<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number 0-28312
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 71-0785261
------------------------------------------------ ----------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification Number)
200 West Stephenson
Harrison, Arkansas 72601
------------------------------------------------ ----------------------
(Address of principal executive office) (Zip Code)
(870) 741-7641
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: As of May 12, 2000, there
were issued and outstanding 3,887,874 shares of the Registrant's Common Stock,
par value $.01 per share.
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
TABLE OF CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Financial Condition
As of March 31, 2000 (unaudited) and December 31, 1999 1
Consolidated Statements of Income and Comprehensive Income
for the three months ended March 31, 2000 (unaudited) and
1999 (unaudited) 2
Consolidated Statement of Stockholders' Equity for the three
months ended March 31, 2000 (unaudited) 3
Consolidated Statements of Cash Flows for the three months
ended March 31, 2000 (unaudited) and 1999 (unaudited) 4
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
ASSETS (Unaudited)
- ------ ----------- ------------
<S> <C> <C>
Cash and cash equivalents $ 8,316 $ 9,983
Investment securities - held to maturity 191,703 189,263
Federal Home Loan Bank stock 4,414 4,258
Loans receivable, net of allowance 467,305 459,978
Accrued interest receivable 5,559 5,977
Real estate acquired in settlement of loans, net 3,807 3,940
Office properties and equipment, net 6,763 6,809
Prepaid expenses and other assets 1,077 511
-------- --------
TOTAL ASSETS $688,944 $680,719
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $525,713 $507,875
Federal Home Loan Bank advances 79,969 83,972
Advance payments by borrowers for
taxes and insurance 1,370 1,089
Other liabilities 3,163 8,146
-------- --------
Total liabilities 610,215 601,082
-------- --------
MINORITY INTEREST 807 822
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, 5,000,000
shares authorized, none issued
Common stock, $.01 par value, 20,000,000 shares
authorized, 5,153,751 shares issued, 3,887,874 and
4,039,374 shares outstanding at March 31, 2000
and December 31, 1999, respectively 52 52
Additional paid-in capital 50,887 50,793
Employee stock benefit plans (3,528) (3,867)
Retained earnings-substantially restricted 53,636 52,598
-------- --------
101,047 99,576
Treasury stock, at cost, 1,265,877 and
1,114,377 shares at March 31, 2000 and
December 31, 1999, respectively (23,125) (20,761)
-------- --------
Total stockholders' equity 77,922 78,815
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $688,944 $680,719
======== ========
</TABLE>
See notes to unaudited consolidated financial statements.
1
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except earnings per share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
2000 1999
------- -------
<S> <C> <C>
INTEREST INCOME:
Loans receivable $ 9,147 $ 8,810
Investment securities 3,353 2,245
Other 33 269
------- -------
Total interest income 12,533 11,324
------- -------
INTEREST EXPENSE:
Deposits 6,419 5,982
Other borrowings 1,225 665
------- -------
Total interest expense 7,644 6,647
------- -------
NET INTEREST INCOME 4,889 4,677
PROVISION FOR LOAN LOSSES -- 20
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,889 4,657
------- -------
NONINTEREST INCOME:
Deposit fee income 227 220
Other 158 173
------- -------
Total noninterest income 385 393
------- -------
NONINTEREST EXPENSES:
Salaries and employee benefits 1,997 1,751
Net occupancy expense 254 217
Federal insurance premiums 27 70
Data processing 206 203
Postage and supplies 142 114
Other 506 375
------- -------
Total noninterest expenses 3,132 2,730
------- -------
INCOME BEFORE INCOME TAXES 2,142 2,320
INCOME TAX PROVISION 712 802
------- -------
NET INCOME AND COMPREHENSIVE INCOME $ 1,430 $ 1,518
======= =======
EARNINGS PER SHARE:
Basic $ 0.39 $ 0.37
======= =======
Diluted $ 0.39 $ 0.37
======= =======
Cash Dividends Declared $ 0.10 $ 0.08
======= =======
</TABLE>
See notes to unaudited consolidated financial statements.
2
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Issued Employee
Common Stock Additional Stock Treasury Stock Total
------------------- Paid-In Benefit Retained --------------------- Stockholders'
Shares Amount Capital Plans Earnings Shares Amount Equity
-------- -------- ---------- ---------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 5,153,751 $52 $50,793 $(3,867) $52,598 1,114,377 $(20,761) $78,815
Net income 1,430 1,430
Release of ESOP shares 99 104 203
Stock compensation expense 235 235
Shares released from
restricted stock trust (5) (5)
Purchase of treasury stock,
at cost 151,500 (2,364) (2,364)
Dividends paid (392) (392)
--------- --- -------- -------- -------- --------- --------- --------
Balance, March 31, 2000 5,153,751 $52 $50,887 $(3,528) $53,636 1,265,877 $(23,125) $77,922
========= === ======= ======== ======= ========= ========= ========
</TABLE>
See notes to unaudited consolidated financial statements.
3
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
2000 1999
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,430 $ 1,518
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses -- 20
Deferred tax benefit (47) (65)
Federal Home Loan Bank stock dividends (66) (53)
Loss on sale of repossessed assets, net 1 5
Originations of loans held for sale (740) (6,476)
Proceeds from sales of loans 1,134 5,793
Gain on sale of mortgage loans originated
to sell (12) (74)
Depreciation 161 131
Depreciation on real estate owned 32 32
Accretion of deferred loan fees, net (122) (234)
Release of ESOP shares 159 187
Stock compensation expense 235 188
Changes in operating assets & liabilities:
Accrued interest receivable 418 474
Prepaid expenses & other assets (569) (89)
Other liabilities 1,088 1,083
--------- ---------
Net cash provided by operating
activities 3,102 2,440
--------- ---------
INVESTING ACTIVITIES:
Purchases of investment securities-held to
maturity (10,530) (36,360)
Proceeds from maturities of investment
securities-held to maturity 2,000 19,430
Loan originations, net of repayments (7,588) 3,761
Proceeds from sales of real estate owned 104 77
Purchases of office properties and
equipment (115) (699)
--------- ---------
Net cash used by investing activities (16,129) (13,791)
--------- ---------
</TABLE>
(Continued)
4
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
------ ------
<S> <C> <C>
FINANCING ACTIVITIES:
Net increase in deposits 17,838 16,708
Advances from FHLB 22,972 --
Repayment of advances from FHLB (26,975) (7,003)
Net increase in advance payments
by borrowers for taxes & insurance 281 203
Purchase of treasury stock (2,364) (1,764)
Dividends paid (392) (354)
--------- --------
Net cash provided by financing
activities 11,360 7,790
--------- --------
Net decrease in cash and cash equivalents (1,667) (3,561)
CASH AND CASH EQUIVALENTS:
Beginning of period 9,983 26,163
--------- --------
End of period $ 8,316 $22,602
========= ========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Cash paid for:
Interest $ 7,452 $ 6,566
========= ========
Income taxes $ -- $ 129
========= ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
ACTIVITIES:
Real estate acquired in settlement of
loans $ 100 $ --
========= ========
Loans to facilitate sales of real estate
owned $ 98 $ 20
========= ========
</TABLE>
(Concluded)
See notes to unaudited consolidated financial statements.
5
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
First Federal Bancshares of Arkansas, Inc. (the "Corporation") is a unitary
holding company which owns all of the stock of First Federal Bank of Arkansas,
FA (the "Bank"). The Bank provides a broad line of financial products to
individuals and small to medium-sized businesses. The consolidated financial
statements also include the accounts of the Bank's wholly-owned subsidiary,
First Harrison Service Corporation ("FHSC"), whose activities are limited to
owning an interest in a repossessed commercial property. During the first
quarter of 1998, in settlement of a loan, FHSC obtained 75% ownership of a
partnership that owned and operated a 202 room hotel in Oklahoma. The financial
position and results of operations of this hotel property have been consolidated
in the financial statements. The remaining 25% ownership is reflected in the
consolidated statements of financial condition as minority interest.
The accompanying unaudited consolidated financial statements of the Corporation
have been prepared in accordance with instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However, such
information reflects all adjustments which are, in the opinion of management,
necessary for a fair statement of results for the interim periods.
The accompanying consolidated financial statements include the accounts of the
Corporation and the Bank. All material intercompany transactions have been
eliminated in consolidation.
The results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the year ending
December 31, 2000. The unaudited consolidated financial statements and notes
thereto should be read in conjunction with the audited financial statements and
notes thereto for the year ended December 31, 1999, contained in the
Corporation's 1999 Annual Report to Stockholders.
NOTE 2 - RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS
133"). SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as "derivatives"), and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial condition and measure those
instruments at fair value. SFAS 133 was originally effective for fiscal years
beginning after June 15, 1999. However, in June 1999 FASB issued Statement No.
137, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - DEFERRAL OF
THE EFFECTIVE DATE OF FASB STATEMENT NO. 133 ("SFAS 137"). SFAS 137 deferred the
effective date of SFAS 133 for all fiscal quarters of all fiscal years beginning
after June 15, 2000.
6
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Management has not yet made a determination as to the effect, if any, the
adoption of SFAS 133 will have on the Company's financial position or results of
operations.
NOTE 3 - EARNINGS PER SHARE
The weighted average number of common shares used to calculate earnings per
share for the quarters ended March 31, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Basic weighted - average shares 3,712,414 4,145,349
Effect of dilutive securities -- --
----------- -----------
Diluted weighted - average shares 3,712,414 4,145,349
</TABLE>
NOTE 4 - DECLARATION OF DIVIDENDS
At their meeting on February 23, 2000, the Board of Directors declared a $.10
(ten cent) per share cash dividend on the common stock of the Corporation. The
cash dividend was paid on March 23, 2000 to the stockholders of record at the
close of business on March 10, 2000.
NOTE 5 - INVESTMENT SECURITIES
Investment securities consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, 2000
------------------------
Amortized Fair
HELD TO MATURITY Cost Value
----------- --------
<S> <C> <C>
U. S. Government and
Agency obligations $191,703 $181,515
======== ========
</TABLE>
7
<PAGE>
NOTE 6 - LOANS RECEIVABLE
Loans receivable consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, 2000
--------------
<S> <C>
First mortgage loans:
One- to four- family residences $368,559
Other properties 29,660
Construction 28,885
Less:
Unearned discounts (221)
Undisbursed loan funds (11,498)
Deferred loan fees, net (2,910)
--------
Total first mortgage loans 412,475
--------
Consumer and other loans:
Commercial 16,810
Automobile 14,326
Consumer 4,267
Home equity and second mortgage 15,524
Savings 1,984
Other 2,449
Add deferred loan costs 210
--------
Total consumer and other loans 55,570
--------
Allowance for loan losses (740)
--------
Loans receivable, net $467,305
========
</TABLE>
Non-accrual loans at March 31, 2000 were $1.0 million. All loans 90 days or more
past due are recorded as non-accrual.
A summary of the activity in the allowance for loan losses is as follows (in
thousands):
<TABLE>
<S> <C>
Balance at December 31, 1999 $752
Provisions for estimated losses ----
Recoveries 10
Losses charged off (22)
- ----
Balance at March 31, 2000 $740
====
</TABLE>
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
At March 31, 2000, the Corporation's assets amounted to $688.9 million as
compared to $680.7 million at December 31, 1999. The $8.2 million or 1.2%
increase was primarily due to an increase of $7.3 million or 1.6% in net loans
receivable and an increase of $2.4 million or 1.3% in investment securities -
held to maturity. The effect of these increases on total assets was partially
offset by a $1.7 million or 16.7% decrease in cash and cash equivalents. Loan
originations for the three month period ended March 31, 2000 consisted of $15.8
million in one- to four- family residential loans, $5.6 million in commercial
loans, $8.0 million in construction loans and $8.8 million in consumer
installment loans, of which $2.8 million consisted of home equity loans and $3.7
million consisted of automobile loans. At March 31, 2000, the Bank had
outstanding loan commitments of $5.2 million, unused lines of credit of $6.8
million, and the undisbursed portion of construction loans of $11.5 million.
Liabilities increased $9.1 million or 1.5% to $610.2 million at March 31, 2000
compared to $601.1 million at December 31, 1999. The increase in liabilities was
primarily due to an increase of $17.8 million or 3.5% in deposits. Such increase
was partially offset by a decrease of $4.0 million or 4.8% in advances from the
Federal Home Loan Bank of Dallas ("FHLB of Dallas"). The increase in deposits
was used to fund the increase in net loans receivable, to repay advances
borrowed from the FHLB of Dallas and to purchase additional investment
securities. Stockholders' equity amounted to $77.9 million or 11.3% of total
assets at March 31, 2000 compared to $78.8 million or 11.6% of total assets at
December 31, 1999. The decrease in stockholders' equity was primarily due to the
purchase of 151,500 shares of treasury stock totaling $2.4 million in connection
with the Corporation's stock repurchase plan and to a lesser extent due to the
payment of cash dividends aggregating $392,000. Such decrease during the three
months ended March 31, 2000 was partially offset by net income of $1.4 million
resulting from continued profitable operations.
Non-performing assets, consisting of non-accruing loans and repossessed
assets, amounted to $4.8 million or .70% of total assets at March 31, 2000,
compared to $5.3 million or .78% of total assets at December 31, 1999. Included
in non-performing assets is a commercial real estate property that had a
carrying value at March 31, 2000 of $3.5 million. A contract to purchase the
property has been signed for $3.6 million. The transaction is presently expected
to close in the second quarter of 2000.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
GENERAL. The Corporation reported net income of $1.4 million during the
three months ended March 31, 2000 compared to net income of $1.5 million for the
same period in 1999. The decrease of $88,000 in net income in the 2000 period
compared to the same period in 1999 was primarily due to an increase in
noninterest expenses which was offset by an increase in net interest income. Net
interest income rose from $4.7 million for the three months ended March 31, 1999
to $4.9 million for the same period in 2000. Net interest income is determined
by the Corporation's interest rate
9
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spread (i.e., the difference between the yields earned on its interest-earning
assets and the rates paid on its interest-bearing liabilities) and the relative
amounts of interest-earning assets and interest-bearing liabilities. The
Corporation's interest rate spread and net interest margin decreased to 2.49%
and 2.96%, respectively, for the 2000 three month period compared to 2.59% and
3.12%, respectively, for the 1999 three month period. These and other
significant fluctuations in operations are discussed below.
INTEREST INCOME. Interest income amounted to $12.5 million for the three
months ended March 31, 2000 compared to $11.3 million for the same period in
1999. The increase of $1.2 million or 10.7% was primarily due to an increase in
the average balance of investment securities and net loans receivable. The
increase in the average balance of investment securities was due to additional
purchases of investment securities. The increase in the average balance of net
loans receivable was due to the continued origination of loans. Such increase
was partially offset by a decline in the average yield earned on loans due
primarily to the origination of loans at market interest rates which were lower
than the average yield of the Bank's loan portfolio and by a decline in the
average balance of other interest-earning assets, primarily interest-bearing
deposits with banks.
INTEREST EXPENSE. Interest expense increased $1.0 million or 15.0% to $7.6
million for the three months ended March 31, 2000 compared to $6.6 million for
the same period in 1999. Such increase was primarily due to an increase in the
average balance of FHLB of Dallas advances, an increase in interest rates paid
on maturing advances, an increase in the average balance of deposits and an
increase in interest rates paid on such deposits.
NONINTEREST INCOME. Noninterest income decreased $8,000 or 2.0% to
$385,000 for the three months ended March 31, 2000 compared to $393,000 for the
three months ended March 31, 1999. The decrease for the three month comparable
periods was primarily due to a decrease of $62,000 from $74,000 to $12,000 in
gain on the sale of mortgage loans in the secondary mortgage market and to a
decrease of $19,000 from $23,000 to $4,000 in loan fees related to the
origination of such loans. The decrease in noninterest income for the three
months ended March 31, 2000 compared to the three months ended March 31, 1999
was partially offset by a decline in the net loss recognized from the operations
of real estate owned in the amount of $12,000 from $59,000 to $47,000.
NONINTEREST EXPENSE. Noninterest expenses increased $402,000 or 14.7%
between the 2000 and 1999 three month periods ended March 31. The increase in
noninterest expenses during the three month period in 2000 compared to 1999 was
primarily due to an increase in salaries and employee benefits and net occupancy
expense. Such increase was partially offset by a decrease of $43,000 from
$70,000 to $27,000 in Federal Deposit Insurance Corporation insurance premiums
as a result of a decline in the deposit assessment rate. Salaries and employee
benefits amounted to $2.0 million compared to $1.8 million resulting in an
increase of $246,000 or 14.1% for the three month periods ended March 31, 2000
and 1999, respectively. Such increase in salaries and employee benefits was
primarily due to an increase in personnel as well as normal salary and merit
increases. Net occupancy expense for the three months ended March 31, 2000 was
$254,000 compared to $217,000 for the same period in 1999 resulting in an
increase of $37,000 or 17.1%.
10
<PAGE>
INCOME TAXES. Income taxes amounted to $712,000 and $802,000 for the three
months ended March 31, 2000 and 1999, respectively, resulting in effective tax
rates of 33.2% and 34.6%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's liquidity, represented by cash and cash equivalents and
eligible investment securities, is a product of its operating, investing and
financing activities. The Bank's primary source of funds are deposits,
collections on outstanding loans, maturities and calls of investment securities
and other short-term investments and funds provided from operations. While
scheduled loan amortization and maturing investment securities and short-term
investments are relatively predictable sources of funds, deposit flows and loan
prepayments are greatly influenced by general interest rates, economic
conditions and competition. The Bank manages the pricing of its deposits to
maintain a steady deposit balance. In addition, the Bank invests excess funds in
overnight deposits and other short-term interest-earning assets which provide
liquidity to meet lending requirements. The Bank has generally been able to
generate enough cash through the retail deposit market, its traditional funding
source, to offset the cash utilized in investing activities. As an additional
source of funds, the Bank has borrowed from the FHLB of Dallas. At March 31,
2000, the Bank had outstanding advances from the FHLB of Dallas of $80.0
million. Such advances were used in the Bank's normal operating and investing
activities.
As of March 31, 2000, the Bank's regulatory capital was well in excess of
all applicable regulatory requirements. At March 31, 2000, the Bank's tangible,
core and risk-based capital ratios amounted to 11.2%, 11.2% and 21.5%,
respectively.
IMPACT OF INFLATION AND CHANGING PRICES
The financial statements and related financial data presented herein have
been prepared in accordance with instructions to Form 10-Q, which require the
measurement of financial position and operating results in terms of historical
dollars, without considering changes in relative purchasing power over time due
to inflation.
Unlike most industrial companies, virtually all of the Bank's assets and
liabilities are monetary in nature. As a result, interest rates generally have a
more significant impact on a financial institution's performance than does the
effect of inflation.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements and information
relating to the Corporation that are based on the beliefs of management as well
as assumptions made by and information currently available to management. In
addition, in those and other portions of this document, the words "anticipate,"
"believe," "estimate," "except," "intend," "should" and similar expressions, or
the negative thereof, as they relate to the Corporation or the Corporation's
management, are intended to identify forward-looking statements. Such statements
reflect the
11
<PAGE>
current views of the Corporation with respect to future looking events and are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize or should underlying assumptions prove
incorrect, actual results may vary from those described herein as anticipated,
believed, estimated, expected or intended. The Corporation does not intend to
update these forward-looking statements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
For a discussion of the Corporation's asset and liability management policies as
well as the potential impact of interest rate changes upon the market value of
the Bank's portfolio equity, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Corporation's 1999 Annual
Report to Stockholders. There has been no material change in the Corporation's
asset and liability position or the market value of the Bank's portfolio equity
since December 31, 1999.
12
<PAGE>
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
PART II
Item 1. LEGAL PROCEEDINGS
Neither the Corporation nor the Bank is involved in any pending legal
proceedings other than non-material legal proceedings occurring in
the ordinary course of business.
Item 2. CHANGES IN SECURITIES
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
Date: May 12, 2000 By: /s/ Larry J. Brandt
-----------------------
Larry J. Brandt
President
Date: May 12, 2000 By: /s/ Tommy W. Richardson
-----------------------
Tommy W. Richardson
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 7268
<INT-BEARING-DEPOSITS> 1048
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 191703
<INVESTMENTS-MARKET> 181515
<LOANS> 468045
<ALLOWANCE> 740
<TOTAL-ASSETS> 688944
<DEPOSITS> 525713
<SHORT-TERM> 68000
<LIABILITIES-OTHER> 4533
<LONG-TERM> 11969
0
0
<COMMON> 24286
<OTHER-SE> 53636
<TOTAL-LIABILITIES-AND-EQUITY> 688944
<INTEREST-LOAN> 9147
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</TABLE>
