UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 20, 2005
FIRSTFED FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 1-9566 95-4087449
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
401 Wilshire Boulevard, Santa Monica, California, 90401-1490
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 319-6000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a 12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act 917 CFR 240.13e-4(c))
ITEM 2.02 Results of Operations and Financial Condition
On April 20, 2005, the registrant, FirstFed Financial Corp., issued a press
release setting forth the Company's first quarter 2005 earnings. A copy of this
press release is attached and incorporated herein as Exhibit 99.
ITEM 9.01 Financial Statements and Exhibits
(a) Financial Statements
Not Applicable.
(b) Pro Forma Financial Information
Not Applicable.
(c) Exhibits:
Exhibit 99 - Press Release dated April 20, 2005, regarding results for
the first quarter of 2005.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRSTFED FINANCIAL CORP.
Dated: April 20, 2005 By: /s/ Douglas J. Goddard
----------------------
Douglas J. Goddard
Chief Financial Officer
Exhibit 99
FIRSTFED REPORTS RESULTS FOR THE FIRST QUARTER OF 2005
Santa Monica, California, April 20, 2005 -- FirstFed Financial Corp.
(NYSE-FED), parent company of First Federal Bank of California, today announced
net earnings of $18.5 million or $1.10 per diluted share of common stock for the
first quarter of 2005 compared to net earnings of $16.4 million or $0.97 per
diluted share of common stock for the fourth quarter of 2004. Net earnings for
the first quarter of 2004 were $15.0 million or $0.86 per diluted share of
common stock.
Net interest income increased to $50.1 million during the first quarter of
2005 from $45.0 million during the fourth quarter of 2004 and $37.7 million
during the first quarter of 2004. Average interest-earning assets during the
first quarter of 2005 increased by 15% compared to the fourth quarter of 2004
and 60% compared to the first quarter of 2004 due to record loan originations.
However, because the Bank's cost of funds responds to changes in rates faster
than its earnings from the loan portfolio, interest rate spreads dropped to
2.39% for the first quarter of 2005 from 2.51% for the fourth quarter of 2004
and 2.95% for the first quarter of 2004 due to the increasing rate environment
during 2004 and year to date 2005.
Loan originations during the first quarter of 2005 were $1.3 billion,
comparable to $1.4 billion during the fourth quarter and substantially more than
$593.5 million during the first quarter of 2004. As a result, the loan portfolio
grew to $7.8 billion at March 31, 2005 compared to $6.8 billion at December 31,
2004 and $4.6 billion at March 31, 2004.
Due to substantial growth in the loan portfolio, the Company recorded a
$3.8 million provision for loan losses during the first quarter of 2005. A $3.0
million provision was recorded during the fourth quarter of 2004 and no
provision was recorded during the same period of the prior year. Net loan loss
recoveries of $159 thousand were recorded during the first quarter of 2005
compared to net loan charge-offs of $6 thousand during the fourth quarter of
2004 and net loan loss recoveries of $58 thousand during the first quarter of
2004.
Loan servicing and other fees were $2.8 million for the first quarter of
2005 compared to $2.6 million for the fourth quarter of 2004 and $2.0 million
for the first quarter of 2004. Because a greater number of loans subject to
prepayment fees paid off, loan prepayment fees grew to $2.6 million for the
first quarter of 2005 compared to $2.2 million for the fourth quarter of 2004
and $1.5 million for the first quarter of 2004. Loan payoffs and principal
reductions were $339.1 million for the first quarter of 2005 compared to $361.5
million for the fourth quarter of 2004 and $331.0 million for the first quarter
of 2004.
Non-interest expense increased to $18.9 million during the first quarter of
2005 from $18.0 million in the fourth quarter of 2004 and $15.3 million for the
first quarter of 2004. The increase is primarily due to higher incentive-based
compensation and other operating costs associated with increased loan
production. However, due to growth in total assets, the ratio of non-interest
expense to average total assets fell to 0.95% for the first quarter of 2005
compared to 1.04% for the fourth quarter of 2004 and 1.22% for the first quarter
of 2004.
Total assets increased to $8.4 billion at March 31, 2005 compared to $7.5
billion at December 31, 2004 and $5.2 billion at March 31, 2004. The growth in
assets was funded primarily with collateralized borrowings which increased to
$1.1 billion as of March 31, 2005 from $187.0 million as of December 31, 2004
and $117.1 million as of March 31, 2004. To facilitate these borrowings, the
Bank completed a loan securitization with Fannie Mae in which $1.3 billion of
multi-family loans were converted into mortgage-backed securities. Because the
Bank retained full recourse on the securitized loans, the mortgage-backed
securities are accounted for as part of the loan portfolio. The securitized
loans are evaluated for risk along with the remainder of the multi-family loan
portfolio.
There have been no repurchases of common stock during the first quarter of
2005. Common stock repurchases during the year 2004 were 696,900 at an average
market price of $40.25 per share. There remain 1,472,079 shares eligible for
repurchase under the Company's stock repurchase program as of April 19, 2005.
First Federal Bank of California operates 29 full-service retail banking
offices in Southern California and lending offices in both Southern and Northern
California.
This news release contains certain forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation Act of 1995.
These forward-looking statements are subject to various factors, many of which
are beyond the Company's control, which could cause actual results to differ
materially from such statements. Such factors include, but are not limited to,
the general business environment, interest rate fluctuations that may affect
operating margin, the California real estate market, branch openings, and
competitive conditions in the business and geographic areas in which the Company
conducts its business and regulatory actions. In addition, these forward-looking
statements are subject to assumptions as to future business strategies and
decisions that are subject to change. The Company makes no guarantees or
promises regarding future results and assumes no responsibility to update such
forward-looking statements.
Contact: Douglas Goddard, Executive Vice President
(310) 319-6014
KEY FINANCIAL RESULTS FOLLOW
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
(Unaudited)
March 31, December 31,
2005 2004
--------------- --------------
ASSETS
Cash and cash equivalents $ 43,444 $ 68,343
Investment securities, available-for-sale (at fair value) 225,260 250,586
Mortgage-backed securities, available-for-sale (at fair value) 90,597 97,059
Loans receivable, net 7,824,493 6,837,945
Accrued interest and dividends receivable 30,629 24,115
Real estate held for investment 656 986
Office properties and equipment, net 15,699 15,881
Investment in Federal Home Loan Bank (FHLB) stock, at cost 158,350 143,425
Other assets 31,575 30,643
--------------- --------------
$ 8,420,703 $ 7,468,983
=============== ==============
LIABILITIES
Deposits $ 3,803,795 $ 3,761,165
FHLB advances 2,998,813 3,004,600
Securities sold under agreements to repurchase 1,059,700 187,000
Accrued expenses and other liabilities 63,062 38,744
--------------- --------------
7,925,370 6,991,509
--------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share;
authorized 100,000,000 shares;
issued 23,717,797 and 23,693,350 shares;
outstanding 16,523,201 and 16,498,754 shares 237 237
Additional paid-in capital 41,414 40,977
Retained earnings - substantially restricted 567,694 549,202
Unreleased shares to employee stock ownership plan (799) (53)
Treasury stock, at cost 7,194,596 and 7,194,596 shares (113,776) (113,776)
Accumulated other comprehensive earnings, net of taxes 563 887
--------------- --------------
495,333 477,474
--------------- --------------
$ 8,420,703 $ 7,468,983
=============== ==============
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
EARNINGS (Dollars in thousands, except per
share data)
(Unaudited)
Three months ended
March 31,
------------------------------
2005 2004
------------- -------------
Interest income:
Interest on loans $ 87,113 $ 55,660
Interest on mortgage-backed securities 728 939
Interest and dividends on investments 3,816 1,918
------------- -------------
Total interest income 91,657 58,517
------------- -------------
Interest expense:
Interest on deposits 17,354 8,484
Interest on borrowings 24,226 12,320
------------- -------------
Total interest expense 41,580 20,804
------------- -------------
Net interest income 50,077 37,713
Provision for loan losses 3,750 --
------------- -------------
Net interest income after provision for loan losses 46,327 37,713
------------- -------------
Other income:
Loan servicing and other fees 2,828 2,001
Retail office fees 1,323 1,320
Gain on sale of loans -- 13
Real estate operations, net 248 49
Other operating income 97 78
------------- -------------
Total other income 4,496 3,461
------------- -------------
Non-interest expense:
Salaries and employee benefits 12,173 9,194
Occupancy 2,295 2,057
Advertising expense 92 219
Amortization of core deposit intangible 499 499
Federal deposit insurance 116 95
Legal 516 289
Other expense 3,176 2,929
------------- -------------
Total non-interest expense 18,867 15,282
------------- -------------
Earnings before income taxes 31,956 25,892
Income tax provision 13,464 10,915
------------- -------------
Net earnings $ 18,492 $ 14,977
============= =============
Net earnings $ 18,492 $ 14,977
Other comprehensive loss, net of taxes (324) (46)
------------- -------------
Comprehensive earnings $ 18,168 $ 14,931
============= =============
Earnings per share:
Basic $ 1.12 $ 0.88
============= =============
Diluted $ 1.10 $ 0.86
============= =============
Weighted average shares outstanding:
Basic 16,502,945 17,067,581
============= =============
Diluted 16,885,898 17,495,422
============= =============
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL RESULTS
(Unaudited)
Quarter ended March 31,
2005 2004
-------------- -----------
(Dollars in thousands, except per share data)
End of period:
Total assets $ 8,420,703 $ 5,173,025
Cash and securities $ 268,704 $ 255,022
Mortgage-backed securities $ 90,597 $ 124,217
Loans $ 7,824,493 $ 4,640,055
Core deposit intangible asset $ 4,834 $ 6,829
Deposits $ 3,803,795 $ 2,712,922
Borrowings $ 4,058,513 $ 1,969,122
Stockholders' equity $ 495,333 $ 452,177
Book value per share $ 29.98 $ 26.46
Tangible book value per share $ 29.69 $ 26.06
Stock price (period-end) $ 51.01 $ 46.13
Total loan servicing portfolio $ 7,916,154 $ 4,833,756
Loans serviced for others $ 111,231 $ 132,308
% of adjustable mortgages 93.73 % 81.08 %
Other data:
Employees (full-time equivalent) 638 590
Branches 29 29
Asset quality:
Real estate owned (foreclosed) $ -- $ 1,324
Non-accrual loans $ 6,851 $ 1,561
Non-performing assets $ 6,851 $ 2,885
Non-performing assets to total assets 0.08 % 0.06 %
General valuation allowance (GVA) $ 82,579 $ 75,296
Allowances for impaired loans -- 496
-------------- -----------
Allowances for loan losses $ 82,579 75,792
Allowances for loan losses as a percent of gross
loans receivable 1.05 % 1.61 %
Loans sold with recourse $ 73,545 $ 88,192
GVA for loans sold with recourse $ -- $ 5,400
GVA to loans sold with recourse -- % 6.12 %
Modified loans (not impaired) $ 2,061 $ 2,446
Impaired loans, net $ 4,546 $ 1,467
Allowance for impaired loans $ -- $ 496
Capital ratios:
Tangible capital ratio 5.77 % 8.21 %
Core capital ratio 5.77 8.21
Risk-based capital ratio 11.75 15.63
Net worth to assets ratio 5.88 8.74
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL RESULTS (continued)
(Unaudited)
Three months ended
March 31,
------------------------------
2005 2004
------------ --------------
(Dollars in thousands)
Selected ratios:
Expense ratios:
Efficiency ratio 34.57 % 37.10 %
Expense-to-average-assets ratio 0.95 1.22
Return on average assets 0.93 1.20
Return on average equity 15.21 13.48
Yields earned and rates paid:
Average yield on loans and mortgage-backed securities 4.71 % 4.90 %
Average yield on investment portfolio (1) 3.76 2.52
Average yield on all interest-earning assets (1) 4.67 4.82
Average rate paid on deposits 1.84 1.29
Average rate paid on borrowings 2.74 2.69
Average rate paid on all interest-bearing liabilities 2.28 1.87
Interest rate spread 2.39 2.95
Effective net spread 2.47 3.07
Average balances:
Average loans and mortgage-backed securities $ 7,409,789 $ 4,619,315
Average investments (2) 247,283 169,682
------------ --------------
Average interest-earning assets (2) 7,657,072 4,788,997
------------ --------------
Average deposits 3,816,761 2,639,485
Average borrowings 3,578,534 1,839,696
------------ --------------
Average interest-bearing liabilities 7,395,295 4,479,181
------------ --------------
Excess of interest-earning assets over interest-bearing
liabilities $ 261,777 $ 309,816
============ ==============
Loan originations $ 1,316,905 $ 593,538
(1) Excludes FHLB stock dividends and other miscellaneous items.
(2) Excludes FHLB stock.