UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended June 30, 2003

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to

Commission File Number 0-28312

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

(Exact name of registrant as specified in its charter)

Texas		71-0785261
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1401 Highway 62-65 North Harrison, Arkansas		72601
(Address of principal executive office)		(Zip Code)

(870) 741-7641
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.

Yes o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 6, 2003, there were issued and outstanding 2,668,943 shares of the Registrant’s Common Stock, par value $.01 per share.

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

TABLE OF CONTENTS

Part I.	Financial Information	Page

Item 1.	Consolidated Financial Statements

	Consolidated Statements of Financial Condition as of June 30, 2003 (unaudited) and December 31, 2002	1

	Consolidated Statements of Income for the three months and six months ended June 30, 2003 (unaudited) and 2002 (unaudited)	2

	Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2003 (unaudited)	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2003 (unaudited) and 2002 (unaudited)	4

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22

Item 4.	Controls and Procedures	23

Part II.	Other Information

Item 1.	Legal Proceedings	24
Item 2.	Changes in Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Submission of Matters to a Vote of Security Holders	24
Item 5.	Other Information	25
Item 6.	Exhibits and Reports on Form 8-K	25

Signatures			26

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share data)

	June 30, 2003			December 31, 2002
	(Unaudited)

ASSETS

Cash and cash equivalents	$	97,413		$	44,493
Investment securities held to maturity	72,585			114,471
Federal Home Loan Bank stock	5,127			5,064
Loans receivable, net	487,247			483,468
Accrued interest receivable	3,884			4,380
Real estate acquired in settlement of loans, net	748			320
Office properties and equipment, net	14,421			10,690
Prepaid expenses and other assets	17,682			17,010
TOTAL ASSETS	$	699,107		$	679,896

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES:
Deposits	$	572,777		$	568,762
Federal Home Loan Bank advances	47,459			38,610
Advance payments by borrowers for taxes and insurance	403			760
Other liabilities	6,346			2,498
Total liabilities	$	626,985		$	610,630

STOCKHOLDERS’ EQUITY:
Preferred stock, no par value, 5,000,000 shares authorized, none issued
Common stock, $.01 par value, 20,000,000 shares authorized, 5,153,751 shares issued, 2,667,943 and 2,687,359 shares outstanding at June 30, 2003 and December 31, 2002, respectively	52			52
Additional paid-in capital	52,456			52,040
Employee stock benefit plans	(1,247		)	(1,551		)
Retained earnings-substantially restricted	70,060			67,043
	121,321			117,584
Treasury stock, at cost, 2,485,808 and 2,466,392 shares at June 30, 2003 and December 31, 2002, respectively	(49,199		)	(48,318		)
Total stockholders’ equity	72,122			69,266

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	699,107		$	679,896

See notes to unaudited consolidated financial statements.

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
INTEREST INCOME:
Loans receivable	$	8,584	$	9,170	$	17,392	$	18,489
Investment securities:
Taxable	826		1,658		1,878		3,201
Nontaxable	115		70		219		140
Other	191		244		318		516
Total interest income	9,716		11,142		19,807		22,346

INTEREST EXPENSE:
Deposits	3,766		5,073		7,789		10,386
Other borrowings	352		635		717		1,368
Total interest expense	4,118		5,708		8,506		11,754
NET INTEREST INCOME	5,598

For the transition period from to

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION