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, 1998
[ ] 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:
1,575,735, shares of common stock, $.01 par value 03/31/98
Transitional Small Business Disclosure Format (check one):
YES NO x
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
March 31 March 31
1998 1997 1998 1997
__________ __________ __________ __________
INTEREST INCOME
Interest and fees on
loans $2,076,117 $1,862,691 $6,157,548 $5,519,531
Interest on mortgage-
backed and related
securities 207,882 104,396 505,931 196,135
Interest on investment
securities 234,461 350,991 767,573 1,106,656
FHLB stock dividends 12,225 11,102 36,703 33,653
Interest on deposits
due from banks 95,398 21,672 249,360 162,989
__________ __________ __________ __________
2,626,083 2,350,852 7,717,115 7,018,964
INTEREST EXPENSE
Interest on deposits 1,347,515 1,195,482 3,969,005 3,519,603
Interest on FHLB
Advances 93,642 0 211,562 0
__________ __________ __________ __________
1,441,157 1,195,482 4,180,567 3,519,603
__________ __________ __________ __________
Net interest income 1,184,926 1,155,370 3,536,548 3,499,361
Provision of losses on
loans 0 0 5,000 0
__________ __________ __________ __________
Net interest income
after provision 1,184,926 1,155,370 3,531,548 3,499,361
for losses on loans
NON-INTEREST INCOME
Loan fees and service
charges 62,372 66,628 179,940 181,732
NOW account fees 70,120 76,435 221,055 230,202
Other 34,826 27,175 89,786 79,813
__________ __________ __________ __________
167,318 170,238 490,781 491,747
NON-INTEREST EXPENSE
Compensation and
benefits 391,484 351,664 1,137,879 1,042,391
Occupancy 27,258 29,071 80,871 90,453
Furniture and
equipment 25,681 13,737 62,069 49,628
Deposit insurance
premium 16,550 16,015 48,891 715,163
Loss on foreclosed
real estate 34,456 151 34,766 297
Data processing 44,099 38,650 124,097 111,256
Other 146,672 118,973 479,002 428,910
__________ __________ __________ __________
686,200 568,261 1,967,575 2,438,098
Income before income
taxes and cumulative
effect of accounting
change 666,044 757,347 2,054,754 1,553,010
Income tax expense:
Current 233,300 204,500 727,270 379,488
Deferred income tax 3,000 33,500 32,000 74,500
__________ __________ __________ __________
Net Income $ 429,744 $ 519,347 $1,295,484 $1,099,022
========== ========== ========== ==========
Basic Earnings per
common share $0.29 $0.34 $0.87 $0.72
Diluted Earnings per
common share $0.29 $0.34 $0.85 $0.72
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
MARCH 31 JUNE 30
ASSETS 1998 1997
____________ ____________
Cash $ 3,681,597 $ 3,347,511
Interest-bearing deposits due from banks 11,639,950 5,058,945
Federal funds sold 0 0
____________ ____________
Total cash and cash equivalents 15,321,547 8,406,456
Other interest-bearing deposits due from
banks 0 0
Investment securities (approximate market
value of $15,995,419 at March 31, 1998
and $18,758,223 at June 30, 1997) 16,001,407 18,814,395
Mortgage-backed and related securities
(approximate market value of $15,956,951
at March 31, 1998 and $7,256,822 at
June 30, 1997) 15,918,300 7,267,626
Federal Home Loan Bank stock, at cost 838,500 801,900
Loans receivable, net 98,371,245 92,760,267
Foreclosed real estate 0 0
Properties and equipment 1,866,375 1,354,677
Accrued interest receivable 1,159,830 1,064,535
Other assets 144,278 292,445
____________ ____________
Total Assets $149,621,482 $130,762,301
============ ============
LIABILITIES AND RETAINED EARNINGS
Liabilities:
Deposits $111,987,465 $103,798,255
Advances from borrowers for taxes and
insurance 206,044 277,749
Accrued interest payable on deposits 636,130 763,339
Accrued expenses and other liabilities 598,154 781,370
Advances/Borrowings from Federal Home
Loan Bank 13,402,000 0
____________ ____________
Total Liabilities 126,829,793 105,620,713
Commitments and contingencies
Stockholders' equity:
Cummulative preferred stock, $.01 par
value, 500,000 shares authorized;
shares issued and outstanding - none
Common stock, $.01 par value, 2,000,000
shares authorized; 1,575,735 and
1,565,595 shares issued and outstanding
at March 31, 1998 and June 30, 1997,
respectively. 15,757 15,656
Additional paid in capital 15,226,040 15,371,923
Retained earnings 8,479,858 10,692,318
Unrealized gain <loss> on available-for-
sale securities (20,503) 4,789
Loan receivable from ESOP (761,760) (761,760)
Treasury Stock at cost (100 shares) (2,228) (181,338)
Unearned Compensation (145,475) 0
____________ ____________
Total stockholders' equity 22,791,689 25,141,588
____________ ____________
Total liabilities and retained earnings $149,621,482 $130,762,301
============ ============
FFBS BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
March 31
1998 1997
____________ ____________
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,295,484 $ 1,099,022
Adjustments to reconcile net
earnings to net cash:
Depreciation of properties and equipment 69,252 65,080
Accretion of discount on loans (9,955) (9,801)
Accretion of discount on mortgage-backed
securities (5,861) (2,319)
Accretion of discount on investments (8,592) (16,061)
Amortization of premium on investments 8,223 11,541
Amortization of premium on mortgage-
backed securities 30,353 5,373
Deferred income taxes <benefit> 32,000 74,500
FHLB stock dividends (36,600) (33,600)
Provision for losses on loans 5,000 0
Sale of loans 5,610,000 3,682,000
Loans originated for sale (5,610,000) (3,682,000)
<Increase> decrease in accrued interest
receivable (95,295) 34,634
<Increase> decrease in other assets 148,167 83,581
Increase <decrease> in accrued
interest payable on deposits (127,209) (195,190)
Increase <decrease> in accrued expenses
and other liabilities (215,216) (273,923)
Provision for losses on foreclosed real
estate 34,766 0
____________ ____________
Net cash provided by operating activities 1,124,517 842,837
CASH FLOWS FROM INVESTING ACTIVITIES
<Increase> decrease in other interest-
bearing deposits due from banks 0 0
Loan originations (41,728,000) (41,500,000)
Purchase of investment securities (7,829,231) (6,545,977)
Sale of equipment 29,993 0
Purchase of mortgage-backed and related
securities (11,358,101) (5,526,547)
Principal repayment of loans 36,121,977 35,441,978
Principal repayments of mortgage-backed
and related securities 2,635,486 468,150
Proceeds from calls and maturities of
investment securities 10,650,000 14,500,000
Purchase of loans 0 0
Sale of foreclosed real estate 85,000 554,515
Foreclosure of real estate (119,766) 0
Purchase of properties and equipment (610,943) (81,961)
____________ ____________
Net cash used investing activities (12,123,585) (2,689,842)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from FHLB 13,791,000 0
Repayments of borrowings from FHLB (389,000) 0
Increase <decrease> in deposits 8,189,210 3,578,963
Increase <decrease> in advances from
borrowers for taxes and insurance (71,705) (81,832)
Purchase of company stock (270,332) (404,179)
Dividends declared (3,507,944) (391,399)
Dividends paid 0 0
Exercise of stock options 303,660 39,670
Adjustment to unrealized loss on
available-for-sale securities 14,745 2,333
Unearned Compensation (145,475) 0
____________ ____________
Net cash provided by <used in>
financing activities 17,914,159 2,743,556
____________ ____________
Net increase <decrease> in cash and
cash equivalents 6,915,091 896,551
Cash and cash equivalents at beginning
of period 8,406,456 7,561,222
____________ ____________
Cash and cash equivalents at end of period $ 15,321,547 $ 8,457,773
============ ============
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
Basic earnings per share for the nine months ended March 31, 1998
have been computed on the basis of the weighted average number of common
shares outstanding (1,490,803).
Diluted earnings per share have been computed on the basis of the
weighted average number of common shares outstanding (1,490,803) and
common stock equivalent shares (36,251) 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,
1998 1997 1998 1997
____________ ____________ ____________ ____________
Select
Consolidated
Financial
Condition Data:
Total Assets $149,621,482 $128,686,323 $149,621,482 $128,686,323
Loans receivable,
net 98,371,245 89,595,974 98,371,245 89,595,974
Deposits 111,987,465 102,727,071 111,987,465 102,727,071
Borrowings 13,402,000 0 13,402,000 0
Stockholders'
equity 22,791,689 24,983,781 22,791,689 24,983,781
Selected
Consolidated
Operations Data:
Net interest
income 1,184,926 1,155,370 3,536,548 3,629,105
Provision for
loan losses 0 0 5,000 0
Non-interest
income 167,318 170,238 490,781 362,003
Non-interest
expense 686,200 568,261 1,967,575 2,438,098
Net income 429,744 519,347 1,295,484 1,099,022
Per Share Data:
Book value at
end of period $15.20 $17.01 $15.20 $17.01
Diluted Earnings
per common and
common
equivalent share 0.29 0.34 0.85 0.72
Cash dividends
declared 0.00 0.00 2.25 0.25
Other Data:
Yield on average
earning assets 7.85% 7.87% 7.93% 7.80%
Cost of funds 4.99% 4.82% 5.00% 4.72%
Interest rate
spread 2.86% 3.05% 2.93% 3.08%
Net interest
margin (1) 3.64% 3.94% 3.69% 3.94%
Annualized return
on average assets 1.21% 1.65% 1.25% 1.16%
Annualized return
on average equity 7.58% 8.40% 7.56% 5.92%
Stockholder's
equity as a
percentage of
total assets 15.23% 19.42% 15.23% 19.42%
Non-performing
assets as a
percentage of
total assets (2) 0.500% 0.39% 0.500% 0.39%
Net interest
income as
percentage of
general and
administrative
expenses 172.68% 203.32% 179.74% 143.53%
(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 For Nine At or For The
Months Ended Year Ended
March 31, 1998 June 30, 1997
_____________ _____________
Cash $ 3,681,597 $ 3,347,511
Interest-bearing deposits due from banks 11,639,950 5,058,945
Federal funds sold 0 0
Trading account assets 0 0
Investments and mortgage-backed
securities held for sale 12,588,787 1,221,505
Investments and mortgage-backed securities
held to maturity - carrying value 19,330,920 24,860,516
Investments and mortgage-backed securities
held to maturity - market value 19,363,583 24,793,540
Loans 98,909,245 93,336,267
Allowance for losses 538,000 576,000
Total assets 149,621,482 130,762,301
Deposits 111,987,465 103,798,255
Short-term borrowings 5,052,000 0
Long-term borrowings 8,350,000 0
Other liabilities 1,440,328 1,822,458
Preferred stock - mandatory redemption 0 0
Preferred stock - no mandatory redemption 0 0
Common stock 15,757 15,656
Other stockholders' equity 22,775,932 25,125,932
Net yield - interest-earning assets -
actual 3.69% 3.93%
Loans on nonaccrual 0 0
Accruing loans past due 90 days or more 741,000 446,000
Troubled debt restructuring 40,000 39,000
Potential problem loans 0 0
Allowance for loan loss - beginning of
period 576,000 666,000
Provision for loan losses 5,000 0
Total charge-offs 49,000 97,000
Total recoveries 6,000 7,000
Allowance for loan loss - end of period 538,000 576,000
Loan loss allowance allocated to domestic
loans 538,000 576,000
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, 1998, there
are no other potential problem loans except as included in the table
below.
(In Thousands)
At
March 31 June 30
1998 1997
_______ _______
Non-accrual mortgage loans 0 0
Non-accrual other loans 0 0
_______ _______
Total non-accrual loans 0 0
Loans 90 days or more delinquent and
still accruing 741 446
_______ _______
Total non-performing loans 741 446
Total foreclosed real estate, net of
related allowance for losses 0 0
_______ _______
Total non-performing assets 741 446
======= =======
Troubled debt restructured 40 39
======= =======
Non-performing loans to total loans 0.75% 0.48%
Total non-performing assets to total assets 0.50% 0.34%
2. There were no loan concentrations in excess of 10% of total loans at
March 31, 1998
3. There were no outstanding foreign loans at March 31, 1998.
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 subsidary 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, 1998 and
June 30, 1997 would be increased (decreased) by approximately
$1,000 and $0 respectively.
6. Management stringently monitors assets that are classified as non-
performing. Non-performing assets include nonaccrual loans, loans past
due 90 days 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, 1998, management was not aware of any potential problem
loans 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 judgement 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 Nine For the
Months Ended Year Ended
March 31, June 30,
1998 1997
____________ ___________
Balance at beginning of period $ 576 $ 666
Provision for loan losses 5 0
Charge-offs:
Mortgage loans 0 0
Other loans 49 97
Recoveries:
Mortgage loans 0 0
Other loans 6 7
____________ ___________
Balance at end of period $ 538 $ 576
============ ===========
Ratio of net charge-offs during the
period to average loans outstanding (Annualized)
during the period 0.050% 0.11%
Ratio of allowance for loan losses
to non-performing loans at end of
period 72.60% 129.15%
Ratio of allowance for loan losses
to net loans receivable at the end
of the period 0.55% 0.62%
Ratio of allowance for loan losses and
foreclosed real estate to total
non-performing assets at end of the
period 72.60% 129.15%
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, 1998, and the results of operations for the
nine month period ending March 31, 1998 and for the three month period
ending March 31, 1998.
Comparison of Changes in Financial Condition
at March 31, 1998 and at June 30, 1997
At March 31, 1998, total assets were $149.6 million, an increase of
$18.9 million, or 14.42% from June 30, 1997. Total cash and cash
equivalents increased $6.9 million, or 82.26%, to $15.3 million at
March 31, 1998. Total cash was decreased $2.1 million subsequent to
March 31, 1998 in purchasing mortgage-backed and related securities that
the Bank was committed to purchase prior to March 31, 1998. Also, cash
was decreased $2.0 million subsequent to March 31, 1998 to pay back
Federal Home Loan Bank advances that matured April 2, 1998. Investment
securities decreased $2.8 million, or 14.95%, to $16.0 million at
March 31, 1998. Cash and proceeds from maturities or calls of investment
securities were invested in mortgage-backed and related securities and
loans. Mortgage-backed and related securities were $15.9 million at
March 31, 1998, an increase of $8.7 million, or 119.03%. Loans receivable
continued to show strong gains to total $98.4 million at March 31, 1998,
an increase of $5.6 million, or 6.05%. Deposits grew $8.2 million, or
7.89%, to $112.0 million at March 31, 1998. Advances from the Federal
Home Loan Bank grew to $13.4 million at March 31, 1998 in following the
Bank's plan to leverage more investments. Stockholder's equity on
March 31, 1998, of $22.8 million remained strong at 15.23% of assets.
Liquidity and Capital Resources
Positive cash flows of $1.1 million were provided by the Company's
operating activities for the nine months ended March 31, 1998, primarily
as a result of net income.
Investing activities of the Company provided negative cash flows of
$12.1 million for the nine months ended March 31, 1998, resulting from
an increase in loan originations over loan repayments of $5.6 million
and an increase in purchases over repayments of mortgage-backed and
related securities of $8.7 million. The Bank purchased property and
equipment totaling $611,000 during the nine months ended March 31, 1998
due primarily to the construction of a new branch. Positive cash flows
were provided by proceeds from calls and maturities of investment
securities over purchases of investment securities of $2.8 million.
Financing activities provided positive cash flows of $17.9 million
for the nine months ended March 31, 1998, due to an increase in deposits
of $8.2 million and advances from the Federal Home Loan Bank of $13.4
million. Offsetting the increase in deposits and advances were $3.5
million in dividends.
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,
1998, the Bank's liquidity ratio was 29.52%.
The OTS capital regulations require savings institutions to meet
three capital standards: a 2.0% tangible capital standard; a 4% leverage
(core capital) ratio; and an 8% risk-based capital standard. Although
the core capital ratio is 4%, the OTS regulations provide that an
institution with less than 4% core capital is deemed to be
"undercapitalized".
At March 31, 1998, 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 $19,257 13.11% $19,257 13.11% $19,795 23.39%
OTS Requirement 2,938 2.0% 5,875 4.0% 6,771 8.0%
_______ _______ _______ _______ _______ _______
Excess $16,319 11.11% $13,382 9.11% $13,024 15.39%
======= ======= ======= ======= ======= =======
Comparison of Operating Results for the
Three Months Ended March 31, 1998 and 1997
General. Net income of the Company for the three months ended March 31,
1998 was $430,000 compared to $519,000 for the three months ended
March 31, 1997, which is a decrease of $90,000, or 17.25%, due to
increased compensation associated with expanded branch operations,
the promotion of the new branch and checking accounts, and the loss on
the sale of real estate owned.
Interest Income. Interest income increased $275,000, or 11.71%, to $2.6
million for the three months ended March 31, 1998 due to an increase of
$12.4 million in average-earning assets.
Interest Expense. Interest expense increased $246,000, or 20.55%, to
$1.4 million for the three months ended March 31, 1998 due to an
increase of $7.9 million in average deposits and $6.6 million in average
Federal Home Loan Bank advances. Also contributing to the increase
in interest expense was an increase in cost of funds from 4.82% for the
three months ended March 31, 1997 to 4.99% for the three months ended
March 31, 1998.
Net Interest Income. Net interest income increased $30,000, or 2.56%, to
$1.2 million for the three months ended March 31, 1998. The net interest
margin was 3.64% for the three months ended March 31, 1998, which was a
decrease from 3.94% for the three months ended March 31, 1997; however,
the effect of the increase in volume of interest-earning assets outweighed
the effect of higher rates paid for higher deposits and advances; thereby,
creating an increase in net interest income.
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 decreased $3,000, or 1.72%, to
$167,000 for the three months ended March 31, 1998.
Non-interest Expense. Non-interest expense increased $118,000, or 20.75%,
to $686,000 for the three months ended March 31, 1998. Compensation and
benefits increased $40,000, or 11.32%, to $391,000 for the three months
ended March 31, 1998 due to added employees for expanded branch operations
and raises. Loss on the sale of real estate owned amounted to $34,000 for
the three months ended March 31, 1998. Other expenses increased $28,000,
or 23.28% due to the promotion of the new branch and checking accounts and
various other general increases.
Income Tax Expense. Income tax expense amounted to $236,000 for the three
months ended March 31, 1998 compared to $238,000 for the three months
ended March 31, 1997. The prior years' taxes were at a reduced rate due
to the taxable deduction of certain benefit plan provisions.
Comparison of Operating Results for the
Nine Months Ended March 31, 1998 and 1997
General. Net income of the Company for the nine months ended March 31,
1998 was $1.3 million compared to $1.1 million for the nine months ended
March 31, 1997, which is an increase of $196,000, or 17.88%. Net income
was decreased $376,000, net of taxes, during the prior year due to the
FDIC one-time special assessment paid on all "Savings Association
Insurance Fund" deposits. Compensation and benefits were increased
$95,000 due to added employees for expanded branch operations, increased
participation in benefit plans and raises.
Interest Income. Interest income increased $698,000, or 9.95%, to $7.7
million for the nine months ended March 31, 1998 due to an increase of
$9.8 million in average-earning assets and an increase in yield on
average-earning assets to 7.93% from 7.80% for the nine months ended
March 31, 1997.
Interest Expense. Interest expense increased $661,000, or 18.78%, to
$4.2 million for the nine months ended March 31, 1998 due to an increase
in average deposits of $7.1 million and an increase in average advances
of $5.0 million coupled with an increase in cost of funds to 5.00% for
the nine months ended March 31, 1998 from 4.72% for the nine months ended
March 31, 1997.
Net Interest Income. Net interest income increased $37,000, or 1.06%, to
$3.5 million for the nine months ended March 31, 1998. The net interest
margin dropped from 3.94% for the nine months ended March 31, 1997 to
3.69% for the nine months ended March 31, 1998; however, average-earning
assets grew $9.8 million in comparing the nine month periods.
Provision for Loan Losses. The Bank's increased its provision to the
reserve for loan losses $5,000 during the nine months ended March 31, 1998.
No provision for loan losses was taken for the nine months ended March 31
1997, because the Bank's reserve for loan losses was considered sufficient
to absorb potential losses.
Non-interest Income. Non-interest income remained stable at $491,000 for
each of the nine month periods.
Non-interest Expense. Non-interest expense decreased $471,000, or 19.3%,
to $2.0 million for the nine months ended March 31, 1998. The decrease is
primarily due to the FDIC one-time special assessment of $599,000 charged
against the prior year's earnings. Compensation and benefits increased
$95,000, or 9.16%, to $1.1 million for the nine months ended March 31,
1998 due to added employees for expanded branch operations, increased
participation in benefit plans, and salary increases. Loss on the sale
of real estate owned amounted to $35,000 for the nine months ended
March 31, 1998. Other expenses increased $50,000, or 11.68%, due to more
advertising, expenses associated with promotion of checking accounts, and
expenses associated with the operation of the automated teller machines.
Income Tax Expense. Income tax expense amounted to $759,000 for the nine
months ended March 31, 1998 compared to $454,000 for the nine months ended
March 31, 1997. The prior year tax savings of $223,000 were recorded in
accordance with the FDIC special assessment coupled with the prior year's
taxes being reduced due to the taxable deduction of certain benefit plan
provisions.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
N/A
Item 2. Changes in Securities.
Stock options on 13,172 shares were exercised during the three
months ended March 31, 1998, with an exercise price of $10.00
per shares. Stock options on 30,366 shares were exercised
during the nine months ended March 31, 1998, with an exercise
price of $10.00 per share.
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: May 11, 1998 By: E. FRANK GRIFFIN, III
E. Frank Griffin, III
Chief Executive Officer
and President
By: SHERRY L. BOYD
Sherry L. Boyd
Chief Financial Officer