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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 22, 1998
FirstFed Financial Corp.
(Exact name of registrant as specified in its charter)
DELAWARE 1-9566 95-4087449
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(State of Incorporation) (Commission File No.) (IRS Employer
Identification No.)
401 WILSHIRE BOULEVARD, SANTA MONICA, CALIFORNIA, 90401-1490
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310)319-6000
Total number of pages is 2.
Index to Exhibit is on Page 3.
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ITEM 5. OTHER EVENTS.
On October 22, 1998, the registrant, FirstFed Financial Corp., issued a press
release. A copy of the relevant portion of this press release is attached and
incorporated herein as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of businesses acquired.
Not applicable.
b) Pro forma financial information.
Not applicable.
c) Exhibits
99. Page one of Press Release dated October 22,1998.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRSTFED FINANCIAL CORP.
Dated: October 22, 1998 By: BABETTE E. HEIMBUCH
Babette E. Heimbuch
President and
Chief Executive Officer
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INDEX TO EXHIBITS
ITEM PAGE
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99 Page one of Press Release dated October 22, 1998. 4
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EXHIBIT 99
FIRSTFED REPORTS RESULTS FOR THE THIRD QUARTER OF 1998
Santa Monica, California, October 22, 1998--FirstFed Financial Corp.
(NYSE-FED), parent company of First Federal Bank of California, today announced
results for the third quarter ended September 30, 1998. Net earnings for the
quarter were $8.8 million or 41 cents per diluted share compared to net earnings
of $5.9 million or 28 cents per diluted share for the third quarter a year ago.
All per share figures have been adjusted for the two-for-one stock split
declared by the Board of Directors on June 25, 1998.
The Company has repurchased 100,800 shares of its common stock since
August 31, 1998 at an average price of $14.58. These purchases were made
pursuant to a 1987 Board of Directors' authorization to repurchase up to 10% of
the Company's then outstanding shares. As a result of this recent repurchase,
only 173,200 shares remain authorized for repurchase under this program.
Therefore, on October 21, 1998, the Board of Directors authorized the repurchase
of an additional 5% of the shares outstanding on that date.
Net earnings increased over the third quarter of the prior year due to
an increase in net interest spread, gains on the sale of loans, and a lower
provision for losses due to improved loan quality. Net interest income for the
third quarter of 1998 increased by $1.1 million, or 5%, over the comparable 1997
quarter. Gains on the sale of loans increased to $1.1 million from $45 thousand
over the same quarter of the prior year due to the sale of fixed rate loans
originated for sale. The provision for loan losses was $1.6 million for the
current year quarter compared to $5.0 million for the third quarter last year.
For the first nine months of 1998, the Company reported net earnings of
$25.6 million or $1.18 per diluted share compared to $16.5 million or 77 cents
per diluted share for the first nine months of 1997. This increase was also due
to an increase in net interest spread, gains on the sale of loans, and a lower
provision for losses due to improved loan quality. Net interest income for the
first nine months of 1998 increased by $6.4 million, or 9%, over the comparable
1997 period. Gains on the sale of loans increased to $2.9 million from $75
thousand for the same period in 1997. The provision for loan losses was $6.2
million for the first nine months of 1998 compared to $16.5 million for the 1997
period.
The provision for loan losses was again reduced due to the continuing
favorable trends in the Bank's levels of non-performing assets and net
charge-offs. Loan charge-offs were $320 thousand and $2.6 million for the third
quarter and
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first nine months of 1998, respectively, compared to $860 thousand
and $9.8 million for the third quarter and first nine months of 1997,
respectively.
The Company's asset quality ratios continued to improve. Non-performing
assets were 0.73% of total assets as of September 30, 1998 compared to 0.95% at
December 31, 1997 and 1.20% at September 30, 1997. The Company's general
valuation allowance, established to absorb potential losses on the Bank's
assets, increased to $67.3 million, or 2.14% of loans and real estate owned at
September 30, 1998 from $58.4 million, or 1.79% at September 30, 1997.
The ratio of non-interest expense to average assets increased to 1.19%
of average assets for the third quarter of 1998 from 1.04% for the comparable
1997 period. The ratio increased to 1.21% for the first nine months of 1998
compared to 1.08% for the first nine months of 1997. The increase was primarily
attributable to investments in new operating systems and the development of new
business products and services. Also, incentive compensation increased due to
growth in deposits and increased mortgage banking activity compared to the prior
year period.
At September 30, 1998, the Bank met the capital requirements necessary
to be deemed "well-capitalized" for regulatory capital purposes. FirstFed
Financial Corp. is the holding company for First Federal Bank of California. The
Bank has 24 full-service retail banking offices.
