First Defiance announced the retirement of longtime president and CEO William Small.
DEFIANCE — First Defiance Financial Corp. this week reported a record profit of $18.7 million, or $1.81 per share, for 2012, an increase of 20.6 percent over 2011 when the holding company had profits of $15.5 million or $1.42 per share.
The company also announced the impending retirement of its longtime CEO.
First Defiance, which is the parent company of First Federal Bank of the Midwest, reported on Monday that its net interest income — a key measure of bank stability — was $69 million in 2012, the same as 2011. Its provisions for loan losses decreased in 2012 to $10.9 million from $12.4 million in 2011.
The company said that its improved 2012 performance stemmed largely from its strategy in the fourth quarter in which it took an after-tax loss of $260,000 through the selling of $60 million in securities, which provided the company with a $1.6 million gain.
It used the sale of the securities to pay off $62 million in Federal Home Loan Bank loans, thereby incurring a $2 million penalty.
However, by paying off the federal loans, First Defiance increased its net interest income, improved its capital (or financial stability) compared to its current risk-adjusted assets, and increased its return on average assets and its return on average equity.
As a result, in the fourth quarter, First Defiance had a profit of $5.2 million, or 52 cents per share, up from $4.1 million, or 36 cents per share for the same period in 2011.
“Asset quality continued to show improvement [in the fourth quarter], reflected by a 17 percent reduction in non-performing loans from the fourth quarter of 2011,” said William J. Small, First Defiance’s chairman, president, and chief executive officer. “We had a 75 percent decrease in net charge-offs in the 2012 fourth quarter compared with the fourth quarter of 2011, reflecting continuation of improvement in the credit profile of First Defiance.”
Besides its annual and fourth quarter financial results, First Defiance also announced Monday that Mr. Small plans to retire from his duties as president and CEO at the end of this year, but will remain chairman of both the holding company and the bank.
Mr. Small has been chairman and CEO since 1999.
As of Jan. 1, 2014, Donald Hileman, the current executive vice president and chief financial officer, will succeed Mr. Small as First Defiance president and CEO. Jim Rohrs will remain president and CEO of First Federal Bank of the Midwest.
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