EX-99 3 ex-99.txt PRESS RELEASE FSF Financial Corp. Contact: Donald A. Glas, Chief Executive Officer (320) 234-4501 George B. Loban, President (651) 480-6020 Richard H. Burgart, Chief Financial Officer (320) 234-4536 For Immediate Release January 20, 2004 FSF Financial Corp. Announces Dividend and Operating Results For First Quarter of Fiscal 2004 Hutchinson, Minnesota (NASDAQ - "FFHH") - FSF Financial Corp. (FSF) today announced net income of $1,180,000 for the first quarter ended December 31, 2003, versus $1,696,000 for the same period in 2002. Diluted earnings per share for the quarter were $0.48, a decrease of $0.25 from the first quarter last year. The Company also announced a dividend of $0.35, an increase of $0.05, to shareholders of record on January 30, 2004, payable on February 16, 2004. "Net income for the first quarter of fiscal 2004 represents a decrease of 30.4% over the same period last year," noted FSF Financial Corp.'s Co-Chairman and Chief Executive Officer, Donald A. Glas. "The high levels of refinancing, coupled with prepayments on mortgage-backed securities have increased liquidity for many financial institutions. Even though the refinancing activity has been reduced with the current economic slowdown, our liquidity level continues to be higher than we would like it to be. With the current levels of interest rates and the expectation of interest rates increasing, we remain cautious about reinvestment alternatives. We reduced interest-bearing deposits and Federal Home Loan Bank Advances, primarily during the month of December, and anticipate these actions should have a positive impact on our margin going forward. We continue developing and refining our construction lending process. The gain on sale of modified construction loans decreased about 10% while the gain on sale of other real estate mortgages decreased by more than 43%." added Mr. Glas. FSF Financial Corp., a financial services company, has four affiliated companies. First Federal Bank is a federally chartered stock savings bank headquartered in Hutchinson, Minnesota. The Bank has thirteen offices located in Hutchinson (2), Hastings, Apple Valley, Buffalo, Glencoe, Inver Grove Heights (2), Litchfield, St Cloud, Waconia, Waite Park and Winthrop, Minnesota. The Federal Deposit Insurance Corporation federally insures the Bank's deposits. The Bank is a community-oriented, full service retail bank offering a variety of deposit and loan products. Homeowners Mortgage Corporation operates from offices in Vadnais Heights and Hastings, Minnesota. Firstate Investments provide non-insured financial products in three locations. Insurance Planners of Hutchinson, Inc., is a property and casualty insurance agency with two locations. This press release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are subject to various risks and uncertainties and are therefore qualified by the Corporation's cautionary statements contained in its filings with the Securities and Exchange Commission. FSF FINANCIAL CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

2 FSF FINANCIAL CORP. AND SUBSIDIARIES UNAUDITED FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share data)

(1) Tangible net worth is total stockholders' equity less goodwill and other intangible assets. 3 FSF FINANCIAL CORP. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

4 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)

1. Annualized. 2. Average balances include non-accrual loans and loans held for sale. 3. Includes interest-bearing deposits in other financial institutions. 4. Net spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. 5. Net margin represents net interest income as a percentage of interest-earning assets. 5

FSF FINANCIAL CORP 8-K