<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 March 31, 2000
--------------
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 April 30, 2000.
Transitional Small Business Disclosure Format (check one): Yes ; No X .
---- ----
<PAGE> 2
FIRST INDEPENDENCE CORPORATION
INDEX
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION Page No.
--------
<S> <C>
Item 1. Financial Statements
Independent Accountant's Report.................................................... 1
Condensed Consolidated Balance Sheet -
March 31, 2000 (Unaudited)....................................................... 2
Condensed Consolidated Statements of Income - Three
Months Ended March 31, 2000 (Unaudited) and
March 31, 1999 (Unaudited)....................................................... 3
Consolidated Statements of Comprehensive Income - Three
Months Ended March 31, 2000 (Unaudited) and
March 31, 1999 (Unaudited)....................................................... 4
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2000 (Unaudited) and
March 31, 1999 (Unaudited)....................................................... 5
Notes to Condensed Consolidated Financial
Statements (Unaudited)........................................................... 6-7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................ 8-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................................. 13
Item 2. Changes in Securities and Use of Proceeds.......................................... 13
Item 3. Defaults upon Senior Securities.................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders................................ 13
Item 5. Other Information.................................................................. 13
Item 6. Exhibits and Reports on Form 8-K................................................... 13
SIGNATURES ................................................................................... 13
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Shareholders
First Independence Corporation
Detroit, Michigan
We have reviewed the condensed consolidated balance sheet of First Independence
Corporation as of March 31, 2000, and the related condensed consolidated
statements of income, comprehensive income and cash flows for the quarters ended
March 31, 2000 and 1999. These financial statements are the responsibility of
the Corporation's management.
We conducted our review in accordance with standards established by the AICPA. A
review of interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
Crowe, Chizek and Company LLP
Grand Rapids, Michigan
May 9, 2000
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<PAGE> 4
FIRST INDEPENDENCE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31,
2000
----------------
(Unaudited)
<S> <C>
ASSETS
Cash and due from banks $ 7,646,028
Federal funds sold 17,770,000
----------------
Total cash and cash equivalents 25,416,028
Securities available for sale 56,925,618
Securities held to maturity (fair value of $1,002,500) 1,006,341
Federal Home Loan Bank and Federal Reserve Bank stock 465,300
Total loans 45,695,727
Allowance for loan losses (957,609)
----------------
44,738,118
Premises and equipment - net 4,120,207
Accrued interest receivable and other assets 3,488,096
----------------
Total assets $ 136,159,708
================
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 50,890,116
Interest-bearing 50,273,033
----------------
101,163,149
Short-term borrowings 27,860,874
Accrued expenses and other liabilities 789,072
Long-term debt 900,000
----------------
Total liabilities 130,713,095
Mandatorily redeemable shares under ESOP, at fair value 365,400
Shareholders' equity
Preferred stock 2,482,086
Common stock, $1 par value: 1,000,000 shares authorized;
336,760 shares issued and outstanding; 301,960 shares outstanding after
reduction for 34,800 mandatorily
redeemable shares under ESOP 301,960
Capital surplus 2,039,182
Retained earnings 1,507,267
Accumulated other comprehensive loss (1,249,282)
----------------
Total shareholders' equity 5,081,213
----------------
Total liabilities and shareholders' equity $ 136,159,708
================
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
2.
<PAGE> 5
FIRST INDEPENDENCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
---- ----
<S> <C> <C>
Interest income
Loans, including fees $ 989,242 $ 968,418
Taxable securities 870,012 799,294
Federal funds sold and other 340,118 232,188
-------------- ---------------
2,199,372 1,999,900
Interest expense
Deposits 447,832 436,443
Other borrowed funds 391,132 260,094
-------------- ---------------
838,964 696,537
-------------- ---------------
NET INTEREST INCOME 1,360,408 1,303,363
Provision for loan losses 30,000 45,000
-------------- ---------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,330,408 1,258,363
Noninterest income
Service charges on deposit accounts 186,552 177,430
ATM income 321,483 51,636
Other noninterest income 17,997 21,679
-------------- ---------------
526,032 250,745
Noninterest expense
Salaries and employee benefits 665,279 660,574
Occupancy 366,152 303,118
Professional services 37,500 59,000
Other noninterest expense 401,238 252,572
-------------- ---------------
1,470,169 1,275,264
-------------- ---------------
INCOME BEFORE INCOME TAX EXPENSE 386,271 233,844
Federal income tax expense 135,360 0
-------------- ---------------
NET INCOME 250,911 233,844
Preferred stock dividends 17,100 17,100
-------------- ---------------
INCOME ATTRIBUTABLE TO COMMON STOCK $ 233,811 $ 216,744
============== ===============
Basic and diluted earnings per common share $ 0.69 $ 0.64
======== =======
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3.
<PAGE> 6
FIRST INDEPENDENCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
---- ----
<S> <C> <C>
Net income $ 250,911 $ 233,844
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on securities (86,709) (399,455)
------------ ------------
Comprehensive income (loss) $ 164,202 $ (165,611)
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
4.
<PAGE> 7
FIRST INDEPENDENCE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 250,911 $ 233,844
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 198,921 139,859
Amortization of premiums and discounts on
securities, net 1,265 24,404
Provision for loan losses 30,000 45,000
Net change in:
Accrued interest receivable and other assets 62,911 (318,832)
Accrued interest payable and other liabilities 85,491 121,111
--------------- ----------------
Net cash from operating activities 629,499 245,386
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans (1,078,789) (732,983)
Securities available for sale:
Proceeds from maturities and principal paydowns 1,779 4,023,577
Purchases (9,958,750) (5,298,200)
Securities held to maturity:
Proceeds from maturities 1,000,000
Premises and equipment expenditures, net (540,652) (124,300)
--------------- ----------------
Net cash from investing activities (10,576,412) (2,131,906)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits (16,473,750) (10,408,852)
Net change in short-term borrowings (5,893,730) 3,059,886
Dividends paid on preferred stock (17,100)
--------------- ----------------
Net cash from financing activities (22,384,580) (7,348,966)
--------------- ----------------
Net change in cash and cash equivalents (32,331,493) (9,235,486)
Cash and cash equivalents at beginning of period 57,747,521 27,970,361
--------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 25,416,028 $ 18,734,875
=============== ================
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 984,914 $ 709,899
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
5.
<PAGE> 8
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 March 31, 2000 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, 1999.
2. EARNINGS PER COMMON SHARE:
A reconciliation of the numerators and denominators of basic and diluted
earnings per common share for the years ended December 31 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Basic earnings per common share
Income attributable to common shareholders $ 233,811 $ 216,744
-------------- ---------------
Weighted average common shares outstanding 336,760 336,760
-------------- ---------------
Basic earnings per common share $ 0.69 $ 0.64
============== ===============
Diluted earnings per common share
Income attributable to common shareholders $ 233,811 $ 216,744
-------------- ---------------
Weighted average common shares outstanding 336,760 336,760
Add: dilutive effects of assumed exercise of
stock options 1,571 1,182
-------------- ---------------
Weighted average common and dilutive
potential common shares outstanding 338,331 337,942
-------------- ---------------
Diluted earnings per common share $ 0.69 $ 0.64
============== ===============
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
6.
<PAGE> 9
FIRST INDEPENDENCE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
3. INCOME TAXES
Prior to the fourth quarter of 1999, a valuation allowance was considered
necessary to eliminate the Corporation's deferred tax asset as a result of
historical net operating losses. As a result, no income tax expense was
considered necessary for the first quarter of 1999. During the fourth
quarter of 1999, due to a trend of positive net income and management's
belief that such trend will continue, management determined that the
valuation allowance for deferred tax assets was no longer necessary,
resulting in taxable income during the fourth quarter of 1999. As a result,
the first quarter of 2000 includes federal income tax expense of $135,360
based upon the Corporation's effective tax rate expected to be applicable
for the entire year.
- --------------------------------------------------------------------------------
7.
<PAGE> 10
FIRST INDEPENDENCE CORPORATION
Item 2. Management's Discussion and Analysis,
and Results of Operations
- --------------------------------------------------------------------------------
This Management's Discussion and Analysis should be read in conjunction with the
condensed consolidated financial statements contained herein. This discussion
provides information about the consolidated financial condition and results of
operations of First Independence Corporation ("Corporation") and its
wholly-owned subsidiary, First Independence National Bank of Detroit ("Bank").
FORWARD-LOOKING STATEMENTS
The following discussion contains forward-looking statements that are based on
management's beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy, and about the
Corporation and Bank. Words such as "anticipates," "believes," "estimates,"
"expects," "forecasts," "intends," "is likely," "plans," "projects," variations
of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions ("Future
Factors") that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
materially differ from what may be expressed or forecasted in such
forward-looking statements. The Corporation undertakes no obligation to update,
amend, or clarify forward-looking statements, whether as a result of new
information, future events (whether anticipated or unanticipated), or otherwise.
Future Factors include, but are not limited to, changes in interest rates and
interest rate relationships; demand for products and services; the degree of
competition by traditional and non-traditional competitors; changes in banking
regulation; changes in tax laws; changes in prices, levies, and assessments; the
impact of technological advances; governmental and regulatory policy changes;
changes in competition and competitive factors; the outcomes of contingencies;
trends in customer behavior as well as their ability to repay loans; and changes
in the national and local economy. These are representative of the Future
Factors that could cause a difference between an ultimate actual outcome and a
preceding forward-looking statement.
FINANCIAL CONDITION
Federal Funds Sold: Federal funds sold, consisting of excess funds sold
overnight to correspondent banks, are used to manage daily liquidity needs and
interest rate sensitivity. Federal funds sold decreased $31,030,000 from
December 31, 1999 to $17,770,000 at March 31, 2000.
The primary decrease relates to the withdrawal of large year-end deposits
received from large corporations or government agencies. At December 31, 1999,
one customer had approximately $20.0 million in excess funds deposited with the
Bank which were subsequently withdrawn. In addition, additional funds previously
held have been reinvested into higher earning securities.
- --------------------------------------------------------------------------------
(Continued)
8.
<PAGE> 11
FIRST INDEPENDENCE CORPORATION
Item 2. Management's Discussion and Analysis,
and Results of Operations
- --------------------------------------------------------------------------------
Securities: The Bank had $58,397,259 of securities at March 31, 2000, compared
to $49,572,930 at December 31, 1999. The increase in securities is the result of
management's strategy to invest excess funds into higher earning assets.
Management continues to hold primarily U.S. Treasury and U.S. Government and
federal agency securities to ensure credit risk is minimized.
Loans: The following table sets forth the composition of the Bank's loan
portfolio (in thousands) at March 31, 2000:
<TABLE>
<S> <C> <C>
Commercial $ 13,190 29%
Commercial real estate 11,025 24
Residential real estate 16,513 36
Consumer 4,968 11
------------ ------
$ 45,696 100%
============ ======
</TABLE>
Total loans decreased by approximately $2.8 million from December 31, 1999. The
majority of the decrease relates to approximately $3.9 million of loans
originated in 1999 by the Bank and participated with other financial
institutions. Due to control provisions included in the loan participation
agreements with such institutions, these loans were treated as a financing
arrangement and reported as loans, with a corresponding secured borrowing due to
the participating financial institutions, as of December 31, 1999. These
agreements were amended subsequent to December 31, 1999 and are currently
reported as net loan sales at March 31, 2000. Not considering these loans, the
loan portfolio increased approximately $1.1 million from December 31, 1999 to
March 31, 2000.
At March 31, 2000, the Bank had $778,000 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. At March 31, 2000, total
nonperforming loans amounted to 1.70% of aggregate loans at March 31, 2000,
compared to 1.57% at December 31, 1999.
At March 31, 2000, 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.
- --------------------------------------------------------------------------------
(Continued)
9.
<PAGE> 12
FIRST INDEPENDENCE CORPORATION
Item 2. Management's Discussion and Analysis,
and Results of Operations
- --------------------------------------------------------------------------------
The allowance for loan losses totaled $957,609 at March 31, 2000, compared to
December 31, 1999 of $905,873. The allowance for loan losses represented 2.10%
of total loans at March 31, 2000 compared with 1.87% at December 31, 1999. The
allowance for loan losses was 123% of nonperforming loans at March 31, 2000 as
compared to 119% of nonperforming loans at December 31, 1999. 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 2000 aggregated $57,307, down from
$187,678 for the same period in the prior year. The decrease in 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 first quarter of 2000 resulted in recoveries of $79,043 on loans
previously charged off.
The following table summarizes activity in the allowance for loan losses during
the three months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Average loans outstanding during the period $ 43,878,611 $ 39,906,206
============== ===============
Allowance for loan losses
Beginning balance $ 905,873 $ 1,174,888
Provision for loan losses 30,000 45,000
Charge-offs (57,307) (187,678)
Recoveries 79,043 27,999
-------------- ---------------
Balance at end of period $ 957,609 $ 1,060,209
============== ===============
Charge-offs by category
Commercial $ 0 $ 134,586
Consumer 57,307 50,180
Real estate mortgages 0 912
-------------- ---------------
Total charge-offs $ 57,307 $ 185,678
============== ===============
Recoveries by category
Commercial $ 5,956 $ 4,708
Consumer 71,775 23,144
Real estate mortgages 1,312 147
-------------- ---------------
Total recoveries $ 79,043 $ 27,999
============== ===============
Net loans charged off $ (21,736) $ 157,679
Net loans charged off as a percent of average loans (.05)% .40%
Total loans charged off as a percent of average loans .13% .47%
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
10.
<PAGE> 13
FIRST INDEPENDENCE CORPORATION
Item 2. Management's Discussion and Analysis,
and Results of Operations
- --------------------------------------------------------------------------------
The table below presents management's allocation of the allowance for loan
losses by loan portfolio at March 31, 2000 (in thousands).
<TABLE>
<CAPTION>
Allowance Percent
--------- -------
<S> <C> <C>
Commercial/commercial real estate $ 439 46%
Real estate mortgage 98 10
Consumer 157 16
Unallocated 264 28
---------- ------
$ 958 100%
========== ======
</TABLE>
Deposits: The Corporation's major source of funds is from deposits. Total
deposits decreased from $117.6 million at December 31, 1999 to $101.2 million at
March 31, 2000, primarily in the interest-earning deposit category. The decrease
was largely the result of withdrawals of large deposits made by large
corporations or local government municipalities at the end of the year.
Generally such year end deposits relate to the collection of tax revenues
collected and not ready to be used at year end.
Shareholders' Equity and Capital Resources: The following table presents the
components of Tier 1 Capital and Total Capital for the Bank as of March 31, 2000
and December 31, 1999. 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>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Risk-Based Capital Ratios:
Tier 1 Capital Ratio 11.54% 10.08%
Total Capital Ratio 12.79% 11.33%
Tier 1 Leverage Ratio 7.09% 5.32%
</TABLE>
LIQUIDITY: The Corporation's liquidity strategy is to fund loan and security
growth with deposits and repurchase agreements and to maintain an adequate level
of short- and medium-term investments to meet typical daily loan and deposit
activity. The Corporation also has the ability to borrow money on a daily basis
through correspondent banks (Federal funds purchased). In addition, securities
are primarily maintained in the available for sale category and provide a
secondary source of liquidity.
At March 31, 2000, Federal funds sold were $17.8 million, or 18% of total
deposits. Management believes the Corporation has adequate liquidity.
- --------------------------------------------------------------------------------
(Continued)
11.
<PAGE> 14
FIRST INDEPENDENCE CORPORATION
Item 2. Management's Discussion and Analysis,
and Results of Operations
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS
Net income attributable to common stock for the first quarter of 1999 was
$233,811, or $.69 per common share, compared to $216,744 or $.64 per common
share for the first quarter of 1999. The increase in net income for the first
quarter 2000, as compared to 1999, was the result of a combination of increases
in net interest income and noninterest income offset by an increase in
noninterest expense.
Net Interest Income: Net interest income for the first quarter of 2000 was
$1,360,408, an increase of $57,045 from the first quarter of 1999 of $1,303,363.
The increase was attributable to a larger increase of average earning assets in
comparison to average earning liabilities. This increase was offset by a
reduction in net interest margin due to the yields on interest-earning
liabilities increasing by more than the increase on interest-earning assets.
Provision for Loan Losses: The provision for loan losses in the first quarter of
2000 was $30,000, a decrease of $15,000 from the first quarter of 1999. The
allowance for loan losses as a percentage of total loans outstanding as of March
31, 2000 was 2.10%. The Bank maintains the allowance for loan losses at a level
management feels is adequate to absorb losses inherent in the loan portfolio.
The evaluation is based upon a continuous review of the Bank's historical loan
loss experience, known and inherent risks contained in the loan portfolio,
composition and growth of the loan portfolio, current and projected economic
conditions and other factors.
Noninterest Income: Noninterest income for the first quarter of 2000 amounted to
$526,032, an increase of $275,287, or 110%, from the first quarter of 1999. The
increase was primarily the result of an increase in ATM surcharge income,
increasing $269,847 from the first quarter of 1999 to the first quarter of 2000.
The Bank continues to add additional ATMs, primarily within the casinos in
Detroit, and anticipates that such income will continue to be a large component
of noninterest income in the future. In addition to the increase in ATM income,
service charges on deposit accounts increased $9,122, or 5%.
Noninterest Expense: Noninterest expense for the first quarter of 2000 amounted
to $1,470,169, an increase of $194,905, or 15%, from the first quarter of 1999.
Occupancy expense increased $63,034 and noninterest expense, primarily related
to expenses for the maintenance of ATMs, increased $148,666. Such increases are
the result of the maintenance and depreciation of the additional ATMs purchased
primarily to service the casinos in Detroit.
INCOME TAX EXPENSE: During the fourth quarter of 1999 the Corporation became
taxable, primarily due to a reduction in a previously established valuation
allowance and the recording of a net deferred tax asset as a result of a trend
of positive net income and management's belief that such trend will continue. As
a result, no income taxes were necessary for the first quarter of 1999. Income
tax expense for the first quarter of 2000 amounted to $135,360.
- --------------------------------------------------------------------------------
12.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-1999
<CASH> 7,646,028
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 17,770,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 56,925,618
<INVESTMENTS-CARRYING> 1,006,341
<INVESTMENTS-MARKET> 1,002,500
<LOANS> 45,695,727
<ALLOWANCE> 957,609
<TOTAL-ASSETS> 136,159,708
<DEPOSITS> 101,163,149
<SHORT-TERM> 27,860,874
<LIABILITIES-OTHER> 789,072
<LONG-TERM> 900,000
365,400
2,482,086
<COMMON> 301,960
<OTHER-SE> 2,297,167
<TOTAL-LIABILITIES-AND-EQUITY> 136,159,708
<INTEREST-LOAN> 989,242
<INTEREST-INVEST> 870,012
<INTEREST-OTHER> 340,118
<INTEREST-TOTAL> 2,199,372
<INTEREST-DEPOSIT> 447,832
<INTEREST-EXPENSE> 838,964
<INTEREST-INCOME-NET> 1,360,408
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,470,169
<INCOME-PRETAX> 386,271
<INCOME-PRE-EXTRAORDINARY> 386,271
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 386,271
<EPS-BASIC> 4.43
<EPS-DILUTED> 0.69
<YIELD-ACTUAL> 0.69
<LOANS-NON> 709,000
<LOANS-PAST> 69,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 905,873
<CHARGE-OFFS> 57,307
<RECOVERIES> 79,043
<ALLOWANCE-CLOSE> 957,609
<ALLOWANCE-DOMESTIC> 957,609
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 264,000
</TABLE>
