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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED) for the transition period from
____________ to ____________
COMMISSION FILE NUMBER: 000-22608
A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM
THAT OF THE ISSUER NAMED BELOW:
First Federal Savings Bank of Lake County Employee Stock Ownership and
401(k) Plan
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
FFLC Bancorp, Inc.
800 North Boulevard West
Leesburg, Florida 34749-0420
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REQUIRED INFORMATION
ITEMS 1-3. The First Federal Savings Bank of Lake County Employee Stock
Ownership and 401(k) Plan (the "Plan") is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and files plan financial
statements and schedules prepared in accordance with the financial reporting
requirements of ERISA. As permitted by Item 4, the Plan is filing financial
statements and schedules in accordance with the financial reporting requirements
of ERISA in lieu of the financial statements required by Items 1-3.
ITEM 4. The Plan, which is subject to ERISA, files plan financial
statements and schedules prepared in accordance with the financial reporting
requirements of ERISA.
EXHIBIT 23.1 CONSENT OF HACKER, JOHNSON & SMITH PA
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PLAN FINANCIALS
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY
EMPLOYEE STOCK OWNERSHIP AND 401(K) PLAN
(EIN 59-0323823)
Leesburg, Florida
Audited Financial Statements
At December 31, 2003 and 2002 and for the Year
Ended December 31, 2003 and Supplemental
Schedule at December 31, 2003
(Together with Independent Auditors' Report)
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INDEPENDENT AUDITORS' REPORT
First Federal Savings Bank of Lake County
Employee Stock Ownership and 401(k) Plan
Leesburg, Florida:
We have audited the accompanying statements of net assets available for
benefits of the First Federal Savings Bank of Lake County Employee Stock
Ownership and 401(k) Plan (the "Plan") as of December 31, 2003 and 2002, and the
related statement of changes in net assets available for benefits for the year
ended December 31, 2003. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Plan as of December 31, 2003 and 2002, and the changes in net assets available
for benefits for the year ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of assets
held for investment purposes at December 31, 2003 is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respect in
relation to the basic financial statements taken as a whole.
/s/ Hacker, Johnson & Smith PA
HACKER, JOHNSON & SMITH PA
Orlando, Florida
March 31, 2004
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31,
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2003 2002
---- ----
ASSETS
Investments, at fair value:
Shares of FFLC Bancorp, Inc. common stock:
ESOP Fund (521,883 shares in 2003 and 356,161
shares in 2002) $ 15,004,136 10,531,681
Employer Stock Fund (8,004 shares in 2003
and 3,288 shares in 2002) 230,115 97,226
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Total common stock 15,234,251 10,628,907
Mutual funds 2,869,003 1,934,481
Money-market funds 227,063 160,768
Participant loans 120,695 47,587
----------- ------------
Total investments 18,451,012 12,771,743
Employer contributions receivable 91,760 87,090
Other receivables 8,616 7,858
----------- ------------
Total assets 18,551,388 12,866,691
Liabilities 7,514 10,442
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Net assets available for benefits $ 18,543,874 12,856,249
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The accompanying notes are an integral part of these financial statements.
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 5,228,436
Interest and dividends 256,286
------------
Total investment income 5,484,722
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Contributions:
Participant deferrals 379,092
Employer contributions 759,938
Participant rollovers 6,272
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Total contributions 1,145,302
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Total additions 6,630,024
Deductions from net assets attributed to:
Benefits paid to participants 859,972
Administrative fees 82,427
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Total deductions 942,399
Net increase 5,687,625
Net assets available for benefits:
Beginning of year 12,856,249
End of year $ 18,543,874
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The accompanying notes are an integral part of these financial statements.
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002 AND THE YEAR ENDED DECEMBER 31, 2003
(1) DESCRIPTION OF THE PLAN
The following description of the First Federal Savings Bank of Lake County
Employee Stock Ownership and 401(k) Plan (the "Plan") provides only
general information. Participants should refer to the Plan agreement for
a more complete description of the Plan's provisions.
The Plan is a defined contribution plan covering all full-time employees
of First Federal Savings Bank of Lake County (the "Bank"), a
wholly-owned subsidiary of FFLC Bancorp, Inc. (the "Company"), who are
age eighteen or older. Employees may begin participating in the Plan the
first month after their hire date, however they do not become eligible
for Bank Matching, Safe Harbor or ESOP contributions discussed below
until they complete one year of service. The Plan is designed to comply
with the regulations of the Internal Revenue Code of 1986, as amended
(the "IRC") and is subject to the applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan
is sponsored and administered by the Bank. The Bank has engaged The
Pentegra Group ("Pentegra") to be the Plan's third-party administrator.
The Bank of New York is the Plan's trustee.
CONTRIBUTIONS. Each year, participants may contribute pretax compensation,
as defined in the Plan. Participants may also contribute amounts
representing distributions from other qualified defined benefit or
contribution plans. The Bank provides three separate contributions to
the Plan: (i) a contribution to all eligible employees of the Bank
calculated as a percentage of salaries ("Safe Harbor" contribution) (ii)
a 401(k) matching contribution to participants who contribute
compensation to the Plan ("Matching" contribution) and (iii) a profit
sharing contribution based on a percentage of the Company's estimated
net income ("ESOP" contribution).
All of the contributions are determined and approved annually by the
Bank. The Bank's current Safe Harbor contribution is 3% of pretax
compensation. The Bank's current Matching contribution is 100% of the
first 3% of compensation that a participant contributes to the Plan. In
addition, the Bank made quarterly ESOP contributions which currently
approximates 4% of the Company's estimated annual net income. Employee
deferrals and the Bank's Safe Harbor and Matching contributions are
invested in the investment options (twelve mutual funds managed by
Barclays Global Investors or the Employer Stock Fund) selected by the
participants and the Bank's ESOP contribution is invested in the ESOP
Fund. The Employer Stock Fund and the ESOP Fund are managed by the
Bank's Retirement Committee and invest in the Company's common stock
through open-market transactions and also maintain funds in a
money-market account to provide liquidity. All contributions are subject
to the vesting guidelines discussed below. The participant and employer
contributions are also subject to certain Internal Revenue Service
("IRS") limitations. Employees may change their investment options at
any time.
(continued)
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(1) DESCRIPTION OF THE PLAN, CONTINUED
PARTICIPANT ACCOUNTS. Each participant's account is credited with the
participant's contributions and allocations of (a) the Bank's
contributions and (b) Plan earnings. Allocations are based on
participant earnings or account balances, as defined. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's vested account.
VESTING. Participants are immediately vested in their voluntary
contributions, including amounts transferred into the Plan from other
qualified employee benefit plans, plus actual earnings thereon.
Participants are also immediately vested in the Bank's Safe Harbor
contributions and earnings thereon. Vesting in the Bank's Matching and
ESOP contributions and earnings thereon is based on the following
vesting schedule:
YEARS OF SERVICE VESTING %
---------------- ---------
Less than two years 0%
Two years 25%
Three years 50%
Four years 75%
Five or more years 100%
PARTICIPANT LOANS. Participants may borrow from their vested fund accounts
subject to certain limitations.
PAYMENT OF BENEFITS. On termination of service due to death, disability or
retirement, a participant may elect to receive either a lump sum amount
equal to the value of the participant's vested interest in his or her
account, or installment payments over a specified period of time, not
exceeding the participant's life expectancy or the joint life expectancy
of the participant and the designated beneficiary. For termination of
service for other reasons, a participant may receive the vested interest
in his or her account as a lump-sum distribution.
VOTING RIGHTS. Each participant is entitled to exercise voting rights
attributable to the Company's shares allocated to his or her account and
is notified by the trustee prior to the time that such rights are to be
exercised. The trustee will vote any allocated share for which
instructions have not been given by a participant in the same proportion
as shares for which the trustee has received voting instructions for.
FORFEITED ACCOUNTS. Forfeited accounts are periodically reallocated to the
remaining participants based on a percentage of a participant's annual
salary to total participants' annual salaries. During 2003, there were
$110,968 in forfeitures. At December 31, 2003 and 2002, unallocated
forfeited accounts included in Plan assets totaled $29,482 and $104,145,
respectively.
(continued)
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(2) SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING. The financial statements of the Plan are prepared under
the accrual method of accounting.
USE OF ESTIMATES. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and changes therein, and
disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION. The Plan's investments are
stated at fair value. Common stock is valued at quoted market prices.
Mutual funds are valued at quoted unit values determined by the mutual
fund manager which represent the net asset value of shares held by the
Plan at year end. Participant loans are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
PAYMENT OF BENEFITS. Benefits are recorded when paid.
EMPLOYER CONTRIBUTIONS RECEIVABLE. Employer contributions receivable
consists of fourth-quarter Bank ESOP contributions not made until the
following Plan year.
(continued)
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(3) INVESTMENTS
Investments that represent 5% or more of Plan's net assets are separately
identified in the following table:
FAIR VALUE
AT DECEMBER 31,
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2003 2002
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Shares of FFLC Bancorp, Inc. common stock:
ESOP Fund $ 15,004,136 10,531,681
Employer Stock Fund 230,115 97,226
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Total FFLC Bancorp, Inc. common stock $ 15,234,251 10,628,907
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During the year ended December 31, 2003, the Plan's investments (including
investments bought, sold, matured and held during the year) appreciated
in value by $5,228,436 as follows:
AMOUNT
------
Investments:
Common stock $ 4,708,624
Mutual funds 519,812
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$ 5,228,436
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(4) PLAN FEES
Fees charged by the Bank of New York and Pentegra for managing and investing
the Plan's assets are paid by the Plan. These administrative fees
totaled $82,427 for the year ended December 31, 2003.
(continued)
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FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(5) PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100% vested in their
accounts.
(6) TAX STATUS
The IRS has determined and informed the Bank by a letter dated September 13,
2002, that the Plan and related trust are designed in accordance with
applicable sections of the IRC. The plan administrator believes the Plan
is designed and is currently operating in compliance with the applicable
requirements of the IRC. Accordingly, no provision for income taxes has
been recorded in the accompanying financial statements.
(7) SUMMARY OF CHANGES IN ESOP FUND
As provided in the Plan, participants may direct the investment of employee
contributions, Bank Matching contributions and Bank Safe Harbor
contributions among various investment choices in the Plan. Only Bank
ESOP contributions would be considered "nonparticipant-directed"
investments as these funds are invested in the ESOP Fund, which
primarily invests in the common stock of the Company. The significant
changes in the ESOP Fund during the year ended December 31, 2003 were as
follows:
Balance at January 1, 2003 (1) $ 10,774,986
Employer contributions (3) 370,040
Net appreciation in fair value 4,770,174
Dividends 245,616
InterPlan transfer (18,957)
Benefits paid to participants (829,099)
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Balance at December 31, 2003 (2)(3) $ 15,312,760
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(1) Includes $10,531,681 in common stock, $156,215 in money-market
funds and $87,090 in accrued employer contributions.
(2) Includes $15,004,136 in common stock, $216,864 in money-market
funds and $91,760 in accrued employer contributions.
(3) Includes fourth quarter 2003 accrued contribution.
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Supplemental Schedule I
FIRST FEDERAL SAVINGS BANK OF LAKE COUNTY EMPLOYEE STOCK
OWNERSHIP AND 401(K) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 2003
INFORMATION FURNISHED PURSUANT TO ITEM 4i OF SCHEDULE H, FORM 5500
IDENTITY OF
ISSUE, BORROWER
LESSOR OR CURRENT
OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
---------------------- ------------------------- --------
FFLC Bancorp, Inc.:
ESOP Fund Common stock $ 15,004,136
Employer Stock Fund Common stock 230,115
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15,234,251
----------
Mutual funds, managed by Barclays
Global Investors:
Money Market Fund Mutual funds 313,589
Stable Value Fund Mutual funds 661,238
Government Bond Fund Mutual funds 152,561
S&P 500 Stock Fund Mutual funds 460,647
S&P 500 Value Stock Fund Mutual funds 169,389
S&P 500 Growth Stock Fund Mutual funds 177,058
S&P 500 Midcap Stock Fund Mutual funds 519,365
Russell 2000 Stock Fund Mutual funds 130,610
International Stock Fund Mutual funds 61,166
Income Plus Fund Mutual funds 102,800
Growth and Income Fund Mutual funds 64,547
Growth Fund Mutual funds 56,033
----------
2,869,003
----------
Money-market funds Money-market funds 227,063
Participant loans Rates ranging from 120,695
5.00% to 9.50% ----------
Total investments per the Form 5500 $18,451,012
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this Annual Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: June 14, 2004 FIRST FEDERAL SAVINGS BANK OF LAKE
COUNTY EMPLOYEE STOCK OWNERSHIP
AND 401(K) PLAN
/s/ Stephen T. Kurtz
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Stephen T. Kurtz
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OF FIRST FEDERAL SAVINGS BANK