FirstFed Financial Corp. (Pink Sheets: FFED) (the “Company”) announced today the positive capital effects of the Worker, Homeownership, and Business Assistance Act of 2009, which became law on November 6, 2009. The new law allows businesses to carry back net operating losses from 2008 and 2009 for up to five years. In light of the new tax legislation, FirstFed Financial Corp. will book a tax benefit in the fourth quarter of 2009 and anticipates receiving a federal income tax cash refund during the first quarter of 2010.
It is too early to estimate the full-year benefit; however, the Company can quantify the law’s impact in relation to its results for the nine months through September 30, 2009, and will be disclosing it as a subsequent event in its quarterly report on Form 10-Q. Had the new law been effective in the third quarter, the Company’s wholly-owned banking subsidiary, First Federal Bank of California, would have had an additional $76.28 million in capital at September 30, 2009, which would have raised the Bank’s core and risk-based capital ratios at that date to 5.49% and 11.13%, respectively.
The Bank’s loan delinquency levels continue to trend downward. Unaudited, unconsolidated monthly results as of October 31, 2009 show a decline in delinquent loans of $58.7 million, or 16%, from the previous month. October was the eighth consecutive month in which the Bank’s loan delinquencies decreased. Total delinquencies are now less than half of historic peak levels reported by the Company in early 2009.
About FirstFed Financial Corp.
FirstFed Financial Corp. is a savings and loan holding company. The Company owns and operates First Federal Bank of California, a federally chartered savings association. The Company’s principal executive offices are located at 12555 W. Jefferson Boulevard, Los Angeles, California 90066, and its telephone number is 310-302-5600. Information about the Company, including corporate background and press releases, is available through the Company’s website at www.firstfedca.com.
This press release contains certain forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. Such risks and uncertainties include, but are not limited to, the ability and willingness of borrowers to pay their mortgage loans, which is affected by external factors such as interest rates, the California real estate market and the strength of the California market, in particular employment levels; fluctuations between consumer interest rates and the cost of funds; federal and state regulation of lending, deposit and other operations, including the regulatory enforcement actions to which the Company and the Bank are currently, and may in the future be, subject; competition for financial products and services within the Bank’s market areas; operational and infrastructural risks; capital market activities; critical accounting estimates; and such other factors as are described in greater detail in the Company’s filings with the Securities and Exchange Commission, including, without limitation, Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.