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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 March 31, 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
 (Issuers Telephone Number)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o þ
 Applicable Only to Corporate Issuers
   o þ




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##### 



FIRST FRANKLIN CORPORATION AND SUBSIDIARIES
 INDEX
 PageNo.Part I Financial InformationItem 1 .
    
    Consolidated Balance
Sheets  March 31 , 2007 and December 31,
2006
    
    
    3Consolidated Statements of Income and Retained Earnings  Three
Month Periods ended March 31 , 2007 and 2006
    
    
    4Consolidated Statements of Cash Flows  Three Month Periods ended
March 31 , 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2 .
    
    Managements Discussion and Analysis or Plan of Operations
    
    
    7Item 3.
    
    Controls and Procedures
    
    
    13Part II
    
    Other Information
    
    
    14SignaturesEX-31.1EX-31.2EX-32.1EX-32.2
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ITEM 1. FINANCIAL STATEMENTS
 FIRST
FRANKLIN CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS   ASSETS
 March 31, 2007
    
    

Dec. 31, 2006(Unaudited)Cash, including certificates of deposit and other interest-earning
deposits of $4,050 at 03/31/07 and $3,100 at 12/31/06
    
    $
    10,341
    
    
    $
    7,828Investment securities:Securities available-for-sale, at market value
(amortized cost of $21,541 at 03/31/07 and $22,038 at 12/31/06)
    
    
    21,351
    
    
    
    21,725Mortgage-backed securities:Securities available-for-sale, at market value
(amortized cost of $4,475 at 03/31/07 and $4,889 at 12/31/06)
    
    
    4,482
    
    
    
    4,900Securities held-to-maturity, at amortized cost
(market value of $446 at 03/31/07 and $486 at 12/31/06)
    
    
    434
    
    
    
    473Loans receivable, net
    
    
    276,000
    
    
    
    278,253Investment in Federal Home Loan Bank of Cincinnati stock, at cost
    
    
    4,797
    
    
    
    4,797Real estate owned, net
    
    
    855
    
    
    
    408Accrued interest receivable
    
    
    1,309
    
    
    
    1,120Property and equipment, net
    
    
    3,994
    
    
    
    4,084Bank owned life insurance
    
    
    5,346
    
    
    
    5,293Other assets
    
    
    2,226
    
    
    
    3,158Total assets
    
    $
    331,135
    
    
    $
    332,039LIABILITIESDeposits
    
    $
    232,925
    
    
    $
    231,179Borrowings
    
    
    70,092
    
    
    
    72,217Advances by borrowers for taxes and insurance
    
    
    1,460
    
    
    
    2,036Other liabilities
    
    
    551
    
    
    
    456Total liabilities
    
    
    305,028
    
    
    
    305,888Minority interest in consolidated subsidiary
    
    
    401
    
    
    
    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 03/31/07 and 12/31/06
    
    
    13
    
    
    
    13Additional paid-in capital
    
    
    6,189
    
    
    
    6,189Treasury
stock, at cost  330,533 shares at 03/31/07 and
324,882 shares at 12/31/06
    
    
    (3,274
    )
    
    
    (3,174
    )Retained earnings, substantially restricted
    
    
    22,910
    
    
    
    22,927Accumulated other comprehensive income:Unrealized loss on available-for-sale securities, net
of taxes of $(69) at 03/31/07 and $(108) at 12/31/06
    
    
    (132
    )
    
    
    (209
    )Total stockholders equity
    
    
    25,706
    
    
    
    25,746$
    331,135
    
    
    $
    332,039
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FIRST
FRANKLIN CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the three months endedMarch 31, 2007
    
    

March 31, 2006(Unaudited)
    
    
    (Unaudited)Interest income:Loans receivable
    
    $
    4,187
    
    
    $
    3,580Mortgage-backed securities
    
    
    67
    
    
    
    82Investments
    
    
    418
    
    
    
    3224,672
    
    
    
    3,984Interest expense:Deposits
    
    
    2,166
    
    
    
    1,728Borrowings
    
    
    897
    
    
    
    6253,063
    
    
    
    2,353Net interest income
    
    
    1,609
    
    
    
    1,631Provision for loan losses
    
    
    70
    
    
    
    50Net interest income after provision for
loan losses
    
    
    1,539
    
    
    
    1,581Noninterest income:Gain on loans sold
    
    
    23
    
    
    
    11Service fees on NOW accounts
    
    
    194
    
    
    
    136Other income
    
    
    167
    
    
    
    128384
    
    
    
    275Noninterest expense:Salaries and employee benefits
    
    
    716
    
    
    
    705Occupancy
    
    
    257
    
    
    
    252Federal deposit insurance premiums
    
    
    7
    
    
    
    7Advertising
    
    
    58
    
    
    
    77Service bureau
    
    
    131
    
    
    
    108Other
    
    
    552
    
    
    
    4401,721
    
    
    
    1,589Income before federal income taxes
    
    
    202
    
    
    
    267Provision for federal income taxes
    
    
    67
    
    
    
    78Net income
    
    $
    135
    
    
    $
    189Retained Earnings-Beginning of period
    
    $
    22,927
    
    
    $
    22,177Net Income
    
    
    135
    
    
    
    189Less: Dividends declared
    
    
    (152
    )
    
    
    (151
    )Retained Earnings-end of period
    
    $
    22,910
    
    
    $
    22,215Net income per common share:Basic
    
    $
    0.08
    
    
    $
    0.11Diluted
    
    $
    0.08
    
    
    $
    0.11
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FIRST
FRANKLIN CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the three months endedMarch 31, 2007
    
    
    March 31, 2006(unaudited)
    
    
    (unaudited)Cash flows from operating activities:Net income
    
    $
    135
    
    
    $
    189Adjustments to reconcile net income to net cash
provided (used) by operating activities:Provision for loan losses
    
    
    70
    
    
    
    50Gain on sale of investments
    
    
    
    
    
    
    Depreciation and amortization
    
    
    113
    
    
    
    99FHLB stock dividends
    
    
    
    
    
    
    (64
    )Bank Owned Life Insurance
    
    
    (53
    )
    
    
    (31
    )Increase in accrued interest receivable
    
    
    (189
    )
    
    
    (164
    )Decrease (increase) in other assets
    
    
    932
    
    
    
    (352
    )Increase (decrease) in other liabilities
    
    
    95
    
    
    
    (140
    )Other, net
    
    
    (841
    )
    
    
    (489
    )Proceeds from sale of loans originated for sale
    
    
    1,975
    
    
    
    1,484Disbursements on loans originated for sale
    
    
    (1,969
    )
    
    
    (1,310
    )Net cash provided (used) by operating activities
    
    
    268
    
    
    
    (728
    )Cash flows from investing activities:Net change in loans receivable
    
    
    2,253
    
    
    
    (8,585
    )Principal reduction on mortgage-backed securities
    
    
    451
    
    
    
    578Proceeds from sale of SBA loans
    
    
    206
    
    
    
    Proceeds from sale of student loans
    
    
    
    
    
    
    5Proceeds from maturities/calls of investment securities:Available-for-sale
    
    
    500
    
    
    
    Proceeds from the sale of real estate owned
    
    
    50
    
    
    
    Capital expenditures
    
    
    (8
    )
    
    
    (42
    )Net cash provided (used) by investing activities
    
    
    3,452
    
    
    
    (8,044
    )Cash flows from financing activities:Net change in deposits
    
    
    1,746
    
    
    
    7,058Net change in borrowed money
    
    
    (2,125
    )
    
    
    (1,431
    )Decrease in advances by borrowers for taxes and insurance
    
    
    (576
    )
    
    
    (571
    )Issuance (purchase) of treasury stock
    
    
    (100
    )
    
    
    360Payment of dividends
    
    
    (152
    )
    
    
    (151
    )Net cash provided (used) by financing activities
    
    
    (1,207
    )
    
    
    5,265Net increase (decrease) in cash
    
    
    2,513
    
    
    
    (3,507
    )Cash at beginning of year
    
    
    7,828
    
    
    
    5,116Cash at end of year
    
    $
    10,341
    
    
    $
    1,609
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FIRST
FRANKLIN CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       - 6 -




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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
   
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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
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Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in thousands)Available-for-saleInvestment securities
    
    $
    21,541
    
    
    $
    28
    
    
    $
    218
    
    
    $
    21,351Mortgage-backed securities
    
    
    4,475
    
    
    
    24
    
    
    
    17
    
    
    
    4,482Held-to-maturityMortgage-backed securities
    
    
    434
    
    
    
    12
    
    
    
    0
    
    
    
    446$
    26,450
    
    
    $
    64
    
    
    $
    235
    
    
    $
    26,279
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(Dollars in thousands)Balance at beginning of period
    
    $
    1,632Charge offs
    
    
    177Additions charged to operations
    
    
    70Recoveries
    
    
    0Balance at end of period
    
    $
    1,525
   Capital Standard
    
    Actual
    
    Required
    
    Excess
    
    Actual
    
    Required
    
    Excess(Dollars in thousands)Core
    
    $23,744
    
        $13,210
    
        $10 ,534
    
        7.19%
    
        4.00%
    
    
    3.19
    %Risk-based
    
    24,535
    
        17,045
    
        7,490
    
        11.52%
    
        8.00%
    
    
    3.52
    %
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For the three month periods ended March 31,2007 vs 2006
    
    
    TotalIncrease (decrease) due to
    
    
    increaseVolume
    
    
    Rate
    
    
    (decrease)(Dollars in thousands)Interest income attributable to:Loans receivable (1)
    
    $
    404
    
    
    $
    203
    
    
    $
    607Mortgage-backed securities
    
    
    (39
    )
    
    
    24
    
    
    
    (15
    )Investments
    
    
    16
    
    
    
    69
    
    
    
    85FHLB stock
    
    
    4
    
    
    
    7
    
    
    
    11Total interest-earning assets
    
    $
    385
    
    
    $
    303
    
    
    $
    688Interest expense attributable to:Demand deposits
    (
    $
    9
    )
    
    $
    22
    
    
    $
    13Savings accounts
    
    
    9
    
    
    
    61
    
    
    
    70Certificates
    
    
    80
    
    
    
    275
    
    
    
    355FHLB advances and other borrowings
    
    
    273
    
    
    
    (1
    )
    
    
    272Total interest-bearing liabilities
    
    $
    353
    
    
    $
    357
    
    
    $
    710Increase in net interest income
    
    $
    32
    
    (
    $
    54
    )
    (
    $
    22
    )
 
 (1)
    
    Includes non-accruing loans.  - 11 -




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For the three months ended March 31, 2007Averageoutstanding
    
    
    Yield/cost(Dollars in thousands)Average interest-earning assetsLoans
    
    $
    276,915
    
    
    
    6.05
    %Mortgage-backed securities
    
    
    4,797
    
    
    
    5.31
    %Investments
    
    
    25,591
    
    
    
    5.36
    %FHLB stock
    
    
    5,045
    
    
    
    6.25
    %Total
    
    $
    312,348
    
    
    
    5.98
    %Average interest-bearing liabilitiesDemand deposits
    
    $
    31,684
    
    
    
    1.30
    %Savings accounts
    
    
    29,145
    
    
    
    1.73
    %Certificates
    
    
    170,233
    
    
    
    4.55
    %FHLB advances
    
    
    70,801
    
    
    
    5.07
    %Total
    
    $
    301,863
    
    
    
    4.06
    %Net interest-earning assets/interest rate spread
    
    $
    10,485
    
    
    
    1.92
    %
 For the three months ended March 31, 2006Averageoutstanding
    
    
    Yield/cost(Dollars in thousands)Average interest-earning assetsLoans
    
    $
    249,700
    
    
    
    5.73
    %Mortgage-backed securities
    
    
    7,369
    
    
    
    4.45
    %Investments
    
    
    24,172
    
    
    
    4.27
    %FHLB stock
    
    
    4,549
    
    
    
    5.63
    %Total
    
    $
    285,790
    
    
    
    5.58
    %Average interest-bearing liabilitiesDemand deposits
    
    $
    36,178
    
    
    
    1.00
    %Savings accounts
    
    
    25,551
    
    
    
    0.88
    %Certificates
    
    
    162,349
    
    
    
    3.90
    %FHLB advances
    
    
    49,225
    
    
    
    5.08
    %Total
    
    $
    273,303
    
    
    
    3.44
    %Net interest-earning assets/interest rate spread
    
    $
    12,487
    
    
    
    2.14
    %
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Item 3 A(T). Controls and Procedures
   - 13 -




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Purchases of Equity Securities
 (d)(c)
    
    
    Maximum number (orTotal number of
    
    
    approximate dollar(a)
    
    
    
    
    
    
    shares
    
    
    value) of shares thatTotal
    
    
    (b)
    
    
    purchased as
    
    
    may yet benumber of
    
    
    Average
    
    
    part of publicly
    
    
    purchased under theshares
    
    
    price paid
    
    
    announced plan
    
    
    plansPeriod
    
    purchased
    
    
    per share
    
    
    or programs
    
    
    or programsJanuary 1, 2007through
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    January 31, 2007February 1, 2007through
    
    
    5,926
    
    
    $
    17.40
    
    
    
    
    
    
    
    February 28, 2007March 1, 2007through
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    March 31, 2007Total
    
    
    5.926
    
    
    $
    17.40
    
    
    
    
    
    
    
    
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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. Voelpel

Daniel T. VoelpelVice President and Chief Financial
OfficerDate: May 11, 2007
 - 16 -