<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
----------------------------
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM_________ TO________
Commission File Number: 0-19609
-------
FirstFed Bancorp, Inc.
-------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Delaware 63-1048648
- -------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1630 Fourth Avenue North
Bessemer, Alabama 35020
- ------------------------------ --------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (205) 428-8472
--------------
Check whether the issuer (1) 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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at August 13, 1998
- ---------------------------- ------------------------------
Common Stock, $.01 par value 2,434,544 shares
Transitional Small Business Disclosure Format
(Check one):
YES NO X
----- -----
<PAGE>
FIRSTFED BANCORP, INC.
----------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF JUNE 30, 1998 AND MARCH 31, 1998..........................................................................2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE
MONTHS ENDED JUNE 30, 1998 AND 1997.............................................................................3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED JUNE 30, 1998 AND 1997.......................................................................4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS .............................................................5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION.............................................................................................7
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.......................................................................................11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS...............................................................11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.........................................................................11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................11
ITEM 5. OTHER INFORMATION.......................................................................................11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................................................................11
SIGNATURES.......................................................................................................12
</TABLE>
THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FURNISHED HAVE NOT BEEN AUDITED
BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, BUT REFLECT, IN THE OPINION OF
MANAGEMENT, ALL ADJUSTMENTS NECESSARY FOR A FAIR PRESENTATION OF FINANCIAL
CONDITION AND THE RESULTS OF OPERATIONS FOR THE PERIODS PRESENTED.
i.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
--------------------------------------------------------
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
ASSETS June 30, March 31,
1998 1998
--------- ---------
<S> <C> <C>
Cash and Cash Equivalents:
Cash on hand and in banks $ 6,007 $ 3,443
Interest-bearing deposits in other banks 2,477 5,592
Federal funds sold 23,200 19,050
--------- ---------
31,684 28,085
--------- ---------
Securities available for sale, at fair value 8,596 9,191
Assets held for sale 1,270 778
Securities held to maturity, at amortized cost, fair
value of $15,072 and $19,291, respectively 14,931 19,118
Loans receivable, net 116,462 117,541
Land, buildings and equipment, net 2,890 2,922
Goodwill 1,362 1,389
Real estate owned 844 665
Accrued interest receivable 1,321 1,399
Other assets 533 380
--------- ---------
$ 179,893 $ 181,468
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 161,324 $ 162,859
Accrued interest payable 124 197
Income taxes payable 29 111
Dividends payable 170 150
Other liabilities 448 518
--------- ---------
162,095 163,835
--------- ---------
Stockholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none outstanding -- --
Common stock, $.01 par value, 10,000,000 shares
authorized, 3,014,322 shares issued and
2,434,420 shares outstanding 30 14
Paid-in capital 7,368 7,098
Retained earnings 15,259 15,204
Treasury stock (3,752) (3,752)
Unearned compensation (1,124) (948)
Unrealized gain on securities available
for sale, net 17 17
--------- ---------
17,798 17,633
--------- ---------
$ 179,893 $ 181,468
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------------
1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 2,705 $ 2,852
Interest and dividends on
securities 399 468
Other interest income 279 94
---------- ----------
Total interest income 3,383 3,414
---------- ----------
INTEREST EXPENSE:
Interest on deposits 1,807 1,806
Interest on other borrowings -- 18
---------- ----------
Total interest expense 1,807 1,824
---------- ----------
Net interest income 1,576 1,590
Provision for loan losses 29 51
---------- ----------
Net interest income after
provision for loan losses 1,547 1,539
---------- ----------
NONINTEREST INCOME:
Fees for customer service 177 179
Miscellaneous operating and
non-operating income, net 27 50
---------- ----------
Total noninterest income 204 229
---------- ----------
NONINTEREST EXPENSE:
Salaries and employee benefits 701 598
Office building and equipment
expenses 141 134
Deposit insurance expense 22 23
Amortization of goodwill 27 27
Other operating expenses 294 325
---------- ----------
Total noninterest expenses 1,185 1,107
---------- ----------
Income before income taxes 566 661
Provision for income taxes 190 227
---------- ----------
NET INCOME $ 376 $ 434
========== ==========
AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC 2,321,010 2,458,334
========== ==========
BASIC EARNINGS PER SHARE $ .16 $ .18
========== ==========
AVERAGE NUMBER OF SHARES
OUTSTANDING - DILUTED 2,447,685 2,557,800
========== ==========
DILUTED EARNINGS PER SHARE $ .15 $ .17
========== ==========
DIVIDENDS DECLARED PER SHARE $ .1325 $ .1125
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1998 1997
-------- --------
<S> <C> <C>
Net income $ 376 $ 434
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation 67 63
Amortization of unearned compensation 31 19
Amortization of premiums, net 77 18
Accretion of deferred income (58) (12)
Loan fees (cost) deferred, net 54 (40)
Provision for loan losses 29 51
Loss on sale of real estate, net 10 --
Origination of loans held for sale (3,387) (1,725)
Proceeds from loans held for sale 2,895 1,654
Amortization of goodwill 27 27
Change in assets and liabilities:
Decrease in accrued interest receivable 78 32
Increase in other assets (153) (2)
Decrease in accrued interest payable (73) (24)
Increase (decrease) in income taxes payable (82) 19
Increase (decrease) in other liabilities (70) 1,496
-------- --------
Net cash provided by (used in) operating
activities (179) 2,010
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and payments received on
securities available for sale 1,096 1,011
Purchase of securities available for sale (499) --
Proceeds from maturities of securities held to maturity 4,108 1,002
Proceeds from sale of repossessed assets 50 --
Net loan repayments 815 1,825
Capital expenditures (33) (104)
-------- --------
Net cash provided by investing activities 5,537 3,734
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in deposits, net (1,535) (1,848)
Proceeds from exercise of stock options 38 21
Dividends paid (301) (247)
Proceeds from dividend reinvestment 39 --
Purchase of treasury stock -- (1,539)
-------- --------
Net cash used in financing activities (1,759) (3,613)
-------- --------
NET INCREASE IN CASH & CASH EQUIVALENTS 3,599 2,131
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 28,085 13,965
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 31,684 $ 16,096
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for-
Income taxes $ 272 $ 208
Interest 1,880 1,848
Noncash transactions-
Transfer of loans receivable to real estate
owned 239 618
Declaration of cash dividends 170 154
Decrease in unrealized loss on securities available
for sale, net of deferred tax -- 41
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
FIRSTFED BANCORP, INC.
----------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
1. BASIS OF PRESENTATION:
----------------------
FirstFed Bancorp, Inc. (the "Company") is the holding company and sole
shareholder of First Federal Savings Bank ("First Federal") and First State
Corporation ("FSC"), which in turn is the sole shareholder of First State Bank
of Bibb County ("First State"). First Federal and First State are referred to
herein collectively as the "Banks".
The accompanying condensed consolidated financial statements as of June 30, 1998
(unaudited), and March 31, 1998, and for the three months ended June 30, 1998
and 1997 (unaudited), include the accounts of the Company and the Banks. All
significant intercompany transactions and accounts have been eliminated in
consolidation.
The Board of Directors has changed the fiscal year-end of the Company from March
31 to December 31 of each year, effective December 31, 1998.
In the opinion of management, all adjustments (none of which are other than
normal recurring accruals) necessary for a fair presentation of the results of
such interim periods have been included. The results of operations for the three
months ended June 30, 1998, are not necessarily indicative of the results of
operations which may be expected for the entire year.
These unaudited condensed financial statements should be read in conjunction
with the Consolidated Financial Statements and the notes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended March 31, 1998. The
accounting policies followed by the Company are set forth in the Summary of
Significant Accounting Policies in the Company's March 31, 1998, Consolidated
Financial Statements.
2. COMMON STOCK:
-------------
The number of common stock shares authorized increase from 3,000,000 to
10,000,000 in July, 1998, when an amendment to the Company's Certificate of
Incorporation received approval from the stockholders.
On July 21, 1998, the Board of Directors declared a two-for-one stock split,
effected in the form of a 100% stock dividend on the Company's outstanding
common stock to stockholders of record on July 31, 1998. Common stock and
paid-in capital as of June 30, 1998, and March 31, 1998, have been restated to
reflect the split. All share and per share data included in this Form 10-QSB
have been restated to reflect the split.
5
<PAGE>
3. EARNINGS AND DIVIDENDS PER SHARE:
---------------------------------
Earnings per share for the three months ended June 30, 1998 and 1997,
respectively, were as follows:
<TABLE>
<CAPTION>
Three Months Three Months
Ended June 30, 1998 Ended June 30, 1997
------------------------------------------ --------------------------------------------
Dilutive Dilutive
Effect of Effect of
Options Options
Basic Issued Diluted Basic Issued Diluted
---------- --------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 376,000 -- $ 376,000 $ 434,000 -- $ 434,000
Shares available to
common shareholders 2,321,010 126,675 2,447,685 2,458,334 99,466 2,557,800
---------- --------- ---------- ---------- -------- ----------
Earnings per share $ 0.16 -- $ 0.15 $ 0.18 -- $ 0.17
========== ========= ========== ========== ======== ==========
</TABLE>
Dividends declared for the quarter ended June 30, 1998, consisted of a
$.0625 per share special dividend and $.07 per share quarterly dividend.
4. REPORTING COMPREHENSIVE INCOME:
-------------------------------
The Financial Accounting Standards Board ("FASB") has issued SFAS No. 130,
"Reporting Comprehensive Income." This Statement established standards for
reporting and display of comprehensive income. The Company adopted this
Statement on April 1, 1998. The following is disclosure of comprehensive
income balances as of June 30, 1998.
Unrealized
Gains on Securities
-------------------
Balance, April 1, 1998 $ 17
Current-period change, net --
---------
Balance, June 30, 1998 $ 17
=========
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management's discussion and analysis includes certain forward-looking statements
addressing, among other things, the Company's prospects for earnings, asset
growth and net interest margin. Forward-looking statements are accompanied by,
and identified with, such terms as "anticipates," "believes," "expects,"
"intends," and similar phrases. Management's expectations for the Company's
future necessarily involve a number of assumptions and estimates. Factors that
could cause actual results to differ from the expectations expressed herein are:
substantial changes in interest rates, and changes in the general economy,
changes in the Company's strategies for credit-risk management, interest-rate
risk management and investment activities. Accordingly, any forward-looking
statements included herein do not purport to be predictions of future events or
circumstances and may not be realized.
Comparison of Financial Condition as of June 30, 1998, and March 31, 1998
- -------------------------------------------------------------------------
All dollar amounts, except per share amounts, included hereafter in Management's
Discussion and Analysis are in thousands.
Fed funds increased $4,150, or 21.8%, to $23,200 at June 30, 1998. The increase
was primarily the result of funds received from the repayment of securities and
loans receivable. Funds are invested based on the needs of the Company and
opportunities in the market place.
Securities available for sale and held to maturity decreased in the aggregate
$4,782, or 16.9%, to $23,527 at June 30, 1998, primarily due to securities
totaling $5,204 maturing, being called prior to maturity or payments being
received, net of purchases totaling $499.
Loans receivable, net, at June 30, 1998, were $116,462, a decrease of $1,079, or
0.9%, from $117,541 at March 31, 1998. The decrease in loans receivable, net,
was primarily due to repayments and the origination of loans for sale in the
secondary market rather than for retention in the Banks' portfolios.
The Company's consolidated allowance for loan losses decreased slightly to
$1,065 at June 30, 1998, from $1,106 at March 31, 1998. This decrease was
primarily due to net charge-offs over recoveries of $70 net of a provision of
$29. Nonperforming loans at June 30, 1998, decreased slightly to $1,695, or
1.45%, of loans receivable from $1,735, or 1.48%, of loans receivable at March
31, 1998. At June 30, 1998, there were no material loans not included in
nonperforming loans which represented material credits about which management
was aware of any information which caused management to have serious doubts as
to the ability of such borrowers to comply with the loan repayment terms.
Real estate owned was $844 at June 30, 1998, an increase of $179 from March 31,
1998, as a result of foreclosures on loans that had been nonperforming at March
31, 1998. Based on an evaluation of the properties, management does not believe
that the Company will suffer any material loss upon their disposition.
Deposits decreased $1,535, or 0.9%, to $161,324 at June 30, 1998, from $162,859
at March 31, 1998. The slight decrease in deposits was primarily the result of
variations in the balances of commercial accounts.
7
<PAGE>
The Company had stockholders' equity of $17,798 as of June 30, 1998, an increase
of $165, or 0.9%, from $17,633 as of March 31, 1998. The increase was primarily
attributable to net income for the three months ended June 30, 1998, of $376,
net of dividends of $.1325 per share. Included in such dividend was a special
dividend of $.0625 per share, which was declared during the first quarter.
Liquidity and Capital Resources
- -------------------------------
Traditionally, the Banks' principal sources of funds have been deposits,
principal and interest payments on loans and mortgage-backed securities, and
proceeds from interest on and maturities of investments. In addition, First
Federal has borrowing ability from the Federal Home Loan Bank of Atlanta if the
need for additional funds arises. At June 30, 1998, the Banks had commitments to
originate and fund loans of $7.8 million. The Banks anticipate that they will
have sufficient funds available to meet their current commitments.
First Federal is required by regulation to maintain minimum levels of liquid
assets. The liquidity ratio of First Federal at June 30, 1998, was 23%, which
exceeded the applicable regulatory requirement.
Under applicable regulations, First Federal, First State and the Company are
each required to maintain minimum capital ratios. Set forth below are actual
capital ratios and the minimum regulatory capital requirements as of June 30,
1998.
<TABLE>
<CAPTION>
First Federal First State The Company
------------------------- ------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
RISK-BASED CAPITAL RATIOS
Tier 1 Capital
Stockholders' Equity less goodwill $ 11,010 8.71% $ 3,039 7.25% $ 16,419 9.13%
Minimum Required 5,496 4.00% 1,676 4.00% 7,196 4.00%
-------- ---------- -------- ---------- -------- -----------
Excess $ 5,514 4.71% $ 1,363 3.25% $ 9,223 5.13%
======== ========== ======== ========== ======== ===========
Total Capital
Tier 1 Capital plus allowances
for loan losses $ 11,773 13.57% $ 3,342 13.76% $ 17,484 15.75%
Minimum Required 6,938 8.00% 1,942 8.00% 8,881 8.00%
-------- ---------- -------- ---------- -------- -----------
Excess $ 4,835 5.57% $ 1,400 5.76% $ 8,603 7.75%
======== ========== ======== ========== ======== ===========
Total Risk-weighted Assets $ 86,731 $ 24,281 $111,012
========== ========
LEVERAGE RATIOS
Tier 1 Capital $ 11,010 8.71% $ 3,039 7.25% $ 16,419 9.13%
Minimum Leverage Requirement 4,122 3.00% 1,257 3.00% 5,397 3.00%
-------- ---------- -------- ---------- -------- -----------
Excess $ 6,888 5.71% $ 1,782 4.25% $ 11,022 6.13%
======== ========== ======== ========== ======== ===========
TANGIBLE CAPITAL RATIO
Tangible Capital $ 11,010 8.71% N/A N/A
Tangible Capital Requirement 2,061 1.50%
-------- -----------
Excess $ 8,949 7.21%
======== ===========
</TABLE>
As of June 30, 1998, management was not aware of any trends, events or
uncertainties that will have or are reasonably likely to have a material effect
on the Company's or the Banks' liquidity, capital resources or operations.
8
<PAGE>
Results of Operations - Comparison of the Three Months Ended June 30, 1998 and
- ------------------------------------------------------------------------------
1997
- ----
Net income for the three months ended June 30, 1998, was $376, a decrease of
$58, or 13.4%, from net income of $434 for the three months ended June 30, 1997.
The decrease was primarily attributable to a decrease in the Banks' interest
rate spread because of a high liquidity position and costs incurred in
connection with the opening of a new First Federal branch in Vance, Alabama, in
July 1997. These items should contribute to future earnings and growth.
Interest Income
- ---------------
Total interest income decreased $31, or 0.9%, to $3,383 for the three months
ended June 30, 1998. This decrease was primarily due to a decrease in the
average yield on interest-earning assets to 8.2%, from 8.3% for the
corresponding quarter of the previous year, net of a slight increase in the
average balance of interest-earnings assets.
Interest income on loans decreased $147, or 0.5%, to $2,705 during the three
months ended June 30, 1998, from $2,852 for the three months ended June 30,
1997. The decrease was primarily the result of a decrease in the average balance
of loans for the three months ended July 31, 1998, as compared to the
corresponding quarter in the previous year. The decrease was net of an increase
in the average yield on loans to 9.1% for the three months ended June 30, 1998,
compared to 9.0% for the same period a year ago.
Interest and dividends on the securities portfolio decreased $69, or 14.7%, for
the three months ended June 30, 1998, as compared to the same period in fiscal
1998. This decrease reflects an 11.3% decrease in the average balance of
securities in addition to a decrease in the average yield for the three months
ended June 30, 1998, compared to the same period a year ago.
Other interest income increased $185, or 196.8%, for the three months ended June
30, 1998, from $94 for the three months ended June 30, 1997. The increase was
the result of 157.7% increase in the average balance of federal funds sold and
interest-bearing deposits plus an increase in average yield to 5.5% for the
three months ended June 30, 1998, compared to 4.8% for the corresponding quarter
of the previous year.
Interest Expense
- ----------------
Interest expense for the quarter ended June 30, 1998, was $1,807, a decrease of
$17, or 0.9%, to $1,807 from the quarter ended June 30, 1997. The decrease was
primarily the result of a reduction in average yield to 4.7% for the three
months ended June 30, 1998, compared to 4.6% for the corresponding quarter of
the previous year, net of an increase in average balance.
Net Interest Income
- -------------------
Net interest income for the quarter ended June 30, 1998, decreased $14, or 0.9%,
to $1,576 from the quarter ended June 30, 1997, level of $1,590. This decrease
was due in part to a decrease in the average net interest spread to 3.62% for
the first quarter of fiscal 1999 from 3.64% for the first quarter of fiscal
1998. The decrease was net of a slight increase in the average balance of
interest-earning assets and interest-bearing liabilities during the first
quarter of fiscal 1999 compared to the first quarter of fiscal
9
<PAGE>
1998. The net interest margin decreased to 3.8% in the first quarter of fiscal
1999 from 3.9% for the first quarter of fiscal 1998.
Provision for Loan Losses
- -------------------------
Management increased the Company's total allowance for loan losses by a
provision of $29 during the quarter ended June 30, 1998. The Banks' allowances
for loan losses were based on management's evaluation of possible losses
inherent in the loan portfolio and consider, among other factors, prior years'
loss experience, economic conditions, distribution of portfolio loans by risk
class and the estimated value of the underlying collateral.
Noninterest Income
- ------------------
Noninterest income during the quarter ended June 30, 1998, decreased $25, to
$204, from the June 30, 1997, level of $229. The decrease was primarily related
to a decline in lease income resulting from the sale of property during the
third quarter of the previous year that was under lease until that time.
Noninterest Expenses
- --------------------
Noninterest expenses during the quarter ended June 30, 1998, increased $78 to
$1,185 from the June 30, 1997, level of $1,107. The increase in noninterest
expense was primarily the result of opening a new branch in Vance, Alabama, in
July 1997.
Income Taxes
- ------------
The provision for income taxes decreased $37, or 16.3%, to $190 for the quarter
ended June 30, 1998, as compared to the corresponding quarter in 1997. The
decreased tax expense was due primarily to a decrease in pretax income from the
same period a year ago.
Year 2000
- ---------
The Company uses various software and related technologies in its business that
will be affected by the date change in the Year 2000. The date change will
require modifications to some software and computer systems so that dates beyond
December 31, 1999, will be properly recognized. The primary data processing
functions are through a third party processor. The Company believes that
upgrades, modifications or conversion of software planned by the Company and the
third party processor will properly address the Year 2000 issues.
The Company has applied both internal and external resources to the Year 2000
project. There was no specific expense associated with the Year 2000 project for
the quarter ended June 30, 1998, and such expense is not estimated to be
material in the fiscal year, although costs for improvements in technologies are
continually incurred in the normal course of business. The Banks are
communicating with customers regarding Year 2000 issues. The primary computer
functions are expected to be Year 2000 compliant by December 31, 1998.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, the Banks are parties to routine legal proceedings occurring
in the ordinary course of business. At June 30, 1998, there were no legal
proceedings to which the Company or the Banks were a party or parties, or to
which any of their property was subject, which were expected by management to
result in a material loss.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
11
<PAGE>
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.
FIRSTFED BANCORP, INC.
Date: August 13, 1998 /s/ B. K. Goodwin, III
------------------- -----------------------------
B. K. Goodwin, III,
Chairman of the Board,
Chief Executive Officer
and President
Date: August 13, 1998 /s/ Lynn J. Joyce
------------------- -----------------------------
Lynn J. Joyce
Chief Financial Officer, Vice
President, Secretary and
Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 6,007
<INT-BEARING-DEPOSITS> 2,477
<FED-FUNDS-SOLD> 23,200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,866
<INVESTMENTS-CARRYING> 14,931
<INVESTMENTS-MARKET> 15,072
<LOANS> 116,462
<ALLOWANCE> 1,065
<TOTAL-ASSETS> 179,893
<DEPOSITS> 161,324
<SHORT-TERM> 0
<LIABILITIES-OTHER> 771
<LONG-TERM> 0
0
0
<COMMON> 30
<OTHER-SE> 17,768
<TOTAL-LIABILITIES-AND-EQUITY> 179,893
<INTEREST-LOAN> 2,705
<INTEREST-INVEST> 399
<INTEREST-OTHER> 279
<INTEREST-TOTAL> 3,383
<INTEREST-DEPOSIT> 1,807
<INTEREST-EXPENSE> 1,807
<INTEREST-INCOME-NET> 1,576
<LOAN-LOSSES> 29
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,185
<INCOME-PRETAX> 566
<INCOME-PRE-EXTRAORDINARY> 566
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 376
<EPS-PRIMARY> .16
<EPS-DILUTED> .15
<YIELD-ACTUAL> 8.2
<LOANS-NON> 765
<LOANS-PAST> 930
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,106
<CHARGE-OFFS> 76
<RECOVERIES> 6
<ALLOWANCE-CLOSE> 1,065
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,065
</TABLE>
