<PAGE>
FIRST ALBANY COMPANIES INC.
Stock Bonus Plan
Form 11K
For Each of the Three Plan Years Ended
December 31, 1997
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Securities and Exchange Commission
Washington, DC 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
or
[ ] Transition Report Pursuant to Section 15(d) of
the Securities Exchange Act of 1934
Commission file number 014140
First Albany Companies Inc. Stock Bonus Plan
(Title of Plan)
First Albany Companies Inc.
(Issuer of Securities)
30 South Pearl Street
Albany, New York 12201
(518) 447-8500
(Address of Principal Executive Office)
I.R.S. Employer I.D. No. 22-2655804
__________
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ITEMS
Item 4. Financial Statements and Schedules
__________________________________
1. Report of Independent Accountants
A. Statements of net assets available for plan benefits
as of December 31, 1997 and 1996
B. Statements of changes in net assets available for plan
benefits for the years ended December 31, 1997, 1996
and 1995
C. Notes to financial statements
D. Schedule of assets held for investment purposes as of December
31, 1997
E. Schedule of reportable transactions for the year ended December
31, 1997
24. Consent of Independent Accountants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the plan) have duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
First Albany Companies Inc.
Stock Bonus Plan
DATE: BY:
_______________________ _______________________________
George C. McNamee
Member of the Administrative
Committee
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THE FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
REPORT OF INDEPENDENT ACCOUNTANTS
For the Years Ended December 31, 1997, 1996, and 1995
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TABLE OF CONTENTS
Page
REPORT OF INDEPENDENT ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statements of net assets available for plan benefits 2
Statements of changes in net assets available for plan benefits 3
Notes to financial statements 4-6
SUPPLEMENTAL SCHEDULES
Schedule of assets held for investment purposes as of December 31, 1997 7
[27(a)]*
Schedule of reportable transactions for the year ended December 31, 1997 8
[27(d)]*
* Refers to item number in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for plan year ended December 31, 1997.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee
of First Albany Companies Inc. Stock Bonus Plan
We have audited the accompanying statements of net assets available for
plan benefits of First Albany Companies Inc. Stock Bonus Plan as of December
31, 1997 and 1996, and the related statements of changes in net assets available
for plan benefits for each of the three years in the period ended
December 31, 1997. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan as of December 31, 1997 and 1996, and the changes in
net assets available for plan benefits for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed
in the accompanying table of contents are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
COOPERS & LYBRAND L.L.P.
Albany, New York
June 12, 19987
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 1997 and 1996
<TABLE>
==============================================================================
1997 1996
<S> <C> <C>
______________________________________________________________________________
ASSETS
Investments, at fair value (Note 3) $24,130,475 $13,200,874
Cash and cash equivalents 387,522 762,443
___________ ___________
Net assets available for plan benefits $24,517,997 $13,963,317
=========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the years ended December 31, 1997, 1996, and 1995
<TABLE>
===============================================================================
For the years ended 1997 1996 1995
_______________________________________________________________________________
<S> <C> <C> <C>
Additions to net assets attributed to:
Contributions from:
Employees $1,674,282 $1,298,852 $962,995
Employer 796,123 631,003 470,167
__________ __________ _________
2,470,405 1,929,855 1,433,162
Net appreciation in the fair value
of investments 8,490,835 1,303,060 3,366,599
Dividend/Interest income 314,784 249,405 180,581
__________ __________ __________
Total additions 11,276,024 3,482,320 4,980,342
__________ __________ __________
Deductions from net assets
attributed to:
Benefits paid to:
Terminated participants 490,756 289,720 339,733
Active participants 230,588 84,654
__________ __________ _________
Total deductions 721,344 289,720 424,387
__________ __________ _________
Net increase 10,554,680 3,192,600 4,555,955
Net assets available for plan
benefits:
Beginning of year 13,963,317 10,770,717 6,214,762
___________ ___________ ___________
End of year $24,517,997 $13,963,317 $10,770,717
=========== =========== ===========
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan
_______________________
The following description of the First Albany Companies Inc. (the
"Company") Stock Bonus Plan (the "Plan") provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
a. General
_______
The Plan is a defined contribution plan covering substantially all
employees of the Company and its subsidiaries. Employees are eligible
to participate upon the first day of the calendar quarter following
completion of at least one thousand hours of service during any
consecutive twelve months of continuous recognized employment as
defined in the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended (ERISA).
All costs and fees incurred in administering the Plan are borne by the
Company, which is the Plan administrator and custodian.
b. Contributions
_____________
Participants elect to make after-tax contributions to the Plan up
to 8% of their gross pay up to a maximum of $12,800 for 1997. The
Company may, but is not required to, contribute to the Plan an amount
equal to a percentage of each participant's voluntary after-tax
contribution. For 1997, 1996 and 1995, the Company's contribution
percentage was 50%. Annually, the Board of Directors of the Company
may authorize an additional contribution to the Plan. Forfeitures are
maintained within the Plan and used to reduce the Company's matching
contribution.
c. Participants Accounts
_____________________
Each participant account is credited with the participant's and
Company's contributions and allocations of Plan earnings. Allocations
are based on participants account balances, as defined. The benefit to
which the participant is entitled is the benefit that can be provided
from the participant's vested account.
d. Vesting
_______
A participant is 100 percent vested in the employer's contribution
after seven years of credited service. Participants' contributions
and earnings thereon are fully vested at all times.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
e. Payment of Benefits
___________________
On termination of service, participants will receive payment, in
cash or shares, of their vested benefits in a lump-sum distribution
equal to the value of their accounts as of the valuation date, as
defined in the Plan.
2. Significant Accounting Policies
_______________________________
a. Basis of Accounting
___________________
The financial statements of the Plan are prepared under the accrual
method of accounting.
b. Use of Estimates
________________
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
c. Investment Valuation and Income Recognition
___________________________________________
The Plan's investments are stated at fair value, which is based upon
quoted market prices in the over-the-counter market.
The Plan is limited to investing solely in the common stock of the
Company, except that interim short-term investments may be made pending
purchase of the Company's stock. Purchases and sales of the Company's
stock are conducted by the Company's principal subsidiary, First Albany
Corporation, a registered broker-dealer. Commissions are not charged
on these transactions.
The Plan presents, in the statements of changes in net assets, the net
appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
d. Payments of Benefits
____________________
Benefits are recorded when paid.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
3. Investments
___________
The Plan's investment portfolio consists of the following as of
December 31, 1997 and 1996:
<TABLE>
<S> 1997 1996
<C> <C>
At Quoted At Quoted
Cost Fair Value Cost Fair Value
____ __________ ____ __________
Common Stock:
First Albany $10,021,882 $24,130,475 $7,204,319 $13,200,874
Companies Inc.
</TABLE>
The number of shares of First Albany Companies Inc. common stock as of
December 31, 1997, and 1996 was 1,649,947 and 1,303,790, respectively.
The realized net gain based on average costs was $378,797, $122,993, and
$131,269 for the years ended December 31, 1997, 1996 and 1995, respectively.
The unrealized net gain based on average costs was $8,112,038, $1,180,067,
and $3,235,330 for the years ended December 31, 1997, 1996 and 1995,
respectively.
The Plan's investment portfolio is subject to daily market price
fluctuations. Since the entire investment portfolio consists of the
Company's common stock, the Plan's portfolio may be exposed to risk in
the event of a decline in the market value of the Company's stock.
5. Forfeitures
___________
The Company applied forfeitures of $41,029, $18,431, and $11,337 to
reduce its matching contribution to the Plan during 1997, 1996 and 1995,
respectively.
6. Plan Termination
________________
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contribution at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, the account of each participant shall become fully
vested and be distributed.
7. Tax Status
__________
The Internal Revenue Service has determined and informed the Company by
a letter dated February 26, 1993, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the IRC.
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES*
As of December 31, 1997
Description
___________ Current
<TABLE> Cost Value
____ _______
<S>First Albany Companies Inc.: <C> <C>
Common stock ($0.01 - par value) $10,021,882 $24,130,475
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</TABLE>
* The supplemental schedule refers to item number 27(a) in Form 5500
(Annual Return/Report of Employee Benefit Plan).
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FIRST ALBANY COMPANIES INC.
STOCK BONUS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE
TRANSACTIONS*
For the year ended December 31, 1997
<TABLE>
<S> (b) (c) (d) (g) (h) (i)
<C> <C> <C> <C> <C> <C>
Current value
of asset on
Description Purchase Selling Cost of transaction Net gain
of Asset price price asset date or (loss)
_____________________________________________________________________________
First Albany $3,176,231 $737,465 $358,668 $5,817,412 $378,797
Companies
(Common Stock)
</TABLE>
* The supplemental schedule refers to item number 27(d) in Form 5500
(Annual Return/Report of Employee Benefit Plan).
</PAGE>
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EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of First Albany Companies Inc. on Form S-8 related to the First Albany
Companies Inc. Stock Bonus Plan (File No. 014140) of our report dated June
12, 1998, on our audits of the statements of net assets available for plan
benefits of First Albany Companies Stock Bonus Plan as of December 31, 1997
and 1996, and the statements of changes in net assets available for plan
benefits for each of the three years in the period ended December 31, 1997,
which report is included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Albany, New York
June 22, 1998
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