<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from > to >
Commission File Number: 0-15777
FIRST INDEPENDENCE CORPORATION
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Michigan 38-2583843
------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
44 Michigan, Detroit, Michigan 48226
----------------------------------------
(Address of Principal Executive Offices)
(313) 256-8400
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 of 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer 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 practicable date:
336,760 shares of Common Stock ($1 par value) as of October 27, 1998.
Transitional Small Business Disclosure Format (check one): Yes ; No X .
--- ---
<PAGE> 2
FIRST INDEPENDENCE CORPORATION
INDEX
PART 1. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements
--------------------
Condensed Consolidated Balance Sheet -
September 30, 1998 (Unaudited).................................. 1
Condensed Consolidated Statements of Income - Three and
Nine Months Ended September 30, 1998 (Unaudited) and
September 30, 1997 (Unaudited).................................. 2
Consolidated Statements of Comprehensive Income - Three
and Nine Months Ended September 30, 1998 (Unaudited) and
September 30, 1997 (Unaudited).................................. 3
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1998 (Unaudited) and
September 30, 1997 (Unaudited).................................. 4
Notes to Condensed Consolidated Financial Statements (Unaudited).. 5
Item 2. Management's Discussion and Analysis or Plan of Operation.......6-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................11
Item 2. Changes in Securities and Use of Proceeds.........................11
Item 3. Defaults upon Senior Securities...................................11
Item 4. Submission of Matters to a Vote of Security Holders...............11
Item 5. Other Information.................................................11
Item 6. Exhibits and Reports on Form 8-K..................................11
SIGNATURES ...............................................................12
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30,
1998
----------------
(Unaudited)
ASSETS
<S> <C>
Cash and due from banks $ 2,674,405
Federal funds sold 10,214,000
----------------
Total cash and cash equivalents 12,888,405
Securities available for sale 37,032,992
Securities held to maturity (fair value of $5,677,715) 5,588,216
----------------
42,621,208
Total loans 40,686,256
Allowance for loan losses (1,143,964)
----------------
39,542,292
Premises and equipment - net 3,108,576
Accrued interest receivable and other assets 1,208,041
----------------
Total assets $ 99,368,522
================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 34,311,731
Interest-bearing 48,550,010
----------------
82,861,741
Short-term borrowings 9,168,187
Accrued expenses and other liabilities 535,813
Long-term debt 900,000
----------------
Total liabilities 93,465,741
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 2,369,784
Retained earnings 112,627
Unrealized gain on securities available for sale 334,102
----------------
Total shareholders' equity 5,902,781
----------------
Total liabilities and shareholders' equity $ 99,368,522
================
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
1.
<PAGE> 4
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
----------Three Months Ended----------- -------------Nine Months Ended-------
September 30, 1998 September 30, 1997 September 30, 1998 September 30, 1997
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Interest income
Loans, including fees $ 1,018,784 $ 1,015,209 $ 2,985,482 $ 3,093,674
Federal funds sold 144,234 173,387 477,746 548,779
Securities 687,526 485,061 2,086,038 1,372,736
--------------- -------------- -------------- --------------
1,850,544 1,673,657 5,549,266 5,015,189
Interest expense
Deposits 470,507 465,793 1,416,661 1,390,095
Other borrowed funds 155,579 71,292 483,247 211,257
--------------- -------------- -------------- --------------
626,086 537,085 1,899,908 1,601,352
--------------- -------------- -------------- --------------
NET INTEREST INCOME 1,224,458 1,136,572 3,649,358 3,413,837
Provision for loan losses 75,000 125,000 225,000 (400,879)
--------------- -------------- -------------- --------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,149,458 1,011,572 3,424,358 3,814,716
Noninterest income
Service charges on deposit accounts 175,366 191,023 521,841 628,551
Net gain on sales of residential real estate loans 2,086 37,088 24,494 158,809
Other noninterest income 83,360 61,015 236,855 119,118
--------------- -------------- -------------- --------------
260,812 289,126 783,190 906,478
Noninterest expense
Salaries and employee benefits 570,459 694,341 1,745,411 2,010,393
Occupancy 290,274 119,335 907,735 339,374
Professional services 77,500 30,000 192,500 173,000
Other noninterest expense 242,206 498,287 686,944 1,642,949
--------------- -------------- -------------- --------------
1,180,439 1,341,963 3,532,590 4,165,716
--------------- -------------- -------------- --------------
INCOME (LOSS) BEFORE FEDERAL INCOME TAX 229,831 (41,265) 674,958 555,478
Federal income tax expense 0 0 0 0
--------------- -------------- -------------- --------------
NET INCOME (LOSS) 229,831 (41,265) 674,958 555,478
Preferred stock dividend requirement 8,550 8,550 25,650 25,650
--------------- -------------- -------------- --------------
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK $ 221,281 $ (49,815) $ 649,308 $ 529,828
=============== ============== ============== ==============
Basic and diluted earnings (loss) per common share $ .66 $ (.15) $ 1.93 $ 1.57
=============== ============== ============== ==============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
2.
<PAGE> 5
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----Three months ended------ -------Nine months ended-------
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net income $ 229,831 $ (41,265) $ 674,958 $ 555,478
Other comprehensive income, net of tax:
Change in unrealized gains (losses)
on securities 444,417 (10,225) 415,387 75,850
------------ ----------- -------------- ------------
Comprehensive income $ 674,248 $ (51,490) $ 1,090,345 $ 631,328
============ =========== ============== ============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3.
<PAGE> 6
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1998 September 30, 1997
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 674,958 $ 555,478
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 365,096 355,018
Amortization of premiums and accretion of
discounts on securities, net 59,983 56,439
Provision (credit) for loan losses 225,000 (400,879)
Net loss on sale/writedown of other assets 72,631
Net change in:
Accrued interest receivable and other assets (40,627) 464,817
Accrued expenses and other liabilities (231,792) (28,837)
--------------- ---------------
Net cash from operating activities 1,052,618 1,074,667
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans (61,403) 5,108,435
Securities available for sale:
Proceeds from maturities and principal paydowns 16,193,923 3,055,939
Purchases (23,092,031) (7,283,999)
Securities held to maturity:
Proceeds from maturities 6,552,329 5,500,000
Purchases (5,526,450)
Premises and equipment expenditures, net (227,767) (167,067)
--------------- ---------------
Net cash from investing activities (634,949) 686,858
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 1,761,988 (1,272,342)
Net change in short-term borrowings (2,949,429) 297,035
Payment of interest on Senior Notes (81,250)
Dividends paid (34,203) (59,850)
--------------- ---------------
Net cash from financing activities (1,221,644) (1,116,407)
--------------- ---------------
Net change in cash and cash equivalents (803,975) 645,118
Cash and cash equivalents at beginning of period 13,692,380 14,321,988
--------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,888,405 $ 14,967,106
=============== ===============
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 1,400,950 $ 1,361,249
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
4.
<PAGE> 7
FIRST INDEPENDENCE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION:
The unaudited condensed consolidated financial statements include the
consolidated results of operations of First Independence Corporation ("the
Corporation") and its wholly-owned subsidiary, First Independence National
Bank of Detroit ("the Bank"). These consolidated financial statements have
been prepared in accordance with the Instructions for Form 10-QSB and Item
310(b) of Regulation S-B and do not include all disclosures required by
generally accepted accounting principles for a complete presentation of the
Corporation's financial condition and results of operations. In the opinion
of management, the information reflects all adjustments (consisting only of
normal recurring accruals) which are necessary in order to make the
financial statements not misleading and for a fair presentation of the
results that may be achieved of operations for such periods. The results
for the period ended September 30, 1998 should not be considered as
indicative of results that may be achieved for a full year. For further
information, refer to the consolidated financial statements and footnotes
included in the Corporation's Annual Report on Form 10-KSB for the year
ended December 31, 1997.
2. EARNINGS (LOSS) PER COMMON SHARE:
Basic earnings (loss) per common share is based on net income (loss)
divided by the weighted average number of common shares outstanding during
the period. Diluted earnings (loss) per common share further assumes the
issue of any potentially dilutive common shares. The weighted average
number of common shares used in the calculation of both basic and diluted
earnings (loss) per common share was 336,760 shares for the three and nine
months ended September 30, 1998 and 1997.
3. COMPREHENSIVE INCOME:
Under a new accounting standard, comprehensive income is now reported for
all periods, effective for both interim and year-end financial statements
for fiscal years beginning after December 31, 1997. Comprehensive income
includes both net income and other comprehensive income. Other
comprehensive income includes the change in net unrealized gains and losses
on securities. Interim financial statements need only disclose total
comprehensive income for each reported period.
- --------------------------------------------------------------------------------
5.
<PAGE> 8
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
SUMMARY OF OPERATIONS
Net income for the third quarter of 1998 was $221,281, or $0.66 per common
share, compared to a net loss of ($49,815) or ($0.15) per common share for the
third quarter of 1997. The increase in net income for the third quarter 1998, as
compared to 1997, was primarily the result of a decrease in the loan loss
provision and a decrease in noninterest expense.
Net income for the nine months ended September 30, 1998 was $649,308, or $1.93
per common share, compared to $529,828, or $1.57 per common share, for the nine
months ended September 30, 1997. The increase was primarily the result of an
increase in net interest income and a decrease in noninterest expense.
Net Interest Income: Net interest income for the third quarter of 1998 was
$1,224,458, an increase of $87,886 from the third quarter of 1997 net interest
income of $1,136,572. Net interest income for the nine months ended September
30, 1998 was $3,649,358, an increase of $235,521 when compared to the nine
months ended September 30, 1997. The increase for both the third quarter and the
first nine months of 1998 as compared to 1997 was attributable to average
earning assets increasing more than average interest-bearing liabilities. This
increase was offset by a reduction in net interest margin due to lower yielding
earning assets and higher rates on deposits.
Provision for Loan Losses: The provision for loan losses in the third quarter of
1998 was $75,000, a decrease of $50,000 from the third quarter of 1997. The
decrease in the need for additional provisions for loan losses is a result of
management's continued efforts on improving the quality of the loan portfolio.
The provision for loan losses for the nine months ended September 30, 1998 was
$225,000, compared to the ($400,879) negative provision for loan losses for the
nine months ended September 30, 1997. The credit to the provision in 1997 was
the result of the February 21, 1997 insurance settlement of $1,441,721 from the
Bank's claims related to "fictitious loans" originated in late 1995 and early
1996. The majority of this amount was recorded as a recovery to the allowance
for loan losses in the first quarter of 1997. Consequently, management reduced
the balance of the allowance for loan losses through a negative provision for
loan losses of $875,000 in the first quarter of 1997, to a level considered
adequate and consistent with management's evaluation of the adequacy of the
allowance for loan losses.
Noninterest Income: Noninterest income for the third quarter of 1998 amounted to
$260,812, a decrease of $28,314, or 9.8%, from the third quarter of 1997. The
decrease was primarily due to a decrease in gains on sales of residential real
estate loans of approximately $35,000.
- --------------------------------------------------------------------------------
(Continued)
6.
<PAGE> 9
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
SUMMARY OF OPERATIONS (Continued)
Noninterest income for the nine months ended September 30, 1998 was $783,190, a
decrease of $123,288 when compared to the nine months ended September 30, 1997.
The decrease was the result of a decrease in service charges on deposits of
$106,710 and a decrease in gains on sales of residential real estate loans of
$134,315, partially offset by an increase in other noninterest income of
$117,737, primarily from additional surcharge fees on ATM usage. The decrease in
gains on sales of residential real estate loans is primarily the result of less
emphasis placed by management on the origination and sale of residential real
estate loans.
Noninterest Expense: Noninterest expense for the third quarter of 1998 amounted
to $1,180,439, a decrease of $161,524, or 12%, from the third quarter of 1997
noninterest expense of $1,341,963. The decrease was primarily the result of a
decrease in salary and wages of $123,882 and other noninterest expense of
$256,081.
For the nine months ended September 30, 1998, noninterest expense of $3,532,590
was down $633,126 as compared to the nine months ended September 30, 1997. The
overall decrease was the result the following: salaries and employee benefits
decreased $264,982, the FDIC assessment decreased $71,312, insurance expense
decreased $46,631, and occupancy decreased $32,576. The decrease in salaries and
employee benefits was the result of employee departures. Less emphasis by
management on the origination and sale of residential real estate loans is also
reflected in the reduction of such noninterest expenses.
BALANCE SHEET ANALYSIS
Liquidity: Federal funds sold were $10,214,000, or 12% of total deposits of
$82,861,741 at September 30, 1998. Total securities available-for-sale at
September 30, 1998 were $37,032,992, or 45% of total deposits. Thus, the Bank
has a liquidity position such that management believes it is capable of funding
loan demand or deposit withdrawals.
Securities: The Bank had approximately $42,620,000 of securities at September
30, 1998, compared to $41,920,000 at December 31, 1997. The increase in
securities is the result of management's strategy to invest the excess funds
made available from an increase in deposits into higher earning assets.
Securities primarily consist of U.S. Treasury and U.S. Government and federal
agency securities.
- --------------------------------------------------------------------------------
(Continued)
7.
<PAGE> 10
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
Loans: The following table sets forth the composition of the Bank's loan
portfolio (in thousands) at September 30, 1998:
Commercial $ 11,780 29.0%
Commercial real estate 8,535 21.0
Residential real estate 14,322 35.2
Consumer 6,049 14.8
---------- --------
$ 40,686 100.0%
========== ========
At September 30, 1998, the Bank had $1,143,423 of loans that were considered
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 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. Impaired loans are those loans
which management does not expect to fully collect all principal and interest
under the original terms of the loan. At September 30, 1998, total nonperforming
and impaired loans amounted to 2.81% of aggregate loans at September 30, 1998,
compared to 10.17% at December 31, 1997.
At September 30, 1998, there were no significant loans other than those
identified above, for which information was known that would cause management to
have serious doubts as to the ability of borrowers to comply with loan repayment
terms.
The allowance for loan losses totaled $1,143,964 at September 30, 1998, compared
to December 31, 1997 of $936,090. The allowance for loan losses represented
2.81% of total loans at September 30, 1998 compared with 2.30% at December 31,
1997. The allowance for loan losses was 100% of nonperforming loans at September
30, 1998 as compared to 22.6% of nonperforming loans at December 31, 1997. 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 third quarter of 1998 aggregated $55,021. The charge
offs are 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 third quarter of 1998 resulted in recoveries of $54,154 on loans
previously charged off.
- --------------------------------------------------------------------------------
(Continued)
8.
<PAGE> 11
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
The table below presents management's allocation of the allowance for loan
losses by loan portfolio at September 30, 1998.
<TABLE>
<CAPTION>
(In thousands) Allowance Percent
--------- -------
<S> <C> <C>
Commercial/commercial real estate $ 518 45%
Real estate mortgage 21 2
Consumer 91 8
Unallocated 514 45
---------- ------
$ 1,144 100%
========== ======
</TABLE>
The following table summarizes activity in the allowance for loan losses during
the nine months ended September 30, 1998.
<TABLE>
<S> <C>
Average loans outstanding during the period $ 41,329,000
================
Allowance for loan losses
Beginning balance $ 936,090
Provision for loan losses 225,000
Charge-offs (144,526)
Recoveries 127,400
----------------
Balance at end of period $ 1,143,964
================
Charge-offs by category
Commercial $ (45,171)
Consumer (97,006)
Real estate mortgages (2,349)
----------------
Total charge-offs $ (144,526)
================
Recoveries by category
Commercial $ 6,397
Consumer 111,151
Real estate mortgages 9,852
----------------
Total recoveries $ 127,400
================
Net loans charged off $ (17,126)
Provision for loan losses as a percent of average loans .54%
Net loans charged off as a percent of average loans .04%
Total loans charged off as a percent of average loans .35%
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
9.
<PAGE> 12
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
Deposits: The following is a summary of the average balances and average rates
paid on deposits for the nine months ending September 30, 1998.
<TABLE>
<CAPTION>
Average Average
(In thousands) Balance Rate
------- ----
<S> <C> <C>
Noninterest-bearing demand deposits $ 32,149
Interest-bearing demand deposits 8,663 2.13%
Savings deposits 14,692 2.33
Time deposits
$100,000 or more * 16,273 3.98
Other time deposits 14,774 4.84
----------
$ 86,551
==========
</TABLE>
* Includes approximately $4.2 million of noninterest-bearing time deposits
from the U.S. Treasury.
Capital Resources: The following table presents the components of Tier 1 Capital
and Total Capital as of September 30, 1998. Both Tier 1 and Total Capital exceed
regulatory minimum requirements of 4% and 8%, respectively. The Tier 1 Leverage
Ratio, also presented below, exceeds the regulatory minimum of 3%.
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---- ----
Ratios (end of period):
Risk-Based Capital Ratios:
<S> <C> <C>
Tier 1 Capital Ratio 12.91% 11.95%
Total Capital Ratio 14.18% 13.20%
Tier 1 Leverage Ratio 6.30% 6.08%
</TABLE>
YEAR 2000 ISSUE
The approach of the Year 2000 presents potential problems to businesses that
utilize computers in their daily operations. Some computer systems may not be
able to properly interpret dates after December 31, 1999, because they use only
two digits to indicate the year in the date. Therefore, a date using "00" as the
year may be recognized as the year 1900 rather than the year 2000.
The Corporation has formed a Year 2000 Committee (the "Committee") to address
the potential problems associated with the Year 2000 computer issue. The
Committee, consisting of directors, officers and employees of the Corporation,
meets on a regular basis and provides regular reports to the Board of Directors
detailing progress with the Year 2000 issue.
- --------------------------------------------------------------------------------
10.
<PAGE> 13
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
Costs to the Corporation related to the Year 2000 issue are estimated to be
approximately $150,000. It is impossible to predict the exact expenses
associated with the Year 2000 issue and additional funds may be needed for
unknown expenses related to Year 2000 testing, training, and education, as well
as system and software replacements.
As with any organization that depends on technology, particularly computer
systems and software, a Year 2000 related failure poses a significant threat to
continued business operations. While the Corporation is doing everything in its
power to ensure Year 2000 readiness, we recognize that the success of our third
party providers is vital to our success. Of primary concern are local utility
and telecommunication companies. These, in addition to other third parties, have
been contacted and we are monitoring their progress towards their own Year 2000
readiness. Another potential risk to the Corporation includes lending and
deposit relationships. The Committee is currently evaluating these two groups
and assessing any potential risks, as well as establishing any necessary
corrective procedures.
Despite careful planning by the Corporation, we recognize there may be
circumstances beyond our control that may prohibit us from operating "as usual"
after December 31, 1999. The Committee is currently in the process of
establishing a contingency plan to address potential Year 2000 problems.
- --------------------------------------------------------------------------------
11.
<PAGE> 14
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 presented 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 nine months ended September 30, 1998.
Item 5. Other Information - none.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits:
(a) Exhibit 27-Financial Data Schedule
Reports on Form 8-K: None
- --------------------------------------------------------------------------------
12.
<PAGE> 15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST INDEPENDENCE CORPORATION
Registrant
Date: November 16, 1998 /s/ William Fuller
------------------ --------------------------------------
William Fuller, President
Date: November 16, 1998 /s/ Rose Ann Lacy
------------------ --------------------------------------
Rose Ann Lacy, Chief Financial Officer
- --------------------------------------------------------------------------------
13.
<PAGE> 16
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,674,405
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,214,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 37,032,992
<INVESTMENTS-CARRYING> 42,621,208
<INVESTMENTS-MARKET> 42,710,707
<LOANS> 40,686,256
<ALLOWANCE> 1,143,964
<TOTAL-ASSETS> 99,638,522
<DEPOSITS> 82,861,741
<SHORT-TERM> 9,168,187
<LIABILITIES-OTHER> 535,813
<LONG-TERM> 900,000
0
2,749,508
<COMMON> 336,760
<OTHER-SE> 2,816,513
<TOTAL-LIABILITIES-AND-EQUITY> 99,368,522
<INTEREST-LOAN> 2,985,482
<INTEREST-INVEST> 2,086,038
<INTEREST-OTHER> 477,746
<INTEREST-TOTAL> 5,549,266
<INTEREST-DEPOSIT> 1,416,661
<INTEREST-EXPENSE> 1,899,908
<INTEREST-INCOME-NET> 3,649,358
<LOAN-LOSSES> 225,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,532,590
<INCOME-PRETAX> 636,675
<INCOME-PRE-EXTRAORDINARY> 636,675
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 636,675
<EPS-PRIMARY> 1.81
<EPS-DILUTED> 1.81
<YIELD-ACTUAL> 0
<LOANS-NON> 673,000
<LOANS-PAST> 427,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,143,423
<ALLOWANCE-OPEN> 936,090
<CHARGE-OFFS> (144,526)
<RECOVERIES> 127,400
<ALLOWANCE-CLOSE> 1,143,964
<ALLOWANCE-DOMESTIC> 1,143,964
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 514,000
</TABLE>
