April 25, 1996
Securities and Exchange Commission
Office of Document Control
450 5th Street N.W.
Washington, D.C. 20549
Re: Definitive Information Statement of First
Financial Corporation and Annual Report for
Annual Meeting of Shareholders to be Held on
May 28, 1996, Commission File No. 0-5559
Dear Madam or Sir:
Enclosed are the following:
1. Eight (8) definitive copies of the Information Statement
(including cover sheet) and seven (7) copies of the Annual Report
to Shareholders on Form 10-KSB, which are being mailed to the
shareholders of First Financial Corporation (the "Company") on or
about April 26, 1996, in connection with the annual meeting of
shareholders scheduled for May 28, 1996;
2. Letter from the Vice President of the Company stating that the
financial statements in the annual report on Form 10-KSB that are
being sent to the shareholders of the Company do not reflect a
change from the preceding year in any accounting principles or
practices, except for the adoption of the Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes, of the
Financial Accounting Standards Board; and
3. $125 in payment of the filing fee has been wired to your account
today.
Very truly yours,
FIRST FINANCIAL CORPORATION
/s/ David W. Mann
BY:
David W. Mann, President
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Information Statement
FIRST FINANCIAL CORPORATION
(Name of Registrant As Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
FIRST FINANCIAL CORPORATION
800 Washington Avenue
P. O. Box 269
Waco, Texas 76703
(817) 757-2424
_______________
INFORMATION STATEMENT
Relating to
ANNUAL MEETING OF SHAREHOLDERS
to be held on May 28, 1996
_______________
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is being furnished by the Board of Directors
of First Financial Corporation (the "Company") to holders of shares of the
Company's common stock in connection with the Annual Meeting of Shareholders
to be held at the principal executive offices of the Company at 800 Washington
Avenue, Waco, Texas, on Tuesday, May 28, 1996, at 2:00 p.m., local time, and
at any adjournment thereof, for the purposes set forth in the accompanying
Notice of Annual Meeting. This Information Statement is being mailed on or
about April 26, 1996.
The Board of Directors has fixed the close of business on April 20,
1996, as the record date for determination of the shareholders entitled to
notice of and to vote at the Annual Meeting ("Record Date"). As of the Record
Date, there were issued and outstanding 173,528 shares of common stock,
excluding 10,222 shares held as treasury stock that will not be voted. A
majority of such shares will constitute a quorum for the transaction of
business at the Annual Meeting. The holders of record on the Record Date of
shares entitled to be voted at the Annual Meeting are entitled to cast one
vote per share on each matter submitted to a vote at the Annual Meeting. The
affirmative vote of a majority of the shares of common stock present, in
person or by proxy, at the Annual Meeting is required for the election of a
director. Shareholders do not have cumulative voting rights. Votes are
counted by representatives of the Company at the Annual Meeting.
The Company will bear all costs and expenses relating to the prepara-
tion, printing, and mailing of this Information Statement and accompanying
materials to shareholders. Arrangements will be made with brokerage firms and
other custodians, nominees and fiduciaries for forwarding the Information
Statement to the beneficial owners of the shares of common stock held by such
persons, and the Company will reimburse such brokerage firms, custodians,
nominees, and fiduciaries for reasonable out-of-pocket expenses incurred by
them in connection therewith.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the best knowledge of the Company, the following table presents
certain information regarding the number and percentage of shares of common
stock beneficially owned by each person who beneficially owns more than 5% of
the Company's common stock, by each director and each nominee for election as
a director, by each executive officer, and by all directors and officers as a
group, as of March 31, 1996. Except as otherwise indicated, the directors,
nominees, and officers have sole voting and investment power with respect to
the shares beneficially owned by them.
Name and Address
of Beneficial Owner
Amount and Nature
of Beneficial Ownership
Percentage of
All Outstanding
Shares
First Financial Holdings,
Ltd.
800 Washington Ave.
Waco, Texas 76701
92,742
53.44%
FFC Holdings, Inc.
800 Washington Ave.
Waco, Texas 76701
92,742(1)
53.44%
Walter J. Rusek
2121 Lake James
Waco, Texas 76710
9(2)
.01%
Henry Dietz
500 LaSalle
Waco, Texas 76706
290
.17%
Jackson K. Walker, MD
3115 Pine
Waco, Texas 76708
25
.01%
David W. Mann
800 Washington Ave.
Waco, Texas 76701
102,075(3)
58.82%
Bluebonnet Investments, Ltd.
800 Washington Ave.
Waco, Texas 76714-8436
9,255
5.33%
Robert A. Mann
P. O. Box 8436
Waco, Texas 76714-8436
9,255(4)
5.33%
Bluebonnet Enterprises, Inc.
800 Washington Ave.
Waco, Texas 76701
9,255(4)
5.33%
David W. Mann 1990 Trust
P. O. Box 8436
Waco, Texas 76714-8436
101,997(5)
58.78%
All directors and
officers as a group
102,399
59.01%
_____________________
(1) Consists of the 92,742 shares owned by First Financial Holdings,
Ltd., a Texas limited partnership, the general partner of which is
FFC Holdings, Inc., a Texas corporation, all of the outstanding
shares of which are owned by David W. Mann as Trustee of the David W.
Mann 1990 Trust. Mary Hyden Mann Hunter, David Wake Mann, and Allen
Barclay Mann are the limited partners of First Financial Holdings,
Ltd. Under the terms of the partnership agreement, the general
partners have sole voting and investment power with respect to the
92,742 shares of the Company owned by the partnership; thus FFC
Holdings, Inc. (which is owned and controlled by David W. Mann, as
Trustee of the David W. Mann 1990 Trust), as the sole remaining
general partner, has sole voting and investment power over such
shares.
(2) Consists of 9 shares owned by the Robert A. Mann Insurance Trust of
which Mr. Rusek is trustee. In addition, Mr. Rusek is a limited
partner in a limited partnership which owns 185 shares over which he
does not have voting or investment power.
(3) Includes 78 shares owned by Barclay, Inc., a Texas corporation owned
by David W. Mann, 92,742 shares owned by First Financial Holdings,
Ltd. and 9,255 shares owned by Bluebonnet Investments, Ltd. First
Financial Holdings, Ltd. is a Texas limited partnership, the general
partner of which is FFC Holdings, Inc., a Texas corporation, all of
the outstanding shares of which are owned by David W. Mann as Trustee
of the David W. Mann 1990 Trust. Mary Hyden Mann Hunter, David Wake
Mann and Allen Barclay Mann are the limited partners of First Finan-
cial Holdings, Ltd. Under the terms of the partnership agreement,
the general partners have sole voting and investment power with
respect to the 92,742 shares of the Company owned by the partnership;
thus FFC Holdings, Inc. as the sole remaining general partner, has
sole voting and investment power over such shares. David W. Mann is
the sole officer and director of FFC Holdings, Inc. Bluebonnet
Investments, Ltd. is a Texas limited partnership, the general
partners of which are Robert A. Mann and Bluebonnet Enterprises,
Inc., a Texas corporation owned by the David W. Mann 1990 Trust, of
which David W. Mann is trustee and beneficiary. David W. Mann is
president of Bluebonnet Enterprises, Inc. David W. Mann also has
direct and indirect interests in limited partnerships which are
limited partners in Bluebonnet Investments, Ltd. The partnership
agreement provides that the general partners have the sole management
rights in partnership affairs, including voting of securities owned
by the partnership, but the agreement further provides that so long
as Robert A. Mann is acting as the individual general partner, he
shall have no right to vote or determine not to vote shares of stock
of a "controlled corporation" as that term is defined in Section 2036
of the Internal Revenue Code and applicable regulations. This
provision is interpreted by the partnership to mean that Robert A.
Mann has no voting power with respect to the shares of the Company
owned by the partnership. Thus, Bluebonnet Enterprises, Inc. cur-
rently exercises sole voting power with respect to the 9,255 shares
of the Company owned by the partnership, and the general partners
together have sole investment power with respect to such shares;
therefore, David W. Mann, through Bluebonnet Enterprises, Inc.,
exercises sole voting power and shared investment power with respect
to the 9,255 shares of the Company owned by the partnership.
(4) Consists of the 9,255 shares owned by Bluebonnet Investments, Ltd., a
Texas limited partnership, the general partners of which are
Robert A. Mann and Bluebonnet Enterprises, Inc., a Texas corporation
owned by the David W. Mann 1990 Trust, of which David W. Mann is
trustee. Robert A. Mann is also a limited partner in the partnership
and is a general partner of limited partnerships which are limited
partners in the partnership. The partnership agreement provides that
the general partners have the sole management rights in partnership
affairs, including voting of securities owned by the partnership, but
the agreement further provides that so long as Robert A. Mann is
acting as the individual general partner, he shall have no right to
vote or determine not to vote shares of stock of a "controlled
corporation" as that term is defined in Section 2036 of the Internal
Revenue Code and applicable regulations. This provision is inter-
preted by the partnership to mean that Robert A. Mann has no voting
power with respect to the shares of the Company owned by the
partnership. Thus, Robert A. Mann currently has shared investment
power but exercises no voting power over the 9,255 shares of the
Company owned by the partnership, and Bluebonnet Enterprises, Inc.
exercises sole voting power and shared investment power over such
shares.
(5) Consists of the 9,255 shares owned by Bluebonnet Investments, Ltd.,
over which the David W. Mann 1990 Trust has sole voting and shared
investment power and the 92,742 shares owned by First Financial
Holdings, Ltd., over which the David W. Mann 1990 Trust has sole
voting and investment power.
ELECTION OF DIRECTORS
Seven directors are to be elected at the meeting to serve until the 1997
Annual Meeting of Shareholders or until their respective successors have been
elected and qualified, or until their earlier death, resignation or removal
from office. All of the nominees are currently directors of the Company.
Each nominee has agreed to serve as a director of the Company. The
Board of Directors knows of no reason why any of its nominees will be unable
to accept election. However, if any nominee becomes unable to accept elec-
tion, the Board will select substitute nominees. The Bylaws of the Corpora-
tion provide that the Board shall consist of not less than three (3) nor more
than ten (10) directors. The Company has no formal procedures for nomination
of directors by shareholders. The Board has fixed the number of directors at
seven (7). Shareholders do not have cumulative voting rights.
The following table sets forth certain information with respect to the
persons nominated by the Board of Directors for election as directors of the
Company at the Annual Meeting:
Name and Principal
Occupation for the
Last Five Years
Age
Served As
A Director
Offices and
Positions
With Company
NOMINEES
Henry Dietz (1)(2)
Chairman of the Board, Dietz Memorial
Company, Inc., Waco, Texas
78
Since 7-29-
76
Director
John Carl Hauser
Retired
73
Since 9-20-
84
Director
David W. Mann (3)(5)
President, First Financial Corpora-
tion since October 29, 1985; Chairman
of the Board, First Financial
Corporation (December 27, 1988 to
July 16, 1991); President, First
Preference Mortgage Corp. since
October, 1991; Executive Vice
President, Citizens State Bank,
Woodville, Texas since July 1, 1995;
Mr. Mann is also an officer and
director of certain insurance agen-
cies and companies and holds
positions with numerous other
entities.
40
Since 4-27-
79
President,
Director
Robert A. Mann (3)(4)(6)
Chairman of the Board, First Finan-
cial Corporation since July 16, 1991;
Consultant to Board of Directors,
First Financial Corporation
(December 27, 1988 to July 16, 1991);
Chairman of the Board, First
Preference Mortgage Corp. since 1993;
Chairman of the Board of Citizens
State Bank, Woodville, Texas, since
1950; Mr. Mann is also an officer and
director of certain insurance
agencies and companies and holds
positions with numerous other
entities.
65
7-1-75 to
12-27-88;
Since
7-16-91
Chairman of
the Board,
Chief
Executive Offi-
cer,
Director
Walter J. Rusek
Vice Chairman of the Board, Citizens
State Bank, Woodville from Febru-
ary 1, 1993, to July 1, 1994;
President and Chief Executive
Officer, Citizens State Bank,
Woodville since July 1, 1994; Vice
Chairman of the Board, United
Bankers, Inc.; consultant for various
entities including the Company from
October 1990 to June 30, 1994.
64
Since 2-26-
70
Director
Barrett Smith (1)(2)
Retired
76
Since 7-24-
79
Director
Jackson K. Walker, M.D.
Self-employed and practices as a
medical doctor in Waco, Texas
63
Since 7-29-
76
Director
______________________
(1) Member of the Audit Committee.
(2) Member of the Executive Compensation Committee.
(3) David W. Mann is the son of Robert A. Mann.
(4) On January 6, 1993, Robert A. Mann filed a petition for bankruptcy
under Chapter 11 of the Bankruptcy Code.
(5) David W. Mann was one of the defendants in a lawsuit filed by the
FDIC, as successor to United Bank of Waco, against a number of former
officers and directors of United Bank of Waco, seeking recovery for
losses sustained by United Bank of Waco while Mr. Mann is alleged to
have been an officer or director. This lawsuit was settled during
1994.
(6) The FDIC, as successor to the failed First Bank & Trust of Bryan,
asserted a claim against Robert A. Mann in his bankruptcy proceeding
seeking recovery against Mr. Mann for losses sustained by that
institution while Mr. Mann was alleged to have been an officer or
director. Prior to the hearing on this claim, the FDIC abandoned the
claim and the Bankruptcy Court has signed an order disallowing the
claim in its entirety.
CERTAIN INFORMATION ABOUT THE FUNCTION OF THE
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held five (5) regular meetings during 1995. All
directors attended at least 75% of all board meetings held in 1995. Each non-
employee director who attended such meetings (all directors during 1995 other
than Robert A. Mann and David W. Mann) was paid a fee of $1,000.00 per
meeting.
The Board functions as a committee of the whole to nominate candidates
for Board membership, and there is no standing nominating committee.
The Company has standing audit and executive compensation committees
that have been appointed by the Board of Directors in accordance with the
provisions of its Bylaws. These committees did not meet during 1995 and took
no action for or on behalf of the Board of Directors during 1995. The Board
of Directors as a whole performed the functions of these committees.
EXECUTIVE OFFICERS
Executive officers of the Company are elected by the Board of Directors
at the annual meeting of the board and hold office until its next annual
meeting or until their successors are elected and qualified, or until their
earlier death, removal or resignation. The following table sets forth, for
each person who is an executive officer of the Company and each person chosen
to become an executive officer, his name, age, business experience for the
last five years, the year he first became officer and the current position
held at the Company:
Name
Age
Officer
Since
Current Position
Robert A. Mann(1)
65
1991
Chairman of
the
Board, Chief
Executive
Officer
David W. Mann(1)
40
1985
President
______________________
(1) Refer to section on Election of Directors for business experience
during last five years.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(SEC). Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during the period beginning January 1, 1995 and ending December
31, 1995, all of its officers, directors and greater than ten percent
beneficial stockholders complied with the applicable requirements under
Section 16(a).
EXECUTIVE COMPENSATION
The following table sets forth information regarding executive
compensation paid to or for the Company's chief executive officer and each of
the most highly compensated executive officers whose cash compensation exceeds
$100,000 during the last three fiscal years.
Annual Compensation
Name
and
Principal
Position
Year
Salary($)
Bonus($)
Other
Annual
Compen-
sation
($)
All Other
Compensation
($)
Robert A. Mann,
Chairman of the
Board and CEO
1993
1994
1995
$172,850(1)
$167,850(1)
$167,850
$ 200
(2)
$50,611(4)
$36,728(4)
$30,264(4)
David W. Mann,
President
1993
1994
1995
$131,200(3)
$108,758(3)
$
72,588(5)
$7,500
$ 200
(2)
$1,728(4)
$1,728(4)
$3,719(4)
______________________
(1) The salary paid to Mr. Mann in 1993 and 1994 includes salary paid by
the Company and First Advisory Services, Inc., a wholly owned
subsidiary of the Company.
(2) The Company or its subsidiaries pay country club dues and automobile
expenses for the named executive offices. The aggregate amount of
these expenses is believed to be less than 10% of their respective
salaries and bonuses.
(3) The salary paid Mr. Mann in 1993 and 1994 includes salary paid by the
Company and its subsidiaries, First Advisory Services, Inc., Apex
Lloyds Insurance Company, First Financial General Agency, Inc., and
First Financial Insurance Agency, Inc. In 1993, the salary also
includes amounts paid to Mr. Mann by subsidiaries of Key Group, Ltd.,
a Texas limited partnership in which the Company holds a 52.94%
limited partnership interest. Key Group, Ltd. may not be considered
a subsidiary of the Company because the Company has no right to
participate in the management or control of the partnership business,
except to the extent permitted under the Texas Revised Limited
Partnership Act. The Company, as the holder of a majority interest
in Key Group, Ltd., has the right to remove the general partners of
Key Group, Ltd. under the terms of the partnership agreement. The
general partners of Key Group, Ltd. are Robert A. Mann and First Key
Holdings, Inc., a Texas corporation owned by the David W. Mann 1990
Trust, of which David W. Mann is the trustee and a beneficiary (see
"Description of Business" in Form 10-KSB and "Transactions with Key
Group, Ltd." below for further information).
(4) In 1993, 1994, and 1995, the Company paid $1,728, $1,728, and $1,764,
respectively, for group life insurance premiums on the lives of
Robert A. Mann and David W. Mann. In 1995, the Company made a
contribution of $2,250 and $1,955 to a 401(k) retirement plan on
behalf of Robert A. Mann and David W. Mann, respectively. The
balance of this amount represents insurance premiums paid on policies
on the life of Robert A. Mann. The Company will recover premiums
paid upon the death of Robert A. Mann or upon surrender of the
policy, to the extent of amounts received at death or upon surrender.
(5) Includes $26,688 paid by Apex Lloyds Insurance Company, a subsidiary
of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Tri-Triangle Agency, Inc., d/b/a Triangle Insurance Agency
Certain subsidiaries of the Company pay commissions to Tri-Triangle
Agency, Inc., a corporation owned by Robert A. Mann, on hazard insurance
policies referred from Tri-Triangle Agency, Inc. to such subsidiaries.
Commissions paid by such subsidiaries amounted to $11,608 and $19,212 for the
years ended December 31, 1994 and 1995, respectively. Substantially all
commissions paid were offset by reimbursement to the Company or its
subsidiaries from Tri-Triangle Agency, Inc. for expenses owed by TriTriangle
Agency, Inc. to the Company or its subsidiaries.
In 1994, the Company sold 100 % of the stock of First Financial General
Agency, Inc., a wholly-owned subsidiary ("FFGA"). All of the assets and
liabilities of FFGA were transferred to the Company prior to its sale, except
for the in-force insurance business which could not have been assigned to the
Company because the Company did not have the necessary insurance licenses.
The in-force insurance was assigned to Tri-Triangle Agency, Inc. It is
anticipated that Tri-Triangle Agency, Inc., will collect premiums on said
in-force insurance business in the future. Tri-Triangle Agency, Inc.,
reimburses the Company for expenses it owes to the Company. In the past these
expenses have approximated the commissions collected by Tri-Triangle Agency,
Inc., and it is anticipated that reimbursed expenses will approximate
commissions collected in the future.
Managerial and Accounting Services Provided by First Advisory Services, Inc.
During 1994 and 1995, Bluebonnet Investments, Ltd. (a limited
partnership described above) and other entities directly or indirectly owned
or controlled by Robert A. Mann, David W. Mann and/or members of the Mann
family paid First Advisory Services, Inc., a subsidiary of the Company, an
aggregate amount of $207,550 and $226,044, respectively, in fees for
accounting and managerial services provided by First Advisory Services, Inc.
to such entities.
Expense Sharing Agreement With UW Insurance Group, Inc.
During 1994 and 1995 the Company and certain subsidiaries of the Company
had expense sharing arrangements with UW Service Corporation, Inc. ("UWSC"),
pursuant to which UWSC provided certain personnel, facilities, equipment and
supplies to the Company and its subsidiaries and allocated to the Company and
its subsidiaries the costs incurred by UWSC for such personnel, facilities,
equipment and supplies. During 1994 and 1995, the Company and its sub-
sidiaries paid a total of $153,580 and $121,104, respectively, to UWSC
pursuant to these expense sharing arrangements. UWSC is a wholly owned
subsidiary of UW Insurance Group, Inc. ("UWIGI"). Approximately 80% of the
outstanding shares of UWIGI is owned by Bluebonnet Investments, Ltd. (a
limited partnership described above), and the remaining 20% of the outstanding
shares is owned by David W. Mann's mother. It is the intention of the parties
to these expense sharing arrangements that no party realize a profit nor incur
a loss as a result of the cost sharing covered by these arrangements.
Transactions with Key Group, Ltd.
The Company has a servicing agreement pursuant to which it services
certain mobile home notes the Company contributed to Key Group, Ltd., a Texas
limited partnership ("Key Group") in exchange for a limited partnership
interest. The Company owns, as a limited partner, 52.94% of Key Group. The
general partners of Key Group are Robert A. Mann, who is Chairman of the Board
of the Company, and First Key Holdings, Inc., a Texas corporation owned by the
David W. Mann 1990 Trust, of which David W. Mann is the trustee and a
beneficiary. David W. Mann, who is the son of Robert A. Mann, is President of
First Key Holdings, Inc. and Robert A. Mann is Chairman of the Board.
Bluebonnet Investments, Ltd. (a limited partnership described above) is the
other limited partner of Key Group, and owns 47.05% of the partnership. The
aggregate amount paid to the Company for servicing said notes during 1994 and
1995 was $43,164 and $34,162, respectively.
First Financial Information Services, Inc. ("FFISI"), which is owned by
First Preference Holdings, Inc., a wholly owned subsidiary of Key Group, bills
out computer services for general ledger accounting, mortgage loan servicing
and insurance policy tracking. FFISI bills other First Preference Holdings,
Inc. subsidiaries, the Company and its subsidiaries, and affiliated insurance
companies such as UW General Agency, Inc., UW Service Corporation, Inc., and
Tri-Triangle Agency, Inc. The total amount billed by FFISI to the Company and
its subsidiaries (including Key Group, Ltd. and its subsidiaries) in 1994 and
1995 was $106,979 and $119,832, respectively.
The loan made by the Company in 1992 to First Preference Mortgage
Corporation ("FPMC"), a wholly owned subsidiary of First Preference Holdings,
Inc., in the original principal amount of $386,000 was paid off in 1995.
Sale of Participations
During 1994, FPMC paid off a $450,000 loan to UW General Agency, Inc.
that was made in connection with the purchase by FPMC of a group of loans from
the Resolution Trust Corporation. The source of the funds utilized to pay off
this loan was generated by FPMC selling participations in certain pools of
manufacturing housing installment sales contracts and installment loan
agreements to UW General Agency, Inc. (see relationship above) described
below:
Date of Participation
Original Amount of Partic-
ipation
Participation
Interest in Pool
3-31-94
$50,000
17.47%
4-30-94
100,000
35.45%
5-31-94
62,000
23.74%
6-30-94
57,626
23.34%
7-31-94
180,374
27.2242%
Total
$450,000
The unpaid balance of the above referenced participations in the
aggregate as of December 31, 1995 was $309,128. The Company continues to
service the manufactured housing installment sales contracts and installment
loan agreements referenced above.
During 1994, FPMC sold participations in a pool of manufactured housing
installment sales contracts and installment loan agreements to Key Group, Ltd.
(see relationship above) as described below:
Date of Participation
Original Amount of Participation
6-30-94
$324,873
7-31-94
93,545
Total
$418,418
On June 1, 1995, Key Group transferred its participation interest in the
above loans to First Preference Holdings, Inc. as a contribution to capital.
At the time, the unpaid balance of the participation interest was $311,650.
In June 1995, First Preference Holdings, Inc. transferred the participation
interest in said loans to FPMC in satisfaction of the unpaid balance of a
$388,000 note from First Preference Holdings, Inc. to FPMC (described below).
The Company continues to service the manufactured housing installment sales
contracts and installment loan agreements referenced above.
On September 30, 1994, FPMC sold a participation in a pool of
manufactured housing installment sales contracts and installment loan
agreements in the amount of $388,000 to its parent First Preference Holdings,
Inc. in exchange for a note from First Preference Holdings, Inc. in the
principal amount of $388,000, bearing interest at Wall Street prime, plus 1%,
due December 31, 1996. The participation interest was immediately transferred
back to FPMC as a contribution to capital. The unpaid balance of the $388,000
note was paid in June 1995, as described above.
Sublease of 800 Washington Ave. Property
The Company subleases approximately 5,350 square feet of its building at
800 Washington Avenue to Bluebonnet Investments, Ltd. (a partnership described
above), UW Service Corporation, Inc. (a corporation described above), and
other entities directly or indirectly owned or controlled by Robert A. Mann,
David W. Mann and/or members of the Mann family. During 1994 and 1995, the
sublessees paid a total of $34,744 and $35,544, respectively, in rent to the
Company.
Expense Sharing Arrangements
On April 21, 1992, the Board approved an expense sharing arrangement
effective January 1, 1992, applicable to Bluebonnet Investments, Ltd., Key
Group, Ltd. (and its subsidiaries), UW Insurance Group, Inc. (and its
subsidiaries), and certain other related entities. Pursuant to this
arrangement, the Company provides certain personnel, facilities, and supplies
to these companies and allocates the costs associated with providing these
items to their operations. It is the intention of the parties to these
expense sharing arrangements that no party realize a profit or incur a loss as
a result of these expense sharing arrangements.
Loans to FPMC
Certain related entities have made loans to FPMC described in the table
below:
Lender
Date of Loan
Original
Amount of Loan
Balance of
Loan
as of 12-31-95
Interest Rate
Vidor,
Ltd.(2)
10-15-93
$225,000
$125,000
Wall Street
Prime +
1 1/2%
Citizens Land
Corp.(1)
3-94
$175,000
$ 36,000
9%
UW General
Agency,
Inc.(1)
3-94
and
8-94
$250,000
$210,000
9%
_____________________
(1) See relationship described above.
(2) Vidor, Ltd. ("Vidor") is a Texas limited partnership. The limited
partners of Vidor are the Company (24%), Robert A. Mann (25%), Mann
Group Investment Company (25%) and The Omnibus Corporation (25%).
The general partners are David W. Mann (.01%) and Shelter Resources,
Inc. (.99%), a Texas corporation and wholly owned subsidiary of the
Company.
Each of the above loans matures on November 15, 1996, and is secured by
mortgage loans.
Sale of Loans to Bluebonnet Investments, Ltd.
On July 30, 1992, First Preference Financial Corp., a wholly-owned
subsidiary of First Preference Holdings, Inc. (a corporation discussed above)
entered into an agreement with Bluebonnet Investments, Ltd. (a limited
partnership discussed above), to sell an undivided 26.63848% participation
interest in and to all principal remittances made after July 30, 1992, on the
mobile home loans owned by First Preference Financial Corp. The purchase
price for this interest was $425,000 and the interest sold was based on the
ratio of $425,000 to $1,595,436.22, the unpaid balance of the loans. First
Preference Financial Corp. pays Bluebonnet Investments, Ltd., interest on its
participation interest at prime rate plus 1%. The loans are serviced by the
Company. In 1994, First Preference Financial Corp. transferred to its parent,
First Preference Holdings, Inc., its undivided interest in the mobile home
loans referred to in this paragraph having an approximate unpaid balance of
$823,663 and First Preference Holdings, Inc. immediately contributed said
interest in such loans to its subsidiary, FPMC, as additional capital. In
December 1995, the undivided 26.63848% participation interest held by
Bluebonnet was repurchased by FPMC for the unpaid balance of approximately
$231,000.
Until December 1995, the Company serviced certain loans owned by or in
which Bluebonnet Investments, Ltd. had a participation interest. The total
servicing fees allocable to the participation interests of Bluebonnet
Investments, Ltd. for 1994 and 1995 was $11,498 and $9,100, respectively.
PARENTS OF THE COMPANY AND
ITS CONSOLIDATED SUBSIDIARIES
The Company is the parent, by way of ownership of all the outstanding
securities, of the following companies:
Pre-Owned Homes, Inc. Mobile Home Conveyers
First Advisory Services, Inc. And Liquidators, Inc.
First Financial Credit Corp. First Financial Insurance
Apex Lloyds Insurance Co. Agency, Inc.
Shelter Resources, Inc. Texas Apex, Inc.
The Company is also the parent, by way of ownership of a 52.94% partnership
interest in Key Group, Ltd. and all of its wholly-owned subsidiaries:
First Preference Holdings, Inc. First Financial Information
Services, Inc.
First Preference Mortgage Corp. First Preference Financial Corp.
The immediate parent of the Company, by way of ownership of approximately
53.44% of its outstanding shares, is First Financial Holdings, Ltd.
AUDITORS
The Board of Directors has selected Pattillo, Brown & Hill as auditors
for the fiscal year ending December 31, 1996. Pattillo, Brown & Hill was the
auditor for the Company for the fiscal year ending December 31, 1995. It is
expected that a representative of Pattillo, Brown & Hill will attend the
Annual Meeting and will have an opportunity to make a statement and be
available to respond to appropriate questions.
The Company has recently been advised by Pattillo, Brown & Hill that,
other than in its capacity as Independent Auditors, Pattillo, Brown & Hill has
no direct or indirect financial interest in or connection with the Company,
nor has it had any such during the past three years.
ANNUAL REPORT
Accompanying this Information Statement is an annual report to security
holders on Form 10-KSB, which is being provided to each shareholder of record
without cost to satisfy the requirement that the Company's annual report to
security holders accompany or precede this Information Statement.
OTHER MATTERS
As of the date of this Information Statement, the Board of Directors is
not aware of any matters that will be presented for action at the Annual
Meeting other than those described above.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David W. Mann
David W. Mann, President
April 26, 1996
April 25, 1996
Securities and Exchange Commission
Office of Document Control
450 5th St., N.W.
Washington, D.C. 20549
Gentlemen:
Pursuant to Reg. 240.14c-3(b), this letter is to notify you that the
financial statements in the 1995 Annual Report (Form 10-KSB) to the
shareholders of First Financial Corporation do not reflect a change from the
preceding year in any accounting principles or practices or in the method of
applying any such principles or practices except for the adoption of the
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, of the Financial Accounting Standards Board.
Sincerely,
/s/ Robert L. Harris
Robert L. Harris
Vice President
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1,079,821
<SECURITIES> 306,762
<RECEIVABLES> 1,113,705
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,889,106
<DEPRECIATION> 954,377
<TOTAL-ASSETS> 9,026,817
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<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 2,927,353
<TOTAL-LIABILITY-AND-EQUITY> 9,026,817
<SALES> 0
<TOTAL-REVENUES> 5,149,139
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,024,037
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<INCOME-PRETAX> 125,102
<INCOME-TAX> 0
<INCOME-CONTINUING> 125,102
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<NET-INCOME> 234,449
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