UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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)
August 6, 1998
FFY FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
Delaware 0-21638 34-1735753
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
724 Boardman-Poland Road, Youngstown, Ohio 44512
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 330-726-3396
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
On August 6, 1998, the Registrant issued the attached press release.
Item 7. Financial Statements and Exhibits
(a) Exhibits
1. Press release, dated August 6, 1998.
SIGNATURES
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.
FFY FINANCIAL CORP.
Date: August 6, 1998 By: /s/ Jeffrey L. Francis
------------------ -----------------------------------
Jeffrey L. Francis,
President and CEO
For Immediate Release For Further Information:
Thursday, August 6, 1998 Jeff Francis, President and CEO
Terri Liutkus, Treasurer and CFO
330/726-3396 - telephone
330/758-1356 - telecopier
FFY Financial Corp. Reports FY98 Net Income of $7.7 Million
$1.98 Annual Net Earnings Per Diluted Share
$.50 4th Quarter Earnings Per Diluted Share
Youngstown, Ohio August 6, 1998 - FFY Financial Corp. (NASDAQ: FFYF)
announced net income of $7.7 million or $1.98 per diluted share for its fiscal
year ended June 30, 1998. Earnings for the current year compare to $5.3 million
or $1.19 per diluted share for the year ended June 30, 1997. Prior year
earnings included a one-time charge of approximately $2.0 million after tax
resulting from legislation to recapitalize the Savings Association Insurance
Fund (SAIF). Earnings for the 4th quarter ended June 30, 1998 totaled $1.9
million or $.50 per diluted share, compared to $2.0 million or $.50 per diluted
share for the 4th quarter ended June 30, 1997.
Assets totaled $651.7 million at June 30, 1998, an increase of $52.5
million or 8.8% from $599.2 million at June 30, 1997 primarily due to growth in
the securities and loan portfolios. Securities totaled $140.8 million at June
30, 1998, an increase of $28.8 million from $112.0 million at June 30, 1997 due
to an increase in government agency and municipal bond holdings. Net loans
receivable increased $21.8 million and totaled $482.5 million at June 30, 1998
with growth predominantly in consumer loans. The growth in consumer loans was
due primarily to $15.9 million in loans to customers in June 1998 to fund their
stock subscriptions in an initial public offering by a local financial
institution converting from a mutual to stock form of ownership. To date,
approximately $12.7 million of these loans have been repaid.
Deposits totaled $444.0 million at June 30, 1998, a decline of $6.2
million, or 1.4% from $450.2 million at June 30, 1997 due to a decline in
deposits in the 4th quarter as a result of withdrawals by customers investing
in the initial public offering of the local financial institution discussed
above. Growth in assets was funded largely through borrowings and repurchase
agreements, which totaled $34.0 million and $64.4 million, respectively at June
30, 1998, an increase of $6.5 million and $32.1 million, respectively from June
30, 1997, enabling the Company to further leverage its excess capital.
Late in 1997, the Company announced plans to offer expanded financial
services to consumers, including real estate services and property and casualty
insurance. Real estate services, which began in September 1997, and insurance
sales, which began operations on April 1, 1998 are offered through investments
of FFY Holdings, Inc., a wholly owned subsidiary of FFY Financial Corp. The
operations of FFY Holdings, Inc. for the quarter and year ended June 30, 1998
were net losses of $83,000 and $141,000, respectively.
On October 20, 1997, the Company announced its intention to repurchase
5%, or 206,020 of its then outstanding shares of common stock in open market
transactions over a twelve month period beginning on that date. To date,
166,400 shares have been repurchased at an average cost of $32.53 per share and
39,620 shares remain to be repurchased. Since completing its conversion to a
publicly owned stock company on June 28, 1993, the Company has repurchased 2.9
million shares at an average price of $21.83 per share, returning $64.3 million
to shareholders.
At its meeting on July 21, 1998 the Company's board of directors approved
its regular quarterly dividend of 20 cents per share. The dividend will be paid
on August 13, 1998 to shareholders of record on July 31, 1998.
Except for the historical information contained herein, the matters
discussed in this press release may be deemed to be forward-looking statements
that involve risks and uncertainties, including changes in economic conditions
in the Company's market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in the Company's market area
and competition, and other risks detailed from time to time in the Company's
SEC reports, including the report on Form 10-K for the year ended June 30, 1997
and Form 10-Q for the quarters ended September 30, 1997, December 31, 1997 and
March 31, 1998. Actual strategies and results in future periods may differ
materially from those currently expected. These forward-looking statements
represent the Company's judgment as of the date of this release. The Company
disclaims, however, any intent or obligation to update these forward-looking
statements.
FFY FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
June 30, June 30, %
Selected Consolidated Financial Condition Data: 1998 1997 Change
- ----------------------------------------------- -------- -------- ------
($ in thousands)
<S> <C> <C> <C>
Total assets $651,746 $599,249 9%
Loans receivable, net 482,463 460,712 5%
Allowance for loan losses 2,740 2,962 -7%
Non-performing assets 3,324 3,993 -17%
Securities available for sale 140,793 112,036 26%
Deposits 444,017 450,224 -1%
Securities sold under agreements to repurchase:
Short-term 13,088 7,307 79%
Long-term 51,300 25,000 105%
Borrowed funds 33,985 27,455 24%
Stockholders' equity 84,216 82,174 2%
</TABLE>
<TABLE>
<CAPTION>
Three months ended Year ended
June 30, June 30,
---------------------------- ----------------------------
% %
Selected Consolidated Operations Data: 1998 1997 Change 1998 1997 Change
- ----------------------------------------- ------- ------- ------ ------- ------- ------
($ in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Total interest income $11,969 $11,709 2% $48,006 $45,925 5%
Total interest expense 6,416 6,219 3% 25,559 23,823 7%
Net interest income 5,553 5,490 1% 22,447 22,102 2%
Provision for loan losses 124 126 -2% 565 688 -18%
Net interest income after provision
for loan losses 5,429 5,364 1% 21,882 21,414 2%
Service charges 186 159 17% 700 563 24%
Gain (loss) on sale of securities 93 25 272% 247 (320) NM
Other non-interest income 269 109 147% 818 375 118%
Total non-interest expense (3,033) (2,764) 10% (11,771) (14,288) -18%
Income before federal income taxes 2,944 2,893 2% 11,876 7,744 53%
Federal income tax expense 1,026 886 16% 4,147 2,420 71%
Net income $ 1,918 $ 2,007 -4% $ 7,729 $ 5,324 45%
Basic earnings per share $ 0.51 $ 0.52 -2% $ 2.06 $ 1.23 67%
Diluted earnings per share $ 0.50 $ 0.50 0% $ 1.98 $ 1.19 66%
Cash dividends declared per share $ 0.20 $ 0.175 14% $ 0.80 $ 0.70 14%
<FN>
<F1> Note 1 - Certain amounts in the 1997 consolidated operations data have been
reclassified to conform with the 1998 presentation.
<F2> NM - Not a meaningful measure of performance.
</FN>
</TABLE>
FFY FINANCIAL CORP. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three months ended Year ended
June 30, June 30,
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Selected Financial Ratios and Other Data: 1998 1997 1998 1997
- ----------------------------------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Performance Ratios:
Return on average assets (1) 1.21% (8) 1.34% (8) 1.25% 0.90%
Return on average equity (2) 9.12% (8) 9.70% (8) 9.28% 5.73%
Interest rate spread information:
Average during period (3) 3.09% (8) 3.20% (8) 3.19% 3.17%
End of period (3) 2.94% 3.06% 2.94% 3.06%
Net interest margin (3) (4) 3.72% (8) 3.82% (8) 3.81% 3.89%
Operating expense to average assets 1.92% (8) 1.85% (8) 1.90% 2.42%
Efficiency ratio (5) 50.45% 48.00% 49.08% 62.01%
Dividend payout ratio (6) 40.00% 35.00% 40.40% 58.82%
Performance Ratios Excluding Affiliates (7):
Return on average assets (1) 1.26% (8) 1.34% (8) 1.27% 0.90%
Return on average equity (2) 9.45% (8) 9.70% (8) 9.41% 5.73%
Operating expense to average assets 1.81% (8) 1.85% (8) 1.84% 2.42%
Efficiency ratio (5) 48.26% 48.00% 47.92% 62.01%
Quality Ratios (end of period):
Non-performing assets to total assets 0.51% 0.67% 0.51% 0.67%
Allowance for loan losses to non-performing assets 82.43% 74.18% 82.43% 74.18%
Allowance for loan losses to gross loans outstanding 0.56% 0.64% 0.56% 0.64%
Capital Ratios:
Equity to total assets at end of period 12.92% 13.71% 12.92% 13.71%
Average equity to average assets 13.30% 13.82% 13.47% 15.71%
Book value per share $21.00 $19.83 $21.00 $19.83
Tangible book value per share $20.98 $19.83 $20.98 $19.83
Change in book value and tangible book value
per share due to SFAS No. 115 $ 0.20 $ 0.03 $ 0.20 $ 0.03
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.15 x 1.14 x 1.15 x 1.17 x
<FN>
<F1> - Ratio of net income to average total assets.
<F2> - Ratio of net income to average equity.
<F3> - Ratio is presented on a fully taxable equivalent basis using the
company's federal statutory tax rate of 34%.
<F4> - Net interest income divided by average interest earning assets -
calculated without consideration of the unrealized gain on securities
available for sale.
<F5> - Ratio is calculated without consideration to goodwill amortization and
gain (loss) on sale of securities.
<F6> - Cash dividends declared per share divided by diluted earnings per
share.
<F7> - Ratios presented are not inclusive of the operations of the company's
real estate and insurance affiliates which began operations in September
1997 and April 1998, respectively.
<F8> - Annualized.
</FN>
</TABLE>
