FSF Financial Corp. Announces Second Quarter Earnings and Dividend

Apr 20, 2001, 01:00 ET from FSF Financial Corp.

    HUTCHINSON, Minn., April 20 /PRNewswire Interactive News Release/ --
     FSF Financial Corp. (Nasdaq: FFHH), whose direct subsidiaries include
 First Federal Bank and Insurance Planners of Hutchinson (collectively, the
 "Company") announced earnings for the quarter ended March 31, 2001, of
 $0.25 per diluted share, or $577,027.  The Company also declared a dividend of
 $0.15 to shareholders of record on April 30, 2001, payable on May 15, 2001.
     "Interest income for the quarter was just over $9 million, an increase of
 15.9% over the second quarter of fiscal 2000," stated Donald A. Glas,
 Co-Chairman and Chief Executive Officer.  "The increase in interest income was
 a result of an increase in yield on loans from 8.55% to 9.04% for the two
 quarters.  The gain in interest income, $1.2 million, was mostly offset by a
 gain in interest expense; however, interest rate decreases that occurred
 during the quarter should have a beneficial impact as we move forward.  Fully
 diluted earnings per share of $0.25 and net income of $577,027 for the quarter
 were both adversely impacted by the agricultural loan charge-off discussed in
 our press release of April 8, 2001.  Management and the Board of Directors
 remain fully committed to the continued diversification of our loan portfolio
 and believe that the loss was an isolated incident.
     "Within the context of a weaker economy, total non-performing assets
 increased from $1.3 million at September 30, 2000, to $2.6 million at the end
 of the March quarter.  A portion of the increase is due to the transfer of the
 remaining balance on an agricultural loan that is reported at fair value of
 $651,000, and a portion of the increase was due to five construction loans,
 all of which we believe will be resolved satisfactorily.  We further believe
 that diversification of our loan portfolio coupled with our lending policies
 will help to mitigate some of the risk of a weaker economy," added Mr. Glas.
     Mortgage lending activity increased during the quarter as a result of an
 increase in refinance activity and the modification and sale of construction
 loans.  The gain on sale of loans increased from $246,000 in 2000 to
 $575,000 for the same quarter this year.  Service charges on deposit accounts
 increased 23.2% to $366,000 and helped contribute to an increase in
 non-interest income of $229,000, 18.2%.  Compensation and benefit expense
 increased 7.2% over the second quarter of 2000 due in part to merit increases
 and to a larger degree to increases in compensation associated with higher
 levels of mortgage lending.
     Mr. Glas noted, "The Board of Directors voted to pay a regular quarterly
 of $0.15 per share on May 15, 2001, to shareholders of record on April 30,
 2001.  They also authorized the continuation of the 250,000 share repurchase
 program that was announced in April 2000.  We continue to focus on enhancing
 shareholder value and the repurchase of shares at a discount to book value is
 consistent with that focus."
     FSF Financial Corp., a financial services company, has four affiliated
 companies.  First Federal Bank is a federally-chartered stock savings bank
 headquartered in Hutchinson, Minn.  The Bank has eleven offices located in
 Hutchinson (2), Hastings, Apple Valley, Buffalo, Glencoe, Inver Grove Heights,
 Litchfield, Waconia, Waite Park and Winthrop, Minn.  The Bank's deposits are
 federally insured by the Federal Deposit Insurance Corporation.  The Bank is a
 community-oriented, full service retail bank offering a variety of deposit and
 loan products.  Homeowners Mortgage Corporation originates residential
 mortgage loans from offices in Vadnais Heights and Hastings, Minn.  Firstate
 Investments provides non-insured financial products in two locations.
 Insurance Planners of Hutchinson, Inc., is a property and casualty insurance
 agency with two locations.  The Company 's common stock is traded on the
 Nasdaq National Market under the symbol "FFHH."
     Statements contained in this news release, which are not historical facts,
 are forward-looking statements as that term is defined in the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements are
 subject to risks and uncertainties which could cause actual results to differ
 materially from those currently anticipated due to a number of factors, which
 include, but are not limited to, factors discussed in documents filed by the
 Company with the Securities and Exchange Commission from time to time.
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
            UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
                                                       March 31,  September 30,
                                                         2001         2000
                                                           (in thousands)
                             ASSETS
     Cash and cash equivalents                          $14,195      $8,482
     Securities available for sale, at fair value:
       Equity securities                                 17,921      18,246
       Mortgage-backed and related securities            15,837      15,369
       Debt securities                                    5,018      12,728
     Securities held to maturity, at amortized cost:
       Debt securities (fair value of
        $18,155 and $16,974)                             18,406      18,393
       Mortgage-backed and related securities (fair
        value of $25,397 and $25,145)                    26,754      26,986
     Loans held for sale                                 12,608       3,191
     Loans receivable, net                              333,838     341,813
     Foreclosed real estate                                 124         321
     Accrued interest receivable                          4,066       4,432
     Premises and equipment                               5,457       5,514
     Other assets                                        11,248      11,040
 
         Total assets                                  $465,472    $466,515
 
                LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities:
       Demand deposits                                  $40,063     $36,964
       Savings accounts                                  87,804      80,087
       Certificates of deposit                          173,689     177,772
         Total deposits                                 301,556     294,823
 
       Federal Home Loan Bank borrowings                118,500     127,500
       Advances from borrowers for taxes and insurance      651         658
       Other liabilities                                  4,305       3,769
         Total liabilities                              425,012     426,750
 
     Stockholders' equity:
       Serial preferred stock, no par value
        5,000,000 shares authorized, no shares issued        --          --
       Common stock, $.10 par value 10,000,000 shares
        authorized, 4,501,277 and 4,501,277 shares
        issued                                              450         450
       Additional paid in capital                        43,173      43,391
       Retained earnings, substantially restricted       29,700      28,925
       Treasury stock at cost (2,133,303 and
        2,094,822 shares)                               (30,116)    (29,504)
       Unearned ESOP shares at cost (109,261 and
        126,823 shares)                                  (1,093)     (1,268)
       Unearned MSP stock grants at cost (42,964 and
        42,964 shares)                                     (458)       (458)
       Accumulated comprehensive loss                    (1,196)     (1,771)
         Total stockholders' equity                      40,460      39,765
 
         Total liabilities and stockholders' equity    $465,472    $466,515
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
                         UNAUDITED FINANCIAL HIGHLIGHTS
                 (Dollars in thousands, except per-share data)
 
                                                        At             At
                                                     March 31,    September 30,
                                                       2001           2000
     Other Financial Condition Data:
       Tangible net worth                             $37,807        $37,052
       Stockholders' equity to total assets              8.69%          8.52%
       Book value per share                            $18.26         $17.78
       Tangible book value per share                   $17.06         $16.57
       Non-performing assets:
         Non-accrual loans                             $2,452           $989
         Real estate                                     $124           $321
           Total non-performing assets                 $2,576         $1,310
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
                  UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 
                                          Three Months        Six Months
                                         Ended March 31,     Ended March 31,
                                          2001     2000      2001      2000
                                        (in thousands, except per share data)
 
     Interest income:
       Loans receivable                  $7,756   $6,322   $15,612   $12,432
       Mortgage-backed and related
        securities                          566      690     1,187     1,345
       Investment securities                713      785     1,452     1,554
         Total interest income            9,035    7,797    18,251    15,331
     Interest expense:
       Deposits                           3,945    2,533     7,953     4,993
       Borrowed funds                     1,814    2,093     3,719     4,019
         Total interest expense           5,759    4,626    11,672     9,012
         Net interest income              3,276    3,171     6,579     6,319
       Provision for loan losses            705       54       795       108
         Net interest income after
          provision for loan losses       2,571    3,117     5,784     6,211
     Non-interest income:
       Gain on sale of loans, net           575      246       947       592
       Other service charges and fees       200      235       366       437
       Service charges on deposit
        accounts                            366      297       761       608
       Commission income                    239      294       509       534
       Other                                105      184       217       281
         Total non-interest income        1,485    1,256     2,800     2,452
     Non-interest expense:
       Compensation and benefits          1,870    1,745     3,752     3,578
       Occupancy and equipment              397      374       763       672
       Deposit insurance premiums            14       12        28        46
       Data processing                      188      168       371       331
       Professional fees                    102       93       201       167
       Other                                555      576     1,142     1,119
         Total non-interest expense       3,126    2,968     6,257     5,913
         Income before provision for
          income taxes                      930    1,405     2,327     2,750
 
     Income tax expense                     353      549       893     1,072
 
         Net income                        $577     $856    $1,434    $1,678
 
     Basic earnings per share             $0.26    $0.35     $0.64     $0.67
     Diluted earnings per share           $0.25    $0.35     $0.61     $0.65
     Cash dividend declared per
      common share                       $0.150   $0.125     $0.30     $0.25
 
     Comprehensive income                  $837     $786    $2,009    $1,528
 
     Weighted average number of
      shares outstanding                  2,238    2,429     2,237     2,510
     Financial rations (annualized):
       Return on average assets            0.50%    0.82%     0.62%     0.81%
       Return on average equity            5.70%    8.25%     7.15%     8.02%
       Net interest margin                 2.96%    3.20%     2.97%     3.21%
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
          UNAUDITED CONSOLIDATED BALANCE SHEET, INTEREST AND DIVIDENDS
              EARNED OR PAID AND RELATED INTEREST YIELDS AND RATES
                             (Dollars in thousands)
 
                                      Three Months Ended March 31,
                                     2001                       2000
                                            Interest                   Interest
                           Average          Yields &  Average          Yields &
                           Balance Interest Rates(a)  Balance Interest Rates(a)
     Assets:
       Loans receivable(b) $343,140 $7,756    9.04%  $295,670  $6,322    8.55%
       Mortgage-backed
        securities           42,365    566    5.34     43,253     690    6.38
       Investment
        securities(c)        57,085    713    5.00     57,721     785    5.44
         Total interest-
          earning assets    442,590  9,035    8.17    396,644   7,797    7.86
         Other assets        22,816                    22,378
     Total assets          $465,406                  $419,022
 
     Liabilities:
       Interest-bearing
        deposits           $300,644 $3,945    5.25%  $232,945  $2,533    4.35%
       Borrowings           119,533  1,814    6.07    140,903   2,093    5.94
         Total interest-
          bearing
          liabilities       420,177  5,759    5.48%   373,848   4,626    4.95%
       Other liabilities      4,765                     3,682
         Total liabilities  424,942                   377,530
     Stockholders' equity    40,464                    41,492
 
     Total liabilities
      and stockholders'
      equity               $465,406                  $419,022
 
     Net interest income            $3,276                     $3,171
     Net spread(4)                            2.69%                      2.92%
     Net margin(5)                            2.96%                      3.20%
     Ratio of average
      interest-earning
      assets to average
      interest-bearing
      liabilities             1.05X                     1.06X
 
     (a) Annualized.
     (b) Average balances include non-accrual loans and loans held for sale.
     (c) Includes interest-bearing deposits in other financial institutions.
     (d) Net spread represents the difference between average yield on
         interest-earning assets and the average cost of interest-bearing
         liabilities.
     (e) Net margin represents net interest income as a percentage of average
         interest-earning assets.
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
      UNAUDITED CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST AND DIVIDENDS
              EARNED OR PAID AND RELATED INTEREST YIELDS AND RATES
                             (Dollars in thousands)
 
                                        Six Months Ended March 31,
                                     2001                       2000
                                            Interest                   Interest
                           Average          Yields &  Average          Yields &
                           Balance Interest Rates(a)  Balance Interest Rates(a)
     Assets:
       Loans
        receivable(b)     $343,524  $15,612   9.09%  $292,244  $12,432   8.51%
       Mortgage-backed
        securities          42,339    1,187   5.61     43,356    1,345   6.20
       Investment
        securities(c)       56,972    1,452   5.10     58,063    1,554   5.35
         Total interest-
          earning assets   442,835   18,251   8.24    393,663   15,331   7.79
         Other assets       22,804                     22,572
     Total assets         $465,639                   $416,235
 
     Liabilities:
       Interest-bearing
        deposits          $298,547   $7,953   5.33%  $231,252   $4,993   4.32%
       Borrowings          122,385    3,719   6.08    139,331    4,019   5.77
         Total interest-
          bearing
          liabilities      420,932   11,672   5.55%   370,583    9,012   4.86%
       Other liabilities     4,594                      3,793
         Total liabilities 425,526                    374,376
     Stockholders' equity   40,113                     41,859
 
     Total liabilities
      and stockholders'
      equity              $465,639                   $416,235
 
     Net interest income             $6,579                     $6,319
     Net spread(d)                            2.69%                      2.92%
     Net margin(e)                            2.97%                      3.21%
     Ratio of average
      interest-earning
      assets to average
      interest-bearing
      liabilities            1.05X                      1.06X
 
     (a) Annualized.
     (b) Average balances include non-accrual loans and loans held for sale.
     (c) Includes interest-bearing deposits in other financial institutions.
     (d) Net spread represents the difference between the average yield on
         interest-earning assets and the average cost of interest-bearing
         liabilities.
     (e) Net margin represents net interest income as a percentage of average
         interest-earning assets.
 
 
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SOURCE FSF Financial Corp.
    HUTCHINSON, Minn., April 20 /PRNewswire Interactive News Release/ --
     FSF Financial Corp. (Nasdaq: FFHH), whose direct subsidiaries include
 First Federal Bank and Insurance Planners of Hutchinson (collectively, the
 "Company") announced earnings for the quarter ended March 31, 2001, of
 $0.25 per diluted share, or $577,027.  The Company also declared a dividend of
 $0.15 to shareholders of record on April 30, 2001, payable on May 15, 2001.
     "Interest income for the quarter was just over $9 million, an increase of
 15.9% over the second quarter of fiscal 2000," stated Donald A. Glas,
 Co-Chairman and Chief Executive Officer.  "The increase in interest income was
 a result of an increase in yield on loans from 8.55% to 9.04% for the two
 quarters.  The gain in interest income, $1.2 million, was mostly offset by a
 gain in interest expense; however, interest rate decreases that occurred
 during the quarter should have a beneficial impact as we move forward.  Fully
 diluted earnings per share of $0.25 and net income of $577,027 for the quarter
 were both adversely impacted by the agricultural loan charge-off discussed in
 our press release of April 8, 2001.  Management and the Board of Directors
 remain fully committed to the continued diversification of our loan portfolio
 and believe that the loss was an isolated incident.
     "Within the context of a weaker economy, total non-performing assets
 increased from $1.3 million at September 30, 2000, to $2.6 million at the end
 of the March quarter.  A portion of the increase is due to the transfer of the
 remaining balance on an agricultural loan that is reported at fair value of
 $651,000, and a portion of the increase was due to five construction loans,
 all of which we believe will be resolved satisfactorily.  We further believe
 that diversification of our loan portfolio coupled with our lending policies
 will help to mitigate some of the risk of a weaker economy," added Mr. Glas.
     Mortgage lending activity increased during the quarter as a result of an
 increase in refinance activity and the modification and sale of construction
 loans.  The gain on sale of loans increased from $246,000 in 2000 to
 $575,000 for the same quarter this year.  Service charges on deposit accounts
 increased 23.2% to $366,000 and helped contribute to an increase in
 non-interest income of $229,000, 18.2%.  Compensation and benefit expense
 increased 7.2% over the second quarter of 2000 due in part to merit increases
 and to a larger degree to increases in compensation associated with higher
 levels of mortgage lending.
     Mr. Glas noted, "The Board of Directors voted to pay a regular quarterly
 of $0.15 per share on May 15, 2001, to shareholders of record on April 30,
 2001.  They also authorized the continuation of the 250,000 share repurchase
 program that was announced in April 2000.  We continue to focus on enhancing
 shareholder value and the repurchase of shares at a discount to book value is
 consistent with that focus."
     FSF Financial Corp., a financial services company, has four affiliated
 companies.  First Federal Bank is a federally-chartered stock savings bank
 headquartered in Hutchinson, Minn.  The Bank has eleven offices located in
 Hutchinson (2), Hastings, Apple Valley, Buffalo, Glencoe, Inver Grove Heights,
 Litchfield, Waconia, Waite Park and Winthrop, Minn.  The Bank's deposits are
 federally insured by the Federal Deposit Insurance Corporation.  The Bank is a
 community-oriented, full service retail bank offering a variety of deposit and
 loan products.  Homeowners Mortgage Corporation originates residential
 mortgage loans from offices in Vadnais Heights and Hastings, Minn.  Firstate
 Investments provides non-insured financial products in two locations.
 Insurance Planners of Hutchinson, Inc., is a property and casualty insurance
 agency with two locations.  The Company 's common stock is traded on the
 Nasdaq National Market under the symbol "FFHH."
     Statements contained in this news release, which are not historical facts,
 are forward-looking statements as that term is defined in the Private
 Securities Litigation Reform Act of 1995.  Such forward-looking statements are
 subject to risks and uncertainties which could cause actual results to differ
 materially from those currently anticipated due to a number of factors, which
 include, but are not limited to, factors discussed in documents filed by the
 Company with the Securities and Exchange Commission from time to time.
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
            UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 
                                                       March 31,  September 30,
                                                         2001         2000
                                                           (in thousands)
                             ASSETS
     Cash and cash equivalents                          $14,195      $8,482
     Securities available for sale, at fair value:
       Equity securities                                 17,921      18,246
       Mortgage-backed and related securities            15,837      15,369
       Debt securities                                    5,018      12,728
     Securities held to maturity, at amortized cost:
       Debt securities (fair value of
        $18,155 and $16,974)                             18,406      18,393
       Mortgage-backed and related securities (fair
        value of $25,397 and $25,145)                    26,754      26,986
     Loans held for sale                                 12,608       3,191
     Loans receivable, net                              333,838     341,813
     Foreclosed real estate                                 124         321
     Accrued interest receivable                          4,066       4,432
     Premises and equipment                               5,457       5,514
     Other assets                                        11,248      11,040
 
         Total assets                                  $465,472    $466,515
 
                LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities:
       Demand deposits                                  $40,063     $36,964
       Savings accounts                                  87,804      80,087
       Certificates of deposit                          173,689     177,772
         Total deposits                                 301,556     294,823
 
       Federal Home Loan Bank borrowings                118,500     127,500
       Advances from borrowers for taxes and insurance      651         658
       Other liabilities                                  4,305       3,769
         Total liabilities                              425,012     426,750
 
     Stockholders' equity:
       Serial preferred stock, no par value
        5,000,000 shares authorized, no shares issued        --          --
       Common stock, $.10 par value 10,000,000 shares
        authorized, 4,501,277 and 4,501,277 shares
        issued                                              450         450
       Additional paid in capital                        43,173      43,391
       Retained earnings, substantially restricted       29,700      28,925
       Treasury stock at cost (2,133,303 and
        2,094,822 shares)                               (30,116)    (29,504)
       Unearned ESOP shares at cost (109,261 and
        126,823 shares)                                  (1,093)     (1,268)
       Unearned MSP stock grants at cost (42,964 and
        42,964 shares)                                     (458)       (458)
       Accumulated comprehensive loss                    (1,196)     (1,771)
         Total stockholders' equity                      40,460      39,765
 
         Total liabilities and stockholders' equity    $465,472    $466,515
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
                         UNAUDITED FINANCIAL HIGHLIGHTS
                 (Dollars in thousands, except per-share data)
 
                                                        At             At
                                                     March 31,    September 30,
                                                       2001           2000
     Other Financial Condition Data:
       Tangible net worth                             $37,807        $37,052
       Stockholders' equity to total assets              8.69%          8.52%
       Book value per share                            $18.26         $17.78
       Tangible book value per share                   $17.06         $16.57
       Non-performing assets:
         Non-accrual loans                             $2,452           $989
         Real estate                                     $124           $321
           Total non-performing assets                 $2,576         $1,310
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
                  UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 
                                          Three Months        Six Months
                                         Ended March 31,     Ended March 31,
                                          2001     2000      2001      2000
                                        (in thousands, except per share data)
 
     Interest income:
       Loans receivable                  $7,756   $6,322   $15,612   $12,432
       Mortgage-backed and related
        securities                          566      690     1,187     1,345
       Investment securities                713      785     1,452     1,554
         Total interest income            9,035    7,797    18,251    15,331
     Interest expense:
       Deposits                           3,945    2,533     7,953     4,993
       Borrowed funds                     1,814    2,093     3,719     4,019
         Total interest expense           5,759    4,626    11,672     9,012
         Net interest income              3,276    3,171     6,579     6,319
       Provision for loan losses            705       54       795       108
         Net interest income after
          provision for loan losses       2,571    3,117     5,784     6,211
     Non-interest income:
       Gain on sale of loans, net           575      246       947       592
       Other service charges and fees       200      235       366       437
       Service charges on deposit
        accounts                            366      297       761       608
       Commission income                    239      294       509       534
       Other                                105      184       217       281
         Total non-interest income        1,485    1,256     2,800     2,452
     Non-interest expense:
       Compensation and benefits          1,870    1,745     3,752     3,578
       Occupancy and equipment              397      374       763       672
       Deposit insurance premiums            14       12        28        46
       Data processing                      188      168       371       331
       Professional fees                    102       93       201       167
       Other                                555      576     1,142     1,119
         Total non-interest expense       3,126    2,968     6,257     5,913
         Income before provision for
          income taxes                      930    1,405     2,327     2,750
 
     Income tax expense                     353      549       893     1,072
 
         Net income                        $577     $856    $1,434    $1,678
 
     Basic earnings per share             $0.26    $0.35     $0.64     $0.67
     Diluted earnings per share           $0.25    $0.35     $0.61     $0.65
     Cash dividend declared per
      common share                       $0.150   $0.125     $0.30     $0.25
 
     Comprehensive income                  $837     $786    $2,009    $1,528
 
     Weighted average number of
      shares outstanding                  2,238    2,429     2,237     2,510
     Financial rations (annualized):
       Return on average assets            0.50%    0.82%     0.62%     0.81%
       Return on average equity            5.70%    8.25%     7.15%     8.02%
       Net interest margin                 2.96%    3.20%     2.97%     3.21%
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
          UNAUDITED CONSOLIDATED BALANCE SHEET, INTEREST AND DIVIDENDS
              EARNED OR PAID AND RELATED INTEREST YIELDS AND RATES
                             (Dollars in thousands)
 
                                      Three Months Ended March 31,
                                     2001                       2000
                                            Interest                   Interest
                           Average          Yields &  Average          Yields &
                           Balance Interest Rates(a)  Balance Interest Rates(a)
     Assets:
       Loans receivable(b) $343,140 $7,756    9.04%  $295,670  $6,322    8.55%
       Mortgage-backed
        securities           42,365    566    5.34     43,253     690    6.38
       Investment
        securities(c)        57,085    713    5.00     57,721     785    5.44
         Total interest-
          earning assets    442,590  9,035    8.17    396,644   7,797    7.86
         Other assets        22,816                    22,378
     Total assets          $465,406                  $419,022
 
     Liabilities:
       Interest-bearing
        deposits           $300,644 $3,945    5.25%  $232,945  $2,533    4.35%
       Borrowings           119,533  1,814    6.07    140,903   2,093    5.94
         Total interest-
          bearing
          liabilities       420,177  5,759    5.48%   373,848   4,626    4.95%
       Other liabilities      4,765                     3,682
         Total liabilities  424,942                   377,530
     Stockholders' equity    40,464                    41,492
 
     Total liabilities
      and stockholders'
      equity               $465,406                  $419,022
 
     Net interest income            $3,276                     $3,171
     Net spread(4)                            2.69%                      2.92%
     Net margin(5)                            2.96%                      3.20%
     Ratio of average
      interest-earning
      assets to average
      interest-bearing
      liabilities             1.05X                     1.06X
 
     (a) Annualized.
     (b) Average balances include non-accrual loans and loans held for sale.
     (c) Includes interest-bearing deposits in other financial institutions.
     (d) Net spread represents the difference between average yield on
         interest-earning assets and the average cost of interest-bearing
         liabilities.
     (e) Net margin represents net interest income as a percentage of average
         interest-earning assets.
 
 
                      FSF FINANCIAL CORP. AND SUBSIDIARIES
      UNAUDITED CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST AND DIVIDENDS
              EARNED OR PAID AND RELATED INTEREST YIELDS AND RATES
                             (Dollars in thousands)
 
                                        Six Months Ended March 31,
                                     2001                       2000
                                            Interest                   Interest
                           Average          Yields &  Average          Yields &
                           Balance Interest Rates(a)  Balance Interest Rates(a)
     Assets:
       Loans
        receivable(b)     $343,524  $15,612   9.09%  $292,244  $12,432   8.51%
       Mortgage-backed
        securities          42,339    1,187   5.61     43,356    1,345   6.20
       Investment
        securities(c)       56,972    1,452   5.10     58,063    1,554   5.35
         Total interest-
          earning assets   442,835   18,251   8.24    393,663   15,331   7.79
         Other assets       22,804                     22,572
     Total assets         $465,639                   $416,235
 
     Liabilities:
       Interest-bearing
        deposits          $298,547   $7,953   5.33%  $231,252   $4,993   4.32%
       Borrowings          122,385    3,719   6.08    139,331    4,019   5.77
         Total interest-
          bearing
          liabilities      420,932   11,672   5.55%   370,583    9,012   4.86%
       Other liabilities     4,594                      3,793
         Total liabilities 425,526                    374,376
     Stockholders' equity   40,113                     41,859
 
     Total liabilities
      and stockholders'
      equity              $465,639                   $416,235
 
     Net interest income             $6,579                     $6,319
     Net spread(d)                            2.69%                      2.92%
     Net margin(e)                            2.97%                      3.21%
     Ratio of average
      interest-earning
      assets to average
      interest-bearing
      liabilities            1.05X                      1.06X
 
     (a) Annualized.
     (b) Average balances include non-accrual loans and loans held for sale.
     (c) Includes interest-bearing deposits in other financial institutions.
     (d) Net spread represents the difference between the average yield on
         interest-earning assets and the average cost of interest-bearing
         liabilities.
     (e) Net margin represents net interest income as a percentage of average
         interest-earning assets.
 
 
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 SOURCE  FSF Financial Corp.