First Federal Bancorp Reports Third Quarter Earnings

First Federal Bancorp Reports Third Quarter Earnings 


ZANESVILLE, Ohio, July 27  /PRNewswire-FirstCall/ -- First Federal Bancorp,
Inc. (NASDAQ:FFBZ), today reported results for the three months and nine months
ended June 30, 2004.

J. William Plummer, President and Chief Executive Officer, stated, "We are
pleased with the Bank's growth in assets during the three months ended June 30,
2004.  This marked the sixth consecutive quarter of an increase in net loans
outstanding versus the prior year.  Our third quarter 2004 results reflected
the impact of lower interest rates versus the prior year and a reduction in
non-interest expenses compared to a year ago due to a one-time expense in the
third quarter 2003.  We remain focused on targeted asset growth, maintaining
strong credit quality, and achieving improved long-term performance."

Third Quarter Results

Net interest income was $2,130,000 for the three months ended June 30, 2004
versus $2,157,000 a year ago.  This 1.3% decline was impacted by an increase in
variable rate mortgages in the loan portfolio and a shift in savings to lower
yielding accounts from certificates of deposit during the past year.  As a
result, net interest margin declined to 3.35% for the third quarter 2004 from
3.76% the prior year.

Non-interest income declined to $411,000 for the third quarter 2004 from
$618,000 last year.  This was principally due to a $186,000 reduction in gain
on loans sold due to a reduction in loans originated for sale during the third
quarter 2004.  Service charges on deposit accounts increased $44,000 for the
third quarter 2004 compared to a year ago, while other fee income was $65,000
below the prior year due to a gain from the sale of a building during the third
quarter 2003.

Non-interest expense was $1,678,000 for the third quarter 2004 or $320,000
below the same period last year.  This difference was primarily due to a
$314,000 one-time expense recorded in the third quarter 2003 to fund
termination of First Federal's defined benefit plan.  Salaries and benefits,
attributable to normal pay increases, and professional fees were higher for the
third quarter 2004 compared to a year ago.

Net income increased to $415,000 for the three months ended June 30, 2004 from
$388,000 for the same period last year.  Net income per diluted share was $0.12
for both periods.

Nine-Month Results

Net interest income was $6,365,000 for the nine months ended June 30, 2004
compared to $6,358,000 for the same period last year.  A decline in interest
rates on deposits combined with a shift in savings to lower yielding accounts
offset a reduction in interest income that resulted from lower interest rates
compared to last year.

Non-interest income rose 8.6% to $1,388,000 for the first nine months of fiscal
2004.  This was due to the recovery of mortgage servicing rights impairment on
loans sold in the secondary market, increases in service charges on deposits
and other fee income, and other income.

Non-interest expense was $5,222,000 for the first nine months of fiscal 2004
versus $5,387,000 last year.  This year-over-year difference was principally
due to a $314,000 one-time expense recorded in the third quarter 2003 which was
partially offset by higher salaries and benefits due to annual pay increases as
well as additional costs for professional fees during the fiscal 2004
year-to-date period.

Net income was $1,315,000 for the first nine months of fiscal 2004 compared to
$1,306,000 for the same period last year.  Net income per diluted share was
$0.39 for the nine months ended June 30, 2004 and 2003, respectively.

Balance Sheet

Total deposits rose 8.7% to $178,775,000 at June 30, 2004 compared to
$164,447,000 at year-end fiscal 2003.  This was principally due to an increase
in jumbo deposits, which exceed $100,000 per account, as well as higher
balances for various checking account products.

Total assets increased 10.1% to $258,197,000 at June 30, 2004 from $234,528,000
at September 30, 2003.  Most of this increase was due to growth in net loans
outstanding, which rose 9.9% to $225,857,000 at June 30, 2004 compared to
September 30, 2003.  Approximately one-half of the June 30, 2004 increase
compared to September 30, 2003 was represented by residential real estate
loans, followed by higher consumer automobile loans, non-residential real
estate and commercial loans, home equity loans and other consumer loans. Return
on average assets was 0.65% for third quarter 2004 versus 0.68% for the same
period last year.

Total shareholders' equity improved to $22,913,000 at June 30, 2004, which
represents $6.80 per diluted common share compared to $6.59 at year-end 2003.
The return on average common shareholders' equity rose to 7.28% for third
quarter 2004 versus 7.19% a year ago.

Asset Quality

First Federal's asset quality remains favorable compared to industry peers. 
Non-performing assets to total assets were 0.41% at June 30, 2004 versus 0.31%
at June 30, 2003.  The loan loss allowance to net loans was 0.81% of net loans
outstanding at June 30, 2004 compared to 0.79% on the same date in 2003.

Share Repurchase Program

The stock repurchase program approved by the Board of Directors in 2002 expired
on June 30, 2004.  During this period 74,700 shares were repurchased at an
average price of $7.55 per share.  At June 30, 2004 there were 3,286,221 common
shares outstanding.

First Federal Bancorp, Inc. is the parent company of First Federal Savings Bank
of Eastern Ohio, whose primary markets include Coshocton, Guernsey, Licking,
Morgan, Muskingum, Perry, and Tuscarawas counties.  Additional information is
available by contacting Connie Ayres LaPlante, Treasurer, First Federal
Bancorp, Inc., at [phone].

Statements made in this press release that are not historical facts are
forward-looking statements as 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
estimated results.  Such risks and uncertainties are detailed in the Company's
filings with the Securities and Exchange Commission.  All forward-looking
statements made in this press release are based on information presently
available to management.  The Company assumes no obligation to update any
forward-looking statements.

                       FIRST FEDERAL BANCORP, INC.

                           FINANCIAL HIGHLIGHTS
                 (In thousands, except per share amounts)
                                                At June 30,    At Sept. 30,
                                                    2004           2003
  Selected Financial Condition Data:
  Assets                                          $258,197       $234,528
  Loans, net                                      $225,857       $205,478
  Mortgage-backed securities                          $237           $303
  Investment securities                             $7,677         $8,168
  FHLB stock                                        $4,928         $4,783
  Deposits                                        $178,775       $164,447
  Total equity                                     $22,913        $22,078
  Total equity per share                             $6.80          $6.59


                           Three Months Ended         Nine Months Ended
                                 June 30,                  June 30,
                            2004         2003         2004         2003
  Selected Operations
   Data:
  Total interest income   $3,380       $3,463      $10,091      $10,569
  Total interest expense   1,250        1,306        3,726        4,211

  Net interest income     $2,130       $2,157       $6,365       $6,358
  Provision for loan
   losses                    229          186          522          256

  Net interest income
   after provision for
   loan losses            $1,901       $1,971       $5,843       $6,102
  Noninterest income         411          618        1,388        1,278
  Noninterest expense      1,678        1,998        5,222        5,387

  Income before income tax  $634         $591       $2,009       $1,993
  Provision for income tax   219          203          694          687

  Net income                $415         $388      $ 1,315      $ 1,306

  Earnings per share:
    Basic                   $.13         $.12         $.40         $.40
    Diluted                 $.12         $.12         $.39         $.39

  Weighted average
   common and common
   equivalent shares:
    Basic              3,286,214    3,218,695    3,271,363    3,237,021
    Diluted            3,376,195    3,333,350    3,371,231    3,353,731


                       FIRST FEDERAL BANCORP, INC.

                           FINANCIAL HIGHLIGHTS

                       At or for the Three Months  At or for the Nine Months
                                Ended June 30,            Ended June 30,
                              2004         2003         2004         2003
  Selected Financial Ratios
   And Other Data:

  Performance Ratios
   (Annualized):
    Return on average
     assets                  0.65%        0.68%        0.71%        0.77%
    Return on average
     equity                  7.28%        7.19%        7.80%        8.11%
    Interest rate spread:
      Average during period  3.40%        3.83%        3.76%        3.80%
    Net interest margin      3.35%        3.76%        3.45%        3.74%
    Noninterest expense
     to average assets       2.64%        3.48%        2.83%        3.17%

  Quality Ratios:
    Nonperforming assets
     to total assets at
     end of period           0.41%        0.31%        0.41%        0.31%
    Efficiency ratio        61.58%       67.62%       63.03%       65.57%
    Loan loss allowance
     to net loans at end
     of period               0.81%        0.79%        0.81%        0.79%

  Capital Ratios:
    Total equity to total
     assets at end of
     period                  8.87%        9.23%        8.87%        9.23%
    Average interest-
     earning assets to
     average interest-
     bearing Liabilities   106.95%      106.72%      107.35%      106.57%


DATASOURCE: First Federal Bancorp, Inc.



CONTACT:  Connie Ayres LaPlante, Treasurer of First Federal Bancorp,

Inc., [phone]

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