<PAGE> 1
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 March 31, 1999
[_] 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)
4750 Ashwood Drive Cincinnati Ohio 45241
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (513) 469-5352
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 March 31, 1999 there were issued and outstanding 1,704,373 shares of the
Registrant's Common Stock.
Transitional Small Business Format (check one)
Yes [_] No [X]
<PAGE> 2
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I Financial Information
Item 1. Consolidated Balance Sheets -
March 31, 1999 and December 31, 1998 3
Consolidated Statements of Income and Retained
Earnings - Three Month Periods ended March 31, 1999
and 1998 4
Consolidated Statements of Cash Flows - Three Month
Periods ended March 31, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II Other Information 13
Item 5. Press Release dated March 12, 1999 14
Press Release dated March 23, 1999 15
Press Release dated April 16, 1999 16
Signatures
</TABLE>
2
<PAGE> 3
Part I - Item 1.
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Mar 31,1999 Dec 31,1998
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Cash, including CD's & other interest-earning
deposits of $4,910 and $8,060 at 03/31/99
and 12/31/98, respectively $4,572 $8,369
Investment securities
Available-for-sale, at market value
(amortized cost of $14,320 and
$19,041, respectively) 14,197 19,125
Mortgage-backed securities
Available-for-sale, at market value
(amortized cost of $41,577 and
$43,462, respectively) 41,663 43,522
Held-to-maturity, at amortized cost
(market value of $11,222 and
$12,469, respectively) 11,166 12,355
Loans receivable, net 154,063 150,179
Real estate owned, net 0 0
Stock in Federal Home Loan Bank
of Cincinnati, at cost 1,820 1,789
Accrued interest receivable 1,378 1,387
Property and equipment, net 2,019 2,039
Other assets 1,314 1,550
---------------- ----------------
$232,192 $240,315
LIABILITIES
Savings accounts $194,692 $202,261
Borrowings 15,508 15,576
Advances by borrowers for taxes
and insurance 664 1,091
Other liabilities 383 446
---------------- ----------------
Total liabilities 211,247 219,374
---------------- ----------------
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; 2,010,867
shares issued at 03/31/99 and 12/31/98,
respectively 13 13
Additional paid in capital 6,190 6,190
Treasury stock, at cost- 306,494 shares at
03/31/99 and 12/31/98 respectively (2,630) (2,630)
Unrealized (loss)gain on available-for-sale
securities, net of taxes of $(12) at 03/31/99
and $49 at 12/31/98 (24) 95
Retained earnings, substantially restricted 17,396 17,273
---------------- ----------------
Total stockholders' equity 20,945 20,941
---------------- ----------------
$232,192 $240,315
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE> 4
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Dollars in Thousands Except per Share Data)
<TABLE>
<CAPTION>
For The Three Months Ended
Mar 31,1999 Mar 31,1998
----------- -----------
(Unaudited)
<S> <C> <C>
Interest income:
Loans receivable $2,861 $3,047
Mortgage-backed securities 718 567
Investment securities 321 589
------------- -------------
3,900 4,203
Interest expense:
Savings accounts 2,319 2,548
Borrowings 204 88
------------- -------------
2,523 2,636
------------- -------------
Net interest income 1,377 1,567
Provision for loan losses 20 32
------------- -------------
Net interest income after
provision for loan losses 1,357 1,535
------------- -------------
Noninterest income:
Gain on loans sold 49 49
Gain on sale of investments 0 143
Service fees on NOW accounts 53 55
Other income 75 117
------------- -------------
177 364
Noninterest expense:
Salaries and employee benefits 521 461
Occupancy expense 160 188
Federal insurance premiums 30 32
Service bureau expense 65 58
Other expenses 389 354
------------- -------------
1,165 1,093
Income before federal income taxes 369 806
Provision for federal income taxes 118 269
------------- -------------
Net Income $251 $537
RETAINED EARNINGS-BEGINNING OF PERIOD $17,273 $15,949
Net income 251 537
Less: dividends declared (128) (119)
------------- -------------
RETAINED EARNINGS-END OF PERIOD $17,396 $16,367
EARNINGS PER COMMON SHARE
Basic $0.15 $0.30
Diluted $0.15 $0.30
DIVIDENDS DECLARED PER COMMON SHARE $0.075 $0.067
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE> 5
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended
Mar 31,1999 Mar 31,1998
----------- -----------
(Unaudited)
<S> <C> <C>
Cash provided by (used in) operating activities:
Net income $251 $537
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 20 32
Depreciation and amortization 126 32
FHLB stock dividend (31) (32)
Decrease (increase) in accrued interest receivable 9 (69)
Decrease (Increase) in other assets 236 (47)
(Decrease) increase in other liabilities (63) 48
Other, net 61 109
Loans sold 5,236 2,430
Disbursements on loans originated for sale (5,097) (1,124)
------------- ------------
Net cash provided by operating activities 748 1,916
------------- ------------
Cash provided by (used in) investing activities:
Loan principal reductions 9,079 10,635
Disbursements on mortgage and other
loans purchased or originated for investment (13,125) (13,065)
Repayments on mortgage-backed securities 6,460 1,902
Purchase of available-for-sale mortgage-backed securities (3,489) (3,979)
Sale of available-for-sale mortgage-backed securities 3,697
Purchase of available-for-sale investment securities (3,992) (14,694)
Proceeds from the sale of or maturity of available-for-sale
investment securities 8,715 12,755
Capital expenditures (1) (35)
------------- ------------
Net cash provided by ( used in) investing activities 3,647 (2,784)
------------- ------------
Cash provided by (used in) financing activities:
Net increase (decrease) in deposits (7,569) 2,016
Repayment of borrowed money (68) (73)
Decrease in advances by borrowers
for taxes and insurance (427) (398)
Payment of dividends (128) (119)
------------- ------------
Net cash provided by (used in) financing activities (8,192) 1,426
------------- ------------
Net increase (decrease) in cash ($3,797) $558
Cash at beginning of period 8,369 5,990
------------- ------------
CASH AT END OF PERIOD $4,572 $6,548
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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FIRST FRANKLIN CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the full
year. The December 31, 1998 Balance Sheet data was derived from audited
Financial Statements, but does not include all disclosures required by generally
accepted accounting principles.
EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities" which establishes standards for derivative instruments,
including derivative instruments imbedded in other contracts, and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. Management does not believe that
adoption of this standard will impact the Company because at the current time
the Company does not hold any of the instruments covered by the standard.
SFAS No. 130, "Reporting Comprehensive Income" requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. For interim period reporting,
an organization is required to report a total for comprehensive income.
Comprehensive income for the three months ended March 31, 1999 and 1998 was
$132,000 and $360,000, respectively. The difference between net income and
comprehensive income consists solely of the effect of unrealized gains and
losses, net of taxes, on available-for-sale securities.
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<PAGE> 7
FIRST FRANKLIN CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
First Franklin Corporation ("Company") is a savings and loan holding company,
which 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 acquired all of the common stock of Franklin
issued in connection with its conversion from the mutual to stock form of
ownership, which was completed on January 25, 1988.
The Company's operating philosophy is to be an efficient and profitable
financial services organization with a professional staff committed to
maximizing shareholder value by structuring and delivering quality services that
attract customers and satisfy their needs and preferences. Management's goal has
been to maintain profitability and a strong capital position. It seeks to
accomplish this goal by pursuing the following strategies: (i) emphasizing
lending in the one- to four-family residential mortgage market, (ii) managing
deposit pricing, (iii) controlling interest rate risk, (iv) controlling
operating expenses (v) controlling asset growth, and (vi) maintaining asset
quality.
As a Delaware corporation, First Franklin is authorized to engage in any
activity permitted by the Delaware General Corporation Law. As a unitary savings
and loan holding company, the Company 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, interest-earning deposits, 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. 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 operates seven banking offices in Hamilton County, Ohio, through which
it offers a full range of consumer banking services, including mortgage loans,
credit and debit cards, checking accounts, auto loans, savings accounts,
automated teller machines, and a voice response telephone inquiry system. To
generate additional fee income and enhance the products and services available
to its customers, Franklin also offers annuities, mutual funds, and discount
brokerage services in its offices through an agreement with a third party.
Franklin receives a portion of the sales commissions earned on these products.
Franklin has one wholly-owned subsidiary, Madison Service Corporation
("Madison"). Madison was formed in 1972 to allow Franklin to diversify into
certain types of business which, by regulation, savings and loans were unable to
enter. At the present time, Madison's assets consist solely of cash and
interest-earning deposits. Its only sources of income are the interest earned on
these deposits and the fees received as a result of the agreement with the third
party broker dealer that provides the discount brokerage services at Franklin's
offices.
First Franklin owns 51% of DirectTeller's outstanding common stock. DirectTeller
was formed in 1989 by the Company and Data Tech Services Inc. to develop and
market a voice response telephone inquiry system to allow financial institution
customers to access information about their
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<PAGE> 8
accounts via the telephone and a facsimile machine. Franklin currently offers
this service to its customers. The inquiry system is currently in operation at
Intrieve Inc., a computer service bureau which offers the DirectTeller system to
the savings and loans it services. The agreement with Intrieve gives
DirectTeller a portion of the profits generated by the use of the inquiry system
by Intrieve's clients.
In September 1997 management and the Board of Directors reviewed the Company's
strategic plan and established the strategic objectives for the next few years.
These objectives include greater emphasis on training, technology, new lending
programs, and noninterest income. A strategic planning session has been
scheduled for September 1999 to evaluate the progress made on the current
objectives and establish objectives for the next few years.
Since the results of operations of Madison and DirectTelller 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 decreased $8.13 million (3.4%) from $240.32 million at
December 31, 1998 to $232.19 million at March 31, 1999, compared to a $1.84
million (0.8%) increase for the same period in 1998. During 1999 mortgage-backed
securities decreased $3.05 million, cash and investments decreased $8.73
million, loans receivable increased $3.88 million and deposits decreased $7.57
million.
Loan disbursements were $18.22 million during the current quarter compared to
$14.19 million during the three months ended March 31, 1998. Loan sales during
the current three month period were $5.24 million. At March 31, 1999,
commitments to originate mortgage loans were $1.85 million. At the same date,
$2.44 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 $8.73 million during the three months ended March 31,
1999, to $18.77 million. This decrease reflects loan sales of $5.24 million,
loan and mortgage-backed securities repayments of $15.54 million less loan
disbursements of $18.22 million, a decrease in savings accounts of $7.57 million
and purchases of mortgage-backed securities of $3.49 million. At March 31, 1999,
liquid assets were 8.1% of total assets.
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 March 31, 1999. No
securities are classified as trading.
<TABLE>
<CAPTION>
(in thousands)
Available-for-sale
<S> <C> <C> <C> <C>
Investment securities $14,320 $57 $180 $14,197
Mortgage-backed securities 41,577 217 131 41,663
Held-to-maturity
Mortgage-backed securities 11,166 104 48 11,222
</TABLE>
At March 31, 1999, savings deposits were $194.69 million compared to $202.26
million at December 31, 1998. This is a decrease of $7.57 million during the
current three month period. During the three
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<PAGE> 9
months ended March 31, 1999, core deposits (transaction and passbook savings
accounts) decreased $2.04 million. During the same period, short-term
certificates (two years or less) decreased $300,000 and certificates with
original terms greater than two years decreased $5.23 million. The decline in
certificates reflects less aggressive rates offered on maturing accounts during
the quarter. Interest of $2.06 million during the current quarter was credited
to accounts. After eliminating the effect of interest credited, savings
decreased $9.63 million during the three month period ended March 31, 1999.
Borrowings at March 31, 1999, consisted of the following Federal Home Loan Bank
advances:
<TABLE>
<CAPTION>
Maturity Interest Outstanding
date rate balance
- ----------- ----------- -------------
(In thousands)
<S> <C> <C>
05/01/06 8.15% $192
06/17/08 5.10% 2,000
06/18/08 5.38% 2,000
09/08/08 4.80% 2,000
10/02/08 4.82% 1,000
11/06/08 4.64% 2,000
11/10/08 4.25% 2,000
10/01/10 6.35% 3,075
12/01/10 6.30% 1,241
--------
$15,508
</TABLE>
At March 31, 1999, $1.82 million of assets were classified substandard, $364,000
classified loss and $2.30 million classified as special mention compared to
$1.35 million as substandard, $363,000 as loss and $1.69 million as special
mention at December 31, 1998. Non-accruing loans and accruing loans delinquent
ninety days or more, net of reserves, were $1.31 million at March 31, 1999 and
$1.23 million at December 31, 1998. Because of the increase in delinquent loans
and substandard assets, the Company has enhanced its collection efforts. At
March 31, 1999, the recorded investment in loans for which impairment under SFAS
No. 114 has been recognized was immaterial to the Company's financial
statements.
The following table shows the activity that has occurred on loss reserves during
the three months ended March 31, 1999.
<TABLE>
<CAPTION>
(Dollars in Thousands)
<S> <C>
Balance at beginning of period $1,092
Charge offs 0
Additions charged to operations 20
Recoveries 0
Balance at end of period $1,112
</TABLE>
The Company's capital supports business growth, provides protection to
depositors, and represents the investment of stockholders on which management
strives to achieve adequate returns. First Franklin continues to enjoy a strong
capital position. At March 31, 1999, net worth was $20.95 million, which is
9.02% of assets. At the same date, book value per share was $12.29 compared to
$12.29 at December 31, 1998.
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<PAGE> 10
The following table summarizes, as of March 31, 1999, the regulatory capital
position of our subsidiary, Franklin Savings.
<TABLE>
<CAPTION>
Capital Standard Actual Required Excess Actual Required Excess
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Core $15,613 $9,212 $6,401 6.78% 4.00% 2.78%
Risk-based 16,361 8,443 7,918 15.50% 8.00% 7.50%
</TABLE>
RESULTS OF OPERATIONS
Net income was $251,000 ($0.15 per basic share) for the current quarter compared
to $537,000 ($0.30 per basic share) for the quarter ended March 31, 1998. This
decrease in net income during the current three month period reflects a $190,000
decrease in net interest income, a decline of $143,000 in profits on the sale of
investments when compared to the same period in 1998 and a $72,000 increase in
operating expenses.
Net interest income, before provisions for loan losses, was $1.38 million for
the current quarter compared to $1.57 million for the first quarter of 1998. The
most significant impact on net interest income between periods relates to the
interaction of changes in the volume of and rates earned or paid on
interest-earning assets and interest-bearing liabilities. The following
rate/volume analysis describes the extent to which changes in interest rates and
the volume of interest related assets and liabilities have affected net interest
income during the periods indicated.
<TABLE>
<CAPTION>
For the three month periods ended March 31,
1999 vs 1998
Total
Increase (decrease) due to increase
Volume Rate (decrease)
Interest income attributable to: (Dollars in thousands)
<S> <C> <C> <C>
Loans receivable (1) $7 ($193) ($186)
Mortgage-backed securities 230 (79) 151
Investments (271) 4 (267)
FHLB stock 0 (1) (1)
-------- -------- --------
Total interest-earning assets ($34) ($269) ($303)
Interest expense attributable to:
Demand deposits $4 $4 $8
Savings accounts 3 1 4
Certificates (115) (126) (241)
FHLB advances 129 (13) 116
-------- -------- --------
Total interest-bearing liabilities $21 ($134) ($113)
Decrease in net interest income ($55) ($135) ($190)
(1) Includes non-accruing loans.
</TABLE>
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As the above table indicates, the reduction in net interest income of $190,000
is due to a $303,000 reduction in income on interest-earning assets offset by a
$113,000 reduction in the cost of interest-bearing liabilities. In both cases,
the majority of the change was the resulted from a decline in rates not a change
in volume. This is the result of a decline in market rates, which caused
prepayments on mortgage loans and mortgage-backed securities to accelerate while
new loans or mortgage-backed securities were acquired at lower rates and
maturing certificates of deposit to be renewed at lower rates.
As the tables below illustrate, average interest-earning assets increased $2.76
million to $228.27 million during the three months ended March 31, 1999, from
$225.51 million for the three months ended March 31, 1998. Average
interest-bearing liabilities increased $3.17 million from $208.33 million for
the three months ended March 31, 1998, to $211.50 million for the current three
month period. Thus, average net interest-earning assets decreased $ 403,000 when
comparing the two periods. The interest rate spread (the yield on
interest-earning assets less the cost of interest-bearing liabilities) was 2.06%
for the three months ended March 31, 1999, compared to 2.40% for the same period
in 1998. The decline in the interest rate spread was the result of a decrease in
the yield on interest-earning assets from 7.46% for the three months ended March
31, 1998, to 6.83% for the same three month period in 1999. The decline in the
yield on interest-earning assets is the result of high levels of prepayments on
mortgage loans and mortgage-backed securities, which reduced the yield to 7.42%
on mortgage loans and, after the amortization of purchase premiums, to 5.35% on
mortgage-backed securities.
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<TABLE>
<CAPTION>
For the Three Months ended March 31,1999
Average
outstanding Yield/cost
($ in thousands)
<S> <C> <C>
Average interest-earning assets
Loans $154,228 7.42%
Mortgage-backed securities 53,687 5.35%
Investments 18,557 6.25%
FHLB stock 1,799 6.89%
Total $228,271 6.83%
Average interest-bearing liabilities
Demand deposits $ 23,241 2.10%
Savings accounts 22,749 2.73%
Certificates 149,975 5.45%
FHLB advances 15,531 5.25%
Total $211,496 4.77%
Net interest-earning assets/interest rate spread $ 16,775 2.06%
<CAPTION>
For the Three Months ended March 31,1998
Average
outstanding Yield/cost
($ in thousands)
<S> <C> <C>
Average interest-earning assets
Loans $153,856 7.92%
Mortgage-backed securities 33,959 6.68%
Investments 35,874 6.21%
FHLB stock 1,820 7.03%
--------------- --------------
Total $225,509 7.46%
Average interest-bearing liabilities
Demand deposits $ 22,501 2.03%
Savings accounts 22,234 2.72%
Certificates 158,182 5.77%
FHLB advances 5,414 6.50%
--------------- --------------
Total $208,331 5.06%
Net interest-earning assets/interest rate spread $ 17,178 2.40%
</TABLE>
Noninterest income for the quarter ended March 31, 1999 was $177,000 compared to
$364,000 for the same quarter in 1998. The decrease in noninterest income when
comparing the three month periods is the result of a decline in profits on the
sale of investments and mortgage-backed securities of $143,000, a decline in
loan servicing income and a reduction in the income received from Madison
Service Corporation.
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<PAGE> 13
Noninterest expenses were $1.17 million for the current quarter compared to
$1.09 million for the quarter ended March 31, 1998. As a percentage of average
assets, this is 1.99% for the current three month period compared to 1.89% for
the first three months of 1998. The increase during the current quarter reflects
an increase in compensation and employee benefit costs and advertising expense.
YEAR 2000 ISSUES
As with all financial institutions, Franklin's operations depend almost entirely
on computer systems. Franklin has addressed the potential problems associated
with the possibility that the computers which control or operate Franklin's
operating systems, facilities, and infrastructure may not be programmed to read
four-digit date codes and, upon arrival of the year 2000, may recognize the
two-digit code "00" as the year 1900, causing systems to fail to function or to
generate erroneous data.
Franklin has developed a five stage action plan which assesses the magnitude of
the Year 2000 problem, provides a strategy that neutralizes the impact of these
problems, develops contingency plans to be implemented if critical systems do
not become Year 2000 compliant, and develops testing procedures to insure that
systems are Year 2000 compliant. The status of this effort is reported to the
Board of Directors on a regular basis. The Company's technology committee meets
on a quarterly basis to monitor the progress being made and address any
concerns. The awareness, assessment, renovation and validation phases of this
plan are substantially complete. Although it is unlikely that they will be
needed, the Company is currently developing contingency plans to be implemented
if any of the critical systems fail to perform properly.
All third party providers of software have either certified their product as
compliant or have indicated that they will be compliant by the end of the second
quarter of 1999. The major provider of data processing services to Franklin has
completed its migration to a Year 2000 ready platform operating system and data
base. Customer transaction testing was completed during the fourth quarter of
1998. All computer equipment has been tested for Year 2000 compliance and any
necessary replacements have been made.
Franklin has not identified any significant expenses which are reasonably likely
to be incurred in future periods in connection with this issue and does not
expect to incur significant expense to implement any necessary corrective
actions. No assurance can be given, at this time, that significant expense will
not be incurred in future periods. In the unlikely event that Franklin is
ultimately required to purchase replacement computer systems, programs and
equipment, or that substantial expense must be incurred to make Franklin's
current systems, programs, and equipment Year 2000 compliant, Franklin's net
income and financial condition could be adversely affected.
In addition to possible expense related to its own systems, Franklin could incur
losses if loan payments are delayed due to Year 2000 problems affecting any of
its significant borrowers or impairing the payroll systems of large employers in
Franklin's primary market area. Because Franklin's loan portfolio is highly
diversified with regard to individual borrowers and types of businesses and its
primary market area is not significantly dependent upon one employer or
industry, Franklin does not expect any significant or prolonged difficulties
that could affect net earnings or cash flow.
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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 March 12, 1999
B. Press Release dated March 23, 1999
C. Press Release dated April 16, 1999
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
None
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<PAGE> 15
FIRST FRANKLIN CORPORATION
4750 Ashwood Drive Cincinnati, Ohio 45241
(513) 469-8000 Fax (513) 469-5360
March 12, 1999
FOR IMMEDIATE RELEASE
CONTACT: Thomas H. Siemers
President and CEO
(513) 469-8000
First Franklin Corporation announced its intention to repurchase up to 5% of its
outstanding shares in the open market. The shares will be purchased at
prevailing market prices from time to time over the next year depending upon
market conditions and other considerations. The repurchased shares will be held
as treasury stock, making them available for general corporate purposes
including issuance in connection with the exercise of stock options.
First Franklin is the parent of Franklin Savings which has seven offices in
Greater Cincinnati. The Corporation's common stock is traded on the Nasdaq
National Market under the symbol "FFHS".
15
<PAGE> 16
FIRST FRANKLIN CORPORATION
4750 Ashwood Drive Cincinnati, Ohio 45241
(513) 469-8000 Fax (513) 469-5360
March 23, 1999
FOR IMMEDIATE RELEASE
CONTACT: Thomas H. Siemers
President and CEO
(513) 469-8000
The Board of Directors of First Franklin Corporation declared a dividend of
$0.075 per share for the first quarter of 1999. This is the forty-fifth
consecutive dividend paid by the company. The quarterly dividend will be payable
April 19, 1999 to shareholders of record as of April 2.
First Franklin is the parent of Franklin Savings which has seven offices in
Greater Cincinnati. The Corporation's common stock is traded on the Nasdaq
National Market under the symbol "FFHS".
16
<PAGE> 17
FIRST FRANKLIN CORPORATION
4750 Ashwood Drive Cincinnati, Ohio 45241
(513) 469-8000 Fax (513) 469-5360
April 16, 1999
FOR IMMEDIATE RELEASE
CONTACT: Thomas H. Siemers
President and CEO
(513) 469-8000
First Franklin Corporation, the parent of Franklin Savings and Loan Company,
Cincinnati, Ohio today announced earnings for the first quarter 1999 of $251,000
($0.15 per share) compared to earnings of $537,000 ($0.30 per share) for the
same period in 1998.
Franklin Savings has seven offices in Greater Cincinnati. The Corporation's
common stock is traded on the Nasdaq National Market under the symbol "FFHS".
17
<PAGE> 18
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
/s/ Daniel T. Voelpel
----------------------------------
Daniel T. Voelpel
Vice President and Chief Financial Officer
Date: May 1, 1999
18
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