First Defiance Financial Corp. Announces 2018 Second Quarter Earnings
Business Wire 16-Jul-2018 5:15 PM
-
Diluted earnings per share of $0.54 for 2018 second quarter, up
from $0.41 in the 2017 second quarter
-
Net income of $11.1 million for 2018 second quarter, up from $8.3
million in the 2017 second quarter
-
Return on average assets of 1.48% for the 2018 second quarter,
compared to 1.15% in the 2017 second quarter
-
Net interest margin of 3.95% for the 2018 second quarter, up from
3.89% in the 2017 second quarter
-
Loan growth of $27.0 million during 2018 second quarter
-
Non-performing assets of $20.1 million for 2018 second quarter,
compared to $31.0 million for 2017 second quarter
First Defiance Financial Corp. (NASDAQ:FDEF) announced today its
unaudited financial results for the three and six-month periods ended
June 30, 2018. All share data has been adjusted to reflect First
Defiance's two-for-one stock split announced on June 22, 2018, to be
issued on July 12, 2018.
Net income for the second quarter ended June 30, 2018, totaled $11.1
million, or $0.54 per diluted common share compared to $8.3 million or
$0.41 per diluted common share for the quarter ended June 30, 2017.
Earnings per diluted share for the second quarter 2018 were up $0.13, or
31.7% from the second quarter 2017, which included a positive impact
from the lower corporate tax rate resulting from the Tax Cuts and Jobs
Act enacted in December 2017, which improved earnings approximately
$0.08 per diluted share for the second quarter 2018.
"Enhanced profitability, steady growth, and improved asset quality
metrics from a year ago were all reflected in our very strong financial
performance for the quarter," said Donald P. Hileman, President and
Chief Executive Officer of First Defiance Financial Corp. "Including the
benefit of the lower corporate tax rate, our return on assets in the
second quarter was 1.48%, up solidly from 1.15% in the second quarter
last year. In addition, total assets have grown 5.2% over the last year;
and non-accrual loans are down 40% from a year ago. Our outlook remains
extremely positive for the rest of the year."
Net Interest Income up Compared to Second Quarter 2017
Net interest income of $26.5 million in the second quarter of 2018 was
up from $24.6 million in the second quarter of 2017. The increase was
primarily due to the growth in earning assets supplemented by expansion
in the net interest margin versus the second quarter last year. Net
interest margin was 3.95% for the second and first quarter of 2018, but
up from 3.89% in the second quarter of 2017. Yield on interest earning
assets increased by 18 basis points, to 4.51% in the second quarter of
2018 from 4.33% in the second quarter of 2017. The cost of
interest-bearing liabilities increased by 16 basis points in the second
quarter of 2018 to 0.74% from 0.58% in the second quarter of 2017.
"As the Federal Reserve has increased rates over the last year, our net
interest margin has remained strong despite the flattening of the yield
curve. Combined with the steady organic growth of our balance sheet, we
continue to generate solid growth in net interest income," said Hileman.
"Net interest income for the second quarter was up 7.8% over the second
quarter last year, and our interest rate risk position remains
well-balanced to future interest rate changes."
Non-Interest Income up from Second Quarter 2017
First Defiance's non-interest income for the second quarter of 2018 was
$10.2 million compared with $10.1 million in the second quarter of 2017.
The second quarter of 2018 had no gains or losses from the sale of
securities gains or losses, while the second quarter 2017 included gains
of $267,000 from the sale of securities.
Mortgage banking income was $2.0 million in the second quarter of 2018,
up from $1.8 million in the second quarter of 2017. Mortgage
originations totaled $80.5 million in the second quarter of 2018, up
seasonally from the first quarter of 2018 and up from $64.2 million in
the same quarter last year. Gains from the sale of mortgage loans
increased in the second quarter of 2018 to $1.4 million from $1.3
million in the second quarter of 2017. Mortgage loan servicing revenue
was $933,000 in the second quarter of 2018, up slightly from $924,000 in
the second quarter of 2017. First Defiance had a positive change in the
valuation adjustment in mortgage servicing assets of $47,000 in the
second quarter of 2018 compared with a positive adjustment of $16,000 in
the second quarter of 2017. In addition, gains on the sale of
non-mortgages, which include SBA and FSA loans, totaled $43,000 in the
second quarter 2018 compared to $90,000 in the second quarter of 2017.
For the second quarter of 2018, commissions from the sale of insurance
products were $3.5 million, up from $3.3 million in the second quarter
of 2017 primarily due to added commissions from the Corporate One
Benefits Agency Inc. ("Corporate One") merger. Service fees and other
charges were $3.3 million in the second quarter of 2018, up from $3.2
million in the second quarter of 2017. Trust income was $522,000 in the
second quarter of 2018, up 12.5% from $464,000 in the second quarter of
2017. Other non-interest income was $281,000 in the second quarter of
2018, down from $612,000 in the second quarter of 2017 mainly due to
gains from the sale of real estate owned in the prior year period.
"Our non-interest income growth this quarter reflects continued
contributions from all of our key business lines. Insurance commissions
and bank service fees had strong gains compared to the second quarter of
last year, which more than offset the decline in gains on sales of
non-mortgage loans," continued Hileman. "Total non-interest income,
excluding securities gains, increased 3.5% over the second quarter of
last year."
Non-Interest Expenses up from Second Quarter 2017
Total non-interest expense was $22.7 million in the second quarter of
2018, an increase from $20.6 million in the second quarter of 2017.
Compensation and benefits increased to $12.9 million in the second
quarter of 2018, compared to $11.5 million in the second quarter of
2017. The increase in compensation and benefits versus the prior year
reflects merit increases, additional increases to minimum pay levels,
higher incentive compensation and increases in staff related to growth
strategies. Other non-interest expense of $4.6 million in the second
quarter of 2018 was up from $4.0 million in the second quarter of 2017.
Credit Quality
Non-performing loans totaled $18.3 million at June 30, 2018, a decrease
from $30.4 million at June 30, 2017. In addition, First Defiance had
$1.8 million of real estate owned at June 30, 2018, compared to $672,000
at June 30, 2017. Accruing troubled debt restructured loans were $15.5
million at June 30, 2018, compared with $10.5 million at June 30, 2017.
The second quarter 2018 results include net charge-offs of $369,000 and
a provision for loan losses of $423,000 compared with net charge-offs of
$2.0 million and a provision of $2.1 million for the same period in 2017.
The allowance for loan loss as a percentage of total loans was 1.15% at
June 30, 2018, compared with 1.16% at March 31, 2018, and 1.15% at June
30, 2017.
"We were especially pleased with the decrease in our non-performing
assets and improvements in our asset quality ratios this quarter," said
Hileman. "While non-performing assets at June 30, 2018, were only 0.66%
of assets, noticeably down from 1.07% a year ago, we continue to work
toward further improvements in this area."
Year-To-Date Results
For the six-month period ended June 30, 2018, net income totaled $22.8
million, or $1.12 per diluted common share, compared to $13.5 million,
or $0.68 per diluted common share for the six months ended June 30,
2017. The first six months of 2017 included approximately four months of
operations of the Commercial Savings Bank ("CSB") acquisition completed
on February 24, 2017 and three months of operations from Corporate One
acquired on April 1, 2017. In comparison, the first six months of 2018
results fully include the operations from both CSB and Corporate One. In
addition, the first six months of 2017 includes merger and conversion
expenses related to the acquisitions of $3.9 million, which had an after
tax impact of $2.8 million, or $0.28 per diluted share.
Net interest income was $52.2 million for the first six months of 2018
compared with $46.3 million in the first six months of 2017. Average
interest-earning assets increased to $2.69 billion in the first six
months of 2018 compared to $2.47 billion in the first six months of
2017. Net interest margin for the first six months of 2018 was 3.95%, up
9 basis points from the 3.86% margin reported in the six-month period
ended June 30, 2017.
The provision for loan losses in the first six months of 2018 was a
credit provision of $672,000 compared to an expense of $2.2 million
recorded during the first six months of 2017.
Non-interest income for the first six months of 2018 was $20.9 million
compared to $20.7 million during the same period of 2017. The first six
months of 2017 included a $1.5 million enhancement value gain related to
the purchase of bank owned life insurance in the first quarter of 2017.
Service fees and other charges were $6.4 million for the first six
months of 2018, up from $5.9 million during the same period of 2017.
Mortgage banking income was $3.8 million for the first six months of
2018 compared with $3.6 million during the same period of 2017.
Insurance commissions rose to $7.8 million for the first six months of
2018 compared with $6.8 million for the same period of 2017.
Non-interest income for the first six months of 2018 included no gains
or losses from the sale of securities compared with securities gains of
$267,000 during the same period of 2017.
Non-interest expense was $45.9 million for the first six months of 2018,
up from $43.8 million for the same period of 2017. Compensation and
benefits expense was $26.1 million for the first six months of 2018
compared with $25.8 million during the same period of 2017. Expenses
also included increases in occupancy of $306,000, data processing of
$230,000, amortization of intangibles of $112,000 and other expenses of
$1.2 million.
Total Assets at $3.0 Billion
Total assets at June 30, 2018, were $3.04 billion compared to $2.99
billion at December 31, 2017, and $2.89 billion at June 30, 2017. Net
loans receivable (excluding loans held for sale) were $2.36 billion at
June 30, 2018, compared to $2.32 billion at December 31, 2017, and $2.23
billion at June 30, 2017. Also, at June 30, 2018, goodwill and other
intangible assets totaled $103.6 million compared to $104.3 million at
December 31, 2017, and $104.7 million at June 30, 2017. Total deposits
at June 30, 2018, were $2.49 billion compared with $2.44 billion at
December 31, 2017, and $2.33 billion at June 30, 2017. Total
stockholders' equity was $386.9 million at June 30, 2018, compared to
$373.3 million at December 31, 2017, and $361.4 million at June 30, 2017.
Dividend to be Paid August 24
The Board of Directors declared a quarterly cash dividend of $0.17 per
common share payable August 24, 2018, to shareholders of record at the
close of business on August 17, 2018. The dividend represents an annual
dividend of 2.08 percent based on the First Defiance common stock
closing price on July 13, 2018. First Defiance has approximately
20,396,178 common shares outstanding.
Conference Call
First Defiance Financial Corp. will host a conference call at 11:00 a.m.
ET on Tuesday, July 17, 2018, to discuss the earnings results and
business trends. The conference call may be accessed by calling
1-877-444-1726. In addition, a live webcast may be accessed at https://services.choruscall.com/links/fdef180717.html.
The replay of the conference call Webcast will be available at www.fdef.com
until 9:00 a.m. ET on July 17, 2019.
First Defiance Financial Corp.
First Defiance Financial Corp. (NASDAQ:FDEF), headquartered in Defiance,
Ohio, is the holding company for First Federal Bank of the Midwest and
First Insurance Group. First Federal Bank operates 43 full-service
branches and numerous ATM locations in northwest and central Ohio,
southeast Michigan and northeast Indiana and a loan production office in
Ann Arbor, Michigan. First Insurance Group is a full-service insurance
agency with nine offices throughout northwest Ohio.
For more information, visit the company's website 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 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 First Defiance 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 our Securities and Exchange Commission (SEC) filings,
including our Annual Report on Form 10-K for the year ended December 31,
2017. One or more of these factors have affected or could in the future
affect First Defiance'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 First Defiance
or any other persons, that our objectives and plans will be achieved.
All forward-looking statements made in this news release are based on
information presently available to the management of First Defiance. We
assume no obligation to update any forward-looking statements.
As required by U.S. GAAP, First Defiance will evaluate the impact of
subsequent events through the issuance date of its June 30, 2018
consolidated financial statements as part of its Quarterly Report on
Form 10-Q to be filed with the SEC. Accordingly, subsequent events could
occur that may cause First Defiance to update its critical accounting
estimates and to revise its financial information from that which is
contained in this news release.
|
|
|
|
|
|
|
Consolidated Balance Sheets (Unaudited)
|
|
First Defiance Financial Corp.
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
Cash and amounts due from depository institutions
|
|
$
|
53,885
|
|
|
$
|
58,693
|
|
|
Interest-bearing deposits
|
|
|
53,000
|
|
|
|
55,000
|
|
|
|
|
|
106,885
|
|
|
|
113,693
|
|
|
Securities
|
|
|
|
|
|
Available-for sale, carried at fair value
|
|
|
286,350
|
|
|
|
260,650
|
|
|
Held-to-maturity, carried at amortized cost
|
|
|
607
|
|
|
|
648
|
|
|
|
|
|
286,957
|
|
|
|
261,298
|
|
|
|
|
|
|
|
|
Loans
|
|
|
2,385,344
|
|
|
|
2,348,713
|
|
|
Allowance for loan losses
|
|
|
(27,321
|
)
|
|
|
(26,683
|
)
|
|
Loans, net
|
|
|
2,358,023
|
|
|
|
2,322,030
|
|
|
Loans held for sale
|
|
|
15,422
|
|
|
|
10,435
|
|
|
Mortgage servicing rights
|
|
|
9,948
|
|
|
|
9,808
|
|
|
Accrued interest receivable
|
|
|
9,475
|
|
|
|
8,706
|
|
|
Federal Home Loan Bank stock
|
|
|
15,989
|
|
|
|
15,992
|
|
|
Bank Owned Life Insurance
|
|
|
66,860
|
|
|
|
66,230
|
|
|
Office properties and equipment
|
|
|
40,444
|
|
|
|
40,217
|
|
|
Real estate and other assets held for sale
|
|
|
1,795
|
|
|
|
1,532
|
|
|
Goodwill
|
|
|
98,569
|
|
|
|
98,569
|
|
|
Core deposit and other intangibles
|
|
|
5,024
|
|
|
|
5,703
|
|
|
Deferred taxes
|
|
|
1,106
|
|
|
|
231
|
|
|
Other assets
|
|
|
23,092
|
|
|
|
38,959
|
|
|
Total Assets
|
|
$
|
3,039,589
|
|
|
$
|
2,993,403
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
Non-interest-bearing deposits
|
|
$
|
548,147
|
|
|
$
|
571,360
|
|
|
Interest-bearing deposits
|
|
|
1,940,981
|
|
|
|
1,866,296
|
|
|
Total deposits
|
|
|
2,489,128
|
|
|
|
2,437,656
|
|
|
Advances from Federal Home Loan Bank
|
|
|
85,722
|
|
|
|
84,279
|
|
|
Notes payable and other interest-bearing liabilities
|
|
|
6,899
|
|
|
|
26,019
|
|
|
Subordinated debentures
|
|
|
36,083
|
|
|
|
36,083
|
|
|
Advance payments by borrowers for tax and insurance
|
|
|
5,207
|
|
|
|
2,925
|
|
|
Other liabilities
|
|
|
29,630
|
|
|
|
33,155
|
|
|
Total Liabilities
|
|
|
2,652,669
|
|
|
|
2,620,117
|
|
|
Stockholders' Equity
|
|
|
|
|
|
Preferred stock
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, net
|
|
|
127
|
|
|
|
127
|
|
|
Additional paid-in-capital
|
|
|
160,847
|
|
|
|
160,940
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
(3,235
|
)
|
|
|
217
|
|
|
Retained earnings
|
|
|
279,122
|
|
|
|
262,900
|
|
|
Treasury stock, at cost
|
|
|
(49,941
|
)
|
|
|
(50,898
|
)
|
|
Total stockholders' equity
|
|
|
386,920
|
|
|
|
373,286
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
3,039,589
|
|
|
$
|
2,993,403
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Income (Unaudited)
|
|
First Defiance Financial Corp.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
(in thousands, except per share amounts)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Interest Income:
|
|
|
|
|
|
|
|
|
Loans
|
$
|
27,660
|
|
$
|
25,318
|
|
$
|
54,186
|
|
|
$
|
47,288
|
|
Investment securities
|
|
2,039
|
|
|
1,752
|
|
|
3,890
|
|
|
|
3,507
|
|
Interest-bearing deposits
|
|
373
|
|
|
201
|
|
|
670
|
|
|
|
346
|
|
FHLB stock dividends
|
|
227
|
|
|
187
|
|
|
458
|
|
|
|
353
|
|
Total interest income
|
|
30,299
|
|
|
27,458
|
|
|
59,204
|
|
|
|
51,494
|
|
Interest Expense:
|
|
|
|
|
|
|
|
|
Deposits
|
|
3,144
|
|
|
2,170
|
|
|
5,755
|
|
|
|
3,966
|
|
FHLB advances and other
|
|
282
|
|
|
414
|
|
|
601
|
|
|
|
780
|
|
Subordinated debentures
|
|
320
|
|
|
229
|
|
|
600
|
|
|
|
443
|
|
Notes Payable
|
|
6
|
|
|
13
|
|
|
14
|
|
|
|
28
|
|
Total interest expense
|
|
3,752
|
|
|
2,826
|
|
|
6,970
|
|
|
|
5,217
|
|
Net interest income
|
|
26,547
|
|
|
24,632
|
|
|
52,234
|
|
|
|
46,277
|
|
Provision for loan losses
|
|
423
|
|
|
2,118
|
|
|
(672
|
)
|
|
|
2,172
|
|
Net interest income after provision for loan losses
|
|
26,124
|
|
|
22,514
|
|
|
52,906
|
|
|
|
44,105
|
|
Non-interest Income:
|
|
|
|
|
|
|
|
|
Service fees and other charges
|
|
3,296
|
|
|
3,161
|
|
|
6,427
|
|
|
|
5,920
|
|
Mortgage banking income
|
|
2,013
|
|
|
1,830
|
|
|
3,755
|
|
|
|
3,568
|
|
Gain on sale of non-mortgage loans
|
|
43
|
|
|
90
|
|
|
267
|
|
|
|
90
|
|
Gain on sale of securities
|
|
-
|
|
|
267
|
|
|
-
|
|
|
|
267
|
|
Insurance commissions
|
|
3,493
|
|
|
3,294
|
|
|
7,770
|
|
|
|
6,752
|
|
Trust income
|
|
522
|
|
|
464
|
|
|
1,074
|
|
|
|
914
|
|
Income from Bank Owned Life Insurance
|
|
566
|
|
|
422
|
|
|
966
|
|
|
|
2,245
|
|
Other non-interest income
|
|
281
|
|
|
612
|
|
|
658
|
|
|
|
933
|
|
Total Non-interest Income
|
|
10,214
|
|
|
10,140
|
|
|
20,917
|
|
|
|
20,689
|
|
Non-interest Expense:
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
12,885
|
|
|
11,473
|
|
|
26,134
|
|
|
|
25,808
|
|
Occupancy
|
|
2,026
|
|
|
1,954
|
|
|
4,097
|
|
|
|
3,791
|
|
FDIC insurance premium
|
|
202
|
|
|
353
|
|
|
562
|
|
|
|
643
|
|
Financial institutions tax
|
|
531
|
|
|
535
|
|
|
1,062
|
|
|
|
1,014
|
|
Data processing
|
|
2,083
|
|
|
2,019
|
|
|
4,188
|
|
|
|
3,958
|
|
Amortization of intangibles
|
|
332
|
|
|
334
|
|
|
679
|
|
|
|
567
|
|
Other non-interest expense
|
|
4,606
|
|
|
3,962
|
|
|
9,194
|
|
|
|
7,991
|
|
Total Non-interest Expense
|
|
22,665
|
|
|
20,630
|
|
|
45,916
|
|
|
|
43,772
|
|
Income before income taxes
|
|
13,673
|
|
|
12,024
|
|
|
27,907
|
|
|
|
21,022
|
|
Income taxes
|
|
2,564
|
|
|
3,677
|
|
|
5,061
|
|
|
|
7,534
|
|
Net Income
|
$
|
11,109
|
|
$
|
8,347
|
|
$
|
22,846
|
|
|
$
|
13,488
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.54
|
|
$
|
0.41
|
|
$
|
1.12
|
|
|
$
|
0.69
|
|
Diluted
|
$
|
0.54
|
|
$
|
0.41
|
|
$
|
1.12
|
|
|
$
|
0.68
|
|
|
|
|
|
|
|
|
|
|
Average Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
20,388
|
|
|
20,294
|
|
|
20,359
|
|
|
|
19,586
|
|
Diluted
|
|
20,492
|
|
|
20,408
|
|
|
20,466
|
|
|
|
19,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Summary and Comparison (Unaudited)
|
|
First Defiance Financial Corp.
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(dollars in thousands, except per share data)
|
|
2018
|
|
2017
|
|
% change
|
|
2018
|
|
2017
|
|
% change
|
|
Summary of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent interest income (2)
|
|
$
|
30,550
|
|
|
$
|
27,944
|
|
|
9.3
|
%
|
|
$
|
59,693
|
|
|
$
|
52,450
|
|
|
13.8
|
%
|
|
Interest expense
|
|
|
3,752
|
|
|
|
2,826
|
|
|
32.8
|
|
|
|
6,970
|
|
|
|
5,217
|
|
|
33.6
|
|
|
Tax-equivalent net interest income (2)
|
|
|
26,798
|
|
|
|
25,118
|
|
|
6.7
|
|
|
|
52,723
|
|
|
|
47,233
|
|
|
11.6
|
|
|
Provision for loan losses
|
|
|
423
|
|
|
|
2,118
|
|
|
NM
|
|
|
|
(672
|
)
|
|
|
2,172
|
|
|
NM
|
|
|
Tax-equivalent NII after provision for loan loss (2)
|
|
|
26,375
|
|
|
|
23,000
|
|
|
14.7
|
|
|
|
53,395
|
|
|
|
45,061
|
|
|
18.5
|
|
|
Investment Securities gains
|
|
|
-
|
|
|
|
267
|
|
|
NM
|
|
|
|
-
|
|
|
|
267
|
|
|
NM
|
|
|
Non-interest income (excluding securities gains/losses)
|
|
|
10,214
|
|
|
|
9,873
|
|
|
3.5
|
|
|
|
20,917
|
|
|
|
20,422
|
|
|
2.4
|
|
|
Non-interest expense
|
|
|
22,665
|
|
|
|
20,630
|
|
|
9.9
|
|
|
|
45,916
|
|
|
|
43,772
|
|
|
4.9
|
|
|
Income taxes
|
|
|
2,564
|
|
|
|
3,677
|
|
|
(30.3
|
)
|
|
|
5,061
|
|
|
|
7,534
|
|
|
(32.8
|
)
|
|
Net Income
|
|
|
11,109
|
|
|
|
8,347
|
|
|
33.1
|
|
|
|
22,846
|
|
|
|
13,488
|
|
|
69.4
|
|
|
Tax equivalent adjustment (2)
|
|
|
251
|
|
|
|
486
|
|
|
(48.4
|
)
|
|
|
489
|
|
|
|
956
|
|
|
(48.8
|
)
|
|
At Period End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
3,039,589
|
|
|
|
2,890,507
|
|
|
5.2
|
|
|
|
|
|
|
|
|
Earning assets
|
|
|
2,756,712
|
|
|
|
2,596,674
|
|
|
6.2
|
|
|
|
|
|
|
|
|
Loans
|
|
|
2,385,344
|
|
|
|
2,254,435
|
|
|
5.8
|
|
|
|
|
|
|
|
|
Allowance for loan losses
|
|
|
27,321
|
|
|
|
25,915
|
|
|
5.4
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
2,489,128
|
|
|
|
2,326,702
|
|
|
7.0
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
386,920
|
|
|
|
361,430
|
|
|
7.1
|
|
|
|
|
|
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
3,018,808
|
|
|
|
2,908,483
|
|
|
3.8
|
|
|
|
2,998,336
|
|
|
|
2,765,443
|
|
|
8.4
|
|
|
Earning assets
|
|
|
2,714,328
|
|
|
|
2,591,397
|
|
|
4.7
|
|
|
|
2,689,216
|
|
|
|
2,473,471
|
|
|
8.7
|
|
|
Loans
|
|
|
2,337,294
|
|
|
|
2,238,061
|
|
|
4.4
|
|
|
|
2,326,805
|
|
|
|
2,132,064
|
|
|
9.1
|
|
|
Deposits and interest-bearing liabilities
|
|
|
2,600,029
|
|
|
|
2,516,024
|
|
|
3.3
|
|
|
|
2,582,782
|
|
|
|
2,395,874
|
|
|
7.8
|
|
|
Deposits
|
|
|
2,487,430
|
|
|
|
2,346,336
|
|
|
6.0
|
|
|
|
2,460,934
|
|
|
|
2,227,986
|
|
|
10.5
|
|
|
Stockholders' equity
|
|
|
381,165
|
|
|
|
357,523
|
|
|
6.6
|
|
|
|
377,579
|
|
|
|
335,983
|
|
|
12.4
|
|
|
Stockholders' equity / assets
|
|
|
12.63
|
%
|
|
|
12.29
|
%
|
|
2.7
|
|
|
|
12.59
|
%
|
|
|
12.15
|
%
|
|
3.7
|
|
|
Per Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
|
$
|
0.41
|
|
|
31.7
|
|
|
$
|
1.12
|
|
|
$
|
0.69
|
|
|
62.3
|
|
|
Diluted
|
|
|
0.54
|
|
|
|
0.41
|
|
|
31.7
|
|
|
|
1.12
|
|
|
|
0.68
|
|
|
64.7
|
|
|
Dividends
|
|
|
0.15
|
|
|
|
0.125
|
|
|
20.0
|
|
|
|
0.30
|
|
|
|
0.25
|
|
|
20.0
|
|
|
Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$
|
33.72
|
|
|
$
|
28.45
|
|
|
18.5
|
|
|
$
|
33.72
|
|
|
$
|
28.45
|
|
|
18.5
|
|
|
Low
|
|
|
27.63
|
|
|
|
24.39
|
|
|
13.3
|
|
|
|
25.51
|
|
|
|
23.14
|
|
|
10.3
|
|
|
Close
|
|
|
33.53
|
|
|
|
26.34
|
|
|
27.3
|
|
|
|
33.53
|
|
|
|
26.34
|
|
|
27.3
|
|
|
Common Book Value
|
|
|
18.97
|
|
|
|
17.81
|
|
|
6.5
|
|
|
|
18.97
|
|
|
|
17.81
|
|
|
6.5
|
|
|
Tangible Common Book Value (1)
|
|
|
13.89
|
|
|
|
12.66
|
|
|
9.7
|
|
|
|
13.89
|
|
|
|
12.66
|
|
|
9.7
|
|
|
Shares outstanding, end of period (000)
|
|
|
20,396
|
|
|
|
20,298
|
|
|
0.5
|
|
|
|
20,396
|
|
|
|
20,298
|
|
|
0.5
|
|
|
Performance Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent net interest margin (2)
|
|
|
3.95
|
%
|
|
|
3.89
|
%
|
|
1.6
|
|
|
|
3.95
|
%
|
|
|
3.86
|
%
|
|
2.5
|
|
|
Return on average assets
|
|
|
1.48
|
%
|
|
|
1.15
|
%
|
|
28.2
|
|
|
|
1.54
|
%
|
|
|
0.98
|
%
|
|
56.2
|
|
|
Return on average equity
|
|
|
11.69
|
%
|
|
|
9.36
|
%
|
|
24.8
|
|
|
|
12.20
|
%
|
|
|
8.10
|
%
|
|
50.7
|
|
|
Efficiency ratio (3)
|
|
|
61.24
|
%
|
|
|
58.96
|
%
|
|
3.9
|
|
|
|
62.35
|
%
|
|
|
64.70
|
%
|
|
(3.6
|
)
|
|
Effective tax rate
|
|
|
18.75
|
%
|
|
|
30.58
|
%
|
|
(38.7
|
)
|
|
|
18.14
|
%
|
|
|
35.84
|
%
|
|
(49.4
|
)
|
|
Dividend payout ratio (basic)
|
|
|
27.78
|
%
|
|
|
30.49
|
%
|
|
(8.9
|
)
|
|
|
26.79
|
%
|
|
|
36.23
|
%
|
|
(26.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Tangible common book value = total stockholders' equity less the
sum of goodwill, core deposit and other intangibles, and preferred
stock divided by shares outstanding at the end of the period.
|
|
(2)
|
|
Interest income on tax-exempt securities and loans has been
adjusted to a tax-equivalent basis using the statutory federal
|
|
|
|
income tax rate of 21% in 2018 and 35% in 2017.
|
|
(3)
|
|
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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Gain from sale of mortgage loans
|
|
$
|
1,383
|
|
|
$
|
1,293
|
|
|
$
|
2,464
|
|
|
$
|
2,377
|
|
|
Mortgage loan servicing revenue (expense):
|
|
|
|
|
|
|
|
|
|
Mortgage loan servicing revenue
|
|
|
933
|
|
|
|
924
|
|
|
|
1,877
|
|
|
|
1,858
|
|
|
Amortization of mortgage servicing rights
|
|
|
(350
|
)
|
|
|
(403
|
)
|
|
|
(669
|
)
|
|
|
(715
|
)
|
|
Mortgage servicing rights valuation adjustments
|
|
|
47
|
|
|
|
16
|
|
|
|
83
|
|
|
|
48
|
|
|
|
|
|
630
|
|
|
|
537
|
|
|
|
1,291
|
|
|
|
1,191
|
|
|
Total revenue from sale and servicing of mortgage loans
|
|
$
|
2,013
|
|
|
$
|
1,830
|
|
|
$
|
3,755
|
|
|
$
|
3,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yield Analysis
|
|
|
|
First Defiance Financial Corp.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
(dollars in thousands)
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
Average
|
|
|
|
Yield
|
|
|
|
Average
|
|
|
|
Yield
|
|
|
|
|
|
Balance
|
|
Interest(1)
|
|
Rate(2)
|
|
|
|
Balance
|
|
Interest(1)
|
|
Rate(2)
|
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
|
|
$
|
2,337,294
|
|
$
|
27,685
|
|
4.75
|
%
|
|
|
|
$
|
2,238,061
|
|
$
|
25,368
|
|
4.55
|
%
|
|
|
|
Securities
|
|
|
280,131
|
|
|
2,265
|
|
3.20
|
%
|
|
(3)
|
|
|
259,619
|
|
|
2,188
|
|
3.42
|
%
|
|
(3)
|
|
Interest Bearing Deposits
|
|
|
80,914
|
|
|
373
|
|
1.85
|
%
|
|
|
|
|
77,725
|
|
|
201
|
|
1.04
|
%
|
|
|
|
FHLB stock
|
|
|
15,989
|
|
|
227
|
|
5.69
|
%
|
|
|
|
|
15,992
|
|
|
187
|
|
4.69
|
%
|
|
|
|
Total interest-earning assets
|
|
|
2,714,328
|
|
|
30,550
|
|
4.51
|
%
|
|
|
|
|
2,591,397
|
|
|
27,944
|
|
4.33
|
%
|
|
|
|
Non-interest-earning assets
|
|
|
304,480
|
|
|
|
|
|
|
|
|
317,086
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,018,808
|
|
|
|
|
|
|
|
$
|
2,908,483
|
|
|
|
|
|
|
|
Deposits and Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits
|
|
$
|
1,933,409
|
|
$
|
3,144
|
|
0.65
|
%
|
|
|
|
$
|
1,785,895
|
|
$
|
2,170
|
|
0.49
|
%
|
|
|
|
FHLB advances and other
|
|
|
67,261
|
|
|
282
|
|
1.68
|
%
|
|
|
|
|
104,923
|
|
|
414
|
|
1.58
|
%
|
|
|
|
Subordinated debentures
|
|
|
36,198
|
|
|
320
|
|
3.55
|
%
|
|
|
|
|
36,156
|
|
|
229
|
|
2.54
|
%
|
|
|
|
Notes payable
|
|
|
9,140
|
|
|
6
|
|
0.26
|
%
|
|
|
|
|
28,609
|
|
|
13
|
|
0.18
|
%
|
|
|
|
Total interest-bearing liabilities
|
|
|
2,046,008
|
|
|
3,752
|
|
0.74
|
%
|
|
|
|
|
1,955,583
|
|
|
2,826
|
|
0.58
|
%
|
|
|
|
Non-interest bearing deposits
|
|
|
554,021
|
|
|
-
|
|
-
|
|
|
|
|
|
560,441
|
|
|
-
|
|
-
|
|
|
|
|
Total including non-interest-bearing demand deposits
|
|
|
2,600,029
|
|
|
3,752
|
|
0.58
|
%
|
|
|
|
|
2,516,024
|
|
|
2,826
|
|
0.45
|
%
|
|
|
|
Other non-interest-bearing liabilities
|
|
|
37,614
|
|
|
|
|
|
|
|
|
34,936
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
2,637,643
|
|
|
|
|
|
|
|
|
2,550,960
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
381,165
|
|
|
|
|
|
|
|
|
357,523
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
3,018,808
|
|
|
|
|
|
|
|
$
|
2,908,483
|
|
|
|
|
|
|
|
Net interest income; interest rate spread
|
|
|
|
$
|
26,798
|
|
3.77
|
%
|
|
|
|
|
|
$
|
25,118
|
|
3.75
|
%
|
|
|
|
Net interest margin (4)
|
|
|
|
|
|
3.95
|
%
|
|
|
|
|
|
|
|
3.89
|
%
|
|
|
|
Average interest-earning assets to average interest bearing
liabilities
|
|
|
|
133
|
%
|
|
|
|
|
|
|
|
133
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
Average
|
|
|
|
Yield
|
|
|
|
Average
|
|
|
|
Yield
|
|
|
|
|
|
Balance
|
|
Interest(1)
|
|
Rate
|
|
|
|
Balance
|
|
Interest(1)
|
|
Rate
|
|
|
|
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable
|
|
$
|
2,326,805
|
|
$
|
54,236
|
|
4.70
|
%
|
|
|
|
$
|
2,132,064
|
|
$
|
47,390
|
|
4.48
|
%
|
|
|
|
Securities
|
|
|
271,864
|
|
|
4,329
|
|
3.21
|
%
|
|
|
|
|
257,230
|
|
|
4,361
|
|
3.46
|
%
|
|
(3)
|
|
Interest Bearing Deposits
|
|
|
74,557
|
|
|
670
|
|
1.81
|
%
|
|
|
|
|
68,904
|
|
|
346
|
|
1.01
|
%
|
|
|
|
FHLB stock
|
|
|
15,990
|
|
|
458
|
|
5.78
|
%
|
|
|
|
|
15,273
|
|
|
353
|
|
4.66
|
%
|
|
|
|
Total interest-earning assets
|
|
|
2,689,216
|
|
|
59,693
|
|
4.48
|
%
|
|
|
|
|
2,473,471
|
|
|
52,450
|
|
4.28
|
%
|
|
|
|
Non-interest-earning assets
|
|
|
309,120
|
|
|
|
|
|
|
|
|
291,972
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,998,336
|
|
|
|
|
|
|
|
$
|
2,765,443
|
|
|
|
|
|
|
|
Deposits and Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits
|
|
$
|
1,911,199
|
|
$
|
5,755
|
|
0.61
|
%
|
|
|
|
$
|
1,706,318
|
|
$
|
3,966
|
|
0.47
|
%
|
|
|
|
FHLB advances and other
|
|
|
73,092
|
|
|
601
|
|
1.66
|
%
|
|
|
|
|
104,600
|
|
|
780
|
|
1.50
|
%
|
|
|
|
Subordinated debentures
|
|
|
36,195
|
|
|
600
|
|
3.34
|
%
|
|
|
|
|
36,153
|
|
|
443
|
|
2.46
|
%
|
|
|
|
Notes payable
|
|
|
12,561
|
|
|
14
|
|
0.22
|
%
|
|
|
|
|
27,135
|
|
|
28
|
|
0.21
|
%
|
|
|
|
Total interest-bearing liabilities
|
|
|
2,033,047
|
|
|
6,970
|
|
0.69
|
%
|
|
|
|
|
1,874,206
|
|
|
5,217
|
|
0.56
|
%
|
|
|
|
Non-interest bearing deposits
|
|
|
549,735
|
|
|
-
|
|
-
|
|
|
|
|
|
521,668
|
|
|
-
|
|
-
|
|
|
|
|
Total including non-interest-bearing demand deposits
|
|
|
2,582,782
|
|
|
6,970
|
|
0.54
|
%
|
|
|
|
|
2,395,874
|
|
|
5,217
|
|
0.44
|
%
|
|
|
|
Other non-interest-bearing liabilities
|
|
|
37,975
|
|
|
|
|
|
|
|
|
33,586
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
2,620,757
|
|
|
|
|
|
|
|
|
2,429,460
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
377,579
|
|
|
|
|
|
|
|
|
335,983
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
2,998,336
|
|
|
|
|
|
|
|
$
|
2,765,443
|
|
|
|
|
|
|
|
Net interest income; interest rate spread
|
|
|
|
$
|
52,723
|
|
3.79
|
%
|
|
|
|
|
|
$
|
47,233
|
|
3.72
|
%
|
|
|
|
Net interest margin (4)
|
|
|
|
|
|
3.95
|
%
|
|
|
|
|
|
|
|
3.86
|
%
|
|
|
|
Average interest-earning assets to average interest bearing
liabilities
|
|
|
|
132
|
%
|
|
|
|
|
|
|
|
132
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 21% in
2018 and 35% in 2017.
|
|
(2)
|
|
Annualized
|
|
(3)
|
|
Securities yield = annualized interest income divided by the
average balance of securities, excluding average unrealized
gains/losses.
|
|
(4)
|
|
Net interest margin is tax equivalent net interest income divided
by average interest-earning assets.
|
|
|
|
|
|
|
|
Selected Quarterly Information
|
|
First Defiance Financial Corp.
|
|
|
|
(dollars in thousands, except per share data)
|
|
2nd Qtr 2018
|
|
1st Qtr 2018
|
|
4th Qtr 2017
|
|
3rd Qtr 2017
|
|
2nd Qtr 2017
|
|
Summary of Operations
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent interest income (1)
|
|
$
|
30,550
|
|
|
$
|
29,142
|
|
|
$
|
29,009
|
|
|
$
|
28,557
|
|
|
$
|
27,944
|
|
|
Interest expense
|
|
|
3,752
|
|
|
|
3,218
|
|
|
|
3,140
|
|
|
|
3,074
|
|
|
|
2,826
|
|
|
Tax-equivalent net interest income (1)
|
|
|
26,798
|
|
|
|
25,924
|
|
|
|
25,869
|
|
|
|
25,483
|
|
|
|
25,118
|
|
|
Provision for loan losses
|
|
|
423
|
|
|
|
(1,095
|
)
|
|
|
314
|
|
|
|
462
|
|
|
|
2,118
|
|
|
Tax-equivalent NII after provision for loan losses (1)
|
|
|
26,375
|
|
|
|
27,019
|
|
|
|
25,555
|
|
|
|
25,021
|
|
|
|
23,000
|
|
|
Investment securities gains, net of impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
160
|
|
|
|
158
|
|
|
|
267
|
|
|
Non-interest income (excluding securities gains/losses)
|
|
|
10,214
|
|
|
|
10,703
|
|
|
|
9,737
|
|
|
|
9,337
|
|
|
|
9,873
|
|
|
Non-interest expense
|
|
|
22,665
|
|
|
|
23,251
|
|
|
|
21,141
|
|
|
|
20,440
|
|
|
|
20,630
|
|
|
Income taxes
|
|
|
2,564
|
|
|
|
2,497
|
|
|
|
4,430
|
|
|
|
4,219
|
|
|
|
3,677
|
|
|
Net income
|
|
|
11,109
|
|
|
|
11,737
|
|
|
|
9,399
|
|
|
|
9,381
|
|
|
|
8,347
|
|
|
Tax equivalent adjustment (1)
|
|
|
251
|
|
|
|
237
|
|
|
|
482
|
|
|
|
476
|
|
|
|
486
|
|
|
At Period End
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,039,589
|
|
|
$
|
3,023,004
|
|
|
$
|
2,993,403
|
|
|
$
|
2,935,030
|
|
|
$
|
2,890,507
|
|
|
Earning assets
|
|
|
2,756,712
|
|
|
|
2,748,338
|
|
|
|
2,691,438
|
|
|
|
2,633,996
|
|
|
|
2,596,674
|
|
|
Loans
|
|
|
2,385,344
|
|
|
|
2,358,330
|
|
|
|
2,348,713
|
|
|
|
2,276,042
|
|
|
|
2,254,435
|
|
|
Allowance for loan losses
|
|
|
27,321
|
|
|
|
27,267
|
|
|
|
26,683
|
|
|
|
26,341
|
|
|
|
25,915
|
|
|
Deposits
|
|
|
2,489,128
|
|
|
|
2,491,801
|
|
|
|
2,437,656
|
|
|
|
2,360,675
|
|
|
|
2,326,702
|
|
|
Stockholders' equity
|
|
|
386,920
|
|
|
|
379,214
|
|
|
|
373,286
|
|
|
|
367,924
|
|
|
|
361,430
|
|
|
Stockholders' equity / assets
|
|
|
12.73
|
%
|
|
|
12.54
|
%
|
|
|
12.47
|
%
|
|
|
12.54
|
%
|
|
|
12.50
|
%
|
|
Goodwill
|
|
|
98,569
|
|
|
|
98,569
|
|
|
|
98,569
|
|
|
|
98,370
|
|
|
|
98,318
|
|
|
Average Balances
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
3,018,808
|
|
|
$
|
2,977,864
|
|
|
$
|
2,968,445
|
|
|
$
|
2,906,795
|
|
|
$
|
2,908,483
|
|
|
Earning assets
|
|
|
2,714,328
|
|
|
|
2,664,114
|
|
|
|
2,646,643
|
|
|
|
2,590,463
|
|
|
|
2,591,397
|
|
|
Loans
|
|
|
2,337,294
|
|
|
|
2,316,316
|
|
|
|
2,279,358
|
|
|
|
2,251,071
|
|
|
|
2,238,061
|
|
|
Deposits and interest-bearing liabilities
|
|
|
2,600,029
|
|
|
|
2,565,537
|
|
|
|
2,560,258
|
|
|
|
2,507,805
|
|
|
|
2,516,024
|
|
|
Deposits
|
|
|
2,487,430
|
|
|
|
2,434,440
|
|
|
|
2,400,061
|
|
|
|
2,338,817
|
|
|
|
2,346,336
|
|
|
Stockholders' equity
|
|
|
381,165
|
|
|
|
373,993
|
|
|
|
369,366
|
|
|
|
363,612
|
|
|
|
357,523
|
|
|
Stockholders' equity / assets
|
|
|
12.63
|
%
|
|
|
12.56
|
%
|
|
|
12.44
|
%
|
|
|
12.51
|
%
|
|
|
12.29
|
%
|
|
Per Common Share Data
|
|
|
|
|
|
|
|
|
|
|
|
Net Income:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
|
$
|
0.58
|
|
|
$
|
0.47
|
|
|
$
|
0.46
|
|
|
$
|
0.41
|
|
|
Diluted
|
|
|
0.54
|
|
|
|
0.58
|
|
|
|
0.46
|
|
|
|
0.46
|
|
|
|
0.41
|
|
|
Dividends
|
|
|
0.15
|
|
|
|
0.15
|
|
|
|
0.125
|
|
|
|
0.125
|
|
|
|
0.125
|
|
|
Market Value:
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$
|
33.72
|
|
|
$
|
29.93
|
|
|
$
|
28.46
|
|
|
$
|
27.00
|
|
|
$
|
28.45
|
|
|
Low
|
|
|
27.63
|
|
|
|
25.51
|
|
|
|
25.14
|
|
|
|
23.51
|
|
|
|
24.39
|
|
|
Close
|
|
|
33.53
|
|
|
|
28.66
|
|
|
|
25.99
|
|
|
|
26.25
|
|
|
|
26.34
|
|
|
Common Book Value
|
|
|
18.97
|
|
|
|
18.62
|
|
|
|
18.38
|
|
|
|
18.13
|
|
|
|
17.81
|
|
|
Shares outstanding, end of period (in thousands)
|
|
|
20,396
|
|
|
|
20,364
|
|
|
|
20,312
|
|
|
|
20,298
|
|
|
|
20,298
|
|
|
Performance Ratios (annualized)
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent net interest margin (1)
|
|
|
3.95
|
%
|
|
|
3.95
|
%
|
|
|
3.88
|
%
|
|
|
3.91
|
%
|
|
|
3.89
|
%
|
|
Return on average assets
|
|
|
1.48
|
%
|
|
|
1.60
|
%
|
|
|
1.26
|
%
|
|
|
1.28
|
%
|
|
|
1.15
|
%
|
|
Return on average equity
|
|
|
11.69
|
%
|
|
|
12.73
|
%
|
|
|
10.10
|
%
|
|
|
10.24
|
%
|
|
|
9.36
|
%
|
|
Efficiency ratio (2)
|
|
|
61.24
|
%
|
|
|
63.48
|
%
|
|
|
59.37
|
%
|
|
|
58.70
|
%
|
|
|
58.96
|
%
|
|
Effective tax rate
|
|
|
18.75
|
%
|
|
|
17.54
|
%
|
|
|
32.03
|
%
|
|
|
31.02
|
%
|
|
|
30.58
|
%
|
|
Common dividend payout ratio (basic)
|
|
|
27.78
|
%
|
|
|
26.09
|
%
|
|
|
26.88
|
%
|
|
|
27.17
|
%
|
|
|
30.49
|
%
|
|
(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 21% in 2018 and 35% in 2017.
|
|
(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)
|
|
2nd Qtr 2018
|
|
1st Qtr 2018
|
|
4th Qtr 2017
|
|
3rd Qtr 2017
|
|
2nd Qtr 2017
|
|
Loan Portfolio Composition
|
|
|
|
|
|
|
|
|
|
|
|
One to four family residential real estate
|
|
$
|
307,480
|
|
|
$
|
275,547
|
|
|
$
|
274,862
|
|
|
$
|
271,048
|
|
|
$
|
276,578
|
|
|
Construction
|
|
|
283,911
|
|
|
|
251,944
|
|
|
|
265,476
|
|
|
|
244,920
|
|
|
|
234,688
|
|
|
Commercial real estate
|
|
|
1,283,698
|
|
|
|
1,282,027
|
|
|
|
1,235,221
|
|
|
|
1,205,695
|
|
|
|
1,182,087
|
|
|
Commercial
|
|
|
489,296
|
|
|
|
500,496
|
|
|
|
526,142
|
|
|
|
510,240
|
|
|
|
515,004
|
|
|
Consumer finance
|
|
|
29,724
|
|
|
|
28,035
|
|
|
|
29,109
|
|
|
|
29,009
|
|
|
|
28,860
|
|
|
Home equity and improvement
|
|
|
129,868
|
|
|
|
133,407
|
|
|
|
135,457
|
|
|
|
132,220
|
|
|
|
130,429
|
|
|
Total loans
|
|
|
2,523,977
|
|
|
|
2,471,456
|
|
|
|
2,466,267
|
|
|
|
2,393,132
|
|
|
|
2,367,646
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Undisbursed loan funds
|
|
|
136,563
|
|
|
|
111,450
|
|
|
|
115,972
|
|
|
|
115,714
|
|
|
|
112,000
|
|
|
Deferred loan origination fees
|
|
|
2,070
|
|
|
|
1,676
|
|
|
|
1,582
|
|
|
|
1,379
|
|
|
|
1,211
|
|
|
Allowance for loan loss
|
|
|
27,321
|
|
|
|
27,267
|
|
|
|
26,683
|
|
|
|
26,341
|
|
|
|
25,915
|
|
|
Net Loans
|
|
$
|
2,358,023
|
|
|
$
|
2,331,063
|
|
|
$
|
2,322,030
|
|
|
$
|
2,249,698
|
|
|
$
|
2,228,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan loss activity
|
|
|
|
|
|
|
|
|
|
|
|
Beginning allowance
|
|
$
|
27,267
|
|
|
$
|
26,683
|
|
|
$
|
26,341
|
|
|
$
|
25,915
|
|
|
$
|
25,749
|
|
|
Provision for loan losses
|
|
|
423
|
|
|
|
(1,095
|
)
|
|
|
314
|
|
|
|
462
|
|
|
|
2,118
|
|
|
Credit loss charge-offs:
|
|
|
|
|
|
|
|
|
|
|
|
One to four family residential real estate
|
|
|
78
|
|
|
|
16
|
|
|
|
170
|
|
|
|
60
|
|
|
|
0
|
|
|
Commercial real estate
|
|
|
254
|
|
|
|
55
|
|
|
|
29
|
|
|
|
0
|
|
|
|
110
|
|
|
Commercial
|
|
|
84
|
|
|
|
97
|
|
|
|
210
|
|
|
|
64
|
|
|
|
2,027
|
|
|
Consumer finance
|
|
|
72
|
|
|
|
31
|
|
|
|
27
|
|
|
|
20
|
|
|
|
21
|
|
|
Home equity and improvement
|
|
|
41
|
|
|
|
117
|
|
|
|
55
|
|
|
|
92
|
|
|
|
100
|
|
|
Total charge-offs
|
|
|
529
|
|
|
|
316
|
|
|
|
491
|
|
|
|
236
|
|
|
|
2,258
|
|
|
Total recoveries
|
|
|
160
|
|
|
|
1,995
|
|
|
|
519
|
|
|
|
200
|
|
|
|
306
|
|
|
Net charge-offs (recoveries)
|
|
|
369
|
|
|
|
(1,679
|
)
|
|
|
(28
|
)
|
|
|
36
|
|
|
|
1,952
|
|
|
Ending allowance
|
|
$
|
27,321
|
|
|
$
|
27,267
|
|
|
$
|
26,683
|
|
|
$
|
26,341
|
|
|
$
|
25,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Quality
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing loans (1)
|
|
$
|
18,340
|
|
|
$
|
27,925
|
|
|
$
|
30,715
|
|
|
$
|
29,152
|
|
|
$
|
30,359
|
|
|
Real estate owned (REO)
|
|
|
1,795
|
|
|
|
1,440
|
|
|
|
1,532
|
|
|
|
532
|
|
|
|
672
|
|
|
Total non-performing assets (2)
|
|
$
|
20,135
|
|
|
$
|
29,365
|
|
|
$
|
32,247
|
|
|
$
|
29,684
|
|
|
$
|
31,031
|
|
|
Net charge-offs (recoveries)
|
|
|
369
|
|
|
|
(1,679
|
)
|
|
|
(28
|
)
|
|
|
36
|
|
|
|
1,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructured loans, accruing (3)
|
|
|
15,834
|
|
|
|
13,722
|
|
|
|
13,770
|
|
|
|
13,044
|
|
|
|
10,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses / loans
|
|
|
1.15
|
%
|
|
|
1.16
|
%
|
|
|
1.14
|
%
|
|
|
1.16
|
%
|
|
|
1.15
|
%
|
|
Allowance for loan losses / non-performing assets
|
|
|
135.69
|
%
|
|
|
92.86
|
%
|
|
|
82.75
|
%
|
|
|
88.74
|
%
|
|
|
83.51
|
%
|
|
Allowance for loan losses / non-performing loans
|
|
|
148.97
|
%
|
|
|
97.64
|
%
|
|
|
86.87
|
%
|
|
|
90.36
|
%
|
|
|
85.36
|
%
|
|
Non-performing assets / loans plus REO
|
|
|
0.84
|
%
|
|
|
1.24
|
%
|
|
|
1.37
|
%
|
|
|
1.30
|
%
|
|
|
1.38
|
%
|
|
Non-performing assets / total assets
|
|
|
0.66
|
%
|
|
|
0.97
|
%
|
|
|
1.08
|
%
|
|
|
1.01
|
%
|
|
|
1.07
|
%
|
|
Net charge-offs / average loans (annualized)
|
|
|
0.06
|
%
|
|
|
-0.29
|
%
|
|
|
0.00
|
%
|
|
|
0.01
|
%
|
|
|
0.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit Balances
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing demand deposits
|
|
$
|
548,147
|
|
|
$
|
550,742
|
|
|
$
|
571,360
|
|
|
$
|
519,911
|
|
|
$
|
520,778
|
|
|
Interest-bearing demand deposits and money market
|
|
|
1,021,445
|
|
|
|
1,055,416
|
|
|
|
1,005,519
|
|
|
|
989,514
|
|
|
|
967,834
|
|
|
Savings deposits
|
|
|
297,870
|
|
|
|
306,510
|
|
|
|
302,022
|
|
|
|
296,230
|
|
|
|
288,643
|
|
|
Retail time deposits less than $250,000
|
|
|
547,871
|
|
|
|
512,746
|
|
|
|
504,912
|
|
|
|
504,277
|
|
|
|
499,298
|
|
|
Retail time deposits greater than $250,000
|
|
|
73,795
|
|
|
|
66,387
|
|
|
|
53,843
|
|
|
|
50,743
|
|
|
|
50,149
|
|
|
Total deposits
|
|
$
|
2,489,128
|
|
|
$
|
2,491,801
|
|
|
$
|
2,437,656
|
|
|
$
|
2,360,675
|
|
|
$
|
2,326,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
30 to 89 days
|
|
Non Accrual
|
|
(dollars in thousands)
|
|
Total Balance
|
|
Current
|
|
past due
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
One to four family residential real estate
|
|
$
|
307,480
|
|
$
|
303,263
|
|
$
|
1,806
|
|
$
|
2,411
|
|
Construction
|
|
|
283,911
|
|
|
283,911
|
|
|
-
|
|
|
-
|
|
Commercial real estate
|
|
|
1,283,698
|
|
|
1,273,236
|
|
|
222
|
|
|
10,240
|
|
Commercial
|
|
|
489,296
|
|
|
483,574
|
|
|
577
|
|
|
5,145
|
|
Consumer finance
|
|
|
29,724
|
|
|
29,438
|
|
|
221
|
|
|
65
|
|
Home equity and improvement
|
|
|
129,868
|
|
|
128,234
|
|
|
1,155
|
|
|
479
|
|
Total loans
|
|
|
2,523,977
|
|
$
|
2,501,656
|
|
$
|
3,981
|
|
$
|
18,340
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
One to four family residential real estate
|
|
$
|
274,862
|
|
$
|
269,624
|
|
$
|
2,201
|
|
$
|
3,037
|
|
Construction
|
|
|
265,476
|
|
|
265,476
|
|
|
-
|
|
|
-
|
|
Commercial real estate
|
|
|
1,235,221
|
|
|
1,215,980
|
|
|
1,022
|
|
|
18,219
|
|
Commercial
|
|
|
526,142
|
|
|
515,874
|
|
|
1,427
|
|
|
8,841
|
|
Consumer finance
|
|
|
29,109
|
|
|
28,728
|
|
|
353
|
|
|
28
|
|
Home equity and improvement
|
|
|
135,457
|
|
|
131,986
|
|
|
2,881
|
|
|
590
|
|
Total loans
|
|
$
|
2,466,267
|
|
$
|
2,427,668
|
|
$
|
7,884
|
|
$
|
30,715
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
|
One to four family residential real estate
|
|
$
|
276,578
|
|
$
|
270,729
|
|
$
|
2,710
|
|
$
|
3,139
|
|
Construction
|
|
|
234,688
|
|
|
234,445
|
|
|
-
|
|
|
243
|
|
Commercial real estate
|
|
|
1,182,087
|
|
|
1,161,810
|
|
|
1,370
|
|
|
18,907
|
|
Commercial
|
|
|
515,004
|
|
|
506,996
|
|
|
545
|
|
|
7,463
|
|
Consumer finance
|
|
|
28,860
|
|
|
28,594
|
|
|
215
|
|
|
51
|
|
Home equity and improvement
|
|
|
130,429
|
|
|
128,668
|
|
|
1,205
|
|
|
556
|
|
Total loans
|
|
$
|
2,367,646
|
|
$
|
2,331,242
|
|
$
|
6,045
|
|
$
|
30,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180716005852/en/
