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Previous: ADVANCED ENERGY INDUSTRIES INC, 10-Q, 1996-11-13 |
Next: DIGITAL DESCRIPTOR SYSTEMS INC, 10QSB, 1996-11-13 |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- ----
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
- ---- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-81818
FIRST FAMILY FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Florida 59-3277352
------- ----------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2801 South Bay Street, Eustis, Florida 32726-6503
- -------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (352) 357-4171
- --------------------------------------------------------------------------------
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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common stock, par value $.01 per share
- --------------------------------------
545,000 shares outstanding at November 7, 1996
----------------------------------------------
CONFORMED COPY
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets-
September 30, 1996 (unaudited) and June 30, 1996........................................................2
Condensed Consolidated Statements of Operations-
Three months ended September 30, 1996 and 1995 (unaudited)..............................................3
Condensed Consolidated Statement of Stockholders' Equity-
Three months ended September 30, 1996 (unaudited).......................................................4
Condensed Consolidated Statements of Cash Flows -
Three months ended September 30, 1996 and 1995 (unaudited)..............................................5
Notes to Condensed Consolidated Financial Statements (unaudited).........................................6-7
Review by Independent Certified Public Accountants.........................................................8
Report on Review by Independent Certified Public Accountants...............................................9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..............................................................................10-15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................................................................16
Item 2. Changes in Securities................................................................................16
Item 3. Default upon Senior Securities.......................................................................16
Item 4. Submission of Matters to a Vote of Security Holders..................................................16
Item 5. Other Information....................................................................................16
Item 6. Exhibits and Reports on Form 8-K.....................................................................16
SIGNATURES......................................................................................................17
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
(In thousands)
September 30, June 30,
------------- --------
1996 1996
---- ----
Assets (unaudited)
<S> <C> <C>
Cash and due from banks $ 1,937 1,752
Interest-bearing deposits with banks 5,677 1,689
-------- --------
Cash and cash equivalents 7,614 3,441
Securities held to maturity 39,753 29,863
Loans held for sale 454 1,991
Loans receivable, net 116,474 114,167
Accrued interest receivable:
Securities 350 603
Loans receivable 696 687
Premises and equipment 2,756 2,575
Other real estate owned 99 64
Restricted securities - Federal Home Loan Bank of
Atlanta stock 1,112 1,112
Prepaid expenses and other assets 1,410 1,387
-------- --------
Total $ 170,718 155,890
========= =======
Liabilities and Stockholders' Equity
Liabilities:
Demand deposits 4,062 4,935
Savings and NOW deposits 15,532 15,070
Money market deposits 18,430 19,092
Other time deposits 120,012 104,265
------- -------
Total deposits 158,036 143,362
Advance payments by borrowers for taxes and insurance 1,638 1,254
Deferred income taxes 66 66
Accrued expenses and other liabilities 1,545 774
Official checks 729 1,212
------- -------
Total liabilities 162,014 146,668
------- -------
Stockholders' equity:
Common stock 5 5
Additional paid-in capital 2,873 2,873
Retained earnings 5,826 6,344
-------- --------
Total stockholders' equity 8,704 9,222
-------- --------
Total $ 170,718 155,890
========= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Condensed Consolidated Statements of Operations
(Dollars in Thousands, except Per Share Amounts)
Three Months
Ended September 30,
-------------------
1996 1995
---- ----
(unaudited)
Interest income:
<S> <C> <C>
Loans receivable $ 2,356 2,392
Securities held to maturity 535 484
Other interest-earning assets 76 45
------- -------
Total interest income 2,967 2,921
------- -------
Interest expense:
Deposits 1,801 1,808
Other borrowed funds 1 5
-------- --------
Total interest expense 1,802 1,813
------- -------
Net interest income 1,165 1,108
Provision for loan losses 30 30
------- -------
Net interest income after provision for loan losses 1,135 1,078
------- -------
Noninterest income:
Fees and service charges 114 137
Gain on sale of loans 86 112
Other 20 37
------- -------
Total noninterest income 220 286
------- -------
Noninterest expenses:
Salaries and employee benefits 451 449
Occupancy and equipment, net 96 85
Data processing 50 65
Deposit insurance premiums 97 118
SAIF recapitalization assessment 966 -
Professional fees 64 60
Loan expense 21 11
Other 128 182
------- -------
Total noninterest expenses 1,873 970
------- -------
(Loss) earnings before income tax provision (518) 394
Income tax provision - 143
--------- -------
Net (loss) earnings $ (518) 251
======= =======
(Loss) earnings per share $ (.95) .46
======= =======
Dividends per share $ - .04
======== =======
Weighted average number of shares outstanding 545,000 545,000
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Condensed Consolidated Statement of Stockholders' Equity
For the Three Month Period Ended September 30, 1996
(In thousands)
Additional Total
Common Paid-in Retained Stockholders'
Stock Capital Earnings Equity
----- ------- -------- ------
<S> <C> <C> <C> <C>
Balance at June 30, 1996 $ 5 2,873 6,344 9,222
Net loss for the three months ended
September 30, 1996 (unaudited) - - (518) (518)
-- ------ ----- -----
Balance at September 30, 1996 (unaudited) $ 5 2,873 5,826 8,704
=== ===== ===== =====
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Condensed Consolidated Statements of Cash Flows
(In Thousands)
Three Months
Ended September 30,
-------------------
1996 1995
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net (loss) earnings $ (518) 251
Adjustments to reconcile net (loss) earnings to net cash provided by
operating activities:
Depreciation and amortization 32 41
Amortization of deferred loan fees, net 1 (20)
Provision for loan losses 30 30
Decrease in accrued interest receivable 244 48
Increase in prepaid expenses and other assets (23) (5)
Increase (decrease) in accrued expenses and other liabilities 771 (388)
Decrease in official checks (483) (68)
Proceeds from sale of loans held-for-sale 1,250 1,725
Origination of loans held-for-sale, net of repayments 373 (931)
Gain on sale of loans (86) (112)
Gain on sale of other real estate owned (21) -
------- -----
Net cash provided by operating activities 1,570 571
------ -----
Cash flows from investing activities:
Net increase in loans (2,469) (1,562)
Purchases of securities held to maturity (10,268) -
Principal payments received on securities 379 261
Proceeds from sale of real estate owned 117 37
Purchases of premises and equipment (214) (74)
------ ------
Net cash used in investing activities (12,455) (1,338)
------ -----
Cash flows from financing activities:
Net (decrease) increase in noninterest bearing demand,
savings and NOW deposit accounts (1,073) 3,021
Net increase (decrease) in time deposits 15,747 (5,331)
Proceeds from Federal Home Loan Bank advances 1,500 2,000
Repayments of Federal Home Loan Bank advances (1,500) (1,500)
Payment of cash dividends - (22)
Increase in advance payments by borrowers for taxes and insurance 384 474
------ ------
Net cash provided by (used in) financing activities 15,058 (1,358)
------ -----
Increase (decrease) in cash and cash equivalents 4,173 (2,125)
Cash and cash equivalents at beginning of period 3,441 4,361
------ -----
Cash and cash equivalents at end of period $ 7,614 2,236
====== =====
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Income taxes $ 115 46
====== =====
Interest $ 1,779 1,836
Noncash investing and financing activities:
Transfers of loans receivable to real estate owned $ 167 35
====== =====
Loans originated for the sale of real estate owned $ 36 123
======= =====
Transfer of loans receivable to loans held-for-sale $ - 411
======== =====
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. General. First Family Financial Corporation (the "Holding Company") owns 100%
of the outstanding stock of First Family Bank, fsb and Subsidiaries (the
"Bank") (collectively the "Company"). The Bank is a federal chartered savings
bank and is insured by the Federal Deposit Insurance Corporation. The Holding
Company operates as a unitary savings and loan holding company. The Holding
Company's only business activities is the operation of the Bank.
In the opinion of the management, the accompanying condensed
consolidated financial statements contain all adjustments (consisting of
normal recurring accruals) necessary to present fairly the financial
position of the Company at September 30, 1996 and the results of
operations and cash flows for the three-month periods ended September
30, 1996 and 1995. The results of operations for the three-month period
ended September 30, 1996 are not necessarily indicative of the results
to be expected for the full year.
2. Loan Impairment and Losses. The Company had no impaired loans at September
30, 1996 or 1995 or for the three month periods then ended. The activity in
the allowance for loan losses is as follows:
For the Three
Months Ended
September 30,
-------------
1996 1995
---- ----
(In thousands)
Balance, beginning of period $ 723 783
Provision charged to earnings 30 30
Charge-offs (9) (37)
---- ---
Balance, end of period $ 744 776
=== ===
3. Interest on Deposit Accounts. Interest expense on deposit accounts was
as follows:
For the Three
Months Ended
September 30,
-------------
1996 1995
---- ----
(In thousands)
NOW and money market deposit accounts $ 223 147
Passbook and statement accounts 55 57
Certificate accounts 1,529 1,612
Early withdrawal penalties (6) (8)
----- -----
Total interest on deposit accounts $ 1,801 1,808
===== =====
4. Earnings (Loss) Per Share. Earnings (loss) per share has been computed by
dividing the net earnings (loss) by the weighted average number of shares
outstanding during the period. The dilutive effect of stock options was not
material.
(continued)
6
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited), Continued
5. Regulatory Capital. In connection with the insurance of deposit accounts, the Bank is required
to maintain certain minimum regulatory capital requirements. The following is a summary
of the regulatory capital requirements, the Bank's capital and the amounts and percentages
in excess of such requirements as of September 30, 1996:
Core Tangible Risk-Based
(Dollars in thousands) % of Risk
% of % of weighted
Amount Assets Amount Assets Amount Assets
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Regulatory capital $ 8,548 5.0% $ 8,548 5.0% $ 9,292 11.2%
Requirement 5,115 3.0 2,558 1.5 6,645 8.0
----- --- ----- --- ----- ---
Excess $ 3,433 2.0% $ 5,990 3.5% $ 2,647 3.2%
======= === ======= === ======= ===
</TABLE>
6. SAIF Recapitalization Assessment. The FDIC has enacted a one-time SAIF
recapitalization assessment. The rate is 65.7 cents per $100 of domestic
deposits held as of March 31, 1995. The effect on the Bank as of September
30, 1996 is a pretax charge of $966,000 (.657% on deposits of $147,032,000 at
March 31, 1995). The amount is included in accrued expenses and other
liabilities as of September 30, 1996.
7
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Review by Independent Certified Public Accountants
Hacker, Johnson, Cohen & Grieb, the Company's independent certified public
accountants, have made a limited review of the financial data at September 30,
1996, and for the three month periods ended September 30, 1996 and 1995
presented in this document, in accordance with standards established by the
American Institute of Certified Public Accountants.
Their report, furnished pursuant to Article 10 of Regulation S-X, is included
herein.
8
<PAGE>
Report on Review by Independent Certified Public Accountants
The Audit Committee of the Board of Directors
of First Family Financial Corporation
Eustis, Florida:
We have reviewed the condensed consolidated balance sheet of First Family
Financial Corporation and subsidiaries (the "Company") as of September 30, 1996,
and the related condensed consolidated statements of operations and cash flows
for the three- month periods ended September 30, 1996 and 1995 and the condensed
consolidated statement of stockholders' equity for the three-month period ended
September 30, 1996. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of June 30, 1996, and the related
consolidated statements of earnings, stockholders' equity and cash flows for the
year then ended (not presented herein); and in our report dated July 17, 1996,
except for Note 18, as to which the date is July 19, 1996 we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of June 30, 1996, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB
Tampa, Florida
October 24, 1996
9
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Comparison of September 30, 1996 and June 30, 1996
Liquidity and Capital Resources
The Company's primary sources of cash and cash equivalents are from loan and
securities principal repayments, sales of loans originated for sale, deposit
account inflows, and borrowings from the Federal Home Loan Bank of Atlanta
("FHLB"). During the three months ending September 30, 1996, securities
principal repayments were $379,000, proceeds from sales of loans were $1.3
million, deposit account inflows totalled $14.7 million and proceeds from
FHLB advances were $1.5 million.
Cash and cash equivalents were used to originate and purchase loans, purchase
securities and to payoff FHLB advances. Loans originated and purchased net of
principal repayments amounted to $2.5 million, the purchase of securities
totalled $10.3 million and repayments of FHLB advances totalled $1.5 million.
At September 30, 1996, the Company had outstanding commitments to originate
loans of $943,000 and loans in process of $3.3 million. It is expected that
these commitments will be funded from the sources described above.
The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in qualifying types of U.S. Government
securities, federal agency securities, and other investments. Regulations
currently in effect require the Bank to maintain liquid assets of not less
than 5% of its average daily balance of its net withdrawable accounts plus
short-term borrowings during the preceding calendar month; short-term liquid
assets must consist of not less than 1% of that amount. The Bank has
consistently exceeded these requirements.
During the three months ended September 30, 1996 the Bank did not declare a
cash dividend.
10
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations, Continued
The following shows selected ratios for the periods ended or at the dates
indicated:
Three Months Three Months
Ended Year Ended Ended
September 30, June 30, September 30,
------------- -------- -------------
1996 1996 1995
------- ------- -------
<S> <C> <C> <C>
Return on average assets (1.30)% .91% .64%
Return on average equity (22.62)% 16.98% 12.55%
Average equity as a percentage of
average assets 5.77% 5.36% 5.13%
Equity to total assets at end of period 5.10% 5.92% 5.21%
Noninterest expense to average assets 2.89% 2.50% 2.49%
Nonperforming loans and other assets
to total assets at end of period .46% .51% .75%
</TABLE>
The following table shows weighted average interest rates at the dates
indicated:
<TABLE>
<CAPTION>
At At At
September 30, June 30, September 30,
1996 1996 1995
------- ------- -------------
Weighted average interests rates:
Interest-earning assets:
<S> <C> <C> <C>
Loans 8.10% 8.18% 8.22%
Mortgage-backed securities 6.64% 6.53% 7.29%
Investment securities 6.51% 6.37% 5.12%
Other interest-earning assets 6.04% 6.10% 7.12%
Total interest-earnings assets 7.64% 7.78% 7.89%
Interest-bearing liabilities:
Deposit accounts 5.00% 4.82% 4.91%
Borrowed funds --% --% 6.75%
Total interest-bearing liabilities 5.00% 4.82% 4.92%
Interest-rate spread 2.64% 2.96% 2.97%
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations, Continued
The following table sets forth information with respect to the Company's
nonperforming assets as of the date indicated ($ in thousands):
At
--------------------------
September 30, June 30,
------------- --------
1996 1996
---- ----
<S> <C> <C>
Loans accounted for on a nonaccrual basis:
Real estate mortgage:
Single-family residential $ 351 272
Multi-family and commercial 236 403
Consumer and other loans - 10
----- ---
Total 587 685
--- ---
Accruing loans which are contractually past due 90 days or more:
Single family residential 48 -
Consumer and other loans - -
----- ---
Total 48 -
--- ---
Total of nonaccrual and 90 days past due loans $ 635 685
=== ===
Percentage of total loans .54% .57%
Other nonperforming assets (1) $ 144 108
=== ===
Total nonperforming assets $ 779 793
=== ===
Percentage of total assets .46% .51%
=== ===
</TABLE>
(1) Other nonperforming assets represent property acquired by the
Company through foreclosure or repossession. This property is
carried at the lower of fair value less estimated selling
costs or the principal balance of the loan.
The following table sets forth information with respect to the Company's
interest on the nonaccruing loans that would have been reported as additional
income had the loans been fully accruing during the periods indicated (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------
1996 1995
---- ----
<S> <C> <C>
Interest income that would have been recorded $ 17 6
Interest income recognized 3 -
-- ---
Interest income foregone $ 14 6
== =
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
FIRST FAMILY FINANCIAL CORPORATION
The following table sets forth, for the periods indicated, information
for the Company regarding (i) the average balances of interest-earning assets
and interest-bearing liabilities; (ii) the total dollar amount of interest and
dividend income from interest-earning assets and the resultant average yields;
(iii) the total dollar amount of interest expense on interest-bearing
liabilities and the resultant average rate; (iv) net interest/dividend income;
(v) interest-rate spread; and (vi) net interest margin.
Three Months Ended September 30,
--------------------------------
1996 1995
---------------------------------- ---------------------------------
Interest Average Interest Average
Average and Yield/ Average and Yield/
Balance Dividends Rate Balance Dividends Rate
------- --------- ---- ------- --------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $114,101 2,356 8.26% $117,334 2,392 8.15%
Mortgage-backed securities 8,512 140 6.58% 20,045 356 7.10%
Investment securities 23,762 395 6.65% 9,270 128 5.52%
Other interest-earning assets (1) 5,460 76 5.57% 2,807 45 6.41%
------- ----- ------- ----- ----
Total interest-earning assets 151,835 2,967 7.82% 149,456 2,921 7.82%
------- ----- ------- ----- ----
Interest-bearing liabilities:
Deposit accounts 147,219 1,801 4.89% 144,659 1,808 4.99%
Borrowed funds 98 1 4.08% 326 5 6.14%
------- ----- ------- ----- ----
Total interest-bearing liabilities 147,317 1,802 4.89% 144,985 1,813 5.00%
------- ----- ------- ----- ----
Net interest income $ 1,165 $ 1,108
======== ========
Interest-rate spread (2) 2.93% 2.82%
==== ====
Net average interest-earning assets, net
interest margin (3) $ 4,518 3.07% $ 4,471 2.97%
======== ==== ======== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.03 1.03
==== ====
</TABLE>
(1) Includes interest-bearing deposits and Federal Home Loan Bank stock.
(2) Interest-rate spread represents the difference between the average
yield on interest-earning assets and the average rate of
interest-bearing liabilities.
(3) Net interest margin is net interest income divided by average
interest-earning assets.
13
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Comparison of Three-Month Periods Ended September 30, 1996 and 1995
Results of Operations
General. Net loss for the three-month period ended September 30, 1996, was
$518,000 or $(.95) per share compared to net earnings of $251,000 or $.46
per share for the 1995 period. The decrease in net earnings for the 1996
period is primarily attributable to a one-time SAIF recapitalization
assessment partially offset by an increase in net interest income and a
decrease in the provision for income taxes.
Interest Income. Interest on loans for the three-month period ended September
30, 1996, decreased $36,000 from $2.39 million for the 1995 period to $2.36
million for the 1996 period, primarily as a result of a decrease in the
average balance from $117.3 million during the 1995 period to $114.1
million in 1996 partially offset by an increase in the average yield earned
from 8.15% in 1995 to 8.26% in 1996.
Interest on mortgage-backed securities decreased $216,000 during the
three-month period ending September 30, 1996 compared to the same period in
1995. This decrease was due primarily to a decrease in the average balance
from $20.0 million during the three-month period ended September 30, 1995
to $8.5 million during the 1996 period. The decrease is also attributed to
a decrease in the rate earned on mortgage-backed securities from 7.10%
during the 1995 period to 6.58% for the 1996 period.
Interest on investment securities increased $267,000 from $128,000 for the
three months ended September 30, 1995 to $395,000 for the comparable period
in 1996. This increase can be attributed to an increase in the average
balance from $9.3 million during 1995 to $23.8 million for the comparable
period in 1996. The increase is also due to an increase in the rate earned
from 5.52% for the three-months ended September 30, 1995 to 6.65% for the
comparable period in 1996.
Other interest and dividends increased $31,000 from $45,000 for the
three-month period ended September 30, 1995, to $76,000 for the three-month
period ended September 30, 1996. The increase was the result of a higher
average balance of such assets, partially offset by a decrease in the yield
earned on these assets.
Interest Expense. Interest expense on deposit accounts decreased slightly for
the three-month period ended September 30, 1996 compared to the comparable
period in 1995. The decrease was primarily due to a decrease in the rate
paid partially offset by an increase in the average balance of deposit
accounts.
(continued)
14
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Provision for Loan Losses. The provision for loan losses is charged to earnings
to bring the total allowance to a level deemed appropriate by management
and is based upon historical experience, the volume and type of lending
conducted by the Company, industry standards, the amount of nonperforming
loans, general economic conditions, particularly as they relate to the
Company's market areas, and other factors related to the collectibility of
the Company's loan portfolio. The Company recorded a $30,000 provision for
loan losses for the three-month periods ended September 30, 1996 and 1995.
Management believes the allowance for loan losses of $744,000 at September
30, 1996 is adequate.
Noninterest Income. Noninterest income decreased $66,000 during the three-month
period ended September 30, 1996 from the comparable period in 1995. The
decrease is primarily attributed to a decrease in the gain on sale of loans
as well as a decrease in fees and service charges.
Noninterest Expense. Noninterest expense increased $903,000, from $970,000 to
$1.9 million during the three-month period ending September 30, 1996
compared with the same period in 1995. The increase was due primarily to
the one-time SAIF recapitalization assessment of $966,000 recorded during
the three-months ended September 30, 1996.
Income Tax Provision. There was no income tax provision for the three month
period ended September 30, 1996 compared to $143,000 (an effective rate of
36.3%) for the same 1995 period.
15
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which First Family
Financial Corporation or any of its subsidiaries is a party or to which any
of their property is subject.
Item 2. Changes in Securities
Not applicable
Item 3. Default upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits - not applicable
b. The Company filed one report on Form 8-K during the quarter ended
September 30, 1996, as follows:
Form 8-K dated July 19, 1996 and filed August 8, 1996, relating to the
Company entering into an Agreement and Plan of Merger to provide for
the merger of the Company with and into Colonial BancGroup in an
exchange for common stock of Colonial BancGroup and cash.
16
<PAGE>
FIRST FAMILY FINANCIAL CORPORATION
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.
FIRST FAMILY FINANCIAL CORPORATION
(Registrant)
Date: November 7, 1996 By:/s/David M. Shepherd
---------------- --------------------
David M. Shepherd, President and
Chief Executive Officer
Date: November 7, 1996 By:/s/ Bradley R. Meredith
---------------- -----------------------
Bradley R. Meredith,
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
17
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
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0
0
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</TABLE>
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