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 June 30,1996
[ ] 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) (Zip Code)
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 June 30,1996, there were issued and outstanding 1,165,318 shares of
the Registrant's Common Stock.
Transitional Small Business Format (check one)
Yes [ ] NO [X]
-1-
<PAGE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
INDEX
Page No.
Part I Financial Information
Item 1. Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 ............................ 3
Consolidated Statements of Operations and Retained
Earnings - Three and Six Month Periods ended
June 30, 1996 and 1995 ......................................... 4
Consolidated Statements of Cash Flows -
Six Month Periods ended June 30,1996
and 1995 ....................................................... 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 ............................................. 16
Item 5. Press Release Dated June 26, 1996 ............................. 17
Press Release Dated July 11, 1996 ............................. 18
Signatures
-2-
<PAGE>
Part I - Item 1.
<TABLE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, 1996 Dec 31, 1995
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash, including CD's & other interest-earning
deposits of $839 and $5,895 at 6/30/96
and 12/31/95, respectively $2,328 $8,653
Investment securities
Available-for-sale, at market value
(amortized cost of $20,551 and $18,839, respectively) 20,294 18,762
Mortgage-backed securities
Available-for-sale, at market value
(amortized cost of $20,722 and $18,701, respectively) 20,860 18,964
Held-to-maturity, at amortized cost
(market value of $20,068 and 22,051, respectively) 21,133 22,258
Loans receivable, net 145,703 139,419
Real estate owned, net 188 0
Stock in Federal Home Loan Bank
of Cincinnati, at cost 1,690 1,650
Accrued interest receivable 1,320 1,252
Property and equipment, net 1,625 908
Other assets 1,367 1,729
-------- --------
$216,508 $213,595
======== ========
LIABILITIES
Savings accounts $188,336 $184,574
Borrowings 7,235 7,393
Advances by borrowers for taxes
and insurance 435 1,207
Other liabilities 215 113
-------- --------
Total liabilities 196,221 193,287
-------- --------
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; 1,278,396
shares issued at 6/30/96 and 1,270,164
at 12/31/95 13 13
Additional paid in capital 5,879 5,838
Treasury stock, at cost- 113,078 shares at
6/30/96 and 91,878 at 12/31/95 (761) (442)
Unrealized (loss) gain on available-for-sale securities,
net of (benefit) taxes of $(41) at 6/30/96 and
$63 at 12/31/95 (79) 122
Retained earnings, substantially restricted 15,235 14,777
-------- --------
Total stockholders' equity 20,287 20,308
-------- --------
$216,508 $213,595
======== ========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-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 Six Months Ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable .......................... $2,863 $2,685 $5,683 $5,336
Mortgage-backed securities ................ 647 541 1,304 1,071
Investment securities ..................... 355 331 717 606
------ ------ ------ ------
3,865 3,557 7,704 7,013
------ ------ ------ ------
Interest expense:
Savings accounts .......................... 2,286 2,158 4,595 4,170
Borrowings ................................ 117 10 236 28
------ ------ ------ ------
2,403 2,168 4,831 4,198
------ ------ ------ ------
Net interest income .................... 1,462 1,389 2,873 2,815
Provision for loan losses ................... 20 0 41 15
------ ------ ------ ------
Net interest income after
provision for loan losses ............ 1,442 1,389 2,832 2,800
------ ------ ------ ------
Noninterest income:
Gain on loans sold ........................ 2 1 15 3
Service fees on NOW accounts .............. 54 53 102 104
Other income .............................. 42 28 107 63
------ ------ ------ ------
98 82 224 170
------ ------ ------ ------
Noninterest expenses:
Salaries and employee benefits ............ 425 423 834 839
Occupancy expense ......................... 157 145 299 292
Federal insurance premiums ................ 107 100 212 200
Service bureau expense .................... 72 64 141 130
Other expenses ............................ 286 272 621 587
------ ------ ------ ------
1,047 1,004 2,107 2,048
------ ------ ------ ------
Income before federal income taxes .......... 493 467 949 922
Provision for federal income taxes .......... 163 152 314 303
------ ------ ------ ------
Net Income ............................. $ 330 $ 315 $ 635 $ 619
====== ====== ====== ======
continued
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS, CONTINUED
(Dollars in Thousands Except per Share Data)
For The Three Months Ended For The Six Months Ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------- ------------- ------------- -------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
RETAINED EARNINGS-BEGINNING OF PERIOD $14,999 $14,027 $14,777 $13,805
Net income 330 315 635 619
Less: dividends declared (94) (83) (177) (165)
--- --- ---- ----
RETAINED EARNINGS-END OF PERIOD $15,235 $14,259 $15,235 $14,259
======= ======= ======= =======
EARNINGS PER COMMON SHARE (in dollars) $0.27 $0.25 $0.52 $0.50
===== ===== ===== =====
DIVIDENDS DECLARED PER
COMMON SHARE (in dollars) $0.08 $0.07 $0.15 $0.14
===== ===== ===== =====
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-5-
<PAGE>
<TABLE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
For The Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
(Unaudited)
<S> <C> <C>
Cash provided by (used in) operating activities:
Net income $635 $619
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 41 15
Depreciation and amortization 108 101
FHLB stock dividend (58) (52)
Increase in accrued interest receivable (68) (81)
Increase in other assets (418) (135)
Increase (decrease) in other liabilities 102 (228)
Other, net (286) (415)
Loans sold 1,073 287
Disbursements on loans originated for sale (873) (287)
---- ----
Net cash provided by (used in) operating activities 256 (176)
--- ----
Cash provided by (used in) investing activities:
Loan principal reductions 14,828 13,022
Disbursements on mortgage and other
loans purchased or originated for investment (21,176) (11,610)
Repayments on mortgage-backed
securities 3,029 1,661
Purchase of available-for-sale mortgage-backed securities (3,947)
Purchase of available-for-sale investment securities (4,199)
Proceeds from the maturity of available-for-sale
investment securities 2,500
Sale of Federal Home Loan Bank stock 17 109
Capital expenditures (10) (35)
--- ---
Net cash (used in) provided by investing activities (8,958) 3,147
------ -----
continued
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-6-
<PAGE>
<TABLE>
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(Dollars in Thousands)
For The Six Months Ended
June 30, 1996 June 30, 1995
------------- -------------
(Unaudited)
<S> <C> <C>
Cash provided by (used in) financing activities:
Net decrease in passbook accounts
and demand deposits .......................... (1,276) (6,973)
Proceeds from sales of certificates
of deposit ................................... 28,146 38,596
Payments for maturing certificates
of deposit ................................... (28,408) (25,140)
Purchase of deposit accounts ................... 5,300
Repayment of borrowed money .................... (158) (132)
Decrease in advances by borrowers
for taxes and insurance ..................... (772) (713)
Purchase of treasury stock ..................... (319)
Proceeds from sale of common stock ............. 41 61
Payment of dividends ........................... (177) (165)
---- ----
Net cash provided by financing activities ........ 2,377 5,534
----- -----
Net increase in cash ............................. ($ 6,325) $ 8,505
Cash at beginning of period ...................... 8,653 2,883
----- -----
CASH AT END OF PERIOD ............................ $ 2,328 $ 11,388
======== ========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
-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
six month periods ended June 30,1996 are not necessarily indicative of the
results that may be expected for the full year. The December 31,1995 Balance
Sheet data was derived from audited Financial Statements, but does not include
all disclosures required by generally accepted accounting principles.
Effective January 1, 1996 the Company was required to adopt the following
accounting standards; Statement of Financial Accounting Standards ("SFAS") No.
121 "Accounting for the Impairment of Long Lived Assets and for Long Lived
Assets to be Disposed", SFAS No. 122 "Accounting for Mortgage Servicing
Rights", and SFAS No. 123 "Accounting for Stock Based Compensation". The
adoption of these new accounting standards did not have a significant impact
on the Company's Consolidated Statement of Operations for the three and six
month periods ended June 30, 1996.
-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, investment securities 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. Franklin initiated a program in 1995,
through a third party provider, to give 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.
DirectTeller was formed in 1989 by the Company and DataTech Services,
Inc. to develop and market a voice response 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
Intreive, a computer service bureau which specializes in financial
institutions. The agreement with Intrieve gives DirectTeller a percentage of
the profits generated by the inquiry system.
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.
-9-
<PAGE>
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Consolidated Assets increased $2.9 million (1.4%) from $213.6 million at
December 31, 1995 to $216.5 million at June 30, 1996, compared to a $7.2
million (3.7%) increase for the same period in 1995.
Loan disbursements were $22.0 million during the current six month period
compared to $11.9 million during the six months ended June 30,1995.
Disbursements during the Second Quarter 1996 were $10.5 million compared to
$7.7 million during the same quarter in 1995. During the current six month
period loan sales were $1.1 million. At June 30,1996, commitments to originate
mortgage loans or purchase mortgage-backed securities were $1.5 million. At
the same date, $4.1 million of undisbursed loan funds were being held on
various construction loans. Management believes that sufficient cash flow and
borrowing capacity exists to fund these commitments.
Liquid assets decreased $4.8 million during the six months ended June
30,1996 to $22.6 million. As reflected in the Statements of Cash Flows, this
decrease is the result of $250,000 generated by operating activities and $2.38
million generated by financing activities less the $8.96 million used in
investing activities. At June 30,1996 liquid assets were 10.4% of total
assets, which was above management's target of 8 %.
The Company's investment and mortgage-backed securities are classified
based on its current intention to hold to maturity or have available for sale,
if necessary. The following table shows the gross unrealized gains or losses
on mortgage-backed securities and investment securities as of June 30,1996.
During the current six month period, there have been no sales of investments
or mortgage-backed securities. No securities are classified as trading.
<TABLE>
Amortized Market Unrealized Unrealized
Cost Value Gains Losses
(in thousands)
<S> <C> <C> <C> <C>
Available-for-sale
Investment securities ............. $20,551 $20,294 $ 71 $ 328
Mortgage-backed securities ........ $20,722 $20,860 $175 $ 37
Held-to-maturity
Mortgage-backed securities ........ $21,133 $20,068 $ 0 $1,065
</TABLE>
-10-
<PAGE>
At June 30,1996 savings deposits were $188.3 million compared to $184.6
million at December 31,1995. This is an increase of $3.7 million during the
current six month period and $1.1 million during the quarter ended June 30,
1996. During the current quarter the Company assumed, in exchange for $5.1
million in cash, $5.3 million in deposits from Suburban Federal Savings Bank
at a premium of 4%. During the six months ended June 30,1996, core deposits
(transaction and passbook savings accounts) increased $240,000, short term
certificates (two years or less) increased $8.8 million and certificates with
original terms greater than two years decreased $5.3 million. Interest of $2.1
million for the quarter and $4.2 million for the six month period was credited
to accounts. After eliminating the effect of interest credited and the
assumption of the deposit accounts, savings decreased $6.3 million during the
three month period and $5.8 million during the six months ended June 30,1996.
At June 30,1996 borrowings consisted of $7.2 million in fixed-rate
Federal Home Loan Bank advances at an average cost of 6.45%. All advances are
being amortized monthly.
At June 30,1996, $1.4 million of assets were classified substandard,
$355,000 classified loss and $2.7 million classified as special mention
compared to $892,000 as substandard, $306,000 as loss and $2.3 million as
special mention at December 31,1995. Non-accruing and accruing loans
delinquent ninety days or more were $563,000 at June 30,1996 compared to $1.0
million at December 31,1995. At June 30,1996 the Company had identified three
multi-family loans with a carrying value of $169,000 as impaired under
Statement of Financial Accounting Standards No. 114, "Accounting by Creditors
for Impairment of a Loan". A loan is considered impaired when, based on
current information and events, it is probable that the Company will be unable
to collect the scheduled payments of principal and interest when due according
to the contractual terms of the loan agreement.
In management's opinion, adequate reserves are available to protect
against reasonably foreseeable losses that may occur on loans or repossessed
assets. The following table shows the activity that has occurred on loss
reserves during the six months ended June 30,1996.
(Dollars in Thousands)
Balance at beginning of period $947
Charge offs 14
Additions charged to operations 41
Recoveries 0
----
Balance at end of period $974
-11-
<PAGE>
First Franklin continues to enjoy a strong net worth position. At June
30,1996, tangible net worth was $20.1 million, which is 9.3% of assets. At the
same date, tangible book value per share was $17.23 compared to $16.67 at June
30,1995. The following table summarizes, as of June 30,1996, the regulatory
capital position of our subsidiary, Franklin Savings.
<TABLE>
Capital Standard Actual Required Excess Actual Required Excess
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Tangible ............ $13,675 $3,180 $10,495 6.45% 1.50% 4.95%
Core ................ $13,675 $6,361 $ 7,314 6.45% 3.00% 3.45%
Risk-based .......... $14,293 $7,537 $ 6,756 15.17% 8.00% 7.17%
</TABLE>
The deposit accounts of Franklin 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 $0.235 per $100 in deposits. This premium disparity could
have a negative competitive impact on Franklin 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 to $0.90 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. If the plan is enacted, Franklin would be regulated as a
bank, and become subject to the more restrictive activity limits imposed on
national banks. The Company would become a bank holding company, which would
subject it to more restrictive activity limits imposed on bank holding
companies and to capital requirements similar to those imposed on Franklin. In
connection with the recapitalization plan, Congress has proposed tax
legislation which would require the Company to recapture the post 1987
additions to its bad debt reserve and would be unable to utilize the
percentage of taxable income method to compute its reserve in the future.
-12-
<PAGE>
Franklin had $174 million in deposits at March 31, 1995. If the special
assessment is $.85 to $0.90 per $100 in deposits, Franklin will incur an
assessment of $1.48 to $1.57 million. This assessment should be
tax-deductible, but it will reduce earnings and capital. It is expected that
quarterly SAIF assessments would be reduced to approximately $.06 to $.065 per
$100 in deposits.
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, the Company
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 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 increased 4.8% to $330,000 ($0.27 per share) for the three
months ended June 30, 1996 from $315,000 ($0.25 per share) for the same
quarter in 1995. During the current six month period, net income increased
2.6% to $635,000 ($0.52 per share) from $619,000 ($0.50 per share) for the six
months ended June 30, 1995.
Net interest income, before provisions for loan losses, was $1.46 million
for the current quarter and $2.87 million for the first six months of 1996
compared to $1.39 million and $2.82 million, respectively, for the same
periods in 1995. As the tables below illustrate, average interest-earning
assets increased $13.2 million to $208.4 million during the six months ended
June 30,1996 from $195.2 million for the year ended December 31,1995. Average
interest-bearing liabilities increased $11.4 million from $181.2 million for
the year ended December 31,1995 to $192.6 for the current six month period.
Thus, average net interest-earning assets increased $1.8 million. The interest
rate spread (the yield on interest-earning assets less the cost of
interest-bearing liabilities) decreased from 2.50% for the year ended December
31,1995 to 2.37% for the current six month period. This decrease in the spread
reflects an increase in the cost of funds from 4.95% for the year ended
December 31,1995 to 5.02% for the six months ended June 30,1996 and a decrease
in the yield on interest-earning assets to 7.39% during the current six month
period from 7.45% for the year ended December 31,1995.
-13-
<PAGE>
For the Six Months ended June 30,1996
Average
Outstanding Yield/cost
($ in thousands)
Average interest-earning assets
Loans $143,220 7.94%
Mortgage-backed securities 39,814 6.55%
Investments 23,754 5.55%
FHLB stock 1,662 6.98%
----- ----
Total $208,450 7.39%
-------- ----
Average interest-bearing liabilities
Demand deposits $23,480 2.24%
Savings accounts 24,926 2.72%
Certificates 136,861 5.84%
FHLB advances 7,301 6.46%
-----
Total $192,568 5.02%
--------
Net interest-earning assets $15,882 2.37%
=======
For the year ended December 31,1995
Average
Outstanding Yield/cost
($ in thousands)
Average interest-earning assets
Loans $134,910 8.07%
Mortgage-backed securities 36,664 6.19%
Investments 22,019 5.82%
FHLB stock 1,608 6.78%
-----
Total $195,201 7.45%
--------
Average interest-bearing liabilities
Demand deposits $23,950 2.45%
Savings accounts 25,758 2.78%
Certificates 128,988 5.82%
FHLB advances 2,483 6.16%
-----
Total $181,179 4.95%
--------
Net interest-earning assets $14,022 2.50%
=======
-14-
<PAGE>
Noninterest income was $98,000 for the quarter and $224,000 for the six
months ended June 30,1996 compared to $82,000 for the same quarter in 1995 and
$170,000 for the six months ended June 30, 1995. The increase in income when
comparing the two periods is the result of increased loan fees due to the
increase in loan disbursements, Madison Service Corporation income and profits
on the sale of loans.
Noninterest expenses were $1.05 million for the current quarter and $2.11
million for the current six month period compared to $1.0 million and $2.05
million for the three and six month periods ended June 30,1995. As a
percentage of average assets, this is 1.97% for the current six month period
compared to 2.09% for the first six months of 1995.
During 1995 the Board of Directors decided to terminate the Company's
defined benefit pension plan effective February 15, 1996. The settlement of
the vested benefit obligation, by lump sum payments to all covered employees,
is expected to be completed late in 1996 or early in 1997. The Company expects
to recognize a settlement loss of approximately $571,000 when the plan's
obligation is settled. The Company anticipates that it will most likely
replace the terminated plan with a defined contribution plan.
-15-
<PAGE>
PART II
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
Item 1. LEGAL PROCEEDING
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
At the Annual Meeting of Shareholders held on April 23, 1996,
the following item was voted on by the shareholders.
<TABLE>
Voting
Negative
or
Affirmative Withheld Abstentions
<S> <C> <C> <C>
Election of the following director
John L. Nolting 1,003,190 45,910
</TABLE>
-16-
<PAGE>
Item 5. OTHER INFORMATION
A. Press Release Dated June 26, 1996
First Franklin Corporation
401 East Court Street
P.O. Box 85350 / Cincinnati, Ohio 45201-5350 / (513) 721-1031
June 26, 1996
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 $0.08 per share for the second quarter of 1996. This
represents an increase from the $0.07 quarterly dividend previously
paid by First Franklin. This is the thirty-first straight quarterly
dividend declared by the Board. The quarterly dividend will be
payable on July 15, 1996 to shareholders of record as of July 5.
First Franklin is the parent organization of Franklin Savings,
which has seven offices in Greater Cincinnati.
-17-
<PAGE>
B. Press Release Dated July 11, 1996
First Franklin Corporation
401 East Court Street
P.O. Box 85350 / Cincinnati, Ohio 45201-5350 / (513) 721-1031
July 11, 1996
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 $330,000
($.27 per share) for the second quarter of 1996 and $635,000 ($.52
per share) for the first six months of the year. This compares to
earnings of $315,000 ($.25 per share) for the second quarter of 1995
and $619,000 ($.50 per share) for the six months ended June 30, 1995
and earnings of $305,000 ($.25 per share) for the first quarter of
1996.
First Franklin conducts its business through its subsidiary
Franklin Savings, with seven full service offices located in
Hamilton County, Ohio.
-18-
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None
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: August 1,1996
-19-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,489
<INT-BEARING-DEPOSITS> 839
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,154
<INVESTMENTS-CARRYING> 21,133
<INVESTMENTS-MARKET> 20,068
<LOANS> 145,703
<ALLOWANCE> 924
<TOTAL-ASSETS> 216,508
<DEPOSITS> 188,336
<SHORT-TERM> 0
<LIABILITIES-OTHER> 650
<LONG-TERM> 7,235
0
0
<COMMON> 13
<OTHER-SE> 20,274
<TOTAL-LIABILITIES-AND-EQUITY> 216,508
<INTEREST-LOAN> 2,863
<INTEREST-INVEST> 983
<INTEREST-OTHER> 19
<INTEREST-TOTAL> 3,865
<INTEREST-DEPOSIT> 2,286
<INTEREST-EXPENSE> 2,403
<INTEREST-INCOME-NET> 1,462
<LOAN-LOSSES> 20
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,047
<INCOME-PRETAX> 493
<INCOME-PRE-EXTRAORDINARY> 330
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 330
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.27
<YIELD-ACTUAL> 2.76
<LOANS-NON> 407
<LOANS-PAST> 156
<LOANS-TROUBLED> 338
<LOANS-PROBLEM> 3,513
<ALLOWANCE-OPEN> 918
<CHARGE-OFFS> 14
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 924
<ALLOWANCE-DOMESTIC> 386
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 538
</TABLE>
