FFD Financial Corp. (FFDF, Financial) filed Quarterly Report for the period ended 2010-09-30.
Ffd Financial Corp. has a market cap of $14.23 million; its shares were traded at around $14 with a P/E ratio of 11.92 and P/S ratio of 1.27. The dividend yield of Ffd Financial Corp. stocks is 4.84%.
The allowance for loan losses totaled $2.1 million at September 30, 2010, an increase of $109,000, or 5.5%, from June 30, 2010, and represented 1.15% of total loans and 1.10% of total loans at those dates, respectively. The increase resulted from a provision of $186,000 and recoveries of $1,000, which were partially offset by charge-offs of $78,000. Management increased the allowance for loan losses despite the improving trends over the three month period with respect to lower impaired loans and lower nonaccruing loans. Management increased the allowance for loan losses despite improving trends in impaired loans and nonaccruing loans. Management felt the improved trends in credit quality should show longer sustainable results as economic conditions are still depressed and would need to improve before considering a decrease to the allowance for loan losses. Nonaccrual loans were $1.2 million at September 30, 2010 and $2.2 million at June 30, 2010, which represented .67% and 1.21% of total loans at those respective dates. Non-accruing non-residential real estate and land mortgage loans decreased by $856,000, one- to four-family properties secured by first liens increased by $31,000 and commercial and consumer loans did not change. The decrease in non-accruing non-residential real estate and land loans was partially due to the favorable resolution, resulting in no loss, of a large non-performing loan during the quarter. Delinquent loans to total loans were 1.24% at September 30, 2010 and 2.34% at June 30, 2010, due to a decrease in non-residential properties delinquent 90 days or more days, and one- to four-family properties secured by first liens delinquent 30 to 89 days. At September 30, 2010, there were no loans past due over 90 days and still on accrual. Although the Corporation experienced decreases in nonaccrual and delinquent loans from June 30, 2010 to September 30, 2010, there can be no assurance that decreases will occur in future periods. Management has reviewed these loans for loss exposure and believes they are adequately collateralized in the event of foreclosure. The composition of the loan portfolio remained relatively the same from June 30, 2010 to September 30, 2010. Residential real estate, one- to four-family and multifamily and nonresidential real estate and land loans make up most of the portfolio. Impaired loan balances were $2.8 million with an allowance of $630,000 and $3.9 million with an allowance of $582,000 at September 30, 2010 and June 30, 2010, respectively. Although management believes that the allowance for loan losses at September 30, 2010, is adequate based upon the available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which could adversely affect the Corporations results of operations.
Deposits totaled $170.8 million at September 30, 2010, a $494,000, or .3%, decrease from total deposits at June 30, 2010. The Bank had a significant number of time deposits maturing during the quarter and experienced some deposit run-off due to investors pursuing higher yields. This run-off resulted in a decrease in interest bearing deposits of $1.7 million, or 1.1%, and was partially offset by an increase in non-interest bearing deposits of $1.2 million, or 9.3%. FHLB advances decreased .4% from $13.7 million at June 30, 2010 to $13.6 million at September 30, 2010. Other borrowed money, consisting of a line of credit with another financial institution, was unchanged with a balance of $630,000 at both June 30, 2010 and September 30, 2010.
The Bank experienced a favorable trend in net interest income this quarter as a result of its prior efforts to grow assets in its new market in Holmes county and the favorable re-pricing of a large block of time deposits. Total interest income increased $158,000, or 6.2%, to $2.7 million for the three months ended September 30, 2010, compared to the same period in 2009. The increase was due primarily to increases in average balances outstanding across all categories of interest earning assets and decreased costs of liabilities. Interest income on loans increased by $153,000, or 6.2%, due to an increase of $18.5 million, or 11.3%, in the average loan portfolio balance outstanding which was offset by a 27 basis point decrease in yield. Interest income on investment securities increased by $8,000, or 16.3%, to $57,000 due to a 20 basis point increase in yield and a $510,000, or 7.6%, increase in the average balance outstanding. Interest income on interest bearing deposits decreased $2,000, or 6.45%, to a total of $29,000 for the three-months ended September 30, 2010, due to a $4.3 million, or 40.6%, decrease in the average balance outstanding, which was partially offset by a 68 basis point increase in yield. Interest income on mortgage-backed securities decreased by $1,000, or 33.3%, due to a decrease of $21,000, or 7.2%, in the average balance outstanding and a 129 basis point decrease in yield.
Noninterest income totaled $381,000 for the three months ended September 30, 2010, an increase of $174,000, or 84.1%, from the 2009 total. Net gain on sale of loans increased by $189,000, or 266.2%, to $260,000 for the three months ended September 30, 2010, compared to $71,000 for the three months ended September 30, 2009. The increase in gain on sale of loans resulted from managements efforts to utilize its strong mortgage banking unit during this time of significantly increased loan refinancing demand. This demand resulted in increased sales into the secondary mortgage market of newly originated loans and refinanced loans as a result of the prevailing low interest rate environment. Service charges on deposit accounts increased by $15,000, or 19.0%, to $94,000 for the three months ended September 30, 2010, compared to $79,000 for the same period in 2009. Mortgage servicing revenue decreased $28,000 in 2010 compared to the same period in 2009, due to greater amortization expense and a smaller recovery of servicing rights fair value. The greater amortization expense partially resulted from the refinancing of older loans with greater original servicing rights valuation. The smaller recovery of servicing rights fair value primarily resulted from the slowing of declining interest rates.
Noninterest expense totaled $1.4 million for the three months ended September 30, 2010, a decrease of $1,000, or .1%, compared to the same period in 2009. The decrease in noninterest expense includes decreases of $20,000, or 37.0%, in postage and stationary supplies, $14,000, or 26.4%, in advertising, $14,000, in loss on sale of real estate owned, $13,000, or 19.4%, in professional and consulting fees, $5,000, or 7.4%, in FDIC insurance expense, $4,000, or 6.9% in checking account maintenance expense and $1,000, or 2.5%, in ATM processing, which were offset by increases of $41,000, or 6.8%, in employee and director compensation and benefits, $23,000, or 18.6%, in occupancy and equipment expense, $5,000, or 2.9%, in other operating expense and $2,000, or 2.2%, in data processing. The increase in employee compensation was due to additional staffing to expand commercial loan production operations and normal merit increases. The increase in occupancy and equipment expense primarily resulted from full operation of the Berlin office in the first quarter of 2010 as opposed to partial operations in the first quarter of 2009.
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Ffd Financial Corp. has a market cap of $14.23 million; its shares were traded at around $14 with a P/E ratio of 11.92 and P/S ratio of 1.27. The dividend yield of Ffd Financial Corp. stocks is 4.84%.
Highlight of Business Operations:
Loans receivable, including loans held for sale, totaled $182.0 million at September 30, 2010, an increase of $1.8 million, or 1.0%, from the June 30, 2010 total. The portfolio of loans secured by one- to four-family residential real estate increased by $873,000, or 1.3%, to $69.0 million at September 30, 2010. Loans secured by nonresidential real estate and land totaled $81.9 million at September 30, 2010, an increase of $1.8 million, or 2.3%, from June 30, 2010. Commercial loans decreased $913,000, or 4.6%, from June 30, 2010 to a total of $19.1 million at September 30, 2010. Loan originations during the period totaling $31.6 million were substantially offset by principal repayments of $29.0 million, adjustments to the allowance for loan losses and net unamortized fees and costs. During the three-month period ended September 30, 2010, loan originations were comprised of $19.4 million of one- to four-family residential real estate loans, $7.3 million of nonresidential real estate loans, $1.3 million of consumer loans, $3.4 million of commercial loans, and $240,000 of multifamily real estate loans. Nonresidential real estate and commercial lending generally involve a higher degree of risk than one- to four-family residential real estate lending due to the relatively larger loan amounts and the effects of general economic conditions on the successful operation of income-producing properties and businesses. The Corporation endeavors to reduce this risk by evaluating the credit history and past performance of the borrower, the location of the real estate, the quality of the management operating the property or business, the debt service ratio, the quality and characteristics of the income stream generated by the property or business and appraisals supporting the real estate or collateral valuation.The allowance for loan losses totaled $2.1 million at September 30, 2010, an increase of $109,000, or 5.5%, from June 30, 2010, and represented 1.15% of total loans and 1.10% of total loans at those dates, respectively. The increase resulted from a provision of $186,000 and recoveries of $1,000, which were partially offset by charge-offs of $78,000. Management increased the allowance for loan losses despite the improving trends over the three month period with respect to lower impaired loans and lower nonaccruing loans. Management increased the allowance for loan losses despite improving trends in impaired loans and nonaccruing loans. Management felt the improved trends in credit quality should show longer sustainable results as economic conditions are still depressed and would need to improve before considering a decrease to the allowance for loan losses. Nonaccrual loans were $1.2 million at September 30, 2010 and $2.2 million at June 30, 2010, which represented .67% and 1.21% of total loans at those respective dates. Non-accruing non-residential real estate and land mortgage loans decreased by $856,000, one- to four-family properties secured by first liens increased by $31,000 and commercial and consumer loans did not change. The decrease in non-accruing non-residential real estate and land loans was partially due to the favorable resolution, resulting in no loss, of a large non-performing loan during the quarter. Delinquent loans to total loans were 1.24% at September 30, 2010 and 2.34% at June 30, 2010, due to a decrease in non-residential properties delinquent 90 days or more days, and one- to four-family properties secured by first liens delinquent 30 to 89 days. At September 30, 2010, there were no loans past due over 90 days and still on accrual. Although the Corporation experienced decreases in nonaccrual and delinquent loans from June 30, 2010 to September 30, 2010, there can be no assurance that decreases will occur in future periods. Management has reviewed these loans for loss exposure and believes they are adequately collateralized in the event of foreclosure. The composition of the loan portfolio remained relatively the same from June 30, 2010 to September 30, 2010. Residential real estate, one- to four-family and multifamily and nonresidential real estate and land loans make up most of the portfolio. Impaired loan balances were $2.8 million with an allowance of $630,000 and $3.9 million with an allowance of $582,000 at September 30, 2010 and June 30, 2010, respectively. Although management believes that the allowance for loan losses at September 30, 2010, is adequate based upon the available facts and circumstances, there can be no assurance that additions to the allowance will not be necessary in future periods, which could adversely affect the Corporations results of operations.
Deposits totaled $170.8 million at September 30, 2010, a $494,000, or .3%, decrease from total deposits at June 30, 2010. The Bank had a significant number of time deposits maturing during the quarter and experienced some deposit run-off due to investors pursuing higher yields. This run-off resulted in a decrease in interest bearing deposits of $1.7 million, or 1.1%, and was partially offset by an increase in non-interest bearing deposits of $1.2 million, or 9.3%. FHLB advances decreased .4% from $13.7 million at June 30, 2010 to $13.6 million at September 30, 2010. Other borrowed money, consisting of a line of credit with another financial institution, was unchanged with a balance of $630,000 at both June 30, 2010 and September 30, 2010.
The Bank experienced a favorable trend in net interest income this quarter as a result of its prior efforts to grow assets in its new market in Holmes county and the favorable re-pricing of a large block of time deposits. Total interest income increased $158,000, or 6.2%, to $2.7 million for the three months ended September 30, 2010, compared to the same period in 2009. The increase was due primarily to increases in average balances outstanding across all categories of interest earning assets and decreased costs of liabilities. Interest income on loans increased by $153,000, or 6.2%, due to an increase of $18.5 million, or 11.3%, in the average loan portfolio balance outstanding which was offset by a 27 basis point decrease in yield. Interest income on investment securities increased by $8,000, or 16.3%, to $57,000 due to a 20 basis point increase in yield and a $510,000, or 7.6%, increase in the average balance outstanding. Interest income on interest bearing deposits decreased $2,000, or 6.45%, to a total of $29,000 for the three-months ended September 30, 2010, due to a $4.3 million, or 40.6%, decrease in the average balance outstanding, which was partially offset by a 68 basis point increase in yield. Interest income on mortgage-backed securities decreased by $1,000, or 33.3%, due to a decrease of $21,000, or 7.2%, in the average balance outstanding and a 129 basis point decrease in yield.
Noninterest income totaled $381,000 for the three months ended September 30, 2010, an increase of $174,000, or 84.1%, from the 2009 total. Net gain on sale of loans increased by $189,000, or 266.2%, to $260,000 for the three months ended September 30, 2010, compared to $71,000 for the three months ended September 30, 2009. The increase in gain on sale of loans resulted from managements efforts to utilize its strong mortgage banking unit during this time of significantly increased loan refinancing demand. This demand resulted in increased sales into the secondary mortgage market of newly originated loans and refinanced loans as a result of the prevailing low interest rate environment. Service charges on deposit accounts increased by $15,000, or 19.0%, to $94,000 for the three months ended September 30, 2010, compared to $79,000 for the same period in 2009. Mortgage servicing revenue decreased $28,000 in 2010 compared to the same period in 2009, due to greater amortization expense and a smaller recovery of servicing rights fair value. The greater amortization expense partially resulted from the refinancing of older loans with greater original servicing rights valuation. The smaller recovery of servicing rights fair value primarily resulted from the slowing of declining interest rates.
Noninterest expense totaled $1.4 million for the three months ended September 30, 2010, a decrease of $1,000, or .1%, compared to the same period in 2009. The decrease in noninterest expense includes decreases of $20,000, or 37.0%, in postage and stationary supplies, $14,000, or 26.4%, in advertising, $14,000, in loss on sale of real estate owned, $13,000, or 19.4%, in professional and consulting fees, $5,000, or 7.4%, in FDIC insurance expense, $4,000, or 6.9% in checking account maintenance expense and $1,000, or 2.5%, in ATM processing, which were offset by increases of $41,000, or 6.8%, in employee and director compensation and benefits, $23,000, or 18.6%, in occupancy and equipment expense, $5,000, or 2.9%, in other operating expense and $2,000, or 2.2%, in data processing. The increase in employee compensation was due to additional staffing to expand commercial loan production operations and normal merit increases. The increase in occupancy and equipment expense primarily resulted from full operation of the Berlin office in the first quarter of 2010 as opposed to partial operations in the first quarter of 2009.
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