CINCINNATI, May 10 /PRNewswire-FirstCall/ -- First Franklin
Corporation (Nasdaq: FFHS), the parent of Franklin Savings and Loan
Company, today reported a net loss of $82,000, or 5 cents
per share, for the first quarter of 2010, compared with net income
of $260,000, or 15 cents per share, in last year's first
quarter.
John J. Kuntz, Chairman,
President and Chief Executive Officer, said, "Our efforts to create
a more robust community bank continue to be partially masked by the
lingering effects of this recession. In particular, this
quarter we recorded a $177,000
increase in the provision for loan losses, which is the way banks
fund their potential loan write downs. Two expense items largely
driven by the foundering economy-- a $153,000 rise in FDIC premiums and a $48,000 increase in costs associated with
maintaining the larger portfolio of real estate now owned by the
bank – also contributed to the loss for the quarter. We
expect loan loss provisions and REO expense to continue for the
foreseeable future as the economy struggles to recover."
Kuntz noted, "Looking beyond the recession-related factors, we
remain generally pleased with our progress on two successful
programs. First, we saw a continued contribution from the team
brought on board during the first quarter of 2009 to enhance
production of residential and commercial mortgages. Selling the
residential mortgages, including servicing rights, in the secondary
market generated $445,000 in
noninterest income in this year's first quarter.
"That program continues to be profitable even though the fee
income contribution was down $169,000
from last year's first quarter and expenses reflected a full
quarter of staffing. Origination volume fluctuates with market
interest rates, and lower rates in last year's first quarter
drove a higher volume of refinancing compared to the first quarter
of 2010. The rise in commission and other expenses to fund this
valuable operation accounted for almost 30% of the overall increase
in non-interest expense in the period, largely because the new loan
originators were on board for a full quarter. The initial group of
originators joined our organization in the middle of last year's
first quarter, and we have also added to that staff over the course
of the past 12 months."
Kuntz added, "Second, we continue to invest in our long-standing
campaign to increase lower-cost checking deposits. The increase in
transaction accounts and the decrease in more expensive
certificates of deposit were the primary drivers of the
$145,000 increase in net interest
income before the provision for loan losses over last year's first
quarter."
Kuntz said, "My first month at the helm of First Franklin has
been busy and productive. My charge from our board is very clear.
We must improve the bank's asset quality, restore profitability and
pay dividends to our shareholders."
First-Quarter Results
For the first quarter, net interest income, before the provision
for loan losses, was $1.72 million,
up from $1.58 million for the
first quarter of 2009. The improvement was primarily the result of
lower interest expense on deposits reflecting both lower interest
rates and lower average balances. Management's continued effort to
build core checking deposits is helping to reduce interest expense.
In addition, the emphasis on loan originations and subsequent sales
is reducing reliance on higher-priced certificates of deposit as a
funding source.
The provision for loan losses rose to $353,000 in the first quarter of 2010, from
$176,000 in the first quarter of
2009. Non-performing loans (non-accruing loans and accruing loans
delinquent 90 days or more) were $9.48
million, or 4.02% of total loans at March 31, 2010, compared to $9.24 million, or 3.79% of total loans at
December 31, 2009. Net charge-offs
for the current period were $437,000,
or 0.18% of average loans, primarily due to a $424,000 charge-off for one commercial property,
compared with $452,000, or 0.17% of
average loans, in last year's first quarter.
Noninterest income for the quarter ended March 31, 2010, was $962,000 compared to $1.00
million for the same quarter in 2009, largely because of
lower gains on the sale of loans. Noninterest expenses were
$2.48 million for the current quarter
compared to $2.02 million for the
quarter ended March 31, 2009, for
reasons discussed previously.
Capital Position
At March 31, 2010, total
stockholders' equity was $22.28
million, or 7.73% of assets, up slightly from $22.21 million, or 7.36% percent of assets, at
year-end 2009. At March 31, 2010,
book value per share was $13.25
compared to $13.21 per share at
December 31, 2009. At March 31, 2010, the company's risk-based capital
ratio was 11.67%, up modestly from year-end.
Kuntz noted, "Franklin is considered 'well capitalized' under
federal regulatory standards and the regulators have provided us
with no specific instructions to raise equity capital. As we are
reminded in our regular interactions with the regulators, the focus
on capital adequacy is a familiar theme to all financial
institutions in the current economic environment. Like many
financial institutions, we are pursuing strategies to enhance our
regulatory capital ratios relative to our risk profile."
Conclusion
Kuntz concluded, "First Franklin has always been about providing
long-term value to shareholders. We have served our community
well for 126 years. Since going public in 1987, we have grown
to $288 million in assets, expanded
our products and services to meet our customers' needs."
About First Franklin Corporation: First
Franklin Corporation is a savings and loan holding company that was
incorporated under the laws of the State
of Delaware in September 1987.
It owns all of the outstanding common stock of The Franklin
Savings and Loan Company. Additional information about First
Franklin and Franklin Savings can be found on the company's Web
site: www.franklinsavings.com.
Forward-Looking Statements: Statements included
in this document which are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995,
and are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results. Such
statements may be identified by the use of the words "may",
"anticipates", "expects", "hopes", "believes", "plans", "intends"
and similar expressions. Factors that could cause financial
performance to differ materially from that expressed in any
forward-looking statement include, but are not limited to, credit
risk, interest rate risk, competition, changes in the regulatory
environment and changes in general and local business and economic
trends.
FIRST FRANKLIN CORPORATION AND
SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(Dollars in
thousands)
|
|
ASSETS
|
|
|
|
March. 31, 2010
|
|
Dec. 31, 2009
|
|
|
|
(Unaudited)
|
|
|
|
Cash, including certificates of deposit and other
interest-earning
|
|
|
|
|
|
|
deposits of $100 at 03/31/10 and $100 at
12/31/09
|
$
|
3,364
|
$
|
6,875
|
|
Investment securities:
|
|
|
|
|
|
|
Securities available-for-sale, at market
value
|
|
|
|
|
|
|
|
(amortized cost of $17,082 at 03/31/10 and $20,185
at 12/31/09)
|
|
17,070
|
|
19,949
|
|
Mortgage-backed securities:
|
|
|
|
|
|
|
Securities available-for-sale, at market
value
|
|
|
|
|
|
|
|
(amortized cost of $2,347 at 03/31/10 and $2,731
at 12/31/09)
|
|
2,418
|
|
2,809
|
|
|
Securities held-to-maturity, at amortized
cost
|
|
|
|
|
|
|
|
(market value of $3,894 at 03/31/10 and $4,155 at
12/31/09)
|
|
3,709
|
|
3,989
|
|
Loans held for sale
|
|
7,369
|
|
7,552
|
|
Loans receivable, net
|
|
228,661
|
|
236,085
|
|
Investment in Federal Home Loan Bank of Cincinnati
stock, at cost
|
|
4,991
|
|
4,991
|
|
Real estate owned, net
|
|
3,045
|
|
2,792
|
|
Accrued interest receivable
|
|
1,183
|
|
1,135
|
|
Property and equipment, net
|
|
3,398
|
|
3,448
|
|
Bank owned life insurance
|
|
6,037
|
|
5,983
|
|
Other assets
|
|
6,748
|
|
6,112
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
287,993
|
$
|
301,720
|
|
|
|
|
|
|
|
LIABILITIES
|
|
Deposits
|
$
|
230,021
|
$
|
244,010
|
|
Borrowings
|
|
33,083
|
|
32,419
|
|
Advances by borrowers for taxes and
insurance
|
|
1,502
|
|
2,160
|
|
Other liabilities
|
|
971
|
|
786
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
265,577
|
|
279,375
|
|
|
|
|
|
|
|
Minority interest in consolidated
subsidiary
|
|
140
|
|
140
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Preferred stock - $.01 par value, 500,000 shares
authorized,
|
|
|
|
|
|
|
none issued and outstanding
|
|
-
|
|
-
|
|
Common stock - $.01 par value, 2,500,000 shares
authorized,
|
|
|
|
|
|
|
2,010,867 shares issued at 03/31/10 and
12/31/09
|
|
13
|
|
13
|
|
Additional paid-in capital
|
|
6,189
|
|
6,189
|
|
Treasury stock, at cost - 330,183 shares at
03/31/10 and 12/31/09
|
|
(3,270)
|
|
(3,270)
|
|
Retained earnings, substantially
restricted
|
|
19,296
|
|
19,378
|
|
Accumulated other comprehensive income:
|
|
|
|
|
|
|
Unrealized gain (loss) on available-for-sale
securities, net
|
|
|
|
|
|
|
|
of taxes of 17 at 03/31/10 and $(48) at
12/31/09
|
|
48
|
|
(105)
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
22,276
|
|
22,205
|
|
|
|
|
|
|
|
|
$
|
287,993
|
$
|
301,720
|
|
|
|
|
|
|
|
|
|
|
FIRST FRANKLIN CORPORATION AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF
INCOME
|
|
(Dollars in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
For
the three months ended
|
|
|
|
|
|
|
|
|
March 31,2010
|
|
March 31, 2009
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Interest income:
|
|
|
|
|
|
|
|
Loans receivable
|
$
|
3,212
|
$
|
3,716
|
|
|
Mortgage-backed securities
|
|
77
|
|
102
|
|
|
Investments
|
|
|
232
|
|
234
|
|
|
|
|
|
|
|
|
3,521
|
|
4,052
|
|
Interest expense:
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
1,433
|
|
1,863
|
|
|
Borrowings
|
|
|
367
|
|
613
|
|
|
|
|
|
|
|
|
1,800
|
|
2,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
1,721
|
|
1,576
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
353
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income after provision for
|
|
|
|
|
|
|
|
|
|
loan losses
|
|
1,368
|
|
1,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest income:
|
|
|
|
|
|
|
Gain on loans sold
|
|
445
|
|
614
|
|
|
Gain on sale of investments
|
|
21
|
|
1
|
|
|
Service fees on NOW accounts
|
|
205
|
|
195
|
|
|
Other income
|
|
|
291
|
|
193
|
|
|
|
|
|
|
|
|
962
|
|
1,003
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense:
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
1,031
|
|
943
|
|
|
Occupancy
|
|
|
286
|
|
273
|
|
|
Federal deposit insurance premiums
|
|
163
|
|
10
|
|
|
Advertising
|
|
|
45
|
|
22
|
|
|
Service bureau
|
|
131
|
|
161
|
|
|
Other
|
|
|
|
|
828
|
|
608
|
|
|
|
|
|
|
|
|
2,484
|
|
2,017
|
|
|
Income (loss) before federal income
taxes
|
|
(154)
|
|
386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit) for federal income
taxes
|
|
(72)
|
|
126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
(82)
|
$
|
260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained Earnings-Beginning of period
|
$
|
19,378
|
$
|
20,919
|
|
|
|
|
Net Income (loss)
|
|
(82)
|
|
260
|
|
Retained Earnings-end of period
|
$
|
19,296
|
$
|
21,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.05)
|
$
|
0.15
|
|
|
|
|
Diluted
|
|
$
|
(0.05)
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE First Franklin Corporation