FedFirst sees 3Q income decline
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MONESSEN – FedFirst Financial Corp., the parent company of First Federal Savings Bank, announced Thursday a 28 percent decline in net income for the third quarter ended Sept. 30.
The Monessen-based financial services company, which operates seven branches, reported income of $463,000, compared to $649,000 for the third quarter of 2012, a decrease of $186,000 or 28.7 percent.
Diluted earnings per share was 19 cents, compared to 23 cents for the third quarter of 2012.
The company reported quarterly net income of $1.8 million, compared to $1.7 million for the nine months ended Sept. 30, 2012, an increase of $134,000 or 7.9 percent. Diluted earnings per share was 75 cents for the nine months ended Sept. 30, compared to 60 cents for the first nine months of 2012, an increase of 15 cents per share or 25 percent.
“The low interest rate environment continues to present a challenge for community banks and the ability to maintain our net interest margin,” said Patrick G. O’Brien, President and chief executive officer. “The uptick in rates in the third quarter helped to slow refinance activity, which contributed to a 2.5 percent increase in the loan portfolio in the quarter. We also continue to benefit from strong results from our insurance agency subsidiary, Exchange Underwriters.
“Offsetting these gains was a slight increase in credit costs, which reflects the unevenness of the economic recovery in our market area.”
Net interest income for the three months ended Sept. 30 decreased $152,000, or 5.7 percent, to $2.5 million compared to $2.6 million for the third quarter of 2012. Modifications and payoffs of higher yielding loans and securities due to the continued low interest rate environment resulted in a $345,000 decline in interest income.
The banks said this was partially offset by interest rate reductions and decreases in average balances on higher-cost deposits that resulted in a $116,000 decrease in deposits expense and payoffs on borrowings that resulted in a $77,000 decrease in borrowings expense.
Noninterest expense increased $172,000, or 7.2 percent, to $2.6 million for the quarter, compared to $2.4 million for the third quarter of 2012. Compensation expense increased $79,000 primarily due to increases in stock-based compensation and employee benefit expenses.