UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER 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
Commission File No. 0-20956
HFB FINANCIAL CORPORATION
A Tennessee Corporation I.R.S. Employer
Identification
No. 61-1228266
Address Telephone Number
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1602 Cumberland Avenue (606) 248-1095
Middlesboro, Kentucky 40965
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding twelve 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 __.
The number of shares of the registrant's $1 par value common stock outstanding
at November 7, 2002 was 1,296,311.
There are a total of 15 pages filed in this document.
HFB FINANCIAL CORPORATION
I N D E X
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PAGE NO
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statement of Stockholders' Equity 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7-8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8-10
ITEM 3. CONTROLS AND PROCEDURES 11
PART II - OTHER INFORMATION 12
SIGNATURES 13
CERTIFICATIONS 14-15
2
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, JUNE 30,
2002 2002
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 4,929,605 $ 5,225,348
Available-for-sale securities 74,778,619 74,636,556
Loans, net of allowance for loan losses of $1,099,524 and
$975,000 at September 30, 2002 and June 30, 2002, respectively 161,965,651 154,449,553
Premises and equipment 3,965,120 3,867,217
Federal Home Loan Bank stock 1,660,900 1,622,100
Interest Receivable 1,675,707 1,638,218
Assets held for sale 956,835 1,560,805
Other assets 335,621 353,189
Cash surrender value of life insurance 2,768,141 2,811,018
------------------ ------------------
Total assets $ 253,036,199 $ 246,164,004
================== ==================
LIABILITIES
Deposits
Non-interest bearing demand $ 6,267,074 $ 7,343,530
Savings, NOW and money market 28,401,303 24,734,538
Certificate of deposits 165,339,076 169,245,427
------------------ ------------------
Total deposits 200,007,453 201,323,495
Short-term debt 1,525,000 -
Long-term debt 24,849,829 19,871,257
Interest payable 1,114,248 855,075
Other liabilities 2,618,377 1,973,592
------------------ ------------------
Total liabilities 230,114,907 224,023,419
------------------ ------------------
STOCKHOLDERS' EQUITY
Issued and outstanding - 1,584,513 shares 1,584,513 1,584,513
Additional paid-in-capital 8,749,714 8,749,714
Less: Common stock acquired by Rabbi trusts for deferred
compensation plans (488,102) (488,102)
Retained earnings 14,214,066 13,922,605
Accumulated other comprehensive income 1,423,099 933,853
------------------ ------------------
25,483,290 24,702,583
Treasury stock, at cost, 288,202 shares (2,561,998) (2,561,998)
------------------ ------------------
Total stockholders' equity 22,921,292 22,140,585
------------------ ------------------
Total liabilities and stockholders' equity $ 253,036,199 $ 246,164,004
================== ==================
See notes to condensed consolidated financial statements.
3
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE-MONTHS ENDED
SEPTEMBER 30,
2002 2001
INTEREST INCOME
Loans receivable $3,071,713 $2,926,681
Investment securities 1,019,271 895,982
Other dividend income - 3,464
Deposits with financial institutions 5,379 85,595
---------- ----------
Total interest income 4,096,363 3,911,722
---------- ----------
INTEREST EXPENSE
Deposits 1,509,570 2,179,567
Short term borrowings 490 -
Long term debt 251,224 171,411
---------- ----------
Total interest expense 1,761,284 2,350,978
---------- ----------
NET INTEREST INCOME 2,335,079 1,560,744
Provision for loan losses 129,227 37,500
---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,205,852 1,523,244
---------- ----------
OTHER INCOME
Service charges for deposit accounts 207,829 164,902
Other customer fees 27,024 22,841
Net gain on trading securities - 9,450
Net realized gain on sales of
available for sale securities - 6,053
Other income 40,670 11,674
---------- ----------
Total other income 275,523 214,920
---------- ----------
OTHER EXPENSES
Salaries and employee benefits 881,807 613,880
Net occupancy expenses 84,664 84,391
Equipment expenses 111,392 115,455
Data processing fees 59,947 59,414
Deposit insurance expense 11,290 8,321
Legal and professional fees 101,666 59,437
Advertising 66,000 60,000
State franchise and deposit taxes 8,131 43,875
Other expenses 339,037 219,595
---------- ----------
Total other expenses 1,663,934 1,264,368
---------- ----------
INCOME BEFORE INCOME TAX 817,441 473,796
Income tax expense 253,755 149,665
---------- ----------
NET INCOME $ 563,686 $ 324,131
========== ==========
BASIC EARNINGS PER SHARE $ 0.45 $ 0.25
DILUTED EARNINGS PER SHARE $ 0.45 $ 0.25
See notes to condensed consolidated financial statements.
4
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE-MONTHS ENDED SEPTEMBER 30, 2002
ACCUMULATED
ADDITIONAL COMPRE- OTHER TOTAL
COMMON PAID-IN RABBI TREASURY HENSIVE RETAINED COMPREHENSIVE STOCKHOLDERS'
STOCK CAPITAL TRUSTS STOCK INCOME EARNINGS INCOME EQUITY
------------------------------------------------------------------------------------------------
BALANCES, JUNE 30, 2002 $1,584,513 $8,749,714 ($488,102) ($2,561,998) $13,922,605 $ 933,853 $22,140,585
Net income $ 563,686 563,686 563,686
Other comprehensive income,
net of tax
Unrealized gain on securities 489,246 489,246 489,246
----------
Comprehensive income $1,052,932
==========
Cash dividend declared
($.21 per share) (272,225) (272,225)
---------------------------------------------- ---------------------------------------
SEPTEMBER 30, 2002 (UNAUDITED) $1,584,513 $8,749,714 ($488,102) ($2,561,998) $14,214,066 $1,423,099 $22,921,292
============================================== =======================================
See notes to condensed consolidated financial statements.
5
HFB FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE-MONTHS ENDED
SEPTEMBER 30,
2002 2001
OPERATING ACTIVITIES
Net cash provided by operating activities $ 1,424,485 $ 2,012,148
------------ ------------
INVESTING ACTIVITIES
Purchases of securities available for sale (3,504,115) (31,946,008)
Proceeds from maturities of securities available for sale 4,090,948 14,788,132
Proceeds from sales of securities available for sale - 9,128,907
Net change in loans (7,645,325) (2,396,267)
Proceeds from sales of assets held for sale 538,745 -
Proceeds from life insurance 80,838 -
Purchases of premises and equipment (196,624) (108,186)
------------ ------------
Net cash used by investing activities (6,635,533) (10,533,422)
------------ ------------
FINANCING ACTIVITIES
Net change in
Non interest-bearing, interest-bearing and
savings deposits 2,590,309 707,218
Certificates of deposit (3,906,351) 3,759,616
Short term borrowings 1,525,000 -
Proceeds of long term debt 5,000,000 -
Repayment of long term debt (21,428) (19,775)
Cash dividends (272,225) (246,402)
------------ ------------
Net cash provided by financing activities 4,915,305 4,200,657
------------ ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (295,743) (4,320,617)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,225,348 13,887,788
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,929,605 $ 9,567,171
============ ============
ADDITIONAL CASH FLOWS INFORMATION
Interest paid $ 1,502,111 $ 1,558,425
Income tax paid 16,845 29,420
See notes to condensed consolidated financial statements.
6
HFB FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. BASIS OF PRESENTATION
The unaudited condensed consolidated financial information for the three-month
periods ended September 30, 2002 and 2001 includes the results of operations of
HFB Financial Corporation (the "Company") and its wholly owned subsidiary Home
Federal Bank Corporation ("Home Federal" or the "Bank"). The accompanying
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial statements and with the instructions to Form 10-QSB. Certain
information and note disclosures normally included in the company's annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted. It is
suggested that these statements and notes be read in conjunction with the
financial statements and notes thereto included in the Company's annual report
for the year ended June 30, 2002 on Form 10-KSB filed with the Securities and
Exchange Commission.
In the opinion of management, the financial information reflects all adjustments
(consisting only of normal recurring adjustments), which are necessary for a
fair presentation of the financial position, results of operations and cash
flows of the Company but should not be considered as indicative of results for a
full year.
The condensed consolidated balance sheet of the Company as of June 30, 2002 has
been derived from the audited consolidated balance sheet of the Company as of
that date.
2. NON-PERFORMING LOANS AND PROBLEM ASSETS
The following sets forth the activity in the Company's allowance for loan losses
for the three-months ended September30, 2002 and 2001:
(Dollars in thousands)
2002 2001
---- ----
Balance July 1 $975 $718
Charge offs (14) (20)
Recoveries 9 -
Provision for loan losses 129 38
------ ----
Balance September 30 $1,099 $736
====== ====
Information on impaired loans is summarized below
AT SEPTEMBER 30 2002
----
Impaired loans with an allowance $1,154
Allowance for impaired loans
(included in the Company's
allowance for loan losses) $298
THREE-MONTHS ENDED SEPTEMBER 30 2002
----
Average balance of impaired loans $1,138
Interest income recognized on impaired loans $0
Cash-basis interest received $0
7
3. RECLASSIFICATIONS
Reclassifications of certain amounts in the September 30, 2001 consolidated
statement have been made to conform to the September 30, 2002 presentation.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Quarterly Report on Form 10-QSB are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company "believes",
"anticipates", "expects", "estimates" or words of similar import. Similarly,
statements that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties, which are described in, close proximity to such
statements and which could cause actual results to differ materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included herein are
only made as of the date of this report and the Company undertakes no obligation
to publicly update such forward-looking statements to reflect subsequent events
or circumstances.
GENERAL:
HFB Financial Corporation, a Tennessee Corporation, was formed in September 1992
at the direction of Home Federal Bank, Federal Savings Bank for the purpose of
becoming a holding company for the Bank as part of its conversion from mutual to
stock form. The Company's primary operation is its investment in the common
stock of the Bank.
The Bank is principally engaged in the business of accepting deposits from the
general public and originating permanent loans, which are secured by one-to-four
family residential properties located in its market area. The Bank also
originates consumer loans and commercial real estate loans, and maintains a
substantial investment portfolio of mortgage-backed and other investment
securities. During the quarter ended December 31, 2001, the Bank converted from
a federal thrift charter to a state chartered commercial bank as a means for
management to focus more on commercial lending and other activities permissible
for commercial banks.
The operations of Home Federal are significantly influenced by general economic
conditions and the monetary and fiscal policies of government regulatory
agencies. Deposit flows and costs of funds are influenced by interest rates on
competing investments and prevailing market rates of interest. Lending
activities are affected by the demand for financing real estate and other types
of loans, which in turn are influenced by the interest rates at which such
financing may be offered and other factors related to loan demand and the
availability of funds.
FINANCIAL CONDITION
The Corporation's assets increased by 2.76% to $253.0 million at September 30,
2002 compared to $246.2 million at June 30, 2002. The majority of this increase
is reflected in increases in loans. These increases were financed primarily by
increases in short-term borrowings, long-term borrowings and decreases in cash
and cash equivalents.
Cash and cash equivalents decreased $295,000 to $4.930 million at September 30,
2002 compared to $5.225 million at June 30, 2002. This decrease provided a
portion of the funding used for increases in the loan and investment portfolios.
8
Investment securities, available for sale, increased $142,000 to $74.779 million
at September 30, 2002 from $74.637 million at June 30, 2002 primarily as the
result of funding available from a decrease in cash and cash equivalents.
Loans, net, increased by $7.6 million to $162.0 million at September 30, 2002
from $154.4 million at June 30, 2002 as the result of continued 1-4 family
mortgage loan demand and an increase in commercial real estate loans. Since the
Banks conversion to a commercial bank, Management has focused on originating
commercial real estate loans.
At September 30, 2002, the allowance for loan losses was $1.100 million or .67%
of loans receivable compared to $975,000 or .63% of loans receivable at June 30,
2002.
Assets held for sale decreased $603,000 to $957,000 at September 30, 2002 from
$1.560 million at June 30, 2002, due to the sale of several parcels of real
estate acquired through foreclosure.
Total deposits decreased by $1.3 million to $200.0 million at September 30, 2002
from $201.3 million at June 30, 2002. During the three months ended September
30, 2002, certificates of deposit decreased $3.9 million and NOW accounts and
savings deposits increased $2.6 million. Competition for deposits in the local
market has increased considerably over the last quarter due to increased loan
demand in the Banks' market area.
At September 30, 2002, the bank met all regulatory requirements. Tier I capital
to averaged assets was 8.3%. tier I capital to risk-weighted assets was 14.7%
and total capital to risk-weighted assets was 15.5% at September 30, 2002
compared to 8.2%, 14.8% and 15.6%, respectively, at June 30, 2002.
RESULTS OF OPERATIONS FOR THE THREE-MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Net income increased by $240,000 to $564,000 for the three-month period ended
September 30, 2002 from $324,000 for the three-month period ended September 30,
2001. The primary reasons for the increase were a $774,000 increase in net
interest income and a $61,000 increase in other income offset by a $400,000
increase in other expense, a $91,000 increase in the provision for loan losses
and a $104,000 increase in income tax expense.
Interest income increased by $185,000 for the three-month period ended September
30, 2002 as compared to the three-month period ended September 30, 2001,
primarily a result of a higher volume of average earning assets during the three
months ended September 30, 2002.
Interest on loans increased by $145,000 to $3.072 million for the three-month
period ended September 30, 2002 as compared to $2.927 million for the
three-month period ended September 30, 2001. This increase is mainly
attributable to a higher average balance of loans during the three months ended
September 30, 2002 even though the weighted-average yield was lower than that of
the quarter ended September 30, 2001.
Interest on investment securities and other dividend income increased by
$123,000 to $1.019 million for the three-month period ended September 30, 2002
from $896,000 for the three-month period ended September 30, 2001. This increase
is primarily the result of a higher average balance of investments during the
three months ended September 30, 2002. The weighted average yield on investments
during the same period was lower than that of the three months ended September
30, 2001.
Interest on deposits with other financial institutions decreased by $81,000 to
$5,000 for the three-month period ended September 30, 2002 from $86,000 for the
three-month period ended September 30, 2001 primarily due to a lower level of
interest-bearing deposits with financial institutions as well as lower yields.
Interest expense on deposits decreased by $700,000 to $1.5 million for the
three-month period ended September 30, 2002 from $2.2 million for the
three-month period ended September 30, 2001 as a result of a significant drop in
rates paid on deposit accounts. For the three months ended September 30, 2002,
the weighted-average cost of deposits was 3.01% on an average deposit balance of
$200.4 million compared to 4.77% on average deposits of $182.7 million for the
three months ended September 30, 2001.
9
Interest expense on long-term debt increased by $80,000 to $251,000 for the
three-month period ended September 30, 2002 from $171,000 for the three-month
period ended September 30, 2001, primarily due to a higher level of long-term
debt outstanding during the three months ended September 30, 2002.
The provision for loan losses increased $91,000 for the three-month period ended
September 30, 2002 as compared to the same period in 2001. The provision was the
result of management's evaluation of the adequacy of the allowance for loan
losses including consideration of recoveries of loans previously charged off,
the perceived risk exposure among loan types, actual loss experience,
delinquency rates, and current economic conditions. The Bank's allowance for
loan losses as a percent of total loans at September 30, 2002 was 0.67%.
Non-interest income increased by $61,000 to $276,000 for the three-month period
ended September 30, 2002 as compared to $215,000 for the same period in 2001.
The increase was primarily attributable to an increase of $43,000 in service
charges on deposits, an increase of $4,000 in other customer fees and an
increase of $29,000 in other income offset by a net decrease of $15,000 in gains
on trading account securities and realized gains and losses on available for
sale securities. The increase of $29,000 in other income was primarily due to
earnings from the increase in cash surrender value of life insurance.
Non-interest expense increased by $400,000 to $1.664 million for the three-month
period ended September 30, 2002 as compared to $1.264 million for the same
period in 2001.
Compensation and benefits increased by $268,000 to $882,000 for the three-month
period ended September 30, 2002 as compared to $614,000 for the three-months
ended September 30, 2001 primarily as the result of annual increases in
salaries, wages and commissions and a $36,000 increase in the cost of funding
the Banks retirement plan. In addition, the Banks staffing was increased due to
growth. At September 30, 2002, the Bank had 67 full time equivalent employees
compared to 60 at September 30, 2001.
Equipment expense decreased by $4,000 to $111,000 for the three-months ended
September 30, 2002 from $115,000 for the three months-ended September 30, 2001
primarily due to a decrease in depreciation expense.
Legal and professional fees increased by $43,000 to $102,000 for the three-month
period ended September 30, 2002 from $59,000 for the three-month period ended
September 30, 2001 primarily due to a higher level of consulting fees and legal
services utilized in the three-months ended September 30, 2002.
Advertising expense increased by $6,000 to $66,000 for the quarter ended
September 30, 2002 compared to $60,000 for the quarter ended September 30, 2001
primarily due to a higher level of advertising activity in the current period.
State deposit and franchise taxes decreased by $36,000 to $8,000 for the quarter
ended September 30, 2002 compared to $44,000 for the quarter ended September 30,
2001. As a result of the Banks recent conversion from a thrift to a commercial
bank, franchise taxes were over accrued. This was due to a difference in the
timing of tax assessment dates between thrifts and commercial banks.
Other expenses increased by $119,000 to $339,000 for the three-month period
ended September 30, 2002 from $220,000 for the three-month period ended
September 30, 2001, primarily due to $94,000 in expenses associated with the
acquisition and sale of other real estate owned.
Income tax expense increased by $104,000 to $254,000 for the three-month period
ended September 30, 2002 compared to $150,000 for the three-months ended
September 30, 2001 due a higher level of taxable income.
10
ITEM 3. CONTROLS AND PROCEDURES
A review and evaluation was performed by the Company's management, including the
Company's Chief Executive Officer (the "CEO") and Chief Financial Officer (the
"CFO"), of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of a date within 90 days prior to the
filing of this quarterly report. Based on that review and evaluation, the CEO
and CFO have concluded that the Company's current disclosure controls and
procedures, as designed and implemented, were effective. There have been no
significant changes in the Company's internal controls or in other factors that
could significantly affect the Company's internal controls subsequent to the
date of their evaluation. There were no significant material weaknesses
identified in the course of such review and evaluation and, therefore, no
corrective measures were taken by the Company.
11
HFB FINANCIAL CORPORATION
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of Security Holders during the
quarter ended September30, 2002.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
12
HFB FINANCIAL CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned, thereunto duly authorized.
HFB FINANCIAL CORPORATION
By: /s/ David B. Cook
----------------------------
David B. Cook
President and
Chief Executive Officer
By: /s/ Stanley Alexander, Jr.
----------------------------
Stanley Alexander, Jr.
Chief Financial Officer
Dated: November 7, 2002
13
10-Q 302 CERTIFICATION
I, David B. Cook certify that:
1. I have reviewed this quarterly report on Form 10-Q of HFB Financial
Corporation;
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 registrant's board of directors (or persons performing 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 7, 2002 /s/ David B. Cook
-----------------------------------
Signature
President & Chief Executive Officer
-----------------------------------
Title
14
10-Q 302 CERTIFICATION
I, Stanley Alexander, Jr. certify that:
1) I have reviewed this quarterly report on Form 10-Q of HFB Financial
Corporation;
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 we 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 of directors (or persons performing the
equivalent function):
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 or not 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 7, 2002 /s/ Stanley Alexander, Jr.
------------------------------------
Signature
Chief Financial Officer
------------------------------------
Title
15