U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO
_________
Commission file number 0-27984
Ridgestone Financial Services, Inc.
(Exact name of small business issuer as specified in its charter)
Wisconsin 39-179151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Indentification
Number)
13925 West North Avenue
Brookfield, Wisconsin 53005
(Address of principal executive offices)
414-789-1011
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No______
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding as of June 30, 1998
Common Stock, no par value 876,055
Transitional Small Business Disclosure Format: Yes______ No X
<PAGE>
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
INDEX
Page
Number
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . 1
Consolidated Statements of Financial Condition
at June 30, 1998 and December 31, 1997 . . . 1
Consolidated Statements of Income For the
Three and Six Months Ended June 30, 1998 and
1997. . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Cash Flows For the
Six Months Ended June 30, 1998 and 1997. . . 3
Consolidated Statements of Changes In
Stockholders' Equity For the Six Months Ended
June 30, 1998 and 1997. . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . 6
Item 2. Management's Discussion and Analysis. . . . . 7
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . 10
Item 5. Other Information . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, 1998 and December 31, 1997
June 30, 1998 December 31,
(Unaudited) 1997
ASSETS
Cash and due from banks $ 2,201,173 $ 2,671,051
Federal funds sold 10,711,000 7,994,000
Interest-bearing deposits 9,196 4,185
---------- ----------
Total cash and cash equivalents 12,921,369 10,669,236
---------- ----------
Investments-Held to Maturity
(fair value Jun 1998, $2,531,256
and Dec 1997, $4,298,356) 2,501,616 4,253,095
Investments-Available for Sale 894,056 874,406
Loans receivable 48,190,081 46,259,021
Less: Allowance for estimated loan
losses (513,367) (624,740)
---------- ----------
Net loans receivable 47,676,714 45,634,281
---------- ----------
Office building and equipment, net 1,342,374 1,403,082
Other real estate owned 1,609,000 1,774,489
Accrued interest & other assets 244,976 495,108
Total assets $67,190,105 $65,103,697
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand $ 6,689,753 $ 7,296,264
Savings, NOW and other time
deposits 53,687,376 51,191,361
---------- ----------
Total deposits 60,377,129 58,487,625
---------- ----------
Accrued interest & other liabilities 766,632 752,772
---------- ----------
Total liabilities 61,143,761 59,240,397
---------- ----------
STOCKHOLDERS' EQUITY
Common stock, no par value: shares
authorized 10,000,000 at June 30, 1988,
1,000,000 at June 30, 1997; 876,055
issued and outstanding at June 30,
1998; 834,340 issued and outstanding
at June 30, 1997; 7,721,399 7,721,399
Retained earnings (deficit) (1,682,983) (1,837,493)
Accumulated other comprehensive income
(loss) 7,928 (20,606)
--------- ---------
Total stockholders' equity 6,046,344 5,863,300
---------- ----------
Total liabilities and stockholders'
equity $ 67,190,105 $ 65,103,697
========== ==========
<PAGE>
<TABLE>
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 1,016,667 $ 610,486 $ 2,008,681 $ 1,103,638
Interest on securities 70,282 173,985 152,195 363,881
Interest on federal funds
sold 102,793 24,925 153,806 88,316
Interest on deposits in
banks 2,910 3,045 4,360 7,137
--------- -------- --------- ---------
Total interest
income 1,192,652 812,441 2,319,042 1,562,972
--------- -------- --------- ---------
Interest expense:
Interest on deposits 718,622 492,876 1,390,367 952,451
--------- --------- --------- ---------
Total interest
expense 718,622 492,876 1,390,367 952,451
--------- --------- --------- ---------
Net interest
income 474,030 319,565 928,675 610,521
Provision for loan
losses 10,000 0 15,000 0
-------- --------- --------- ---------
Net interest income
after provision for
loan losses 464,030 319,565 913,675 610,521
--------- -------- --------- ---------
Non-interest income:
Loan fees 34,008 2,653 55,181 8,471
Gain on sale AFS
securities 23,747 83,718 0 160,072
Service charges on
deposit
accounts 8,951 5,793 17,640 11,155
Miscellaneous 22,804 20,502 34,879 35,251
--------- --------- ---------- ----------
Total other operating
income 89,510 112,666 107,700 214,949
--------- --------- ---------- ----------
Non-interest expense:
Salaries and employee
benefits 266,018 233,440 525,210 463,884
Occupancy and equipment
expense 93,669 78,735 175,407 160,399
Loss on sale AFS
securities 0 0 7,687 0
Other expense 147,661 89,370 251,261 167,093
--------- -------- ---------- ----------
Total other operating
expense 507,348 401,545 959,565 791,376
---------- -------- ---------- ----------
Income before income taxes 46,192 30,686 61,810 34,094
Income taxes (102,500) 0 (92,700) 1,251
Net income $ 148,692 $ 30,686 $ 154,510 $ 32,843
=========== ========== =========== ===========
Earnings per share
Basic $ 0.17 $ 0.04 $ 0.18 $ 0.04
Diluted $ 0.17 $ 0.04 $ 0.18 $ 0.04
Average shares outstanding 876,055 834,340 855,199 834,340
</TABLE>
<PAGE>
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 1998 and 1997
(Unaudited)
Six Months Ended
June 30, June 30,
1998 1997
Cash Flows From Operating Activities:
Net income $154,510 $32,843
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation 78,499 88,492
Gain (loss) on sale of investment
securities 7,687 (160,073)
Provision for loan losses 15,000 0
Charges to loan losses (126,373) 0
Accretion/Amortization of
securities-net (441) 0
(Increase)decrease in assets
Interest receivable 16,676 (152,136)
Other real estate owned 165,489 0
Other assets 233,456 0
Increase(decrease) in liabilities
Accrued interest 192,379 35,885
Other liabilities (178,519) 0
-------- --------
Total adjustments 403,853 (187,832)
-------- --------
Net cash provided by (used in)
operating activities 558,363 (154,989)
-------- --------
Cash Flows From Investing Activities
Proceeds from sales of available for
sale securities 141,316 1,317,651
Purchase of available for sale
securities (138,200) (1,439,221)
Proceeds from maturities of held to
maturity securities 1,750,000 4,702
Purchase of held to maturity
securities 0 (250,000)
Purchases of premises and equipment (17,790) (43,658)
Net increase in loans (1,931,060) (12,490,954)
---------- -----------
Net cash used in investing activities (195,734) (12,901,480)
---------- -----------
Cash Flows From Financing Activities:
Net increase in deposits 1,889,504 5,878,422
---------- ----------
Net cash provided by financing
activities 1,889,504 5,878,422
---------- ----------
Net increase(decrease) in cash and
cash equivalents 2,252,133 (7,178,047)
Cash and cash equivalents, beginning 10,669,236 14,937,881
---------- ----------
Cash and cash equivalents, ending $12,921,369 $7,759,834
========== =========
Supplemental disclosure of cash flow
information
Cash paid during the period for:
Interest $1,407,043 $953,997
========= =======
Income taxes $9,800 $1,276
===== =====
Supplemental schedule of noncash
investing activities:
Net changes in unrealized gain on
securities
available for sale $28,534 $12,393
====== ======
<PAGE>
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Six Months Ended June 30, 1998 and 1997
Unrealized
Gain on
Available
Common Retained For Sale
Stock Earnings Securities
Balances
December 31,1996 7,721,399 (1,879,126) 25,732
Net gain-YTD 1997 $ $32,843 $
Changes in unrealized gain
on available for sale
securities 12,393
--------- ---------- --------
Balances
June 30,1997 $7,721,399 $(1,846,283) $38,125
--------- ---------- --------
Balances
December 31,1997 $7,721,399 $(1,837,493) $(20,606)
Net gain-YTD 1998 154,510
Changes in unrealized gain
on available for sale
securities 28,534
--------- --------- -------
Balances
June 30,1998 $7,721,399 $(1,682,983) $7,928
--------- ---------- ------
<PAGE>
RIDGESTONE FINANCIAL SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998 and 1997
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form
10-QSB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
six-months ended June 30, 1998 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1998. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Ridgestone Financial Services, Inc., (the "Company") and its wholly owned
subsidiary, Ridgestone Bank (the "Bank"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
NOTE 3 - COMPARATIVE DATA
The Company was incorporated in May of 1994, but its primary operating
subsidiary, the Bank, did not commence operations until December 7, 1995.
Comparative statements of income for the three and six months and cash
flows for the six months ended June 30, 1998 and June 30, 1997 have been
presented.
NOTE 4 COMPREHENSIVE INCOME
The Financial Accounting Standards Board (FASB) has issued SFAS No. 130,
"Reporting Comprehensive Income," which is effective for fiscal years
beginning after December 15, 1997. This statement establishes standards
for reporting and display of comprehensive income and its components
(revenues, expenses, gains and losses) in a full set of general purpose
financial statements. This statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The
Company adopted SFAS No. 130 on December 31, 1997 and all required
disclosures will be included in the Company's 1998 Annual Report on Form
10-KSB.
The Company's comprehensive income for the three and six months ended June
30, 1998 and June 30, 1997 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net income $148,692 $30,686 $154,510 $32,843
Other comprehensive income, net
of taxes:
Unrealized gains(losses)
arising during period (5,211) 92,542 23,537 116,440
Less reclassified adjustment
for gains included in net
income (15,436) (54,417) 4,997 (104,047)
-------- -------- ------- --------
Total other comprehensive
income (20,647) 38,125 28,534 12,393
-------- -------- ------- --------
Comprehensive income $128,045 $68,811 $183,044 $45,236
======== ======== ======= ========
</TABLE>
Item 2. Management's Discussion and Analysis
General
Ridgestone Financial Services, Inc. (the "Company") was formed in May 1994
under the laws of the State of Wisconsin for the purpose of becoming the
bank holding company of Ridgestone Bank (the "Bank").
The Bank was capitalized on December 6, 1995, and commenced operation on
December 7, 1995. The Bank was organized as a Wisconsin chartered
commercial bank with depository accounts insured by the Federal Deposit
Insurance Corporation. The Bank provides full service commercial and
consumer banking services in Brookfield, Wisconsin, and adjacent
communities.
The following is a discussion of the Company's Financial Condition and
Results of Operations as of and for the three and six months ended June
30, 1998.
Financial Condition
Total Assets. Total assets of the Company as of June 30, 1998 were
$67,190,105 compared to $65,103,697 as of December 31, 1997, an increase
of 3.2%.
Loans. Loans prior to the allowance for estimated loan losses were
$48,190,081 as of June 30, 1998, an increase of $1,931,060 or 4.2% from
December 31, 1997. At June 30, 1998, the mix of the loan portfolio
included Commercial Loans of $20,048,920 or 41.6% of total loans;
Commercial Real Estate Loans of $12,828,523 or 26.6% of total loans;
Residential Real Estate Loans of $11,426,860 or 23.7% of total loans; and
Consumer Loans of $3,885,779 or 8.1% of total loans.
Allowance for Loan Losses. The allowance for estimated loan losses was
$513,367 or 1.07% of gross loans on June 30, 1998. The Bank evaluates the
adequacy of the reserve for loan losses based on factors such as the local
and national economy as well as an analysis of specific problem loans and
loans on an aggregate basis. The reserve for loan losses is maintained at
a level management considers adequate to provide for potential future
losses. For additional information regarding the Company's allowance for
loan losses, see "Results of Operations - Provision for Loan Losses"
below.
In the first six months of 1998, the Bank charged $3,884 against the loan
loss reserve. The Bank also reduced Other Real Estate Owned by $122,488.50
and charged this amount against the loan loss reserve in order to reduce
the value of Other Real Estate Owned to the appraised value as received on
December 30, 1997. During the second quarter of 1998, the Bank further
reduced Other Real Estate Owned by $43,000 as a result of the sale of real
estate assets owned by the Bank.
Cash and Cash Equivalents. Cash and cash equivalents were $12,921,369 as
of June 30, 1998 compared to $10,669,236 as of December 31, 1997, an
increase of $2,252,133. Cash and cash equivalents represent cash
maintained at the Bank and funds that the Bank and the Company have
deposited in other financial institutions.
Investment Securities. The Bank's investment portfolio consists of (i)
securities purchased with the intent to hold the securities until they
mature and (ii) securities placed in the available for sale category which
may be liquidated to provide cash for operating or financing purposes.
The securities held-to-maturity portfolio was $2,501,616 at June 30, 1998
compared to $4,253,095 at December 31, 1997. The securities available-
for-sale portfolio was $894,056 at June 30, 1998 compared to $874,406 at
December 31, 1997.
Deposits. As of June 30, 1998, total deposits were $60,377,129, an
increase of $1,889,504 or 3.2% from December 31, 1997.
Asset/Liability Management. The principal function of asset/liability
management is to manage the balance sheet mix, maturities, repricing
characteristics and pricing components to provide an adequate and stable
net interest margin with an acceptable level of risk over time and through
interest rate cycles.
Liquidity. For banks, liquidity generally represents the ability to meet
withdrawals from deposits and the funding of loans. The assets that
provide liquidity are cash, federal funds sold and short-term loans and
securities. Liquidity needs are influenced by economic conditions,
interest rates and competition. Although loan growth can negatively
affect short-term liquidity, management believes that current liquidity
levels are sufficient to meet future demands.
Results of Operations
For the quarter ended June 30, 1998, the Company reported net income of
$148,692 as compared to a profit of $30,686 in the same period of 1997.
For the six-month period ended June 30, 1998, the Company reported net
income of $154,510 which compares favorably to a profit of $32,843 for the
six months ended June 30, 1997. A combination of factors drove the profit
improvement over the first six months of 1997, including controlled
deposit and loan growth, improved margins and greater fee income
generation.
A tax benefit related to a tax loss carryforward accounted for $102,500
and $92,700 of net income for the three and six months ended June 30,
1998, respectively.
Net Interest Income. Net interest income before loan loss provision for
the three and six months ended June 30, 1998 was $474,030 and $928,675,
respectively, compared to $319,565 and $610,521 for the same periods in
1997, an improvement of 48.3% and 52.1%, respectively. The increase was
due primarily to greater average outstanding balances in interest bearing
assets, primarily loans. Total interest income for the three and six
months ended June 30, 1998 increased by $380,211 and $756,070
respectively, as compared with the same periods in 1997, while total
interest expense rose by $225,746 and $437,916.
Provision for Loan Losses. The provision for loan losses is based on
management's evaluation of factors such as the local and national economy
and the risk associated with the loans in the portfolio.
During the six-month period ended June 30, 1998, a provision of $15,000
was made to the loan loss reserve in order to ensure that the loan loss
reserve is maintained at adequate levels.
Non-Interest Income and Expense. Total other operating income (excluding
gains and losses on the sale of securities) was $65,763 for the three
months ended June 30, 1998 compared to $28,948 for the same period in
1997, an increase of 127.2%. Total other operating income (excluding
gains and losses on the sale of securities) was $107,700 for the first six
months of 1998 compared to $54,877 for the same period in 1997, an
increase of 96.3%. Greater fee income from loans accounted for the
majority of this increase.
Total other operating expenses were $507,348 for the three months ended
June 30, 1998, compared to $401,545 for the same period in 1997, an
increase of 26.3%. For the three month period ending June 30, 1998,
salaries and employee benefit expense was $266,018 or 55.0% of total
operating expenses, and occupancy and equipment expense was $93,669 or
19.4% of total operating expenses. Payroll and occupancy expense
increased by $47,512 over the same period in 1997. Other expense
increased by $58,291 from the same period in 1997.
Total other operating expenses were $959,565 for the six months ended June
30, 1998 compared to $791,376 for the same period in 1997, an increase of
21.3% from the prior period in 1997. For the six months ended June 30,
1998, salaries and employee benefit expense was $525,210 or 54.7% of total
operating expenses, and occupancy and equipment expense was $175,407 or
18.3% of total operating expenses. Other expense increased by $84,168
from the same period in 1997.
Year 2000 Matters. Many computer programs use two digits rather than four
to describe a year in a date field. As a result, certain of these programs
will experience malfunctions associated with the turning of the year 2000.
The Bank has appointed a committee to conduct an assessment and recommend
methods of remediation of internal and external year 2000 software
concerns. This committee reports to the Board of Directors on a regular
basis. While the Company expects to incur certain costs associated with
becoming fully operable during the year 2000, the Company does not
anticipate those costs will be material or will have a material affect on
the business or results of operation of the Company or the Bank. The
committee has contacted certain outside service providers used by the Bank
to perform data processing and other services to determine the status of
those vendors' year 2000 compliance processes, and has generally been
informed that such vendors have undertaken review and remediation of
potential year 2000 issues. However, there can be no assurance that such
vendors will not experience system malfunctions associated with the year
2000 which could have a material adverse effect on the Company's results
of operations. The Company expects its internal operations to be year
2000 compliant by early 1999.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of shareholders held on April 28, 1998
(the "Annual Meeting"), the following individuals were elected to the
Board of Directors to hold office until the 1999 annual meeting of
shareholders and until their successors are duly elected and qualified:
Shares Voted Authority to Vote
Directors For Withheld
William R. Hayes 813,440 700
Charles N. Ackley 813,440 700
John E. Horning 811,890 2,250
Frederick I. Olson 812,890 1,250
At the Annual Meeting, the following individuals were elected to the
Board of Directors to hold office until the 2000 annual meeting of
shareholders and until their successors are duly elected and qualified:
Authority to Vote
Shares Voted Withheld
Directors For
Christine V. Lake 813,440 700
Gregory J. Hoesly 813,440 700
Richard A. Streff 813,440 700
William J. Tetzlaff 813,440 700
At the Annual Meeting, the following individuals were elected to the
Board of Directors to hold office until the 2001 annual meeting of
shareholders and until their successors are duly elected and qualified:
Authority to Vote
Shares Voted Withheld
Directors For
Paul E. Menzel 813,440 700
William F. Krause, Jr. 813,440 700
Charles G. Niebler 813,440 700
James E. Renner 813,440 700
The following proposals were approved at the Annual Meeting:
Broker
Affirmative Negative Votes Non-
Proposal Votes Votes Abstained Votes
Classified Board of Directors 514,115 4,300 4,500 291,225
Removal of Directors Only for
Cause 506,665 11,750 4,500 291,225
Vacancies on the Board of
Directors to be Filled by
Majority Vote of Directors 508,990 9,100 4,825 291,225
Terms of Other Capital Stock
Entitled to Elect Directors
Govern Features of Those
Directorships 500,965 12,250 9,700 291,225
Supermajority Voting
Requirements to Amend
Provisions of Articles or By-
Laws Relating to a Classified
Board 504,015 11,700 7,200 291,225
Increase Authorized Common
Stock From One Million Shares
to Ten Million Shares 803,540 4,400 6,200 291,225
Establish a Series of
Preferred Stock 504,090 9,125 9,700 291,225
Approval of the Ridgestone
Financial Services, Inc. 1996
Stock Option Plan, as Amended 512,115 8,600 2,200 291,225
Item 5 Other Information
Proposals of shareholders pursuant to rule 14a-8 under the Securities
and Exchange Act of 1934, as amended ("Rule 14a-8"), that are intended to
be presented at the 1999 annual meeting must be received by the Company no
later than November 18, 1998 to be included in the Company's proxy
materials for that meeting. Further, if the Company does not receive
notice of a shareholder proposal submitted otherwise than pursuant Rule
14a-8 on or prior to February 1, 1999, then the persons named in proxies
solicited by the Board of Directors for the 1999 annual meeting may
exercise discretionary voting power with respect to such proposal.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
10.1 Ridgestone Financial Services, Inc. 1996 Stock
Option Plan, as amended [incorporated by reference
to Exhibit 4.1 to Ridgestone Financial Services,
Inc.'s Registration Statement on Form S-8
(Registration No. 333-52323)]
10.2 Form of Stock Option Agreement used in conjunction
with the Ridgestone Financial Services, Inc. 1996
Stock Option Plan, as amended [incorporated by
reference to Exhibit 4.2 to Ridgestone Financial
Services, Inc.'s Registration Statement on Form S-8
(Registration no. 333-52323)]
27 Financial Date Schedule
(EDGAR version only)
b. Reports on Form 8-K
The Company did not file a Current Report on Form 8-K
during the quarter ended June 30, 1998.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RIDGESTONE FINANCIAL SERVICES, INC.
/s/ Paul E. Menzel
Date: August 14, 1998 Paul E. Menzel
President
/s/ William R. Hayes
Date: August 14, 1998 William R. Hayes
Vice President and Treasurer
<PAGE>
EXHIBIT INDEX
Exhibit Number
10.1 Ridgestone Financial Services, Inc. 1996 Stock
Option Plan, as amended [incorporated by
reference to Exhibit 4.1 to Ridgestone Financial
Services, Inc.'s Registration Statement on Form
S-8 (Registration No. 333-52323)]
10.2 Form of Stock Option Agreement used in
conjunction with the Ridgestone Financial
Services, Inc. 1996 Stock Option Plan, as amended
[incorporated by reference to Exhibit 4.2 to
Ridgestone Financial Services, Inc.'s
Registration Statement on Form S-8 (Registration
No. 333-52323)]
27 Financial Data Schedule
(EDGAR version only)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS OF RIDGESTONE FINANCIAL SERVICES, INC. AS OF
AND FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,201,173
<INT-BEARING-DEPOSITS> 9,196
<FED-FUNDS-SOLD> 10,711,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 894,056
<INVESTMENTS-CARRYING> 2,501,616
<INVESTMENTS-MARKET> 2,531,256
<LOANS> 48,190,081
<ALLOWANCE> 513,367
<TOTAL-ASSETS> 67,190,105
<DEPOSITS> 60,377,129
<SHORT-TERM> 0
<LIABILITIES-OTHER> 766,632
<LONG-TERM> 0
0
0
<COMMON> 7,721,399
<OTHER-SE> (1,675,055)
<TOTAL-LIABILITIES-AND-EQUITY> 67,190,105
<INTEREST-LOAN> 2,008,681
<INTEREST-INVEST> 152,195
<INTEREST-OTHER> 158,166
<INTEREST-TOTAL> 2,319,042
<INTEREST-DEPOSIT> 1,390,367
<INTEREST-EXPENSE> 1,390,367
<INTEREST-INCOME-NET> 928,675
<LOAN-LOSSES> 15,000
<SECURITIES-GAINS> (7,687)
<EXPENSE-OTHER> 951,878
<INCOME-PRETAX> 61,810
<INCOME-PRE-EXTRAORDINARY> 61,810
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154,510
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
<YIELD-ACTUAL> 8.14
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 624,740
<RECOVERIES> 126,373
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 513,367
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 513,367
</TABLE>
