UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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: 0-26360
FRANKFORT FIRST BANCORP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 61-1271129
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
216 West Main Street, Frankfort, Kentucky 40602
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(502) 223-1638
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(Registrant's telephone number, including area code)
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 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 issuer's classes of
common stock as of May 9, 2001: 1,246,108
Page 1 of 13 pages
page 1
CONTENTS
PART I. FINANCIAL INFORMATION PAGE
--------------------------------------------------------------
Item 1 Consolidated Statements of Financial Condition at
March 31, 2001 and June 30, 2000 3
Consolidated Statements of Earnings for the three
months and nine months ended March 31,
2001 and 2000 4
Consolidated Statements of Cash Flows for the nine
months ended March 31, 2001 and 2000 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
PART II. OTHER INFORMATION
-----------------
Item 1 Legal Proceedings 12
Item 2 Changes in Securities and Use of Proceeds 12
Item 3 Defaults upon Senior Securities 12
Item 4 Submission of Matters to a
Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
- ----------
page 2
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
March 31, June 30,
2001 2000
(Audited)
ASSETS
Cash and due from banks $ 801 $ 133
Interest-bearing deposits in other financial institutions 2,649 845
-------- --------
Cash and cash equivalents
3,450 978
Certificates of deposit in other financial institutions 100 100
Investment securities held to maturity- at amortized cost,
approximate fair market value of $2,015 and $1,965 as of
March 31, 2001 and June 30, 2000 1,991 1,979
Loans receivable - net 137,873 137,792
Office premises and equipment - at depreciated cost 1,402 1,453
Federal Home Loan Bank stock - at cost 2,520 2,351
Accrued interest receivable on loans 437 413
Accrued interest receivable on investments and
interest-bearing deposits 15 41
Prepaid expenses and other assets 54 77
Prepaid federal income taxes 177 251
Deferred federal income taxes -- 19
-------- --------
Total assets $148,019 $145,454
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 80,853 $ 82,502
Advances from the Federal Home Loan Bank 47,484 42,108
Other borrowed money -- 373
Advances by borrowers for taxes and insurance 204 337
Accrued interest payable 57 59
Deferred federal income taxes 42 --
Other liabilities 1,301 1,251
-------- --------
Total liabilities 129,941 126,630
Shareholders' equity
Preferred stock, 500,000 shares authorized, $.01 par
value; no shares issued -- --
Common stock, 3,750,000 shares authorized, $.01
par value; 1,672,443 shares issued 17 17
Additional paid-in capital 5,876 5,876
Retained earnings - restricted 18,619 18,412
Less 426,335 and 352,335 shares of treasury stock-at cost (6,434) (5,481)
-------- --------
Total shareholders' equity 18,078 18,824
-------- --------
Total liabilities and shareholders' equity $148,019 $145,454
======== ========
Book value per share $ 14.51 $ 14.26
======== ========
page 3
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Nine months ended Three months ended
March 31, March 31,
2001 2000 2001 2000
Interest income
Loans $7,907 $7,255 $2,661 $2,460
Investment securities 100 79 33 33
Interest-bearing deposits and other 201 134 83 44
------ ------ ------ ------
Total interest income 8,208 7,468 2,777 2,537
Interest expense
Deposits 3,049 2,872 1,029 953
Borrowings 2,119 1,536 721 550
------ ------ ------ ------
Total interest expense 5,168 4,408 1,750 1,503
------ ------ ------ ------
Net interest income 3,040 3,060 1,027 1,034
Provision for losses on loans - 1 - 1
------ ------ ------ ------
Net interest income after provision for
losses on loans 3,040 3,059 1,027 1,033
Other operating income 35 32 10 9
General, administrative and other expense
Employee compensation and benefits 711 709 246 249
Occupancy and equipment 123 125 46 45
Federal deposit insurance premiums 13 30 4 4
Franchise and other taxes 83 81 27 31
Data processing 98 103 36 37
Other operating 252 241 79 80
------ ------ ------ ------
Total general, administrative
and other expense 1,280 1,289 438 446
------ ------ ------ ------
Earnings before income taxes 1,795 1,802 599 596
Federal income taxes
Current 549 562 186 188
Deferred 61 51 18 15
------ ------ ------ ------
Total federal income taxes 610 613 204 203
------ ------ ------ ------
NET EARNINGS $1,185 $1,189 $ 395 $ 393
====== ====== ====== ======
Basic Earnings Per Share $ 0.93 $ 0.83 $ 0.31 $ 0.29
====== ====== ====== ======
Diluted Earnings Per Share $ 0.93 $ 0.82 $ 0.31 $ 0.29
====== ====== ====== ======
page 4
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
(IN THOUSANDS)
2001 2000
Cash flows from operating activities:
Net earnings for the period $ 1,185 $ 1,189
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of discounts and premiums on loans,
investments, and mortgage backed securities, net (12) 1
Amortization of deferred loan origination (fees) costs (32) 8
Depreciation and amortization 55 61
Provision for losses on loans -- 1
Federal Home Loan Bank stock dividends (134) (96)
Increase (decrease) in cash due to changes in:
Accrued interest receivable 2 13
Prepaid expenses and other assets 23 71
Accrued interest payable (2) (17)
Other liabilities 49 18
Federal income taxes
Current 74 (79)
Deferred 61 51
-------- -------
Net cash provided by operating activities 1,269 1,221
Cash flows provided by (used in) investing activities:
Purchase of investment securities designated as held to maturity -- (1,970)
Proceeds from maturity of investment securities -- 2,000
Purchase of Federal Home Loan Bank stock (35) (294)
Loan principal repayments 15,961 18,872
Loan disbursements (16,010) (21,784)
Purchase of office premises and equipment (4) (56)
-------- -------
Net cash used in investing activities (88) (3,232)
Cash flows provided by (used in) financing activities:
Net decrease in deposit accounts (1,649) (3,118)
Proceeds from Federal Home Loan Bank advances 14,650 33,200
Repayment of Federal Home Loan Bank advances (9,274) (25,653)
Proceeds from other borrowed money 460 1,877
Repayment of other borrowed money (833) (2,111)
Advances by borrowers for taxes and insurance (133) (122)
Dividends paid on common stock (977) (1,018)
Acquisition of treasury stock (953) (2,688)
-------- -------
Net cash provided by financing activities 1,291 367
-------- -------
Net increase (decrease) in cash and cash equivalents 2,472 (1,644)
Cash and cash equivalents at beginning of period 978 2,591
-------- -------
Cash and cash equivalents at end of period $ 3,450 $ 947
======== =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ 475 $ 640
======== =======
Interest on deposits and borrowings $ 5,170 $ 4,425
======== =======
page 5
FRANKFORT FIRST BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-Q and therefore do not include all
disclosures necessary for a complete presentation of the statements of financial
condition, statements of earnings, and statements of cash flows in conformity
with generally accepted accounting principles. However, all adjustments which
are, in the opinion of management, necessary for the fair presentation of the
interim financial statements have been included and all such adjustments are of
a normal recurring nature. The results of operations for the nine and three
month periods ended March 31, 2001 and 2000 are not necessarily indicative of
the results which may be expected for the entire year. These financial
statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto included in the Company's Annual Report on Form
10-K for the year ended June 30, 2000.
(2) PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Frankfort First Bancorp, Inc. (the Company) and First Federal Savings Bank of
Frankfort (the Bank). All significant intercompany items have been eliminated.
(3) EARNINGS PER SHARE
Basic earnings per share is computed based upon the weighted average common
shares outstanding which totaled 1,267,626 and 1,246,108 for the nine and three
month periods ended March 31, 2001, respectively, and 1,434,424 and 1,354,096
for the nine and three month periods ended March 31, 2000.
Diluted earnings per share is computed taking into consideration common
shares outstanding and dilutive potential common shares, i.e. the Company's
stock option plan. Weighted-average common shares deemed outstanding for
purposes of computing diluted earnings per share totaled 1,267,626 and 1,247,897
for the nine and three month periods ended March 31, 2001, respectively, and
1,446,555 and 1,354,096 for the nine and three month periods ended March 31,
2000, respectively. Incremental shares related to the assumed exercise of stock
options included in the calculation of diluted earnings per share totaled 1,789
for the three month period ended March 31, 2001, and 12,131 for the nine month
period ended March 31, 2000. For the nine month period ended March 31, 2001, and
the three month period ended March 31, 2000, there were no incremental shares
related to the assumed exercise of stock options due to the non-dilutive nature
of the options during those periods. The Company has 239,492 stock options
outstanding of which 234,745 have an exercise price of $13.80 per share and
4,747 have an exercise price of $14.91 per share.
(4) EFFECTS OF RECENT ACCOUNTING PRONOUNCEMENTS
Accounting for Derivative Instruments and Hedging Activities. In June,
1998, the Financial Accounting Standards Board (the "FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires entities to recognize all
derivatives in their financial statements as either assets or liabilities
measured at fair value. SFAS No. 133 also specifies new methods of accounting
for hedging transactions, prescribes the items and transactions that may be
hedged, and specifies detailed criteria to be met to qualify for hedge
accounting.
The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an interest
rate or foreign exchange rate, that is applied to a notional amount, such as an
amount of currency, to determine the settlement amount(s). It generally requires
no significant initial investment and can be settled net or by delivery of an
asset that is readily convertible to cash. SFAS No. 133 applies to derivatives
embedded in other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.
page 6
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years
beginning after June 15, 2000. On adoption, entities are permitted to transfer
held-to-maturity debt securities to the available-for-sale or trading category
without calling into question their intent to hold other debt securities to
maturity in the future. Management adopted SFAS No. 133 effective July 1, 2000,
as required, without material impact on the Company's financial statements.
In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities", which
revises the standards for accounting for securitizations and other transfers of
financial assets and collateral and requires certain disclosures, but carries
over most of the provisions of SFAS No. 125 without reconsideration. SFAS No.
140 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The Statement is
effective for recognition and reclassification of collateral and for disclosures
relating to securitization transactions and collateral for fiscal years ending
after December 15, 2000. SFAS No. 140 is not expected to have a material effect
on the Company's financial position or results of operations.
page 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information contained herein, the following
discussion contains forward-looking statements that involve risks and
uncertainties. Economic circumstances, the Company's operations, and the
Company's actual results could differ significantly from those discussed in the
forward-looking statements. Some of the factors that could cause or contribute
to such differences are discussed herein but also include changes in the economy
and interest rates in the nation and the Company's market area generally.
GENERAL
The principal business of the Bank consists of accepting deposits from the
general public and investing these funds in loans secured by one- to four-family
owner-occupied residential properties in the Bank's primary market area. The
Bank also invests in loans secured by non-owner occupied one- to four-family
residential properties and some churches located in the Bank's primary market
area. The Bank also maintains an investment portfolio which includes FHLB stock,
FHLB certificates of deposit, U.S. Government Agency-issued bonds, and other
investments.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2001 AND JUNE 30, 2000
ASSETS: The Company's total assets amounted to $148.0 million at March 31,
2001, an increase of $2.6 million or 1.8% over June 30, 2000. The increase in
total assets is primarily attributable to an increase in the Company's cash and
cash equivalents. Cash and cash equivalents increased $2.5 million or 252.8% to
$3.5 million at March 31, 2001. Also increasing was Federal Home Loan Bank
stock, which increased by $169,000 or 7.2% to $2.5 million at March 31, 2001.
LIABILITIES: The Company's total liabilities increased from $126.6 million
at June 30, 2000 to $129.9 million at March 31, 2001, an increase of $3.3
million or 2.6%. The increase in total liabilities is primarily attributable to
an increase in Advances from the Federal Home Loan Bank ("Advances"). Advances
increased $5.4 million or 12.8% to $47.5 million at March 31, 2001. The increase
has been utilized to fund new loans, replace lost deposits and to make dividends
to the Company. The Company, in turn, has repurchased some of its common stock
(see "Stock Repurchase"). Deposits decreased from $82.5 million at June 30, 2000
to $80.9 million at March 31, 2001, a decrease of $1.6 million or 2.0%.
SHAREHOLDERS' EQUITY: Shareholders' equity decreased from $18.8 million at
June 30, 2000 to $18.1 million at March 31, 2001, a decrease of $746,000 or
4.0%. This decrease is a result of the Company's net earnings of $1.2 million
less the Company's dividends declared during the period of $977,000 and less the
acquisition of the Company's own stock at a cost of $953,000 (see "Dividends"
and "Stock Repurchase"). The Company's book value per share was $14.51 at March
31, 2001 compared to $14.26 at June 30, 2000.
COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2001 AND
MARCH 31, 2000
NET EARNINGS: The Company's net earnings decreased $4,000 or 0.3% while
remaining relatively unchanged at $1.2 million for the nine month periods ended
March 31, 2001 and 2000. The decrease in net earnings is primarily attributable
to a decrease in net interest income of $20,000. The Company's basic earnings
per share rose $0.10 or 12.0% from $0.83 per share for the nine month period
ended March 31, 2000 to $0.93 per share for the nine month period ended March
31, 2001. The Company's diluted earnings per share rose $0.11 or 13.4% from
$0.82 per share for the nine month period ended March 31, 2000 to $0.93 per
share for the nine month period ended March 31, 2001. The increase in the per
share amounts was due to a decrease in the weighted-average number of shares
outstanding.
NET INTEREST INCOME: Net interest income totaled $3.0 million for the nine
month period ended March 31, 2001, a decrease of $20,000 or 0.7% from the same
period in 2000. The decrease was primarily due to an increase in total interest
expense.
page 8
INTEREST INCOME: Interest income increased $740,000 or 9.9% to $8.2 million
for the nine month period ended March 31, 2001. The increase in interest income
from loans was primarily responsible for the increased level of interest income
for the period. Interest income from loans increased $652,000 or 9.0% to $7.9
million for the nine month period ended March 31, 2001. Interest income from
interest-bearing deposits and other increased from $134,000 for the nine month
period ended March 31, 2000 to $201,000 for the nine month period ended March
31, 2001, an increase of $67,000 or 50.0%. Interest income from investment
securities increased from $79,000 for the nine month period ended March 31, 2000
to $100,000 for the nine month period ended March 31, 2001, an increase of
$21,000 or 26.6%.
INTEREST EXPENSE: Interest expense increased $760,000 or 17.2% to $5.2
million for the nine month period ended March 31, 2001. This increase was
primarily due to an increase in interest expense on borrowings which increased
$583,000 or 38.0% to $2.1 million for the nine month period ended March 31,
2001. The increase is a result of an increase in the average amount of Advances
outstanding as well as an increase in the average interest rate paid on those
borrowings. Supplementing the increase in interest expense on Advances was an
increase of $177,000 or 6.2% in interest expense on deposits, which increased to
$3.0 million for the nine month period ended March 31, 2001.
PROVISION FOR LOSSES ON LOANS: The provision for losses on loans decreased
$1,000 or 100.0% as there was no provision for the nine month period ended March
31, 2001, compared to the nine month period from the prior year. Management
believed, on the basis of its analysis of the risk profile of the Company's
assets, that the allowance for loan losses, which was $101,000, was appropriate
at March 31, 2001 and 2000. In determining the appropriate provision, management
considers a number of factors, including specific loans in the Company's
portfolio, real estate market trends in the Company's market area, economic
conditions, interest rates, and other conditions that may affect a borrower's
ability to comply with repayment terms. There can be no assurance that the
allowance will be adequate to cover losses on nonperforming assets in the
future.
OTHER OPERATING INCOME: Other operating income increased $3,000 or 9.4%
from $32,000 for the nine month period ended March 31, 2000 to $35,000 for the
nine month period ended March 31, 2001. Other operating income is not a
significant component of the Company's statement of earnings.
GENERAL, ADMINISTRATIVE, AND OTHER EXPENSES: General, administrative, and
other expense decreased $9,000 or 0.7% in remaining relatively unchanged at $1.3
million for the nine month periods ended March 31, 2001 and 2000. The decrease
was comprised primarily of a $17,000 or 56.7% decrease in Federal deposit
insurance premiums and a $5,000 or 4.9% decrease in data processing expense,
which were partially offset by an $11,000 or 4.6% increase in other operating
expenses. The decrease in Federal deposit insurance premiums is due to a
reduction in premium rates year to year. Effective January 1, 2000, the FICO
assessment rate for SAIF-insured institutions was reduced from 5.920 basis
points to 2.120 basis points. Further reductions in the assessment rate were
made for each quarterly period of 2000. As of April 1, 2001, the current FICO
assessment rate is set at 1.90 basis points. The increase in other operating
expenses was a result of an isolated incident which management does not expect
to reoccur.
INCOME TAX: The Company's provision for federal income taxes decreased from
$613,000 for the nine month period ended March 31, 2000 to $610,000 for the nine
month period ended March 31, 2001. The decrease was a result of the decrease in
the Company's pretax earnings. The Company's effective tax rate was 34.0% for
the nine month periods ended March 31, 2001 and 2000.
NON-PERFORMING ASSETS: At March 31, 2001, the Bank had approximately
$253,000 in loans 90 days or more past due but still accruing. These delinquent
loans represent 0.2% of the Bank's net loans. The Bank had $60,000 in loans
listed as special mention in addition to $644,000 in loans internally classified
as Substandard. No loans were classified as Doubtful or Loss. The Bank has not
charged off any loans during the period.
page 9
DIVIDENDS: On September 13, 2000, the Company announced a dividend policy
whereby it will pay a quarterly cash dividend of $0.26 per share, per quarter,
payable on the 15th day of the month following the end of each quarter, to
shareholders of record as of the last business day of each quarter. This
represented an increase of $0.02 or 8.3% from the previous quarterly dividend of
$0.24 per share, which was established on September 15, 1999. The Board of
Directors determined that the payment of a dividend was appropriate in light of
the Company's capital position and financial condition. Although the Board of
Directors has adopted this policy, the future payment of dividends is dependent
upon the Company's financial condition, earnings, equity structure, capital
needs, regulatory requirements, and economic conditions. The Company last paid a
dividend on January 12, 2001. At March 31, 2001, the Company had recorded
dividends payable of $324,000 for the payment of a dividend on April 13, 2001.
STOCK REPURCHASES: On September 13, 2000, the Company announced a plan to
purchase up to 65,000 shares of the Company's common stock, which represented
approximately 5% of the outstanding common stock at that time. Management
believes that the repurchase program should be completed within nine months of
commencement. The Board of Directors considers the Company's common stock to be
an attractive investment, and the repurchase program may improve liquidity in
the market for the common stock and result in increased per share earnings and
book value per share. The Board will continue to consider stock repurchases and
in the future may enact similar programs depending on market conditions,
interest rates, and the availability of funds. At May 9, 2001, 15,000 shares had
been repurchased at an average cost of $12.94 per share.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001
AND MARCH 31, 2000
NET EARNINGS: The Company's net earnings increased $2,000 or 0.5% to
$395,000 for the three months ended March 31, 2001 compared to $393,000 for the
three months ended March 31, 2000. This increase is primarily attributable to a
decrease in general, administrative and other expense of $8,000. The Company's
basic and diluted earnings per share rose $0.02 or 6.9% from $0.29 per share for
the three month period ended March 31, 2000 to $0.31 per share for the three
month period ended March 31, 2001. The increase in the per share amounts was due
to a decrease in the weighted-average number of shares outstanding.
NET INTEREST INCOME: Net interest income totaled $1.0 million for the three
months ended March 31, 2001, a decrease of $7,000 or 0.7% from the same period
in 2000. The decrease was primarily due to an increase in total interest
expense.
INTEREST INCOME: Interest income increased $240,000 or 9.5% to $2.8 million
for the three month period ended March 31, 2001. This was primarily attributed
to the increase in interest income from loans, which increased $201,000 or 8.2%
to $2.7 million for the three month period ended March 31, 2001. Interest income
from interest-bearing deposits and other increased from $44,000 for the three
month period ended March 31, 2000 to $83,000 for the three month period ended
March 31, 2001, an increase of $39,000 or 88.6%. Interest income from investment
securities remained unchanged at $33,000 for the three month periods ended March
31, 2001 and 2000.
INTEREST EXPENSE: Interest expense increased $247,000 or 16.4% to $1.8
million for the three month period ended March 31, 2001. This increase was
primarily due to an increase in interest expense on borrowings which increased
$171,000 or 31.1% from $550,000 for the three month period ended March 31, 2000
to $721,000 for the three month period ended March 31, 2001. The increase is a
result of an increase in the average amount of Advances outstanding as well as
an increase in the average interest rate paid on those borrowings. Also, the
Company experienced an increase of $76,000 or 8.0% in interest expense on
deposits, which increased from $953,000 for the three month period ended March
31, 2000, to $1.0 million for the three month period ended March 31, 2001.
page 10
PROVISION FOR LOSSES ON LOANS: The provision for losses on loans decreased
$1,000 or 100.0% as there was no provision for the three month period ended
March 31, 2001, compared to the three month period from the prior year.
Management believed, on the basis of its analysis of the risk profile of the
Company's assets, that the allowance for loan losses, which was $101,000 was
appropriate at March 31, 2001 and 2000, respectively. In determining the
appropriate provision, management considers a number of factors, including
specific loans in the Company's portfolio, real estate market trends in the
Company's market area, economic conditions, interest rates, and other conditions
that may affect a borrower's ability to comply with repayment terms. There can
be no assurance that the allowance will be adequate to cover losses on
nonperforming assets in the future.
OTHER OPERATING INCOME: Other operating income increased $1,000 or 11.1%
from $9,000 for the three month period ended March 31, 2000 to $10,000 for the
three month period ended March 31, 2001. Other operating income is not a
significant component of the Company's statement of earnings.
GENERAL, ADMINISTRATIVE, AND OTHER EXPENSES: General, administrative, and
other expense decreased $8,000 or 1.8% from $446,000 for the three month period
ended March 31, 2000 to $438,000 for the three month period ended March 31,
2001. The decrease was primarily the result of a $4,000 or 12.9% decrease in
franchise and other taxes. Also contributing to the decrease in general,
administrative and other expense was a decrease in employee compensation and
other expense of $3,000 or 1.2%.
INCOME TAX: The Company's provision for federal income taxes increased from
$203,000 for the three month period ended March 31, 2000 to $204,000 for the
three month period ended March 31, 2001. The increase was a result of the
increase in the Company's pretax earnings. The Company's effective tax rate was
34.1% for each of the three month periods ended March 31, 2001 and 2000.
page 11
PART II.
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits: None
Reports on Form 8-K: None
page 12
Signature
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.
Frankfort First Bancorp, Inc.
Date: May 9, 2001
/S/ Don D. Jennings
---------------------------------------
.
Don D. Jennings
President
/S/ R. Clay Hulette
---------------------------------------
R. Clay Hulette
Vice President and Treasurer
(Principal Financial and Accounting
Officer)
page 13