##### Table of Contents



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
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from  to
 Commission file number: 0-51153
 FEDFIRST FINANCIAL CORPORATION
  United States
    
    25-1828028(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer Identification No.)
 Donner at Sixth Street, Monessen, Pennsylvania
    
    15062(Address of principal executive offices)
    
    (Zip Code)
 
 þ o
 o þ
  o þ




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##### 



FORM 10-QSB
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements.
    
    
    1Consolidated Statements of Financial Condition at June 30, 2007 (Unaudited) and December 31, 2006
    
    
    1Consolidated Statements of (Loss) Income for the Three and Six Months Ended June 30, 2007 and 2006 (Unaudited)
    
    
    2Consolidated Statements of Changes in Stockholders Equity and Comprehensive Loss for the Six Months Ended June 30, 2007 and 2006 (Unaudited)
    
    
    3Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006 (Unaudited)
    
    
    4Notes to the Unaudited Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    10Item 3. Controls and Procedures
    
    
    21PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    23Signatures
    
    
    24EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 June 30,
    
    December 31,2007
    
    2006(Dollars in thousands)
    
    (UNAUDITED)AssetsCash and cash equivalents:Cash and due from banks
    
    $
    1,796
    
    
    $
    1,561Interest-earning deposits
    
    
    3,094
    
    
    
    2,871Total cash and cash equivalents
    
    
    4,890
    
    
    
    4,432Securities available-for-sale
    
    
    68,154
    
    
    
    83,045Loans, net
    
    
    179,460
    
    
    
    174,718Federal Home Loan Bank (FHLB) stock, at cost
    
    
    4,046
    
    
    
    4,901Accrued interest receivable  loans
    
    
    1,012
    
    
    
    1,033Accrued interest receivable  securities
    
    
    576
    
    
    
    559Premises and equipment, net
    
    
    3,076
    
    
    
    2,162Bank-owned life insurance
    
    
    7,401
    
    
    
    7,259Goodwill
    
    
    1,080
    
    
    
    1,080Real estate owned
    
    
    569
    
    
    
    569Other assets
    
    
    443
    
    
    
    1,232Deferred tax assets and tax credit carryforwards
    
    
    2,788
    
    
    
    2,527Total assets
    
    $
    273,495
    
    
    $
    283,517Liabilities and Stockholders EquityDeposits:Noninterest-bearing
    
    
    8,799
    
    
    
    5,409Interest-bearing
    
    
    145,258
    
    
    
    138,086Total deposits
    
    
    154,057
    
    
    
    143,495Borrowings
    
    
    69,930
    
    
    
    89,323Advance payments by borrowers for taxes and insurance
    
    
    399
    
    
    
    254Accrued interest payable  deposits
    
    
    1,091
    
    
    
    1,180Accrued interest payable  borrowings
    
    
    280
    
    
    
    319Other liabilities
    
    
    2,534
    
    
    
    2,521Total liabilities
    
    
    228,291
    
    
    
    237,092Minority interest in subsidiary
    
    
    67
    
    
    
    79Stockholders equity:Preferred stock $0.01 par value; 10,000,000 shares
authorized; none issued
    
    
    
    
    
    
    Common stock $0.01 par value; 20,000,000 shares
authorized; 6,707,500 shares issued
    
    
    67
    
    
    
    67Additional paid-in-capital
    
    
    28,958
    
    
    
    28,787Retained earnings  substantially restricted
    
    
    19,448
    
    
    
    20,475Accumulated other comprehensive loss, net of deferred taxes of
$(358) and $(475)
    
    
    (555
    )
    
    
    (737
    )Unearned Employee Stock Ownership Plan (ESOP)
    
    
    (2,160
    )
    
    
    (2,246
    )Common stock held in treasury, at cost (66,300 and 0 shares)
    
    
    (621
    )
    
    
    Total stockholders equity
    
    
    45,137
    
    
    
    46,346Total liabilities and stockholders equity
    
    $
    273,495
    
    
    $
    283,517
  1




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##### Table of Contents



CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)
 For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,(Dollars in thousands, except per share data)
    
    2007
    
    2006
    
    2007
    
    2006Interest income:Loans
    
    $
    2,581
    
    
    $
    2,501
    
    
    $
    5,075
    
    
    $
    4,939Securities
    
    
    969
    
    
    
    784
    
    
    
    1,994
    
    
    
    1,594Other interest-earning assets
    
    
    158
    
    
    
    115
    
    
    
    277
    
    
    
    189Total interest income
    
    
    3,708
    
    
    
    3,400
    
    
    
    7,346
    
    
    
    6,722Interest expense:Deposits
    
    
    1,249
    
    
    
    915
    
    
    
    2,417
    
    
    
    1,749Borrowings
    
    
    809
    
    
    
    888
    
    
    
    1,765
    
    
    
    1,837Total interest expense
    
    
    2,058
    
    
    
    1,803
    
    
    
    4,182
    
    
    
    3,586Net interest income
    
    
    1,650
    
    
    
    1,597
    
    
    
    3,164
    
    
    
    3,136Provision for loan losses
    
    
    30
    
    
    
    20
    
    
    
    75
    
    
    
    40Net interest income after provision for loan
losses
    
    
    1,620
    
    
    
    1,577
    
    
    
    3,089
    
    
    
    3,096Noninterest income:Fees and service charges
    
    
    101
    
    
    
    95
    
    
    
    196
    
    
    
    183Insurance commissions
    
    
    340
    
    
    
    326
    
    
    
    931
    
    
    
    880Income from bank-owned life insurance
    
    
    72
    
    
    
    71
    
    
    
    142
    
    
    
    138Net loss on securities held for trading
    
    
    (1
    )
    
    
    
    
    
    
    (1,410
    )
    
    
    Net gain on sales of real estate owned
    
    
    
    
    
    
    22
    
    
    
    
    
    
    
    33Other
    
    
    4
    
    
    
    28
    
    
    
    7
    
    
    
    33Total noninterest income
    
    
    516
    
    
    
    542
    
    
    
    (134
    )
    
    
    1,267Noninterest expense:Compensation and employee benefits
    
    
    1,366
    
    
    
    1,178
    
    
    
    2,793
    
    
    
    2,327Occupancy
    
    
    278
    
    
    
    208
    
    
    
    531
    
    
    
    405FDIC insurance premiums
    
    
    5
    
    
    
    16
    
    
    
    11
    
    
    
    32Data processing
    
    
    95
    
    
    
    77
    
    
    
    185
    
    
    
    152Other
    
    
    461
    
    
    
    429
    
    
    
    899
    
    
    
    824Total noninterest expense
    
    
    2,205
    
    
    
    1,908
    
    
    
    4,419
    
    
    
    3,740Minority interest in net income of
consolidated subsidiary
    
    
    7
    
    
    
    6
    
    
    
    38
    
    
    
    37(Loss) income before income tax (benefit)
expense
    
    
    (76
    )
    
    
    205
    
    
    
    (1,502
    )
    
    
    586Income tax (benefit) expense
    
    
    (18
    )
    
    
    55
    
    
    
    (475
    )
    
    
    198Net (loss) income
    
    $
    (58
    )
    
    $
    150
    
    
    $
    (1,027
    )
    
    $
    388Earnings per share:Basic and diluted
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.16
    )
    
    $
    0.06Weighted-average shares outstanding:Basic
    
    
    6,444,010
    
    
    
    6,377,051
    
    
    
    6,414,977
    
    
    
    6,374,891Diluted
    
    
    6,448,038
    
    
    
    6,377,051
    
    
    
    6,419,483
    
    
    
    6,374,891
  2




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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND
 COMPREHENSIVE LOSS (UNAUDITED)
 Accumulated
    
    
    
    
    
    
    CommonAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Stock
    
    
    TotalCommon
    
    
    Paid-in-
    
    
    Retained
    
    
    Comprehensive
    
    
    Unearned
    
    
    Held in
    
    
    Stockholders
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    ESOP
    
    
    Treasury
    
    
    Equity
    
    
    Income (Loss)(Dollars in thousands)Balance at January 1, 2006
    
    $
    66
    
    
    $
    28,648
    
    
    $
    20,131
    
    
    $
    (1,026
    )
    
    $
    (2,419
    )
    
    $
    
    
    
    $
    45,400Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    388
    
    
    $
    388Unrealized loss on securities
available-for-sale
net of tax of $(308)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (478
    )
    
    
    
    
    
    
    
    
    
    
    (478
    )
    
    
    (478
    )ESOP shares committed
to be released
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    84Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (90
    )Balance at June 30, 2006
    
    $
    66
    
    
    $
    28,646
    
    
    $
    20,519
    
    
    $
    (1,504
    )
    
    $
    (2,333
    )
    
    $
    
    
    
    $
    45,394
 Accumulated
    
    
    
    
    
    
    CommonAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Stock
    
    
    TotalCommon
    
    
    Paid-in-
    
    
    Retained
    
    
    Comprehensive
    
    
    Unearned
    
    
    Held in
    
    
    Stockholders
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    ESOP
    
    
    Treasury
    
    
    Equity
    
    
    Income (Loss)Balance at January 1, 2007
    
    $
    67
    
    
    $
    28,787
    
    
    $
    20,475
    
    
    $
    (737
    )
    
    $
    (2,246
    )
    
    $
    
    
    
    $
    46,346Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    (1,027
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,027
    )
    
    $
    (1,027
    )Transfer of securities
held for trading
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    857
    
    
    
    
    
    
    
    
    
    
    
    857
    
    
    
    857Unrealized loss on securities
available-for-sale
net of tax of $(435)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (675
    )
    
    
    
    
    
    
    
    
    
    
    (675
    )
    
    
    (675
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (611
    )
    
    
    (611
    )ESOP shares committed
to be released
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    80Stock-based compensation
expense
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170Stock awards forfeited
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    (3
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (845
    )Balance at June 30, 2007
    
    $
    67
    
    
    $
    28,958
    
    
    $
    19,448
    
    
    $
    (555
    )
    
    $
    (2,160
    )
    
    $
    (621
    )
    
    $
    45,137
  3




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 For the Six MonthsEnded June 30,(Dollars in thousands)
    
    2007
    
    2006Cash flows from operating activitiesNet (loss) income
    
    $
    (1,027
    )
    
    $
    388Adjustments to reconcile net (loss) income to net cash provided
by operating activitiesMinority interest in net income of consolidated subsidiary
    
    
    38
    
    
    
    37Provision for loan losses
    
    
    75
    
    
    
    40Depreciation
    
    
    181
    
    
    
    135Net loss on securities held for trading
    
    
    1,410
    
    
    
    Proceeds from sales of securities held for trading
    
    
    40,483
    
    
    
    Proceeds from principal repayments of securities held for trading
    
    
    638
    
    
    
    Net gain on sales of real estate owned
    
    
    
    
    
    
    (33
    )Net gain on sale of student loan portfolio
    
    
    
    
    
    
    (26
    )Net amortization of security premiums and loan costs
    
    
    (651
    )
    
    
    (125
    )Non cash expense for ESOP
    
    
    80
    
    
    
    84Non cash expense for stock-based compensation
    
    
    170
    
    
    
    Increase in bank-owned life insurance
    
    
    (142
    )
    
    
    (138
    )Decrease in other assets
    
    
    335
    
    
    
    245Decrease in other liabilities
    
    
    (79
    )
    
    
    (75
    )Net cash provided by operating activities
    
    
    41,511
    
    
    
    532Cash flows from investing activitiesNet loan originations
    
    
    (4,890
    )
    
    
    (2,645
    )Proceeds from sale of student loan portfolio
    
    
    12
    
    
    
    1,224Proceeds from maturities of and principal repayments of
securities available-for-sale
    
    
    10,702
    
    
    
    8,416Purchases of securities available-for-sale
    
    
    (37,330
    )
    
    
    Purchases of premises and equipment
    
    
    (1,095
    )
    
    
    (166
    )Decrease in FHLB stock, at cost
    
    
    855
    
    
    
    331Proceeds from sales of other real estate owned
    
    
    
    
    
    
    92Net cash (used in) provided by investing activities
    
    
    (31,746
    )
    
    
    7,252Cash flows from financing activities:Net decrease in borrowings
    
    
    (19,393
    )
    
    
    (14,756
    )Net increase in deposits
    
    
    10,562
    
    
    
    6,403Increase in advance payments by borrowers for taxes and insurance
    
    
    145
    
    
    
    186Purchases of treasury stock
    
    
    (621
    )
    
    
    Net cash used in financing activities
    
    
    (9,307
    )
    
    
    (8,167
    )Net increase (decrease) in cash and cash equivalents
    
    
    458
    
    
    
    (383
    )Cash and cash equivalents, beginning of period
    
    
    4,432
    
    
    
    6,332Cash and cash equivalents, end of period
    
    $
    4,890
    
    
    $
    5,949Supplemental cash flow information:Cash paid for:Interest on deposits and borrowings
    
    $
    3,793
    
    
    $
    3,456Income tax expense
    
    
    25
    
    
    
    32Transfer of securities from available-for-sale to held for trading
    
    $
    42,531
    
    
    $
    
  4




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##### Table of Contents



Notes to the Unaudited Consolidated Financial Statements
 Note 1. Basis of Presentation/Nature of Operations
     Note 2. Recent Accounting Pronouncements
 The Fair Value Option for Financial Assets and Financial Liabilities: The Fair Value Option for Financial Assets and Financial Liabilities
 5




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##### Table of Contents



Fair Value Measurements: Fair Value Measurements.
 Note 3. Securities
  June 30, 2007
    
    December 31, 2006Amortized
    
    Fair
    
    Amortized
    
    Fair(Dollars in thousands)
    
    Cost
    
    Value
    
    Cost
    
    ValueSecurities available-for-sale:Government-Sponsored Enterprises
    
    $
    25,069
    
    
    $
    24,568
    
    
    $
    30,475
    
    
    $
    30,036Mortgage-backed
    
    
    17,441
    
    
    
    17,331
    
    
    
    14,892
    
    
    
    14,885REMICs
    
    
    22,506
    
    
    
    22,239
    
    
    
    34,831
    
    
    
    34,121Corporate debt
    
    
    4,002
    
    
    
    3,967
    
    
    
    4,010
    
    
    
    3,954Equities
    
    
    49
    
    
    
    49
    
    
    
    49
    
    
    
    49Total securities available-for-sale
    
    $
    69,067
    
    
    $
    68,154
    
    
    $
    84,257
    
    
    $
    83,045
 6




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##### Table of Contents



Note 4. Loans
  June 30, 2007
    
    December 31, 2006(Dollars in thousands)
    
    Amount
    
    Percent
    
    Amount
    
    PercentReal estate-mortgageOne-to-four family residential
    
    $
    132,819
    
    
    
    73.3
    %
    
    $
    133,821
    
    
    
    75.2
    %Multi-family
    
    
    14,154
    
    
    
    7.8
    
    
    
    18,410
    
    
    
    10.3Commercial
    
    
    13,390
    
    
    
    7.4
    
    
    
    5,437
    
    
    
    3.1Total real estate-mortgage
loans
    
    
    160,363
    
    
    
    88.5
    
    
    
    157,668
    
    
    
    88.6Real estate-constructionResidential
    
    
    3,206
    
    
    
    1.8
    
    
    
    5,021
    
    
    
    2.8Commercial
    
    
    
    
    
    
    

    
    
    
    1,750
    
    
    
    1.0Total real estate-construction
    
    
    3,206
    
    
    
    1.8
    
    
    
    6,771
    
    
    
    3.8ConsumerHome equity
    
    
    12,209
    
    
    
    6.7
    
    
    
    9,470
    
    
    
    5.3Loans on savings accounts
    
    
    410
    
    
    
    0.2
    
    
    
    493
    
    
    
    0.3Home improvement
    
    
    318
    
    
    
    0.2
    
    
    
    381
    
    
    
    0.2Other
    
    
    666
    
    
    
    0.4
    
    
    
    531
    
    
    
    0.3Total consumer loans
    
    
    13,603
    
    
    
    7.5
    
    
    
    10,875
    
    
    
    6.1Commercial business
    
    
    3,916
    
    
    
    2.2
    
    
    
    2,616
    
    
    
    1.5Total loans
    
    $
    181,088
    
    
    
    100.0
    %
    
    $
    177,930
    
    
    
    100.0
    %Premium on loans purchased
    
    
    377
    
    
    
    
    
    
    
    465Net deferred loan costs
    
    
    446
    
    
    
    
    
    
    
    432Discount on loans purchased
    
    
    (126
    )
    
    
    
    
    
    
    (139
    )Loans in process
    
    
    (1,384
    )
    
    
    
    
    
    
    (3,104
    )Allowance for loan losses
    
    
    (941
    )
    
    
    
    
    
    
    (866
    )Loans, net
    
    $
    179,460
    
    
    
    
    
    
    $
    174,718
 7




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##### Table of Contents



NonPerforming Assets.
 June 30,
    
    December 31,(Dollars in thousands)
    
    2007
    
    2006Nonaccrual loans:Real estate  mortgage
    
    $
    477
    
    
    $
    592Real estate  construction
    
    
    
    
    
    
    Consumer
    
    
    169
    
    
    
    175Commercial business
    
    
    
    
    
    
    Total
    
    
    646
    
    
    
    767Accruing loans past due 90 day or moreReal estate  mortgage
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Commercial business
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    Total of nonaccrual and 90 days or
more past due loans
    
    
    646
    
    
    
    767Real estate owned
    
    
    569
    
    
    
    569Total nonperforming assets
    
    $
    1,215
    
    
    $
    1,336Troubled debt restructurings
    
    
    
    
    
    
    Troubled debt restructurings and total
nonperforming assets
    
    $
    1,215
    
    
    $
    1,336Total nonperforming loans to total loans
    
    
    0.36
    %
    
    
    0.43
    %Total nonperforming loans to total assets
    
    
    0.24
    
    
    
    0.27Total nonperforming assets to total assets
    
    
    0.44
    
    
    
    0.47
 Allowance for loan losses.
 Three Months
    
    Year
    
    Three MonthsEnded
    
    Ended
    
    EndedJune 30,
    
    December 31,
    
    June 30,(Dollars in thousands)
    
    2007
    
    2006
    
    2006Allowance at beginning of period
    
    $
    911
    
    
    $
    800
    
    
    $
    820Provision for loan losses
    
    
    30
    
    
    
    84
    
    
    
    20Charge-offs
    
    
    
    
    
    
    (18
    )
    
    
    Recoveries
    
    
    
    
    
    
    
    
    
    
    Net charge-offs
    
    
    
    
    
    
    (18
    )
    
    
    Allowance at end of period
    
    $
    941
    
    
    $
    866
    
    
    $
    840
 8




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##### Table of Contents



Six Months
    
    Year
    
    Six MonthsEnded
    
    Ended
    
    EndedJune 30,
    
    December 31,
    
    June 30,(Dollars in thousands)
    
    2007
    
    2006
    
    2006Allowance at beginning of period
    
    $
    866
    
    
    $
    800
    
    
    $
    800Provision for loan losses
    
    
    75
    
    
    
    84
    
    
    
    40Charge-offs
    
    
    
    
    
    
    (18
    )
    
    
    Recoveries
    
    
    
    
    
    
    
    
    
    
    Net charge-offs
    
    
    
    
    
    
    (18
    )
    
    
    Allowance at end of period
    
    $
    941
    
    
    $
    866
    
    
    $
    840
 Note 5. Deposits
  June 30, 2007
    
    December 31, 2006
    
    June 30, 2006(Dollars in thousands)
    
    Amount
    
    Percent
    
    Amount
    
    Percent
    
    Amount
    
    PercentNoninterest-bearing demand deposits
    
    $
    8,799
    
    
    
    5.7
    %
    
    $
    5,409
    
    
    
    3.8
    %
    
    $
    4,661
    
    
    
    3.5
    %Interest-bearing demand deposits
    
    
    13,341
    
    
    
    8.7
    
    
    
    12,530
    
    
    
    8.7
    
    
    
    13,090
    
    
    
    10.0Savings accounts
    
    
    25,145
    
    
    
    16.3
    
    
    
    26,525
    
    
    
    18.5
    
    
    
    29,186
    
    
    
    22.2Money market accounts
    
    
    12,032
    
    
    
    7.8
    
    
    
    7,663
    
    
    
    5.3
    
    
    
    5,249
    
    
    
    4.0Certificates of deposit
    
    
    94,740
    
    
    
    61.5
    
    
    
    91,368
    
    
    
    63.7
    
    
    
    79,114
    
    
    
    60.3Total deposits
    
    $
    154,057
    
    
    
    100.0
    %
    
    $
    143,495
    
    
    
    100.0
    %
    
    $
    131,300
    
    
    
    100.0
    %
 Note 6. Borrowings
  Six
    
    
    
    
    
    SixMonths
    
    Year
    
    MonthsEnded
    
    Ended
    
    EndedJune 30,
    
    December 31,
    
    June 30,(Dollars in thousands)
    
    2007
    
    2006
    
    2006Maximum amount outstanding at any month end
during the period
    
    $
    89,663
    
    
    $
    98,766
    
    
    $
    98,766Average amounts outstanding during the period
    
    
    82,659
    
    
    
    90,308
    
    
    
    93,811Weighted average rate during the period
    
    
    4.27
    %
    
    
    4.04
    %
    
    
    3.92
    %Balance outstanding at end of period
    
    $
    69,930
    
    
    $
    89,323
    
    
    $
    87,648Weighted average rate at end of period
    
    
    4.10
    %
    
    
    4.22
    %
    
    
    3.94
    %
 Note 7. Earnings Per Share
  9




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##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006(Dollars in thousands, except per share amounts)Net (loss) income
    
    $
    (58
    )
    
    $
    150
    
    
    $
    (1,027
    )
    
    $
    388Weighted-average shares outstanding:Basic
    
    
    6,444,010
    
    
    
    6,377,051
    
    
    
    6,414,977
    
    
    
    6,374,891Effect of dilutive stock options and
restrictive stock awards
    
    
    4,028
    
    
    
    
    
    
    
    4,506
    
    
    
    Diluted
    
    
    6,448,038
    
    
    
    6,377,051
    
    
    
    6,419,483
    
    
    
    6,374,891Earnings per share:Basic
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.16
    )
    
    $
    0.06Diluted
    
    $
    (0.01
    )
    
    $
    0.02
    
    
    $
    (0.16
    )
    
    $
    0.06
 
 Item 2. Managements Discussion and Analysis or Plan of Operation
  Forward-Looking Statements
   General
  10




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##### Table of Contents



Balance Sheet Analysis
 Assets.
   Liabilities.
   Stockholders
Equity.
 11




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##### Table of Contents



Results of Operations for the Three Months Ended June 30, 2007 and 2006
 Overview.
 Three Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    2006Net (loss) income
    
    $
    (58
    )
    
    $
    150Return on average assets
    
    
    (0.08
    )%
    
    
    0.22
    %Return on average equity
    
    
    (0.51
    )
    
    
    1.32Average equity to average assets
    
    
    16.60

    
    16.94
 Net Interest Income.
   12




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##### Table of Contents



Three Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeInterest income:Loans
    
    $
    2,581
    
    
    $
    2,501
    
    
    
    3.2
    %Securities
    
    
    969
    
    
    
    784
    
    
    
    23.6Other interest-earning assets
    
    
    158
    
    
    
    115
    
    
    
    37.4Total interest income
    
    
    3,708
    
    
    
    3,400
    
    
    
    9.1Interest expense:Interest-bearing demand deposits
    
    
    16
    
    
    
    15
    
    
    
    6.7Savings accounts
    
    
    64
    
    
    
    74
    
    
    
    (13.5
    )Money market accounts
    
    
    112
    
    
    
    24
    
    
    
    366.7Certificates of deposit
    
    
    1,057
    
    
    
    802
    
    
    
    31.8Total interest-bearing deposits
    
    
    1,249
    
    
    
    915
    
    
    
    36.5Borrowings
    
    
    809
    
    
    
    888
    
    
    
    (8.9
    )Total interest expense
    
    
    2,058
    
    
    
    1,803
    
    
    
    14.1Net interest income
    
    $
    1,650
    
    
    $
    1,597
    
    
    
    3.3
    %
 13




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##### Table of Contents



Average Balances and Yields .
 Three Months Ended June 30,2007
    
    
    2006Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    and
    
    
    Yield/
    
    
    Average
    
    
    and
    
    
    Yield/Balance
    
    
    Dividends
    
    
    Cost
    
    
    Balance
    
    
    Dividends
    
    
    CostAssets:Interest-earning assets:Loans, net (1)(2)
    
    $
    175,986
    
    
    $
    2,581
    
    
    
    5.87
    %
    
    $
    172,362
    
    
    $
    2,501
    
    
    
    5.80
    %Securities (3)
    
    
    71,738
    
    
    
    969
    
    
    
    5.40
    
    
    
    73,512
    
    
    
    784
    
    
    
    4.27Other interest-earning assets
    
    
    10,954
    
    
    
    158
    
    
    
    5.77
    
    
    
    7,815
    
    
    
    115
    
    
    
    5.89Total interest-earning
assets
    
    
    258,678
    
    
    $
    3,708
    
    
    
    5.73
    
    
    
    253,689
    
    
    $
    3,400
    
    
    
    5.36Noninterest-earning assets
    
    
    17,670
    
    
    
    
    
    
    
    
    
    
    
    15,248Total assets
    
    $
    276,348
    
    
    
    
    
    
    
    
    
    
    $
    268,937Liabilities and
Stockholders equity:Interest-bearing liablities:Interest-bearing
demand deposits
    
    $
    13,137
    
    
    $
    16
    
    
    
    0.49
    %
    
    $
    13,295
    
    
    $
    15
    
    
    
    0.45
    %Savings accounts
    
    
    25,418
    
    
    
    64
    
    
    
    1.01
    
    
    
    29,599
    
    
    
    74
    
    
    
    1.00Money market accounts
    
    
    11,235
    
    
    
    112
    
    
    
    3.99
    
    
    
    5,075
    
    
    
    24
    
    
    
    1.89Certificates of deposit
    
    
    92,755
    
    
    
    1,057
    
    
    
    4.56
    
    
    
    77,983
    
    
    
    802
    
    
    
    4.11Total interest-bearing
deposits
    
    
    142,545
    
    
    
    1,249
    
    
    
    3.50
    
    
    
    125,952
    
    
    
    915
    
    
    
    2.91Borrowings
    
    
    76,519
    
    
    
    809
    
    
    
    4.23
    
    
    
    90,082
    
    
    
    888
    
    
    
    3.94Total interest-bearing
liabilities
    
    
    219,064
    
    
    
    2,058
    
    
    
    3.76
    
    
    
    216,034
    
    
    
    1,803
    
    
    
    3.34Noninterest-bearing liabilities
    
    
    11,424
    
    
    
    
    
    
    
    
    
    
    
    7,349Total liabilities
    
    
    230,488
    
    
    
    
    
    
    
    
    
    
    
    223,383Stockholders equity:
    
    
    45,860
    
    
    
    
    
    
    
    
    
    
    
    45,554Total liabilities and
stockholders equity
    
    $
    276,348
    
    
    
    
    
    
    
    
    
    
    $
    268,937Net interest income
    
    
    
    
    
    $
    1,650
    
    
    
    
    
    
    
    
    
    
    $
    1,597Interest rate spread (4)
    
    
    
    
    
    
    
    
    
    
    1.97
    %
    
    
    
    
    
    
    
    
    
    
    2.02
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    2.55
    
    
    
    
    
    
    
    
    
    
    
    2.52Average interest-earning
assets to average
interest-bearing liablities
    
    
    
    
    
    
    
    
    
    
    118.08
    %
    
    
    
    
    
    
    
    
    
    
    117.43
    %
 
 (1)
    
    Amount is net of deferred loan costs, loans in process and estimated allowance for loan
losses.(2)
    
    Amount includes nonaccrual loans in average balances only.(3)
    
    Amount does not include effect of unrealized gain (loss) on securities available-for-sale.(4)
    
    Interest rate spread represents the difference between the yield on interest-earning assets
and the cost of interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income divided by average interest-earning
assets. 14




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##### Table of Contents



Rate/Volume Analysis .
 Three Months Ended June 30, 2007Compared ToThree Months Ended June 30, 2006Increase (decrease) due to(Dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    TotalInterest and dividend income:Loans, net
    
    $
    50
    
    
    $
    30
    
    
    $
    80Securities
    
    
    (18
    )
    
    
    203
    
    
    
    185Other interest-earning assets
    
    
    45
    
    
    
    (2
    )
    
    
    43Total interest-earning assets
    
    
    77
    
    
    
    231
    
    
    
    308Interest expense:Deposits
    
    
    133
    
    
    
    201
    
    
    
    334Borrowings
    
    
    (141
    )
    
    
    62
    
    
    
    (79
    )Total interest-bearing liablities
    
    
    (8
    )
    
    
    263
    
    
    
    255Change in net interest income
    
    $
    85
    
    
    $
    (32
    )
    
    $
    53
 Provision for Loan Losses.
 Noninterest Income .
 Three Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeFees and service charges
    
    $
    101
    
    
    $
    95
    
    
    
    6.3
    %Insurance commissions
    
    
    340
    
    
    
    326
    
    
    
    4.3Income from bank-owned life insurance
    
    
    72
    
    
    
    71
    
    
    
    1.4Net loss on securities held for trading
    
    
    (1
    )
    
    
    
    
    
    
    N/MNet gain on sale of real estate owned
    
    
    
    
    
    
    22
    
    
    
    (100.0
    )Other
    
    
    4
    
    
    
    28
    
    
    
    (85.7
    )Total noninterest income
    
    $
    516
    
    
    $
    542
    
    
    
    (4.8
    )%
  15




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##### Table of Contents



Noninterest Expense.
 Three Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeCompensation and employee benefits
    
    $
    1,366
    
    
    $
    1,178
    
    
    
    16.0
    %Occupancy
    
    
    278
    
    
    
    208
    
    
    
    33.7FDIC insurance premiums
    
    
    5
    
    
    
    16
    
    
    
    (68.8
    )Data processing
    
    
    95
    
    
    
    77
    
    
    
    23.4Advertising
    
    
    44
    
    
    
    50
    
    
    
    (12.0
    )Professional services
    
    
    146
    
    
    
    130
    
    
    
    12.3Stationary, printing and supplies
    
    
    34
    
    
    
    34
    
    
    
    Telephone
    
    
    14
    
    
    
    13
    
    
    
    7.7Postage
    
    
    33
    
    
    
    29
    
    
    
    13.8Correspondent bank fees
    
    
    30
    
    
    
    23
    
    
    
    30.4All other
    
    
    160
    
    
    
    150
    
    
    
    6.7Total noninterest expense
    
    $
    2,205
    
    
    $
    1,908
    
    
    
    15.6
    %
  Income Tax (Benefit) Expense.
 Results of Operations for the Six Months Ended June 30, 2007 and 2006
 Overview.
 Six Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    2006Net (loss) income
    
    $
    (1,027
    )
    
    $
    388Return on average assets
    
    
    (0.73
    )%
    
    
    0.29
    %Return on average equity
    
    
    (4.45
    )
    
    
    1.71Average equity to average assets
    
    
    16.44
    
    
    
    16.77
 Net Interest Income.
  16




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##### Table of Contents



Six Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeInterest income:Loans
    
    $
    5,075
    
    
    $
    4,939
    
    
    
    2.8
    %Securities
    
    
    1,994
    
    
    
    1,594
    
    
    
    25.1Other interest-earning assets
    
    
    277
    
    
    
    189
    
    
    
    46.6Total interest income
    
    
    7,346
    
    
    
    6,722
    
    
    
    9.3Interest expense:Interest-bearing demand deposits
    
    
    31
    
    
    
    31
    
    
    
    Savings accounts
    
    
    128
    
    
    
    148
    
    
    
    (13.5
    )Money market accounts
    
    
    187
    
    
    
    40
    
    
    
    367.5Certificates of deposit
    
    
    2,071
    
    
    
    1,530
    
    
    
    35.4Total interest-bearing deposits
    
    
    2,417
    
    
    
    1,749
    
    
    
    38.2Borrowings
    
    
    1,765
    
    
    
    1,837
    
    
    
    (3.9
    )Total interest expense
    
    
    4,182
    
    
    
    3,586
    
    
    
    16.6Net interest income
    
    $
    3,164
    
    
    $
    3,136
    
    
    
    0.9
    %
 17




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##### Table of Contents



Average Balances and Yields .
 Six Months Ended June 30,2007
    
    
    2006Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    and
    
    
    Yield/
    
    
    Average
    
    
    and
    
    
    Yield/Balance
    
    
    Dividends
    
    
    Cost
    
    
    Balance
    
    
    Dividends
    
    
    CostAssets:Interest-earning assets:Loans, net (1)(2)
    
    $
    175,760
    
    
    $
    5,075
    
    
    
    5.77
    %
    
    $
    171,844
    
    
    $
    4,939
    
    
    
    5.75
    %Securities (3)
    
    
    77,948
    
    
    
    1,994
    
    
    
    5.12
    
    
    
    75,596
    
    
    
    1,594
    
    
    
    4.22Other interest-earning assets
    
    
    9,660
    
    
    
    277
    
    
    
    5.73
    
    
    
    8,252
    
    
    
    189
    
    
    
    4.58Total interest-earning
assets
    
    
    263,368
    
    
    $
    7,346
    
    
    
    5.58
    
    
    
    255,692
    
    
    $
    6,722
    
    
    
    5.26Noninterest-earning assets
    
    
    17,181
    
    
    
    
    
    
    
    
    
    
    
    15,393Total assets
    
    $
    280,549
    
    
    
    
    
    
    
    
    
    
    $
    271,085Liabilities and
Stockholders equity:Interest-bearing liablities:Interest-bearing
demand deposits
    
    $
    13,067
    
    
    $
    31
    
    
    
    0.47
    %
    
    $
    13,331
    
    
    $
    31
    
    
    
    0.47
    %Savings accounts
    
    
    25,829
    
    
    
    128
    
    
    
    0.99
    
    
    
    29,918
    
    
    
    148
    
    
    
    0.99Money market accounts
    
    
    9,890
    
    
    
    187
    
    
    
    3.78
    
    
    
    5,069
    
    
    
    40
    
    
    
    1.58Certificates of deposit
    
    
    92,136
    
    
    
    2,071
    
    
    
    4.50
    
    
    
    76,425
    
    
    
    1,530
    
    
    
    4.00Total interest-bearing
deposits
    
    
    140,922
    
    
    
    2,417
    
    
    
    3.43
    
    
    
    124,743
    
    
    
    1,749
    
    
    
    2.80Borrowings
    
    
    82,659
    
    
    
    1,765
    
    
    
    4.27
    
    
    
    93,811
    
    
    
    1,837
    
    
    
    3.92Total interest-bearing
liabilities
    
    
    223,581
    
    
    
    4,182
    
    
    
    3.74
    
    
    
    218,554
    
    
    
    3,586
    
    
    
    3.28Noninterest-bearing liabilities
    
    
    10,837
    
    
    
    
    
    
    
    
    
    
    
    7,058Total liabilities
    
    
    234,418
    
    
    
    
    
    
    
    
    
    
    
    225,612Stockholders equity:
    
    
    46,131
    
    
    
    
    
    
    
    
    
    
    
    45,473Total liabilities and
stockholders equity
    
    $
    280,549
    
    
    
    
    
    
    
    
    
    
    $
    271,085Net interest income
    
    
    
    
    
    $
    3,164
    
    
    
    
    
    
    
    
    
    
    $
    3,136Interest rate spread (4)
    
    
    
    
    
    
    
    
    
    
    1.84
    %
    
    
    
    
    
    
    
    
    
    
    1.98
    %Net interest margin (5)
    
    
    
    
    
    
    
    
    
    
    2.40
    
    
    
    
    
    
    
    
    
    
    
    2.45Average interest-earning
assets to average
interest-bearing liablities
    
    
    
    
    
    
    
    
    
    
    117.80
    %
    
    
    
    
    
    
    
    
    
    
    116.99
    %
 (1)
    
    Amount is net of deferred loan costs, loans in process and estimated allowance for loan
losses.(2)
    
    Amount includes nonaccrual loans in average balances only.(3)
    
    Amount does not include effect of unrealized gain (loss) on securities available-for-sale.(4)
    
    Interest rate spread represents the difference between the yield on interest-earning assets
and the cost of interest-bearing liabilities.(5)
    
    Net interest margin represents net interest income divided by average interest-earning
assets. 
 18




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##### Table of Contents



Rate/Volume Analysis .
 Six Months Ended June 30, 2007Compared ToSix Months Ended June 30, 2006Increase (decrease) due to(Dollars in thousands)
    
    Volume
    
    Rate
    
    TotalInterest and dividend income:Loans, net
    
    $
    102
    
    
    $
    34
    
    
    $
    136Securities
    
    
    (298
    )
    
    
    698
    
    
    
    400Other interest-earning assets
    
    
    (17
    )
    
    
    105
    
    
    
    88Total interest-earning assets
    
    
    (213
    )
    
    
    837
    
    
    
    624Interest expense:Deposits
    
    
    490
    
    
    
    178
    
    
    
    668Borrowings
    
    
    (383
    )
    
    
    311
    
    
    
    (72
    )Total interest-bearing liablities
    
    
    107
    
    
    
    489
    
    
    
    596Change in net interest income
    
    $
    (320
    )
    
    $
    348
    
    
    $
    28
 Provision for Loan Losses.
 Noninterest Income .
 Six Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeFees and service charges
    
    $
    196
    
    
    $
    183
    
    
    
    7.1
    %Insurance commissions
    
    
    931
    
    
    
    880
    
    
    
    5.8Income from bank-owned life insurance
    
    
    142
    
    
    
    138
    
    
    
    2.9Net loss on securities held for trading
    
    
    (1,410
    )
    
    
    
    
    
    
    N/MNet gain on sale of real estate owned
    
    
    
    
    
    
    33
    
    
    
    (100.0
    )Other
    
    
    7
    
    
    
    33
    
    
    
    (78.8
    )Total noninterest income
    
    $
    (134
    )
    
    $
    1,267
    
    
    
    (110.6)
    %
  19




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##### Table of Contents



Noninterest Expense.
 Six Months EndedJune 30,(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    % ChangeCompensation and employee benefits
    
    $
    2,793
    
    
    $
    2,327
    
    
    
    20.0
    %Occupancy
    
    
    531
    
    
    
    405
    
    
    
    31.1FDIC insurance premiums
    
    
    11
    
    
    
    32
    
    
    
    (65.6
    )Data processing
    
    
    185
    
    
    
    152
    
    
    
    21.7Advertising
    
    
    73
    
    
    
    89
    
    
    
    (18.0
    )Professional services
    
    
    284
    
    
    
    249
    
    
    
    14.1Stationary, printing and supplies
    
    
    65
    
    
    
    68
    
    
    
    (4.4
    )Telephone
    
    
    26
    
    
    
    27
    
    
    
    (3.7
    )Postage
    
    
    64
    
    
    
    53
    
    
    
    20.8Correspondent bank fees
    
    
    61
    
    
    
    44
    
    
    
    38.6All other
    
    
    326
    
    
    
    294
    
    
    
    10.9Total noninterest expense
    
    $
    4,419
    
    
    $
    3,740
    
    
    
    18.2
    %
  Income Tax (Benefit) Expense.
 Liquidity and Capital Management
 Liquidity Management .
    20




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##### Table of Contents



Capital Management.
 Off-Balance Sheet Arrangements.
  
 Item 3. Controls and Procedures
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  21




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  Total Number ofShares
    
    
    MaximumPurchased as
    
    
    Number ofTotal
    
    
    
    
    
    
    Part of the
    
    
    Shares that MayNumber of
    
    
    Average
    
    
    Publicly
    
    
    Yet BeShares
    
    
    Price Paid
    
    
    Announced
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    per Share
    
    
    Program(1)
    
    
    the Program(1)April 1-30, 2007
    
    
    41,500
    
    
    $
    9.34
    
    
    
    41,500
    
    
    
    112,000May 1-31, 2007
    
    
    15,000
    
    
    
    9.52
    
    
    
    15,000
    
    
    
    97,000June 1-30, 2007
    
    
    8,800
    
    
    
    9.20
    
    
    
    8,800
    
    
    
    88,200Total
    
    
    65,300
    
    
    $
    9.36
    
    
    
    65,300
 
 (1)
    
    On March 28, 2007, the Company announced that the board of directors had approved the
repurchase of up to 153,500 shares of the Companys outstanding common stock, which is
approximately 5% of outstanding shares held by persons other than FFMHC. This repurchase
program is scheduled to expire on September 30, 2007. 
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
   Nominees
    
    Votes For
    
    Votes WithheldRichard B. Boyer
    
    
    5,969,204
    
    
    
    372,600John M. Kish
    
    
    6,162,404
    
    
    
    179,400David L. Wohleber
    
    
    6,154,383
    
    
    
    187,421
  Percent of SharesSummary
    
    Number
    
    Represented at the Meetingof Votes
    
    of Shares
    
    and Entitled to VoteFor
    
    
    6,289,238
    
    
    
    99.2
    %Against
    
    
    47,083
    
    
    
    0.7
    %Abstain
    
    
    5,483
    
    
    
    0.1
    %
 
 Item 5. Other Information.
  22




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    Amended and Restated Charter of FedFirst Financial Corporation (1)3.2
    
    Amended and Restated Bylaws of FedFirst Financial Corporation (2)4.0
    
    Specimen Stock Certificate of FedFirst Financial Corporation (1)31.1
    
    Rule 13a-14 (a) / 15d-14 (a) Certification (President and Chief Executive Officer)31.2
    
    Rule 13a-14 (a) / 15d-14 (a) Certification (Chief Financial Officer)32.1
    
    Certification of John G. Robinson pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Robert C. Barry Jr. pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
    Incorporated herein by reference to the Exhibits to the Registration Statement on Form
SB-2, and amendments thereto, initially filed on December 17, 2004, Registration No. 333-121405.(2)
    
    Incorporated herein by reference to the Exhibits to FedFirst Financial Corporations Form
10-QSB filed on November 9, 2006. 23




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##### Table of Contents



SIGNATURES
  FEDFIRST FINANCIAL CORPORATION
(Registrant)Date:  August 10, 2007
    /s/ John G. RobinsonJohn G. RobinsonPresident and Chief Executive OfficerDate: August 10, 2007
    /s/ Robert C. Barry Jr.Robert C. Barry Jr.Chief Financial Officer and Senior Vice President
(Principal Financial Officer and Chief Accounting Officer) 24