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 25, 2002
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 5. Other Events.
On July 25, 2002, the registrant, FirstFed Financial Corp., issued a press
release. A copy of this press release is attached and incorporated herein as
Exhibit 99.
Item 99. Press release dated July 25, 2002.
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 25, 2002 By:/s/ Douglas J. Goddard
Douglas J. Goddard
Chief Financial Officer
Contact: Douglas Goddard, Executive Vice President
(310) 319-6014
FIRSTFED REPORTS RESULTS FOR THE SECOND QUARTER OF 2002
Santa Monica, California, July 25, 2002 -- FirstFed Financial
Corp. (NYSE-FED), parent company of First Federal Bank of
California, today announced net earnings of $12.3 million or $0.70
per diluted common share for the second quarter of 2002, compared to
net earnings of $12.4 million or $0.70 per diluted common share for
the first quarter of 2002 and $12.6 million or $0.71 per diluted
common share for the second quarter of June 2001. Net earnings for
the first six months of 2002 were $24.7 million or $1.40 per diluted
common share, compared to $25.0 million or $1.42 per diluted common
share for the first six months of 2001.
Net earnings decreased during the second quarter of 2002
compared to the second quarter of 2001 primarily as a result of
increased operating costs associated with two financial institutions
acquired in November of 2001. Growth in earning assets and net
interest income associated with the acquisition of those
institutions was offset by declining earning assets due to loan
payoffs. Net earnings decreased during the first six months of 2002
compared to the first six months of 2001 primarily as a result of
increased loan compensation costs, legal expenses and increased
retail branch operating costs. These added costs were partially
offset by increases in loan prepayment charges and retail deposit
fees.
Net interest income decreased during the second quarter of 2002
compared to the second quarter of 2001 primarily as a result of a
reduction in average interest-earning assets. Average
interest-earning assets decreased to $4.3 billion during the second
quarter of 2002 from $4.4 billion for the same period of last year
due to continued high levels of loan payoffs. These payoffs were
offset by $287.8 million of loan originations during the second
quarter. The interest rate spread increased to 2.81% and 2.77% for
the second quarter and first six months of 2002 from 2.72% and 2.66%
during the same periods last year as the cost of interest-bearing
liabilities re-priced at reduced rates more quickly than the yield
on interest-earning assets during the period.
The Company's general valuation allowance was $74.1 million or
1.83% of loans and real estate owned as of June 30, 2002, compared
to $73.3 million or 1.70% as of December 31, 2001 and $70.9 million
or 1.65% at June 30, 2001. Non-performing assets were 0.11% of
total assets as of June 30, 2002 compared to 0.17% as of December
31, 2001 and 0.22% as of June 30, 2001.
The Company did not record a provision for loan losses during
the first six months of 2002 or for any period during 2001. Net
loan recoveries totaled $1.4 million and $1.2 million during the
second quarter and first six months of 2002, respectively. For the
comparable periods last year, the Company recorded net loan
charge-offs of $160 thousand and $225 thousand for the second
quarter and first six months of 2001, respectively.
The Company had $4.4 billion in total assets as of June 30, 2002
and operates 29 full-service retail banking offices and 4 loan
production offices in Southern California. At June 30, 2002, the
consolidated stockholders' equity of the Company was $350.3
million. As of July 25, 2002, there remain 889,016 shares eligible
for repurchase under the Company's stock repurchase program. No
shares were repurchased during 2001 or 2002. The Company intends to
recommence its stock repurchase program when market conditions
warrant such activity in management's view. At June 30, 2002, First
Federal Bank of California met the capital requirements necessary to
be deemed "well-capitalized" for regulatory capital purposes.
KEY FINANCIAL RESULTS FOLLOW
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
(Unaudited)
June 30, December 31, June 30,
2002 2001 2001
--------- ----------- ----------
ASSETS
Cash and cash equivalents $ 58,747 $ 174,171 $ 69,851
Investment securities,
available-for-sale (at fair
value) 115,441 110,444 130,019
Mortgage-backed securities,
available-for-sale (at fair
value) 235,148 284,079 338,269
Loans receivable, held-for-sale
(fair value of $250, $5,246
and 6,766) 250 5,246 6,766
Loans receivable, net 3,856,073 3,999,643 3,876,950
Accrued interest and dividends
receivable 19,389 22,076 27,162
Real estate 606 1,515 2,002
Office properties and equipment,
net 10,399 10,822 9,932
Investment in Federal Home Loan
Bank (FHLB) stock, at cost 85,634 91,713 87,615
Other assets 26,585 26,580 23,418
--------- ----------- ----------
$4,408,272 $4,726,289 $4,571,984
========= =========== ==========
LIABILITIES
Deposits $2,493,389 $2,546,647 $2,275,544
FHLB advances 1,342,000 1,597,000 1,674,000
Securities sold under agreements
to repurchase 176,131 211,040 264,640
Accrued expenses and other
liabilities 46,486 45,924 61,422
--------- --------- ---------
4,058,006 4,400,611 4,275,606
--------- --------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per
share;
Authorized 100,000,000 shares;
issued 23,381,165, 23,362,196
and 23,335,788 shares outstanding
17,270,269, 17,251,300 and
17,268,298 shares 234 234 233
Additional paid-in capital 34,858 34,670 33,207
Retained earnings - 388,368 363,713 338,376
substantially restricted
Unreleased shares to employee
stock ownership plan -- -- (421)
Treasury stock, at cost,
6,110,896 shares (75,930) (75,930) (75,743)
Accumulated other comprehensive
gain, net of taxes 2,736 2,991 726
--------- ----------- ----------
350,266 325,678 296,378
--------- ----------- ----------
$4,408,272 $4,726,289 $4,571,984
========= =========== ==========
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2002 2001 2002 2001
--------- ----------- -------- ---------
Interest income:
Interest on loans $ 60,701 $ 77,891 $ 125,664 $ 155,871
Interest on mortgage-
backed securities 2,267 5,542 5,237 11,501
Interest and dividends on
investments 2,955 4,010 5,799 8,088
------- -------- -------- --------
Total interest income 65,923 87,443 136,700 175,460
------- -------- -------- --------
Interest expense:
Interest on deposits 15,638 25,185 32,997 51,801
Interest on borrowings 17,305 28,696 36,734 57,945
------- -------- -------- --------
Total interest expense 32,943 53,881 69,731 109,746
------- -------- -------- --------
Net interest income 32,980 33,562 66,969 65,714
Provision for loan losses -- -- -- --
------- -------- ------- --------
Net interest income after
provision for loan losses 32,980 33,562 66,969 65,714
------- -------- ------- --------
Other income:
Loan servicing and other fees 838 624 1,890 1,475
Retail office fees 1,135 815 2,176 1,688
Gain on sale of loans 184 108 369 210
Real estate operations, net 31 (268) 192 (226)
Other operating income 306 362 566 501
------- ------- ------- --------
Total other income 2,494 1,641 5,193 3,648
------- ------- ------- --------
Non-interest expense:
Compensation 8,269 7,435 16,466 14,730
Occupancy 2,099 2,098 4,150 3,979
Amortization of core deposit
intangible 464 372 965 744
Other expenses 3,401 3,290 7,963 6,275
------- ------- ------- --------
Total non-interest expense 14,233 13,195 29,544 25,728
------- ------- ------- --------
Earnings before income taxes 21,241 22,008 42,618 43,634
Income tax provision 8,954 9,416 17,963 18,669
------- ------- ------- --------
Net earnings $ 12,287 $ 12,592 $ 24,655 $ 24,965
======= ======= ======= ========
Other comprehensive earnings
(loss) net of taxes 533 (187) (255) 2,884
------- ------- ------- --------
Comprehensive earnings $ 12,820 $ 12,405 $ 24,400 $ 27,849
======= ======= ======= ========
Earnings per share:
Basic $ 0.71 $ 0.73 $ 1.43 $ 1.45
======= ======= ======= ========
Diluted $ 0.70 $ 0.71 $ 1.40 $ 1.42
======= ======= ======= ========
Weighted average shares
outstanding:
Basic 17,264,461 17,218,464 17,259,638 17,200,593
========== ========== ========== ==========
Diluted 17,644,145 17,650,751 17,625,541 17,638,569
========== ========== ========== ==========
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL HIGHLIGHTS
Quarter ended June 30,
2002 2001
--------- --------
(Dollars in thousands,
except per share data)
End of period:
Total assets $ 4,408,272 $ 4,571,984
Cash and securities $ 174,188 $ 199,870
Mortgage-backed securities $ 235,148 $ 338,269
Loans $ 3,856,323 $ 3,883,716
Core deposit intangible asset $ 10,322 $ 8,559
Deposits $ 2,493,389 $ 2,275,544
Borrowings $ 1,518,131 $ 1,938,640
Stockholders' equity $ 350,266 $ 296,378
Book value per share $ 20.28 $ 17.16
Tangible book value per share $ 19.68 $ 16.67
Stock price (period-end) $ 29.00 $ 29.80
Total loan servicing portfolio $ 4,262,297 $ 4,432,287
Loans serviced for others $ 229,141 $ 284,169
% of Adjustable mortgages 69.47% 81.87%
Other data:
Employees (full-time equivalent) 508 473
Branches 29 25
Loan production offices 4 3
Asset quality:
Real estate (foreclosed) $ 577 $ 1,971
Non-accrual loans $ 4,186 $ 8,007
Non-performing assets $ 4,763 $ 9,978
Non-performing assets to total assets 0.11% 0.22%
General valuation allowance (GVA) $ 74,136 $ 70,877
GVA to assets with loss exposure * 1.83% 1.65%
Loans sold with recourse $ 112,468 $ 137,713
GVA for loans sold with recourse $ 12,824 $ 12,824
GVA to loans sold with recourse 11.40% 9.31%
Modified loans (not impaired) $ 2,362 $ 798
Impaired loans, net $ 3,111 $ 7,380
Allowance for impaired loans $ 2,154 $ 1,850
Capital ratios:
Tangible capital ratio 7.51 % 6.14%
Core capital ratio 7.51 6.14
Risk-based capital ratio 13.77 12.28
Net worth to assets ratio 7.95 6.48
* Primarily the Bank's loans receivable
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL HIGHLIGHTS (continued)
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2002 2001 2002 2001
--------- ---------- --------- ---------
(Dollars in thousands)
Selected ratios:
Expense ratios:
Efficiency ratio 40.33% 37.60% 41.15% 37.20%
Expense-to-average-assets
ratio 1.27 1.16 1.29 1.15
Return on average assets 1.10 1.11 1.08 1.11
Return on average equity 14.30 17.37 14.60 17.68
Yields earned and rates paid:
Average yield on loans and
mortgage-backed securities 6.13% 7.96% 6.29% 8.09%
Average yield on investment
portfolio** 4.35 5.30 3.30 5.56
Average yield on all
interest-earning assets** 6.06 7.84 6.15 7.97
Average rate paid on deposits 2.50 4.43 2.64 4.64
Average rate paid on
borrowings 4.48 5.93 4.54 6.11
Average rate paid on all
interest-bearing liabilities 3.25 5.12 3.39 5.31
Interest rate spread 2.81 2.72 2.77 2.66
Effective net spread 2.98 2.92 2.93 2.87
Average balances:
Average loans and
mortgage-backed securities $4,118,647 $4,184,565 $4,169,092 $4,131,442
Average investments *** 161,045 200,924 194,340 199,566
--------- ---------- --------- ---------
Average interest-earning
assets *** 4,279,692 4,385,489 4,363,432 4,331,008
--------- ---------- --------- ---------
Average deposits 2,513,306 2,279,483 2,519,687 2,251,907
Average borrowings 1,546,013 1,935,997 1,630,550 1,907,509
--------- ---------- --------- ---------
Average interest-bearing
liabilities 4,059,319 4,215,480 4,150,237 4,159,416
--------- ---------- --------- ---------
Excess of interest-earning
assets over interest-
bearing liabilities $ 220,373 $ 170,009 $ 213,195 $ 171,592
========= ========== ========= =========
Loan originations and purchases $ 287,793 $ 452,522 $ 587,564 $ 814,735
** Excludes FHLB stock dividends and other miscellaneous items.
*** Excludes FHLB stock.