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) July 23, 2004
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
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements
Not Applicable.
(b) Pro Forma Financial Information
Not Applicable.
(c) Exhibits:
99. Press Release dated July 23, 2004, regarding results for
the second quarter of 2004.
ITEM 12. Results of Operations and Financial Condition
On July 23, 2004, the registrant, FirstFed Financial Corp., issued a press
release setting forth the Company's second quarter 2004 earnings. A copy of this
press release is attached and incorporated herein as Exhibit 99.
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: July 23, 2004 By: /s/ Douglas J. Goddard
----------------------
Douglas J. Goddard
Chief Financial Officer
Exhibit 99
FIRSTFED REPORTS RESULTS FOR THE SECOND QUARTER OF 2004
Santa Monica, California, July 23, 2004 -- FirstFed Financial Corp.
(NYSE-FED), parent company of First Federal Bank of California, today announced
net earnings of $16.6 million or $0.96 per diluted share of common stock for the
second quarter of 2004 compared to net earnings of $15.6 million or $0.90 per
diluted share for the second quarter of 2003. Net earnings for the first six
months of 2004 were $31.5 million or $1.82 per diluted common share compared to
$31.1 million or $1.80 per diluted common share for the first six months of
2003. Net earnings for the second quarter and first six months of 2004 include
$1.6 million in interest received from the California Franchise Tax Board. The
interest resulted from the recent settlement of amended returns for tax years
1993 to 1998.
On July 22, 2004, the Board of Directors authorized the repurchase of
820,302 additional shares, which represents 5% of the Company's shares
outstanding on that date. Combined with amounts previously authorized, shares
available for repurchase total 1,472,079, or 9% of shares outstanding as of July
22, 2004. The Company repurchased 696,900 shares of common stock during the
first six months of 2004, all of which were purchased in the second quarter at
an average market price of $40.25 per share.
In addition to the interest received on tax settlements, net interest
income increased by 4% and 2% during the second quarter and first six months of
2004 compared to the previous periods due to 20% and 18% growth in
interest-earning assets, respectively. The growth in interest-earning assets
compensated for decreased interest rate spreads which dropped to 2.81% and
2.89%, respectively, for the second quarter and first six months of 2004 from
3.25% and 3.30%, respectively, for the second quarter and first six months of
2003. The reduced spreads resulted from downward interest rate adjustments on
the Bank's adjustable loan portfolio, which exceeded decreases in the Bank's
cost of funds.
Loan originations were $682.6 million and $1.3 billion for the second
quarter and first six months of 2004 compared to $508.1 million and $1.0 billion
for the same periods last year. Loan prepayments and amortization totaled $399.1
million and $730.1 million for the second quarter and first six months of 2004
compared to $399.0 million and $789.4 million for the second quarter and first
six months of last year.
Loan servicing and other fees increased to $2.5 million and $4.5 million
for the second quarter and first six months of 2004, respectively, compared to
$1.5 million and $3.1 million for the same periods of the prior year. The amount
of loan servicing and other fees varies based on the total dollar amount and
types of loans paid off. Loan prepayment fees were $2.0 million and $3.6 million
for the second quarter and first six months of 2004 compared to $873 thousand
and $2.0 million for the same periods last year.
Other operating expense increased during the second quarter and first six
months of 2004 primarily due to increases in compensation and legal costs
compared to the same periods last year. Also, other operating expense for the
first six months of 2004 includes a $395 thousand loss due to a vendor
defalcation. However, non-interest expense as a percentage of average assets
decreased to 1.15% and 1.18%, respectively, for the second quarter and first six
months of 2004 from 1.21% and 1.26%, respectively, for the second quarter and
first six months of 2003 due to asset growth.
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Total assets increased to $5.5 billion as of June 30, 2004 from $4.5
billion as of June 30, 2003 due to growth in loan originations. Consolidated
stockholders' equity was $439.5 million as of June 30, 2004 compared to $402.6
million as of June 30, 2003.
The Company did not record a provision for loan losses during first six
months of 2004 or for any period in 2003. Net loan recoveries totaled $154
thousand and $212 thousand during the second quarter and first six months of
2004, respectively. For the comparable periods last year, the Company recorded
net loan charge-offs of $22 thousand during the second quarter and net loan
recoveries of $25 thousand during the first six months.
First Federal Bank of California operates 29 full-service retail banking
offices in Southern 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
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
(Unaudited)
June 30, December 31, June 30,
2004 2003 2003
------------- --------------- --------------
ASSETS
Cash and cash equivalents $ 40,268 $ 54,318 $ 34,388
Investment securities, available-for-sale (at fair
value) 275,894 116,411 80,221
Mortgage-backed securities, available-for-sale (at fair
value) 116,378 135,176 168,937
Loans receivable, held-for-sale (fair value $283, $494
and $2,797) 280 492 2,775
Loans receivable, net 4,927,767 4,373,620 4,037,893
Accrued interest and dividends receivable 18,695 16,941 17,700
Real estate, net -- 1,324 --
Office properties and equipment, net 10,773 10,568 10,315
Investment in Federal Home Loan Bank (FHLB) stock, at
cost 104,575 87,775 76,078
Other assets 30,296 28,397 32,820
------------- --------------- --------------
$ 5,524,926 $ 4,825,022 $ 4,461,127
============= =============== ==============
LIABILITIES
Deposits $ 2,758,676 $ 2,538,398 $ 2,462,508
FHLB advances 2,169,000 1,694,000 1,424,000
Securities sold under agreements to repurchase 125,224 122,622 139,725
Accrued expenses and other liabilities 32,508 33,435 32,319
------------- --------------- --------------
5,085,408 4,388,455 4,058,552
------------- --------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share;
authorized 100,000,000 shares;
issued 23,600,644, 23,543,339 and 23,489,532 shares;
outstanding 16,406,048, 17,045,643 and 16,991,836 shares 236 235 235
Additional paid-in capital 38,552 37,733 36,775
Retained earnings - substantially restricted 514,890 483,360 449,995
Unreleased shares to employee stock ownership plan (964) (125) (559)
Treasury stock, at cost, 7,194,596, 6,497,696 and
6,497,696 shares (113,776) (85,727) (85,727)
Accumulated other comprehensive earnings, net of taxes 580 1,091 1,856
------------- --------------- --------------
439,518 436,567 402,575
------------- --------------- --------------
$ 5,524,926 $ 4,825,022 $ 4,461,127
============= =============== ==============
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended June 30, Six months ended June 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Interest income:
Interest on loans $ 57,854 $ 56,882 $ 113,514 $ 113,951
Interest on mortgage-backed
securities 867 1,385 1,806 3,055
Interest and dividends on investments 2,639 1,145 4,557 3,245
------------- ------------- ------------- -------------
Total interest income 61,360 59,412 119,877 120,251
------------- ------------- ------------- -------------
Interest expense:
Interest on deposits 8,645 9,886 17,129 21,253
Interest on borrowings 12,728 12,464 25,048 24,420
------------- ------------- ------------- -------------
Total interest expense 21,373 22,350 42,177 45,673
------------- ------------- ------------- -------------
Net interest income 39,987 37,062 77,700 74,578
Provision for loan losses -- -- -- --
------------- ------------- ------------- -------------
Net interest income after provision for
loan losses 39,987 37,062 77,700 74,578
------------- ------------- ------------- -------------
Other income:
Loan servicing and other fees 2,464 1,511 4,465 3,121
Retail office fees 1,396 1,150 2,716 2,296
Gain on sale of loans 18 220 31 693
Real estate operations, net 81 349 130 363
Other operating income 81 163 159 265
------------- ------------- ------------- -------------
Total other income 4,040 3,393 7,501 6,738
------------- ------------- ------------- -------------
Non-interest expense:
Salaries and employee benefits 9,421 8,247 18,615 17,029
Occupancy 2,022 1,962 4,079 3,969
Advertising expense 140 54 359 111
Amortization of core deposit
intangible 499 499 998 997
Federal deposit insurance 95 101 190 204
Legal 443 137 732 218
Other expense 2,731 2,429 5,660 5,016
------------- ------------- ------------- -------------
Total non-interest expense 15,351 13,429 30,633 27,544
------------- ------------- ------------- -------------
Earnings before income taxes 28,676 27,026 54,568 53,772
Income tax provision 12,123 11,393 23,038 22,662
------------- ------------- ------------- -------------
Net earnings $ 16,553 $ 15,633 $ 31,530 $ 31,110
============= ============= ============= =============
Other comprehensive loss, net of taxes (465) (435) (511) (345)
------------- ------------- ------------- -------------
Comprehensive earnings $ 16,088 $ 15,198 $ 31,019 $ 30,765
============= ============= ============= =============
Earnings per share:
Basic $ 0.99 $ 0.92 $ 1.86 $ 1.84
============= ============= ============= =============
Diluted $ 0.96 $ 0.90 $ 1.82 $ 1.80
============= ============= ============= =============
Weighted average shares outstanding:
Basic 16,773,686 16,968,389 16,921,062 16,947,280
============= ============= ============= =============
Diluted 17,159,248 17,342,336 17,327,753 17,310,139
============= ============= ============= =============
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL RESULTS
Quarter ended June 30,
2004 2003
-------------- -----------
(Dollars in thousands, except per share data)
End of period:
Total assets $ 5,524,926 $ 4,461,127
Cash and securities $ 316,162 $ 114,609
Mortgage-backed securities $ 116,378 $ 168,937
Loans $ 4,928,047 $ 4,040,668
Core deposit intangible asset $ 6,330 $ 8,325
Deposits $ 2,758,676 $ 2,462,508
Borrowings $ 2,294,224 $ 1,563,725
Stockholders' equity $ 439,518 $ 402,575
Book value per share $ 26.79 $ 23.69
Tangible book value per share $ 26.40 $ 23.20
Stock price (period-end) $ 41.60 $ 35.29
Total loan servicing portfolio $ 5,088,711 $ 4,320,547
Loans serviced for others $ 129,033 $ 167,730
% of Adjustable mortgages 83.60 % 72.87 %
Other data:
Employees (full-time equivalent) 606 527
Branches 29 29
Asset quality:
Real estate (foreclosed) $ -- $ --
Non-accrual loans $ 1,331 $ 3,871
Non-performing assets $ 1,331 $ 3,871
Non-performing assets to total assets 0.02 % 0.09 %
General valuation allowance (GVA) $ 75,450 $ 75,248
Allowances for impaired loans 496 496
-------------- -----------
Allowances for loan losses $ 75,946 75,744
Allowances for loan losses as a percent of gross
loans receivable 1.52 % 1.84 %
Loans sold with recourse $ 85,044 $ 99,760
GVA for loans sold with recourse $ 5,400 $ 6,900
GVA to loans sold with recourse 6.35 % 6.92 %
Modified loans (not impaired) $ 2,416 $ 2,243
Impaired loans, net $ -- $ 2,960
Allowance for impaired loans $ 496 $ 496
Capital ratios:
Tangible capital ratio 7.44 % 8.40 %
Core capital ratio 7.44 8.40
Risk-based capital ratio 14.56 14.91
Net worth to assets ratio 7.96 9.02
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL RESULTS (continued)
Three months ended June 30, Six months ended June 30,
------------------------------ -----------------------------
2004 2003 2004 2003
------------ -------------- ------------- ------------
(Dollars in thousands)
Selected ratios:
Expense ratios:
Efficiency ratio 34.85 % 33.38 % 35.94 % 34.16 %
Expense-to-average-assets ratio 1.15 1.21 1.18 1.26
Return on average assets 1.24 1.41 1.22 1.42
Return on average equity 14.85 15.84 14.24 16.07
Yields earned and rates paid:
Average yield on loans and
mortgage-backed securities 4.70 % 5.61 % 4.80 % 5.72 %
Average yield on investment portfolio (1) 2.61 1.64 2.58 2.70
Average yield on all interest-earning
assets (1) 4.59 5.49 4.70 5.63
Average rate paid on deposits 1.28 1.61 1.28 1.72
Average rate paid on borrowings 2.43 3.25 2.55 3.38
Average rate paid on all
interest-bearing liabilities 1.78 2.24 1.81 2.33
Interest rate spread 2.81 3.25 2.89 3.30
Effective net spread 2.91 3.40 2.99 3.45
Average balances:
Average loans and mortgage-backed
securities $ 4,866,407 $ 4,153,331 $ 4,742,861 $ 4,092,189
Average investments (2) 256,672 128,383 213,177 122,503
------------ -------------- ------------- ------------
Average interest-earning assets (2) 5,123,079 4,281,714 4,956,038 4,214,692
------------ -------------- ------------- ------------
Average deposits 2,719,624 2,468,641 2,697,892 2,491,320
Average borrowings 2,108,350 1,538,505 1,974,023 1,457,813
------------ -------------- ------------- ------------
Average interest-bearing liabilities 4,827,974 4,007,146 4,671,915 3,949,133
------------ -------------- ------------- ------------
Excess of interest-earning assets
over interest-bearing liabilities $ 295,105 $ 274,568 $ 284,123 $ 265,559
============ ============== ============= ============
Loan originations and purchases $ 682,629 $ 508,145 $ 1,276,167 $ 1,047,074
(1) Excludes FHLB stock dividends and other miscellaneous items.
(2) Excludes FHLB stock.
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