FORM 11-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1996 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-22240
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principle executive office:
First Southeast Financial Corporation
201 North Main Street
Anderson, South Carolina 29621
THE PLAN IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"). IN ACCORDANCE WITH ITEM NO. 4 OF REQUIRED INFORMATION, THE
PLAN FINANCIAL STATEMENTS AND SCHEDULES ATTACHED HERETO ARE PREPARED IN
ACCORDANCE WITH THE FINANCIAL REPORTING REQUIREMENTS OF ERISA.
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FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(k) Profit Sharing Plan
Financial Statements
June 30, 1996 and 1995
(with Independent Auditors' Report thereon)
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FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(K) PROFIT SHARING PLAN
Table of Contents
June 30, 1996 and 1995
Page(s)
------
Independent Auditors' Report . . . . . . . . . . . . . 1
Statements of Net Assets Available for Benefits . . . . 2
Statement of Changes in Net Assets Available for
Benefits. . . . . . . . . . . . . . . . . . . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . 4-7
Schedule
- --------
"1" Schedule of Assets Held for Investment
Purposes. . . . . . . . . . . . . . . . . . 8
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Logo of
Crisp Hughes & Co., L.L.P
- Independent Auditors' Report -
The Board of Trustees
First Federal Savings and Loan Association
of Anderson 401(k) Profit Sharing Plan
Anderson, South Carolina
We have audited the accompanying statements of net assets available for
benefits of First Federal Savings and Loan Association of Anderson 401(k)
Profit Sharing Plan as of June 30, 1996 and 1995, and the related statement of
changes in net assets available for benefits for the year ended June 30, 1996.
These financial statements are the responsibility of the Plan's administrative
committee. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the administrative committee, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the First
Federal Savings and Loan Association of Anderson 401(k) Profit Sharing Plan as
of June 30, 1996 and 1995, and changes in net assets available for benefits
for the years then ended June 30, 1996, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes is presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 and is not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated, in all material respects, in relation
to the basic financial statements taken as a whole.
/s/Crisp Hughes & Co. L.L.P
---------------------------
Asheville, North Carolina Crisp Hughes & Co. L.L.P
December 5, 1996
(1)
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FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN
Statements of Net Assets Available for Benefits
June 30, 1996 and 1995
Assets 1996 1995
------ ---- ----
Certificates of deposit:
Participant $ 512,859 $ 235,096
Employer 672,394 349,483
Investments at fair value:
Common stock:
Participant 180,121 362,719
Employer 228,209 455,173
---------- ----------
Total assets 1,593,583 1,402,471
---------- ----------
Liabilities
-----------
Due to participants - 3,059
---------- ----------
Net assets available for benefits $1,593,583 $1,399,412
========== ==========
The accompanying notes are an integral part of these financial statements.
(2)
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FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN
Statement of Changes in Net Assets Available for Benefits
For the Year Ended June 30, 1996
Participant Directed Employer Directed
------------------------------- --------------------------------
Certificates Company Certificates Company
of Deposit Stock Other of Deposit Stock Other Total
---------- ----- ----- ---------- ----- ----- -----
Additions:
Investment income:
Net realized and
unrealized depreciation
<S> <C> <C> <C> <C> <C> <C> <C>
on investments $ - $ (157,029) $ - $ - $ (198,925) $ - $ (355,954)
Interest 15,713 - - 22,110 - - 37,823
Dividends - 195,352 - - 244,267 - 439,619
--------- ---------- ------- --------- ---------- ------- ----------
Total investment income 15,713 38,323 - 22,110 45,342 - 121,488
--------- ---------- ------- --------- ---------- ------- ----------
Contributions:
Participants 84,308 - - - - - 84,308
Employer - - - 84,308 - - 84,308
Other - - - 80 - - 80
--------- ---------- ------- --------- ---------- ------- ----------
Total contributions 84,308 - - 84,388 - - 168,696
--------- ---------- ------- --------- ---------- ------- ----------
Total additions 100,021 38,323 - 106,498 45,342 - 290,184
--------- ---------- ------- --------- ---------- ------- ----------
Deductions:
Benefits paid to
participants 17,472 25,569 - 25,672 27,300 - 96,013
--------- ---------- ------- --------- ---------- ------- ----------
Net increase (decrease)
before transfers 82,549 12,754 - 80,826 18,042 - 194,171
Interfund transfers 195,214 (195,352) 138 242,058 (244,979) 2,921 -
--------- ---------- ------- --------- ---------- ------- ----------
Net increase (decrease) 277,763 (182,598) 138 322,884 (226,937) 2,921 194,171
Net assets available for
benefits:
Beginning of year 235,096 362,719 (138) 349,483 455,173 (2,921) 1,399,412
--------- ---------- ------- --------- ---------- ------- ----------
End of year $ 512,859 $ 180,121 $ - $ 672,367 $ 228,236 $ - $1,593,583
========= ========== ======= ========= ========== ======= ==========
The accompanying notes are an integral part of these financial statements.
(3)
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FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN
Notes to Financial Statements
June 30, 1996 and 1995
1. Description of Plan
-------------------
The following description of the First Federal Savings and Loan
Association of Anderson (Association) 401(k) Profit Sharing Plan (Plan)
provides only general information. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
General - The Plan is a defined contribution plan covering all full-time
employees of the Association who have one year of service and are age
twenty-one or older. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Contributions - Each year, the Association contributes to the Plan a
matching contribution equal to 100% of the first 6% of salary elected for
deferral. In addition, the Association makes a discretionary contribution
as determined by the Association. Such contribution also includes a
special discretionary contribution on behalf of each non-highly
compensated participant equal to a percentage, as determined by the
Association, of their compensation.
Participant Accounts - Each participant's account is credited with the
participant's contribution and allocation of (1) the Association's
matching contribution, (2) the Association's discretionary contribution
and special discretionary contribution, (3) Plan earnings, and (4)
forfeitures of terminated participants' nonvested accounts. Allocations
are based on participant compensation or account balances. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's account. Participants may elect to defer a maximum
amount each year equal to the lesser of 6% of annual compensation or the
dollar limit prescribed by law.
Vesting - Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the remainder of
their accounts is based on years of continuous service. A participant is
100% vested after seven years of credited service.
Payment of Benefits - On termination of service, a participant may elect
to receive either a lump-sum amount equal to the value of his or her
account, or annual installments over the participant's expected remaining
life as determined using actuarial methods.
Investments - Investments consist of common stock in First Southeast
Financial Corporation (FSFC), a bank holding company which owns 100% of
the Association's common stock. The common stock of FSFC held by the Plan
represents elections of the Plan participants to invest in this stock.
Participants may direct the Plan to sell their shares at their discretion.
(4)
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FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN Notes to Financial Statements, Continued
- ------------------------------------------------------------------------------
2. Summary of Significant Accounting Policies
------------------------------------------
Investments - Quoted market bid prices on a national securities exchange
are used to value investments.
Basis of Presentation - The accompanying financial statements have been
prepared on the accrual basis of accounting in accordance with generally
accepted accounting principles.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. Plan Amendments
---------------
The Plan was not amended during the fiscal year ended June 30, 1996.
4. Income Tax Status
-----------------
The Plan obtained its latest determination letter on June 5, 1992, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that
the Plan is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, they
believe that the Plan was qualified and the related trust was tax-exempt
as of the financial statement date.
5. Cash and Cash Equivalents
-------------------------
The Plan's cash and cash equivalents consist of interest-bearing accounts
maintained with the Association. For FDIC insurance purposes, each
participant's account balance is aggregated with other deposit accounts
the participant may have at the Association. This total of cash and cash
equivalents for each participant is individually insured up to $100,000 as
provided by FDIC. As of June 30, 1996, no individual participants had
balances in the aggregated certificate of deposit account in excess of
$100,000.
(5)
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FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN Notes to Financial Statements, Continued
- ---------------------------------------------------------------------------
6. Investments
-----------
The stock in FSFC is the only investment held by the Plan. Information
regarding this stock is presented below.
Fair Value
of Investments
---------------------
June 30, June 30,
1996 1995
--------------------- ---------------------
Number of Number of
Shares Fair Value Shares Fair Value
------ ---------- ------ ----------
Investments at fair
value as determined
by quoted market
bid price:
FSFC common stock 41,880 $ 408,330 44,816 $ 817,892
====== ========= ====== =========
During the year ended June 30, 1996, the Plan's investments depreciated
in value as follows.
Net Depreciation in Fair Value
------------------------------
Depreciation in fair
value as determined
by quoted market
bid price:
FSFC common stock $ (355,954)
==========
On June 28, 1996, First Federal Savings and Loan paid a special dividend
of $10 per share that caused the significant decrease in market value.
7. Administrative Expenses
-----------------------
All administrative expenses related to the Plan are absorbed by the
Association. Accordingly, there are no administrative expenses included
in the statement of changes in net assets available for benefits.
8. Plan Termination
----------------
Although it has not expressed any intent to do so, the Association has
the right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their accounts.
(6)
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FIRST FEDERAL SAVINGS AND LOAN
ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN Notes to Financial Statements, Continued
- -----------------------------------------------------------------------------
9. Plan Distributions
------------------
During the year ended June 30, 1996, the Plan made the following
distributions to terminated and retired participants:
Plan Distribution
-----------------
Cash $ 43,144
FSFC stock (at fair value) 52,869
--------
$ 96,013
========
(7)
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Schedule "1"
FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF ANDERSON
401(k) PROFIT SHARING PLAN
Schedule of Assets Held for Investment Purposes
June 30, 1996
Description of Investment
Including Maturity Date,
Identity of Issue, Rate of Interest,
Borrower, Lessor, or Collateral, Par or Current
Similar Party Maturity Value Cost Value
- --------------------- -------------------------- ---- -------
*First Federal Savings
and Loan Association
of Anderson Certificates of deposit,
5.35%, matures on
1/31/97 $1,185,253 $1,185,253
*First Southeast Finan-
cial Corporation Common stock, $.01 par
value, 41,880 shares 418,800 408,330
*Party-in-interest
See Independent Auditors' Report.
(8)
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SIGNATURE
The Plan. Pursuant to the requirements of the Securities and
Exchange Act of 1934, the trustees (or other persons who administer the
employee benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
FIRST SOUTHEAST FINANCIAL
CORPORATION 401(K) PROFIT SHARING PLAN
Date: December 27, 1996 By: /s/John L. Biediger
____________________________
John L. Biediger
Executive Vice President and
Treasurer
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