UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1995
Commission file Number 0-15777
First Independence Corporation
(Exact name of registrant as specified in its charter.)
Michigan 38-2583843
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
44 Michigan Detroit Michigan 48226
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code:
(313) 256-8448
Indicate by check mark whether the registrant(1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:
Common Stock, $1 Par Value - 336,760 shares as of
June 30, 1995.
PART I. - FINANCIAL INFORMATION
First Independence Corporation and Subsidiary
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30 December 31
1995 1994
__________________ _________________
<S> <C> <C>
Assets
Cash and due from banks $ 4,737,684 $ 4,432,689
Federal funds sold 11,750,000 11,050,000
Investment securities (market value 32,302,166 28,268,841
of approximately $29,998,000 in
1995 and $19,742,398 in 1994)
Loans
Commercial 7,583,489 16,167,440
Real estate mortgages 23,009,628 12,690,095
Consumer 9,118,771 8,224,820
----------- ----------
39,711,888 37,082,355
Allowance for loan losses (931,711) (804,829)
----------- ----------
Net Loans 38,780,177 36,277,516
Premises and equipment, net 3,518,974 2,765,855
Accrued interest receivable and
other assets 1,179,709 1,139,025
---------- ----------
Total Assets $ 92,268,710 $ 83,933,926
============= =============
Liabilities and shareholders' equity
Liabilities:
Deposits:
Noninteresting-bearing 28,886,569 26,931,688
Interest-bearing 49,892,264 46,755,213
---------- ----------
78,778,833 73,686,901
Federal funds Purchased and
securities sold under repurchase
agreements 7,435,575 4,823,624
Accrued expenses and other
liabilities 826,585 943,568
Notes Payable 900,000 900,000
---------- ----------
Total Liabliities 87,940,993 80,354,093
Shareholders' Equity:
Preferred Stock 2,658,908 2,220,000
Common stock, $1 par value:500,000
shares authorized: 336,700 shares
issued and outstanding 336,760 336,760
Surplus 2,369,784 2,369,782
Unrealized holding gains(losses)
on investment securities available
for sale 11,524 (279,332)
Accumulated deficit (1,049,259) (1,067,377)
----------- -----------
Total Shareholders' Equity 4,327,717 3,579,833
----------- -----------
Total Liabilities and $ 92,268,710 $ 83,933,926
Shareholders' Equity =========== ============
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
Consolidated Statement Of Income (unaudited)
<TABLE>
<CAPTION>
Three Months Ending Six Months Ending
JUNE 1995 JUNE 1994 June 30,1995 June 30,1994
______________ ______________ _____________ _____________
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 946,092 $ 836,309 $1,930,884 $ 1,614,297
Interest bearing time deposits 10,816 10,816
Interest on Investment Securities:
Taxable 390,009 305,813 275,814 627,297
Tax-exempt 3,967 404 8,654 2,777
Interest on federal funds sold and
securities purchased under
agreements to resell 189,964 85,850 854,162 164,920
---------- --------- ____________ ____________
Total Interest Income 1,530,032 1,239,192 3,069,514 2,419,957
Interest Expense:
Interest On deposits 362,886 297,533 694,022 595,601
Interest on borrowed funds 91,227 44,558 174,548 93,097
---------- --------- ____________ _____________
Total Interest Expense 454,113 346,091 868,570 688,698
---------- --------- ____________ _____________
Net Interest Income 1,076,372 893,101 2,200,944 1,731,259
Provision For Loan Losses 45,000 90,000 76,000 180,000
---------- --------- ____________ _____________
Net Interest Income after
Provision for Loan Losses 1,031,372 803,101 2,124,944 1,551,259
Other Operating Income:
Service charges on deposit accounts 200,457 233,836 404,804 454,834
Securities gains, net 0 11,681 0 11,681
Other 282,853 136,249 542,401 191,421
---------- --------- ____________ _____________
Total Other Operating Income 483,310 381,766 947,205 657,936
Other Operating Expenses:
Salaries and benefits 708,728 546,610 1,364,455 1,025,277
Net occupancy expense 211,915 97,264 376,407 219,360
Premmises and equipment 169,600 113,415 253,411 219,936
Other expenses 351,305 404,515 860,936 807,127
---------- --------- ____________ _____________
Total Operating Expenses 1,441,548 1,161,804 2,855,209 2,268,700
---------- --------- ____________ _____________
Income before federal income tax 73,134 23,063 216,940 (59,505)
Federal Income Taxes 0 0 0 0
---------- ---------- ____________ _____________
Net Income $ 73,134 $ 23,063 216,940 (59,505)
========== ========== ============ =============
Income (loss) per share of common .22 .08 .62 .08
500,000 shares authorized
336,760 shares outstanding
</TABLE>
<PAGE>
FIRST INDEPENDENCE NATIONAL BANK OF DETROIT
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(Amounts in thousands)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash Flow From Operating Activities:
Net Income(Loss) $ 216,940 $ (82,568)
__________ __________
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation And amortization 156,374 73,800
Amortization of premiums and
accreation of discounts 34,263 36,257
Provision for loan losses 76,000 90,000
Securities gains net 0 0
Changes In:
Deferred Income Tax 0 0
Accrued interest receivable and
other assets (40,684) (16,023)
Accrued expenses and other
liabilities (116,983) (31,921)
__________ __________
Net Cash Provided by Operating
activities 325,910 69,545
Cash Flows from Investing Activities:
Invwatments:
Maturities HTM 4,075,134 0
Maturities AFS 121,268
Purchases HTM (6,002,478) 1,097,132
Purchase of investment AFS (2,000,000) (1,485,000)
Changes in loans (2,578,661) (3,117,555)
Purchase of premeises and equipment (909,493) (181,460)
___________ ___________
Net Cash Provided by (used in)
Investing Activities (7,294,230) (3,686,883)
Cash Flows From Financng Activities:
Changes in:
Deposits 4,075,134 4,355,055
Federal Funds Purchased and
securities sold under retail
repurchase agreements 2,611,951 552,305
Issuance of Stock 269,408 0
Other 0 0
___________ __________
Net Cash Provided By (Used In)
Financing Activities 7,973,291 4,907,340
___________ __________
Net increase (decrease) in cash
and cash equivalents 1,004,971 1,290,002
Cash and cash equivalents at
beginning of period 15,482,689 9,346,802
___________ __________
Cash and cash equivalents $ 16,487,660 $ 10,636,804
at end of period ============ ===========
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
June 30, 1995
The consolidated balance sheet as of June 30, 1995, the related
consolidated statements of income for the three month period and
the statement of cash flows for the six month period ended June
30, 1995 and 1994 are unaudited.
In the opinion of management, all normal recurring adjustments
necessary for a fair presentation of such financial statements have
been included. Interim results are not necessarily indicative of
results for a full year.
The consolidated statements include the accounts of First
Independence Corporation ( the "Corporation") and its wholly owned
subsidiary, First Independence National Bank of Detroit ( the
"Bank").
All siginificant intercompany balances and transactions have been
eliminated in consolidation.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Liquidity
Deposits at June 30, 1995 totaled $78,778,833 compared to
$73,686,000 at December 31, 1994. At June 30, 1995 Federal Funds
Sold were $11,750,000 compared to $11,300,000 at December 31, 1994.
In the second quarter of 1995 average deposits recorded a modest
increase over the comparable 1994 quarter. This trend is expected
to continue throughout 1995, however, should a decline occur,
scheduled investment maturities are available to fund deposit
withdrawls. At June 30, 1995, the Bank had $2,000,000 in
investments maturing within three months.
Capital Resources
At June 30, 1995, the capital to assets ratio of the Bank was
7.20% and in compliance with the Comptroller of Currency
requirement of 5.50%, at December 31, 1994 the ratio was 6.21%.
The Corporation issued a total of 438.758 shares of Class C Preferred
Stock, Series 1994-1 as payment for $269,408 of interest on Senior
Notes which had been in arrears and $169,500 of cummulative preferred
dividends which were in arrears on the Class A and Class B Stock.
As previously reported, the holders of the Senior Notes and the Class
A and Class B Preferred Stock had agreed to accept the Series 1994-1
Preferred Stock in lieu of cash for the interest and dividends which
had been accrued and not paid. The issuance of these shares eliminates
the deliguency in payment of interst and dividends with respect to the
Senior Notes and the Class A and Class C Preferred Stock.
Capital Investments
During the first half of 1995 the Corporation has invested approximately
$750,000 in a new computer system, digital imaging system , update and upgrade
additional workstation and modernization of Main Office to accomodate a
Bank Operations Center which were located in leased premises.
The leased premises have been sublet for the remaining 2 years of the
lease term. The move and subleting should reduce operating cost by $25,000
per year.
The new computer system will greatly increase banks efficiency and product
development.
<PAGE>
Results of Operations
Earnings summary
Three months ended June 30, 1995 and 1994
The Company experienced a consolidated net gain for the three month
period ended June 30, 1995 of $73,134 compared to $23,023 in
the comparable period in 1994. Net interest income increased
$290,804 from the comparable period of 1994, This was primarily a
result of average earning assets increasing by $ 9,480,000 of higher
quality assets.
Management and the Board of Directors of the Bank have emphasized
working out problem loans and tightening lending standards to improve
the quality of the loan portfolio. They also have applied stringent
standards to the loan portfolio in order to position the Bank for growth
and increased income in subsequent periods. The provision for loan
losses for the three month period is $45,000 lower than the $90,000
provision in 1994 as a result of management's belief that the reserve for
loan losses is adequately funded and the quality of the loans being added
to the portfolio are higher than in prior periods. The Loan documentation
and review processes also have been strenghtened.
Other operating income in the 1995 period increased $101,544 compared
to the 1994 period.
Other operating expenses increased by $279,000. The major areas of
increases were in salaries and benefits which were increased $162,000
over the same period in 1994. These increases were attributable to
normal salary increases and need to improve the quality of management
within the bank. The premises and equipment rose $56,000 . These increases
represent management's and the board of directors' goals of bringing the
bank up to date with new data processing and individual work
station capabilities to better service our customers needs and allow
for future expansion when the need arises.
The bank has within the last quarter consolidated its operations and accounting
departments by moving them into the main office and subleasing the quarters
they were in in order to defray any additional expenses. It's anticipate that
the consolidation will reduce overall expenses and maximize customer service.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Reference is made to the information reported under legal
proceedings in Form 10-KSB for year ended December 31, 1994.
ITEM 2. Changes in securities - none
ITEM 3. Defaults upon senior securities
Referance is made to the above section on Capital and Resources.
ITEM 4. Submission of matters to vote of security holders
Pursuant to the Poxy statement dated April 18,1995 the May 23 ,1995
annual meeting of shareholders' was held .
At the shareholders' meeting the following persons were elected
by the votes shown below:
For Against
Don Davis 224,174 1,284
Charles Morton 224,144 1,314
Richard Shealey 224,174 1,284
Dennis Silber 224,176 1,282
Gerald Van Wyke 224,176 1,282
Eloise Whitten 224,151 1,307
In addition the shareholders' approved the 1995 Stock Option
Plan for key employees and directors by a vote of 218,780 FOR;
1,853 AGAINST; 608 abstained.
ITEM 5. Other information - none
ITEM 6. Exhibits and reports on Form 8-K
(a) Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the registrant has duly cause this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
Registrant
August 15, 1995 Richard W. Shealey
Date Richard W. Shealey
Chief Executive Officer
August 15, 1995 Rose Ann Lacey
Date Rose Ann Lacey
Chief Financial Officer
August 15, 1995 Paul F. Miller
Date Paul F. MIller
Chief Accounting Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
<PERIOD-TYPE> 6 MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 4,738
<INTEREST-BEARING DEPOSITS> 0
<FED-FUNDS-SOLD> 11,750
<TRADING ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 32,302
<INVESTMENTS-MARKET> 0
<LOANS> 39,712
[ALLOWANCES] (932)
<TOTAL-ASSETS> 92,269
<DEPOSITS> 78,779
<SHORT-TERM> 0
<LIABILITIES-OTHER> 827
<LONG-TERM> 900
<COMMON> 337
2,370
<OTHER-SEC> 0
<TOTAL-LIABILITIES-AND-EQUITY> 88,212
<INTEREST-LOANS> 1,930,844
<INTEREST-INVEST> 1,138,630
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<INTEREST-TOTAL> 3,070
<INTEREST-DEPOSITS> 869
<INTEREST-INCOME-NET> 2,201
<LOAN-LOSSES> 76
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,855
<INCOME-PRETAX> 217
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<NET-INCOME> 217
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