<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act
For the transition period____________________ to
________________________
Commission file number 0-15777
FIRST INDEPENDENCE CORPORATION
------------------------------
(Exact Name of Small Business Issuer in Its Charter)
Michigan 38-2583843
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
44 Michigan, Detroit, Michigan 48226
------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(313) 256-8400
--------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12 (b) of the Exchange Act:
NONE
Securities registered under Section 12 (g) of the Exchange Act:
Common stock, par value $1.00 per share
Check whether the issuer: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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 May 12, 1998
<PAGE> 2
FIRST INDEPENDENCE CORPORATION
INDEX
PAGE
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet March 31, 1998 3
Consolidated Statement of Income
Three Months and YTD Ended March 31, 1998 and 1997 4
Consolidated Statement of Comprehensive Income
Three Months and YTD Ended March 31, 1998 and 1997 5
Consolidated Statement of Cash Flows
Three Months ended March 31, 1998 and 1997 6
Notes to Consolidated Financial Statements 7 - 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 10 - 14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Exhibits and Reports on Form 8-K 15
Signatures 15
2
<PAGE> 3
PART I.
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
<S> <C>
March 1998
----------
Cash and due from banks
$ 2,898,117
Federal funds sold
16,941,000
-------------
Total cash and cash equivalents
19,839,117
Securities available for sale
31,840,757
Securities held to maturity (fair value of $14,194,789)
14,106,400
----------
Total securities
45,947,157
Loans
commercial
11,239,825
Commercial real estate
10,314,332
Residential real estate
13,739,257
Consumer
6,023,391
--------------
41,316,805
Allowance for loan losses
(1,031,233)
-------------
40,285,572
Premises and equipment, net
3,186,256
Accrued interest receivable and other assets
1,409,348
-------------
Total assets
$ 110,667,450
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing
$ 37,172,980
Interest-bearing
55,108,922
-------------
92,281,902
Short-term borrowings
11,812,506
Accrued expenses and other liabilities
524,677
Long-term debt
900,000
--------------
Total liabilities
105,519,085
Shareholders' equity:
Preferred stock
2,749,508
Common Stock, $1 par value: 500,000 shares authorized; 336,760 shares issued and outstanding
336,760
Capital surplus
2,369,782
Accumulated deficit
(287,702)
Unrealized gain (losses) on securities available for sale
(17,108)
Unrealized holding loss on securities transferred
(2,875)
-------------
Total shareholders' equity
5,148,365
-------------
Total liabilities and shareholders' equity
$ 110,667,450
===========
</TABLE>
3
<PAGE> 4
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
STATEMENT OF INCOME
QUARTER AND YTD ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Interest income
loans, including fees $ 972,129 $ 1,068,622
Investment securities 688,529 428,402
Federal funds sold 182,693 172,837
---------- ----------
Total interest income 1,843,351 1,669,861
Interest expense
Deposits 456,505 462,249
Other borrowed funds 166,970 71,698
--------- ----------
Total interest expense 623,475 533,947
Net interest income 1,219,876 1,135,914
Provision (credit) for loan losses 75,000 (874,572)
----------- ----------
Net interest income after provision (credit) for 1,144,876 2,010,486
loan losses
Noninterest income
Service charges on deposit accounts 165,246 200,404
Net realized gains on sales of residential real 18,790 64,628
estate loans
Other noninterest income 98,316 61,377
---------- ----------
Total noninterest income 282,352 326,409
Noninterest expenses
Salaries and employee benefits 588,779 668,755
Occupancy 160,466 164,274
Professional services 67,500 113,000
Insurance expense 6,691 17,995
Other noninterest expenses 363,368 495,970
----------- -----------
Total noninterest expenses 1,186,804 1,459,994
---------- ----------
Income before federal income taxes 240,424 876,901
Federal income taxes - -
------------- ------------
Net income 240,424 876,901
Preferred stock dividends 8,550 8,550
------------ -------------
Income attributable to common stock $ 231,874 $ 868,351
============ ============
Basic earnings per share $ 0.69 $ 2.58
============ ============
Diluted eanings per share $ 0.69 $ 2.58
============ ============
</TABLE>
4
<PAGE> 5
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
STATEMENT OF COMPREHENSIVE INCOME
QUARTER AND YTD ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net Income $ 240,424 $ 876,901
Other comprehensive income, net of tax
Change in unrealized gains and losses on securities (74,867) (63,624)
---------- ----------
Comprehensive income $ 165,557 $ 813,277
========= ==========
</TABLE>
5
<PAGE> 6
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 240,424 $ 876,901
Reconciling items:
Provision (credit) for loan losses 75,000 (874,572)
Depreciation 122,505 117,126
Net amortization of premium and discounts 18,453 18,727
Loss/writedown of other assets - 5,417
Loans originated for sale (403,908) (697,854)
Proceeds from loans originated for sale 271,100 938,232
Net gains on sale of residential real estate loans (18,790) (64,628)
Changes in assets and liabilities:
Interest receivable and other assets (92,306) 119,130
Accrued expenses and other liabilities (106,759) 57,168
------------- ------------
Net cash from operating activities 105,719 495,647
CASH FLOWS FROM INVESTING ACTIVITIES:
Securities available for sale:
Purchases (14,094,375) -
Sales proceeds - -
Principal payments 7,063,923 1,007,707
Securities held to maturity
Purchases - (2,471,213)
Maturities 2,910,000 1,500,000
Net change in loans (652,713) 4,067,423
Premises and equipment expenditures, net (62,856) (56,313)
------------- -----------
Net cash from investing activities (4,836,021) 4,047,604
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits 11,182,149 (6,659,288)
Net change in short term borrowings (305,110) (867,806)
------------ ------------
Net cash from financing activities 10,877,039 (7,527,094)
---------- -----------
Net change in cash and ca6sh equivalents 6,146,737 (2,983,843)
Cash and cash equivalents at beginning of year 13,692,380 14,321,988
---------- ----------
Cash and cash equivalents at end of year $ 19,839,117 $ 11,338,145
=========== ==========
Supplemental disclosure of cash flow information:
Cash paid for interest 604,725 481,285
Loans transferred to other real estate 149,628 -
</TABLE>
6
<PAGE> 7
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
1. The consolidated balance sheet as of March 31, 1998, the related
consolidated statements of income for the three months and YTD ended March 31,
1998 and 1997, and the statement of cash flows for the three month period
ended March 31, 1998 and 1997 are unaudited.
2. 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.
3. 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 significant
intercompany balances and transactions have been eliminated in consolidation.
4. Securities are classified as held to maturity and carried at amortized
cost when management has the positive intent and ability to hold them to
maturity. Securities are classified as available for sale when they might be
sold before maturity. Securities available for sale are carried at fair value,
with unrealized holding gains and losses reported separately in shareholders'
equity. Securities are written down to fair value with a charge to net income
when a decline in fair value is not considered temporary.
Gains and losses on sales of securities are determined using amortized
cost of the specific security sold. Interest income includes amortization of
purchased premiums and discounts.
5. Loans are reported at the principal balance outstanding, net of deferred
loan fees and costs, and the allowance for loan losses. Interest income is
reported on the interest method and includes amortization of net deferred loan
fees and costs over the loan term. Interest income is not reported when full
loan repayment is in doubt, typically when payments are past due 90 days (180
days for residential mortgages). Payments received on such loans are reported
as principal reductions.
6. The allowance for possible losses on loans is maintained at a level
believed adequate by management to absorb potential losses from specific assets
identified as having greater than a normal risk of loss as well as losses from
the remainder of the portfolio. Management's determination of the level of the
allowance is based upon an evaluation of the portfolio, past experience,
current economic conditions, size and composition of the portfolio, collateral
location and values, cash flow positions, industry concentrations,
delinquencies and other relevant factors.
Loan impairment is reported when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of
similar nature such as residential mortgage, consumer, and credit card loans,
and on individual loan basis for other loans. If a loan is impaired, a portion
of the allowance is allocated so that the loan is reported, net, at the present
value of estimated cash flows using the loan's existing rate or at the fair
value of the collateral if the loan is collateral dependent. When credit
analysis of a borrower's operating results and financial condition indicates
that the underlying cash flows of the borrower's business are
7
<PAGE> 8
not adequate to meet its debt service requirements, including the Bank's loans
to the borrower, the loan is evaluated for impairment. Often this is
associated when payments are delayed, typically 90 days or more, or when the
internal grading system indicates a substandard or doubtful classification.
Nonaccrual loans are often also considered impaired.
The following table details information concerning nonperforming, non-accrual,
and other impaired loans as of March 31, 1998.
(in thousands)
<TABLE>
<S> <C>
Non-accrual loans 827
Impaired loans 1,159
Loans past due 90 days or more 465
------
Total 2,451
======
</TABLE>
Interest that would have been accrued on the non-accrual loans at March 31,
1998, had they been on accrual status would have been approximately $27,500.
7. Premises and equipment are reported net of accumulated depreciation.
Depreciation expense is calculated on the straight-line method over the assets'
useful lives. These assets are reviewed for impairment under Financial
Accounting Standard No. 121 when events indicate the carrying value amount may
not be recoverable.
8. Other real estate acquired in settlement of loans is initially reported at
estimated fair value at acquisition. After acquisition, a valuation allowance
reduces the reported amount to the lower of the initial amount or fair value
less costs to sell. Expenses, gains and losses on disposition, and changes in
the valuation allowance are reported in net loss on other real estate.
9. Income tax expense is the sum of the current year income tax due or
refundable and the change in deferred tax assets and liabilities. Deferred tax
assets and liabilities are the expected future tax consequences of temporary
differences between the carrying amounts and tax bases of assets and
liabilities, computed using enacted tax rates. A valuation allowance, if
needed, reduces tax assets to the amount expected to be realized. No federal
income taxes were paid in 1997 or the first quarter of 1998.
10. Basic earnings per share is based on weighted-average common shares
outstanding. Diluted earnings per share further assumes issue of any dilutive
potential common shares. The accounting standard for computing earnings per
share was revised for 1997, and all earnings per share previously reported are
restated to follow the new standard.
11. The Financial Accounting Standards Board issued SFAS No, 130, Reporting
Comprehensive Income, which is effective for both interim and year-end
financial statements for fiscal years beginning after December 15, 1997. SFAS
No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, and losses) in a full set of
general-purpose financial statements.
8
<PAGE> 9
Comprehensive income is defined as all changes in equity other than those
resulting from investments by owners or distributions by owners. Net income is,
therefore, a component of comprehensive income. The most common items of other
comprehensive income are unrealized gains or losses on securities available for
sale. Interim financial statements need only disclose total comprehensive
income for each reported period. No disclosure is required if the Company has
no items of other comprehensive income in any reported period included in the
financial statements.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
SUMMARY OF OPERATIONS
Net income for the first quarter of 1998 was $240,424, or $0.69 per share,
compared to net income of $876,901 or $2.58 per share for first quarter 1997.
The decrease in net income for first quarter 1998, as compared to 1997,
resulted from a lower loan loss provision for the first quarter of 1997 as
compared to first quarter 1998. The loan loss provision for the first quarter
in 1997 was a credit of $874,572 as compared to a charge of $75,000, in 1998.
The credit to loan loss provision in 1997 resulted from the February 21, 1997,
insurance settlement of $1,444,721 from its fidelity insurance underwriters in
settlement of the Bank's claims related to the fictitious "loans" made in late
1995 and January 1996. As a result, the Bank recorded a recovery of $1,137,000
to the allowance for loan losses for amounts previously charged off related to
the fictitious "loans". Subsequently, the allowance was reduced through a
negative provision in the first quarter of 1997 to a level considered adequate,
consistent with management's evaluation of the allowance.
Net Interest Income
Net interest income in the first quarter of 1998 was $1,219,876, an increase of
$83,962 from first quarter 1997 net interest income of $1,135,914. The
increase was attributable to average earning assets increasing more than
average interest bearing liabilities by $3,882,000. This increase was offset
by a reduction in net interest margin, in 1998 from 1997, of 30 basis points.
Net interest margin decreased 30 basis points due to lower yielding earning
assets and higher rates on deposits.
Provision for Possible Credit Losses
The provision for possible credit losses in the first quarter in 1998 was
$75,000, an increase of $949,572 from the first quarter 1997 credit to
provision for possible credit losses of $874,572. The increase resulted from
the February 21, 1997, insurance settlement of $1,444,721 described above. A
detailed analysis of the related allowance for possible credit losses,
charge-offs, recoveries, and ratios is presented on page 13.
Noninterest Income
Noninterest income for the first quarter of 1998 amounted to $282,352, a
decrease of $44,057, or 13.50 percent, from first quarter 1997 noninterest
income of $326,409. The decrease was primarily due to a decrease in gains on
sales of residential real estate loans of $46,000, and a decrease in service
charges on deposit accounts of $35,000. This decrease was partially offset by
an increase in other noninterest income of $37,000. The increase in other
noninterest income was due to ATM surcharge fees.
Noninterest Expenses
Noninterest expenses for the first quarter of 1998 amounted to $1,186,804, a
decrease of $273,190, or 18.71
10
<PAGE> 11
percent, from first quarter 1997 noninterest expense of $1,459,994. The
decrease was primarily the result of a decrease in salary and wages of $80,000,
professional fee expense of $45,500, FDIC assessment of $28,000, write-down of
other assets $16,000, single business tax of $39,000, and insurance expense of
$11,000.
BALANCE SHEET ANALYSIS
LIQUIDITY
Deposits at March 31, 1998 totaled $92,281,902 while federal funds sold were
$16,941,000 (18.36% of total deposits). Total securities available-for-sale at
March 31, 1998 were $31,840,757 (34.50% of total deposits). In addition, $5.7
million (6.19% of total deposits) of the Bank's $45.9 million of securities
will mature within one year. Thus, the bank has a liquidity position such that
management believes it is capable of funding loan demand or deposit
withdrawals.
INVESTMENTS
The Bank had $45,947,157 of investment securities at March 31, 1998, compared
to $41,920,025 of such securities at December 31, 1997. The following is a
summary of contractual maturities and weighted average yields for the
investment portfolio at March 31, 1998. Yields are not calculated on a tax
equivalent basis.
<TABLE>
<CAPTION>
Within After One But After Five But After Ten
One Year Within Five Years Within Ten Years Years Total
--------- ----------------- ---------------- ----- -----
<S> <C> <C> <C> <C> <C>
Available for sale
U.S. Treasury $ - $ 4,069 $ - $ - $ 4,069
U.S. Government Agencies 1,041 16,250 10,080 - 27,371
Mortgage-backed 186 48 - - 234
Other - - - 167 167
------- -------- --------- -------- ---------
Total $ 1,227 $ 20,367 $ 10,080 $ 167 $ 31,841
======= ======== ========= ========= ========
Weighted average yield 6.04% 6.14% 6.83% 5.98% 6.16%
Held to maturity
U.S. Treasury $ 2,990 $ 3,998 $ - $ - $ 6,988
U.S. Government Agencies 1,495 5,623 - - 7,118
------- -------- ------------ ---------- -------
Total $ 4,485 $ 9,621 $ - $ - $14,106
======== ========= ============= =========== =======
Weighted average yield 5.73% 6.14% - - 6.01%
</TABLE>
11
<PAGE> 12
LOANS
The following table sets forth the composition of the Bank's loan portfolio at
March 31, 1998.
<TABLE>
<S> <C> <C>
Commercial $11,240 27.20%
Commercial Real Estate 10,314 24.96
Residential Real Estate 13,740 33.26
Consumer 6,023 14.58
------- ------
$41,317 100.00%
======= ======
</TABLE>
At March 31, 1998, the Bank had $2,451,000 of loans that were nonperforming.
Nonperforming loans include non-accrual loans, loans with principal or interest
past due 90 days or more, and other impaired loans. Non-accrual loans are
those nonperforming and/or impaired loans on which the Bank does not accrue
interest income. Loans are placed on non-accrual status when principal or
interest is in default for a period of 90 days or more unless the loan is in
the process of collection and is well secured so that delinquent principal and
interest would be expected to be satisfied from the collateral. Nonperforming
loans and non-accrual loans are all considered "impaired loans" under SFAS 114,
"Accounting by Creditors for Impairment of a Loan," and SFAS 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and Disclosure." At
March 31, 1998, total nonperforming and impaired loans amounted to 5.93% of
aggregate loans at March 31, 1998, compared to 10.17% at the end of 1997.
The table included on page 13 details information concerning nonperforming,
non-accrual and impaired loans, by loan type, as of March 31, 1998. The amount
of interest income that would have been accrued on the loans on non-accrual
status at March 31, 1998, had those loans remained current, was approximately
$27,500.
At March 31, 1997, there were no significant loans other than those included in
the above table, for which information was known that caused management to have
serious doubts as to the ability of borrowers to comply with loan repayment
terms.
The allowance for loan losses totaled $1,031,233 at March 31, 1998, compared to
1997 year end balance of $936,090. The allowance for loan losses represented
2.50% of loans compared with 2.30% at December 31, 1997. The allowance for
loan losses was 79.80% of the aggregate of non-accrual loans and loans
delinquent 90 days or more at March 31, 1998. At December 31, 1997, the
allowance was 32.29% of such loans. The total amount of the allowance for loan
losses is based on management's evaluation of the portfolio, past experience,
economic conditions, composition of the portfolio, collateral location and
values, cash flow positions of the borrowers, delinquencies and other factors
deemed relevant. The allowance for loan losses, in management's opinion, is
adequate taking all such considerations into account.
Loans charged off in the first quarter of 1998 aggregated $32,734. The charge
offs were part of the Bank's continuing effort to address problem loans in the
loan portfolio and improve the quality of the loan assets. The Bank's
collection efforts in the first quarter of 1998 resulted in recoveries of
$52,877 on loans previously charged off.
12
<PAGE> 13
The table below presents management's allocation of the allowance for loan
losses at March 31, 1998.
<TABLE>
<CAPTION>
(in thousands) Allowance Percent*
--------- --------
<S> <C> <C>
Commercial/Commercial real estate 704 52%
Real estate mortgage 21 33
Consumer 90 15
Unallocated 216 -
------- ------
1,031 100%
====== ======
</TABLE>
*Represents percent of loans in each category as a percent of total loans
The following table summarizes activity in allowance for loan losses during the
first quarter of 1998.
<TABLE>
<S> <C>
Average loans outstanding during the period
$40,591,970
==========
Allowance for loan losses:
Beginning balance
936,090
Provision for credit losses
75,000
Charge-Offs
(32,734)
Recoveries
52,877
-----------
Balance at end-of-period
1,031,233
=========
Charge-Offs by category
Commercial
(2,321)
Consumer
(28,064)
Real-Estate mortgages
(2,349)
----------
Total charge-offs
(32,734)
Recoveries by category
Commercial
2,152
Consumer
48,054
Real-Estate mortgages
2,671
-----------
Total recoveries 52,877
==========
Net loans charged off
20,143
Provision for loan losses as a percent of average loans
.18%
Net loans charged off as a percent of average loans
(.05)%
Total loans charged off as a percent of average loans
.08%
</TABLE>
13
<PAGE> 14
DEPOSITS
The following is a summary of the average balances and average rates paid on
deposits for the quarter ending March 31, 1998.
<TABLE>
<CAPTION>
Average Balance Average Rate
--------------- ------------
<S> <C> <C>
(in thousands)
Non-interest bearing demand deposits 32,669
Interest bearing demand deposits 9,876 2.09
Savings deposits 14,663 2.29
Time deposits
$100,000 or more * 15,403 3.74
Other time deposits 14,710 4.81
------
Total 87,321
======
</TABLE>
* Includes approximately $4.6 million of non-interest bearing time deposits
from the U.S. Treasury.
CAPITAL RESOURCES
The following table presents the components of Tier 1 Capital and Total
Capital. Both Tier 1 and Total Capital exceed regulatory minimum requirements
of 4.0 percent and 8.0 percent, respectively. The Tier 1 Leverage Ratio, also
presented below, exceeds the regulatory minimum of 3.0 percent.
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
<S> <C> <C>
Capital Components:
Tier 1 Capital:
Common Shareholders' Equity $ 6,060,197 $ 5,881,141
Adjustments 19,985 (54,882)
----------- -----------
Total Tier 1 Capital $ 6,080,182 $ 5,826,259
========= ==========
Total Capital:
Common Shareholders' Equity $ 6,060,197 $ 5,881,141
Adjustments 19,985 (54,882)
Qualifying Allowance for Possible Credit Losses 1,031,738 936,090
--------- ----------
Total Capital $ 7,111,920 $ 6,762,349
========= =========
Ratios (end of period):
Risk-Based Capital Ratios:
Tier 1 Capital Ratio 12.21% 11.95%
Total Capital Ratio 13.47% 13.20%
Tier 1 Leverage Ratio 5.75% 6.08%
</TABLE>
14
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings. The judgment for wrongful termination, entered
against the Corporation in October 1994, in the amount of $320,000 was
reversed in March 1997 by the Michigan Court of Appeals holding that
there was no liability by the Corporation, the Bank's subsidiary, or
any of the individual defendants. The plaintiff sought leave of the
Michigan Supreme Court to appeal the reversal by the Michigan Court of
Appeals. On March 17, 1998, the Michigan Supreme Court denied the
appeal holding that the questions should not be reviewed by the
Court.
ITEM 2. Changes in Securities - none.
ITEM 3. Defaults upon senior securities.
None
ITEM 4. Submission of matters to vote of security holders.
There were no matters submitted to a vote of the security holders
during the quarter ended March 31, 1998.
ITEM 5. Exhibits and reports on Form 8-K.
Exhibits:
(a)Exhibit 27-Financial Data Schedule
Reports on Form 8-K: None
15
<PAGE> 16
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934, the
registrant has duly caused this to report on Form 10-QSB to be signed on
behalf of the undersigned thereunto duly authorized.
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
Registrant
May 12, 1998 /s/ Don Davis
-------------------------
Don Davis
Chief Executive Officer
May 12, 1998 /s/ Rose Ann Lacy
------------------------
Rose Ann Lacy
Chief Financial Officer
Chief Accounting Officer
16
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,898,117
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 16,941,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 31,840,757
<INVESTMENTS-CARRYING> 14,106,400
<INVESTMENTS-MARKET> 14,194,789
<LOANS> 41,316,805
<ALLOWANCE> 1,031,233
<TOTAL-ASSETS> 110,667,450
<DEPOSITS> 92,281,902
<SHORT-TERM> 11,812,506
<LIABILITIES-OTHER> 524,677
<LONG-TERM> 900,000
0
2,749,508
<COMMON> 336,760
<OTHER-SE> 2,062,097
<TOTAL-LIABILITIES-AND-EQUITY> 110,667,450
<INTEREST-LOAN> 972,129
<INTEREST-INVEST> 688,529
<INTEREST-OTHER> 182,693
<INTEREST-TOTAL> 1,843,351
<INTEREST-DEPOSIT> 456,505
<INTEREST-EXPENSE> 623,475
<INTEREST-INCOME-NET> 1,219,876
<LOAN-LOSSES> 75,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,186,804
<INCOME-PRETAX> 240,424
<INCOME-PRE-EXTRAORDINARY> 240,424
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 240,424
<EPS-PRIMARY> 0.69
<EPS-DILUTED> 0.69
<YIELD-ACTUAL> 0
<LOANS-NON> 827,000
<LOANS-PAST> 465,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,159,000
<ALLOWANCE-OPEN> 936,090
<CHARGE-OFFS> 32,734
<RECOVERIES> 52,877
<ALLOWANCE-CLOSE> 1,031,233
<ALLOWANCE-DOMESTIC> 815,315
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 215,918
</TABLE>
