UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
(Mark One)
[X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE QUARTERLY PERIOD ENDED:
MARCH 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM ___________
TO _____________ FOR QUARTER ENDED
COMMISSION FILE NUMBER: 0-21688
FFBS BANCORP, INC.
(exact name of registrant as specified in its charter)
Delaware 64-0828070
(State or other (IRS Employer ID No)
jurisdiction of
incorporation or organization)
1121 Main Street, Columbus, Mississippi 39701
(Address of principal executive offices)
(601) 328-4631
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
the reports required to be filed by Section 13 of 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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
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 subsequent to the
distribution of securities under a plan confirmed by a court.
YES_____ NO_____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
1,572,883 shares of common stock, $.01 par value 03/31/96
Transitional Small Business Disclosure Format (check one):
YES NO x
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
__________ __________ __________ __________
INTEREST INCOME
Interest and fees on
loans $1,778,169 $1,659,983 $5,285,223 $4,835,290
Interest on mortgage-
backed and related
securities 41,931 29,763 99,828 97,428
Interest on investment
securities 325,509 370,778 1,046,486 1,098,995
FHLB stock dividends 10,918 10,700 34,261 28,720
Interest on deposits
due from banks 79,666 30,778 197,457 145,277
__________ __________ __________ __________
2,236,193 2,102,002 6,663,255 6,205,710
INTEREST EXPENSE
Interest on deposits 1,153,644 967,978 3,409,434 2,802,476
__________ __________ __________ __________
Net interest income 1,082,549 1,134,024 3,253,821 3,403,234
Provision of losses on
loans 0 0 0 0
__________ __________ __________ __________
Net interest income
after provision for
losses on loans 1,082,549 1,134,024 3,253,821 3,403,234
NON-INTEREST INCOME
Loan fees and service
charges 41,779 30,808 131,781 106,714
NOW account fees 71,478 52,250 204,535 183,169
Other 36,767 20,182 89,031 39,142
__________ __________ __________ __________
150,024 103,240 425,347 329,025
NON-INTEREST EXPENSE
Compensation and
benefits 340,100 321,381 971,554 959,709
Occupancy 26,697 23,302 79,935 65,952
Furniture and
equipment 18,813 16,206 53,463 39,695
Deposit insurance
premium 54,520 51,156 159,873 154,347
Loss on foreclosed
real estate 3,364 6,221 7,077 6,221
Data processing 39,393 39,761 119,257 101,941
Other 132,191 97,813 393,933 331,675
__________ __________ __________ __________
615,078 555,840 1,785,092 1,659,540
__________ __________ __________ __________
Income before income
taxes and cumulative
effect of accounting
change 617,495 681,424 1,894,076 2,072,719
Income tax expense:
Current 181,500 201,500 554,640 611,597
Deferred income tax 6,500 0 65,500 0
__________ __________ __________ __________
Net Income $ 429,495 $ 479,924 $1,273,936 $1,461,122
========== ========== ========== ==========
Earnings per common
share $ 0.28 $ 0.30 $ 0.86 $ 0.91
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
March 31, June 30,
1996 1995
ASSETS ____________ ____________
Cash $ 3,079,175 $ 3,175,089
Interest-bearing deposits due from bank 5,748,149 1,970,611
Federal funds sold 750,000 1,350,000
____________ ____________
Total cash and cash equivalents 9,577,324 6,495,700
Other interest-bearing deposits due
from banks 0 100,000
Investment securities (approximate
market value of $24,615,640 at
March 31, 1996, and $26,529,620 at
June 30, 1995) 24,752,538 26,710,113
Mortgage-backed and related securities
(approximate market value of
$2,610,638 at March 31, 1996 and
$1,993,621 at June 30, 1995) 2,648,193 2,010,978
Federal Home Loan Bank stock, at cost 745,700 711,600
Loans receivable, net 83,558,243 80,391,001
Foreclosed real estate 0 0
Properties and equipment 1,098,350 1,129,212
Accrued interest receivable 955,806 1,020,115
Other assets 217,262 397,758
____________ ____________
Total Assets $123,553,416 $118,966,477
============ ============
LIABILITIES AND RETAINED EARNINGS
Liabilities:
Deposits $ 98,537,667 $ 92,576,167
Advances from borrowers for taxes
and insurance 181,383 268,699
Accrued interest payable on deposits 545,760 598,009
Accrued expenses and other liabilities 118,597 382,646
____________ ____________
Total liabilities 99,383,407 93,825,521
Commitments and contingencies
Stockholders' equity:
Cumulative preferred stock, $.01 par
value, 500,000 shares authorized;
shares issued and outstanding - none 0 0
Common stock, $.01 par value,
2,000,000 shares authorized;
1,572,883 and 1,592,173 shares
issued and outstanding at March 31,
1996 and June 30, 1995,
respectively. 15,729 15,922
Additional paid in capital 15,092,418 15,285,124
Retained earnings 10,236,242 11,014,290
Loan receivable from ESOP (1,015,680) (1,015,680)
Unearned compensation - stock awards (158,700) (158,700)
____________ ____________
Total stockholders' equity 24,170,009 25,140,956
____________ ____________
Total Liabilities and Retained Earnings $123,553,416 $118,966,477
============ ============
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
March 31,
1996 1995
___________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,273,936 $ 1,461,122
Adjustments to reconcile net earnings
to net cash:
Depreciation of properties and
equipment 55,110 45,690
Accretion of discount on loans (2,787) (8,165)
Accretion of discount on mortgage-
backed securities (379) (777)
Accretion of discount on
investments (76,895) (56,382)
Amortization of premium on
investments 15,337 11,577
Amortization of premium on
mortgage-backed securities 4,702 12,888
FHLB stock dividends (34,100) (28,600)
Provision for losses on loans 0 0
(Increase) decrease in accrued
interest receivable 64,309 (16,259)
(Increase) decrease in other
assets 180,496 476,502
Increase (decrease) in accrued
interest payable on deposits (52,249) (23,805)
Increase (decrease) in accrued
expenses and other liabilities (264,049) 81,714
(Gain) loss on sale of foreclosed
real estate 7,077 5,730
___________ ___________
Net cash provided by operating
activities 1,170,508 1,961,235
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in other interest-
bearing deposits due from banks 100,000 1,178,346
Loan originations (31,307,000) (24,957,000)
Purchase of mortgage-backed and
related securities (984,900) 0
Purchase of investment securities (13,691,400) (8,009,492)
Principal repayment of loans 24,538,603 20,122,500
Principal repayments of mortgage-
backed and related securities 343,362 672,539
Sale of loans 3,721,000 935,366
Maturities of investment securities 15,713,872 5,150,000
Purchase of loans (117,055) 0
Sale of foreclosed real estate 45,100 37,000
Foreclosure of real estate (52,177) (42,730)
Purchase of properties and equipment (24,248) (115,566)
___________ ___________
Net cash used in investing activities (1,714,843) (5,029,037)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in deposits 5,961,500 178,794
Increase (decrease) in advances from
borrowers for taxes and insurance (87,316) (67,540)
Purchase of company stock (336,516) (726,264)
Dividends declared 0 0
Dividends paid (1,908,370) (320,872)
(Increase) decrease in unrealized
loss on marketable equity securities (3,339) 3,343
___________ ___________
Net cash provided by (used in)
financing activities 3,625,959 (932,539)
___________ ___________
Net increase (decrease) in cash and
cash equivalents 3,081,624 (4,000,341)
Cash and cash equivalents at beginning
of period 6,495,700 11,327,871
___________ ___________
Cash and cash equivalents at end of
period $ 9,577,324 $ 7,327,530
=========== ===========
FFBS BANCORP, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements include
the accounts of FFBS Bancorp, Inc. and its wholly owned subsidiary, First
Federal Bank for Savings. All significant intercompany balances and
transactions have been eliminated for the purpose of the consolidated
financial statements. In preparing the statement, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities as of the date of the balance sheets and revenues
and expenses for the periods. Actual results could differ from those
estimates. In the opinion of management, all adjustments necessary for the
fair presentation of the results of operations for the interim periods
presented have been made. Such adjustments were of a normal recurring
nature.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The results of
operations for the interim periods are not necessarily indicative of the
results that may be expected for the entire fiscal year.
(2) Earnings Per Share
Earnings per share for the nine months ended March 31, 1996 have been
computed on the basis of the weighted average number of common shares
outstanding (1,478,312) and common stock equivalent shares (43,187)
outstanding. Common stock equivalent shares arise from stock option plans
and a recognition and retention stock plan.
FFBS BANCORP, INC.
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
UNAUDITED
At and for the At and for the
Three Months Ended Nine Months Ended
March 31, March 31, March 31, March 31,
1996 1995 1996 1995
____________ ____________ ____________ ____________
Select Consolidated
Financial Condition
Data:
Total assets $123,553,416 $117,187,033 $123,553,416 $117,187,033
Loans receivable,
net 83,558,243 77,916,716 83,558,243 77,916,716
Deposits 98,537,667 91,689,167 98,537,667 91,689,167
Stockholders' equity 24,170,009 24,778,522 24,170,009 24,778,522
Selected Consolidated
Operations Data:
Net interest income 1,082,549 1,134,024 3,253,821 3,430,234
Provision for loan
losses 0 0 0 0
Non-interest income 150,024 103,240 425,347 329,025
Non-interest expense 615,078 555,840 1,785,092 1,659,540
Net income 429,495 479,924 1,273,936 1,461,122
Per Share Data:
Book value at end of
period $16.43 $15.56 $16.43 $15.56
Earnings per common
and common
equivalent share 0.28 0.30 0.86 0.91
Cash dividends
declared 0.00 0.00 1.20 0.20
Other Data:
Yield on average
earning assets 7.63% 7.46% 7.64% 7.36%
Cost of funds 4.79% 4.22% 4.79% 4.08%
Interest rate spread 2.84% 3.24% 2.85% 3.28%
Net interest
margin (1) 3.79% 4.05% 3.78% 4.07%
Annualized return on
average assets 1.41% 1.61% 1.41% 1.67%
Annualized return on
average equity 7.04% 7.54% 7.05% 7.82%
Stockholder's equity
as a percentage of
total assets 19.65% 21.14% 19.56% 21.14%
Non-performing assets
as a percentage of
total assets (2) 0.58% 1.00% 0.58% 1.00%
Net interest income
as a percentage of
general and
administrative
expenses 176.00% 204.02% 182.28% 205.07%
(1) Net interest income divided by average interest earning assets.
(2) Non-performing assets consist of non-accruing loans, accruing loans
delinquent 90 days or more, and foreclosed real estate.
FFBS BANCORP, INC.
FINANCIAL DATA SCHEDULE
At or At or
For the For the
Nine Months Year
Ended Ended
March 31, June 30,
1996 1995
____________ ____________
Cash $ 3,079,175 $ 3,175,089
Interest-bearing deposits due from
banks 5,748,149 2,070,611
Federal funds sold 750,000 1,350,000
Trading account assets 0 0
Investments and mortgage-backed
securities held for sale 0 0
Investments and mortgage-backed
securities held to maturity -
carrying value 27,400,731 28,721,091
Investments and mortgage-backed
securities held to maturity -
market value 27,226,278 28,523,241
Loans 84,225,243 81,096,001
Allowance for losses 667,000 705,000
Total assets 123,553,416 118,966,477
Deposits 98,537,667 92,576,167
Short-term borrowings 0 0
Other liabilities 845,740 1,249,354
Long-term debt 0 0
Preferred stock -
mandatory redemption 0 0
Preferred stock -
no mandatory redemption 0 0
Common stock 15,729 15,922
Other stockholders' equity 24,154,280 25,125,034
Net yield - interest-earning assets -
actual 3.79% 4.04%
Loans on accrual 380,000 549,000
Accruing loans past due 90 days or more 333,000 735,000
Troubled debt restructuring 156,000 307,000
Potential problem loans 0 0
Allowance for loan loss - beginning of
period 706,000 803,000
Total charge-offs 40,000 52,000
Total recoveries 1,000 4,000
Allowance for loan loss - end of period 667,000 705,000
Loan loss allowance allocated to
domestic loans 667,000 705,000
Loan loss allowance allocated to foreign
loans 0 0
Loan loss allowance - unallocated 0 0
Non-Performing Assets
1. The following table sets forth information regarding non-accrual
loans, loans which are 90 or more days delinquent and still
accruing, and foreclosed properties at the date indicated. At
March 31, 1996, there are no other potential problem loans except
as included in the table below.
(In Thousands)
At
March 31, June 30,
1996 1995
_________ _________
Non-accrual mortgage loans $ 324 $ 508
Non-accrual other loans 56 41
_________ _________
Total non-accrual loans 380 549
Loans 90 days or more delinquent
and still accruing 333 735
_________ _________
Total non-performing loans 713 1,284
Total foreclosed real estate, net of
related allowance for losses 0 0
_________ _________
Total non-performing assets 713 1,284
========= =========
Troubled debt restructured 156 307
========= =========
Non-performing loans to total loans 0.85% 1.60%
Total non-performing assets to total
assets 0.58% 1.08%
2. There were no loan concentrations in excess of 10% of total
loans at March 31, 1996.
3. There were no outstanding foreign loans at March 31, 1996.
4. Loans classified for regulatory purposes or for internal credit
review that have not been disclosed in the above table do not
represent or result from trends or uncertainties that
management expects will materially impact the financial condition
of the Company or its subsidiary bank, or the future operating
results, liquidity or capital resources.
5. If all nonaccrual loans have been current throughout their terms,
interest income for the nine months ended March 31, 1996, and
June 30, 1995, increased (decreased) by approximately $2,000 and
$6,200, respectively.
6. Management stringently monitors assets that are classified as
non-performing. Non-performing assets include nonaccrual loans,
loans past due 90 or more, and foreclosed properties. Management
places loans on a nonaccrual status when it is determined that
the borrower is unable to meet his contractual obligations or
when interest or principal is 90 days or more past due, unless
the loan is adequately secured by way of collateralization,
guarantees, or other security.
7. At March 31, 1996, management was not aware of any potential
problem areas not previously disclosed.
Allowance for Loan Losses
The allowance for loan losses is established through a provision
for loan losses based on management's periodic evaluation of
the adequacy of the allowance for loan losses. Such evaluation,
which includes a review of all loans on which full collectibility
may not be reasonably assured, considers, among other matters, known
and inherent risks in the portfolio, prevailing market conditions,
management's judgment as to collectibility, the estimated net
realizable value of the underlying collateral, historical loan
loss experience and other factors that warrant recognition in
providing for an adequate loan loss allowance.
(In Thousands)
For the For the
Nine Months Year
Ended Ended
March 31, June 30,
1996 1995
________ ________
Balance at beginning of period $ 706 $ 803
Provision for loan losses 0 (50)
Charge-offs:
Mortgage loans 0 0
Other loans 40 52
Recoveries:
Mortgage loans 0 0
Other loans 1 4
________ ________
Balance at end of period $ 667 $ 705
======== ========
Ratio of net charge-offs during
the period to average loans (Annualized)
outstanding during the period 0.05% 0.05%
Ratio of allowance for loan
losses to non-performing loans
at end of period 93.55% 54.91%
Ratio of allowance for loan
losses to net loans receivable
at the end of the period 0.80% 0.88%
Ratio of allowance for loan
losses and foreclosed real
estate to total non-performing
assets at end of the period 93.55% 54.91%
FFBS BANCORP, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion reviews the financial condition of FFBS
Bancorp, Inc. and its wholly owned subsidiary First Federal Bank for
Savings as of March 31, 1996, and the results of operations for the nine
month period ending March 31, 1996 and the three month period ending
March 31, 1996.
Comparison of Changes in Financial Condition
at March 31, 1996 and at June 30, 1995
At March 31, 1996, total assets were $123.6 million, an increase of
$4.6 million, or 3.86%, from June 30, 1995. Cash and cash equivalents
increased $3.1 million to $9.6 million at March 31, 1996. Other
interest-bearing deposits decreased $100,000 during the nine month
period as investment securities decreased $2.0 million to $24.7
million. Mortgage-backed and related securities increased $637,000 to $2.6
million at March 31, 1996. During the nine month period, net loans
receivable accounted for the greatest change in total assets as the
balance increased $3.2 million, or 3.94%, to $83.6 million. Total
deposits increased $6.0 million, or 6.44%, to $98.5 million at March 31,
1996, thereby funding the increase in cash and cash equivalents and net
loans receivable. Total stockholder's equity was $24.2 million at
March 31, 1996, a decrease of $971,000 from June 30, 1995.
Stockholder's equity was decreased by the payment of cash dividends of
$1.9 million and purchases of the Company's stock under a stock
repurchase program, and increased by earnings of $1.3 million.
Liquidity and Capital Resources
Positive cash flows of $1.2 million were provided by the Company's
operating activities for the nine months ended March 31, 1996, primarily
as a result of net income.
Investing activities of the Company provided negative cash flows
of $1.7 million for the nine months ended March 31, 1996, resulting
primarily from an increase in loan originations over loan repayments.
Financing activities provided positive cash flows of $3.6 million
due to the increase in deposits of $6.0 million, which was partially
offset by the payment of cash dividends of $1.9 million.
The Company is required to maintain minimum levels of liquid assets
as defined by OTS regulations. This requirement, which may be varied at
the direction of the OTS depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowings.
The required minimum liquidity ratio is currently 5.0%. At March 31,
1996, the Bank's liquidity ratio was 31.25%.
The OTS capital regulations require savings institutions to meet
three capital standards: a 1.5% tangible capital standard; a 3% leverage
(core capital) ratio; and an 8% risk-based capital standard. Although
the core capital ratio is 3%, the OTS regulations provide that an
institution with less than 4% core capital is deemed to be
"undercapitalized".
At March 31, 1996, the Bank's capital position exceeded minimum
regulatory capital requirements as indicated by the following table
(dollars in thousands):
Risk-based
Tangible Capital Core Capital Capital
________________ ________________ ________________
Amount Percent Amount Percent Amount Percent
_______ _______ _______ _______ _______ _______
First Federal $18,418 15.5% $18,418 15.5% $18,993 29.4%
OTS Requirement 1,783 1.5% 3,568 3.0% 5,163 8.0%
_______ _______ _______ _______ _______ _______
Excess $16,635 14.0% $14,850 12.5% $13,830 21.4%
======= ======= ======= ======= ======= =======
Comparison of Operating Results for the
Three Months Ended March 31, 1996 and 1995
General
Net income of the Company for the three months ended March 31, 1996 was
$429,000 compared to $480,000 for the three months ended March 31, 1995,
a decrease of $50,000, or 10.50%, due primarily to a decrease in net
interest income of $51,000.
Interest Income
Interest income increased $134,000, or 6.38%, to $2.2 million for the
three months ended March 31, 1996 due to an increase of $3.6 million in
average-earning assets and an increase in yield on average-earning
assets to 7.63% from 7.46% for the three months ended March 31, 1995.
Interest Expense
Interest expense increased $186,000, or 19.18%, to $1.2 million for the
three months ended March 31, 1996 due to an increase in average deposits
of $2.9 million and an increase in the cost of funds of 57 basis points
from 4.22% for the three months ended March 31, 1995 to 4.79% for the
three months ended March 31, 1996.
Net Interest Income
Net interest income decreased $51,000, or 4.54%, to $1,083,000 for the
three months ended March 31, 1996 due to a decrease in the interest
rate spread from 3.24% for the three months ended March 31, 1995 to
2.84% for the three months ended March 31, 1996. The net interest
margin decreased from 4.05% to 3.79% in comparing the three month
periods primarily as a result of rates increasing faster on deposits
than loans and investments. The Company's average-earning assets
increased $3.6 million while average deposits increased $2.9 million
in comparing the three month periods.
Provision for Loan Losses
The Bank's reserve for loan losses was considered sufficient to absorb
potential losses; therefore, no provisions for loan losses was taken
for either of the three months periods.
Non-interest Income
Non-interest income increased $47,000 or 45.32%, to $150,000 for the
three months ended March 31, 1996. Loan fees and service charges have
increased due to increased originations. Loan originations for the
quarter ended March 31, 1996 were $11.0 million compared to $7.7
million for the quarter ended March 31, 1995. Sold loans have also
been on the increase, which increases the other income category for
the sale of servicing through service release premiums. NOW account
fees have increased $19,000, or 36.80%, to $71,000 for the three
months ended March 31, 1996 compared to $52,000 for the three months
ended March 31, 1995. The increase is attributable to an increase of
415 accounts, or 16.80%, in the number of accounts since March 31,
1995 and increased fees for non-sufficient funds and negative balances.
Non-interest Expense
Non-interest expense increased $59,000, or 10.66%, to $615,000 for the
three months ended March 31, 1996, compared to $556,000 for the three
months ended March 31, 1995. The increase is due in part to increased
expenditures of $19,000 in compensation and benefits due in part to
added employees for the branch expansion and increased expenditures in
occupancy and furniture and fixture expense also related to the opening
of the branch. Due to increased deposits, the deposit insurance premium
has increased as have other expenses related to having more accounts.
Income Tax Expense
Income tax expense amounted to $188,000 for the three months ended
March 31, 1996 compared to $202,000 for the three months ended March 31,
1995. The Company recorded deferred income taxes of $6,500 for the
three months ended March 31, 1996 due to timing differences.
Comparison of Operating Results for the
Nine Months Ended March 31, 1996 and 1995
General
Net income of the Company for the nine months ended March 31, 1996 was
$1,274,000 compared to $1,461,000 for the nine months ended March 31,
1995, a decrease of $187,000, or 12.81% The net interest margin for
the nine months ended March 31, 1996 was 3.78% compared to 4.07% for
the nine months ended March 31, 1995, and net interest income
decreased $149,000, or 4.39%.
Interest Income
Interest income increased $458,000, or 7.37%, to $6.7 million for the
nine months ended March 31, 1996. Average-earning assets increased
$4.3 million to $117.5 million due a growth in average deposits and
the investment of earnings. The yield on average-earning assets
increased to 7.64% for the nine months ended March 31, 1996, from
7.36% for the nine months ended March 31, 1995. The average yield
increased in response to the rising interest rate environment
prevalent in the economy.
Interest Expense
Interest expense increased $607,000, or 21.66%, to $3.4 million for
the nine months ended March 31, 1996. The increase is attributable
to the average cost of deposits rising from 4.08% to 4.79% in comparing
the nine month periods, and average deposits rising from $91.4 million
at March 31, 1995, to $94.8 million at March 31, 1996. The average cost
of deposits also increased in response to the rising interest rate
environment prevalent in the economy.
Net Interest Income
Net interest income decreased $149,000, or 4.39% to $3.3 million for
the nine months ended March 31, 1996. The net interest margin
decreased to 3.78% for the nine months ended March 31, 1996 from 4.07%
for the nine months ended March 31, 1995 primarily as a result of
rates increasing faster on deposits than loans and investments. The
Company's average-earning assets increased $4.3 million, while average
deposits increased $3.4 million.
Provision for Loan Losses
The Bank's reserve for loan losses was considered sufficient to absorb
potential losses for the nine months ended March 31, 1996 and 1995.
Non-interest Income
Non-interest income increased $96,000 or 29.27%, to $425,000 for the
nine months ended March 31, 1996. Loan fees and service charges have
increased due to increased originations. Loan originations for the
nine months ended March 31, 1996 were $31.3 million compared to $25.0
million for the nine months ended March 31, 1995. Sold loans have also
been on the increase, which increases the other income category for the
sale of servicing through service release premiums. NOW account fees
have increased $21,000. or 11.66%, to $205,000 for the nine months
ended March 31, 1996 compared to $183,000 for the nine months ended
March 31, 1995. The increase is attributable to an increase of 415
accounts, or 16.80%, in the number of accounts since March 31, 1995
and increased fees for non-sufficient funds and negative balances.
Non-interest Expense
Non-interest expense increased $126,000, or 7.56% to $1,785,000 for
the nine months ended March 31, 1996. Compensation, occupancy and
furniture and fixture expense have increased due mainly to the opening
of an additional branch facility. The data processing function has
been updated, which also produces more expenditures. Due to increased
deposits, the deposit insurance premium has increased as have other
expenses related to having more accounts.
Income Tax Expense
Income tax expense amounted to $620,000 for the nine months ended
March 31, 1996, compared to $612,000 for the nine months ended March 31,
1995. The Company recorded deferred income taxes of $66,000 for the nine
months ended March 31, 1996 due to timing differences.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
N/A
Item 2. Changes in Securities.
N/A
Item 3. Defaults Upon Senior Securities.
N/A
Item 4. Submission of Matters to a Vote of Security Holders.
N/A
Item 5. Other Information
N/A
Item 6. Exhibits
N/A
SIGNATURES
Pursuant to the requirement of the Security Exchange Act of 1934,
the registrant has duly caused this report to the signed on its behalf
by the undersigned thereunto duly authorized.
FFBS BANCORP, INC.
Date: ______________________ By: _____________________________
E. Frank Griffin, III
Chief Executive Officer
and President
By: _____________________________
Sherry L. Boyd
Chief Financial Officer