FIRST PLACE After-tax charge hits $3.4 million
Core earnings were higher than the comparable quarter a year ago.
WARREN -- First Place Financial Corp. reported net income of $1.6 million for the second quarter compared with $4.8 million in the preceding quarter and $4.3 million in the prior year's quarter.
First Place took an after-tax charge of $3.4 million to reflect other-than-temporary impairment of Fannie Mae and Freddie Mac preferred stocks. The current quarter core earnings, which exclude the $3.4 million in impairment charge, were $5 million, an increase of 6.1 percent over core earnings for the preceding quarter and 16.5 percent over core earnings for the prior year quarter.
Delinquencies, nonperforming loans and year-to-date charge-offs at Dec. 31, 2004, were all below levels from a year earlier despite a 68-percent increase in loans.
The board of directors declared a 14-cent-per share cash dividend. First Place president and CEO Steven R. Lewis said acquiring Franklin Bank last year diversified the company's assets and helped boost net interest income. The move also expanded the company's geographic footprint and increased its share of earnings from stable sources including net interest income and service charges.
"Unfortunately these excellent core results come at the same time as a significant noncash impairment charges," Lewis said in a press release.
"While Freddie Mac and Fannie Mae securities continue to be rated as investment grade quality, we believe that taking an impairment charge at this time would be the conservative thing to do given the market value of these preferred stocks over the recent past and the prospects for the appreciation in the near term."