<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- -----------------
COMMISSION FILE NUMBER 0-17194
F.F.O. FINANCIAL GROUP, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Florida 59-2899802
- ------------------------ -------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2013 Live Oak Boulevard, St. Cloud, Florida 34771-8462
- ------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (407) 892-1200
--------------
- --------------------------------------------------------------------------------
FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
<TABLE>
<S> <C>
Common stock, par value $.10 per share 8,430,000 shares outstanding at August 8, 1996
- -------------------------------------- ----------------------------------------------
</TABLE>
<PAGE> 2
F.F.O. FINANCIAL GROUP, INC.
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS PAGE
----
<S> <C>
Condensed Consolidated Balance Sheets -
June 30, 1996 (unaudited) and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Earnings -
Three and Six months ended June 30, 1996 and 1995 (unaudited) . . . . . . . . . . . . . . . 3
Condensed Consolidated Statement of Stockholders' Equity -
Six months ended June 30, 1996 (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1995 (unaudited) . . . . . . . . . . . . . . . . . . . . 5-6
Notes to Condensed Consolidated Financial Statements (unaudited) . . . . . . . . . . . . . . . . 7-9
Review by Independent Certified Public Accountants . . . . . . . . . . . . . . . . . . . . . . . 10
Report on Review by Independent Certified Public Accountants . . . . . . . . . . . . . . . . . . 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . 21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
1
<PAGE> 3
F.F.O. FINANCIAL GROUP, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------- ------------
1996 1995
---- ----
ASSETS (UNAUDITED)
<S> <C> <C>
Cash and due from banks
$ 5,401 6,989
Interest-bearing deposits in other banks 21,404 2,768
Federal funds sold - 669
--------- -------
Cash and cash equivalents 26,805 10,426
Investment securities available-for-sale, at market value - 10,019
Investment trading securities, at market value 6,916 9,401
Mortgage-backed securities held-to-maturity, at cost
(market value of $16,565 and $17,046) 16,524 17,636
Mortgage-backed securities available-for-sale, at market value 37,565 39,813
Mortgage-backed trading securities, at market value 10,993 13,675
Loans receivable, net 185,396 161,190
Loans held for sale, at lower of cost or market value 9,091 22,765
Real estate owned, net 641 3,358
Premises and equipment, net 5,540 5,700
Federal Home Loan Bank stock 2,514 2,514
Accrued interest receivable 1,741 1,821
Deferred income tax asset
2,178 2,249
Prepaid expenses and other assets 1,151 918
--------- -------
Total $ 307,055 301,485
========= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposit accounts 262,755 248,936
Accrued interest on deposit accounts 165 282
Due to bank 1,029 1,120
Advances from Federal Home Loan Bank 20,000 30,000
Advance payments by borrowers for taxes and insurance 2,235 819
Other liabilities 1,766 1,548
--------- -------
Total liabilities 287,950 282,705
--------- -------
Stockholders' equity:
Preferred stock - -
Common stock 843 843
Additional paid-in capital 17,599 17,599
Retained earnings 822 244
Unrealized gain (loss) on securities available-for-sale (159) 94
--------- -------
Total stockholders' equity 19,105 18,780
--------- -------
Total $ 307,055 301,485
========= =======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 4
F.F.O. FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 4,072 3,811 8,090 7,805
Interest on mortgage-backed securities 1,035 462 2,113 1,057
Interest on investment securities 212 404 488 732
Interest on other interest-earning assets 79 103 173 164
---------- ---------- ----------- ----------
Total interest income 5,398 4,780 10,864 9,758
---------- ---------- ----------- ----------
Interest expense:
Deposit accounts 2,906 2,433 5,803 4,588
Borrowings 36 44 279 148
---------- ---------- ----------- ----------
Total interest expense 2,942 2,477 6,082 4,736
---------- ---------- ----------- ----------
Net interest income 2,456 2,303 4,782 5,022
Provision for loan losses - 30 150 171
---------- ---------- ----------- ----------
Net interest income after provision
for loan losses 2,456 2,273 4,632 4,851
---------- ---------- ----------- ----------
Noninterest income:
Fees and service charges 519 445 1,027 948
Net trading account profit (loss) (145) 58 (323) 163
Gain on sale of mortgage-backed securities - 63 - 63
Gain on sale of loans - 31 43 37
Unrealized loss on loans held for sale (165) - (276) -
Other 354 68 396 117
---------- ---------- ----------- ----------
Total noninterest income 563 665 867 1,328
---------- ---------- ----------- ----------
Noninterest expenses:
Employee compensation and benefits 1,034 989 2,050 2,060
Occupancy and equipment 489 448 956 894
FDIC insurance premiums 179 157 352 315
Marketing and advertising 102 80 234 172
Data processing 171 144 322 288
Legal and professional fees 103 70 175 124
Printing and office operations 69 58 147 161
Telephone expense 73 64 144 142
Loss (gain) on real estate operations (243) 254 (210) 466
Other 210 164 408 337
---------- ---------- ----------- ----------
Total noninterest expenses 2,187 2,428 4,578 4,959
---------- ---------- ----------- ----------
Earnings before provision for income taxes 832 510 921 1,220
Provision for income taxes 310 174 343 424
---------- ---------- ----------- ----------
Net earnings $ 522 336 578 796
========== ========== =========== ==========
Net earnings per share of common stock .06 .04 .07 .09
========== ========== =========== ==========
Dividends per share $ - - - -
========== ========== =========== ==========
Weighted average number of shares 8,430,000 8,430,000 8,430,000 8,430,000
========== ========== =========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 5
F.F.O. FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
ADDITIONAL ON SECURITIES TOTAL
COMMON PAID-IN RETAINED AVAILABLE- STOCKHOLDERS'
STOCK CAPITAL EARNINGS FOR-SALE EQUITY
--------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $ 843 17,599 244 94 18,780
Change in unrealized gain (loss)
on securities available-for-
sale for the six months
ended June 30, 1996
net of income taxes
of $152 (unaudited) - - - (253) (253)
Net earnings for the six months
ended June 30, 1996 (unaudited) - - 578 - 578
----- ------ ---- ---- ------
Balance, June 30, 1996
(unaudited) $ 843 17,599 822 (159) 19,105
===== ====== ==== ==== ======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 6
F.F.O. FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Operating activities:
Net earnings $ 578 796
Adjustments to reconcile net earnings to net cash provided
by (used in) operating activities:
Depreciation of premises and equipment 273 294
Provision for loan losses 150 171
Provision for losses on real estate owned - 240
Provision for deferred income taxes, net 223 81
Net decrease (increase) in trading securities 5,168 (8,117)
Net amortization of deferred loan fees 34 8
Proceeds from sale of loans held for sale, net 14,242 3,454
Originations of loans held for sale (801) -
Gain on sale of mortgage-backed securities - (63)
Gain on sale of real estate owned (233) (20)
Gain on sale of loans (43) (37)
Unrealized loss on loans held for sale 276 -
Decrease (increase) in accrued interest receivable 80 (241)
(Increase) decrease in other assets (233) 530
(Decrease) increase in accrued interest payable (117) 78
Increase (decrease) in other liabilities and due to bank 127 (495)
--------- --------
Net cash provided by (used in) operating activities 19,724 (3,321)
--------- --------
Investing activities:
Proceeds from sales and maturities of investment securities 10,019 15,166
Principal repayments on mortgage-backed securities 2,955 1,113
Net increase in loans receivable (22,333) (15,341)
Payments capitalized to real estate owned (78) -
Proceeds from sale of real estate owned 970 1,702
Purchase of premises and equipment (113) (164)
--------- --------
Net cash (used in) provided by investing activities (8,580) 2,476
--------- --------
Financing activities:
Net increase in deposit accounts 13,819 22,397
Net increase in advance payments by borrowers for taxes
and insurance 1,416 1,444
Proceeds from Federal Home Loan Bank advances 116,000 118,800
Repayments of Federal Home Loan Bank advances (126,000) (140,200)
--------- --------
Net cash provided by financing activities 5,235 2,441
--------- --------
Net increase in cash and cash equivalents 16,379 1,596
Cash and cash equivalents at beginning of period 10,426 8,566
--------- --------
Cash and cash equivalents at end of period $ 26,805 10,162
========= ========
</TABLE>
(continued)
5
<PAGE> 7
F.F.O. FINANCIAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid (refunds received) during the period for:
Income taxes $ (223) 528
======= =====
Interest $ 6,199 4,658
======= =====
Noncash investing and financing activities:
Transfers of loans to real estate owned $ 292 3,702
======= =====
Loans originated for the sale of real estate owned $ 2,350 1,104
======= =====
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE> 8
F.F.O. FINANCIAL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL. In the opinion of the management of F.F.O. Financial Group, Inc.
(the "Company"), the accompan ying condensed consolidated financial
statements contain all adjustments (consisting principally of normal
recurring accruals ) necessary to present fairly the financial position
at June 30, 1996, and the results of operations for the three-month and
six-month periods ended June 30, 1996 and 1995 and the cash flows for the
six-month periods ended June 30, 1996 and 1995. These financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report to
Stockholders for the year ended December 31, 1995. The results of
operations for the six months ended June 30, 1996, are not necessarily
indicative of the operating results to be anticipated for the full year.
F.F.O. Financial Group, Inc. is a Florida corporation organized in
1988 as a unitary savings and loan holding company. The accompanying
unaudited condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiary, First Federal
Savings and Loan Association of Osceola County (the "Association"), and
the Association's wholly-owned subsidiary, Gulf American Financial
Corporation. All significant intercompany accounts and transactions have
been eliminated in consolidation.
2. EARNINGS PER SHARE. Earnings per share are computed by dividing net
earnings by the weighted average number of shares outstanding during
the period. No adjustment has been made to give effect to the shares
that would be outstanding, assuming the exercise of outstanding stock
options, since the impact is deemed immaterial.
3. LOAN IMPAIRMENT AND LOSSES. On January 1, 1995, the Company adopted
Statements of Financial Accounting Standards No. 114 and 118 ("SFAS No.
114 and 118"). These Statements address the accounting by creditors for
impairment of certain loans. The Statements generally require the
Company to identify loans for which the Company probably will not receive
full repayment of principal and interest, as impaired loans. The
Statements require that impaired loans be valued at the present value of
expected future cash flows, discounted at the loan's effective interest
rate, or at the observable market price of the loan, or the fair value of
the underlying collateral if the loan is collateral dependent. The
Company has implemented the Statements by modifying its quarterly review
of the adequacy of the allowance for loan losses to also identify and
value impaired loans in accordance with guidance in the Statements. The
adoption of the Statements did not have any material effect on the
results of operations for the six months ended June 30, 1996 or 1995.
The following summarizes the amounts of impaired loans, all of which
were collateral-dependent, at June 30, 1996 and December 31, 1995, and
the average net investment in impaired loans and interest income
recognized and received on impaired loans during the three- and
six-month periods ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
-------- ------------
1996 1995
---- ----
(UNAUDITED)
<S> <C> <C>
Loans identified as impaired:
Gross loans with no related allowance for
credit losses $ - -
Gross loans with related allowance for credit
losses recorded 8,072 6,380
Less: Allowances on these loans (1,524) (1,537)
-------- ---------
Net investment in impaired loans $ 6,548 4,843
======== =========
</TABLE>
(continued)
7
<PAGE> 9
F.F.O. FINANCIAL GROUP, INC.
3. LOAN IMPAIRMENT AND LOSSES, CONTINUED.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Average investment in impaired loans $ 6,407 5,305 5,552 6,586
======= ===== ===== =====
Interest income recognized on impaired loans $ 121 65 239 137
======= ===== ===== =====
Interest income received on impaired loans $ 121 65 239 137
======= ===== ===== =====
</TABLE>
The activity in the allowance for loan losses is as follows (dollars in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Beginning balance $ 5,210 8,340 5,138 8,207
Provision for loan losses - 30 150 171
Charge-offs (83) (2,335) (168) (2,377)
Recoveries 4 3 11 37
------- ------ ----- ------
Ending balance $ 5,131 6,038 5,131 6,038
======= ====== ====== =======
</TABLE>
4. REAL ESTATE OWNED. The following is a summary of the transactions in the
allowance for losses on real estate owned (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Beginning balance $ 1,175 2,974 1,124 2,873
Provision charged to operations - 120 - 240
Net (charge-offs) recoveries (7) (1,852) 44 (1,871)
------- ------ ----- ------
Ending balance $ 1,168 1,242 1,168 1,242
======= ====== ===== ======
</TABLE>
Loss on real estate operations consists of the following (dollars in
thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net gain on sale of real estate owned $(233) - (233) (20)
Net operating (profit) loss (10) 134 23 246
Provision charged to operations - 120 - 240
----- --- ---- ---
Net (gain) loss on real estate operations $(243) 254 (210) 466
===== === ==== ===
</TABLE>
(continued)
8
<PAGE> 10
F.F.O. FINANCIAL GROUP, INC.
5. IMPACT OF NEW ACCOUNTING STANDARDS. On January 1, 1996, the Company
adopted Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" ("SFAS No. 123"), which establishes
financial accounting and reporting standards for stock-based employee
compensation plans. The Statement requires certain disclosures about
stock-based compensation arrangements, regardless of the method used to
account for them, and defines a fair value based method of accounting for
an employee stock option or similar equity instrument and encourages all
entities to adopt that method of accounting for all of their employee
stock compensation plans. However, SFAS No. 123 also allows an entity to
continue to measure compensation cost for stock-based compensation plans
using the intrinsic value method of accounting prescribed by APB Opinion
No. 25, "Accounting for Stock Issued to Employees." Entities electing to
continue using the accounting method in APB Opinion No. 25 must make pro
forma disclosures of net earnings and earnings per share as if the fair
value method of accounting defined in SFAS No. 123 had been applied.
Under the fair value method, compensation cost is measured at the grant
date based on the value of the award and is recognized over the service
period, which is usually the vesting period. Under the intrinsic value
method, compensation cost is the excess, if any, of the quoted market
price of the stock at grant date or other measurement date over the
amount an employee must pay to acquire the stock. The Company elected to
continue to utilize the intrinsic value method of accounting defined in
APB Opinion No. 25. The adoption of SFAS No. 123 had no effect on the
Company's financial position at June 30, 1996 or results of operations
for the six months then ended. The pro forma disclosures required under
SFAS No. 123, for stock options granted during 1995 and thereafter, are
not required for interim condensed financial statements.
On January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 122 "Accounting for Mortgage Servicing Rights,
an amendment of FASB Statement No. 65" ("SFAS No. 122"), which requires
mortgage banking enterprises that acquire mortgage servicing through
either the purchase or origination of mortgage loans and sell or
securitize those loans with servicing retained to allocate the total cost
of the mortgage loans to the mortgage servicing rights and the loans
based on their relative fair values. Mortgage banking enterprises
include commercial banks and thrift institutions that conduct operations
substantially similar to the primary operations of a mortgage banking
enterprise. The adoption of SFAS No. 122 had no material effect on the
Company's financial position at June 30, 1996 or results of operations
for the six months then ended.
6. FUTURE ACCOUNTING REQUIREMENTS. In June 1996, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS No. 125"). This Statement
provides accounting and reporting standards for transfers and servicing
of financial assets as well as extinguishments of liabilities. This
Statement also provides consistent standards for distinguishing transfers
of financial assets that are sales from transfers that are secured
borrowings. SFAS No. 125 is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after
December 31, 1996. SFAS No. 125 will supercede SFAS No. 122, however,
the major provisions of SFAS No. 122 are included in SFAS No. 125.
Management of the Company does not expect SFAS No. 125 to have a material
effect on the Company's financial statements.
9
<PAGE> 11
F.F.O. FINANCIAL GROUP, INC.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hacker, Johnson, Cohen & Grieb, the Company's independent certified
public accountants, have made a limited review of the financial data as
of June 30, 1996, and for the three-month and six-month periods ended
June 30, 1996 and 1995 presented in this document, in accordance with
standards established by the American Institute of Certified Public
Accountants.
Their report, furnished pursuant to Article 10 of Regulation S-X, is
included herein.
10
<PAGE> 12
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors
F.F.O. Financial Group, Inc.
St. Cloud, Florida:
We have reviewed the condensed consolidated balance sheet of F.F.O.
Financial Group, Inc. and Subsidiaries (the "Company") as of June 30, 1996, and
the related condensed consolidated statements of earnings for the three-month
and six-month periods ended June 30, 1996 and 1995, the condensed consolidated
statements of cash flows for the six-month periods ended June 30, 1996 and
1995, and the condensed consolidated statement of stockholders' equity for the
six-month period ended June 30, 1996. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. 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 condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1995, and the
related consolidated statements of earnings, stockholders' equity and cash
flows for the year then ended (not presented herein); and in our report dated
February 2, 1996, except for Note 12, as to which the date was February 29,
1996, expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1995, is fairly stated
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB
Orlando, Florida
August 2, 1996
11
<PAGE> 13
F.F.O. FINANCIAL GROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
F.F.O. Financial Group, Inc. (the "Holding Company") was incorporated in the
State of Florida on June 6, 1988. On October 20, 1988, the Holding Company
became the unitary savings and loan holding company for First Federal Savings
and Loan Association of Osceola County (the "Association") (together, the
"Company"). The Holding Company's operations are limited to ownership of its
subsidiary.
The Association is a federally chartered savings and loan association which
conducts business from its headquarters and main office in Kissimmee, Florida
and ten branch offices located in Central Florida. It was founded in 1934 as a
mutual savings and loan association. On October 20, 1988, the Association
converted to a federally chartered stock association. The Association's
deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") up
to applicable limits through the Savings Association Insurance Fund ("SAIF").
The Association has one wholly-owned subsidiary, Gulf American Financial
Corporation, which is currently inactive.
COMPARISON OF JUNE 30, 1996 AND DECEMBER 31, 1995
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash are from principal repayments on loans
and mortgage-backed securities, proceeds from sales of loans and maturities of
investment securities, net deposit account inflows and proceeds from Federal
Home Bank advances. During the six-month period ended June 30, 1996, proceeds
from loan sales were $14.2 million, proceeds from maturities of investment
securities were $10.0 million, net deposit account inflows were $13.8 million
and proceeds from Federal Home Loan Bank advances were $116.0 million. Cash
was used primarily to fund net loan disbursements of $23.1 million and repay
Federal Home Loan Bank advances of $126.0 million. At June 30, 1996, the
Company had approved commitments to fund $12.2 million of the undisbursed
portion of existing first mortgage loans, and to originate real estate loans of
$3.5 million. It is expected that these commitments will be funded from the
sources described above.
The Association is required under federal regulations to maintain specified
levels of liquid investments, which include qualifying types of U.S. government
and federal agency securities, cash and other investments. Current regulations
require the Association to maintain liquid assets of not less than 5% of its
average daily balance of net withdrawable deposit accounts plus short term
borrowings during the preceding calendar month; short-term liquid assets must
consist of not less than 1% of that amount. These levels are established by
the Office of Thrift Supervision ("OTS") and are adjusted periodically to
reflect current conditions. The Association has generally maintained liquidity
in excess of required levels. The Association's average daily liquidity ratio
was 6.2% and its short-term liquidity ratio was 5.9% at June 30, 1996.
(continued)
12
<PAGE> 14
F.F.O. FINANCIAL GROUP, INC.
REGULATORY MATTERS
In accordance with applicable laws, the Association is required to maintain
certain minimum regulatory capital requirements. The following is a summary of
the regulatory capital requirements, the Association's capital, and the amounts
in excess of such required capital as of June 30, 1996:
<TABLE>
<CAPTION>
TANGIBLE CORE RISK-BASED
-------------------- --------------------- --------------------
($ IN THOUSANDS)
% OF
RISK
% OF % OF WEIGHTED
AMOUNT ASSETS AMOUNT ASSETS AMOUNT ASSETS
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Regulatory capital $ 17,172 5.6% $ 17,172 5.6% $ 19,085 12.7%
Requirement 4,581 1.5 9,162 3.0 12,047 8.0
-------- --- -------- --- -------- ----
Excess $ 12,591 4.1% $ 8,010 2.6% $ 7,038 4.7%
======== === ======== === ======== ====
</TABLE>
If an association is unable to comply with all of its regulatory capital
requirements, the OTS may take such actions as it deems appropriate to protect
the deposit insurance funds, the association, and its depositors. Such actions
may include various operating restrictions, limitations on liability growth,
limitations on deposit account interest rates, and investment restrictions. As
a means of limiting regulatory discretion to allow undercapitalized depository
institutions to remain in operation and thereby minimizing insurance fund
losses, the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") requires the OTS and the other federal banking agencies to establish
a prompt regulatory action system pursuant to which banks and thrifts will be
classified, according to their capital levels, into five categories: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized.
Under regulations adopted by the federal banking agencies to implement these
requirements, the Association met the capital requirements of a "well
capitalized" institution as of June 30, 1996.
The Association may not declare or pay cash dividends on its shares of Common
Stock (all of which are held by the Holding Company) without prior approval of
the OTS.
The FDIC recently established a new assessment rate schedule of 0 to 27 basis
points for Bank Insurance Fund ("BIF") members. Approximately 92% of BIF
members pay only the $2,000 per year legal minimum insurance premium. The FDIC
retained the existing assessment rate schedule of 23 to 31 basis points
applicable to SAIF member institutions. In announcing the rule, the FDIC noted
that the premium differential may have adverse consequences for SAIF members,
including reduced earnings and an impaired ability to raise funds in the
capital markets. In addition, SAIF members, such as the Association, could be
placed at a disadvantage to BIF members with respect to pricing of loans and
deposits and the ability to achieve lower operating costs. Legislation pending
in Congress would impose a one-time assessment of between 85 and 90 basis
points on the amount of deposits held by SAIF-member institutions, including
the Association, to recapitalize the SAIF fund. If the assessment is made at
the proposed rate, the effect on the Association would be a pretax charge of
approximately $1,897,000 (0.85% on deposits of $223.2 million at March 31,
1995), or $1,186,000 after tax (37.5% assumed tax rate). Should this occur,
the Holding Company does not expect to have to contribute capital to the
Association for it to remain a well-capitalized institution.
(continued)
13
<PAGE> 15
F.F.O. FINANCIAL GROUP, INC.
ASSET QUALITY
The Company is required by the OTS to classify its own assets and to establish
valuation allowances based in part on such classifications. These
classifications are subject to review by the OTS examiners. Management of the
Company reviews its loan, real estate owned and investment portfolios on a
quarterly basis, classifying those assets deemed appropriate and establishing
valuation allowances as appropriate. In addition, the Company continues to
establish general loss allowances for unclassified loans based on its
historical loss experience. An asset is classified substandard if it is
determined to involve a distinct possibility that the Company could sustain
some loss if deficiencies associated with the asset are not corrected. An
asset is classified as doubtful if full collection is highly questionable or
improbable. An asset is classified loss if it is considered uncollectible,
even if a partial recovery could be expected in the future. If an asset is
classified substandard or doubtful pursuant to the Company's policies, or by
regulatory examiners, general allowances for losses may be established. If an
asset is classified as loss, the Company is required to establish a specific
allowance in an amount equal to 100% of the portion of the asset classified
loss or it must charge off that amount.
Pursuant to applicable regulations, the OTS and the FDIC have the authority to
require the Association to increase its loss allowance if either agency
determines that the allowances are inadequate. The estimation of appropriate
levels of loss allowances is a process that involves a high degree of
subjectivity, and the regulatory authorities may arrive at conclusions that
differ from management's regarding allowance levels. The OTS last performed an
examination of the Association as of September 30, 1995. The examination was
part of the OTS' routine supervision of the Association and included
evaluations of the Association's loan and real estate owned loss allowances.
Based upon the results of the OTS examination, management believes the
Association's policies and procedures for determination of loan and real estate
owned allowances are generally consistent with those used by the OTS in
determining the adequacy of the loss allowances maintained by thrift
institutions. However, there is no assurance that the OTS will concur with
this assessment in future examinations.
The following table sets forth the Company's classified assets (dollars in
thousands):
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
----------- ---------------
CLASSIFICATION OF ASSETS 1996 1995
------------------------ ---- ----
<S> <C> <C>
Substandard $ 9,297 10,914
Doubtful 148 596
Loss 805 920
-------- ------
Total classified assets $ 10,250 12,430
======== ======
</TABLE>
(continued)
14
<PAGE> 16
F.F.O. FINANCIAL GROUP, INC.
The Company had nonperforming assets as follows, all of which are included in
the foregoing classified assets table, as of each of the dates indicated
(dollars in thousands):
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
----------- ---------------
1996 1995
---- ----
<S> <C> <C>
Nonaccrual loans $ 3,187 2,675
Troubled debt restructured 4,876 4,890
Real estate owned 1,809 4,482
------- ------
Total nonperforming assets $ 9,872 12,047
======= ======
Nonperforming assets to total assets 3.21% 4.00%
======= ======
Allowance for loan losses 5,131 5,138
Allowance for REO losses 1,168 1,124
------- ------
Total allowance for losses $ 6,299 6,262
======= ======
</TABLE>
15
<PAGE> 17
F.F.O. FINANCIAL GROUP, INC.
COMPARISON OF RESULTS OF OPERATIONS
GENERAL
Net earnings for the six-month period ended June 30, 1996 were $578,000
compared to $796,000 for the 1995 period. The decrease in net earnings for the
1996 period was primarily attributable to a decrease in net interest income of
$240,000 and a decrease in noninterest income of $461,000, partially offset by
a decrease in noninterest expenses of $381,000.
The following table shows selected ratios for the periods ended or at the dates
indicated:
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED
JUNE 30, DECEMBER 31, JUNE 30,
1996 1995 1995
---------- ------------ ---------
<S> <C> <C> <C>
Average equity as a percentage of
average assets 6.42% 5.98% 6.91%
Equity to total assets at end of period 6.22% 6.23% 6.96%
Return on average assets .39% .64% .64%
Return on average equity 6.06% 9.17% 9.24%
Noninterest expenses to average assets 3.08% 3.67% 3.98%
Nonperforming loans and real estate
owned to total assets at end of period 3.21% 4.00% 5.71%
</TABLE>
The following table shows weighted average interest rates at the dates
indicated:
<TABLE>
<CAPTION>
AT AT AT
JUNE 30, DECEMBER 31, JUNE 30,
1996 1995 1995
---------- ------------ ----------
<S> <C> <C> <C>
Weighted average interest rates:
Interest-earning assets:
Loans 8.19% 8.44% 8.61%
Mortgage-backed securities 6.60% 6.59% 5.82%
Investment securities 7.46% 6.58% 6.69%
Other interest-earning assets 5.34% 5.56% 6.16%
Total interest-earning assets 7.62% 7.80% 8.01%
Interest-bearing liabilities:
Deposit accounts 4.29% 4.50% 4.60%
Borrowed funds 5.60% 5.85% - %
Total interest-bearing liabilities 4.38% 4.65% 4.60%
Interest-rate spread 3.24% 3.15% 3.41%
</TABLE>
(continued)
16
<PAGE> 18
F.F.O FINANCIAL GROUP, INC.
The following table sets forth, for the periods indicated, information
regarding (i) the total dollar amount of interest and dividend income of the
Company from interest-earning assets and the resultant average yields; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average cost; (iii) net interest income; (iv) interest-rate spread;
and (v) net interest margin.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------------------------------------
1996 1995
------------------------------- ------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE BALANCE DIVIDENDS RATE
------- --------- -------- ------- --------- --------
(DOLLARS IN THOUSAND)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable $ 191,114 4,072 8.52% $ 179,643 3,811 8.49%
Mortgage-backed securities 67,224 1,035 6.16% 29,685 462 6.23%
Investment securities 13,955 212 6.07% 24,819 404 6.51%
Other interest-earning assets 4,630 79 6.83% 5,296 103 7.78%
--------- -------- ---- --------- ------ ----
Total interest-earning assets 276,923 5,398 7.80% 239,443 4,780 7.99%
-------- ------
Noninterest-earning assets 17,234 12,444
Total assets $ 294,157 $ 251,887
========= =========
Interest-bearing liabilities:
Deposit accounts 267,113 2,906 4.35% 225,639 2,433 4.31%
Borrowed funds 2,747 36 5.24% 2,907 44 6.05%
--------- -------- ---- --------- ------ ----
Total interest-bearing liabilities 269,860 2,942 4.36% 228,546 2,477 4.34%
Noninterest-bearing liabilities 5,834 5,723
Stockholders' equity 18,463 17,618
--------- ---------
Total liabilities and
stockholders' equity $ 294,157 $ 251,887
========= =========
Net interest income $ 2,456 $ 2,303
======== =======
Interest-rate spread (1) 3.44% 3.65%
==== ====
Net average interest-earning assets, net
interest margin (2) $ 7,063 3.55% $ 10,897 3.85%
========= ==== ========= ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.03 1.05
==== ====
</TABLE>
- --------------------------------
(1) Interest-rate spread represents the difference between the average
yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(2) Net interest margin is net interest income divided by average
interest-earning assets.
17
<PAGE> 19
F.F.O FINANCIAL GROUP, INC.
The following table sets forth, for the periods indicated, information
regarding (i) the total dollar amount of interest and dividend income of the
Company from interest-earning assets and the resultant average yields; (ii) the
total dollar amount of interest expense on interest-bearing liabilities and the
resultant average cost; (iii) net interest income; (iv) interest-rate spread;
and (v) net interest margin.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------------------------------------
1996 1995
------------------------------- ------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE BALANCE DIVIDENDS RATE
------- --------- -------- ------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable (1) $ 188,662 8,090 8.58% $ 176,511 7,805 8.84%
Mortgage-backed securities 68,745 2,113 6.15% 33,018 1,057 6.40%
Investment securities 13,450 488 7.26% 22,638 732 6.47%
Other interest-earning assets 4,973 173 6.96% 4,282 164 7.66%
--------- ----- ---- --------- ----- ----
Total interest-earning assets 275,830 10,864 7.88% 236,449 9,758 8.25%
Noninterest-earning assets 21,167 12,928
--------- ---------
Total assets $ 296,997 $ 249,377
========= =========
Interest-bearing liabilities:
Deposit accounts 263,201 5,803 4.41% 222,536 4,588 4.12%
Borrowed funds 9,923 279 5.62% 4,920 148 6.02%
--------- ------ --------- ------
Total interest-bearing liabilities 273,124 6,082 4.45% 227,456 4,736 4.16%
------ ------
Noninterest-bearing liabilities 5,091 4,682
Stockholders' equity 18,782 17,239
--------- ---------
Total liabilities and
stockholders' equity $ 296,997 $ 249,377
========= =========
Net interest income $4,782 $5,022
====== ======
Interest-rate spread (2) 3.43% 4.09%
==== ====
Net average interest-earning assets, net
interest margin (3) $ 2,706 3.47% $ 8,993 4.25%
========= ==== ========= ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.01 1.04
==== ====
</TABLE>
- --------------------------------
(1) Interest for six months ended June 30, 1995, includes $373,000 related
to previously unaccrued interest on a loan which was brought current
during the first quarter.
(2) Interest-rate spread represents the difference between the average
yield on interest-earning assets and the average cost of
interest-bearing liabilities.
(3) Net interest margin is net interest income divided by average
interest-earning assets.
18
<PAGE> 20
F.F.O. FINANCIAL GROUP, INC.
COMPARISON OF THREE-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
INTEREST INCOME
For the three months ended June 30, 1996, total interest income was $5.4
million, an increase of $618,000 from the same period in 1995, due primarily to
a $573,000 increase in interest income on mortgage-backed securities and a
$261,000 increase in interest on loans. This was partially offset by a
decrease of $192,000 in interest income on investment securities. The increase
in interest income on loans was primarily the result of an increase in average
loans outstanding from $179.6 million for the three-month period ended June 30,
1995 to $191.1 million for the comparable period in 1996, as well as an
increase in the average yield earned during the 1996 period. The increase in
interest income on mortgage-backed securities was due to a $37.5 million
increase in the average balance outstanding partially offset by a decrease in
the average yield earned on those securities during the three months ended June
30, 1996 compared to the 1995 period. The decrease in interest income on
investment securities was due to a reduction of $10.9 million in the average
balance outstanding during the three months ended June 30, 1996 compared to the
1995 period, as well as a reduction in the average yield earned from 6.51%
during the 1995 period to 6.07% during the 1996 period.
INTEREST EXPENSE
Total interest expense for the three months ended June 30, 1996 was $2.9
million, an increase of $465,000 from the same period in 1995. Interest
expense on deposits increased from $2.4 million in the second quarter of 1995
to $2.9 million in the second quarter of 1996. The increase was primarily due
to an increase of $41.5 million in the average deposits outstanding during the
1996 period. The increase in interest expense on deposits was also the result
of an increase in the average rate paid on deposits, from 4.31% to 4.35% for
the three months ended June 30, 1995 and 1996, respectively.
PROVISION FOR LOAN LOSSES
The Company did not record a provision for loan losses for the three months
ended June 30, 1996 compared to $30,000 for the same period in 1995.
Management of the Company monitors the loan portfolio on a regular basis and
evaluates the adequacy of the allowance for loan losses. Management believes
that the allowance as of June 30, 1996 was adequate based on facts and
circumstances known to them at that time.
NONINTEREST INCOME
Noninterest income for the three-month period ended June 30, 1996 decreased
$102,000 or 15.3%, compared to the same period in 1995, primarily due to a net
trading account loss of $145,000 for the three-month period ended June 30, 1996
and the recording of $165,000 to reflect the unrealized loss on loans held for
sale at June 30, 1996. The Company had a trading securities portfolio profit
of $58,000, and no unrealized losses on loans held for sale during the 1995
period. Those decreases were partially offset by an increase of $286,000 in
other noninterest income due primarily to a refund of $312,000 related to a
1983 housing bond program.
NONINTEREST EXPENSES
Total noninterest expenses decreased by $241,000 or 9.9% for the three-month
period ended June 30, 1996, compared to the same period in 1995. This decrease
was primarily due to a gain of $243,000 on real estate operations in the second
quarter of 1996 compared to a loss of $254,000 in the same quarter of 1995,
partially offset by increases in employee compensation and benefits, occupancy
and equipment and other noninterest expenses.
INCOME TAXES
The income tax provision for the three months ended June 30, 1996, was $310,000
(an effective rate of 37.3%) compared to $174,000 (an effective rate of 34.1%)
for the 1995 period.
19
<PAGE> 21
F.F.O. FINANCIAL GROUP, INC.
COMPARISON OF SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
INTEREST INCOME
For the six months ended June 30, 1996, total interest income was $10.9
million, an increase of $1.1 million from the same period in 1995, due
primarily to an $1.1 million increase in interest income on mortgage-backed
securities and a $285,000 increase in interest on loans, partially offset by a
decrease of $244,000 in interest income on investment securities. The increase
in interest income on loans was primarily the result of a $12.2 million
increase in average loans outstanding for the six months ended June 30, 1996
compared with the same 1995 period, partially offset by a decrease in average
yield earned during the period. The increase in interest income on
mortgage-backed securities was due to a $35.7 million increase in the average
balance of those securities outstanding during the 1996 period. Interest
income on investment securities decreased primarily due to a decrease in the
average balance outstanding, partially offset by an increase in the average
yield earned on those securities in 1996 compared to 1995.
INTEREST EXPENSE
Total interest expense for the six months ended June 30, 1996 was $6.1 million,
an increase of $1.3 million or 28.4% from the same period in 1995. Interest
expense on deposits increased from $4.6 million in the 1995 period to $5.8
million for the six months ended June 30, 1996. The increase was due to an
increase of $40.7 million in the average balance of deposits outstanding during
1996 and an increase in the average rate paid on deposits, from 4.12% for the
six months ended June 30, 1995 to 4.41% for the 1996 period.
PROVISION FOR LOAN LOSSES
The Company's provision for loan losses for the six months ended June 30, 1996
was $150,000, compared to $171,000 for the same period in 1995. Management of
the Company monitors the loan portfolio on a regular basis and evaluates the
adequacy of the allowance for loan losses. Management believes that the
allowance as of June 30, 1996 was adequate based on facts and circumstances
known to them at that time.
NONINTEREST INCOME
Noninterest income for the six-month period ended June 30, 1996 decreased
$461,000 or 34.7%, compared to the same period in 1995, primarily due to a net
trading account loss of $323,000 and unrealized losses of $276,000 on loans
held for sale for the six-month period ended June 30, 1996. The Company had a
net trading profit of $163,000, and no unrealized loss on loans held for sale
during the comparable 1995 period. Those decreases were partially offset by an
increase of $279,000 in other noninterest income, which was primarily due to a
$312,000 refund related to a 1983 housing bond program.
NONINTEREST EXPENSES
Total noninterest expenses decreased by $381,000 or 7.7% for the six-month
period ended June 30, 1996, compared to the same period in 1995. That decrease
was due primarily to a gain on real estate operations of $210,000 during the
six months ended June 30, 1996 compared to a loss on real estate operations of
$466,000 during the 1995 period, partially offset by increases in legal and
professional fees, occupancy and equipment, marketing and advertising and other
noninterest expenses.
INCOME TAXES
The income tax provision for the six months ended June 30, 1996, was $343,000
(an effective rate of 37.2%) compared to $424,000 (an effective rate of 34.8%)
for the 1995 period.
20
<PAGE> 22
F.F.O. FINANCIAL GROUP, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not engaged in any legal proceedings of a material nature at
the present time. From time to time, it is a party to legal proceedings in
the ordinary course of business wherein it enforces its security interest
in loans.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders ("Annual Meeting") of F.F.O. Financial
Group, Inc. ("Company") was held on April 24, 1996, to consider the election
of two directors, each for a term of three years and the ratification of the
appointment of the Company's independent auditors for the year ending
December 31, 1996. At the Annual Meeting, incumbent directors James B.
Davis and Edward A. Moore were reelected.
At the Annual Meeting, 7,648,781 shares were present in person or by proxy.
The following is a summary and tabulation of the matters that were voted
upon at the Annual Meeting:
PROPOSAL I.
The election of two directors, each for a term of three years:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR WITHHELD AGAINST NONVOTES
--- -------- ------- ----------
<S> <C> <C> <C> <C>
James B. Davis 7,645,023 3,758 - -
========= ======== ======= ==========
Edward A. Moore 7,646,100 2,681 - -
========= ======== ======= ==========
</TABLE>
PROPOSAL II:
To ratify the appointment of the Company's independent auditors for the
year ending December 31, 1996: ABSTENTIONS
<TABLE>
<CAPTION>
AND BROKER
FOR WITHHELD AGAINST NONVOTES
--- -------- ------- ----------
<S> <C> <C> <C>
7,645,025 - 2,000 1,756
========= ======== ======= ==========
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: Exhibits 27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K: No reports on Form 8-K were filed by the
Company during the quarter.
21
<PAGE> 23
F.F.O. FINANCIAL GROUP, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
F.F.O. FINANCIAL GROUP, INC.
(Registrant)
Date: August 12, 1996 By: /s/ James B. Davis
------------------------ --------------------------------------
James B. Davis, President and Chief
Executive Officer
Date: August 12, 1996 By: /s/ Phyllis A. Elam
------------------------ --------------------------------------
Phyllis A. Elam, Senior Vice President
and Chief Financial Officer
22
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF F.F.O. FINANCIAL GROUP, INC., FOR THE SIX MONTHS ENDED
JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 5,401
<INT-BEARING-DEPOSITS> 21,404
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 17,909
<INVESTMENTS-HELD-FOR-SALE> 37,565
<INVESTMENTS-CARRYING> 16,524
<INVESTMENTS-MARKET> 16,565
<LOANS> 194,487
<ALLOWANCE> (5,131)
<TOTAL-ASSETS> 307,055
<DEPOSITS> 262,755
<SHORT-TERM> 20,000
<LIABILITIES-OTHER> 5,195
<LONG-TERM> 0
0
0
<COMMON> 843
<OTHER-SE> 18,262
<TOTAL-LIABILITIES-AND-EQUITY> 307,055
<INTEREST-LOAN> 8,090
<INTEREST-INVEST> 2,601
<INTEREST-OTHER> 173
<INTEREST-TOTAL> 10,864
<INTEREST-DEPOSIT> 5,803
<INTEREST-EXPENSE> 6,082
<INTEREST-INCOME-NET> 4,782
<LOAN-LOSSES> 0
<SECURITIES-GAINS> (323)
<EXPENSE-OTHER> 4,578
<INCOME-PRETAX> 921
<INCOME-PRE-EXTRAORDINARY> 921
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 578
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
<YIELD-ACTUAL> 7.80
<LOANS-NON> 3,187
<LOANS-PAST> 0
<LOANS-TROUBLED> 4,876
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,210
<CHARGE-OFFS> (83)
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 5,131
<ALLOWANCE-DOMESTIC> 5,131
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
