NEWS RELEASE
		Contact:	William J. Small
			Chairman, President and CEO
			(419) 782-5015
			bsmall@first-fed.com

 

For Immediate Release

Exhibit 99.1

 

FIRST DEFIANCE FINANCIAL CORP. ANNOUNCES 2013

FIRST QUARTER EARNINGS

 

·

Net Income of $5.6 million for 2013 first quarter, up from $4.2 million in the first quarter of 2012

·

Provision for Loan Losses of $425,000, down from $3.5 million in the first quarter of 2012

·

Net Interest Margin of 3.78%, flat with the first quarter of 2012

 

DEFIANCE, OHIO (April 22, 2013) – First Defiance Financial Corp. (NASDAQ: FDEF) today announced that net income for its first quarter ended March 31, 2013 totaled $5.6 million, or $0.55 per diluted common share, compared to $4.2 million or $0.37 per diluted common share for the quarter ended March 31, 2012.

 

“We are encouraged by the improvement in net income results versus last year and the continuation of the momentum built in the latter part of 2012,” said William J. Small, Chairman, President, and Chief Executive Officer of First Defiance Financial Corp. “However, we are still feeling the strain from the recent economic cycle, which has impacted loan growth and has caused some drag on first quarter performance.”

 

Credit Quality

 

The first quarter results include expense for provision for loan losses of $425,000, compared with $3.5 million for the same period in 2012 and $2.6 million in the fourth quarter of 2012.

 

Non-performing loans totaled $35.3 million at March 31, 2013, a decrease from $45.4 million at March 31, 2012. In addition, First Defiance had $4.3 million of real estate owned at March 31, 2013 compared to $3.4 million at March 31, 2012. Accruing troubled debt restructured loans were $28.0 million at March 31, 2013 compared with $3.8 million at March 31, 2012. For the first quarter of 2013, First Defiance recorded net charge-offs of $677,000, down from $7.9 million in the first quarter of 2012 and down from the fourth quarter level of $2.2 million. The allowance for loan loss as a percentage of total loans was 1.76% at March 31, 2013 compared with 1.96% at March 31, 2012.

 

“There were several positive indicators of overall improvement in asset quality during the first quarter including significant declines in net charge-offs and in classified loans. The levels of charge-offs and provision expense were reflections of the improvement in credit quality,” said Small. “We see this as an overall improving trend developing in those categories as the economy stabilizes.”

 

 

Net Interest Income down compared to first quarter 2012

 

Net interest income of $16.5 million in the first quarter of 2013 was down from $17.2 in the first quarter of 2012. Net interest margin was flat at 3.78% for the first quarter of 2013 compared to the first quarter of 2012. Yield on interest earning assets declined by 32 basis points, to 4.22% in the first quarter of 2013 from 4.54% in the first quarter of 2012. The cost of interest-bearing liabilities decreased by 39 basis points in the first quarter of 2013 to 0.54% from 0.93% in the first quarter of 2012.

 

“The stability of the net interest margin for the quarter is noteworthy,” said Small. “The low interest rates and low loan demand present significant challenges to margin management. We will continue to look for additional opportunities to maintain our margin, as well as other ways to minimize the impact of the sustained low rate environment.”

 

Non-Interest Income up from first quarter 2012

 

First Defiance’s non-interest income for the first quarter of 2013 was $9.0 million compared with $8.4 million in the first quarter of 2012. Mortgage banking income increased to $2.8 million in the first quarter of 2013, up from $2.4 million in the first quarter of 2012. Gains from the sale of mortgage loans decreased in the first quarter of 2013 to $2.2 million from $2.5 million in the first quarter of 2012. Mortgage loan servicing revenue was $870,000 in the first quarter of 2013, which was up slightly from $844,000 in the first quarter of 2012. Service fees and other charges were $2.4 million in the first quarter of 2013, down from $2.7 million in the first quarter of 2012.

 

The continuing low rate environment helped contribute to solid first quarter of 2013 mortgage originations, although they were down slightly from the first quarter of 2012. The Company had a positive change in the valuation adjustment in mortgage servicing assets (“MSR”) of $473,000 in the first quarter of 2013 compared with a negative adjustment of $79,000 in the first quarter of 2012. The MSR positive valuation adjustment is a reflection of the increase in fair value of certain sectors of the Company’s portfolio of MSRs. The increase was driven by a slight increase in market rates in the quarter which also contributed to lower amortization of servicing rights.

 

Income from the sale of insurance and investment products increased to $3.0 million for the first quarter of 2013, from $2.5 million in the first quarter of 2012. First Defiance’s insurance subsidiary, First Insurance Group of the Midwest, Inc., typically recognizes contingent revenues during the first quarter. These revenues are bonuses paid by insurance carriers when the Company achieves certain loss ratios or growth targets. In the first quarter of 2013, First Insurance Group earned $944,000 of contingent income, compared to $504,000 during the first quarter of 2012.

 

“We are pleased with the ongoing strong mortgage banking contribution as well as the improvement in the overall insurance operations income stream,” continued Mr. Small. “Mortgage production maintained its intensity in this quarter, with robust activity carrying into the second quarter.”

 

 

Non-Interest Expenses

 

Total non-interest expense was $17.2 million in the first quarter of 2013, an increase from $16.3 million in the first quarter of 2012.

 

Compensation and benefits increased to $8.8 million in the first quarter of 2013 compared to $8.5 in the first quarter of 2012. The Company granted pay increases and accrued for bonus payments based on meeting 2013 targeted performance in the first quarter of 2013. Other non-interest expense increased to $3.9 million in the first quarter of 2013 from $3.3 million in the first quarter of 2012. An accrual for estimated secondary market buy-back losses of $581,000 was established in the first quarter of 2013 compared to no losses accrued in the first quarter of 2012. These losses were accrued and expensed as of March 31, 2013 based on an estimated exposure to repurchase requests resulting from notifications received from Fannie Mae’s post-foreclosure review process during the first quarter of 2013.

 

Total Assets at $2.04 Billion

 

Total assets at March 31, 2013 were $2.04 billion, compared to $2.14 billion at March 31, 2012. Net loans receivable (excluding loans held for sale) were $1.48 billion at March 31, 2013, compared to $1.45 billion at March 31, 2012. Total cash and cash equivalents were $156.3 million at March 31, 2013 compared with $136.8 million at December 31, 2012 and $249.9 million at March 31, 2012. Also, at March 31, 2013, goodwill and other intangible assets totaled $65.9 million compared to $66.3 million at December 31, 2012 and $67.3 million at March 31, 2012.

 

Total deposits at March 31, 2013 were $1.66 billion compared with $1.67 billion at December 31, 2012, and $1.67 billion at March 31, 2012. Non-interest bearing deposits at March 31, 2013 were $291.8 million compared to $315.1 million at December 31, 2012 and $265.7 million at March 31, 2012. Total stockholders’ equity was $262.6 million at March 31, 2013 compared to $258.1 million at December 31, 2012 and $281.4 million at March 31, 2012.

 

Conference Call

 

First Defiance Financial Corp. will host a conference call at 11:00 a.m. (EDT) on Tuesday, April 23, 2013 to discuss the earnings results and business trends. The conference call may be accessed by calling 1-888-317-6016. A live webcast may be accessed at http://services.choruscall.com/links/fdef130423.html.

 

Audio replay of the Internet Webcast will be available at www.fdef.com until April 23, 2014 at 9:00 a.m.

 

Annual Meeting of Shareholders

 

First Defiance Financial Corp. will host its Annual Meeting of Shareholders at 2:00 p.m. on Tuesday, April 23, 2013 at the First Federal Bank operations center at 25600 Elliott Road in Defiance. Following the meeting, the audio replay, slide presentation and transcript will be available at the Company’s Website at www.fdef.com.

 

 

First Defiance Financial Corp.

 

First Defiance Financial Corp., headquartered in Defiance, Ohio, is the holding company for First Federal Bank of the Midwest and First Insurance Group. First Federal operates 33 full service branches and 42 ATM locations in northwest Ohio, southeast Michigan and Fort Wayne, Indiana. First Insurance Group is a full service insurance agency with six offices throughout northwest Ohio.

 

For more information, visit the company’s Web site at www.fdef.com.

 

Financial Statements and Highlights Follow-

 

Safe Harbor Statement

This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements may include, but are not limited to, all statements regarding intent, beliefs, expectations, projections, forecasts and plans of First Defiance Financial Corp. and its management, and specifically include statements regarding: changes in economic conditions, the nature, extent and timing of governmental actions and reforms, future movements of interest rates, the production levels of mortgage loan generation, the ability to continue to grow loans and deposits, the ability to benefit from a changing interest rate environment, the ability to sustain credit quality ratios at current or improved levels, the ability to sell real estate owned properties, continued strength in the market area for First Federal Bank of the Midwest, and the ability of the Company to grow in existing and adjacent markets. These forward-looking statements involve numerous risks and uncertainties, including those inherent in general and local banking, insurance and mortgage conditions, competitive factors specific to markets in which the Company and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions or capital market conditions and other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission (SEC) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2012. One or more of these factors have affected or could in the future affect the Company's business and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurances that the forward-looking statements included in this news release will prove to be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other persons, that the objectives and plans of the Company will be achieved. All forward-looking statements made in this news release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.

 

 

Consolidated Balance Sheets

First Defiance Financial Corp.

 

		(Unaudited)
		March 31,				December 31,				March 31,
(in thousands)		2013				2012				2012
Assets
Cash and cash equivalents
Cash and amounts due from depository institutions		$	31,342			$	45,832			$	32,882
Interest-bearing deposits			125,000				91,000				217,000
			156,342				136,832				249,882
Securities
Available-for sale, carried at fair value			196,132				194,101				242,964
Held-to-maturity, carried at amortized cost			492				508				644
			196,624				194,609				243,608
Loans			1,507,008				1,525,257				1,473,955
Allowance for loan losses			(26,459	)			(26,711	)			(28,833	)
Loans, net			1,480,549				1,498,546				1,445,122
Loans held for sale			10,761				22,064				11,201
Mortgage servicing rights			8,379				7,833				8,498
Accrued interest receivable			6,025				5,594				6,243
Federal Home Loan Bank stock			19,354				20,655				20,655
Bank Owned Life Insurance			42,061				41,832				36,128
Office properties and equipment			39,218				39,663				40,548
Real estate and other assets held for sale			4,313				3,805				3,408
Goodwill			61,525				61,525				61,525
Core deposit and other intangibles			4,402				4,738				5,776
Deferred taxes			301				78				-
Other assets			9,557				9,174				9,670
Total Assets		$	2,039,411			$	2,046,948			$	2,142,264
Liabilities and Stockholders’ Equity
Non-interest-bearing deposits		$	291,765			$	315,132			$	265,716
Interest-bearing deposits			1,364,583				1,352,340				1,405,654
Total deposits			1,656,348				1,667,472				1,671,370
Advances from Federal Home Loan Bank			12,784				12,796				81,830
Notes payable and other interest-bearing liabilities			52,747				51,702				54,609
Subordinated debentures			36,083				36,083				36,083
Advance payments by borrowers for tax and insurance			1,366				1,473				1,316
Deferred taxes			-				-				404
Other liabilities			17,440				19,294				15,288
Total liabilities			1,776,768				1,788,820				1,860,900
Stockholders’ Equity
Preferred stock, net of discount			-				-				36,687
Common stock, net			127				127				127
Common stock warrant			878				878				878
Additional paid-in-capital			136,406				136,046				135,888
Accumulated other comprehensive income			3,808				4,274				3,937
Retained earnings			168,082				164,103				151,163
Treasury stock, at cost			(46,658	)			(47,300	)			(47,316	)
Total stockholders’ equity			262,643				258,128				281,364
Total Liabilities and Stockholders’ Equity		$	2,039,411			$	2,046,948			$	2,142,264

 

 

Consolidated Statements of Income (Unaudited)

First Defiance Financial Corp.

 

		Three Months Ended
		March 31,
(in thousands, except per share amounts)		2013				2012
Interest Income:
Loans		$	16,796			$	18,650
Investment securities			1,403				1,783
Interest-bearing deposits			58				92
FHLB stock dividends			219				229
Total interest income			18,476				20,754
Interest Expense:
Deposits			1,647				2,369
FHLB advances and other			90				751
Subordinated debentures			152				331
Notes Payable			60				104
Total interest expense			1,949				3,555
Net interest income			16,527				17,199
Provision for loan losses			425				3,503
Net interest income after provision for loan losses			16,102				13,696
Non-interest Income:
Service fees and other charges			2,385				2,671
Mortgage banking income			2,830				2,445
Gain on sale of non-mortgage loans			15				9
Gain on sale of securities			53				43
Insurance and investment sales commissions			3,036				2,536
Trust income			163				153
Income from Bank Owned Life Insurance			229				220
Other non-interest income			251				342
Total Non-interest Income			8,962				8,419
Non-interest Expense:
Compensation and benefits			8,798				8,465
Occupancy			1,654				1,788
FDIC insurance premium			656				669
State franchise tax			629				514
Data processing			1,181				1,169
Amortization of intangibles			336				375
Other non-interest expense			3,945				3,279
Total Non-interest Expense			17,199				16,259
Income before income taxes			7,865				5,856
Income taxes			2,306				1,703
Net Income		$	5,559			$	4,153
Dividends Accrued on Preferred Shares			-				(462	)
Accretion on Preferred Shares			-				(46	)
Redemption of Preferred Shares			-				-
Net Income Applicable to Common Shares		$	5,559			$	3,645
Earnings per common share:
Basic		$	0.57			$	0.37
Diluted		$	0.55			$	0.37
Average Shares Outstanding:
Basic			9,736				9,726
Diluted			10,105				9,970

 

 

Financial Summary and Comparison

First Defiance Financial Corp.

 

		(Unaudited)
		Three Months Ended
		March 31,
(dollars in thousands, except per share data)		2013				2012				% change
Summary of Operations
Tax-equivalent interest income (1)		$	18,885			$	21,144				(10.7	)%
Interest expense			1,949				3,555				(45.2	)
Tax-equivalent net interest income (1)			16,936				17,589				(3.7	)
Provision for loan losses			425				3,503				(87.9	)
Tax-equivalent NII after provision for loan loss (1)			16,511				14,086				17.2
Investment Securities gains			53				43				23.3
Impairment losses on securities			-				-				NM
Non-interest income (excluding securities gains/losses)			8,909				8,376				6.4
Non-interest expense			17,199				16,259				5.8
Income taxes			2,306				1,703				35.4
Net Income			5,559				4,153				33.9
Dividends Declared on Preferred Shares			-				(462	)			(100.0	)
Accretion on Preferred Shares			-				(46	)			(100.0	)
Net Income Applicable to Common Shares			5,559				3,645				52.5
Tax equivalent adjustment (1)			409				390				4.9
At Period End
Assets			2,039,411				2,142,264				(4.8	)
Earning assets			1,858,747				1,966,419				(5.5	)
Loans			1,507,008				1,473,955				2.2
Allowance for loan losses			26,459				28,833				(8.2	)
Deposits			1,656,348				1,671,370				(0.9	)
Stockholders’ equity			262,643				281,364				(6.7	)
Average Balances
Assets			2,027,906				2,080,502				(2.5	)
Earning assets			1,823,089				1,879,393				(3.0	)
Loans			1,500,222				1,781,710				(15.8	)
Deposits and interest-bearing liabilities			1,746,092				1,456,807				19.9
Deposits			1,650,772				1,610,275				2.5
Stockholders’ equity			259,625				279,848				(7.2	)
Stockholders’ equity / assets			12.80	%			13.45	%			(4.8	)
Per Common Share Data
Net Income
Basic		$	0.57			$	0.37				54.1
Diluted			0.55				0.37				48.6
Dividends			0.10				0.05				100.0
Market Value:
High		$	23.75			$	17.76				33.7
Low			18.42				14.41				27.8
Close			23.32				16.86				38.3
Common Book Value			26.80				25.06				7.0
Tangible Common Book Value			20.05				18.14				10.5
Shares outstanding, end of period (000)			9,766				9,728				0.4
Performance Ratios (annualized)
Tax-equivalent net interest margin (1)			3.78	%			3.78	%			0.1
Return on average assets			1.11	%			0.80	%			38.5
Return on average equity			8.68	%			5.97	%			45.5
Efficiency ratio (2)			66.55	%			62.62	%			6.3
Effective tax rate			29.32	%			29.08	%			0.8
Dividend payout ratio (basic)			17.54	%			13.51	%			29.8

 

(1)

Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35%

(2)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains or losses, net.

NM Percentage change not meaningful

 

 

Income from Mortgage Banking

 

Revenue from sales and servicing of mortgage loans consisted of the following:

 

		Three Months Ended
		March 31,
(dollars in thousands)		2013				2012
Gain from sale of mortgage loans		$	2,176			$	2,544
Mortgage loan servicing revenue (expense):
Mortgage loan servicing revenue			870				844
Amortization of mortgage servicing rights			(689	)			(864	)
Mortgage servicing rights valuation adjustments			473				(79	)
			654				(99	)
Total revenue from sale and servicing of mortgage loans		$	2,830			$	2,445

 

 

Yield Analysis

First Defiance Financial Corp.

 

		Three Months Ended March 31,
		(dollars in thousands)
		2013												2012
		Average								Yield				Average								Yield
		Balance				Interest(1)				Rate(2)				Balance				Interest(1)				Rate(2)
Interest-earning assets:
Loans receivable		$	1,500,222			$	16,814				4.55	%		$	1,456,807			$	18,678				5.16	%
Securities			196,571				1,794				3.85	%			237,541				2,145				3.76	%
Interest Bearing Deposits			106,332				58				0.22	%			164,390				92				0.23	%
FHLB stock			19,964				219				4.45	%			20,655				229				4.46	%
Total interest-earning assets			1,823,089				18,885				4.22	%			1,879,393				21,144				4.54	%
Non-interest-earning assets			204,817												201,109
Total assets		$	2,027,906											$	2,080,502
Deposits and Interest-bearing liabilities:
Interest bearing deposits		$	1,356,547			$	1,647				0.49	%		$	1,365,021			$	2,369				0.70	%
FHLB advances and other			12,788				90				2.85	%			81,834				751				3.69	%
Other Borrowings			46,396				60				0.52	%			53,403				104				0.78	%
Subordinated debentures			36,136				152				1.71	%			36,198				331				3.68	%
Total interest-bearing liabilities			1,451,867				1,949				0.54	%			1,536,456				3,555				0.93	%
Non-interest bearing deposits			294,225				-				-				245,254				-				-
Total including non-interest-bearing demand deposits			1,746,092				1,949				0.45	%			1,781,710				3,555				0.80	%
Other non-interest-bearing liabilities			22,189												18,944
Total liabilities			1,768,281												1,800,654
Stockholders' equity			259,625												279,848
Total liabilities and stockholders' equity		$	2,027,906											$	2,080,502
Net interest income; interest rate spread						$	16,936				3.68	%						$	17,589				3.61	%
Net interest margin (3)											3.78	%											3.78	%
Average interest-earning assets to average interest bearing liabilities											126	%											122	%

 

(1)

Interest on certain tax exempt loans and securities is not taxable for Federal income tax purposes. In order to compare the tax-exempt yields on these assets to taxable yields, the interest earned on these assets is adjusted to a pre-tax equivalent amount based on the marginal corporate federal income tax rate of 35%.

(2)

Annualized

(3)

Net interest margin is net interest income divided by average interest-earning assets.

 

 

Selected Quarterly Information

First Defiance Financial Corp.

 

(dollars in thousands, except per share data)		1st Qtr 2013				4th Qtr 2012				3rd Qtr 2012				2nd Qtr 2012				1st Qtr 2012
Summary of Operations
Tax-equivalent interest income (1)		$	18,885			$	19,993			$	20,525			$	20,935			$	21,144
Interest expense			1,949				2,186				2,923				3,273				3,555
Tax-equivalent net interest income (1)			16,936				17,807				17,602				17,662				17,589
Provision for loan losses			425				2,618				705				4,097				3,503
Tax-equivalent NII after provision for loan losses (1)			16,511				15,189				16,897				13,565				14,086
Investment securities gains, net of impairment			53				1,606				103				382				43
Non-interest income (excluding securities gains/losses)			8,909				8,574				7,677				7,612				8,376
Non-interest expense			17,199				17,538				16,450				15,532				16,259
Income taxes			2,306				2,253				2,366				1,690				1,703
Net income			5,559				5,157				5,434				3,921				4,153
Dividends Declared on Preferred Shares			-				-				(3	)			(435	)			(462	)
Accretion on Preferred Shares			-				-				(8	)			(305	)			(46	)
Redemption on Preferred Shares			-				-				642				-				-
Net Income Applicable to Common Shares			5,559				5,157				5,423				3,823				3,645
Tax equivalent adjustment (1)			409				421				427				416				390
At Period End
Total assets		$	2,039,411			$	2,046,948			$	2,055,672			$	2,067,616			$	2,142,264
Earning assets			1,858,747				1,853,585				1,874,671				1,885,846				1,966,419
Loans			1,507,008				1,525,257				1,512,132				1,500,637				1,473,955
Allowance for loan losses			26,459				26,711				26,310				26,409				28,833
Deposits			1,656,348				1,667,472				1,609,350				1,613,611				1,671,370
Stockholders’ equity			262,643				258,128				255,136				249,870				281,364
Stockholders’ equity / assets			12.88	%			12.61	%			12.41	%			12.08	%			13.13	%
Goodwill			61,525				61,525				61,525				61,525				61,525
Average Balances
Total assets		$	2,027,906			$	2,023,890			$	2,047,139			$	2,102,675			$	2,080,502
Earning assets			1,823,089				1,815,263				1,849,715				1,903,714				1,879,393
Loans			1,500,222				1,509,611				1,481,995				1,462,312				1,456,807
Deposits and interest-bearing liabilities			1,746,092				1,744,274				1,774,312				1,800,036				1,781,710
Deposits			1,650,772				1,633,432				1,605,749				1,629,094				1,610,275
Stockholders’ equity			259,625				256,304				251,592				281,031				279,848
Stockholders’ equity / assets			12.80	%			12.66	%			12.29	%			13.37	%			13.45	%
Per Common Share Data
Net Income:
Basic		$	0.57			$	0.53			$	0.56			$	0.39			$	0.37
Diluted			0.55				0.52				0.54				0.38				0.37
Dividends			0.10				0.05				0.05				0.05				0.05
Market Value:
High		$	23.75			$	19.38			$	18.06			$	17.46			$	17.76
Low			18.42				15.75				15.80				15.23				14.41
Close			23.32				19.19				17.26				17.12				16.86
Common Book Value			26.80				26.44				26.13				25.49				25.06
Shares outstanding, end of period (in thousands)			9,766				9,729				9,729				9,729				9,728
Performance Ratios (annualized)
Tax-equivalent net interest margin (1)			3.78	%			3.92	%			3.80	%			3.75	%			3.78	%
Return on average assets			1.11	%			1.01	%			1.06	%			0.75	%			0.80	%
Return on average equity			8.68	%			8.00	%			8.59	%			5.61	%			5.97	%
Efficiency ratio (2)			66.55	%			66.48	%			65.07	%			61.45	%			62.62	%
Effective tax rate			29.32	%			30.40	%			30.33	%			30.12	%			29.08	%
Common dividend payout ratio (basic)			17.54	%			9.43	%			8.93	%			12.82	%			13.51	%

 

(1)

Interest income on tax-exempt securities and loans has been adjusted to a tax-equivalent basis using the statutory federal income tax rate of 35%

(2)

Efficiency ratio = Non-interest expense divided by sum of tax-equivalent net interest income plus non-interest income, excluding securities gains, net.

 

 

Selected Quarterly Information

First Defiance Financial Corp.

 

(dollars in thousands, except per share data)		1st Qtr 2013				4th Qtr 2012				3rd Qtr 2012				2nd Qtr 2012				1st Qtr 2012
Loan Portfolio Composition
One to four family residential real estate		$	197,675			$	200,826			$	210,053			$	210,520			$	202,132
Construction			33,398				37,788				31,428				22,923				36,362
Commercial real estate			802,098				797,385				792,351				775,526				790,168
Commercial			365,551				383,817				365,510				372,266				326,904
Consumer finance			15,549				15,936				16,785				17,127				17,647
Home equity and improvement			106,524				108,718				111,563				112,427				114,891
Total loans			1,520,795				1,544,470				1,527,690				1,510,789				1,488,104
Less:
Loans in process			13,084				18,478				14,831				9,439				13,430
Deferred loan origination fees			703				735				727				713				719
Allowance for loan loss			26,459				26,711				26,310				26,409				28,833
Net Loans		$	1,480,549			$	1,498,546			$	1,485,822			$	1,474,228			$	1,445,122
Allowance for loan loss activity
Beginning allowance			26,711				26,310				26,409				28,833			$	33,254
Provision for loan losses			425				2,618				705				4,097				3,503
Credit loss charge-offs:
One to four family residential real estate			206				976				217				584				738
Commercial real estate			266				593				780				5,448				4,496
Commercial			205				541				355				486				2,666
Consumer finance			46				59				19				14				41
Home equity and improvement			272				497				203				254				211
Total charge-offs			995				2,666				1,574				6,786				8,152
Total recoveries			318				449				770				265				228
Net charge-offs (recoveries)			677				2,217				804				6,521				7,924
Ending allowance		$	26,459			$	26,711			$	26,310			$	26,409			$	28,833
Credit Quality
Total non-performing loans (1)		$	35,283			$	32,570			$	37,803			$	41,702			$	45,351
Real estate owned (REO)			4,313				3,805				2,843				3,538				3,408
Total non-performing assets (2)		$	39,596			$	36,375			$	40,646			$	45,240			$	48,759
Net charge-offs			677				2,217				804				6,521				7,924
Restructured loans, accruing (3)			27,981				28,203				4,305				3,581				3,820
Allowance for loan losses / loans			1.76	%			1.75	%			1.74	%			1.76	%			1.96	%
Allowance for loan losses / non-performing assets			66.82	%			73.43	%			64.73	%			58.38	%			59.13	%
Allowance for loan losses / non-performing loans			74.99	%			82.01	%			69.60	%			63.33	%			63.58	%
Non-performing assets / loans plus REO			2.62	%			2.38	%			2.68	%			3.01	%			3.30	%
Non-performing assets / total assets			1.94	%			1.78	%			1.98	%			2.19	%			2.28	%
Net charge-offs / average loans (annualized)			0.18	%			0.59	%			0.22	%			1.78	%			2.18	%
Deposit Balances
Non-interest-bearing demand deposits		$	291,765			$	315,132			$	271,305			$	261,211			$	265,716
Interest-bearing demand deposits and money market			681,061				664,857				636,510				628,760				665,889
Savings deposits			177,336				166,945				166,155				165,699				165,325
Retail time deposits less than $100,000			330,870				342,472				356,369				370,443				383,471
Retail time deposits greater than $100,000			173,379				176,029				176,725				180,594				183,420
National/Brokered time deposits			1,937				2,037				2,286				6,904				7,549
Total deposits		$	1,656,348			$	1,667,472			$	1,609,350			$	1,613,611			$	1,671,370

 

(1)

Non-performing loans consist of non-accrual loans.

(2)

Non-performing assets are non-performing loans plus real estate and other assets acquired by foreclosure or deed-in-lieu thereof.

(3)

Accruing restructured loans are loans with known credit problems that are not contractually past due and therefore are not included in non-performing loans.

 

 

Loan Delinquency Information

First Defiance Financial Corp.

 

(dollars in thousands)		Total Balance				Current				30 to 89 days past due				Non Accrual Loans
March 31, 2013
One to four family residential real estate		$	197,675			$	191,725			$	1,787			$	4,163
Construction			33,398				33,398				-				-
Commercial real estate			802,098				776,138				1,076				24,884
Commercial			365,551				358,205				1,194				6,152
Consumer finance			15,549				15,429				120				-
Home equity and improvement			106,524				105,560				880				84
Total loans		$	1,520,795			$	1,480,455			$	5,057			$	35,283
December 31, 2012
One to four family residential real estate		$	200,826			$	195,188			$	2,036			$	3,602
Construction			37,788				37,788				-				-
Commercial real estate			797,385				773,170				1,125				23,090
Commercial			383,817				376,548				1,608				5,661
Consumer finance			15,936				15,701				235				-
Home equity and improvement			108,718				106,002				2,499				217
Total loans		$	1,544,470			$	1,504,397			$	7,503			$	32,570
March 31, 2012
One to four family residential real estate		$	202,132			$	196,384			$	1,865			$	3,883
Construction			36,362				36,203				-				159
Commercial real estate			790,168				756,158				945				33,065
Commercial			326,904				318,111				1,175				7,618
Consumer finance			17,647				17,542				100				5
Home equity and improvement			114,891				113,078				1,192				621
Total loans		$	1,488,104			$	1,437,476			$	5,277			$	45,351