First Defiance Financial Corp. (NASDAQ: FDEF) announced today that net income for the first quarter ended March 31, 2014 totaled $5.2 million, or $0.51 per diluted common share, compared to $5.6 million or $0.55 per diluted common share for the quarter ended March 31, 2013.
The first quarter 2014 results were negatively impacted by $786,000 ($511,000 after tax), or $0.05 per diluted common share, for costs to terminate the merger agreement with First Community Bank.
“Our earnings performance in the first quarter was solid, despite the impact of terminating our merger agreement,” said Donald P. Hileman, President, and Chief Executive Officer of First Defiance Financial Corp. “Our strong focus on the fundamentals coupled with our new business strategies enabled us to overcome the impact of a significant reduction in mortgage banking this past quarter.”
Credit QualityNon-performing loans totaled $26.8 million at March 31, 2014, a decrease from $35.3 million at March 31, 2013. In addition, First Defiance had $6.0 million of real estate owned at March 31, 2014 compared to $4.3 million at March 31, 2013. Accruing troubled debt restructured loans were $26.7 million at March 31, 2014 compared with $28.0 million at March 31, 2013. For the first quarter of 2014, First Defiance recorded net charge-offs of $270,000, down from $677,000 in the first quarter of 2013 and down from the fourth quarter level of $1.5 million. The allowance for loan loss as a percentage of total loans was 1.58% at March 31, 2014 compared with 1.76% at March 31, 2013. The first quarter results include expense for provision for loan losses of $103,000, compared with $425,000 for the same period in 2013 and $475,000 in the fourth quarter of 2013. “Asset quality measures showed continued improvement from the prior quarter and clearly compared to a year ago. The low levels of charge offs and provision expense were both contributing factors in our results,” said Hileman. “We expect our asset quality to maintain positive trends as we go forward despite the mixed indicators in the economy.”