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 September 30, 2002
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
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(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 November 8, 2002: 1,246,108
Page 1 of 13 pages
CONTENTS
PART I. FINANCIAL INFORMATION PAGE
--------------------------------------------------------------
Item 1 Consolidated Statements of Financial Condition at
September 30, 2002 and June 30, 2002 3
Consolidated Statements of Earnings for the three
months ended September 30, 2002 and 2001 4
Consolidated Statements of Cash Flows for the three
months ended September 30, 2002 and 2001 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
Item 3 Quantitative and Qualitative Disclosures
About Market Risk 11
Item 4 Controls and Procedures 11
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 11
Item 2 Changes in Securities and Use of Proceeds 11
Item 3 Defaults upon Senior Securities 11
Item 4 Submission of Matters to a
Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
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page 2
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except per share data)
September 30, June 30,
2002 2002
ASSETS
Cash and due from banks $ 190 $ 638
Interest-bearing deposits in other financial institutions 5,603 4,174
--------- ---------
Cash and cash equivalents
5,793 4,812
Certificates of deposit in other financial institutions 100 100
Loans receivable - net 128,917 131,180
Property acquired in settlement of loans-net 133 311
Office premises and equipment - at depreciated cost 1,370 1,372
Federal Home Loan Bank stock - at cost 2,740 2,708
Accrued interest receivable on loans 365 389
Prepaid expenses and other assets 58 85
--------- ---------
Total assets $ 139,476 $ 140,957
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 75,107 $ 75,896
Advances from the Federal Home Loan Bank 44,502 44,982
Advances by borrowers for taxes and insurance 469 329
Accrued interest payable 57 55
Accrued federal income taxes 217 13
Deferred federal income taxes 210 217
Other liabilities 824 1,400
--------- ---------
Total liabilities 121,386 122,892
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 18,631 18,606
Less 426,335 shares of treasury stock-at cost (6,434) (6,434)
--------- ---------
Total shareholders' equity 18,090 18,065
--------- ---------
Total liabilities and shareholders' equity $ 139,476 $ 140,957
========= =========
Book value per share $ 14.52 $ 14.50
========= =========
page 3
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Three months ended
September 30,
2002 2001
Interest income
Loans $ 2,248 $ 2,559
Investment securities 1 29
Interest-bearing deposits and other 52 86
------- -------
Total interest income 2,301 2,674
Interest expense
Deposits 641 986
Borrowings 688 721
------- -------
Total interest expense 1,329 1,707
------- -------
Net interest income 972 967
Provision for losses on loans -- 1
------- -------
Net interest income after provision for
losses on loans 972 966
Other operating income 20 18
General, administrative and other expense
Employee compensation and benefits 247 258
Occupancy and equipment 43 41
Federal deposit insurance premiums 3 4
Franchise and other taxes 26 14
Data processing 30 31
Other operating 72 78
------- -------
Total general, administrative
and other expense 421 426
------- -------
Earnings before income taxes 571 558
Federal income taxes
Current 204 172
Deferred (7) 19
------- -------
Total federal income taxes 197 191
------- -------
NET EARNINGS $ 374 $ 367
======= =======
Basic Earnings Per Share $ 0.30 $ 0.30
======= =======
Diluted Earnings Per Share $ 0.29 $ 0.29
======= =======
page 4
FRANKFORT FIRST BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 30,
(In thousands)
2002 2001
Cash flows from operating activities:
Net earnings for the period $ 374 $ 367
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 -- (2)
Amortization of deferred loan origination fees (21) (15)
Depreciation and amortization 19 20
Provision for losses on loans -- 1
Federal Home Loan Bank stock dividends (32) (45)
Increase (decrease) in cash due to changes in:
Accrued interest receivable 24 (1)
Prepaid expenses and other assets 27 9
Accrued interest payable 2 17
Other liabilities (576) 17
Federal income taxes
Current 204 172
Deferred (7) 19
------- -------
Net cash provided by operating activities 14 559
Cash flows provided by (used in) investing activities:
Proceeds from maturity of investment securities -- 1,000
Loan principal repayments 8,825 5,969
Loan disbursements (6,541) (8,192)
Proceeds from sale of real estate acquired through foreclosure 178 --
Purchase of office premises and equipment (17) (4)
------- -------
Net cash provided by (used in) investing activities
2,445 (1,227)
Cash flows provided by (used in) financing activities:
Net increase (decrease) in deposit accounts (789) 164
Repayment of Federal Home Loan Bank advances (480) (607)
Advances by borrowers for taxes and insurance 140 133
Dividends paid on common stock (349) (349)
------- -------
Net cash used in financing activities (1,478) (659)
------- -------
Net increase (decrease) in cash and cash equivalents 981 (1,327)
Cash and cash equivalents at beginning of period 4,812 6,717
------- -------
Cash and cash equivalents at end of period $ 5,793 $ 5,390
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Federal income taxes $ -- $ --
======= =======
Interest on deposits and borrowings $ 1,327 $ 1,690
======= =======
page 5
FRANKFORT FIRST BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2002 AND 2001
(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 accounting principles generally accepted in the United States of America.
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 three month period ended September 30, 2002 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, 2002.
(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 1,246,108 for each of the three month periods
ended September 30, 2002, and 2001.
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 1,286,257 and 1,286,343
for the three month periods ended September 30, 2002 and 2001, respectively.
Incremental shares related to the assumed exercise of stock options included in
the calculation of diluted earnings per share totaled 40,149 and 40,235 for the
three month periods ended September 30, 2002 and 2001, respectively. The Company
has 181,859 stock options outstanding of which 177,112 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
In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 carries over the
recognition and measurement provisions in SFAS No. 121. Accordingly, an entity
must recognize an impairment loss if the carrying value of a long-lived asset or
asset group (a) is not recoverable and (b) exceeds its fair value. Similar to
SFAS No. 121, SFAS No. 144 requires an entity to test an asset or asset group
for impairment whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable. SFAS No. 144 differs from SFAS No. 121
in that it provides guidance on estimating future cash flows to test
recoverability. An entity may use either a probability-weighted approach or
best-estimate approach in developing estimates of cash flows to test
recoverability. SFAS No. 144 is effective for financial statements issued for
fiscal years beginning after December 15, 2001 and interim periods within those
fiscal years. Management adopted SFAS No. 144 effective July 1, 2002, as
required, without material effect on the Company's financial condition or
results of operations.
page 6
In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 provides financial accounting
and reporting guidance for costs associated with exit or disposal activities,
including one-time termination benefits, contract termination costs other than
for a capital lease, and costs to consolidate facilities or relocate employees.
SFAS No. 146 is effective for exit or disposal activities initiated after
December 31, 2002. SFAS No. 146 is not expected to have a material effect on the
Company's financial position or results of operations.
In October 2002, the FASB issued SFAS No. 147, "Accounting for Certain
Financial Institutions: An Amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9," which removes acquisitions of financial institutions from
the scope of SFAS No. 72, "Accounting for Certain Acquisitions of Banking and
Thrift Institutions," except for transactions between mutual enterprises.
Accordingly, the excess of the fair value of liabilities assumed over the fair
value of tangible and intangible assets acquired in a business combination
should be recognized and accounted for as goodwill in accordance with SFAS No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets."
SFAS No. 147 also requires that the acquisition of a less-than-whole
financial institution, such as a branch, be accounted for as a business
combination if the transferred assets and activities constitute a business.
Otherwise, the acquisition should be accounted for as the acquisition of net
assets.
SFAS No. 147 also amends the scope of SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," to include long-term customer
relationship assets of financial institutions (including mutual enterprises)
such as depositor- and borrower-relationship intangible assets and credit
cardholder intangible assets.
The provisions of SFAS No. 147 related to unidentifiable intangible assets
and the acquisition of a less-than-whole financial institution are effective for
acquisitions for which the date of acquisition is on or after October 1, 2002.
The provisions related to impairment of long-term customer relationship assets
are effective October 1, 2002. Transition provisions for previously recognized
unidentifiable intangible assets are effective on October 1, 2002, with earlier
application permitted.
SFAS No. 147 is not expected to have a material effect on the Company's
financial condition 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 local
and national economy, as well as changes in the general level of interest rates.
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 may include FHLB
stock, FHLB certificates of deposit, U.S. Government Agency-issued bonds, and
other investments.
COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2002 AND JUNE 30, 2002
ASSETS: The Company's total assets were $139.5 million at September 30,
2002, a decrease of $1.5 million or 1.1% from $141.0 million at June 30, 2002.
The decrease in total assets is primarily attributable to a decrease in the
Company's loans receivable, which decreased $2.3 million or 1.7% to $128.9
million at September 30, 2002, partially offset by an increase of $981,000or
2.0% in cash and cash equivalents.
LIABILITIES: The Company's total liabilities decreased by $1.5 million or
1.2% from $122.9 million at June 30, 2002 to $121.4 million at September 30,
2002. The decrease in total liabilities is attributable to decreases in deposits
and other liabilities. Deposits decreased $789,000 or 1.0% to $75.1 million at
September 30, 2002. Other liabilities decreased $576,000 or 41.1% to $824,000 at
September 30, 2002, as liabilities associated with the Company's deferred
compensation program were reduced during the period. This plan has been amended
for withdrawal of some participants, thus reducing the overall liability to
participants.
SHAREHOLDERS' EQUITY: Shareholders' equity remained constant at $18.1
million at September 30, 2002 and June 30, 2002. The Company's book value per
share was $14.52 at September 30, 2002, compared to $14.50 at June 30, 2002.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2002, AND SEPTEMBER 30, 2001
NET EARNINGS: The Company's net earnings increased $7,000 or 1.9% from
$367,000 for the three month period ended September 30, 2001, to $374,000 for
the three month period ended September 30, 2002. The increase in net earnings is
attributable to an increase in net interest income of $5,000 and a decrease in
general, administrative and other expense of $5,000. The Company's basic
earnings per share remained unchanged at $0.30 per share for the three month
periods ended September 30, 2002 and 2001. The Company's diluted earnings per
share also remained unchanged at $0.29 per share for the three month periods
ended September 30, 2002 and 2001.
NET INTEREST INCOME: Net interest income after provision for loan losses
increased $5,000 or 0.5% from $967,000 for the three month period ended
September 30, 2001 to $972,000 for the three month period ended September 30,
2002. While total interest income and interest expense decreased from period to
period, the increase in net interest income was primarily due to a greater
decrease in total interest expense than the decrease in interest income.
page 8
INTEREST INCOME: Interest income decreased $373,000 or 13.9% to $2.3
million for the three month period ended September 30, 2002. The decrease was
related primarily to a decrease in interest income from loans, which decreased
$311,000 or 12.2%, to $2.2 million for the three month period ended September
30, 2002. Also contributing to the decrease in interest income were decreases in
interest income from interest-bearing deposits and other and investment
securities. Interest income from interest-bearing deposits and other decreased
$34,000 or 39.5% to $52,000 for the three month period ended September 30, 2002,
compared to $86,000 for the three month period for the prior year. Interest
income from investment securities decreased $28,000 or 96.6% from $29,000 for
the three month period ended September 30, 2001 to $1,000 for the period just
ended.
The decrease in yield on the Company's loan portfolio is related to both a
decrease in the average rate earned on the portfolio and a decrease in the
average balance of the portfolio. The average rate earned on the loan portfolio
decreased 50 basis points to 6.92% for the three month period ended September
30, 2002, compared to the prior year period, while the average balance of the
loan portfolio decreased $7.9 million or 5.8% to $130.0 million for the most
recent quarter ended. The decrease in yield on the Company's loan portfolio is a
result of downward adjustments of rates on adjustable rate mortgages, borrowers
refinancing to lower rates, and the customary replacement of older,
higher-yielding loans in the portfolio with newer, lower-yielding loans (as a
result of home sales, scheduled repayment, etc.) Demand for the Bank's primary
product, the Adjustable Rate Mortgage, declines somewhat in periods of falling
or low prevailing interest rates. Still, Management believes the origination of
this loan provides the best blend of yield and interest rate risk protection and
will continue to emphasize its origination.
INTEREST EXPENSE: Interest expense decreased $378,000 or 22.1% to $1.3
million for the three month period ended September 30, 2002. This decrease was
primarily due to a decrease in interest expense on deposits, which decreased
$345,000 or 35.0% to $641,000 for the three month period ended September 30,
2002. The decrease in interest expense on deposits is primarily attributable to
a 133 basis point decrease in the rate paid on deposits to 3.4% for the three
month period ended September 30, 2002, although the $8.1 million or 9.7%
decrease in the average balance of deposits outstanding from period to period
also contributed. The average balance of deposits outstanding for the three
month period ended September 30, 2002, was $75.2 million, compared to $83.3
million for the three month period ended September 30, 2001. Interest expense on
FHLB advances decreased $33,000 or 4.6% to $688,000 for the three month period
ended September 30, 2002, compared to the same period in 2001. In general, rates
paid on FHLB advances are greater than rates paid on deposits. Management
believes that, when compared to other sources of funds, FHLB advances offer
plans and terms that can be more easily matched to characteristics of the
Company's interest-earning assets. This strategy may be altered as market
conditions affect the terms, rates, and availability of retail deposits.
It is difficult to predict what interest rates will do in the near future.
If interest rates continue to decline, the cost of the Company's deposits will
probably continue to decrease. However, Management cannot predict whether the
cost of liabilities will decrease as fast as the yield generated by the loan and
investment portfolio. If interest rates increase, the Company's cost of deposits
will increase as well, and may increase faster than the yield generated by the
loan and investment portfolio.
PROVISION FOR LOSSES ON LOANS: There was no provision for losses on loans
for the three month period ended September 30, 2002, compared to a $1,000
provision for the three month period from the prior year. This represents a
decrease of $1,000 or 100.0%. The allowance for loan losses was $82,000 and
$102,000 at September 30, 2002 and 2001, respectively. As a percentage of
non-performing assets, the allowance for losses on loans increased from 11.1% at
September 30, 2001 to 30.7% at September 30, 2002. This increase was caused by a
decrease in the balance of non-performing assets from period to period (see
"Non-Performing Assets"). Management believed, based on its analysis of the risk
profile of the Company's assets, that the allowance for losses on loans was
adequate at September 30, 2002. 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. Overall, management considers
the fact that the vast majority of loans in the Company's portfolio are secured
by 1-4 family residential real estate, which heretofore has resulted in minimal
losses on loans. However, there can be no assurance that the allowance will be
adequate to cover losses on non-performing assets in the future.
page 9
OTHER OPERATING INCOME: Other operating income increased $2,000 or 11.1%
from $18,000 for the three month period ended September 30, 2001 to $20,000 for
the three month period ended September 30, 2002. 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 $5,000 or 1.2% from $426,000 for the three month period
ended September 30, 2001 to $421,000 for the three month period ended September
30, 2002. The decrease was due primarily to an $11,000 or 4.3% decrease in
employee compensation and benefits, which resulted mostly from decreased costs
associated with the Company's deferred compensation program. Although the
deferred compensation plan has some features that cause compensation expense to
increase with the Company's stock price, the Company has taken steps to greatly
reduce the expense in the future and to reduce the effects that increasing stock
prices can have on the expense associated with this plan. Partially offsetting
the decrease in employee compensation and benefits was a $12,000 or 85.7%
increase in franchise and other taxes. The increase in franchise and other taxes
resulted from state income tax expense returning to normal after carrying back
income tax attributes to a prior period.
INCOME TAX: The Company's provision for federal income taxes increased from
$191,000 for the three month period ended September 30, 2001 to $197,000 for the
three month period ended September 30, 2002. The increase was a result of the
increase in the Company's pretax earnings. The Company's effective tax rate was
34.5% and 34.2% for the three month periods ended September 30, 2002 and 2001,
respectively.
NON-PERFORMING ASSETS: At September 30, 2002, the Bank had approximately
$267,000 (0.2% of net loans) in loans 90 days or more past due but still
accruing, as compared to $912,000 at September 30, 2001. Also, the Bank had
approximately $130,000 in loans listed as special mention and $459,000 in loans
internally classified as Substandard. No loans were classified as Doubtful or
Loss. All assets listed as non-performing are 1-4 family mortgage loans with a
loan-to-value ratio (based on the original appraisal and current principal
balance) of less than 80%. Non-performing assets are considered by the Bank to
still be accruing as long as the reasonably determined fair value of the
collateral exceeds all principal, interest, and fees required to discharge the
obligation without loss. Management has initiated foreclosure proceedings on
some of the loans included in non-performing assets. With others, management is
attempting to encourage the borrower to remedy the delinquency although
foreclosure remains an option. The Bank has not charged off any loans during the
period. On April 8, 2002, the Bank acquired through foreclosure two parcels of
real estate valued at $385,000 based on a then current appraisal. As of October
31, 2002, both properties had been sold.
DIVIDENDS: On September 14, 2001, the Company announced a dividend policy
whereby it will pay a quarterly cash dividend of $0.28 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. 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. At September
30, 2002, the Company had recorded dividends payable of $349,000 for the payment
of a dividend on October 15, 2002.
STOCK REPURCHASES: The Company has utilized stock repurchase programs to
increase earnings per share, increase the Company's return on equity, and to
attempt to improve the market liquidity in the Company's stock. During the three
month period ended September 30, 2002, the Company did not repurchase any shares
of its stock, due largely to an increase in the market price of the Company's
shares. On August 15, 2002, the Company announced a new repurchase program
whereby it would seek to purchase up to 62,000 shares of its outstanding common
stock. The program is dependent upon market conditions and there is no guarantee
as to the exact number of shares to be repurchased by the Company. The Company's
Board and Management continue to believe in the potential positive effects of a
repurchase strategy and will continue to evaluate market conditions along with
other possible uses of capital in determining the authorization of future
repurchase programs.
page 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information as of September 30, 2002, concerning the Company's exposure to
market risk, which has remained relatively unchanged from June 30, 2002, is
incorporated by reference under Item 7A, "Quantitative and Qualitative
Disclosures About Market Risk," in the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2002.
ITEM 4. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the Company's disclosure controls and procedures (as such term is
defined in Rule 13a-14 (c) under the Exchange Act) as of a date within 90 days
of the date of filing of this Form 10-Q. Based upon such evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have concluded
that such controls and procedures are effective to ensure that the information
required to be disclosed by the Company in the reports it files under the
Exchange Act is gathered, analyzed and disclosed with adequate timeliness.
There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of the evaluation described above.
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: Exhibit 99-Certification of Chief Executive Officer
and Chief Financial Officer pursuant to section 906
of the Sarbanes-Oxley Act of 2002
Reports on Form 8-K: None
page 11
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: November 12, 2002
/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 12
CERTIFICATION
I, Don Jennings, President and Chief Executive Officer of Frankfort First
Bancorp, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Frankfort First
Bancorp, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board or directors (or persons fulfilling the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: November 12, 2002
/s/ Don Jennings
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Don Jennings
President and Chief Executive Officer
page 13
CERTIFICATION
I, R. Clay Hulette, Vice President and Chief Financial Officer of Frankfort
First Bancorp, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Frankfort First
Bancorp, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board or directors (or persons fulfilling the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: November 12, 2002
/s/ R. Clay Hulette
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R. Clay Hulette
Vice President and Chief Financial Officer