FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended: DECEMBER 31, 1997
-----------------
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 0-18832
-------
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
KENTUCKY 61-1168311
-------- ----------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
2323 Ring Road
ELIZABETHTOWN, KENTUCKY 42701
-----------------------------
(Address of principal executive offices)
(Zip Code)
(502)765-2131
-------------
(Registrants's telephone number, including area code)
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.
CLASS OUTSTANDING AS OF JANUARY 31, 1998
----------- ------------------------------------
Common Stock 4,128,759 shares
This document is comprised of 13 pages.
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
INDEX
PART I - Financial Information Page Number
Item 1 - Financial Statements
Consolidated Statements of Financial Condition as
of December 31, 1997 (Unaudited) and June 30, 1997. 3
Consolidated Statements of Income for the Three Months
and Six Months Ended December 31, 1997 and 1996
(Unaudited). 4
Consolidated Statements of Cash Flows for the Six
Months Ended December 31, 1997 and 1996 (Unaudited). 5
Notes to Consolidated Financial Statements. 6
Item 2 - Management's Discussion and Analysis of the Consolidated
Statements of Financial Condition and Results of Operations. 7
PART II - Other Information 12
SIGNATURES 13
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, June 30,
ASSETS 1997 1997
------ ------------- -----------
(unaudited)
<S> <C> <C>
Cash $ 6,007,803 $ 8,694,283
Interest bearing deposits 1,679,051 481,430
Securities:
Securities held-to-maturity 16,444,240 17,484,427
Securities available-for-sale 2,005,816 5,192,323
(Total securities fair value: $18,559,135 at
December 31, 1997; $22,992,346 at June 30, 1997)
Loans receivable, net 344,029,240 327,791,495
Real estate owned:
Acquired through foreclosure 260,438 183,569
Held for development 687,261 687,261
Investment in Federal Home Loan Bank stock 2,879,500 2,777,200
Premises and equipment 10,671,415 10,221,228
Other assets 759,870 842,656
Excess of cost over net assets of affiliate purchased 2,904,445 3,024,481
----------- -----------
TOTAL ASSETS $388,329,079 $377,380,353
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
- ----------------------------------
LIABILITIES:
Savings deposits $290,367,820 $281,342,174
Advances from Federal Home Loan Bank 41,462,955 41,514,194
Accrued interest payable 198,642 202,982
Accounts payable and other liabilities 1,132,209 706,892
Deferred income taxes 2,067,144 1,949,361
------------ ------------
TOTAL LIABILITIES 335,228,770 325,715,603
------------ ------------
STOCKHOLDERS' EQUITY:
Serial preferred stock 5,000,000 shares authorized
and unissued -- --
Common stock, $1 par value per share; authorized
10,000,000 shares; issued and outstanding 4,143,732
shares on December 31, 1997 and 4,170,003 shares
on June 30, 1997 4,143,732 4,170,003
Additional paid-in capital 3,731,550 4,330,548
Retained earnings - substantially restricted 44,085,114 42,193,609
Net unrealized holding gain on securities
available-for-sale, net of tax 1,139,913 970,590
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 53,100,309 51,664,750
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $388,329,079 $377,380,353
============ ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Interest on loans $7,270,383 $6,683,488 $14,359,868 $13,191,837
Interest and dividends
on investments and deposits 422,576 449,395 854,817 893,716
---------- ---------- ----------- -----------
Total interest income 7,692,959 7,132,883 15,214,685 14,085,553
---------- --------- ---------- ----------
Interest expense:
Savings deposits 3,389,315 2,990,636 6,636,878 5,963,664
FHLB advances 603,222 591,268 1,184,213 1,101,833
--------- --------- --------- ---------
Total interest expense 3,992,537 3,581,904 7,821,091 7,065,497
--------- --------- --------- ---------
Net interest income 3,700,422 3,550,979 7,393,594 7,020,056
Provision for loan losses 30,000 -- 90,000 200,000
--------- --------- --------- ---------
Net interest income after
provision for loan losses 3,670,422 3,550,979 7,303,594 6,820,056
--------- --------- --------- ---------
Other income:
Customer service fees
on deposit accounts 323,703 290,171 636,948 611,076
Other income 290,987 207,097 600,922 430,165
Gain on sale of investment -- (6,000) 116,945 316,927
--------- ------- --------- ---------
Total other income 614,690 491,268 1,354,815 1,358,168
--------- ------- --------- ---------
Other expense:
Employee compensation
and benefits 925,429 857,613 1,813,564 1,744,126
Office occupancy and
equipment expense 232,525 211,725 470,058 442,285
Federal insurance
premiums (Note 2) 44,387 118,589 88,613 1,927,428
Marketing and advertising 98,226 103,393 184,622 201,704
Outside services and
data processing 151,899 148,049 295,413 302,949
State franchise tax 75,939 73,994 149,978 144,788
Other expense 539,386 434,561 975,812 877,939
--------- ------- --------- ---------
Total other expense 2,067,791 1,947,924 3,978,060 5,641,220
--------- --------- --------- ---------
Income before taxes 2,217,321 2,094,323 4,680,349 2,537,004
Income taxes 764,921 707,668 1,624,181 865,118
--------- --------- --------- ---------
Net Income $1,452,400 $1,386,655 $3,056,168 $1,671,886
========= ========== ========= =========
Weighted average common
shares outstanding 4,148,785 4,186,608 4,158,049 4,196,340
Net income per share
of common stock (Note 3) $ 0.35 $ 0.33 $ 0.74 $ 0.40
Dividends per share ====== ====== ====== ======
of common stock $ 0.14 $ 0.12 $ 0.28 $ 0.24
====== ====== ====== ======
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
Six Months Ended
DECEMBER 31,
-----------------
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $3,056,168 $1,671,886
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses and real estate owned 90,000 200,000
Provision for depreciation 292,290 257,431
Net change in deferred loan fees and cost 94,043 83,830
Federal Home Loan Bank stock dividends (102,300) (91,800)
Amortization of discounts on securities
held-to-maturity (61,806) (71,091)
Amortization of acquired intangible assets 120,036 120,036
Gain on sale of investments available-for-sale (116,945) (316,927)
Increase (Decrease) in interest payable (4,340) 92,024
Decrease in other assets 82,786 255,019
Increase in accounts payable and other liabilities 543,100 1,471,680
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,993,032 3,672,088
--------- ---------
INVESTING ACTIVITIES:
Sale of securities available-for-sale 3,479,138 335,111
Purchases of securities available-for-sale (36,082) (100,215)
Purchases of securities held-to-maturity (5,000,000) (6,000,000)
Principal collections on securities
held-to-maturity 6,101,993 274,811
Net increase in loans to customers (16,866,565) (16,573,888)
Purchases of premises and equipment (742,477) (588,250)
Sales of real estate acquired in settlement
of loans 382,948 399,839
Increase in real estate held for development -- (182,000)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (12,681,045) (22,404,592)
---------- ----------
FINANCING ACTIVITIES:
Advances from, repayments to,
Federal Home Loan Bank (51,239) 10,745,865
Net increase in customer savings deposits 9,025,646 2,046,163
Dividends paid (1,164,663) (1,005,430)
Proceeds from stock options exercised -- 60,543
Common stock repurchased (625,275) (730,411)
Collection on advance to ESOP 14,685 --
--------- ---------
Net cash provided by financing activities 7,199,154 11,116,730
--------- ----------
Increase (Decrease) in cash and cash equivalents (1,488,859) (7,615,774)
Cash and cash equivalents, beginning of year 9,175,713 16,160,272
--------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $7,686,854 $8,544,498
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. INTERIM FINANCIAL STATEMENTS
First Federal Financial Corporation of Kentucky ("Corporation") is the
parent to its wholly owned subsidiary, First Federal Savings Bank of
Elizabethtown ("Bank"). The Corporation has no material income, other
than that generated by the Bank.
In the opinion of management, these unaudited consolidated financial
statements include all adjustments necessary for a fair presentation of
its financial position as of December 31, 1997 and the results of its
operations and its cash flows for the three month and six month periods
then ended. All such adjustments were of a normal recurring nature.
The results of operations for the three month and six month periods
ended December 31, 1997 and 1996 are not necessarily indicative of the
results for the full years.
It is suggested that these financial statements be read in conjunction
with the financial statements, accounting policies and financial notes
thereto included in the Appendix to the Company's 1997 Proxy Statement
which has been previously filed with the Commission.
2. Federal Deposit Insurance Corporation (FDIC) legislation was signed
into law on September 30, 1996, to recapitalize the Savings Association
Insurance Fund (SAIF). All SAIF-insured savings institutions were
required to pay a one-time special assessment of $.657 for every $100
of customer deposits. This has resulted in a charge to earnings of
$1,658,151 ($1,094,380, net of tax) during the Bank's first quarter
ended September 30, 1996.
3. The Bank has elected to adopt SFAS No. 128 "Earnings per Share,"
effective for both interim and annual fiscal periods ending after
December 15, 1997. The reconcilation of the numerators and denominators
of the basic and diluted EPS computations is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
DECEMBER 31, DECEMBER 31,
------------------- ----------------
1997 1996 1997 1996
---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C>
Net income available
to common shareholders $1,452 $1,387 $3,056 $1,672
====== ====== ====== ======
Basic EPS:
Weighted average common shares 4,148,785 4,186,608 4,158,049 4,196,340
========= ========= ========= =========
Diluted EPS:
Weighted average common shares 4,148,785 4,186,608 4,158,049 4,196,340
Dilutive effect of stock options 30,237 43,271 28,739 47,800
Weighted average common and --------- --------- --------- ---------
incremental shares 4,179,022 4,229,879 4,186,788 4,244,140
========= ========= ========= =========
Earnings per share:
Basic $0.35 $0.33 $0.74 $0.40
===== ===== ===== =====
Diluted $0.35 $0.33 $0.73 $0.39
===== ===== ===== =====
</TABLE>
6
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
First Federal Financial Corporation of Kentucky ("Corporation") is the parent to
its wholly owned subsidiary, First Federal Savings Bank of Elizabethtown
("Bank"). The Bank has operations in the central Kentucky communities of
Elizabethtown, Radcliff, Bardstown, Munfordville, Shepherdsville, and Mt.
Washington.
The following discussion and analysis covers any material changes in the
financial condition since June 30, 1997 and any material changes in the results
of operations for the three month and six month periods ending, December 31,
1997. This discussion and analysis should be read in conjunction with
"Managements Discussion and Analysis of Financial Condition and Results of
Operations" included in the 1997 Annual Report to Shareholders.
RESULTS OF OPERATIONS
THREE MONTH PERIOD ENDED DECEMBER 31, 1997 VS. 1996 - Net income was $1,452,400
or $0.35 per share for the three month period ended December 31, 1997, as
compared to $1,386,655 or $0.33 per share for the same period in 1996. In
addition to the higher net income, the 6% increase in net income per share was
also attributable to the Corporation's stock repurchase plans which have reduced
the weighted average number of shares outstanding from 4,186,608 for the 1996
period to 4,148,785 for the 1997 period. The following discussion outlines the
material differences in income and expenses for the three month period ended
December 31, 1997, as compared to 1996.
Net interest income increased by $149,443 in 1997 as compared to 1996 in spite
of the declining net interest margin which was 3.97% for the 1997 period, as
compared to 4.08% for the 1996 period. The Corporation's cost of funds increased
by 21 basis points in 1997 compared to 1996, due to higher rates paid on
short-term customer deposits and FHLB advances.
Average interest-earning assets increased by $24 million from $342 million for
the 1996 period to $366 million for the 1997 period. Average loans were $26
million higher and averaged $342 million during 1997, while the average yield on
loans decreased by 5 basis points to 8.44%.
Average interest-bearing liabilities increased by $20 million to an average
balance of $330 million for the 1997 period. Customer deposits averaged $289
million during 1997, an increase of $22 million compared to the 1996 quarter.
Total other income was $614,690 for the three months ended December 31, 1997, as
compared to $491,268 for the 1996 period, a increase of $123,422. Customer
service fees charged on deposit accounts increased by $ 34,000 during 1997 due
to a growth in customer checking accounts. Other sources of income, such as
brokerage commissions, loan fees, safety deposit box rental, and other customer
transaction fees increased by $83,422, or 17% in 1997 versus 1996.
Total other expense was $2,067,791 for the three month period ended December 31,
1997, as compared to $1,947,924 for the 1996 period. This 6.2% increase of
$119,867 was primarily due to the Bank's opening of a new branch office in the
Bardstown community which became operational in November 1997, and inflationary
increases in other occupancy and equipment related expenses. Employee
compensation and benefits increased by 7.9% in 1997 as compared to 1996 due to
new employees added to service the normal customer growth of the bank. The rest
of the increase was attributable to expanded services and products offered to
customers. FDIC premiums were $74,202 lower this quarter versus the 1996 quarter
due to the SAIF special assessment reducing the normal prepaid quarterly
premium.
7
<PAGE>
SIX MONTH PERIOD ENDED DECEMBER 31, 1997 VS. 1996 - Net income was $3,056,168 or
$0.74 per share for the six month period ended December 31, 1997, as compared to
$2,766,266 or $0.66 per share for the same period in 1996. During the quarter
ended September 30, 1996, net income was affected by a one-time special
assessment of $1,658,151 ($1,094,380, net of tax) paid to the FDIC. Due to this
payment, actual net income was $1,671,886 or $0.40 per share during the 1996
period. See further discussion under "Regulatory Matters."
In addition to the higher net income the 12% increase in net income per share
was also attributable to the Corporation's stock repurchase plans which have
reduced the weighted average number of shares outstanding from 4,196,340 for the
1996 period to 4,158,049 for 1997.
Net interest income increased by $373,538 in 1997 as compared to 1996 in spite
of the declining net interest margin which was 4.04% for the 1997 period as
compared to 4.07% for the 1996 period. Average interest-earning assets increased
by $22 million during the six months ended December 31, 1997, compared to the
1996 period as average loans grew by $25 million. Average interest-bearing
liabilities increased by $20 million to an average balance of $326 million for
the 1997 period, while the average cost of funds increased by 17 basis points
during the comparative periods due to higher rates paid on short-term customer
deposits.
Total other income was $1,354,815 for the six months ended December 31, 1997, as
compared to $1,358,168 for the 1996 period, a decrease of $3,353. The decrease
in income is due to reduced sales of available-for-sale securities. For the 1997
period, the Bank reported gains from investment sales of $116,945 as compared to
$316,927 for 1996, a decrease of $199,982. Other sources of non-interest income,
such as brokerage commissions, loan fees, checking account fees, and other
customer transaction fees, increased by $196,629, or 19% in 1997 versus 1996.
Total other expense was $3,978,060 for the six months ended December 31, 1997,
as compared to $5,641,220 for the 1996 period, a decrease of $1,663,160. The
decrease is a result of the SAIF special assessment recorded in the first
quarter of 1996. Federal insurance premium expense decreased $153,815 during the
1997 period, reflecting lower assessment rates while other expenses remained
relatively constant.
8
<PAGE>
NON-PERFORMING ASSETS
Management periodically evaluates the adequacy of the allowance for loan losses
based on the Bank's past loan loss experience, known and inherent risks in the
portfolio, adverse situations that may effect the borrower's ability to repay
and other factors. During the six month period ended December 31, 1997,
management chose to add $90,000 to the reserve for loan loss. Although current
loan charge-offs and delinquencies are consistent with previous years, the
reserve was increased to compensate for the Bank's continued strong loan growth.
The Bank experienced an insignificant amount of uncollectible loans during the
periods indicated in the table below. Approximately 58% of the Bank's delinquent
loans are secured by one-to-four-family residences at December 31, 1997.
Three Months Ended Six Months Ended
DECEMBER 31, DECEMBER 31,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
(Dollars in thousands)
Allowance for loan losses:
Balance, beginning of period $1,766 $1,785 $1,715 $1,613
Provision for loan losses 30 -- 90 200
Charge-offs (10) (33) (25) (60)
Recoveries 9 20 15 19
------- ------ ------- ------
Balance, end of period $1,795 $1,772 $1,795 $1,772
====== ====== ====== ======
Net loans outstanding at quarter end $344,029 $318,284
Non-performing loans at quarter end:
Collateralized by one-to-four family homes $1,066 $971
Other non-performing loans $526 $343
Ratios:
Non-performing loans to total loans .46% .41%
Allowance for loan losses to non-performing
loans 113% 135%
Allowance for loan losses to net loans .52% .57%
Non-performing assets to total assets .48% .46%
LIQUIDITY & CAPITAL RESOURCES
Loan demand continued to be strong during the six months ended December 31,
1997, as net loans grew by $16.2 million to $344 million, a 10% annualized
growth rate. In spite of strong competition from new financial institutions,
mutual funds, and the stock market, customer deposits increased by $9.0 million,
or 6.4% annualized, during the six month period, primarily in customer accounts
with maturity terms under two years. The Bank's loan growth was funded by
additional borrowings of $5 million from the Federal Home Loan Bank.
Current regulations require the Corporation's subsidiary, First Federal Savings
Bank, to maintain minimum specific levels of liquid assets, (currently 4%) of
cash and eligible investments to the savings deposits and short-term borrowings.
At December 31, 1997, the Bank's liquid assets were 6.62% of its liquidity base.
The Bank intends to continue to fund loan growth (outstanding loan commitments
were $5.9 million at December 31, 1997) and any declines in customer deposits
through additional advances from the FHLB. At December 31, 1997, the Bank has an
unused approved line of credit in the amount of $11.4 million, and the potential
to significantly increase its indebtedness with the FHLB, if necessary, due to
the Bank's strong financial condition.
9
<PAGE>
The Office of Thrift Supervision's capital regulations require the Bank to meet
three capital standards. As indicated below, the Bank substantially exceeded the
regulatory requirements for each category at December 31, 1997.
(Dollars in thousands)
TANGIBLE CORE RISK-WEIGHTED
Actual capital $47,005 $47,005 $48,800
Regulatory requirement 5,753 14,923 20,040
------- ------- -------
Excess $41,252 $32,082 $28,760
======= ======= =======
REGULATORY MATTERS
The Bank insures its customers' deposits through the Savings Association
Insurance Fund ("SAIF"). On September 30, 1996, Federal Deposit Insurance
Corporation ("FDIC") legislation was signed into law to recapitalize the SAIF.
As was anticipated, all SAIF-insured savings institutions were required to pay a
one-time special assessment of $.657 for every $100 of customer deposits. This
has resulted in a charge to earnings of $1,095,000, net of tax,during the
quarter ended September 30, 1996. On January 1, 1997, the Bank began paying
insurance premiums of $.064 per $100 of deposits as compared to a previous
premium of $.23 per $100 of deposits.
NEW ACCOUNTING PRONOUNCEMENT
Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Comprehensive
Income," was issued in June 1997 and becomes effective for fiscal periods
beginning after December 15, 1997. SFAS 130 requires reclassification of earlier
financial statements for comparative purposes. SFAS No. 130 requires that
changes in the amounts of certain items, including foreign currency translation
adjustments and gains and losses on certain securities be shown in the financial
statements. SFAS No. 130 does not require a specific format for the financial
statement in which comprehensive income is reported, but does require that an
amount representing total comprehensive income be reported in that statement.
Management has determined that the adoption of SFAS 130 will not have a material
effect on the consolidated financial statements.
YEAR 2000
The Bank is currently in the process of addressing a potential problem that is
facing all users of automated information systems. This problem arises from the
fact that many computer systems process transactions based on two digits
representing the year of the transaction (e.g., "97" to represent "1997"),
rather than the full four digits. These computer systems may not operate
properly when the last two digits become "00", as will occur on January 1, 2000.
In some cases a date after December 31, 1999 will cause a computer to stop
operating, while in other cases incorrect output may result. This potential
problem could affect a wide variety of automated information systems such as
mainframe applications, personal computers, communications systems and other
information systems utilized in all industries.
The Bank recognizes the need to ensure its operations will not be adversely
impacted by Year 2000 software failures. To accomplish this, the Bank has an
ongoing program designed to ensure that its operational and financial systems
will be Year 2000 compliant. While the Bank believes it is taking all of the
appropriate steps to assure Year 2000 compliance, it is to some extent dependent
upon vendor cooperation. The Bank is requiring its computer systems and software
vendors to represent that the services and products provided are, or will be,
Year 2000 compliant. Due to the Bank's current contract expiring in March 1999
with its core
10
<PAGE>
operating system vendor, it is evaluating the alternative of staying with the
current third-party vendor or possibly switching to another.
Based on currently available information, management does not anticipate that
the cost to address the Year 2000 issue will have a material adverse impact on
the Bank's financial condition, results of operations, or liquidity. However, it
is recognized that any Year 2000 compliance failures could result in additional
expense to the Bank.
11
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
Part II. Other Information
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of
Security Holders
Not Applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits: Not Applicable
Reports on Form 8-K:
Not Applicable
12
<PAGE>
FIRST FEDERAL FINANCIAL CORPORATION OF KENTUCKY
Pursuant to the requirements of Section 13 or 15(d) 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.
DATE: February 11, 1998 BY: (S) B. KEITH JOHNSON
----------------------
B. Keith Johnson
President and Chief Executive Officer
DATE: February 11, 1998 BY: (S) RICHARD L. MUSE
---------------------
Richard L. Muse
Vice President and Comptroller
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
(This schedule contains summary financial information extracted from the
registrant's unaudited consolidated financial statements for the six months
ended December 31, 1997 and is qualified in its entirety by reference to such
financial statements.)
</LEGEND>
<CIK> 0000854395
<NAME> First Federal Financial Corp of Kentucky
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1998 JUN-30-1997
<PERIOD-START> JUL-01-1997 JUL-01-1996
<PERIOD-END> DEC-31-1997 DEC-31-1996
<EXCHANGE-RATE> 1.000 1.000
<CASH> 6,007,803 8,544,498
<INT-BEARING-DEPOSITS> 1,679,051 0
<FED-FUNDS-SOLD> 0 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 2,005,816 4,840,356
<INVESTMENTS-CARRYING> 16,444,240 17,790,077
<INVESTMENTS-MARKET> 18,559,135 23,103,148
<LOANS> 344,029,240 318,284,338
<ALLOWANCE> 1,794,751 1,772,000
<TOTAL-ASSETS> 388,329,079 367,067,314
<DEPOSITS> 290,367,820 266,991,907
<SHORT-TERM> 41,462,955 45,724,944
<LIABILITIES-OTHER> 3,397,995 3,107,886
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 4,143,732 4,182,018
<OTHER-SE> 48,956,577 45,804,694
<TOTAL-LIABILITIES-AND-EQUITY> 388,329,079 367,067,314
<INTEREST-LOAN> 14,359,868 13,191,837
<INTEREST-INVEST> 854,817 893,716
<INTEREST-OTHER> 0 0
<INTEREST-TOTAL> 15,214,685 14,085,553
<INTEREST-DEPOSIT> 6,636,878 5,963,664
<INTEREST-EXPENSE> 7,821,091 7,065,497
<INTEREST-INCOME-NET> 7,393,594 7,020,056
<LOAN-LOSSES> 90,000 200,000
<SECURITIES-GAINS> 116,945 316,927
<EXPENSE-OTHER> 3,978,060 5,641,219
<INCOME-PRETAX> 4,680,349 2,537,004
<INCOME-PRE-EXTRAORDINARY> 4,680,349 2,537,004
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,056,168 1,671,886
<EPS-PRIMARY> 0.74 0.40
<EPS-DILUTED> 0.73 0.39
<YIELD-ACTUAL> 8.35 8.23
<LOANS-NON> 0 0
<LOANS-PAST> 1,592,000 1,314,000
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 2,217,000 2,197,000
<ALLOWANCE-OPEN> 1,715,000 1,613,000
<CHARGE-OFFS> 25,000 60,000
<RECOVERIES> 15,000 19,000
<ALLOWANCE-CLOSE> 1,795,000 1,772,000
<ALLOWANCE-DOMESTIC> 0 0
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 1,795,000 1,772,000
</TABLE>
