FIRST FEDERAL BANCSHARES OF ARKANSAS INC - 10-Q Quarterly Report

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, 2004

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 ý No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of July 29, 2004, there were issued and outstanding 5,199,482 shares of the Registrant’s Common Stock, par value $.01 per share.

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

TABLE OF CONTENTS

		Page
Part I.	Financial Information

Item 1.	Consolidated Financial Statements

	Consolidated Statements of Financial Condition as of June 30, 2004 and December 31, 2003 (unaudited)	1

	Consolidated Statements of Income for the three and six months ended June 30, 2004 and 2003 (unaudited)	2

	Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2004 (unaudited)	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2004 and 2003 (unaudited)	4

	Notes to Unaudited Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

Part II.	Other Information

Item 1.	Legal Proceedings	22
Item 2.	Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Submission of Matters to a Vote of Security Holders	22
Item 5.	Other Information	23
Item 6.	Exhibits and Reports on Form 8-K	23

Signatures

Exhibits
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14a of Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14a of Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Section 906 Certification of the CEO
32.2	Section 906 Certification of the CFO

FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except share data)

(Unaudited)

	June 30, 2004			December 31, 2003
ASSETS

Cash and cash equivalents	$	15,509		$	56,201
Investment securities held to maturity	77,378			80,379
Federal Home Loan Bank stock	3,322			3,749
Loans receivable, net	578,682			512,756
Accrued interest receivable	4,269			4,089
Real estate acquired in settlement of loans, net	523			822
Office properties and equipment, net	14,599			14,238
Cash surrender value of life insurance	17,509			17,102
Prepaid expenses and other assets	850			1,317

TOTAL ASSETS	$	712,641		$	690,653

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES:
Deposits	$	581,641		$	573,580
Federal Home Loan Bank advances	53,497			39,562
Advance payments by borrowers for taxes and insurance	591			725
Other liabilities	2,339			1,708
Total liabilities	638,068			615,575

STOCKHOLDERS’ EQUITY:
Preferred stock, no par value, 5,000,000 shares authorized, none issued
Common stock, $.01 par value, 20,000,000 shares authorized, 10,307,502 shares issued, 5,195,482 and 5,340,086 shares outstanding at June 30, 2004 and December 31, 2003, respectively	103			103
Additional paid-in capital	53,690			52,950
Employee stock benefit plans	(804		)	(1,025		)
Retained earnings-substantially restricted	75,273			72,634
	128,262			124,662
Treasury stock, at cost, 5,112,020 and 4,967,416 shares at June 30, 2004 and December 31, 2003, respectively	(53,689		)	(49,584		)
Total stockholders’ equity	74,573			75,078

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	712,641		$	690,653

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				Six Months Ended
	June 30, 2004		June 30, 2003		June 30, 2004		June 30, 2003

INTEREST INCOME:
Loans receivable	$	8,745	$	8,584	$	17,074	$	17,392
Investment securities:
Taxable	778		826		1,572		1,878
Nontaxable	172		115		338		219
Other	18		191		110

Part II.

Other Information