Firstfed Financial Corporation (NYSE:FED)
Industry: Financial
FirstFed Financial Corp. (FFC), incorporated on February 3, 1987, is a savings and loan holding company that wholly owns First Federal Bank of California (the Bank). The Bank attracts checking and savings deposits from the general public, and uses such deposits, together with borrowings and other funds, to make real estate, business and consumer loans. The Company operates 30 full-service banking branches, all located in Southern California. In addition to these branches, FFC operates six lending offices that are located in both Southern and Northern California, a call center that conducts transactions with deposit and loan clients by telephone, and an Internet Website through which clients can open accounts, transfer funds or pay bills. The Bank has three wholly owned subsidiaries: Seaside Financial Corporation (Seaside), Oceanside Insurance Agency, Inc. (Oceanside) and Santa Monica Capital Group (SM CG). SMCG is an inactive corporation. Seaside acts as trustee on the Bank's deeds of trust. Oceanside engages in limited insurance agent activities. Lending Activities The Bank's primary lending activity has been the origination of loans for the purpose of enabling borrowers to purchase, refinance or construct improvements on residential real property. The loan portfolio primarily consists of loans made to homebuyers and homeowners on the security of single-family dwellings and property owners on multi-family dwellings. The loan portfolio also includes loans secured by commercial and industrial properties, consumer loans and commercial business loans. Southern California has traditionally been the Bank's primary lending area. During the year ended December 31, 2004, it opened a single-family loan office in Northern California. Single-family loans originated in Northern California comprised 47% of originations, during the year ended December 31, 2005. The majority of the residential loans are obtained from wholesale loan brokers. Residential loans are also offered by all of its full-service branches. In addition, the Bank has an income property lending group and a commercial banking group that lend primarily in Southern California. Loans based on the security of single-family properties (one- to four-units) consist of the largest category of the Bank's loan portfolio. The loan portfolio also includes loans secured by multi-family, and commercial and industrial properties. As of December 31, 2005, 76% of the loan portfolio consisted of first liens on single-family properties while first liens on multi-family properties were 20% of the portfolio, and first liens on commercial properties represented 3% of the portfolio. Commercial business loans, construction loans, consumer loans and other loans comprised the remaining 1% of the loan portfolio as of December 31, 2005. Investment Activities The Bank invests in securities purchased under agreements to resell (repurchase agreements). The Bank obtains collateral for these agreements, which normally consists of United States treasury securities or mortgage-backed securities guaranteed by agencies of the United States Government. The collateral is held in the custody of a trustee, who is not a party to the transaction. The duration of these agreements is typically one to 30 days. The Bank deals with investment banking firms as the counterparties to these agreements. FFC's investment in repurchase agreements consists solely of securities purchased under agreements to resell identical securities. Investment securities principally consist of United States Treasury and agency securities, collateralized mortgage obligations and mortgage-backed securities. Mortgage-backed securities are created when the Bank exchanges pools of the Bank's own loans for mortgage-backed securities. The Bank classifies all of its investments and mortgage-backed securities as available-for-sale based upon a determination that such securities might be sold at a future date or that there may be foreseeable circumstances under which the Bank would sell such securities. Sources of Funds
As Of: 10/07 00:00 ET
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