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) January 29, 2003
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 January 29, 2003, 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 January 29, 2003.
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: January 29, 2003 By:/s/ Douglas J. Goddard
Douglas J. Goddard
Chief Financial Officer
FIRSTFED REPORTS RESULTS FOR THE FOURTH QUARTER OF 2002
Santa Monica, California, January 29, 2003 -- FirstFed
Financial Corp. (NYSE-FED), parent company of First Federal Bank of
California, today announced net earnings of $14.3 million or $0.83
per diluted common share for the fourth quarter of 2002, compared to
net earnings of $16.2 million or $0.92 per diluted common share for
the third quarter of 2002 and $12.9 million or $0.73 per diluted
common share for the fourth quarter of December 2001. Net earnings
for the quarter ended December 31, 2002 include a $1.1 million
recovery of interest income on charged-off and non-accrual loans and
other adjustments to loan income. Net earnings for the third
quarter of 2002 include income of $5.9 million resulting from a
revised estimate of the Bank's repurchase liability for loans sold
with recourse.
Net earnings for the twelve months of 2002 were $55.2 million
or $3.15 per diluted common share, compared to $50.3 million or
$2.85 per diluted common share for the twelve months of 2001. Net
earnings for the twelve months of 2002 include the aforementioned
income resulting from the Bank's repurchase liability for loans sold
with recourse. After tax, year-to-date earnings were increased by
$3.4 million or $0.19 per diluted common share during 2002 due to
this revised estimate.
Net interest income increased by 3% and 2% during the fourth
quarter and twelve months of 2002, respectively, compared to the
prior year periods due to increased interest rate spreads. The
interest rate spreads increased to 3.21% and 2.92% for the fourth
quarter and twelve months of 2002 from 2.83% and 2.71% for the same
periods last year as the cost of interest-bearing liabilities
declined faster than the yield on interest-earning assets. The
increased spreads compensated for declines in average earning
assets.
Due to continued high levels of loan payoffs, average
interest-earning assets decreased to $4.1 billion for the fourth
quarter and $4.3 billion for the twelve months of 2002 compared to
$4.5 billion for the fourth quarter and $4.4 billion for the twelve
months of the prior year. Loan originations were $417.7 million and
$1.3 billion for the fourth quarter and twelve months of 2002
compared to $271.7 million and $1.5 billion for the same periods
last year.
Allowances for loan losses (including general valuation
allowances and valuation allowances for impaired loans) totaled
$75.7 million or 1.96% of the loan portfolio as of December 31, 2002
compared to $74.8 million or 1.83% as of December 31, 2001.
Non-performing assets were 0.17% of total assets as of December 31,
2002, the same as December 31, 2001.
The Bank did not record a provision for loan losses during 2002
or 2001. Net loan recoveries of $50 thousand and $950 thousand were
recorded for the fourth quarter and twelve months of 2002,
respectively, compared to net loan recoveries of $288 thousand and
$118 thousand for the fourth quarter and twelve months of 2001,
respectively.
As of December 31, 2002, the Company had assets totaling $4.3
billion and consolidated stockholders' equity of $371.6 million.
During the fourth quarter of 2002, the Company repurchased 119,600
shares of common stock at an average market price of $25.74. During
2002, the Company repurchased 353,000 shares of common stock at an
average market price of $25.74. There remain 1,382,477 shares
eligible for repurchase under the Company's stock repurchase program
as of January 28, 2003. First Federal Bank of California operates 29
full-service retail banking offices and 4 loan production offices in
Southern California.
1
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, 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 guarantee or promises regarding future results and assumes
no responsibility to update such forward-looking statements.
KEY FINANCIAL RESULTS FOLLOW
2
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except share data)
(Unaudited)
December 31, December 31,
2002 2001
---------- ----------
ASSETS
Cash and cash equivalents $ 45,199 $ 174,171
Investment securities,
available-for-sale (at fair
value) 103,055 110,444
Mortgage-backed securities,
available-for-sale (at fair
value) 200,585 284,079
Loans receivable, held-for-sale
(fair value of $2,300 and
$5,250) 2,293 5,246
Loans receivable, net 3,766,942 3,999,643
Accrued interest and dividends
receivable 17,752 22,076
Real estate 347 1,515
Office properties and equipment,
net 10,342 10,822
Investment in Federal Home Loan
Bank (FHLB) stock, at cost 78,728 91,713
Other assets 28,486 26,580
--------- ---------
$ 4,253,729 $ 4,726,289
========= =========
LIABILITIES
Deposits $ 2,527,026 $ 2,546,647
FHLB advances 1,167,000 1,597,000
Securities sold under agreements
to repurchase 155,273 211,040
Accrued expenses and other
liabilities 32,789 45,924
--------- ---------
3,882,088 4,400,611
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per
share;
Authorized 100,000,000 shares;
issued 23,395,202 and
23,362,196 shares, outstanding
16,931,306, and 17,251,300
shares 234 234
Additional paid-in capital 35,680 34,670
Retained earnings -
substantially restricted 418,885 363,713
Unreleased shares to employee
stock ownership plan (597) --
Treasury stock, at cost,
6,463,896, and 6,110,896 shares (84,762) (75,930)
Accumulated other comprehensive
earnings, net of taxes 2,201 2,991
--------- --------
371,641 325,678
--------- --------
$ 4,253,729 $ 4,726,289
========= =========
3
FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
--------------------- --------------------
2002 2001 2002 2001
--------- ---------- -------- ---------
Interest income:
Interest on loans $ 58,112 $ 69,614 $ 243,716 $ 298,942
Interest on mortgage
-backed securities 1,891 3,717 9,154 19,803
Interest and dividends
on investments 2,435 3,304 11,008 15,187
-------- ---------- --------- ---------
Total interest income 62,438 76,635 263,878 333,932
-------- ---------- --------- ---------
Interest expense:
Interest on deposits 13,166 19,878 60,808 94,568
Interest on borrowings 14,210 22,733 67,611 107,186
-------- ---------- --------- ---------
Total interest expense 27,376 42,611 128,419 201,754
Net interest income 35,062 34,024 135,459 132,178
Provision for loan losses -- -- -- --
-------- ---------- --------- ---------
Net interest income after
provision for loan losses 35,062 34,024 135,459 132,178
-------- ---------- --------- ---------
Other income:
Loan servicing and other
fees 1,263 841 4,325 3,319
Retail office fees 1,256 1,151 4,604 3,791
Gain on sale of loans 1,242 155 7,806 656
Real estate operations, net 206 (79) 339 304
Other operating income 203 184 1,000 849
-------- ---------- --------- ---------
Total other income 4,170 2,252 18,074 8,919
-------- ---------- --------- ---------
Non-interest expense:
Compensation 8,152 7,357 32,627 29,682
Occupancy 2,158 2,122 8,557 8,302
Amortization of core
deposit intangible 498 448 1,962 1,564
Other expenses 3,753 3,781 15,066 13,626
-------- ---------- --------- ---------
Total non-interest expense 14,561 13,708 58,212 53,174
-------- ---------- --------- ---------
Earnings before income taxes 24,671 22,568 95,321 87,923
Income tax provision 10,380 9,658 40,149 37,621
-------- ---------- --------- ---------
Net earnings $ 14,291 $ 12,910 $ 55,172 $ 50,302
======== ========== ========= =========
Other comprehensive earnings
(loss), net of taxes (390) (561) (790) 5,149
-------- ---------- --------- ---------
Comprehensive earnings $ 13,901 $ 12,349 $ 54,382 $ 55,451
======== ========== ========= =========
Earnings per share:
Basic $ 0.85 $ 0.75 $ 3.22 $ 2.92
======== ========== ========= =========
Diluted $ 0.83 $ 0.73 $ 3.15 $ 2.85
======== ========== ========= =========
Weighted average shares
outstanding:
Basic 16,888,883 17,283,591 17,149,712 17,234,591
========== ========== ========== ==========
Diluted 17,236,018 17,619,704 17,506,129 17,645,647
========== ========== ========== ==========
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL HIGHLIGHTS
Quarter ended December 31,
2002 2001
--------- --------
(Dollars in thousands,
except per share data)
End of period:
Total assets $ 4,253,729 $ 4,726,382
Cash and securities $ 148,254 $ 284,615
Mortgage-backed securities $ 200,585 $ 284,079
Loans $ 3,769,235 $ 4,004,889
Core deposit intangible asset $ 9,323 $ 12,750
Deposits $ 2,527,026 $ 2,546,647
Borrowings $ 1,322,273 $ 1,808,040
Stockholders' equity $ 371,641 $ 325,678
Book value per share $ 21.95 $ 18.88
Tangible book value per share $ 21.40 $ 18.14
Stock price (period-end) $ 28.95 $ 25.63
Total loan servicing portfolio $ 4,123,602 $ 4,436,112
Loans serviced for others $ 197,250 $ 257,629
% of Adjustable mortgages 71.46% 71.38%
Other data:
Employees (full-time equivalent) 497 506
Branches 29 29
Loan production offices 4 4
Asset quality:
Real estate (foreclosed) $ 319 $ 1,485
Non-accrual loans $ 6,722 $ 6,443
Non-performing assets $ 7,041 $ 7,928
Non-performing assets as a percent
of total assets 0.17% 0.17%
General valuation allowance (GVA) $ 75,223 $ 72,919
Allowance for impaired loans $ 496 $ 1,850
--------- ---------
Allowances for loan losses $ 75,719 $ 74,769
Allowances for loan losses as a
percent of gross loans
receivable 1.96% 1.83%
Loans sold with recourse $ 108,606 $ 137,204
GVA for loans sold with recourse $ 6,900 $ 12,824
GVA as a percent of loans sold with
recourse 6.35% 9.35%
Modified loans (not impaired) $ 2,299 $ 927
Impaired loans, net $ 1,071 $ 7,394
Capital ratios:
Tangible capital ratio 8.05% 6.42%
Core capital ratio 8.05 6.42
Risk-based capital ratio 14.53 12.51
Net worth to assets ratio 8.74 6.89
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FIRSTFED FINANCIAL CORP.
AND SUBSIDIARY
KEY FINANCIAL HIGHLIGHTS (continued)
Three months ended Twelve months ended
December 31, December 31,
---------------------- ---------------------
2002 2001 2002 2001
--------- ----------- --------- ----------
Selected ratios: (Dollars in thousands)
Expense ratios:
Efficiency ratio 38.71% 37.95% 39.95% 37.86%
Expense-to-average-assets 1.36 1.18 1.31 1.17
ratio
Return on average assets 1.33 1.11 1.24 1.10
Return on average equity 15.65 16.19 15.82 16.93
Yields earned and rates paid:
Average yield on loans and
mortgage-backed securities 6.05% 6.91% 6.18% 7.61%
Average yield on investment
portfolio (1) 3.86 3.96 3.65 5.16
Average yield on all
interest-earning assets (1) 5.97 6.76 6.08 7.50
Average rate paid on deposits 2.08 3.24 2.42 4.08
Average rate paid on
borrowings 4.02 4.85 4.39 5.67
Average rate paid on all
interest-bearing liabilities 2.76 3.93 3.16 4.79
Interest rate spread 3.21 2.83 2.92 2.71
Effective net spread 3.38 2.99 3.09 2.90
Average balances:
Average loans and
mortgage-backed securities $ 3,961,612 $ 4,225,715 $ 4,091,852 $4,181,554
Average investments (2) 150,729 229,831 172,996 200,807
--------- --------- --------- ---------
Average interest-earning
assets (2) 4,112,341 4,455,546 4,264,848 4,382,361
--------- --------- --------- ---------
Average deposits 2,515,045 2,432,038 2,517,366 2,317,744
Average borrowings (3) 1,350,902 1,831,462 1,518,283 1,885,426
--------- --------- --------- ---------
Average interest-bearing
liabilities 3,865,947 4,263,500 4,035,649 4,203,170
--------- --------- --------- ---------
Excess of interest-earning
assets over interest-
bearing liabilities $ 246,394 $ 192,046 $ 229,199 $ 179,191
========= ========= ========= =========
Loan originations and purchases $ 417,713 $ 271,738 $ 1,288,772 $1,502,335
(1) Excludes FHLB stock dividends and other miscellaneous items.
(2) Excludes FHLB stock.
(3) Excludes accrued interest on tax assessment.
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