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 MARCH 31, 2000
|_| 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 May 5, 2000
- ---------------------------- --------------------------
Common Stock, $.01 par value 2,511,915 shares
Transitional Small Business Disclosure Format
(Check one):
YES [ ] NO [ X ]
<PAGE>
FIRSTFED BANCORP, INC.
----------------------
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
AS OF MARCH 31, 2000, AND DECEMBER 31, 1999..............................2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE
MONTHS ENDED MARCH 31, 2000 AND 1999.....................................3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE
MONTHS ENDED MARCH 31, 2000 AND 1999 ....................................4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2000 AND 1999...............................5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ......................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
OF OPERATION.................................................8
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
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
<TABLE>
<CAPTION>
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
--------------------------------------------------------
(Dollar amounts in thousands)
March 31, December 31,
ASSETS 2000 1999
--------- ---------
<S> <C> <C>
Cash and Cash Equivalents:
Cash on hand and in banks $ 3,943 $ 6,132
Interest-bearing deposits in other banks 10,082 6,455
Federal funds sold 7,350 5,250
--------- ---------
21,375 17,837
--------- ---------
Securities available-for-sale, at fair value 12,204 12,383
Loans held for sale 106 255
Securities held-to-maturity, at amortized cost, fair
value of $18,131 and $18,602, respectively 18,336 18,825
Loans receivable, net 113,887 114,404
Land, buildings and equipment, net 3,100 3,151
Goodwill 1,173 1,200
Real estate owned 879 709
Accrued interest receivable 1,495 1,603
Other assets 830 880
--------- ---------
$ 173,385 $ 171,247
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 153,465 $ 151,579
Accrued interest payable 166 147
Dividends payable 175 175
Other liabilities 381 366
--------- ---------
154,187 152,267
Stockholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none outstanding -- --
Common stock, $.01 par value, 10,000,000 shares
authorized, 3,089,389 shares issued and 2,509,487
shares outstanding at March 31, 2000 and 3,084,133
shares issued and 2,347,886 shares outstanding at
December 31, 1999 31 31
Paid-in capital 7,820 7,773
Retained earnings 16,189 16,155
Deferred compensation obligation 1,353 1,307
Deferred compensation treasury stock (159,550
shares at March 31, 2000 and 156,345 shares at
December 31, 1999) (1,466) (1,433)
Treasury stock, at cost (579,902 shares at March 31, 2000
and December 31, 1999) (3,752) (3,752)
Unearned compensation (897) (934)
Accumulated other comprehensive income (80) (167)
--------- ---------
19,198 18,980
--------- ---------
$ 173,385 $ 171,247
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Dollar amounts in thousands, except per share amounts)
Three Months Ended
March 31,
2000 1999
---------- ----------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 2,574 $ 2,480
Interest and dividends on
securities 458 299
Other interest income 178 425
---------- ----------
Total interest income 3,210 3,204
---------- ----------
INTEREST EXPENSE:
Interest on deposits 1,518 1,779
---------- ----------
Total interest expense 1,518 1,779
---------- ----------
Net interest income 1,692 1,425
Provision for loan losses 29 29
---------- ----------
Net interest income after
provision for oan losses 1,663 1,396
---------- ----------
NONINTEREST INCOME:
Fees and other noninterest income 216 239
---------- ----------
Total noninterest income 216 239
---------- ----------
NONINTEREST EXPENSE:
Salaries and employee benefits 737 650
Office building and equipment
expenses 149 147
Deposit insurance expense 10 19
Amortization of goodwill 27 27
Other operating expenses 350 304
---------- ----------
Total noninterest expenses 1,273 1,147
---------- ----------
Income before in me taxe 606 488
Provision for income taxes 221 177
---------- ----------
NET INCOME $ 385 $ 311
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC 2,437,021 2,386,377
========== ==========
BASIC EARNINGS PER SHARE $ .16 $ .13
========== ==========
AVERAGE N MBER OF SHARES
OUTSTANDING - DILUTED 2,518,683 2,464,437
========== ==========
DILUTED EARNINGS PER SHARE $ .15 $ .13
========== ==========
DIVIDENDS DECLARED PER SHARE $ .14 $ .14
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
FIRSTFED BANCORP, INC.
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
---------------------------------------------------------
For the Three Months Ended March 31, 2000 and 1999
--------------------------------------------------
(Dollar amounts in thousands, except per share amounts)
Deferred Accumulated
Deferred Compen- Compre- Compre-
Compen- sation Unearned hensive hensive
Common Paid-In Retained sation Treasury Treasury Compen- Income Income
Stock Capital Earnings Obligation Stock Stock sation (Loss) (Note 1)
----- ------- -------- ---------- ----- ----- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998 $ 30 $ 7,502 $ 15,622 $ 1,199 $(1,373) $(3,752) $(1,064) $ 39
Net income -- -- 311 -- -- -- -- -- $ 311
Change in unrealized gain
(loss) on securities
available for sale, net
of tax of $21 -- -- -- -- -- -- -- (37) (37)
Comprehensive income- -- -- -- -- -- -- -- -- $ 274
Amortization of unearned
compensation -- -- -- -- -- -- 38 --
Dividends declared ($.14
per share) -- -- (347) -- -- -- -- --
Exercise of stock options1 45 -- -- -- -- -- --
Amortization of Deferred
Compensation -- -- -- 8 -- -- -- --
Purchase of Deferred
Compensation Treasury -- -- -- 17 (17) -- -- --
Stock issued under Dividend
Reinvestment Plan -- 61 -- -- -- -- -- --
------- ------- -------- --------- ------- ------- ------- -------
BALANCE, March 31, 1999 $ 31 $ 7,608 $ 15,586 $ 1,224 $(1,390) $(3,752) $(1,026) $ 2
======= ======= ========= ========= ======= ======= ======= =======
BALANCE, December 31, 1999$ 31 7,773 $ 16,155 $ 1,307 $(1,433) $(3,752) $ (934) $ (167)
Net income -- -- 385 -- -- -- -- -- $ 385
Change in unrealized gain
(loss) on securities
available for sale, net
of tax of $31 -- -- -- -- -- -- -- 87 87
Comprehensive income- -- -- -- -- -- -- -- -- $ 298
Amortization of unearned
compensation -- -- -- -- -- -- 37 --
Dividends declared ($.14
per share) -- -- (351) -- -- -- -- --
Amortization of Deferred
Compensation -- -- -- 13 -- -- -- --
Purchase of Deferred
Compensation Treasury -- -- -- 33 (33) -- -- --
Stock issued under Dividend
Reinvestment Plan -- 47 -- -- -- -- -- --
------- ------- -------- --------- ------- ------- ------- --------
BALANCE, March 31, 2000 $ 31 $ 7,820 $ 16,189 $ 1,353 $(1,466) $(3,752) $ (897) $ (80)
======= ======= ======== ========= ======= ======= ======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
FIRSTFED BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollar amounts in thousands)
Three Months Ended
March 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 2000 1999
-------- --------
<S> <C> <C>
Net income $ 385 $ 311
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, amortization and accretion 131 81
Loan fees (cost) deferred, net 7 84
Provision for loan losses 29 29
Loss (gain) on sale of real estate, net 36 (26)
Origination of loans held for sale (1,324) (4,315)
Proceeds from loans held for sale 1,473 5,726
Amortization of goodwill 27 27
Provision for deferred compensation 33 17
Decrease (increase) in assets:
Accrued interest receivable 108 43
Other assets 118 (32)
Increase (decrease) in liabilities:
Accrued interest payable 19 18
Other liabilities 15 36
-------- --------
Net cash provided by operating activities 1,057 1,999
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities available-for-sale 200 1,350
Purchase of securities available-for-sale -- (2,000)
Proceeds from maturities and payments received on securities held-to-maturity 457 3,220
Purchase of securities held-to-maturity -- (4,000)
Proceeds from sale of real estate and repossessed assets 100 645
Net loan repayments (originations) 188 (2,409)
Capital expenditures (13) (144)
-------- --------
Net cash provided by (used in) investing activities 932 (3,338)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits, net 1,886 (4,759)
Proceeds from exercise of stock options -- 45
Dividends paid (351) (351)
Proceeds from dividend reinvestment 47 61
Purchase of treasury stock for Deferred Compensation Plan (33) (17)
-------- --------
Net cash provided by (used in) financing activities 1,549 (5,021)
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,538 (6,360)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 17,837 43,635
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,375 $ 37,275
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for -
Income taxes $ 100 $ 31
Interest 1,499 1,761
Non-cash transactions -
Transfer of loans receivable to real estate owned 304 93
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<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 March 31,
2000 (unaudited), and December 31, 1999, and for the three months ended March
31, 2000 and 1999 (unaudited), include the accounts of the Company and the
Banks. All significant intercompany transactions and accounts have been
eliminated in consolidation.
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 March 31, 2000, 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 incorporated in
the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999.
The accounting policies followed by the Company are set forth in the Summary of
Significant Accounting Policies in the Company's December 31, 1999, Consolidated
Financial Statements.
2. EARNINGS AND DIVIDENDS PER SHARE:
---------------------------------
Earnings per share ("EPS") for the three months ended March 31, 2000 and 1999,
respectively, were as follows:
<TABLE>
<CAPTION>
Three Months Three Months
Ended March 31, 2000 Ended March 31, 1999
----------------------------------------- ----------------------------------------
Dilutive Dilutive
Effect of Effect of
Options Options
Basic Issued Diluted Basic Issued Diluted
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $ 385,000 -- $ 385,000 $ 311,000 -- $ 311,000
Shares available to
common shareholders 2,437,021 81,662 2,518,683 2,386,377 78,060 2,464,437
---------- ---------- ---------- ---------- ---------- ----------
Earnings per share $ 0.16 -- $ 0.15 $ 0.13 -- $ 0.13
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
Options to purchase 12,985 shares of common stock were outstanding during the
quarter ended March 31, 2000, but were not included in the computation of
diluted EPS because the options' exercise price was greater than the average
market price of the common stock.
6
<PAGE>
Dividends declared for the quarter ended March 31, 2000, consisted of a $.07 per
share special dividend and $.07 per share quarterly dividend.
3. SEGMENT DISCLOSURE:
------------------
The holding company is considered a separate reportable segment from the banking
operations since it does not offer products or services or interact with
customers, but does meet the quantitative threshold as outlined in the
accounting standards. The Company's segment disclosure is as follows for the
three months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
March 31, 2000
-----------------------------------------------------
Banking Holding Total
Operations Company Eliminations Company
---------- ------- ------------ -------
(In thousands)
<S> <C> <C> <C> <C>
Net interest income $ 1,672 $ 20 $ - $ 1,692
Provision for loan losses 29 - - 29
Noninterest income 216 - - 216
Noninterest expense 1,137 136 - 1,273
--------- -------- --------- ----------
Income before income
taxes 722 (116) - 606
Income tax expense 260 (39) - 221
--------- -------- --------- ----------
Net income $ 462 $ (77) $ - $ 385
========= ======== ======== ==========
Total assets $ 173,236 $ 19,487 $ (19,338) $ 173,385
========= ======== ========= ==========
<CAPTION>
March 31, 1999
-----------------------------------------------------
Banking Holding Total
Operations Company Eliminations Company
---------- ------- ------------ -------
(In thousands)
<S> <C> <C> <C> <C>
Net interest income $ 1,400 $ 25 $ - $ 1,425
Provision for loan losses 29 - - 29
Noninterest income 239 - - 239
Noninterest expense 1,059 88 - 1,147
--------- -------- --------- ----------
Income before income
taxes 551 (63) - 488
Income tax expense 200 (23) - 177
--------- -------- --------- ----------
Net income $ 351 $ (40) $ - $ 311
========= ======== ========= =========
Total assets $ 181,016 $ 18,619 $ (18,115) $ 181,520
========= ======== ========= ==========
</TABLE>
7
<PAGE>
ITEM 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, changes in the general economy, and
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 March 31, 2000, and December 31, 1999
- -----------------------------------------------------------------------------
All dollar amounts, except per share amounts, included hereafter in Management's
Discussion and Analysis are in thousands.
Interest-bearing deposits and fed funds sold increased $5,727, or 48.9%, to
$17,432 at March 31, 2000. The increase is primarily the result of a slight
decrease in loans, securities and cash.
Securities available for sale and held to maturity decreased in the aggregate
$668, or 2.1%, to $30,540 at March 31, 2000, primarily due to maturities and
repayments.
Loans receivable, net, at March 31, 2000, were $113,887, a decrease of $517, or
0.5%, from $114,404 at December 31, 1999. The decrease in loans receivable, net,
was primarily due to a slight decrease in demand for adjustable-rate loans not
sold into the secondary market.
The Company's consolidated allowance for loan losses decreased slightly to $984
at March 31, 2000, from $1,038 at December 31, 1999. This decrease was primarily
due to charge-offs over recoveries of $83 net of a provision of $29.
Nonperforming loans at March 31, 2000, increased to $2,723, or 2.39% of loans
receivable, from $2,027, or 1.77% of loans receivable, at December 31, 1999. At
March 31,2000, 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 $879 at March 31, 2000, an increase of $170 from December
31, 1999, as a result of the addition of several properties net of several
dispositions.
Deposits increased $1,886, or 1.2%, to $153,465 at March 31, 2000, from $151,579
at December 31, 1999. The increase is primarily the result of fluctuations in
checking and savings account balances.
The Company had stockholders' equity of $19,198 as of March 31, 2000, an
increase of $218, or 1.1%, from $18,980 as of December 31, 1999. The increase
was primarily attributable to net income for the three months ended March 31,
2000, of $385, net of dividends of $.14 per share. Included in such dividends
was a special dividend of $.07 per share, which was declared during the first
quarter.
8
<PAGE>
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 March 31, 2000, the Banks had commitments
to originate and fund loans of $8.6 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 March 31,2000, was 19%, 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 March 31,
2000.
<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 $13,3941 7.22% $ 3,954 15.58% $18,025 17.39%
Minimum Required 3,111 4.00% 1,015 4.00% 4,147 4.00%
------- ----- ------- ----- ------- -----
Excess $10,283 13.22% $ 2,939 11.58% $13,878 13.39%
======= ===== ======= ===== ======= =====
Total Capital
Tier 1 Capital plus allowances
for loan losses $14,100 18.13% $ 4,219 16.62% $19,009 18.33%
Minimum Required 6,223 8.00% 2,031 8.00% 8,294 8.00%
------- ----- ------- ----- ------- -----
Excess $ 7,877 10.13% $ 2,188 8.62% $10,715 10.33%
======= ===== ======= ===== ======= =====
LEVERAGE RATIOS
Tier 1 Capital $13,394 10.47% $ 3,954 8.79% $18,025 10.46%
Minimum Leverage Requirement 5,119 4.00% 1,799 4.00% 6,993 4.00%
------- ----- ------- ----- ------- -----
Excess $ 8,275 6.47% $ 2,155 4.79% $11,032 6.46%
======= ===== ======= ===== ======= =====
TANGIBLE CAPITAL RATIO
Tangible Capital $13,394 10.47% N/A N/A
Tangible Capital Requirement 1,920 1.50%
------- -----
Excess $11,474 8.97%
======= =====
</TABLE>
As of March 31, 2000, 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.
<PAGE>
Results of Operations - Comparison of the Three Months Ended March 31, 2000 and
1999
- --------------------------------------------------------------------------------
Net income for the three months ended March 31, 2000, was $385, an increase of
$74, or 23.8%, from net income of $311 for the three months ended March 31,
1999. The increase was primarily attributable to an increase in the Banks'
interest rate spread.
9
<PAGE>
Interest Income
- ---------------
Total interest income increased $6, or 0.2%, to $3,210 for the three months
ended March 31, 2000. This increase was primarily due to an increase in the
average yield on interest-earning assets to 8.2% from 7.5%. This increase was
partially offset by a decrease in the average balance of interest-earnings
assets.
Interest Expense
- ----------------
Interest expense for the quarter ended March 31, 2000, was $1,518, a decrease of
$261, or 14.7%, from $1,779 for the quarter ended March 31, 1999. The decrease
was primarily the result of a reduction in average rate paid to 4.0% for the
three months ended March 31, 2000, compared to 4.3% for the corresponding
quarter of the previous year, in addition to a decrease in average balance. The
decrease in the average rate paid on deposits is primarily the result of the
movement of rate-sensitive funds.
Net Interest Income
- -------------------
Net interest income for the quarter ended March 31, 2000, increased $267, or
18.7%, to $1,692 from the quarter ended March 31, 1999, level of $1,425. This
increase was due in part to an increase in the average net interest spread to
4.1% for the first quarter of fiscal 2000 compared to 3.2% for the same period a
year ago. The increase was net of a decrease in the average balance of
interest-earning assets and interest-bearing liabilities during the first
quarter of fiscal 2000 compared to the same period a year ago. The net interest
margin increased to 4.3% in the first quarter of fiscal 2000.
Provision for Loan Losses
- -------------------------
Management increased the Company's total allowance for loan losses by a
provision of $29 during the quarter ended March 31, 2000. The Banks' allowances
for loan losses were based on management's evaluation of possible losses 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 March 31, 2000, decreased $23, to
$216, from the March 31, 1999, level of $239. The decrease in noninterest income
is primarily the result of a decrease in secondary market fees for loans sold.
Noninterest Expenses
- --------------------
Noninterest expenses during the quarter ended March 31, 2000, increased $126, or
11.0%, to $1,273, from the March 31, 1999, quarter of $1,147. The increase was
attributable to slight increases in employee costs and other operating expenses.
<PAGE>
Income Taxes
- ------------
The provision for income taxes increased $44, or 24.9%, to $221 for the quarter
ended March 31, 2000, as compared to the corresponding quarter in the previous
year. The increased tax expense was due primarily to an increase in pretax
income from the same period a year ago.
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 March 31, 2000, 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.
Exhibit 27 - Financial Data Schedule (SEC Use Only)
(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: May 11, 2000 \s\ B. K. Goodwin, III
------------ ----------------------
B. K. Goodwin, III,
Chairman of the Board,
Chief Executive Officer
and President
Date: May 11, 2000 \s\ Lynn J. Joyce
------------ -----------------
Lynn J. Joyce
Chief Financial Officer, Vice
President, Secretary and
Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,943
<INT-BEARING-DEPOSITS> 10,082
<FED-FUNDS-SOLD> 7,350
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,204
<INVESTMENTS-CARRYING> 18,336
<INVESTMENTS-MARKET> 18,131
<LOANS> 113,887
<ALLOWANCE> 984
<TOTAL-ASSETS> 173,385
<DEPOSITS> 153,465
<SHORT-TERM> 0
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0
0
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<INTEREST-TOTAL> 3,210
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<EPS-DILUTED> .15
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<ALLOWANCE-UNALLOCATED> 984
</TABLE>
