SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
(Mark One)
[X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED:
DECEMBER 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM ___________ TO
_____________ FOR QUARTER ENDED
COMMISSION FILE NUMBER: 0-21688
FFBS BANCORP, INC.
(exact name of registrant as specified in its charter)
Delaware 64-0828070
(State or other (IRS Employer ID No)
jurisdiction of
incorporation or organization)
1121 Main Street, Columbus, Mississippi 39701
(Address of principal executive offices)
(601) 328-4631
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all the
reports required to be filed by Section 13 of 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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15 (d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
YES_____ NO_____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
1,572,639, shares of common stock, $.01 par value 12/31/97
Transitional Small Business Disclosure Format (check one):
YES ______ NO X
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
December 31 December 31
1997 1996 1997 1996
__________ __________ __________ __________
INTEREST INCOME
Interest and fees on
loans $2,049,974 $1,835,036 $4,081,430 $3,656,840
Interest on mortgage-
backed and related
securities 152,462 53,646 298,049 91,739
Interest on investment
securities 278,541 372,522 569,100 755,665
FHLB stock dividends 12,310 11,320 24,478 22,551
Interest on deposits
due from banks 70,126 83,294 117,973 141,317
__________ __________ __________ __________
2,563,413 2,355,818 5,091,030 4,668,112
INTEREST EXPENSE
Interest on deposits 1,326,504 1,176,591 2,621,490 2,324,121
Interest on FHLB
Advances 68,727 0 117,920 0
__________ __________ __________ __________
1,395,231 1,176,591 2,739,410 2,324,121
__________ __________ __________ __________
Net interest income 1,168,182 1,179,227 2,351,620 2,343,991
Provision of losses on
loans 5,000 0 5,000 0
__________ __________ __________ __________
Net interest income
after provision 1,163,182 1,179,227 2,346,620 2,343,991
for losses on loans
NON-INTEREST INCOME
Loan fees and service
charges 49,033 61,244 119,694 115,104
NOW account fees 78,668 75,244 150,935 153,767
Other 26,836 24,430 52,833 52,638
__________ __________ __________ __________
154,537 160,918 323,462 321,509
NON-INTEREST EXPENSE
Compensation and
benefits 383,975 344,821 746,395 690,727
Occupancy 26,277 33,738 53,612 61,382
Furniture and equip-
ment 17,603 17,259 36,388 35,891
Deposit insurance
premium 16,263 44,302 32,340 699,148
Loss on foreclosed
real estate 310 25 310 146
Data processing 37,372 36,099 79,998 72,606
Other 169,782 168,226 324,516 309,937
__________ __________ __________ __________
651,582 644,470 1,273,559 1,869,837
Income before income
taxes and cumulative
effect of accounting
change 666,137 695,675 1,396,523 795,663
Income tax expense
Current 248,668 198,200 501,783 174,988
Deferred income tax 3,000 23,000 29,000 41,000
__________ __________ __________ __________
Net Income $ 414,469 $ 474,475 $ 865,740 $ 579,675
========== ========== ========== ==========
Basic Earnings per
common share $ 0.28 $ 0.31 $ 0.58 $ 0.38
Diluted Earnings per
common share $ 0.27 $ 0.31 $ 0.56 $ 0.38
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
ASSETS DECEMBER 31 JUNE 30
1997 1997
____________ ___________
Cash $ 2,176,656 $ 3,347,511
Interest-bearing deposits due from banks 4,474,216 5,058,945
Federal funds sold 0 0
____________ ___________
Total cash and cash equivalents 6,650,872 8,406,456
Other interest-bearing deposits due
from banks 0 0
Investment securities (approximate market
value of $16,977,950 at Dec. 31, 1997
and $18,758,223 at June 30, 1997) 16,992,329 18,814,395
Mortgage-backed and related securities
(approximate market value of $13,342,152
at Dec. 31, 1997 and $7,256,822 at
June 30, 1997) 13,316,180 7,267,626
Federal Home Loan Bank stock, at cost 826,300 801,900
Loans receivable, net 97,474,811 92,760,267
Foreclosed real estate 118,966 0
Properties and equipment 1,578,444 1,354,677
Accrued interest receivable 1,102,255 1,064,535
Other assets 295,504 292,445
____________ ___________
Total Assets $138,355,661 $130,762,301
============ ============
LIABILITIES AND RETAINED EARNINGS
Liabilities:
Deposits $107,812,086 $103,798,255
Advances from borrowers for taxes and
insurance 110,780 277,749
Accrued interest payable on deposits 496,745 763,339
Accrued expenses and other liabilities 965,561 781,370
Advances/Borrowings from Federal Home
Loan Bank 6,570,000 0
____________ ____________
Total Liabilities 115,955,172 105,620,713
Commitments and contingencies
Stockholders' equity
Cummulative preferred stock, $.01 par
value, 500,000 shares authorized;
shares issued and outstanding - none
Common stock, $.01 par value, 2,000,000
shares authorized; 1,574,639 and
1,565,595 shares issued and outstanding
at Dec. 31, 1997 and June 30, 1997,
respectively. 15,746 15,656
Additional paid in capital 15,462,273 15,371,923
Retained earnings 7,947,256 10,692,318
Unrealized gain <loss> on available-for-
sale securities 5,078 4,789
Loan receivable from ESOP (761,760) (761,760)
Treasury Stock at cost (12,076 shares) (268,104) (181,338)
____________ ____________
Total stockholders' equity 22,400,489 25,141,588
____________ ____________
Total liabilities and retained earnings $138,355,661 $130,762,301
============ ============
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
December 31
1997 1996
____________ ____________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 865,740 $ 579,674
Adjustments to reconcile net earnings
to net cash:
Depreciation of properties and
equipment 42,331 45,488
Accretion of discount on loans (7,074) (6,461)
Accretion of discount on mortgage-
backed securities (4,006) (466)
Accretion of discount on investments (6,337) (13,043)
Amortization of premium on investments 5,069 10,256
Amortization of premium on mortgage-
backed securities 16,963 2,143
Deferred income taxes <benefit> 29,000 41,000
FHLB stock dividends (24,400) (22,500)
Provision for losses on loans 5,000 0
Sale of loans 3,238,000 2,923,000
Loans originated for sale (3,238,000) (2,923,000)
<Increase> decrease in accrued
interest receivable (37,720) 52,487
<Increase> decrease in other assets (3,059) 113,244
Increase <decrease> in accrued
interest payable on deposits (266,594) (314,902)
Increase <decrease> in accrued
expenses and other liabilities 155,191 28,504
Provision for losses on foreclosed
real estate 0 0
_____________ ____________
Net cash provided by operating
activities 770,104 515,424
CASH FLOWS FROM INVESTING ACTIVITIES
<Increase> decrease in other interest-
bearing deposits due from banks 0 0
Loan originations (26,508,000) (24,945,000)
Purchase of investment securities (4,808,772) (6,528,078)
Sale of equipment 11,993 0
Purchase of mortgage-backed and related
securities (8,139,859) (3,657,749)
Principal repayment of loans 21,795,530 21,835,697
Principal repayments of mortgage-backed
and related securities 2,060,408 213,054
Proceeds from calls and maturities of
investment securities 6,650,000 10,500,000
Purchase of loans 0 0
Sale of foreclosed real estate 0 554,515
Foreclosure of real estate (118,966) 0
Purchase of properties and equipment (278,091) (14,483)
_____________ ____________
Net cash used investing activities (9,335,757) (2,042,044)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from FHLB 6,791,000 0
Repayments of borrowings from FHLB (221,000) 0
Increase <decrease> in deposits 4,013,831 2,314,752
Increase <decrease> in advances from
borrowers for taxes and insurance (166,969) (179,338)
Purchase of company stock (268,104) (222,829)
Dividends declared (3,510,918) (391,899)
Dividends paid 0 0
Exercise of stock options 171,940 39,670
Adjustment to unrealized loss on
available-for-sale securities 289 2,333
_____________ ____________
Net cash provided by <used in>
financing activities 6,810,069 1,562,689
_____________ ____________
Net increase <decrease> in cash and cash
equivalents (1,755,584) 36,069
Cash and cash equivalents at beginning of
period 8,406,456 7,561,222
_____________ ____________
Cash and cash equivalents at end of period $ 6,650,872 $ 7,597,291
============= ============
FFBS BANCORP, INC.
Notes to Unaudited Consolidated Financial Statements
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements include
the accounts of FFBS Bancorp, Inc. and its wholly owned subsidiary, First
Federal Bank for Savings. All significant intercompany balances and
transactions have been eliminated for the purpose of the consolidated
financial statements. In preparing the statement, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheets and revenues
and expenses for the periods. Actual results could differ from those
estimates. In the opinion of management, all adjustments necessary for
the fair presentation of the results of operations for the interim periods
presented have been made. Such adjustments were of a normal recurring
nature.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The results of
operations for the interim periods are not necessarily indicative of the
results that may be expected for the entire fiscal year.
(2) Earnings Per Share
Basic earnings per share for the six months ended December 31, 1997
have been computed on the basis of the weighted average number of common
shares outstanding (1,492,986).
Diluted earnings per share have been computed on the basis of the
weighted average number of common shares outstanding (1,492,986) and common
stock equivalent shares (41,231) outstanding. Common stock equivalent
shares arise from stock option plans and a recognition and retention stock
plan
FFBS BANCORP, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
(unaudited)
At and for the At and for the
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
____________ ____________ ____________ ____________
Select
Consolidated
Financial
Condition Data:
Total Assets $138,355,661 $127,125,322 $138,355,661 $127,125,322
Loans receivable,
net 97,474,811 86,643,915 97,474,811 86,643,915
Deposits 107,812,086 101,462,860 107,812,086 101,462,860
Borrowings 6,570,000 0 6,570,000 0
Stockholders'
equity 22,400,489 24,645,284 22,400,489 24,645,284
Selected
Consolidated
Operations Data:
Net interest
income 1,168,182 1,179,227 2,351,620 2,343,991
Provision for
loan losses 5,000 0 5,000 0
Non-interest
income 154,537 160,918 323,462 321,509
Non-interest
expense 651,582 644,470 1,273,559 1,869,837
Net income 414,469 474,475 865,740 579,675
Per Share Data:
Book value at
end of period $ 15.06 $ $16.68 $ 15.06 $ 16.68
Diluted earnings
per common and
common equivalent
share 0.27 0.31 0.56 0.38
Cash dividends
declared 0.25 0.25 2.25 0.25
Other Data:
Yield on average
earning assets 7.86% 7.79% 7.87% 7.74%
Cost of funds 5.04% 4.73% 4.94% 4.71%
Interest rate
spread 2.82% 3.06% 2.93% 3.03%
Net interest
margin (1) 3.61% 3.96% 3.71% 3.97%
Annualized return
on average assets 1.21% 1.50% 1.28% 0.92%
Annualized return
on average equity 7.35% 7.67% 7.56% 4.69%
Stockholder's
equity as a
percentage of
total assets 16.19% 19.39% 16.19% 19.39%
Non-performing
assets as a
percentage of
total assets (2) 0.003% 1.00% 0.003% 1.00%
Net interest
income as a
percentage of
general and
administrative
expenses 179.28% 182.98% 184.65% 125.36%
(1) Net interest income divided by average interest earning assets.
(2) Non-performing assets consist of non-accruing loans, accruing loans
delinquent 90 days or more, and foreclosed real estate.
FFBS BANCORP, INC.
FINANCIAL DATA SCHEDULE
At or For Six At or For The
Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
_____________ _____________
Cash $ 2,176,656 $ 3,347,511
Interest-bearing deposits due from banks 4,474,216 5,058,945
Federal funds sold 0 0
Trading account assets 0 0
Investments and mortgage-backed securities
held for sale 8,666,209 1,221,505
Investments and mortgage-backed securities
held to maturity - carrying value 21,642,300 24,860,516
Investments and mortgage-backed securities
held to maturity - market value 21,653,894 24,793,540
Loans 98,022,811 93,336,267
Allowance for losses 548,000 576,000
Total assets 138,355,661 130,762,301
Deposits 107,812,086 103,798,255
Short-term borrowings 5,220,000 0
Long-term borrowings 1,350,000 0
Other liabilities 1,573,086 1,822,458
Preferred stock - mandatory redemption 0 0
Preferred stock - no mandatory redemption 0 0
Common stock 15,746 15,656
Other stockholders' equity 22,384,743 25,125,932
Net yield - interest-earning assets -
actual 3.71% 3.93%
Loans on nonaccrual 0 0
Accruing loans past due 90 days or more 583,000 446,000
Troubled debt restructuring 156,000 39,000
Potential problem loans 0 0
Allowance for loan loss - beginning of
period 550,000 666,000
Provision for loan losses 5,000 0
Total charge-offs 8,000 97,000
Total recoveries 1,000 7,000
Allowance for loan loss - end of period 548,000 576,000
Loan loss allowance allocated to domestic
loans 548,000 576,000
Loan loss allowance allocated to foreign
loans 0 0
Loan loss allowance - unallocated 0 0
Non-performing Assets
1. The following table sets forth information regarding non-accrual loans,
loans which are 90 or more days delinquent and still accruing, and
foreclosed properties at the date indicated. At December 31, 1997,
there are no other potential problem loans except as included in the
table below.
(In Thousands)
At
Dec. 31 June 30
1997 1997
_______ _______
Non-accrual mortgage loans 0 0
Non-accrual other loans 0 0
_______ _______
Total non-accrual loans 0 0
Loans 90 days or more delinquent
and still accruing 583 446
_______ _______
Total non-performing loans 583 446
Total foreclosed real estate, net of
related allowance for losses 117 0
_______ _______
Total non-performing assets 700 446
======= =======
Troubled debt restructured 156 39
======= =======
Non-performing loans to total loans 0.59% 0.48%
Total non-performing assets to total assets 0.51% 0.34%
2. There were no loan concentrations in excess of 10% of total loans at
December 31, 1997.
3. There were no outstanding foreign loans at December 31, 1997.
4. Loans classified for regulatory purposes or for internal credit review
that have not been disclosed in the above table do not represent or
result from trends or uncertainties that management expects will
materially impact the financial condition of the Company or its
subsidary bank, or the future operating results, liquidity, or capital
resources.
5. If all nonaccrual loans have been current throughout their terms,
interest income for the nine months ended December 31, 1997 and
June 30, 1997 would be increased (decreased) by approximately $0
and $0 respectively.
6. Management stringently monitors assets that are classified as non-
performing. Non-performing assets include nonaccrual loans, loans past
due 90 days or more, and foreclosed properties. Management places loans
on a nonaccrual status when it is determined that the borrower is
unable to meet his contractual obligations or when interest or
principal is 90 days or more past due, unless the loan is adequately
secured by way of collateralization, guarantees, or other security.
7. At December 31, 1997, management was not aware of any potential
problem loans not previously disclosed.
Allowance for Loan Losses
The allowance for loan losses is established through a provision for loan
losses based on management's periodic evaluation of the adequacy of the
allowance for loan losses. Such evaluation, which includes a review of
all loans on which full collectibility may not be reasonably assured,
considers, among other matters, known and inherent risks in the portfolio,
prevailing market conditions, management's judgement as to collectibility,
the estimated net realizable value of the underlying collateral,
historical loan loss experience and other factors that warrant recognition
in providing for an adequate loan loss allowance.
(In Thousands)
For the Six For the
Months Ended Year Ended
Dec. 31 June 30
1997 1997
____________ ___________
Balance at beginning of period $ 550 $ 666
Provision for loan losses 5 0
Charge-offs:
Mortgage loans 0 0
Other loans 8 97
Recoveries:
Mortgage loans 0 0
Other loans 1 7
------------ -----------
Balance at end of period $ 548 $ 576
============ ===========
Ratio of net charge-offs during the
period to average loans outstanding Annualized)
during the period 0.008% 0.11%
Ratio of allowance for loan losses
to non-performing loans at end of
period 94.00% 129.15%
Ratio of allowance for loan losses
to net loans receivable at the end
of the period 0.56% 0.62%
Ratio of allowance for loan losses and
foreclosed real estate to total
non-performing assets at end of the
period 78.29% 129.15%
FFBS BANCORP, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion reviews the financial condition of FFBS
Bancorp, Inc. and its wholly owned subsidiary First Federal Bank for
Savings as of December 31, 1997, and the results of operations for the
six month period ending December 31, 1997 and for the three month period
ending December 31, 1997.
Comparison of Changes in Financial Condition
at December 31, 1997 and at June 30, 1997
At December 31, 1997, total assets were $138.4 million, an increase
of $7.6 million, or 5.81% from June 30, 1997. Total cash and cash
equivalents decreased $1.8 million, or 20.9%, to $6.7 million at
December 31, 1997. Investment securities also decreased $1.8 million,
or 9.68%, to $17.0 million at December 31, 1997. Cash and proceeds from
maturities or calls of investment securities were invested in
mortgage-backed and related securities and loans. Mortgage-backed and
related securities were $13.3 million at December 31, 1997, an increase
of $6.0 million, or 83.23%. Loans receivable continued to show strong
gains to total $97.5 million at December 31, 1997, an increase of $4.7
million, or 5.08%. Deposits grew $4.0 million, or 3.87%, to $107.8
million at December 31, 1997. Advances from the Federal Home Loan
Bank grew to $6.6 million at December 31, 1997, as the Bank leverages
more investments. Stockholder's equity on December 31, 1997, of $22.4
million remained strong at 16.19% of assets. Dividend payments of
$3.5 million decreased stockholder's equity as did the purchase of
$268,000 of treasury stock.
Liquidity and Capital Resources
Positive cash flows of $770,000 were provided by the Company's
operating activities for the six months ended December 31, 1997,
primarily as a result of net income.
Investing activities of the Company provided negative cash flows of
$9.3 million for the six months ended December 31, 1997, resulting from
an increase in loan originations over loan repayments of $4.7 million
and an increase in purchases over repayments of mortgage-backed and
related securities of $6.1 million. Positive cash flows were provided
by proceeds from calls and maturities of investment securities over
purchases of investment securities of $1.8 million.
Financing activities provided positive cash flows of $6.8 million for
the six months ended December 31, 1997, due to an increase in deposits of
$4.0 million and advances from the Federal Home Loan Bank of $6.6 million.
Offsetting the increase in deposits and advances were $3.5 million in
dividends.
The Company is required to maintain minimum levels of liquid assets
as defined by OTS regulations. This requirement, which may be varied at
the direction of the OTS depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowings.
The required minimum liquidity ratio is currently 5.0%. At December 31,
1997, the Bank's liquidity ratio was 24.24%.
The OTS capital regulations require savings institutions to meet
three capital standards: a 1.5% tangible capital standard; a 3% leverage
(core capital) ratio; and an 8% risk-based capital standard. Although
the core capital ratio is 3%, the OTS regulations provide that an
institution with less than 4% core capital is deemed to be
"undercapitalized".
At December 31, 1997, the Bank's capital position exceeded minimum
regulatory capital requirements as indicated by the following table
(dollars in thousands):
Risk-based
Tangible Capital Core Capital Capital
________________ ________________ ________________
Amount Percent Amount Percent Amount Percent
_______ _______ _______ _______ _______ _______
First Federal $18,857 13.90% $18,857 13.90% $19,405 25.87%
OTS Requirement 2,034 1.5% 4,069 3.0% 6,000 8.0%
_______ _______ _______ _______ _______ _______
Excess $16,823 12.40% $14,788 10.90% $13,405 17.87%
======= ======= ======= ======= ======= =======
Comparison of Operating Results for the
Three Months Ended December 31, 1997 and 1996
General. Net income of the Company for the three months ended
December 31, 1997 was $414,000 compared to $474,000 for the three
months ended December 31, 1996, which is a decrease of $60,000,
or 12.65%, due primarily to increased compensation and benefits
and increased taxes.
Interest Income. Interest income increased $208,000, or 8.8%, to
$2.6 million for the three months ended December 31, 1997 due to an
increase of $8.8 million in average-earning assets and an increase
in yield on average-earning assets to 7.86% from 7.79% for the three
months ended December 31, 1996.
Interest Expense. Interest expense increased $216,000, or 18.32%,
to $1.4 million for the three months ended December 31, 1997 due to
an increase of $6.7 million in average deposits and $5.2 million in
average Federal Home Loan Bank advances. Also contributing to the
increase in interest expense was an increase in cost of funds
from 4.73% for the three months ended December 31, 1996 to 5.04% for
the three months ended December 31, 1997.
Net Interest Income. Net interest income decreased $11,000, or .93%,
to $1.2 million for the three months ended December 31, 1997. The net
interest margin was 3.61% for the three months ended December 31,
1997, which was a decrease from 3.96% for the three months ended
December 31, 1996.
Provision for Loan Losses. The Bank increased its provision to the
reserve for loan losses $5,000 during the three months ended
December 31, 1997. No provision for loan losses was taken for the
three months ended December 31 1996, because the Bank's reserve for
loan losses was considered sufficient to absorb potential losses.
Non-interest Income. Non-interest income decreased $6,000, or 3.9%,
to $155,000 for the three months ended December 31, 1997.
Non-interest Expense. Non-interest expense increased $7,000, or 1.1%,
to $652,000 for the three months ended December 31, 1997. Compensation
and benefits increased $39,000, or 11.35%, to $384,000 for the three
months ended December 31, 1997 due to added employees and more employees
participating in benefit plans. Deposit insurance decreased $28,000, or
63.3%, to $16,000 for the three months ended December 31, 1997 due to
decreased premium rates.
Income Tax Expense. Income tax expense amounted to $252,000 for the
three months ended December 31, 1997 compared to $221,000 for the
three months ended December 31, 1996. The prior years taxes were
at a reduced rate due to the taxable deduction of certain benefit plan
provisions.
Comparison of Operating Results for the
Six Months Ended December 31, 1997 and 1996
General. Net income of the Company for the six months ended December 31,
1997 was $866,000 compared to $580,000 for the six months ended
December 31, 1996, which is an increase of $286,000, or 49.3%. Net
income was decreased $376,000, net of taxes, during the prior year due
to the FDIC one-time special assessment paid on all "Savings Association
Insurance Fund" deposits.
Interest Income. Interest income increased $423,000, or 9.06%, to $5.1
million for the six months ended December 31, 1997 due to an increase of
$8.5 million in average-earning assets and an increase in yield on
average-earning assets to 7.87% from 7.74% for the six months ended
December 31, 1996.
Interest Expense. Interest expense increased $395,000, or 16.87%, to
$2.7 million for the six months ended December 31, 1997 due to an
increase in average deposits of $6.7 million and an increase in average
advances of $5.7 million coupled with an increase in cost of funds to
4.94% for the six months ended December 31, 1997 from 4.71% for the six
months ended December 31, 1996.
Net Interest Income. Net interest income increased $8,000, or .33%, to
$2.4 million for the six months ended December 31, 1997. The net interest
margin dropped from 3.97% for the six months ended December 31, 1996 to
3.71% for the six months ended December 31, 1997; however, average-earning
assets grew $8.5 million in comparing the six month periods.
Provision for Loan Losses. The Bank's increased its provision to the
reserve for loan losses $5,000 during the six months ended December 31,
1997. No provision for loan losses was taken for the six months ended
December 31 1996, because the Bank s reserve for loan losses was
considered sufficient to absorb potential losses.
Non-interest Income. Non-interest income increased $2,000, or .6%, to
$323,000 for the six months ended December 31, 1997.
Non-interest Expense. Non-interest expense decreased $596,000, or 31.88%,
to $1.3 million for the six months ended December 31, 1997. The decrease
is primarily due to the FDIC one-time special assessment of $599,000
charged against the prior year s earnings. Compensation and benefits
increased $56,000, or 8.06%, to $746,000 for the six months ended
December 31, 1997 due to added employees, increased participation in
benefit plans, and salary increases. Other expenses increased $15,000,
or 4.70%, due to more advertising and expenses associated with promotion
of checking accounts.
Income Tax Expense. Income tax expense amounted to $531,000 for the six
months ended December 31, 1997 compared to $216,000 for the six months
ended December 31, 1996. The prior year tax savings of $223,000 were
recorded in accordance with the FDIC special assessment coupled with the
prior year s taxes being reduced due to the taxable deduction of certain
benefit plan provisions.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
N/A
Item 2. Changes in Securities.
N/A
Item 3. Defaults Upon Senior Securities.
N/A
Item 4. Submission of Matters to a Vote of Security Holders.
N/A
Item 5. Other Information
N/A
Item 6. Exhibits
N/A
SIGNATURES
Pursuant to the requirement of the Security Exchange Act of 1934, the
registrant has duly caused this report to the signed on its behalf by the
undersigned thereunto duly authorized.
FFBS BANCORP, INC.
Date: January 30, 1998 By: E. FRANK GRIFFIN, III
E. Frank Griffin, III
Chief Executive Officer
and President
By: SHERRY L. BOYD
Sherry L. Boyd
Chief Financial Officer
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