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United States
Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-QSB
 þ
    
    Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended June 30, 2007
 o
    
    Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition Period from  to
 Commission File Number 0-16362
 FIRST FRANKLIN CORPORATION
  Delaware
    
    31-1221029(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer 
Identification Number)
 4750 Ashwood Drive Cincinnati, Ohio 45241
    
    (513) 469-5352(Address of principal executive offices)
    
    (Issuers Telephone Number)
 
 þ o
 o þ
 Applicable Only to Corporate Issuers
   o þ




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##### 



FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
 INDEX
 Page No.Part I Financial InformationItem 1.
    
    Consolidated Balance Sheets 
June 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Income and Retained
Earnings - Three - and six-month periods ended June 30, 2007
and 2006
    
    
    4Consolidated Statements of Cash Flows  Six-month
periods ended June 30, 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis or Plan of Operations
    
    
    8Item 3.
    
    Controls and Procedures
    
    
    14Part II Other Information
    
    
    15SignaturesEX-31.1EX-31.2EX-32.1EX-32.2
  2




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ITEM 1. FINANCIAL STATEMENTS
 FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 June 30, 2007
    
    
    Dec. 31, 2006(Unaudited)ASSETSCash, including certificates of deposit and other interest-earning
deposits of $4,150 at 06/30/07 and $3,100 at 12/31/06
    
    $
    8,801
    
    
    $
    7,828Investment securities:Securities available-for-sale, at market value
(amortized cost of $20,043 at 06/30/07 and $22,038 at 12/31/06)
    
    
    19,633
    
    
    
    21,725Mortgage-backed securities:Securities available-for-sale, at market value
(amortized cost of $3,971 at 06/30/07 and $4,889 at 12/31/06)
    
    
    3,992
    
    
    
    4,900Securities held-to-maturity, at amortized cost
(market value of $407 at 06/30/07 and $486 at 12/31/06)
    
    
    395
    
    
    
    473Loans receivable, net
    
    
    271,406
    
    
    
    278,253Investment in Federal Home Loan Bank of Cincinnati stock, at cost
    
    
    4,797
    
    
    
    4,797Real estate owned, net
    
    
    1,148
    
    
    
    408Accrued interest receivable
    
    
    1,245
    
    
    
    1,120Property and equipment, net
    
    
    3,903
    
    
    
    4,084Bank owned life insurance
    
    
    5,403
    
    
    
    5,293Other assets
    
    
    2,138
    
    
    
    3,158Total assets
    
    $
    322,861
    
    
    $
    332,039LIABILITIESDeposits
    
    $
    229,271
    
    
    $
    231,179Borrowings
    
    
    65,890
    
    
    
    72,217Advances by borrowers for taxes and insurance
    
    
    1,261
    
    
    
    2,036Other liabilities
    
    
    506
    
    
    
    456Total liabilities
    
    
    296,928
    
    
    
    305,888Minority interest in consolidated subsidiary
    
    
    396
    
    
    
    405STOCKHOLDERS EQUITYPreferred 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 06/30/07 and 12/31/06
    
    
    13
    
    
    
    13Additional paid-in capital
    
    
    6,189
    
    
    
    6,189Treasury stock, at cost - 330,258 shares at 06/30/07 and
324,882 shares at 12/31/06
    
    
    (3,271
    )
    
    
    (3,174
    )Retained earnings, substantially restricted
    
    
    22,887
    
    
    
    22,927Accumulated other comprehensive income:Unrealized loss on available-for-sale securities, net
of taxes of $(145) at 06/30/07 and $(108) at 12/31/06
    
    
    (281
    )
    
    
    (209
    )Total stockholders equity
    
    
    25,537
    
    
    
    25,746$
    322,861
    
    
    $
    332,039
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FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
 For the three months ended
    
    
    For the six months endedJune 30, 2007
    
    
    June 30,2006
    
    
    June 30,2007
    
    
    June 30,2006(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Interest income:Loans receivable
    
    $
    4,094
    
    
    $
    3,826
    
    
    $
    8,281
    
    
    $
    7,406Mortgage-backed securities
    
    
    62
    
    
    
    80
    
    
    
    129
    
    
    
    162Investments
    
    
    437
    
    
    
    332
    
    
    
    855
    
    
    
    6544,593
    
    
    
    4,238
    
    
    
    9,265
    
    
    
    8,222Interest expense:Deposits
    
    
    2,201
    
    
    
    1,884
    
    
    
    4,367
    
    
    
    3,612Borrowings
    
    
    857
    
    
    
    733
    
    
    
    1,754
    
    
    
    1,3583,058
    
    
    
    2,617
    
    
    
    6,121
    
    
    
    4,970Net interest income
    
    
    1,535
    
    
    
    1,621
    
    
    
    3,144
    
    
    
    3,252Provision for loan losses
    
    
    75
    
    
    
    66
    
    
    
    145
    
    
    
    116Net interest income after provision
for loan losses
    
    
    1,460
    
    
    
    1,555
    
    
    
    2,999
    
    
    
    3,136Noninterest income:Gain on loans sold
    
    
    45
    
    
    
    13
    
    
    
    68
    
    
    
    24Gain on sale of investments
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    5Gain on sale of Intrieve investment
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    42Gain on sale of Financial Institution
Partners III investment
    
    
    
    
    
    
    575
    
    
    
    
    
    
    
    575Service fees on NOW accounts
    
    
    210
    
    
    
    152
    
    
    
    404
    
    
    
    288Other income
    
    
    193
    
    
    
    169
    
    
    
    360
    
    
    
    297448
    
    
    
    956
    
    
    
    832
    
    
    
    1,231Noninterest expense:Salaries and employee benefits
    
    
    736
    
    
    
    720
    
    
    
    1,452
    
    
    
    1,425Occupancy
    
    
    263
    
    
    
    258
    
    
    
    520
    
    
    
    510Federal deposit insurance premiums
    
    
    7
    
    
    
    7
    
    
    
    14
    
    
    
    14Advertising
    
    
    51
    
    
    
    83
    
    
    
    109
    
    
    
    160Service bureau
    
    
    128
    
    
    
    104
    
    
    
    259
    
    
    
    212Other
    
    
    572
    
    
    
    489
    
    
    
    1,124
    
    
    
    9291,757
    
    
    
    1,661
    
    
    
    3,478
    
    
    
    3,250Income before federal income taxes
    
    
    151
    
    
    
    850
    
    
    
    353
    
    
    
    1,117Provision for federal income taxes
    
    
    23
    
    
    
    284
    
    
    
    90
    
    
    
    362Net income
    
    $
    128
    
    
    $
    566
    
    
    $
    263
    
    
    $
    755Retained Earnings-Beginning of period
    
    $
    22,910
    
    
    $
    22,215
    
    
    $
    22,927
    
    
    $
    22,177Net Income
    
    
    128
    
    
    
    566
    
    
    
    263
    
    
    
    755Less: Dividends declared
    
    
    (151
    )
    
    
    (152
    )
    
    
    (303
    )
    
    
    (303
    )Retained Earnings-end of period
    
    $
    22,887
    
    
    $
    22,629
    
    
    $
    22,887
    
    
    $
    22,629Net income per common share:Basic
    
    $
    0.08
    
    
    $
    0.34
    
    
    $
    0.16
    
    
    $
    0.45Diluted
    
    $
    0.07
    
    
    $
    0.33
    
    
    $
    0.15
    
    
    $
    0.44
  4




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FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the six months endedJune 30, 2007
    
    
    June 30, 2006(unaudited)
    
    
    (unaudited)Cash flows from operating activities:Net income
    
    $
    263
    
    
    $
    755Adjustments to reconcile net income to net cash
provided (used) by operating activities:Provision for loan losses
    
    
    145
    
    
    
    116Gain on sale of investments
    
    
    
    
    
    
    (5
    )Gain on sale of Intrieve investment
    
    
    
    
    
    
    (42
    )Gain on sale of Financial Institution Partners III investment
    
    
    
    
    
    
    (575
    )Depreciation and amortization
    
    
    211
    
    
    
    196FHLB stock dividends
    
    
    
    
    
    
    (130
    )Bank Owned Life Insurance
    
    
    (110
    )
    
    
    (61
    )Increase in accrued interest receivable
    
    
    (125
    )
    
    
    (124
    )Decrease (increase) in other assets
    
    
    1,020
    
    
    
    (601
    )Increase (decrease) in other liabilities
    
    
    50
    
    
    
    (155
    )Other, net
    
    
    (1,486
    )
    
    
    (144
    )Proceeds from sale of loans originated for sale
    
    
    5,577
    
    
    
    3,565Disbursements on loans originated for sale
    
    
    (5,410
    )
    
    
    (2,600
    )Net cash provided by operating activities
    
    
    135
    
    
    
    195Cash flows from investing activities:Net change in loans receivable
    
    
    6,847
    
    
    
    (27,452
    )Principal reduction on mortgage-backed securities
    
    
    994
    
    
    
    1,227Proceeds from sale of SBA loans
    
    
    206
    
    
    
    Proceeds from sale of student loans
    
    
    137
    
    
    
    213Proceeds from maturities/calls of investment securities:Available-for-sale
    
    
    2,000
    
    
    
    2,000Proceeds from the sale of real estate owned
    
    
    78
    
    
    
    Proceeds from sale of Intrieve investment
    
    
    
    
    
    
    42Capital expenditures
    
    
    (14
    )
    
    
    (42
    )Net cash provided (used) by investing activities
    
    
    10,248
    
    
    
    (24,012
    )Cash flows from financing activities:Net change in deposits
    
    
    (1,908
    )
    
    
    8,655Net change in borrowed money
    
    
    (6,327
    )
    
    
    14,801Decrease in advances by borrowers for taxes and insurance
    
    
    (775
    )
    
    
    (751
    )Issuance (purchase) of treasury stock
    
    
    (97
    )
    
    
    360Payment of dividends
    
    
    (303
    )
    
    
    (303
    )Net cash provided (used) by financing activities
    
    
    (9,410
    )
    
    
    22,762Net increase (decrease) in cash
    
    
    973
    
    
    
    (1,055
    )Cash at beginning of year
    
    
    7,828
    
    
    
    5,116Cash at end of year
    
    $
    8,801
    
    
    $
    4,061
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Item 2. Managements Discussion and Analysis or Plan of Operations
 FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
MANAGEMENT S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
 GENERAL
   1.
    
    Exceed customers expectations regarding service and products.2.
    
    Achieve success through our employees efforts.3.
    
    Stockholder satisfaction will enable us to continue serving our customers.4.
    
    Support the communities we serve.5.
    
    Combine business success with integrity.
     8




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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
   9




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Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in thousands)Available-for-saleInvestment securities
    
    $
    20,043
    
    
    $
    4
    
    
    $
    414
    
    
    $
    19,633Mortgage-backed securities
    
    
    3,971
    
    
    
    33
    
    
    
    12
    
    
    
    3,992Held-to-maturityMortgage-backed securities
    
    
    395
    
    
    
    12
    
    
    
    0
    
    
    
    407$
    24,409
    
    
    $
    49
    
    
    $
    426
    
    
    $
    24,032
      10




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(Dollars in thousands)Balance at beginning of period
    
    $
    1,632Charge offs
    
    
    217Additions charged to operations
    
    
    145Recoveries
    
    
    32Balance at end of period
    
    $
    1,592
   Capital Standard
    
    Actual
    
    Required
    
    Excess
    
    Actual
    
    Required
    
    Excess(Dollars in thousands)Core
    
    $
    23,905
    
    
    $
    12,891
    
    
    $
    11,014
    
    
    
    7.42
    %
    
    
    4.00
    %
    
    
    3.42
    %Risk-based
    
    
    24,542
    
    
    
    16,858
    
    
    
    7,684
    
    
    
    11.65
    %
    
    
    8.00
    %
    
    
    3.65
    %
      11




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For the six month periods ended June 30,2007 vs 2006TotalIncrease (decrease) due to
    
    
    increaseVolume
    
    
    Rate
    
    
    (decrease)(Dollars in thousands)Interest income attributable to:Loans receivable (1)
    
    $
    528
    
    
    $
    347
    
    
    $
    875Mortgage-backed securities
    
    
    (71
    )
    
    
    38
    
    
    
    (33
    )Investments
    
    
    43
    
    
    
    135
    
    
    
    178FHLB stock
    
    
    6
    
    
    
    17
    
    
    
    23Total interest-earning assets
    
    $
    506
    
    
    $
    537
    
    
    $
    1,043Interest expense attributable to:Demand deposits
    
    
    ($17
    )
    
    $
    40
    
    
    $
    23Savings accounts
    
    
    16
    
    
    
    123
    
    
    
    139Certificates
    
    
    119
    
    
    
    474
    
    
    
    593FHLB advances and other borrowings
    
    
    382
    
    
    
    14
    
    
    
    396Total interest-bearing liabilities
    
    $
    500
    
    
    $
    651
    
    
    $
    1,151Increase in net interest income
    
    $
    6
    
    
    
    ($114
    )
    
    
    ($108
    )
 
 (1)
    
    Includes non-accruing loans.  12




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For the six months ended June 30, 2007Averageoutstanding
    
    
    Yield/cost(Dollars in thousands)Average interest-earning assetsLoans
    
    $
    275,247
    
    
    
    6.02
    %Mortgage-backed securities
    
    
    4,794
    
    
    
    5.38
    %Investments
    
    
    25,366
    
    
    
    5.53
    %FHLB stock
    
    
    4,797
    
    
    
    6.38
    %Total
    
    $
    310,204
    
    
    
    5.97
    %Average interest-bearing liabilitiesDemand deposits
    
    $
    31,352
    
    
    
    1.26
    %Savings accounts
    
    
    29,459
    
    
    
    1.79
    %Certificates
    
    
    169,904
    
    
    
    4.60
    %FHLB advances
    
    
    69,039
    
    
    
    5.08
    %Total
    
    $
    299,754
    
    
    
    4.08
    %Net interest-earning assets/interest rate spread
    
    $
    10,450
    
    
    
    1.89
    %
 For the six months ended June 30, 2006Averageoutstanding
    
    
    Yield/cost(Dollars in thousands)Average interest-earning assetsLoans
    
    $
    257,392
    
    
    
    5.75
    %Mortgage-backed securities
    
    
    7,060
    
    
    
    4.59
    %Investments
    
    
    23,535
    
    
    
    4.45
    %FHLB stock
    
    
    4,582
    
    
    
    5.67
    %Total
    
    $
    292,569
    
    
    
    5.62
    %Average interest-bearing liabilities
    
    
    
    
    
    
    
    %Demand deposits
    
    $
    35,989
    
    
    
    0.97
    %Savings accounts
    
    
    26,412
    
    
    
    0.94
    %Certificates
    
    
    164,187
    
    
    
    4.04
    %FHLB advances
    
    
    54,010
    
    
    
    5.03
    %Total
    
    $
    280,598
    
    
    
    3.54
    %Net interest-earning assets/interest rate spread
    
    $
    11,971
    
    
    
    2.08
    %
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Item 3A (T). Controls and Procedures
   14




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(a)
    
    None(b)
    
    None(c)
    
    None(d)
    
    None
     Voting negative,withholdingAffirmative
    
    or abstainingElection of two directors:John J. Kuntz
    
    
    1,243,762
    
    
    
    267,024Thomas H. Siemers
    
    
    1,195,075
    
    
    
    315,711Ratification of the selection of Clark, Schaefer,
Hackett & Co. as independent accountants
for the current fiscal year.
    
    
    1,451,806
    
    
    
    58,980
     31.1
    
    CEO certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    CFO certification pursuant to Section 302 of the Sarbanes Oxley Act of 2002.32.1
    
    CEO certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    CFO certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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FIRST FRANKLIN CORPORATION/s/ Daniel T. VoelpelDaniel T. VoelpelVice President and Chief Financial Officer  16