<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
December 31, 1997 1-13640
SOUTHFIRST BANCSHARES, INC.
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 63-1121255
- ---------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
126 North Norton Avenue, Sylacauga, Alabama 35150
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 205- 245-4365
- ---------------------------------------------------------------------------
Not applicable
- ---------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:
Common Stock, par value $.01 per share 975,744 shares
- -------------------------------------- --------------------------------
Class Outstanding at February 12, 1998
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SOUTHFIRST BANCSHARES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition (Unaudited) at December 31, 1997 and September 30, 1997 ........ 1
Consolidated Statements of Earnings (Unaudited) for the Three Months Ended December 31, 1997 and 1996.......... 2
Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 1997 and 1996........ 3
Notes to Consolidated Financial Statements (Unaudited)......................................................... 5
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations.................. 7
PART II - OTHER INFORMATION.................................................................................... 11
SIGNATURES..................................................................................................... 13
</TABLE>
<PAGE> 3
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Financial Condition
December 31, 1997 and September 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
Assets 1997 1997
------ ---- ----
<S> <C> <C>
Cash and amounts due from depository institutions $ 11,069,496 2,448,123
Investment securities held to maturity at cost 11,965,717 162,448
Investment securities available for sale, at fair value 35,790,976 16,665,770
Loans receivable 100,660,075 71,966,579
Less allowance for loan losses (787,644) (284,324)
-------------- -------------
Net loans 99,872,431 71,682,255
Loans held for sale at cost (which approximates fair value) 485,278 333,750
Premises and equipment, net 3,174,880 1,780,286
Foreclosed real estate, net 126,597 --
Accrued interest receivable 992,523 529,500
Investments in affiliates 105,568 192,560
Other assets 1,804,768 1,994,010
-------------- -------------
Total assets $ 165,388,234 95,788,702
============== =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing $ 6,186,799 1,255,745
Interest bearing 124,241,441 59,296,791
-------------- -------------
Total deposits 130,428,240 60,552,536
Advances by borrowers for property taxes and insurance 305,253 388,918
Accrued interest payable 353,031 859,111
Borrowed funds 17,747,878 18,653,386
Accrued expenses and other liabilities 554,144 1,711,417
-------------- -------------
Total liabilities 149,388,546 82,165,368
-------------- -------------
Stockholders' equity:
Common stock, $.01 par value, 2,000,000 shares authorized; 991,344 shares
issued and 975,744 outstanding shares at December 31, 1997, and 863,200
shares issued and 847,600 outstanding shares at
September 30, 1997 9,913 8,632
Additional paid-in capital 9,874,007 7,792,748
Treasury stock (198,392) (198,392)
Unearned compensation on common stock employee benefit plans (914,604) (914,604)
Retained earnings, substantially restricted 5,959,089 5,815,352
Unrealized gain on investment securities available for sale, net of tax 1,269,675 1,119,598
-------------- -------------
Total stockholders' equity 15,999,688 13,623,334
-------------- -------------
Total liabilities and stockholders' equity $ 165,388,234 95,788,702
============== =============
</TABLE>
See accompanying notes to consolidated financial statements.
1
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SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Earnings (Unaudited) for the
Three Months Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 1,876,470 1,365,697
Interest and dividend income on investment
securities held to maturity 204,600 2,154
Interest and dividend income on securities
available for sale 462,128 377,482
------------ ------------
Total interest and dividend income 2,543,198 1,745,333
------------ ------------
Interest expense:
Interest on deposits 955,869 732,205
Interest on borrowed funds 290,528 205,666
------------ ------------
Total interest expense 1,246,397 937,871
------------ ------------
Net interest income 1,296,801 807,462
Provision for loan losses 7,589 --
------------ ------------
Net interest income after provision for loan losses 1,289,212 807,462
------------ ------------
Other income:
Service charges and other fees 137,686 146,635
Employee benefit consulting fees 148,399 --
Gain on sale of loans 45,353 48,772
Gain on sale of investment securities 692 --
Equity in loss of affiliate (5,328) (20,912)
Other 50,295 8,464
------------ ------------
Total other income 377,097 182,959
------------ ------------
Other expenses:
Compensation and benefits 755,782 463,109
Net occupancy expense 68,416 42,524
Furniture and fixtures 64,781 58,260
Data processing 33,824 41,546
Office supplies and expenses 81,127 44,038
Deposit insurance premiums 17,730 10,464
Other 232,459 121,880
------------ ------------
Total other expenses 1,254,119 781,821
------------ ------------
Income before taxes 412,190 208,598
Income tax expense 162,303 81,323
------------ ------------
Net income $ 249,687 127,275
============ ============
Basic earnings per common share $ 0.28 0.15
Diluted earnings per common share $ 0.27 0.15
Dividends paid per common share $ 0.125 0.125
Weighted average common shares outstanding 897,764 823,700
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 5
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows (Unaudited) for the
Three Months Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Operating activities:
Net income $ 249,687 127,275
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 49,385 43,941
Provision for losses on foreclosed real estate 5,133 --
Provision for loan losses 7,589 --
Loss on sale of unconsolidated affiliate 6,564 --
Equity in loss of unconsolidated affiliates 5,328 20,912
Gain on sale of loans (5,448) (48,772)
Gain on sale of investment securities (692) --
Increase (decrease) in deferred loan origination fees (22,321) 10,170
Net amortization (accretion) of premium/discount
on investment securities (26,749) 198
Loans originated for sale (1,672,150) (1,035,950)
Proceeds from sale of loans 1,526,070 857,544
Decrease in accrued interest receivable (102,918) 50,650
Decrease in other assets 664,127 22,753
Decrease in accrued interest payable (759,652) (636,420)
Decrease in accrued expenses and other liabilities (1,336,121) (251,980)
------------- ------------
Net cash used in operating activities (1,412,168) (885,186)
------------- ------------
Investing activities:
Net cash paid in acquisition of subsidiary (145,672) --
Proceeds from sale of unconsolidated affiliate 90,100 --
Investment in unconsolidated affiliated companies (15,000) --
Purchase of investment securities available for sale (11,803,852) --
Proceeds from sale of investments 15,860,175 1,500,000
Reinvestment of mutual fund dividend -- (7,897)
Principal repayments and maturities of investment
securities available for sale 925,232 861,410
Net (increase) decrease in loans 3,728,589 (3,405,464)
Proceeds from sale of foreclosed real estate 23,277 --
Purchase of premises and equipment (385,173) (72,051)
------------- ------------
Net cash provided by (used in) investing activities 8,277,676 (1,124,002)
------------- ------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 6
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows (Unaudited) for the
Three Months Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Financing activities:
Net increase in deposits 4,901,429 601,515
Proceeds from borrowed funds 3,108,509 3,050,000
Cash dividends paid (105,950) (102,963)
Repayment of borrowed funds (6,014,017) (955)
Decrease in advances by borrowers
for property taxes and insurance (134,106) (134,561)
------------- ------------
Net cash provided by financing activities 1,755,865 3,413,036
------------- ------------
Increase in cash and amounts due from
depository institutions 8,621,373 1,403,849
Cash and amounts due from depository institutions
at beginning of period 2,448,123 2,625,561
------------- ------------
Cash and amounts due from depository institutions
at end of period $ 11,069,496 4,029,410
============= ============
Supplemental information on cash payments:
Interest paid $ 1,752,477 937,871
============= ============
Income taxes paid $ -- 81,323
============= ============
Supplemental information on non-cash transactions:
Acquisition of subsidiary-
Assets acquired:
Cash and amounts due from depository institutions $ 3,005,000 --
Investment securities 35,733,000 --
Loans receivable, net 31,904,000 --
Premises and equipment 1,059,000 --
Accrued interest receivable 371,000 --
Other assets 212,000 --
------------- ------------
Total assets 72,284,000 --
Liabilities assumed:
Deposits 64,974,000 --
Advances by borrowers for property taxes and insurance 50,000 --
Accrued interest payable 254,000 --
Borrowed funds 2,000,000 --
Other liabilities 179,000 --
-------------
Total liabilities 67,457,000 --
Cash paid 3,151,000 --
Common stock issued 2,082,000 --
Goodwill recorded 406,000 --
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 7
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements (Unaudited)
December 31, 1997 and 1996
(1) BASIS OF PRESENTATION
Information filed on this Form 10-QSB as of and for the quarter ended
December 31, 1997, was derived from the financial records of SouthFirst
Bancshares, Inc. (the "Corporation") and its wholly-owned subsidiaries,
First Federal of the South (the "Bank" or "First Federal"), and Pension
& Benefit Financial Services, Inc. ("Pension & Benefit"), a Montgomery,
Alabama-based employee benefits consulting firm. Collectively, the
Corporation and its subsidiaries are referred to herein as the
"Company."
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (none of
which are other than normal recurring accruals) necessary for a fair
statement of the financial position of the Company and the results of
operations for the three-month periods ended December 31, 1997 and
1996. The results contained in these statements are not necessarily
indicative of the results which may be expected for the entire year.
(2) ACQUISITION
On October 31, 1997, the Company consummated the acquisition of First
Federal Savings and Loan Association of Chilton County ("Chilton
County"), a federally chartered stock savings and loan association
based in Clanton, Alabama. Chilton County was merged with and into the
Company's subsidiary, First Federal of the South. Pursuant to the terms
of the acquisition agreement, Chilton County shareholders received
either shares of common stock of the Company, cash, or a combination of
common stock and cash. The acquisition was accounted for as a purchase
and the results of operations since the acquisition date have been
consolidated. The total purchase price was $5.2 million, including the
issuance of 128,144 shares valued at $2.1 million. The resulting
goodwill of approximately $406,000 will be amortized straight line over
15 years.
A summary of the net assets acquired follows:
<TABLE>
<S> <C>
Assets acquired:
Cash and amounts due from depository institutions $ 3,005,000
Investment securities 35,733,000
Loans receivable, net 31,904,000
Premises and equipment 1,059,000
Accrued interest receivable 371,000
Other assets 212,000
------------
Total assets 72,284,000
</TABLE>
5
<PAGE> 8
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements (Unaudited)
(2) ACQUISITION, CONTINUED
<TABLE>
<S> <C>
Liabilities assumed:
Deposits 64,974,000
Advances by borrowers for property taxes and insurance 50,000
Accrued interest payable 254,000
Borrowed funds 2,000,000
Other liabilities 179,000
------------
Total liabilities 67,457,000
Net assets acquired 4,827,000
Total purchase price 5,233,000
------------
Goodwill $ 406,000
============
</TABLE>
The table below presents supplemental pro forma information for 1997
and 1996 as if the acquisition were made at the beginning of the
periods at the same purchase price as at the acquisition date:
<TABLE>
<CAPTION>
Three months ended December 31,
-------------------------------
1997 1996
---- ----
<S> <C> <C>
Total interest income $ 2,978,000 3,101,000
Net interest income 1,426,000 1,195,000
Net income 190,000 60,000
Net income per common share $0.18 $0.06
</TABLE>
(3) NEW ACCOUNTING STANDARD
During the quarter ended December 31, 1997, the Bank adopted the
requirements of Statement of Financial Accounting Standard No. 128,
Earnings Per Share. This statement establishes standards for computing
and presenting earnings per share (EPS) and applies to entities with
publicly held common stock or potential common stock. This statement
replaces the presentation of primary EPS with a presentation of basic
EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the
earnings of the entity.
6
<PAGE> 9
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
REVIEW OF RESULTS OF OPERATIONS
OVERVIEW
Net income for the three months ended December 31, 1997, increased $122,000 or
96 percent when compared to the comparable period during fiscal 1996. Net
interest income increased $489,000 for the three-month period ended December 31,
1997, compared to the same period in fiscal 1996. Other income increased
$194,000 for the three-month period ended December 31, 1997, compared to the
same period in fiscal 1996, while other expenses increased $472,000.
Substantially all of those increases are attributable to the acquisition of
Chilton County on October 31, 1997. See Note 2 to "Notes to Financial
Statements." Net income per common share, based on weighted average shares
outstanding, was $0.28 and $0.15 for the three months ended December 31, 1997
and 1996, respectively.
Further discussion of significant items affecting net earnings are discussed in
detail below.
NET INTEREST INCOME
Net interest income is the difference between the interest and fees earned on
loans, securities, and other interest-bearing assets (interest income) and the
interest paid on deposits and borrowed funds (interest expense). Higher net
interest income is a result of the relationship between the interest-earning
assets and the interest-bearing liabilities.
As of December 31, 1997, the interest rate spread increased 50 basis points as
rates earned on interest-earning assets decreased 34 basis points to 7.68
percent while the cost of funds decreased 84 basis points to 4.05 percent. The
decline in yields earned and rates paid reflects the somewhat lower interest
rate environment of Chilton County's market area as well as the continuing
downtrend of the overall interest rate environment. Also, the acquisition of
Chilton County was largely responsible for the increase in the average balance
of interest-earning assets from $86.9 million to $132.4 million while the
average balance of interest-bearing liabilities increased from $76.5 million to
$130 million. The combined effect of the increases in average balances and the
changes in rates discussed above resulted in an increase in net interest income
of $489,000, or 60.6 percent, and an increase in the interest rate spread from
3.13 percent to 3.63 percent for the three months ended December 31, 1997, as
compared to the comparable period in 1996.
OTHER INCOME
Other income for the three months ended December 31, 1997, increased by $194,000
to $377,000 as compared to $183,000 for the three months ended December 31,
1996. A significant portion of the increase was attributable to employee benefit
consulting fees of $147,000 during 1997 resulting from the Corporation's
acquisition of Pension & Benefit on April ll, 1997. The acquisition of Chilton
County
7
<PAGE> 10
added approximately $27,000 to other income in 1997 and accounted for
substantially all of the remaining increase.
OTHER EXPENSE
Other expense for the three months ended December 31, 1997, increased by
$472,000 to $1,254,000 as compared to $782,000 for the three months ended
December 31, 1996. Most of the increase is due to increases in compensation
expense ($293,000), office supplies ($37,000) and other ($111,000). The increase
in compensation expense is attributable to salary increases and staff additions
to handle the higher volume of transactions resulting from the Chilton County
acquisition, as well as the additional compensation expense for the employees of
Pension & Benefit and Chilton County. The acquisition of Chilton County was
responsible for approximately $70,000 of the increase in total other expenses.
The increase in office supplies is attributable to the conversion of most of the
Company's information technology systems in 1997, which was undertaken in order
to help ensure the Company's compliance with federal regulations concerning the
"year 2000" problem. The year 2000 problem arises from the widespread use of
computer programs that rely on two-digit date codes to perform computations or
decision-making functions. Many of these programs may fail due to an inability
to properly interpret date codes beginning January 1, 2000. For example, such
programs may misinterpret "00" as the year 1900 rather than 2000. In addition,
some equipment, being controlled by microprocessor chips, may not deal
appropriately with the year "00." The Company believes that its systems are
currently year 2000 compliant and does not believe that the expenditures
necessary to implement any further modifications will be material. However,
there can be no assurance that all necessary modifications will be made
determined or corrected or that unforeseen difficulties or costs will not arise.
INCOME TAX EXPENSE
The Company's effective tax rate for the three-month periods ended December 31,
1997 and 1996, was 39.4 percent and 39.0 percent, respectively, compared to the
federal statutory rate of 34.0 percent. The Company's effective tax rate was
higher than the statutory rate due primarily to state income taxes. Income tax
expense increased $82,000 or 99.8 percent to $163,000 for the three months ended
December 31, 1997, as compared to $81,000 for the three months ended December
31, 1996, due to the increase in pre-tax earnings
REVIEW OF FINANCIAL CONDITION
OVERVIEW
Management continuously monitors the financial condition of the Company in order
to protect depositors, increase retained earnings, and protect current and
future earnings.
Return on average stockholders' equity is one way of assessing the return the
Company has generated for its stockholders. The table below sets forth the
return on average stockholders' equity and other performance ratios of the
Company for the periods indicated.
8
<PAGE> 11
<TABLE>
<CAPTION>
At or for the
three months ended
December 31,
------------
1997 1996
---- ----
<S> <C> <C>
Return on assets 0.59% 0.55%
Return on equity 4.90% 3.98%
Equity-to-assets ratio 9.67% 13.79%
Interest rate spread 3.63% 3.13%
Net interest margin 3.92% 3.72%
Total risk-based capital ratio 20.24% 22.50%
Nonperforming loans to loans 1.98% 0.74%
Allowance for loan losses to loans 0.78% 0.38%
Allowance for loan losses to nonperforming loans 39.60% 51.14%
Ratio of net charge-offs to average loans outstanding 0.00% 0.00%
Book value per common share outstanding $17.82 $15.81
</TABLE>
Significant factors affecting the Company's financial condition during the three
months ended December 31, 1997, are detailed below:
ASSETS
Total assets increased $69,600,000 or 72.7 percent from $95,789,000 at September
30, 1997, to $165,388,000 at December 31, 1997. The acquisition of Chilton
County was responsible for an increase of $72,451,000 while net loans decreased
$3,729,000 due to seasonal changes in loan demand, particularly construction
loans. Also, the Company sold approximately $14,000,000 of the investment
securities acquired from Chilton County and reinvested the proceeds primarily in
short-term held-to-maturity securities.
LIABILITIES
Total liabilities increased $67,223,000, or 81.8%, from $82,165,000 at September
30, 1997, to $149,388,000 at December 31, 1997. Approximately $67,457,000 of the
increase was attributable to the acquisition of Chilton County. Deposits
increased approximately $4,901,000 during the period and the proceeds were used
primarily to pay down borrowed funds by approximately $2,906,000. The increase
in deposits reflects recent efforts by the Company to increase this source of
funds through increased advertising and competitive rates.
LOAN QUALITY
A major key to long-term earnings growth is maintenance of a high-quality loan
portfolio. The Company's directive in this regard is carried out through its
policies and procedures for review of loans. The goal and result of these
policies and procedures is to provide a sound basis for new credit extensions
and an early recognition of problem assets to allow the most flexibility in
their timely disposition.
9
<PAGE> 12
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
At December 31, 1997, the allowance for loan losses was $787,644, as compared to
$284,324 at September 30, 1997. The increase is due almost entirely to the
acquisition of Chilton County. The Company recorded provisions for loan losses
of only $7,589 and $-0- in the first three months of fiscal 1998 and 1997,
respectively, because charge-offs were insignificant during these periods.
Nonperforming loans at December 31, 1997, were approximately $1,990,168 as
compared to approximately $707,000 at September 30, 1997. At December 31, 1997
and September 30, 1997, the allowance for loan losses represented .78 percent
and .38 percent of loans outstanding, respectively. The provision for loan
losses and the adequacy of the allowance for loan losses is based upon
management's continuing evaluation of the collectibility of the loan portfolio
under current economic conditions and includes analyses of underlying collateral
value and other factors which could affect collectibility. Management considers
the allowance for loan losses to be adequate based upon the evaluations of
specific loans, internal loan rating systems and guidelines provided by the
banking regulatory authorities governing the Bank. Although loans have
increased, management believes loan loss reserves are adequate due to the fact
it has not experienced significant loan charge-offs.
LIQUIDITY AND INTEREST SENSITIVITY
Liquidity is the ability of an organization to meet its financial commitments
and obligations on a timely basis. These commitments and obligations include
credit needs of customers, withdrawals by depositors, and payment of operating
expenses and dividends.
The Company is required under applicable federal regulations to maintain
specified levels of cash and "liquid" investments in qualifying types of United
States Treasury and Federal Agency securities, and other investments generally
having maturities of five years or less. Such investments serve as a source of
funds upon which the Company may rely to meet deposit withdrawals and other
short-term needs. The Company closely monitors its cash flow position to assure
necessary liquidity and to take advantage of market opportunities. Management
believes that the Company's liquidity is adequate to fund all outstanding
commitments and other cash needs.
Changes in interest rates will necessarily lead to changes in the net interest
margin. It is the Company's goal to minimize volatility in the net interest
margin by taking an active role in managing the level, mix and maturities of
assets and liabilities.
To reduce the adverse effect of changes in interest on its net interest margin,
the Company is pursuing various strategies to improve the rate sensitivity of
its assets and stabilize net interest income.
CAPITAL ADEQUACY AND RESOURCES
Management is committed to maintaining First Federal's capital at a level
sufficient to protect depositors, provide for reasonable growth, and fully
comply with all regulatory requirements. Management's strategy to achieve this
goal is to retain sufficient earnings while providing a reasonable return on
equity.
The Office of Thrift Supervision has issued guidelines identifying minimum
regulatory "tangible" capital equal to 1.50 percent of adjusted total assets, a
minimum 3.0 percent core capital ratio, and a minimum risk-based capital of 8.0
percent of risk-weighted assets. First Federal has provided the majority of its
capital requirements through the retention of earnings.
10
<PAGE> 13
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
At December 31, 1997, First Federal satisfied all regulatory capital
requirements. First Federal's compliance with the current standards is as
follows:
<TABLE>
<CAPTION>
Percent of
asset
Amount base
------ ----
(Dollars in thousands)
<S> <C> <C>
Tangible Capital $ 14,232,000 8.69%
Core Capital 14,232,000 8.69%
Risk-Based Capital 15,020,000 20.24%
</TABLE>
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this filing are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as statements relating to financial results and plans for future business
development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition and other
uncertainties detailed from time to time in the Company's Securities Exchange
Commission filings.
PART II. OTHER INFORMATION
ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS
In connection with the acquisition of the common stock of Chilton County on
October 31, 1997, the Corporation issued, in the aggregate, 128,144 shares of
its $.01 par value common stock (the "Common Stock") to certain shareholders of
Chilton County. The shares of Common Stock issued to certain Chilton County
shareholders were registered under the Securities Act of 1933, as amended.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In connection with the necessary stockholder approval of the acquisition of
Chilton County by the Company (the "Acquisition"), the Company held a Special
Meeting of Stockholders (the "Special Meeting") on October 29, 1997. See Note 2
to "Notes to Consolidated Financial Statements." At the Special Meeting, the
Acquisition was duly approved. The results of voting with respect to the
Acquisition were as follows:
<TABLE>
<CAPTION>
For Against Abstaining
--- ------- ----------
<S> <C> <C>
477,114 10,200 1,000
</TABLE>
11
<PAGE> 14
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27 - Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K. In connection with the consummation of the
Acquisition, on November 17, 1997, the Company, under Item 2
(Acquisition or Disposition of Assets), filed a report on Form 8-K. No
financial statements were filed with such report.
12
<PAGE> 15
SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARY
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.
SOUTHFIRST BANCSHARES, INC.
(Registrant)
Date: February 12, 1998 By: /s/ Donald C. Stroup
---------------------------------------------
Donald C. Stroup, President and
Chief Executive Officer
(principal executive officer)
Date: February 12, 1998 By: /s/ Joe K. McArthur
---------------------------------------------
Joe K. McArthur, Executive Vice President
and Chief Financial Officer
(principal financial and accounting officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SOUTHFIRST BANCSHARES, INC. FOR THE THREE MONTHS ENDED
DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> SEP-30-1997
<PERIOD-END> DEC-31-1997
<CASH> 11,069
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 35,791
<INVESTMENTS-CARRYING> 11,966
<INVESTMENTS-MARKET> 11,966
<LOANS> 100,660
<ALLOWANCE> 788
<TOTAL-ASSETS> 165,388
<DEPOSITS> 130,428
<SHORT-TERM> 12,254
<LIABILITIES-OTHER> 1,212
<LONG-TERM> 3,791
0
0
<COMMON> 0
<OTHER-SE> 16,000
<TOTAL-LIABILITIES-AND-EQUITY> 165,388
<INTEREST-LOAN> 1,876
<INTEREST-INVEST> 667
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,543
<INTEREST-DEPOSIT> 956
<INTEREST-EXPENSE> 1,246
<INTEREST-INCOME-NET> 1,297
<LOAN-LOSSES> 8
<SECURITIES-GAINS> 46
<EXPENSE-OTHER> 1,254
<INCOME-PRETAX> 412
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 250
<EPS-PRIMARY> .28
<EPS-DILUTED> .27
<YIELD-ACTUAL> 7.68
<LOANS-NON> 0
<LOANS-PAST> 1,990
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 285
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 788
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
