The following summarizes key activities of the Company during the quarter ended September 30, 2010:
Note: Several balance sheet and income statement accounts have been reclassified for presentation consistent with industry standards. All prior periods have been conformed to current period presentation.
- Net interest margin, on a fully tax equivalent basis, was 3.91%, compared to 3.94% for the June 30, 2010 quarter and down from 4.03% for the comparable quarter last year.
- The provision for loan losses was down $18.8 million from the linked quarter and $3.7 million from the same period last year. Net charge-offs were $17.7 million and $7.3 million for the September 30, 2010 and 2009 quarters respectively. The current quarter net charge-offs were down from $32.2 million for the linked quarter.
- Core deposits, which include checking, money market and savings accounts, increased during the quarter, while higher priced certificates of deposit declined as a result of matured accounts not being renewed.
- First Federal remains categorized as "well-capitalized" under regulatory standards with total risk-based capital at 12.55% and Tier 1 risk-based capital of 11.27% as of September 30, 2010.
As of September 30, 2010, First Financial's total assets were $3.3 billion, relatively flat with the June 30, 2010 quarter end and a decrease of $187.3 million or 5.3% from September 30, 2009. The decline was primarily related to reductions in the loan portfolio resulting from decreased customer demand and increased charge-offs, as well as higher levels of prepayments on mortgage-backed securities.
Investment securities, primarily comprised of mortgage-backed securities, totaled $473.4 million at September 30, 2010, a decrease of $8.9 million or 1.8% from the linked quarter and down $87.9 million or 15.7% from September 30, 2009. The reductions in investment securities are the result of higher levels of prepayments during the year combined with the challenge in finding replacement securities that have acceptable yields.