Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1995
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period
Commission File Number 0-16362
First Franklin Corporation
(Exact Name of Registrant as
Specified in its Charter)
Delaware 31-1221029
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
401 East Court Street Cincinnati, Ohio 45202
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code
(513) 721-1031
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 twelve months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
requirements for the past 90 days.
Yes [X] NO [ ]
As of September 30, 1995, there were issued and outstanding 1,175,786
shares of the Registrant's Common Stock.
Transitional Small Business Format (check one)
Yes [ ] NO [X]
<PAGE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
INDEX
Page No.
Part I Financial Information
Item 1. Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 ................. 3
Consolidated Statements of Operations and Retained
Earnings - Three and Nine Month Periods ended
September 30, 1995 and 1994 .............................. 4
Consolidated Statements of Cash Flows -
Nine Month Periods ended September 30, 1995 and .......... 6
Notes to Consolidated Financial Statements ............... 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................. 9
Part II Other Information ......................................... 15
Item 5. Press Release Dated September 26, 1995 ...................... 16
Press Release Dated October 12, 1995 ........................ 17
Signatures
<PAGE>
Part I - Item 1.
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Sept 30, Dec 31,
1995 1994
(Unaudited)
ASSETS
Cash, including CD's & other interest-earning
deposits of $6,516 and $827 at 09/30/95
and 12/31/94, respectively ......................... $ 11,818 $ 2,883
Investment securities
Available-for-sale, at market value
(amortized cost of $16,397 and $14,899, ......... 16,046 13,747
respectively)
Held-to-maturity, at amortized cost
(market value of $977 and $933, respectively).... 881 881
Mortgage-backed securities
Available-for-sale, at market value
(amortized cost of $19,822 and $21,543, ......... 20,043 20,742
respectively)
Held-to-maturity, at amortized cost
(market value of $18,195 and $13,100, ......... 18,747 14,583
respectively)
Loans receivable, net ................................ 137,194 134,170
Real estate owned, net ............................... 0 0
Stock in Federal Home Loan Bank
of Cincinnati, at cost ............................. 1,621 1,649
Accrued interest receivable .......................... 1,258 1,021
Property and equipment, net .......................... 901 985
Other assets ......................................... 1,158 1,729
--------- ---------
$ 209,667 $ 192,390
========= =========
LIABILITIES
Savings accounts ..................................... $ 183,457 $ 172,502
Borrowings ........................................... 5,457 596
Advances by borrowers for taxes
and insurance ...................................... 725 1,114
Other liabilities .................................... 232 326
--------- ---------
Total liabilities ............................... 189,871 174,538
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock; $.01 par value per share;
500,000 shares authorized; no shares issued
Common stock; $.01 par value per share;
2,500,000 shares authorized; 1,267,664
shares issued at 09/30/95 and 1,255,464
at 12/31/94 ....................................... 13 13
Additional paid in capital ........................... 5,826 5,765
Treasury stock, at cost- 91,878 shares at
09/30/95 and 12/31/94 ............................... (442) (442)
Unrealized loss on available-for-sale securities,
net of taxes of $44 at 09/30/95 and $663 at (86) (1,289)
12/31/94............................................
Retained earnings, substantially restricted .......... 14,485 13,805
--------- ---------
Total stockholders' equity ...................... 19,796 17,852
--------- ---------
$ 209,667 $ 192,390
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3
<PAGE>
<TABLE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Dollars in thousands)
For The Three Months Ended For The Nine Months Ended
Sept 30, 1995 Sept 30, 1994 Sept 30, 1995 Sept 30, 1994
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable ..................................... $ 2,730 $ 2,480 $ 8,066 $ 7,588
Mortgage-backed securities ........................... 544 520 1,615 1,548
Investment securities ................................ 394 247 1,000 729
-------- -------- -------- --------
3,668 3,247 10,681 9,865
Interest expense: -------- -------- -------- --------
Savings accounts ..................................... 2,299 1,852 6,469 5,472
Borrowings ........................................... 19 20 47 57
-------- -------- -------- --------
2,318 1,872 6,516 5,529
-------- -------- -------- --------
Net interest income ............................... 1,350 1,375 4,165 4,336
Provision for loan losses .............................. 5 0 20 62
Net interest income after -------- -------- -------- --------
provision for loan losses ....................... 1,345 1,375 4,145 4,274
Noninterest income: -------- -------- -------- --------
Gain on loans sold ................................... 5 5 7 22
Service fees on NOW accounts ......................... 51 52 155 157
Other income ......................................... 42 44 106 210
-------- -------- -------- --------
98 101 268 389
Noninterest expenses: -------- -------- -------- --------
Salaries and employee benefits ....................... 408 439 1,247 1,287
Occupancy expense .................................... 142 138 434 433
Federal insurance premiums ........................... 100 99 300 308
Service bureau expense ............................... 68 64 198 190
Other expenses ....................................... 262 274 849 943
-------- -------- -------- --------
980 1,014 3,028 3,161
-------- -------- -------- --------
Income before federal income taxes ..................... 463 462 1,385 1,502
Provision for federal income taxes ..................... 155 152 458 500
-------- -------- -------- --------
Net Income ........................................ $ 308 $ 310 $ 927 $ 1,002
Continued The accompanying notes are an integral part of the consolidated financial statements. Page 4
<PAGE>
For The Three Months Ended For The Nine Months Ended
Sept 30, 1995 Sept 30, 1994 Sept 30, 1995 Sept 30, 1994
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
RETAINED EARNINGS-BEGINNING OF PERIOD .................. $ 14,259 $ 13,363 $ 13,805 $ 12,816
Net income ........................................... 308 310 927 1,002
Less: dividends declared ............................. (82) (73) (247) (218)
-------- -------- -------- --------
RETAINED EARNINGS-END OF PERIOD ........................ $ 14,485 $ 13,600 $ 14,485 $ 13,600
EARNINGS PER COMMON SHARE (in dollars) ................. $ 0.25 $ 0.25 $ 0.75 $ 0.82
DIVIDENDS DECLARED PER
COMMON SHARE (in dollars) ............................. $ 0.07 $ 0.0625 $ 0.21 $ 0.1875
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5
<PAGE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
For The Nine Months Ended
Sept 30, Sept 30,
1995 1994
(Unaudited)
Cash provided by (used in) operating activities:
Net income ........................................... $ 927 $ 1,002
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Provision for loan losses ........................ 20 62
Depreciation and amortization .................... 149 185
FHLB stock dividend .............................. (80) (68)
Loss (gain) on sale of real estate owned ......... 75 (41)
Increase in accrued interest receivable .......... (237) (191)
Decrease in deferred loan fees ................... (226) (159)
Decrease (increase) in other assets .............. 571 (395)
Increase (decrease) in other liabilities ......... (94) 101
Other, net ....................................... (1,252) 389
Loans sold ....................................... 655 3,842
Disbursements on loans originated for sale ....... (655) (1,904)
------ ------
Net cash provided by (used in) operating ............. (147) 2,823
activities ------ ------
Cash provided by (used in) investing activities:
Loan principal reductions .......................... 20,414 22,617
Disbursements on mortgage and other
loans for investment ............................ (22,892) (24,471)
Repayments on mortgage-backed
securities ...................................... 3,127 4,385
Purchase of available-for-sale mortgage-backed
securities ...................................... (500) (2,635)
Purchase of available-for-sale investment .......... (1,998) (1,498)
Purchase of held-to-maturity mortgage-backed
securities ...................................... (5,101)
Proceeds from the maturity of
available-for-sale investment securities ......... 500 1,000
Proceeds from the maturity of
held-to-maturity investment securities ........... 10
Proceeds from redemption of Federal Home
Loan Bank stock .................................. 109 187
Proceeds from the sale of real estate owned......... 219 765
Capital expenditures ............................... (37) (78)
------ ------
Net cash provided by (used in) investing act ......... (6,159) 282
------ ------
Continued
The accompanying notes are an integral part of the consolidated financial
statements.
Page 6
<PAGE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(Dollars in Thousands)
For The Nine Months Ended
Sept 30, Sept 30,
1995 1994
(Unaudited)
Cash provided by (used in) financing activities:
Net decrease in passbook accounts and
demand deposits ................................ (6,424) (9,042)
Proceeds from sales of certificates
of deposit ..................................... 57,455 31,379
Payments for maturing certificates
of deposit ..................................... (40,076) (24,781)
Proceeds from (repayment of) borrowed money....... 4,861 (693)
Decrease in advances by borrowers
for taxes and insurance ....................... (389) (422)
Proceeds from sale of common stock ............... 61 20
Payment of dividends ............................. (247) (218)
------ ------
Net cash provided by (used in) financing activities. 15,241 (3,757)
------ ------
Net increase (decrease) in cash .................... $ 8,935 ($ 652)
Cash at beginning of period ........................ 2,883 7,358
------ ------
CASH AT END OF PERIOD .............................. $ 11,818 $ 6,706
The accompanying notes are an integral part of the consolidated financial
statements.
Page 7
<PAGE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three and
nine month periods ended September 30, 1995 are not necessarily indicative of
the results that may be expected for the full year. The December 31, 1994
Balance Sheet data was derived from audited Financial Statements, but does not
include all disclosures required by generally accepted accounting principles.
NOTE 2: STOCK SPLIT
On January 10, 1995, a two-for-one stock split took place. All references
in the accompanying financial statements to the number of common shares and
per share amounts have been adjusted to reflect the stock split. Common shares
and paid-in capital have also been adjusted to reflect the split.
Page 8
<PAGE>
Part I - Item 2.
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
First Franklin Corporation ("Company") was incorporated under the laws of
the State of Delaware in September 1987 by authorization of the Board of
Directors of the Franklin Savings and Loan Company ("Franklin"). The Company
applied for and received regulatory approval to acquire all the common stock
of Franklin to be outstanding upon its conversion from the mutual to stock
form of ownership. This conversion was completed January 25, 1988.
As a Delaware corporation, First Franklin is authorized to engage in any
activity permitted by Delaware General Corporate Law. As a unitary savings and
loan holding company, First Franklin is subject to examination and supervision
by the Office of Thrift Supervision ("OTS") , although the Company's
activities are not limited by the OTS as long as certain conditions are met.
The Company's assets consist of cash and investments in Franklin and
DirectTeller Systems Inc. ("DirectTeller").
Franklin is an Ohio chartered stock savings and loan headquartered in
Cincinnati, Ohio. It was originally chartered in 1883 as the Green Street
Number 2 Loan and Building Company. Franklin operates seven banking offices in
Hamilton County, Ohio through which it offers a wide range of consumer banking
services, including mortgage loans, credit cards, checking accounts, auto
loans, savings and certificate accounts, automated teller machines and a voice
response telephone inquiry system. Beginning in March 1995, Franklin initiated
a program to provide its customers access to mutual funds, annuities and
brokerage services in its offices. The business of Franklin consists primarily
of attracting deposits from the general public and using those deposits,
together with borrowings and other funds, to originate and purchase
investments and real estate loans for retention in its portfolio and sale in
the secondary market.
Franklin has one subsidiary, Madison Service Corporation ("Madison").
Madison was formed on February 22,1972 by Franklin which owns 100% of its
outstanding stock. At the present time, Madison's only activity is the
servicing of a multi-family mortgage loan. Madison had net income of $11,429
for 1994 and $3,300 for the nine months ended September 30, 1995. The 1994
income includes the collection of $10,000 in non-recurring fees on the
multi-family loan which Madison services.
DirectTeller was formed in 1989 by the Company and DataTech Services,
Inc. to develop and market a voice response and fax retrieval telephone
inquiry system to allow financial institution customers to access information
about their accounts via the telephone and/or a facsimile machine. The inquiry
system is installed at Intrieve, a computer service bureau which specializes
in financial institutions. The system is currently operational at 26 of
Intrieve's clients in 10 states servicing approximately 575,000 accounts. The
agreement with Intrieve gives DirectTeller a percentage of the future profits
generated by the inquiry system.
Page 9
<PAGE>
Payments during 1995 under this agreement have totalled $9,800.
DirectTeller is continuing to market this system. First Franklin owns 51% of
DirectTeller's outstanding common stock. The Company's share of DirectTeller's
net profit for the nine months ended September 30, 1995 was $6,400. For the
year ended December 31, 1994 the Company's share of DirectTeller's operating
loss was $1,738.
Since the results of operations of Madison and DirectTeller have not been
material to the operations and financial condition of the Company, the
following discussion focuses primarily on Franklin.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Consolidated assets increased $17.3 million (9.0%) from $192.4 million at
December 31, 1994 to $209.7 million at September 30, 1995, compared to a $3.3
million (1.7%) decrease for the same period in 1994. During the Third Quarter
1995 assets increased $10.1 million (5.1%) compared to a $6.7 million (3.5%)
increase during the same quarter in 1994.
Loan disbursements were $23.5 million during the current nine months
compared to $26.4 million during the nine months ended September 30, 1994.
Disbursements were $11.5 million during the Third Quarter 1995 compared to
$7.9 million during the same quarter in 1994. Based on current market
conditions and seasonal factors, it is anticipated that loan disbursements
will decline during the fourth quarter from levels experienced during the
current quarter. At September 30, 1995, commitments to originate mortgage
loans or purchase mortgage-backed securities were $2.6 million. At the same
date, $2.4 million of undisbursed loan funds were being held on various
construction loans. Management believes that sufficient cash flow and
borrowing capacity exist to fund these commitments. To maintain a favorable
match between the assets and liabilities maturing or repricing during a
specific period, Franklin may buy mortgage-backed securities or sell some of
the mortgage loans that it originates, mortgage-backed securities being held
in its available-for-sale portfolio and adjustable rate loans that have used
their conversion privilege to convert to a fixed rate loan. Demand for
adjustable rate mortgage loans has been strong during the first nine months of
1995, therefore, sales of fixed rate mortgage loans have been less than
experienced during previous years. During the current nine month period, $5.1
million of fixed rate and $500,000 of adjustable rate mortgage-backed
securities were purchased. During the same period no mortgage-backed
securities were sold.
Liquid assets increased $11.2 million during the nine months ended
September 30, 1995 to $28.7 million. This is due to an increase in deposits of
$11.0 million. At December 31, 1994 liquid assets maturing in less than six
months did not offer sufficient protection against an increase in short term
cash needs, therefore, the increase in savings deposits was used to increase
fed funds and other short term investments. At September 30, 1995 liquid
assets were 13.7% of total assets.
The Company adopted SFAS No. 115 as of January 1, 1994 and investment and
mortgage-backed securities were classified based on the Company's current
intention to hold to maturity or have available for sale, if necessary. No
securities were classified as trading. The following table shows the gross
unrealized gains or losses on mortgage-backed securities and investment
securities as of September 30, 1995. During the current nine month period,
there have been no sales of investments or mortgage-backed securities.
Page 10
<PAGE>
Amortized Market Unrealized Unrealized
Cost Value Gains Losses
(in thousands)
Available-for-sale
Investment securities $16,397 $16,046 $1 $352
Mortgage-backed securities $19,822 $20,043 $235 $14
Held-to-maturity
Investment securities $881 $977 $96 $0
Mortgage-backed securities $18,747 $18,195 $0 $552
At September 30, 1995 savings deposits were $183.5 million compared to
$172.5 million at December 31, 1994. This is an increase of $11.0 million
during the current nine month period and $4.5 million during the quarter ended
September 30, 1995. The increase during the quarter and nine month period
reflects more competitive pricing on certificates to retain funds currently in
passbook savings and money market accounts, and to attract new funds. During
the nine months ended September 30, 1995, core deposits (transaction and
passbook savings accounts) decreased $6.4 million. A substantial portion of
these funds were transferred to certificates of deposit, which caused short
term certificates (two years or less) to increase by $15.9 million and
certificates with original terms greater than two years to increase $1.5
million. Interest of $2.1 million for the quarter and $5.8 million for the
nine month period was credited to accounts. After eliminating the effect of
interest credited, savings increased $2.4 million during the three months and
$5.2 million during the nine months ended September 30, 1995.
At September 30, 1995 borrowings consisted of $5.5 million in Federal
Home Loan Bank advances. During the current quarter, Franklin obtained $5.0
million of 15 year fixed rate advances at 6.35% and invested the proceeds in
30 year fixed rate mortgage-backed securities yielding 7.30%, all of which
were classified as held-to-maturity.
At September 30, 1995, $1.1 million of assets were classified
substandard, $300,000 classified loss and $3.0 million classified as special
mention compared to $1.9 million as substandard, $577,000 as loss and $2.9
million as special mention at December 31, 1994. Non-accruing and accruing
loans delinquent ninety days or more at both September 30, 1995 and December
31, 1994 were $1.1 million. During the remainder of 1995, continued emphasis
will be placed on the collection process to reduce the amount of these loans.
In management's opinion, adequate reserves are available to protect
against reasonably foreseeable losses that may occur on loans or repossessed
assets. Based on the credit quality of the loan portfolio and management's
belief that the level of general reserves is adequate to protect against
reasonably foreseeable losses, the charges against current operations were
reduced as compared to previous years. The following table shows the activity
that has occurred on loss reserves during the nine months ended September 30,
1995. The $339,000 in charge offs includes $253,000 on loans, mostly consumer,
which had previously had specific reserves established against them that were
determined to be uncollectible and charged off.
(in thousands)
Balance at beginning of per $1,256
Charge offs 339
Additions charged to operations 20
Recoveries 0
------
Balance at end of period $937
Page 11
<PAGE>
First Franklin continues to enjoy a strong net worth position. At
September 30, 1995, net worth was $19.8 million, which is 9.4% of assets. At
the same date, book value per share was $16.84 compared to $15.60 at September
30, 1994. The following table summarizes, as of September 30, 1995, the
regulatory capital position of our subsidiary, Franklin Savings.
Capital Standard Actual Required Excess Actual Required Excess
(in thousands)
Tangible $13,881 $3,080 $10,801 6.76% 1.50% 5.26%
Core $13,881 $6,160 $7,721 6.76% 3.00% 3.76%
Risk-based $14,517 $7,410 $7,107 15.67% 8.00% 7.67%
The deposit accounts of Franklin Savings and other savings institutions
are insured by the Federal Deposit Insurance Corporation ("FDIC") in the
Savings Association Insurance Fund ("SAIF"). The reserves of the SAIF are
below the level required by law, because a significant portion of the
assessments paid into the fund are used to pay the cost of prior thrift
failures. The deposit accounts of commercial banks are insured by the FDIC in
the Bank Insurance Fund ("BIF"), except to the extent such banks have acquired
SAIF deposits. The reserves of the BIF met the level required by law in May
1995. As a result of the respective reserve levels of the funds, deposit
insurance assessments paid by healthy savings associations exceed those paid
by healthy commercial banks by approximately $0.19 per $100 in deposits. This
premium disparity could have a negative competitive impact on Franklin Savings
and other institutions in the SAIF.
Congress is considering legislation to recapitalize the SAIF and
eliminate the significant premium disparity. Currently that recapitalization
plan provides for a special assessment of approximately $.85 per $100 of SAIF
deposits held at March 31, 1995, in order to increase SAIF reserves to the
level required by law. In addition, the cost of prior thrift failures would be
shared by both the SAIF and the BIF. This would likely increase BIF
assessments by $0.02 to $0.025 per $100 in deposits. SAIF assessments would
initially be set at the same level as BIF assessments and could never be
reduced below that level. These projected assessment levels may change if
commercial banks holding SAIF deposits are provided some relief from the
special assessment or are allowed to transfer to the BIF.
The last part of the recapitalization plan provides for the merger of the
SAIF and BIF on January 1, 1998. However, the SAIF recapitalization
legislation currently provides for the elimination of the thrift charter or of
the separate federal regulation of thrifts prior to the merger of the deposit
insurance funds. Franklin Savings would have to convert to a bank charter or
be regulated as a bank. As a result, it would become subject to the more
restrictive activity limits imposed on national banks, but it would have a
specified period of time to divest any non-conforming assets. If Franklin
Savings is required to convert to a commercial bank charter, it would have to
recapture approximately $3.1 million of its bad debt reserve, unless Congress
amends those recapture provisions. Such a proposal is currently under
consideration. That proposal would eliminate the special thrift method of tax
accounting for bad debt reserves, which Franklin Savings has relied on,
effective in 1996. In addition, with any such conversion by Franklin Savings,
First Franklin would become a bank holding company, which would subject it to
more restrictive activity limits and to capital requirements similar to those
imposed on Franklin Savings.
Franklin Savings had $174 million in deposits at March 31, 1995. If the
special assessment is $.85 per $100 in deposits, Franklin Savings will pay an
additional assessment of $1.5 million on January 1, 1996. This assessment
should be tax-deductible, but it will reduce earnings and capital. It is
expected that quarterly SAIF assessments for early 1996 would be reduced to
approximately $.06 to $.065 per $100 in deposits.
Page 12
<PAGE>
No assurances can be given that the SAIF recapitalization plan will be
enacted into law or in what form it may be enacted. In addition, First
Franklin can give no assurances that the disparity between BIF and SAIF
assessments will be eliminated and cannot be certain of the impact of its
being regulated as a bank holding company, Franklin Savings being converted to
a bank or the change in tax accounting for bad debt reserves until the
legislation requiring such changes is enacted.
RESULTS OF OPERATIONS
Net income remained relatively stable at $308,000 ($0.25 per share) for
the three months ended September 30, 1995 from $310,000 ($0.25 per share) for
the same quarter in 1994. Net income declined 7.5% to $927,000 ($0.75 per
share) for the current nine month period from $1,002,000 ($0.82 per share) for
the nine months ended September 30, 1994.
Net interest income, before provisions for loan losses, was $1.35 million
for the current quarter and $4.17 million for the first nine months of 1995.
For the same periods in 1994, it was $1.38 million and $4.34 million,
respectively. The decline during the current nine months reflects the
collection of $120,000 in interest on a non-accruing multi-family loan which
became current during the quarter ended March 31, 1994. As the tables below
illustrate, average interest-earning assets increased $3.9 million to $191.7
million during the nine months ended September 30, 1995 from $187.8 million
for the year ended December 31, 1994. Average interest-bearing liabilities
increased $4.3 million from $173.9 million for the year ended December 31,
1994 to $178.2 for the current nine month period. Thus, average net
interest-earning assets decreased $400,000. The interest rate spread (the
yield on interest-earning assets less the cost of interest-bearing
liabilities) decreased from 2.76% for the year ended December 31, 1994 to
2.55% for the current nine month period. This decrease in the spread reflects
an increase in the cost of funds from 4.32% for the year ended December 31,
1994 to 4.88% for the nine months ended September 30, 1995. The yield on
interest-earning assets increased from 7.08% for the year ended December 31,
1994 to 7.43% for the nine month period ended September 30, 1995.
For the nine months ended September 30, 1995
Average
Outstanding Yield/cost
($ in thousands)
Average interest-earning assets
Loans $133,855 8.03%
Mortgage-backed securities 35,246 6.11%
Investments 20,985 5.85%
FHLB stock 1,600 6.75%
--------
Total $191,686 7.43%
--------
Average interest-bearing liabilities
Demand deposits $23,891 2.46%
Savings accounts 26,132 2.76%
Certificates 127,091 5.76%
FHLB advances 1,061 5.15%
Other borrowings 0 0.00%
--------
Total $178,175 4.88%
--------
Net interest-earning assets $13,511 2.55%
Page 13
<PAGE>
For the year ended December 31, 1994
Average
Outstanding Yield/cost
($ in thousands)
Average interest-earning assets
Loans $130,839 7.81%
Mortgage-backed securities 37,947 5.44%
Investments 17,403 5.24%
FHLB stock 1,643 5.72%
--------
Total $187,832 7.08%
--------
Average interest-bearing liabilities
Demand deposits $28,446 2.49%
Savings accounts 34,155 2.79%
Certificates 110,426 5.24%
FHLB advances 830 8.67%
Other borrowings 17
--------
Total $173,874 4.32%
--------
Net interest-earning assets $13,958 2.76%
Noninterest income was $98,000 for the quarter and $268,000 for the nine
months ended September 30, 1995 compared to $101,000 for the same quarter in
1994 and $389,000 for the nine months ended September 30, 1994. The majority
of the decrease during the nine month period is attributable to a reduction in
loan fees, late charges and profits on the sale of fixed rate loans and real
estate owned. As discussed previously, demand for adjustable rate mortgage
loans remains strong, therefore management anticipates that loan sales will
remain at levels lower than those experienced during recent years.
Noninterest expenses were $980,000 for the current quarter and $3.03
million for the current nine month period compared to $1.01 million and $3.16
million for the three and nine month periods ended September 30, 1994. As a
percentage of average assets, this is 2.03% for the current nine month period
compared to 2.17% for the first nine months of 1994.
Page 14
<PAGE>
PART II
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
Item 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the holding
company or any subsidiary is a party or to which any of their property is
subject.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
A. Press Release Dated September 26, 1995
September 26, 1995
FOR IMMEDIATE RELEASE
CONTACT: Thomas H. Siemers
President and CEO
721-0808
Thomas H. Siemers, President and CEO of First Franklin Corporation, has
announced that the Board of Directors has declared a dividend of $0.07 per
share for the third quarter of 1995. This is the twenty-eighth straight
quarterly dividend declared by the Board. The quarterly dividend will be
payable on October 16, 1995 to shareholders of record as of October 6.
First Franklin is the parent organization of Franklin Savings, which has
seven offices in Greater Cincinnati and assets of $198,356,000 as of August
31, 1995.
B. Press Release Dated October 12, 1995
FOR IMMEDIATE RELEASE
CONTACT: Thomas H. Siemers
President and CEO
721-0808
First Franklin Corporation, the parent of Franklin Savings and Loan
Company, Cincinnati, Ohio announced today earnings of $308,000 ($.25 per
share) for the third quarter of 1995 and $927,000 ($.75 per share) for the
first nine months of the year. This compares to earnings of $310,000 ($.25 per
share) for the third quarter of 1994 and $1,002,000 ($.82 per share) for the
nine months ended September 30, 1994.
First Franklin conducts its business through its subsidiary Franklin
Savings, with seven full service offices located in Hamilton County, Ohio.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27. Financial Data Schedule
Page 15
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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 FRANKLIN CORPORATION
Daniel T. Voelpel
Vice President and
Chief Financial Officer
Date: October 1, 1995
Page 16
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