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 March 31, 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) 256-8428
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
March 31, 1995.
PART I. - FINANCIAL INFORMATION
First Independence Corporation and Subsidiary
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31 December 31
1995 1994
__________________ _________________
<S> <C> <C>
Assets
Cash and due from banks $ 5,241,856 $ 4,432,689
Federal funds sold 10,300,000 11,300,000
Investment securities (market value 31,240,769 28,268,841
of approximately $30,785,260 in
1995 and $23,543,319 in 1994)
Loans
Commercial 7,899,186 16,167,440
Real estate mortgages 21,327,738 12,690,095
Consumer 8,710,205 8,224,820
----------- ----------
37,937,129 37,082,355
Allowance for loan losses (878,390) (804,829)
----------- ----------
Net Loans 37,058,739 36,277,516
Premises and equipment, net 3,171,188 2,765,855
Accrued interest receivable and
other assets 1,200,348 1,139,025
---------- ----------
Total Assets $ 88,212,900 $ 83,933,926
========== ===========
Liabilities and shareholders' equity
Liabilities:
Deposits:
Noninteresting-bearing 27,756,821 26,931,688
Interest-bearing 48,770,177 46,755,213
---------- ----------
76,526,998 73,686,901
Federal funds Purchased and
securities sold under repurchase
agreements 5,898,986 4,823,624
Accrued expenses and other
liabilities 758,685 943,568
Notes Payable 900,000 900,000
---------- ----------
Total Liabliities 84,084,669 80,354,093
Shareholders' Equity:
Preferred Stock 2,650,358 2,220,000
Common stock, $1 par value:500,000
shares authorized: 336,700 shares
issued and outstanding 336,700 336,700
Surplus 2,369,784 2,369,782
Unrealized holding gains(losses)
on investment securities available
for sale (135,602) (279,332)
Accumulated deficit (1,093,069) (1,067,377)
----------- -----------
Total Shareholders' Equity 4,128,231 3,579,833
----------- -----------
Total Liabilities and $ 88,212,900 $ 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
March 1995 March 1994
______________ ______________
<S> <C> <C>
Interest Income:
Interest and fees on loans $ 984,339 $ 777,838
Interest on Investment Securities:
Taxable 412,359 321,484
Tax-exempt 4,687 2,373
Interest on federal funds sold and
securities purchased under
agreements to resell 137,644 79,070
---------- ---------
Total Interest Income 1,539,029 1,180,765
Interest Expense:
Interest On deposits 331,136 298,068
Interest on borrowed funds 83,321 44,539
---------- ---------
Total Interest Expense 414,457 342,607
---------- ---------
Net Interest Income 1,124,572 838,158
Provision For Loan Losses 31,000 90,000
---------- ---------
Net Interest Income after
Provision for Loan Losses 1,093,572 748,158
Other Operating Income:
Service charges on deposit accounts 204,347 220,998
Securities gains, net 0 0
Other 259,548 55,172
---------- ---------
Total Other Operating Income 463,895 276,170
Other Operating Expenses:
Salaries and benefits 655,727 478,667
Net occupancy expense 164,492 122,096
Premises and equipment 44,949 103,521
Other expenses 548,493 402,612
---------- ---------
Total Operating Expenses 1,413,661 1,106,896
---------- ---------
Income before federal income tax 143,806 (82,568)
Federal Income Taxes 0 0
---------- ----------
Net Income $ 143,806 $ (82,568)
========== ==========
Income (loss) per share of common
stock 500,000 shares authorized
336,700 shares outstanding .43 (.25)
========= ==========
</TABLE>
<PAGE>
FIRST INDEPENDENCE NATIONAL BANK OF DETROIT
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash Flow From Operating Activities:
Net Income(Loss) $ 143,806 $ (82,568)
__________ __________
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation And amortization 64,500 73,800
Amortization of premiums and
accreation of discounts 158,374 36,257
Provision for loan losses 31,000 90,000
Securities gains net 0 0
Changes In:
Deferred Income Tax 0 0
Accrued interest receivable and
other assets 61,323 (16,023)
Accrued expenses and other
liabilities (184,883) (31,921)
__________ __________
Net Cash Provided by Operating
activities 274,120 69,545
Cash Flows from Investing Activities:
Proceeds from sales of investment
securities 0 0
Proceeds from maturities of
investment securities-HTM 26,613 1,097,132
Proceeds of investment securities-AFS 116,803 (1,485,000)
Purchase of investment sec-HTM (2,991,772)
Changes in loans 844,744 (3,117,555)
Purchase of premeises and equipment (469,833) (181,460)
___________ ___________
Net Cash Provided by (used in)
Investing Activities (4,130,412) (3,686,883)
Cash Flows From Financing Activities:
Changes in:
Deposits 2,840,097 4,355,055
Federal Funds Purchased and
securities sold under retail
repurchase agreements 1,075,362 552,305
Repayment of notes payable 0 0
Other 0 0
___________ __________
Net Cash Provided By (Used In)
Financing Activities 3,915,459 4,907,340
___________ __________
Net increase (decrease) in cash
and cash equivalents 59,167 1,290,002
Cash and cash equivalents at
beginning of period 15,482,689 9,346,802
___________ __________
Cash and cash equivalents $ 15,541,856 $ 10,636,804
at end of period ============ ===========
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
The consolidated balance sheet as of March 31, 1995, the related
consolidated statements of income for the three month period and
the statement of cash flows for the three month period ended March
31, 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").
In May, 1993 a jury verdict was entered against the Corporation and
a non-operating subsidiary of the Bank in the amount of $320,000,
which was further discussed in the year end 1994 10-KSB report to
the Securities and Exchange .
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 March 31, 1995 totaled $76,526,000 compared to
$73,686,000 at December 31, 1994. At March 31, 1995 Federal Funds
Sold were $10,300,000 compared to $11,050,000 at March 31, 1994.
In the first 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 March 31, 1995, the Bank had $2,000,000 in
investments maturing within three months.
Capital Resources
At March 31, 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 board and management of the Corporation continue to strengthen
the position of the bank as relates to all aspects of the
Comptroller's agreement.
The Corporation was successful in raising additional capital by
the issuance of preferred stock in the amount of $1,500,000.
The Corporation transferred $1,350,000 to the Bank and issued stock to
pay the interest that was in arrears on the Senior Notes. This action
by the board of directors complied with other aspects of the Comptroller's
agreement.
<PAGE>
Results of Operations
Earnings summary
Three months ended March 31, 1995 and 1994
The Company experienced a consolidated net gain for the three month
period ended March 31, 1995 of $146,806 a increase of $226,374 from
the comparable period in 1994. Net interest income increased
$286,414 from the comparable period of 1994 this was due to the
realignment of the loan portfolio in the latter part of 1994 and
early 1995. Average earning assets did not increase but were better
utilized towards profitability. Management has continued a program
of planned growth through increased commercial and real estate lending
with the addition of high quality commercial loans and secured real
estate mortgage loans.
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 $59,000 lower than the $90,000
provision in 1994 as a result of management directive to correct
various deficiencies in the lending area.
Other operating income in the 1995 period decreased $18,826 compared
to the 1994 period. Service charges on demand deposits decreased
$16,723 compared to the same period in 1994 primarily due to a decrease
in NSF and overdraft fees.
Other operating expenses increased by $120,494. The major areas of
increases were in salaries and benefits which were increased $29,922
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. Professional fees were reduced by $17,000 and occupancy
expense was reduced by $22,104. Other expenses in 1995 were $128,922 higher
than the prior period in 1994 due to the writedown of other assets. The
Corporation reviews all expense categories on an ongoing basis and makes
reductions where possible without placing undue restraints on achieving
desired levels of quality performance.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Referance 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
There were no matters to a vote of the security holders
during the quarter ended March 31, 1995 .
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
March 14, 1995 Richard W. Shealey
Date Richard W. Shealey
Chief Executive Officer
March 14, 1995 Rose Ann Lacey
Date Rose Ann Lacey
Chief Financial Officer
March 14, 1995 Paul F. Miller
Date Paul F. MIller
Chief Accounting Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3 MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 5,242
<INTEREST-BEARING DEPOSITS> 0
<FED-FUNDS-SOLD> 10,300
<TRADING ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE>
<INVESTMENTS-CARRYING>
<INVESTMENTS-MARKET> 30,671
<LOANS> 37,887
[ALLOWANCES] (918)
<TOTAL-ASSETS> 88,212
<DEPOSITS> 27,935
<SHORT-TERM> 0
<LIABILITIES-OTHER> 359
<LONG-TERM> 900
<COMMON> 337
2,370
<OTHER-SEC> 0
<TOTAL-LIABILITIES-AND-EQUITY> 88,212
<INTEREST-LOANS> 984
<INTEREST-INVEST> 417
<INTEREST-OTHER> 138
<INTEREST-TOTAL> 1,539
<INTEREST-DEPOSITS> 313
<INTEREST-EXPENSE> 83
<INTEREST-INCOME-NET> 1,125
<LOAN-LOSSES> 31
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,413
<INCOME-PRETAX> 144
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144
<EPS-PRIMARY> .45
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 498
<LOANS-PAST> 896
<LOANS-TROUBLED> 997
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 878
<CHARGE-OFFS> 10
<RECOVERIES> 93
<ALLOWANCE-CLOSE> 878
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 878
</TABLE>
