Participants in Wednesday's annual meeting of First Federal Savings Bank could be forgiven if they sounded a little self-satisfied. After all, a year ago there were 14 savings and loans in Utah. Today there are only seven as fully half of the state's S&Ls were closed, merged or sold.

Not only is First Federal a survivor of what may be the most difficult year in the history of S&Ls, but business - and profits - have never been better."How did you do it?" is a question Chairman and President Gerald R. Christensen gets asked a lot lately. On Wednesday, he shared the secret with the company's shareholders at the Doubletree Hotel.

"It isn't what we did, it's what we didn't do," said Christensen. "We stuck to the basics - local mortgage lending and retail deposits." Another reason, he said, was "our commitment to the planning process. Each year our planning committee sets goals and (the action needed) to achieve them. This year has been no exception."

No one disagreed. First Federal's goal of 60 cents per share for the fiscal year ended last June came in at 77 cents on net profit of $841,000, the company's best earnings in a decade. And in the first fiscal quarter of 1991, ended Sept. 30, the savings bank posted net income of $503,754 or 44

cents per share, up from $108,182 or 9 cents per share for the same period last year.

But the key to success in the volatile savings and loan business in the '90s, Christensen indicated, is maintenance of adequate capital in the face of more stringent federal requirements.

Many institutions have had to shrink to meet FIRREA requirements instituted in the wake of the mammoth savings and loan bailout, but Christensen assured shareholders that First Federal meets and surpasses them.

Christensen said the 638 mortgages totaling $65 million the bank wrote last year fulfilled all goals and have kept First Federal among the top five mortgage lenders in Salt Lake County, its primary lending area. Real estate owned (foreclosed) peaked at $3.7 million on April 30, 1988, when Utah was experiencing difficult economic conditions, and that has been cut to $348,999, 0.10 of assets.

Despite the faltering of the national economy in recent months - some say the country is already in a recession - Christensen sees no faltering in the local outlook and First Federal's first fiscal quarter has set an upbeat pace for the new year.

"For 1991, we plan to continue looking for opportunities to grow through acquisition," he said. "We plan to increase our earnings per share over this year's earnings. We plan to continue monitoring our operating expenses, continue to increase our mortgage market share and increase deposit acquisitions."

During the question and answer period, one shareholder noted that, historically, First Federal's returns to shareholders have been low and that the stock has not been trading at its true value. The shareholder also asked that a provision in the bylaws that prevents any single shareholder from owning more than 10 percent of the shares be removed so that the bank might become a viable acquisition prospect, with significant potential profit to shareholders.

Christensen noted that the first fiscal quarter's annualized return was 14.6 percent, and while he can't legally make predictions of future earnings, the goal is to remain as profitable as possible. Commenting on the 10 percent rule, he said it was instituted to prevent any single entity from acquiring control of the bank without paying a premium.

He said the rule will expire in 1992 and the board will then reassess it and make recommendations to shareholders as to whether it should be reinstated. In any case, he said, the rule does not prevent board members - who are elected by shareholders - from considering takeover offers, whether they are friendly or unfriendly.

As for the value of the shares, Christensen noted that most financial stocks have been depressed this year.