ý
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934. For the Quarterly Period Ended September 30,
2007
|
¨
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 For the Transition Period from
___________to__________
|
Ohio
|
34-1803915
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
Number)
|
|
601
Clinton Street, Defiance, Ohio
|
43512
|
|
(Address
or principal executive office)
|
(Zip
Code)
|
Large
accelerated filer ¨
|
Accelerated
filer ý
|
Non-accelerated
filer ¨
|
Page
Number
|
||
2
|
||
4
|
||
5
|
||
6
|
||
7
|
||
19
|
||
33
|
||
35
|
||
36
|
||
36
|
||
36
|
||
36
|
||
37
|
||
37
|
||
37
|
||
38
|
September
30,
2007
|
December
31,
2006
|
|||||||
(In
Thousands)
|
||||||||
Assets
|
||||||||
Cash
and cash equivalents:
|
||||||||
Cash
and amounts due from
depository institutions
|
$ |
30,558
|
$ |
47,668
|
||||
Interest-bearing
deposits
|
29,379
|
2,355
|
||||||
59,937
|
50,023
|
|||||||
Securities:
|
||||||||
Available-for-sale,
carried at
fair value
|
111,236
|
110,682
|
||||||
Held-to-maturity,
carried at
amortized cost
|
||||||||
(fair
value $1,279 and $1,492 at
September 30, 2007
|
||||||||
and
December 31, 2006,
respectively)
|
1,236
|
1,441
|
||||||
112,472
|
112,123
|
|||||||
Loans
held for sale
|
7,426
|
3,426
|
||||||
Loans
receivable, net of allowance of $13,427 at September
|
||||||||
30,
2007 and $13,579 at December 31, 2006, respectively
|
1,251,445
|
1,226,310
|
||||||
Accrued
interest receivable
|
8,102
|
6,984
|
||||||
Federal
Home Loan Bank stock
|
18,586
|
18,586
|
||||||
Bank
owned life insurance
|
28,315
|
25,326
|
||||||
Premises
and equipment
|
38,287
|
34,899
|
||||||
Real
estate and other assets held for sale
|
3,392
|
2,392
|
||||||
Goodwill
|
36,515
|
35,090
|
||||||
Core
deposit and other intangibles
|
3,717
|
3,397
|
||||||
Mortgage
servicing rights
|
5,917
|
5,529
|
||||||
Other
assets
|
5,835
|
3,794
|
||||||
Total
assets
|
$ |
1,579,946
|
$ |
1,527,879
|
September
30,
2007
|
December
31,
2006
|
|||||||
(In
Thousands)
|
||||||||
Liabilities
and stockholders’ equity
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$ |
1,208,164
|
$ |
1,138,445
|
||||
Advances
from the Federal Home
Loan Bank
|
128,461
|
162,228
|
||||||
Short
term borrowings and other
interest-bearing liabilities
|
24,645
|
30,424
|
||||||
Subordinated
debentures
|
36,083
|
20,619
|
||||||
Advance
payments by
borrowers
|
430
|
667
|
||||||
Deferred
taxes
|
1,292
|
1,295
|
||||||
Other
liabilities
|
16,165
|
14,376
|
||||||
Total
liabilities
|
1,415,240
|
1,368,054
|
||||||
Stockholders’
equity:
|
||||||||
Preferred
stock, no par value per
share:
|
||||||||
5,000
shares authorized; no
shares issued
|
-
|
-
|
||||||
Common
stock, $.01 par value per
share:
|
||||||||
20,000
shares authorized; 11,703
shares issued
|
||||||||
and
7,095 and 7,142 shares
outstanding, respectively
|
117
|
117
|
||||||
Additional
paid-in
capital
|
112,587
|
110,285
|
||||||
Stock
acquired by
ESOP
|
(202 | ) | (628 | ) | ||||
Accumulated
other comprehensive
loss, net of
|
||||||||
tax
of $(376) and $(362),
respectively
|
(699 | ) | (671 | ) | ||||
Retained
earnings
|
124,899
|
120,112
|
||||||
Treasury
stock, at cost, 4,608 and
4,561 shares
respectively
|
(71,996 | ) | (69,390 | ) | ||||
Total
stockholders’ equity
|
164,706
|
159,825
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
1,579,946
|
$ |
1,527,879
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Interest
Income
|
||||||||||||||||
Loans
|
$ |
22,983
|
$ |
22,341
|
$ |
67,882
|
$ |
63,605
|
||||||||
Investment
securities:
|
||||||||||||||||
Taxable
|
1,129
|
1,198
|
3,403
|
3,387
|
||||||||||||
Non-taxable
|
310
|
284
|
887
|
853
|
||||||||||||
Interest-bearing
deposits
|
262
|
7
|
483
|
145
|
||||||||||||
FHLB
stock
dividends
|
305
|
262
|
898
|
765
|
||||||||||||
Total
interest income
|
24,989
|
24,092
|
73,553
|
68,755
|
||||||||||||
Interest
Expense
|
||||||||||||||||
Deposits
|
10,536
|
9,140
|
30,130
|
23,835
|
||||||||||||
FHLB
advances and
other
|
1,636
|
2,256
|
5,253
|
6,778
|
||||||||||||
Subordinated
debentures
|
597
|
343
|
1,518
|
962
|
||||||||||||
Notes
payable
|
193
|
144
|
519
|
403
|
||||||||||||
Total
interest expense
|
12,962
|
11,883
|
37,420
|
31,978
|
||||||||||||
Net
interest income
|
12,027
|
12,209
|
36,133
|
36,777
|
||||||||||||
Provision
for loan losses
|
671
|
373
|
1,704
|
1,438
|
||||||||||||
Net
interest income after provision for loan losses
|
11,356
|
11,836
|
34,429
|
35,339
|
||||||||||||
Non-interest
Income
|
||||||||||||||||
Service
fees and other
charges
|
2,764
|
2,580
|
7,997
|
6,658
|
||||||||||||
Insurance
and investment sales
commission income
|
1,180
|
981
|
4,244
|
3,643
|
||||||||||||
Mortgage
banking
income
|
921
|
923
|
2,780
|
2,544
|
||||||||||||
Gain
on sale of non-mortgage
loans
|
138
|
63
|
204
|
500
|
||||||||||||
Gain
on sale of
securities
|
21
|
-
|
21
|
-
|
||||||||||||
Trust
income
|
95
|
76
|
280
|
232
|
||||||||||||
Income
from Bank Owned Life
Insurance
|
321
|
250
|
929
|
730
|
||||||||||||
Other
non-interest
income
|
144
|
187
|
407
|
395
|
||||||||||||
Total
non-interest income
|
5,584
|
5,060
|
16,862
|
14,702
|
||||||||||||
Non-interest
Expense
|
||||||||||||||||
Compensation
and
benefits
|
6,424
|
6,211
|
19,610
|
18,251
|
||||||||||||
Occupancy
|
1,516
|
1,278
|
4,324
|
3,793
|
||||||||||||
State
franchise
tax
|
355
|
331
|
1,074
|
995
|
||||||||||||
Data
processing
|
941
|
903
|
2,838
|
2,760
|
||||||||||||
Amortization
of
intangibles
|
167
|
180
|
481
|
539
|
||||||||||||
Other
non-interest
expense
|
2,893
|
2,188
|
7,623
|
6,291
|
||||||||||||
Total
non-interest expense
|
12,296
|
11,091
|
35,950
|
32,629
|
||||||||||||
Income
before income taxes
|
4,644
|
5,805
|
15,341
|
17,412
|
||||||||||||
Federal
income taxes
|
1,515
|
1,982
|
4,995
|
5,785
|
||||||||||||
Net
Income
|
3,129
|
3,823
|
10,346
|
11,627
|
||||||||||||
Earnings
per share (Note 6)
|
||||||||||||||||
Basic
|
$ |
0.44
|
$ |
0.54
|
$ |
1.46
|
$ |
1.66
|
||||||||
Diluted
|
$ |
0.44
|
$ |
0.53
|
$ |
1.44
|
$ |
1.62
|
||||||||
Dividends
declared per share (Note 5)
|
$ |
0.25
|
$ |
0.24
|
$ |
0.75
|
$ |
0.72
|
||||||||
Average
shares outstanding (Note 6)
|
||||||||||||||||
Basic
|
7,080
|
7,032
|
7,101
|
7,020
|
||||||||||||
Diluted
|
7,171
|
7,146
|
7,201
|
7,161
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Balance
at beginning of period
|
$ |
164,657
|
$ |
154,312
|
$ |
159,825
|
$ |
151,216
|
||||||||
Adjustment
to initially apply FIN 48
|
-
|
-
|
(200 | ) |
-
|
|||||||||||
Balance
at beginning of period as adjusted
|
164,657
|
154,312
|
159,625
|
151,216
|
||||||||||||
Comprehensive
income:
|
||||||||||||||||
Net
income
|
3,129
|
3,823
|
10,346
|
11,627
|
||||||||||||
Other
comprehensive income
(loss)
|
483
|
962
|
(28 | ) | (45 | ) | ||||||||||
Total
comprehensive income
|
3,612
|
4,785
|
10,318
|
11,582
|
||||||||||||
ESOP
shares released
|
333
|
324
|
1,376
|
1,326
|
||||||||||||
Stock
option expense
|
72
|
77
|
202
|
210
|
||||||||||||
Tax
benefit of employee plans
|
-
|
409
|
56
|
409
|
||||||||||||
Shares
issued under stock option plans
|
-
|
498
|
462
|
2,208
|
||||||||||||
Treasury
shares repurchased
|
(2,216 | ) | (569 | ) | (4,271 | ) | (3,741 | ) | ||||||||
Acquisition
of Huber, Harger, Welt and Smith
|
-
|
-
|
2,250
|
-
|
||||||||||||
Common
cash dividends declared (Note 5)
|
(1,752 | ) | (1,681 | ) | (5,312 | ) | (5,055 | ) | ||||||||
Balance
at end of period
|
$ |
164,706
|
$ |
158,155
|
$ |
164,706
|
$ |
158,155
|
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2007
|
2006
|
|||||||
Operating
Activities
|
||||||||
Net
cash provided by operating activities
|
$ |
9,514
|
$ |
16,609
|
||||
Investing
Activities
|
||||||||
Proceeds
from maturities of held-to-maturity securities
|
204
|
185
|
||||||
Proceeds
from maturities of available-for-sale securities
|
17,355
|
8,542
|
||||||
Proceeds
from sale of available-for-sale securities
|
2,521
|
-
|
||||||
Proceeds
from sale of real estate and other assets held for sale
|
2,120
|
1,714
|
||||||
Proceeds
from sale of property, plant and equipment
|
5
|
222
|
||||||
Net
cash received in acquisition of Huber, Harger, Welt and
Smith
|
190
|
-
|
||||||
Proceeds
from sale of non-mortgage loans
|
11,320
|
-
|
||||||
Purchases
of available-for-sale securities
|
(20,499 | ) | (14,061 | ) | ||||
Investment
in bank owned life insurance
|
(2,060 | ) |
-
|
|||||
Purchases
of office properties and equipment
|
(5,664 | ) | (4,611 | ) | ||||
Net
increase in loans receivable
|
(41,506 | ) | (64,386 | ) | ||||
Net
cash (used in) provided by investing activities
|
(36,014 | ) | (72,395 | ) | ||||
Financing
Activities
|
||||||||
Net
increase in deposits and advance payments by borrowers
|
69,560
|
61,061
|
||||||
Repayment
of Federal Home Loan Bank long-term advances
|
(653 | ) | (66,988 | ) | ||||
Net
(decrease) increase in Federal Home Loan Bank short-term
advances
|
(33,100 | ) |
17,500
|
|||||
Proceeds
from issuance of subordinated debentures
|
15,464
|
-
|
||||||
Proceeds
from Federal Home Loan Bank long-term advances
|
-
|
45,000
|
||||||
Decrease
in securities sold under repurchase agreements
|
(5,779 | ) | (2,141 | ) | ||||
Purchase
of common stock for treasury
|
(4,271 | ) | (3,741 | ) | ||||
Cash
dividends paid
|
(5,325 | ) | (5,036 | ) | ||||
Proceeds
from exercise of stock options
|
462
|
2,208
|
||||||
Excess
tax benefits from exercise of stock options
|
56
|
409
|
||||||
Net
cash provided by financing activities
|
36,414
|
48,272
|
||||||
(Decrease)
increase in cash and cash equivalents
|
9,914
|
(7,514 | ) | |||||
Cash
and cash equivalents at beginning of period
|
50,023
|
49,256
|
||||||
Cash
and cash equivalents at end of period
|
$ |
59,937
|
$ |
41,742
|
||||
Supplemental
cash flow information:
|
||||||||
Interest
paid
|
$ |
36,725
|
$ |
31,114
|
||||
Income
taxes paid
|
$ |
4,520
|
$ |
4,664
|
||||
Transfers
from loans to other real estate owned and other
|
||||||||
assets
held for
sale
|
$ |
3,510
|
$ |
4,336
|
Nine
months ended September 30
|
||||||||||||||||
2007
|
2006
|
|||||||||||||||
Options
Outstanding
|
Weighted
Average
Option
Prices
|
Options
Outstanding
|
Weighted
Average
Option
Prices
|
|||||||||||||
Options
outstanding, beginning of period
|
404,154
|
$ |
19.36
|
569,099
|
$ |
16.00
|
||||||||||
Forfeited
or cancelled
|
(2,550 | ) |
25.98
|
(11,150 | ) |
23.14
|
||||||||||
Exercised
|
(32,922 | ) |
14.04
|
(194,588 | ) |
11.35
|
||||||||||
Granted
|
54,250
|
27.41
|
48,250
|
26.49
|
||||||||||||
Options
outstanding, end of period
|
422,932
|
$ |
20.76
|
411,611
|
$ |
19.24
|
Nine
Months Ended September 30
|
||||||||
2007
|
2006
|
|||||||
Proceeds
of options exercised
|
$ |
462,076
|
$ |
2,208,234
|
||||
Related
tax benefit recognized
|
55,414
|
409,278
|
||||||
Intrinsic
value of options exercised
|
475,048
|
2,970,005
|
Nine
Months Ended September 30
|
||||||||
2007
|
2006
|
|||||||
Expected
average risk-free rate
|
4.86 | % | 5.17 | % | ||||
Expected
average life
|
6.63
|
years |
6.50
|
years | ||||
Expected
volatility
|
21.80 | % | 22.40 | % | ||||
Expected
dividend yield
|
3.64 | % | 3.63 | % |
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Numerator
for basic and diluted
earnings
per share – Net income
|
$ |
3,129
|
$ |
3,823
|
$ |
10,346
|
$ |
11,627
|
||||||||
Denominator:
|
||||||||||||||||
Denominator
for basic
earnings
per
share – weighted average
shares
|
7,080
|
7,032
|
7,101
|
7,020
|
||||||||||||
Effect
of dilutive
securities:
|
||||||||||||||||
Employee
stock
options
|
91
|
114
|
100
|
141
|
||||||||||||
Denominator
for diluted earnings per
share
– adjusted weighted average
shares
and assumed conversions
|
7,171
|
7,146
|
7,201
|
7,161
|
||||||||||||
Basic
earnings per share from net income
|
$ |
0.44
|
$ |
0.54
|
$ |
1.46
|
$ |
1.66
|
||||||||
Diluted
earnings per share from
net
income
|
$ |
0.44
|
$ |
0.53
|
$ |
1.44
|
$ |
1.62
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
At
September 30, 2007
|
||||||||||||||||
Available-for-Sale
Securities:
|
||||||||||||||||
U.S.
Treasury securities and
obligations
of
U.S. Government
corporations and
agencies
|
$ |
27,571
|
$ |
199
|
$ | (19 | ) | $ |
27,751
|
|||||||
Mortgage-backed
securities
|
24,542
|
64
|
(275 | ) |
24,331
|
|||||||||||
REMICs
|
3,064
|
-
|
(10 | ) |
3,054
|
|||||||||||
Collateralized
mortgage
obligations
|
19,730
|
62
|
(203 | ) |
19,589
|
|||||||||||
Trust
preferred
stock
|
7,887
|
6
|
(347 | ) |
7,546
|
|||||||||||
Obligations
of state and political
subdivisions
|
28,631
|
347
|
(13 | ) |
28,965
|
|||||||||||
Totals
|
$ |
111,425
|
$ |
678
|
$ | (867 | ) | $ |
111,236
|
|||||||
Held-to-Maturity
Securities:
|
||||||||||||||||
FHLMC
certificates
|
$ |
199
|
$ |
6
|
$ |
-
|
$ |
205
|
||||||||
FNMA
certificates
|
515
|
4
|
(1 | ) |
518
|
|||||||||||
GNMA
certificates
|
162
|
1
|
-
|
163
|
||||||||||||
Obligations
of state and
political subdivisions
|
360
|
33
|
-
|
393
|
||||||||||||
Totals
|
$ |
1,236
|
$ |
44
|
$ | (1 | ) | $ |
1,279
|
At
December 31, 2006
|
||||||||||||||||
Available-for-Sale
Securities:
|
||||||||||||||||
U.S.
Treasury securities and
obligations
of
U.S. Government
corporations and
agencies
|
$ |
36,108
|
$ |
106
|
$ | (171 | ) | $ |
36,043
|
|||||||
Mortgage-backed
securities
|
18,595
|
23
|
(276 | ) |
18,342
|
|||||||||||
REMICs
|
3,071
|
-
|
(11 | ) |
3,060
|
|||||||||||
Collateralized
mortgage
obligations
|
20,099
|
52
|
(346 | ) |
19,805
|
|||||||||||
Trust
preferred
stock
|
8,116
|
82
|
(20 | ) |
8,178
|
|||||||||||
Obligations
of state and
political subdivisions
|
24,840
|
418
|
(4 | ) |
25,254
|
|||||||||||
Totals
|
$ |
110,829
|
$ |
681
|
$ | (828 | ) | $ |
110,682
|
|||||||
Held-to-Maturity
Securities:
|
||||||||||||||||
FHLMC
certificates
|
$ |
272
|
$ |
8
|
$ |
-
|
$ |
280
|
||||||||
FNMA
certificates
|
614
|
5
|
(4 | ) |
615
|
|||||||||||
GNMA
certificates
|
195
|
1
|
-
|
196
|
||||||||||||
Obligations
of state and
political
subdivisions
|
360
|
41
|
-
|
401
|
||||||||||||
Totals
|
$ |
1,441
|
$ |
55
|
$ | (4 | ) | $ |
1,492
|
Duration
of Unrealized Loss Position
|
||||||||||||||||||||||||
Less
than 12 Months
|
12
Month or Longer
|
Total
|
||||||||||||||||||||||
Gross
|
Gross
|
|||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Losses
|
|||||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||||||
At
September 30, 2007
|
||||||||||||||||||||||||
Available-for-sale
securities:
|
||||||||||||||||||||||||
U.S.
treasury securities and obligations of U.S. government
corporations
and
agencies
|
$ |
-
|
$ |
-
|
$ |
6,550
|
$ | (19 | ) | $ |
6,550
|
$ | (19 | ) | ||||||||||
Mortgage-backed
securities
|
6,739
|
(58 | ) |
9,901
|
(217 | ) |
16,640
|
(275 | ) | |||||||||||||||
Collateralized
mortgage obligations and REMICs
|
4,049
|
(14 | ) |
14,109
|
(199 | ) |
18,158
|
(213 | ) | |||||||||||||||
Trust
preferred stock
|
1,995
|
(102 | ) |
1,645
|
(245 | ) |
3,640
|
(347 | ) | |||||||||||||||
Obligations
of state and political subdivisions
|
3,522
|
(11 | ) |
192
|
(2 | ) |
3,714
|
(13 | ) | |||||||||||||||
Held
to maturity securities:
|
||||||||||||||||||||||||
Mortgage-backed
securities
|
120
|
-
|
144
|
(1 | ) |
264
|
(1 | ) | ||||||||||||||||
Total
temporarily
impaired
securities
|
$ |
16,425
|
$ | (185 | ) | $ |
32,541
|
$ | (683 | ) | $ |
48,966
|
$ | (868 | ) |
September
30,
2007
|
December
31,
2006
|
|||||||
Real
Estate:
|
||||||||
One-to-four
family
residential
|
$ |
230,075
|
$ |
250,808
|
||||
Construction
|
15,392
|
17,339
|
||||||
Non-residential
and
multi-family
|
592,914
|
579,860
|
||||||
838,381
|
848,007
|
|||||||
Other
Loans:
|
||||||||
Commercial
|
267,897
|
232,914
|
||||||
Consumer
finance
|
38,280
|
43,770
|
||||||
Home
equity and
improvement
|
127,641
|
122,789
|
||||||
433,818
|
399,473
|
|||||||
Total
real estate and other loans
|
1,272,199
|
1,247,480
|
||||||
Deduct:
|
||||||||
Loans
in process
|
6,301
|
6,409
|
||||||
Net
deferred loan origination
fees and costs
|
1,026
|
1,182
|
||||||
Allowance
for loan
loss
|
13,427
|
13,579
|
||||||
Totals
|
$ |
1,251,445
|
$ |
1,226,310
|
Three
Months ended
September
30,
|
Nine
Months ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Balance
at beginning of period
|
$ |
13,417
|
$ |
14,239
|
$ |
13,579
|
$ |
13,673
|
||||||||
Provision
for loan losses
|
671
|
373
|
1,704
|
1,438
|
||||||||||||
Charge-offs:
|
||||||||||||||||
One-to-four
family residential
real estate
|
128
|
58
|
223
|
269
|
||||||||||||
Non-residential
and multi-family
real estate
|
586
|
134
|
1,669
|
364
|
||||||||||||
Commercial
|
-
|
85
|
92
|
115
|
||||||||||||
Home
equity and
improvement
|
10
|
48
|
51
|
101
|
||||||||||||
Consumer
finance
|
25
|
67
|
119
|
296
|
||||||||||||
Total
charge-offs
|
749
|
392
|
2,154
|
1,145
|
||||||||||||
Recoveries
|
88
|
78
|
298
|
332
|
||||||||||||
Net
charge-offs
|
661
|
314
|
1,856
|
813
|
||||||||||||
Ending
allowance
|
$ |
13,427
|
$ |
14,298
|
$ |
13,427
|
$ |
14,298
|
September
30,
2007
|
December
31,
2006
|
|||||||
(in
thousands)
|
||||||||
Non-accrual
loans
|
$ |
8,523
|
$ |
7,283
|
||||
Loans
over 90 days past due and still accruing
|
-
|
-
|
||||||
Total
non-performing loans
|
8,523
|
$ |
7,283
|
|||||
Real
estate owned (REO)
|
3,392
|
2,392
|
||||||
Total
non-performing assets
|
$ |
11,915
|
$ |
9,675
|
September
30,
2007
|
December
31,
2006
|
|||||||
Non-interest-bearing
checking accounts
|
$ |
109,128
|
$ |
106,328
|
||||
Interest-bearing
checking and money market accounts
|
330,168
|
306,003
|
||||||
Savings
accounts
|
98,719
|
74,491
|
||||||
Retail
certificates of deposit less than $100,000
|
524,347
|
493,594
|
||||||
Retail
certificates of deposit greater than $100,000
|
142,645
|
140,392
|
||||||
Brokered
or national certificates of deposit
|
3,157
|
17,637
|
||||||
$ |
1,208,164
|
$ |
1,138,445
|
September
30,
2007
|
December
31,
2006
|
|||||||
(in
thousands)
|
||||||||
FHLB
Advances:
|
||||||||
Overnight
borrowings
|
$ |
-
|
$ |
33,100
|
||||
Single
maturity fixed rate advances
|
10,000
|
10,000
|
||||||
Single
maturity LIBOR based advances
|
45,000
|
45,000
|
||||||
Putable
advances
|
45,000
|
45,000
|
||||||
Strike-rate
advances
|
27,000
|
27,000
|
||||||
Amortizable
mortgage advances
|
1,461
|
2,128
|
||||||
Total
|
$ |
128,461
|
$ |
162,228
|
||||
Junior
subordinated debentures owed to
unconsolidated
subsidiary trusts
|
$ |
36,083
|
$ |
20,619
|
||||
September
30,
2007
|
December
31,
2006
|
|||||||
First
Defiance Statutory Trust I due December 2035
|
$ |
20,619
|
$ |
20,619
|
||||
First
Defiance Statutory Trust II due June 2037
|
15,464
|
-
|
||||||
Total
junior subordinated debentures owned to unconsolidated subsidiary
Trusts
|
$ |
36,083
|
$ |
20,619
|
September
30,
2007
|
December
31,
2006
|
|||||||
(In
Thousands)
|
||||||||
Loan
commitments
|
$ |
263,982
|
$ |
260,349
|
||||
Standby
Letters of Credit
|
13,331
|
16,869
|
||||||
Total
|
$ |
277,313
|
$ |
277,218
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(In
Thousands)
|
||||||||||||||||
Service
cost-benefits attributable to service
during
the period
|
$ |
12
|
$ |
10
|
$ |
37
|
$ |
30
|
||||||||
Interest
cost on accumulated post-retirement
benefit
obligation
|
31
|
27
|
94
|
80
|
||||||||||||
Net
amortization and deferral
|
11
|
8
|
32
|
23
|
||||||||||||
Net
periodic postretirement benefit cost
|
$ |
54
|
$ |
45
|
$ |
163
|
$ |
133
|
Three
Months Ended September 30,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||
Balance
|
Interest(1)
|
Rate(2)
|
Balance
|
Interest(1)
|
Rate(2)
|
|||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
receivable
|
$ |
1,244,531
|
$ |
22,995
|
7.33 | % | $ |
1,225,456
|
$ |
22,346
|
7.23 | % | ||||||||||||
Securities
|
112,645
|
1,615
|
5.66
|
119,628
|
1,625
|
5.35
|
||||||||||||||||||
Interest-earning
deposits
|
21,760
|
262
|
4.78
|
580
|
7
|
4.79
|
||||||||||||||||||
FHLB
stock and other
|
18,585
|
305
|
6.51
|
18,050
|
262
|
5.76
|
||||||||||||||||||
Total
interest-earning assets
|
1,397,521
|
25,177
|
7.14
|
1,363,714
|
24,240
|
7.05
|
||||||||||||||||||
Non-interest-earning
assets
|
152,653
|
148,930
|
||||||||||||||||||||||
Total
assets
|
$ |
1,550,174
|
$ |
1,512,644
|
||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Deposits
|
$ |
1,074,413
|
$ |
10,536
|
3.89 | % | $ |
1,030,433
|
$ |
9,140
|
3.52 | % | ||||||||||||
FHLB
advances and other
|
128,597
|
1,636
|
5.05
|
175,255
|
2,256
|
5.11
|
||||||||||||||||||
Notes
payable
|
24,935
|
193
|
3.07
|
19,749
|
144
|
2.89
|
||||||||||||||||||
Subordinated
debentures
|
36,295
|
597
|
6.53
|
20,619
|
343
|
6.60
|
||||||||||||||||||
Total
interest-bearing liabilities
|
1,264,240
|
12,962
|
4.07
|
1,246,056
|
11,883
|
3.78
|
||||||||||||||||||
Non-interest
bearing deposits
|
103,181
|
-
|
93,964
|
-
|
||||||||||||||||||||
Total
including non-interest bearing
|
||||||||||||||||||||||||
demand
deposits
|
1,367,421
|
12,962
|
3.76
|
1,340,020
|
11,883
|
3.52
|
||||||||||||||||||
Other
non-interest-bearing liabilities
|
18,002
|
16,607
|
||||||||||||||||||||||
Total
liabilities
|
1,385,423
|
1,356,627
|
||||||||||||||||||||||
Stockholders'
equity
|
164,751
|
156,017
|
||||||||||||||||||||||
Total
liabilities and stock-
|
||||||||||||||||||||||||
holders'
equity
|
$ |
1,550,174
|
$ |
1,512,644
|
||||||||||||||||||||
Net
interest income; interest
|
||||||||||||||||||||||||
rate
spread
|
$ |
12,215
|
3.07 | % | $ |
12,357
|
3.27 | % | ||||||||||||||||
Net
interest margin (3)
|
3.47 | % | 3.59 | % | ||||||||||||||||||||
Average
interest-earning assets
|
||||||||||||||||||||||||
to
average interest-bearing
|
||||||||||||||||||||||||
liabilities
|
111 | % | 109 | % |
(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.
|
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Average
|
Yield/
|
Average
|
Yield/
|
|||||||||||||||||||||
Balance
|
Interest(1)
|
Rate(2)
|
Balance
|
Interest(1)
|
Rate(2)
|
|||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
receivable
|
$ |
1,233,987
|
$ |
67,916
|
7.36 | % | $ |
1,204,142
|
$ |
63,622
|
7.06 | % | ||||||||||||
Securities
|
112,466
|
4,795
|
5.68
|
116,215
|
4,670
|
5.34
|
||||||||||||||||||
Interest-earning
deposits
|
12,461
|
483
|
5.18
|
3,992
|
145
|
4.86
|
||||||||||||||||||
FHLB
stock and other
|
18,585
|
898
|
6.46
|
17,797
|
765
|
5.75
|
||||||||||||||||||
Total
interest-earning assets
|
1,377,499
|
74,092
|
7.19
|
1,342,146
|
69,202
|
6.89
|
||||||||||||||||||
Non-interest-earning
assets
|
151,905
|
146,633
|
||||||||||||||||||||||
Total
assets
|
$ |
1,529,404
|
$ |
1,488,779
|
||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
Deposits
|
$ |
1,053,810
|
$ |
30,130
|
3.82 | % | $ |
999,977
|
$ |
23,835
|
3.19 | % | ||||||||||||
FHLB
advances and other
|
139,087
|
5,253
|
5.05
|
185,826
|
6,778
|
4.88
|
||||||||||||||||||
Notes
payable
|
22,920
|
519
|
3.03
|
19,224
|
403
|
2.80
|
||||||||||||||||||
Subordinated
debentures
|
31,147
|
1,518
|
6.52
|
20,619
|
962
|
6.24
|
||||||||||||||||||
Total
interest-bearing liabilities
|
1,246,964
|
37,420
|
4.01
|
1,225,646
|
31,978
|
3.49
|
||||||||||||||||||
Non-interest
bearing deposits
|
100,908
|
-
|
93,492
|
-
|
||||||||||||||||||||
Total
including non-interest bearing
|
||||||||||||||||||||||||
demand
deposits
|
1,347,872
|
37,420
|
3.71
|
1,319,138
|
31,978
|
3.24
|
||||||||||||||||||
Other
non-interest-bearing liabilities
|
18,042
|
15,348
|
||||||||||||||||||||||
Total
liabilities
|
1,365,914
|
1,334,486
|
||||||||||||||||||||||
Stockholders'
equity
|
163,490
|
154,293
|
||||||||||||||||||||||
Total
liabilities and stock-
|
||||||||||||||||||||||||
holders'
equity
|
$ |
1,529,404
|
$ |
1,488,779
|
||||||||||||||||||||
Net
interest income; interest
|
||||||||||||||||||||||||
rate
spread
|
$ |
36,672
|
3.18 | % | $ |
37,224
|
3.40 | % | ||||||||||||||||
Net
interest margin (3)
|
3.56 | % | 3.71 | % | ||||||||||||||||||||
Average
interest-earning assets
|
||||||||||||||||||||||||
to
average interest-bearing
|
||||||||||||||||||||||||
liabilities
|
110 | % | 110 | % |
(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.
|
September
30,
2007
|
December
31,
2006
|
|||||||
(in
thousands)
|
||||||||
Non-accrual
loans
|
$ |
8,523
|
$ |
7,283
|
||||
Loans
over 90 days past due and still accruing
|
-
|
-
|
||||||
Total
non-performing loans
|
$ |
8,523
|
$ |
7,283
|
||||
Real
estate owned (REO)
|
3,392
|
2,392
|
||||||
Total
non-performing assets
|
$ |
11,915
|
$ |
9,675
|
||||
Allowance
for loans losses as a percentage of total loans
|
1.06 | % | 1.10 | % | ||||
Allowance
for loan losses as a percentage of non-
performing
assets
|
112.69 | % | 140.35 | % | ||||
Allowance
for loan losses as a percentage of non-
performing
loans
|
157.54 | % | 186.45 | % | ||||
Total
non-performing assets as a percentage of total assets
|
0.75 | % | 0.64 | % | ||||
Total
non-performing loans as a percentage of total loans
|
0.67 | % | 0.58 | % | ||||
Core
Capital
|
Risk-Based
Capital
|
|||||||||||||||
Adequately
Capitalized
|
Well
Capitalized
|
Adequately
Capitalized
|
Well
Capitalized
|
|||||||||||||
Regulatory
capital
|
$ |
152,669
|
$ |
152,669
|
$ |
166,096
|
$ |
166,096
|
||||||||
Minimum
required regulatory capital
|
61,434
|
76,792
|
106,101
|
132,626
|
||||||||||||
Excess
regulatory capital
|
$ |
91,235
|
$ |
75,877
|
$ |
59,995
|
$ |
33,470
|
||||||||
Regulatory
capital as a percentage of assets (1)
|
9.9 | % | 9.9 | % | 12.5 | % | 12.5 | % | ||||||||
Minimum
capital required as a percentage of assets
|
4.0 | % | 5.0 | % | 8.0 | % | 10.0 | % | ||||||||
Excess
regulatory capital as a percentage of assets
|
5.9 | % | 4.9 | % | 4.5 | % | 2.5 | % |
(1)
|
Core
capital is computed as a percentage of adjusted total assets of $1.54
billion. Risk-based capital is computed as a percentage of total
risk-weighted assets of $1.33
billion.
|
Item
1.
|
Legal
Proceedings
|
|
First
Defiance is not engaged in any legal proceedings of a material
nature.
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Period
|
Total
Number
of
Shares
Purchased
|
Average
Price
Paid
Per
Share
|
Total
Number of
Shares
Purchased
as
Part of
Publicly
Announced
Plans
or
Programs
|
Maximum
Number
of Shares
that
May Yet Be
Purchased
Under
the
Plans or
Programs
(a)
|
July
1, 2007 –
July
31, 2007
|
20,473
|
$26.93
|
20,473
|
224,844
|
August
1, 2007 –
August
31, 2007
|
56,283
|
$26.70
|
56,283
|
168,561
|
Sept.
1, 2007 –
Sept.
30, 2007
|
5,721
|
$28.21
|
5,721
|
162,840
|
Total
for 2007
Third
Quarter
|
82,477
|
$26.87
|
82,477
|
162,840
|
Item
3.
|
Defaults
upon Senior Securities
|
Item
4.
|
Submission
of Matters to a Vote of Security
Holders
|
Item
5.
|
Other
Information
|
Item
6.
|
Exhibits
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
||
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act
|
||
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
||
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act
|
First
Defiance Financial Corp.
|
||
(Registrant)
|
||
Date: November
9, 2007
|
By:
|
/s/
William J.
Small
|
William
J. Small
|
||
Chairman,
President and
|
||
Chief
Executive Officer
|
||
Date: November
9, 2007
|
By:
|
/s/
John C.
Wahl
|
John
C. Wahl
|
||
Executive
Vice President, Chief
|
||
Financial
Officer and
|
||
Treasurer
|