018,083 1,081,719
Commercial 1,265,165 1,245,998 1,234,130 1,212,947 1,173,115
Consumer 393,630 395,942 399,637 384,629 393,383
---------- ---------- ---------- ---------- ----------
Total loans 2,613,455 2,630,943 2,648,777 2,615,659 2,648,217
Less
allowance
for loan
losses 33,577 31,428 28,216 28,874 26,360
---------- ---------- ---------- ---------- ----------
Loans, net 2,579,878 2,599,515 2,620,561 2,586,785 2,621,857
Federal Home
Loan Bank
stock 36,221 36,221 35,761 34,523 34,100
Premises and
equipment,
net 40,454 40,328 40,089 50,902 51,568
Premises held
for sale, net 13,333 13,491 13,555 -- --
Goodwill 93,741 93,741 93,626 91,978 91,835
Core deposit
and other
intangibles 11,979 12,767 13,573 13,998 15,108
Other assets 109,328 103,276 97,865 92,507 88,699
---------- ---------- ---------- ---------- ----------
Total assets $3,378,023 $3,315,953 $3,341,046 $3,288,984 $3,304,274
========== ========== ========== ========== ==========
LIABILITIES
Deposits
Noninterest-
bearing
checking $ 227,434 $ 222,305 $ 248,851 $ 227,994 $ 228,019
Interest-
bearing
checking 160,274 158,298 159,874 155,941 157,742
Savings 393,070 438,410 475,835 453,609 432,644
Money markets 285,615 305,320 359,801 362,711 391,027
Certificates
of deposit 1,474,557 1,281,294 1,124,731 1,128,340 1,090,411
---------- ---------- ---------- ---------- ----------
Total
deposits 2,540,950 2,405,627 2,369,092 2,328,595 2,299,843
Short-term
borrowings 142,454 156,173 197,100 150,214 222,471
Long-term debt 364,269 414,448 424,374 464,371 436,518
Other
liabilities 20,991 28,790 31,513 32,106 33,353
---------- ---------- ---------- ---------- ----------
Total
liabilities 3,068,664 3,005,038 3,022,079 2,975,286 2,992,185
SHAREHOLDERS'
EQUITY 309,359 310,915 318,967 313,698 312,089
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity $3,378,023 $3,315,953 $3,341,046 $3,288,984 $3,304,274
========== ========== ========== ========== ==========
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of or for the three months ended
12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
----------------------------------------------
(Dollars in thousands 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
except per share data) FY 2009 FY 2009 FY 2008 FY 2008 FY 2008
---------------------------------------------------------------------
EARNINGS (GAAP)
Tax equivalent net
interest income $ 21,713 23,358 23,241 22,246 21,930
Net interest income $ 21,303 22,955 22,861 21,835 21,558
Provision for loan
losses $ 9,216 7,351 4,631 4,680 5,195
Noninterest income $ 4,543 (1,598) 6,124 9,936 714
Noninterest expense $ 22,858 21,360 21,209 19,972 22,455
Net income (loss) $ (2,595) (6,159) 2,914 4,769 (3,147)
Basic earnings (loss)
per share $ (0.16) (0.37) 0.18 0.30 (0.20)
Diluted earnings
(loss) per share $ (0.16) (0.37) 0.18 0.30 (0.20)
PERFORMANCE RATIOS
(GAAP) (annualized)
Return on average
assets (0.31)% (0.74)% 0.36% 0.59% (0.39)%
Return on average
equity (3.35)% (7.74)% 3.75% 6.11% (3.93)%
Return on average
tangible assets (0.32)% (0.76)% 0.37% 0.61% (0.40)%
Return on average
tangible equity (5.12)% (11.71)% 5.66% 9.25% (5.91)%
Net interest margin,
fully tax equivalent 2.81% 3.07% 3.13% 2.98% 2.92%
Efficiency ratio 87.06% 98.16% 72.23% 62.06% 99.17%
Noninterest expense as
a percent of average
assets 2.71% 2.56% 2.60% 2.45% 2.76%
RECONCILIATION OF
NET INCOME TO CORE
EARNINGS
GAAP net income
(loss) $ (2,595) (6,159) 2,914 4,769 (3,147)
Merger, integration
and restructuring,
net of tax $ 692 29 293 -- 514
Core earnings (loss) $ (1,903) (6,130) 3,207 4,769 (2,633)
CORE EARNINGS
Core earnings (loss) $ (1,903) (6,130) 3,207 4,769 (2,633)
Basic core earnings
(loss) per share $ (0.11) (0.37) 0.20 0.30 (0.16)
Core diluted earnings
(loss) per share $ (0.11) (0.37) 0.20 0.30 (0.16)
CORE PERFORMANCE RATIOS
(annualized)
Core return on average
assets (0.23)% (0.73)% 0.39% 0.59% (0.32)%
Core return on average
equity (2.46)% (7.71)% 4.13% 6.11% (3.28)%
Core return on average
tangible assets (0.23)% (0.76)% 0.41% 0.61% (0.33)%
Core return on average
tangible equity (3.76)% (11.65)% 6.23% 9.25% (4.94)%
Core net interest
margin, fully tax
equivalent 2.81% 3.07% 3.13% 2.98% 2.92%
Core efficiency ratio 83.00% 97.95% 70.69% 62.06% 95.68%
Core noninterest
expense as a percent
of average assets 2.58% 2.56% 2.55% 2.45% 2.66%
As of or for the
six months ended
December 31,
----------------
(Dollars in thousands except per share data) 2008 2007
---------------------------------------------------------------------
EARNINGS (GAAP)
Tax equivalent net interest income $ 45,070 43,676
Net interest income $ 44,258 42,930
Provision for loan losses $ 16,567 7,156
Noninterest income $ 2,945 10,905
Noninterest expense $ 44,218 42,884
Net income (loss) $ (8,754) 3,107
Basic earnings (loss) per share $ (0.53) 0.19
Diluted earnings (loss) per share $ (0.53) 0.19
PERFORMANCE RATIOS (GAAP) (annualized)
Return on average assets (0.52)% 0.19%
Return on average equity (5.58)% 1.93%
Return on average tangible assets (0.54)% 0.20%
Return on average tangible equity (8.48)% 2.90%
Net interest margin, fully tax equivalent 2.94% 2.93%
Efficiency ratio 92.09% 78.57%
Noninterest expense as a percent of average assets 2.63% 2.66%
RECONCILIATION OF NET INCOME TO CORE EARNINGS
GAAP net income (loss) $ (8,754) 3,107
Merger, integration and restructuring, net of tax $ 721 514
Core earnings (loss) $ (8,033) 3,621
CORE EARNINGS
Core earnings (loss) $ (8,033) 3,621
Basic core earnings (loss) per share $ (0.49) 0.22
Core diluted earnings (loss) per share $ (0.49) 0.22
CORE PERFORMANCE RATIOS (annualized)
Core return on average assets (0.48)% 0.22%
Core return on average equity (5.12)% 2.25%
Core return on average tangible assets (0.49)% 0.23%
Core return on average tangible equity (7.78)% 3.38%
Core net interest margin, fully tax equivalent 2.94% 2.93%
Core efficiency ratio 89.78% 77.12%
Core noninterest expense as a percent of average
assets 2.57% 2.61%
FIRST PLACE FINANCIAL CORP.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited)
As of or for the three months ended
(Dollars in 12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
thousands 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
except per -----------------------------------------------------
share data) FY 2009 FY 2009 FY 2008 FY 2008 FY 2008
---------------------------------------------------------------------
CAPITAL
Equity to
total assets
at end of
period 9.16% 9.38% 9.55% 9.54% 9.45%
Tangible
equity to
tangible
assets 6.22% 6.37% 6.55% 6.53% 6.42%
Book value
per share $ 18.23 18.32 18.79 19.11 19.01
Tangible book
value per
share $ 12.00 12.04 12.48 12.65 12.50
Period-end
market value
per share $ 3.83 12.85 9.40 13.00 13.99
Dividends
declared per
common
share $ 0.085 0.085 0.170 0.170 0.170
Common stock
dividend
payout ratio N/M N/M 94.44% 56.67% N/M
Period-end
common
shares
outstanding
(000) 16,973 16,973 16,973 16,418 16,416
Average basic
shares
outstanding
(000) 16,558 16,547 15,986 15,969 16,096
Average
diluted
shares
outstanding
(000) 16,558 16,547 15,992 15,999 16,096
ASSET QUALITY
Net
charge-offs $ 7,066 4,140 5,434 2,165 5,254
Annualized
net
charge-offs
to average
loans 1.07% 0.63% 0.85% 0.33% 0.80%
Nonperforming
loans
(NPLs) $ 66,951 62,860 50,722 57,480 46,322
NPLs as a
percent of
total loans 2.56% 2.39% 1.91% 2.20% 1.75%
Nonperforming
assets
(NPAs) $ 101,752 89,433 74,417 70,692 55,914
NPAs as a
percent of
total assets 3.01% 2.70% 2.23% 2.15% 1.69%
Allowance for
loan losses $ 33,577 31,428 28,216 28,874 26,360
Allowance for
loan losses
as a percent
of loans 1.28% 1.19% 1.07% 1.10% 1.00%
Allowance for
loan losses
as a percent
of NPLs 50.15% 50.00% 55.63% 50.23% 56.91%
MORTGAGE
BANKING
Mortgage
originations $ 291,765 263,900 333,000 335,700 282,400
Mortgage
banking
gains $ 2,106 2,064 2,398 3,938 1,065
Mortgage
servicing
portfolio $1,549,536 1,498,521 1,425,915 1,357,944 1,228,283
Mortgage
servicing
rights $ 13,636 14,457 14,272 13,402 11,721
Mortgage
servicing
rights
valuation
(loss)
recovery $ (1,071) (292) 350 (145) (305)
Mortgage
servicing
rights /
Mortgage
servicing
portfolio 0.88% 0.96% 1.00% 0.99% 0.95%
END OF PERIOD
BALANCES
Assets $3,378,023 3,315,953 3,341,046 3,288,984 3,304,274
Deposits $2,540,950 2,405,627 2,369,092 2,328,595 2,299,843
Shareholders'
equity $ 309,359 310,915 318,967 313,698 312,089
Tangible
shareholders'
equity $ 203,639 204,407 211,768 207,722 205,146
AVERAGE
BALANCES
Loans $2,622,016 2,608,491 2,584,075 2,625,799 2,613,435
Loans held
for sale $ 64,798 65,614 84,488 74,675 60,112
Earning
assets $3,063,980 3,016,618 2,990,206 3,007,062 2,989,442
Assets $3,351,864 3,308,996 3,277,762 3,276,830 3,236,941
Deposits $2,483,101 2,394,237 2,330,860 2,323,244 2,279,620
Shareholders'
equity $ 307,093 315,519 312,476 313,888 318,909
Tangible
shareholders'
equity $ 200,996 208,705 207,018 207,400 211,933
As of or for the
six months ended
December 31,
--------------------
(Dollars in thousands except per share data) 2008 2007
---------------------------------------------------------------------
CAPITAL
Equity to total assets at end of period 9.16% 9.45%
Tangible equity to tangible assets 6.22% 6.42%
Book value per share $ 18.23 19.01
Tangible book value per share $ 12.00 12.50
Period-end market value per share $ 3.83 13.99
Dividends declared per common share $ 0.170 0.325
Common stock dividend payout ratio N/M 171.05%
Period-end common shares outstanding (000) 16,973 16,416
Average basic shares outstanding (000) 16,553 16,285
Average diluted shares outstanding (000) 16,553 16,383
ASSET QUALITY
Net charge-offs $ 11,206 6,900
Annualized net charge-offs to average loans 0.85% 0.53%
Nonperforming loans (NPLs) $ 66,951 46,322
NPLs as a percent of total loans 2.56% 1.75%
Nonperforming assets (NPAs) $ 101,752 55,914
NPAs as a percent of total assets 3.01% 1.69%
Allowance for loan losses $ 33,577 26,360
Allowance for loan losses as a percent of
loans 1.28% 1.00%
Allowance for loan losses as a percent of NPLs 50.15% 56.91%
MORTGAGE BANKING
Mortgage originations $ 555,665 613,100
Mortgage banking gains $ 4,170 2,921
Mortgage servicing portfolio $1,549,536 1,228,283
Mortgage servicing rights $ 13,636 11,721
Mortgage servicing rights valuation (loss)
recovery $ (1,363) (305)
Mortgage servicing rights / Mortgage servicing
portfolio 0.88% 0.95%
END OF PERIOD BALANCES
Assets $3,378,023 3,304,274
Deposits $2,540,950 2,299,843
Shareholders' equity $ 309,359 312,089
Tangible shareholders' equity $ 203,639 205,146
AVERAGE BALANCES
Loans $2,615,253 2,582,357
Loans held for sale $ 65,206 71,325
Earning assets $3,040,299 2,968,453
Assets $3,330,430 3,211,462
Deposits $2,438,669 2,252,725
Shareholders' equity $ 311,306 320,641
Tangible shareholders' equity $ 204,850 213,244