UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 25049
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 1998
---------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------ ------------------
Commission File Number 0-27620
-------
Green Street Financial Corp
---------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1951478
-------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
241 Green Street
Fayetteville, North Carolina 28301-5051
---------------------------------------
(Address of principal executive office) (Zip code)
(910)-483-3681
--------------
(Registrant's telephone number)
N/A
---
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check X whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 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
--- ---
As of February 5, 1999 there were issued and outstanding 4,083,219 shares of the
Registrant's common stock, no par value.
<PAGE>
Green Street Financial Corp andSubsidiary
CONTENTS
PART I - FINANCIAL INFORMATION Pages
-----
Item 1. Condensed Consolidated Financial Statements
Statements of financial condition at September 30, 1998
and December 31, 1998 (unaudited) 1-2
Statements of income for the three months ended
December 31, 1997 (unaudited) and
December 31, 1998 (unaudited) 3
Statements of cash flows for the three months ended
December 31, 1997 (unaudited) and
December 31, 1998 (unaudited) 4-5
Notes to condensed consolidated financial statements 6-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
Green Street Financial Corp and Subsidiary
CONDENSED Consolidated Statements of Financial Condition
December 31, 1998 and September 30, 1998
December 31, September 30,
ASSETS 1998 1997
- -----------------------------------------------------------------------
(Unaudited)
Cash and short-term cash investments:
Interest-earning $ 32,168,240 $ 27,817,856
Noninterest-earning 668,276 171,500
Federal funds sold 3,930,000 1,473,000
Investment securities:
Held to maturity, at amortized cost 3,000,000 9,000,000
Nonmarketable equity securities 1,144,700 1,144,700
Loans receivable, net 129,613,357 131,697,916
Accrued interest receivable, investments - 180,301
Real estate acquired in settlement of loans 34,521 34,521
Property and equipment, net 340,190 349,190
Prepaid expenses and other assets 821,979 835,561
--------------------------
Total Assets $171,721,263 $ 172,704,545
==========================
See Notes to Condensed Consolidated Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
December 31, September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1998
- -----------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Liabilities:
Deposits $ 109,133,084 $ 110,459,780
Advance payments by borrowers for taxes and insurance 503,776 208,998
Income taxes payable 335,082 -
Accrued expenses and other liabilities 288,394 222,918
Dividends payable 489,986 1,102,469
Deferred compensation 375,988 377,804
----------------------------
Total liabilities 111,126,310 112,371,969
----------------------------
Stockholders' equity:
Preferred stock, no par value, authorized 1,000,000 shares;
none issued - -
Common stock, no par value, authorized 10,000,000 shares;
issued and outstanding 4,083,219 shares - -
Additional paid-in capital 38,572,882 38,550,912
Unearned ESOP shares (1,885,000) (1,950,000)
Retained earnings, substantially restricted 23,907,071 23,731,664
----------------------------
Total stockholders' equity 60,594,953 60,332,576
----------------------------
Total liabilities and stockholders' equity $ 171,721,263 $ 172,704,545
============================
</TABLE>
2
<PAGE>
Green Street Financial Corp and Subsidiary
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest and dividend income:
Loans $ 2,574,242 $ 2,623,634
Investment Securities 524,190 717,908
-----------------------------
Total interest income 3,098,432 3,341,542
Interest expense 1,346,709 1,459,877
-----------------------------
Net interest income 1,751,723 1,881,665
Provision for loan losses - -
-----------------------------
Net interest income after provision for loan losses 1,751,723 1,881,665
-----------------------------
Noninterest income 35,773 20,779
-----------------------------
Noninterest expense:
Compensation and employee benefits 540,472 589,578
Other 228,640 217,375
-----------------------------
769,112 806,953
-----------------------------
Income before income taxes 1,018,384 1,095,491
Income taxes 375,611 406,450
-----------------------------
Net income $ 642,773 $ 689,041
=============================
Basic earnings per share $ 0.17 $ 0.17
=============================
Diluted earnings per share $ 0.17 $ 0.17
=============================
Dividends paid per share $ 0.12 $ 0.11
=============================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
Green Street Financial Corp and Subsidiary
Condensed Consolidated Statements of Cash Flows (unaudited)
Three Months Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 642,773 $ 689,041
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 9,000 9,000
Increase in deferred income taxes 4,000 3,000
Decrease in deferred compensation (1,816) (4,595)
ESOP compensation charged to paid-in capital 21,970 55,445
Changes in assets and liabilities:
(Increase) decrease in:
Prepaid expenses and other assets 13,582 17,378
Accrued interest receivable 180,301 (31,819)
Increase (decrease) in:
Accrued expenses and other liabilities 61,476 (126,976)
Income taxes payable 335,082 165,700
----------------------------
Net cash provided by operating activities 1,266,368 776,174
----------------------------
Cash Flows From Investing Activities
Net increase in loans receivable 2,084,559 (1,287,293)
Proceeds from held to maturity investment securities 6,000,000 3,000,000
Purchase of held to maturity investment securities - (9,000,000)
Purchase of property and equipment - (11,191)
----------------------------
Net cash provided by (used in) investing activities 8,084,559 (7,298,484)
----------------------------
</TABLE>
4
<PAGE>
Green Street Financial Corp and Subsidiary
Condensed Consolidated Statements of Cash Flows (unaudited)
Three Months Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Financing Activities
Net decrease in deposits $ (1,326,696) $ 1,705,763
Principal payment for ESOP debt 65,000 65,000
Cash dividends paid (1,079,849) (1,093,918)
Increase in advance payments by borrowers
for taxes and insurance 294,778 279,604
-----------------------------------
Net cash provided by (used in) financing activities (2,046,767) 956,449
-----------------------------------
Net increase (decrease) in cash and cash equivalents 7,304,160 (5,565,861)
Cash and cash equivalents:
Beginning 29,462,356 33,087,640
-----------------------------------
Ending $ 36,766,516 $ 27,521,779
===================================
Cash and cash equivalents:
Cash and short-term investments:
Interest-bearing $ 32,168,240 $ 24,138,855
Noninterest-bearing 668,276 242,924
Federal funds sold 3,930,000 3,140,000
-----------------------------------
$ 36,766,516 $ 27,521,779
===================================
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest $ 1,347,929 $ 1,462,315
===================================
Income taxes $ 40,529 $ 240,750
===================================
Supplemental Disclosure of Noncash Investing and Financing
Activities:
Dividends declared and accrued $ 489,986 $ 472,794
===================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- ----------------------------------------------------------------
Note 1. Nature of Business
Green Street Financial Corp (the "Corporation") was incorporated under the laws
of the State of North Carolina for the purpose of becoming the savings and loan
holding company of Home Federal Savings and Loan Association (the "Association"
or "Home Federal") in connection with the Association's conversion from a
federally chartered mutual savings and loan association to a federally chartered
stock savings and loan association, pursuant to its Plan of Conversion. The
Corporation was organized in December 1995 to acquire all of the common stock of
Home Federal upon its conversion to stock form. A subscription offering of the
Corporation's shares closed on April 3, 1996, at which time the Corporation
acquired all of the shares of the Association and commenced operations. The
financial statements of the Corporation are presented on a consolidated basis
with those of Home Federal.
The Corporation has no operations and conducts no business of its own other than
owning Home Federal, investing its portion of the net proceeds received in the
Conversion, and lending funds to the Employee Stock Ownership Plan (the "ESOP")
which was formed in connection with the Conversion. The principal business of
the Association is accepting deposits from the general public and using those
deposits and other sources of funds to make loans secured by real estate and
other forms of collateral located in the Association's primary market area of
Cumberland and Robeson counties in North Carolina.
Home Federal's results of operations depend primarily on its net interest
income, which is the difference between interest income from interest-earning
assets and interest expense on interest-bearing liabilities. The Association's
operations are also affected by noninterest income, such as miscellaneous income
from loans, customer deposit account service charges, and other sources of
revenue. The Association's principal operating expenses, aside from interest
expense, consist of compensation and associated benefits, federal deposit
insurance premiums, occupancy costs, advertising, and other general and
administrative expenses.
Note 2. Basis of Presentation
The accompanying unaudited consolidated financial statements (except for the
statement of financial condition at September 30, 1998, which is audited) have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Regulation S-X. 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 (none of
which were other than normal recurring accruals) necessary for a fair
presentation of the financial position and results of operations for the periods
presented have been included. The results of operations for the three month
period ended December 31, 1998 are not necessarily indicative of the results of
operations that may be expected for the year ended September 30, 1999 or any
other interim period.
6
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- ----------------------------------------------------------------
Note 2. Basis of Presentation (Continued)
The accounting policies followed are as set forth in Note 1 of the Notes to
Consolidated Financial Statements in the 1998 annual report of the Corporation.
Note 3. Dividends Declared
On December 30, 1998, the Board of Directors of the Corporation declared a
dividend of $ .12 a share for stockholders of record as of January 12, 1999 and
payable on January 22, 1999. The dividends declared were accrued and reported as
other liabilities in the December 31, 1998 consolidated statement of financial
condition.
Note 4. Earnings Per Share
As required, the Corporation adopted statement of Financial Accounting Standards
No. 128 during the quarter ended December 31, 1997. This statement requires dual
presentation of basic and diluted earnings per share (EPS) with a reconciliation
of the numerator and denominator of the EPS computations. Basic per share
amounts are based on the weighted average shares of common stock outstanding.
Diluted earnings per share assume the conversion, exercise or issuance of all
potential common stock instruments such as options, warrants and convertible
securities, unless the effect is to reduce a loss or increase earnings per
share. Accordingly, this presentation has been adopted for all periods
presented. The basic and diluted weighted average shares outstanding are as
follows:
<TABLE>
<CAPTION>
1998 1997
----------------------------------
<S> <C> <C>
Weighted average shares outstanding 4,083,219 4,298,125
Less unallocated ESOP shares 191,750 217,750
----------------------------------
Weighted average outstanding shares used for basic EPS 3,891,469 4,080,375
Plus incremental shares from assumed issuance
of stock options - 83,330
----------------------------------
Weighted average outstanding shares used for diluted EPS 3,891,469 4,163,705
==================================
Net income $ 642,773 $ 689,041
==================================
Basic earnings per share $ 0.17 $ 0.17
==================================
Diluted earnings per share $ 0.17 $ 0.17
==================================
</TABLE>
7
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
- --------------------------------------------------------------------------------
Comparison of Financial Condition at December 31, 1998 and September 30, 1998:
Total assets decreased by $1.0 million during the first quarter to $171.7
million at December 31, 1998. The only significant change in the component of
the Corporation's assets during the quarter was that $6.0 million in investment
securities were called and placed in short term interest earning assets at
December 31, 1998. Investments and other short term interest earning assets
amounted to $40.2 million at December 31, 1998, compared to $39.4 million at
September 30, 1998. Net loans receivable decreased by $2.1 million during the
quarter and amounted to $129.6 million at December 31, 1998, due to loan
repayments exceeding loan originations. Approximately 99% of the Corporation's
assets were interest earning at December 31, 1998, and approximately 76% of such
interest earning assets were held in the form of loans receivable.
The Association had no borrowings outstanding during or at the end of the three
month period ended December 31, 1998, but has guaranteed the repayment of the
ESOP's note payable to the Corporation which was originated on April 3, 1996 in
order for the ESOP to purchase 260,000 shares of common stock in the
Corporation. The Corporation's note receivable from the ESOP, which amounted to
$1.9 million at December 31, 1998 net of a $65,000 principal repayment during
the quarter, is reported as a reduction of stockholders' equity. Retained
earnings increased by $.2 million to $23.9 million at December 31, 1998, which
is attributable to the Corporation's consolidated earnings during the three
months ended December 31, 1998, less dividends accrued for the quarter.
At December 31, 1998, the Corporation's stockholders' equity amounted to $60.6
million, which as a percentage of total assets was 35.3%. As a Federally
chartered savings and loan association, the Association is required to meet
three separate capital standards established by the Office of Thrift
Supervision. The Association's stand-alone equity was $45.2 million at December
31, 1998 and was substantially in excess of all such capital requirements.
The Association's level of nonperforming loans, defined as loans past due 90
days or more, as a percentage of loans outstanding, was .10% and .15% at
December 31, 1998 and September 30, 1998, respectively. The Association's level
of nonperforming loans was .10% at December 31, 1997. During the quarter ended
December 31, 1998, the Association's level of nonperforming loans remained
consistently low in relation to prior periods and total loans outstanding, and
the Association did not incur any loan losses. Based on management's analysis of
the adequacy of it allowance at December 31, 1998, no additional provision for
loan losses was made during the quarter.
8
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
- --------------------------------------------------------------------------------
Comparison of Operating Results for the Three Months Ended December 31, 1998 and
1997:
General. Net income for the three month period ended December 31, 1998 was
$643,000, a 6.7% decrease over the $689,000 earned during the same period in
1997. The decrease in net income was primarily attributable to a decrease in net
interest income for the 1998 quarter.
Interest income. Interest income decreased by $243,000 to $3.1 million for the
three months ended December 31, 1998, from $3.3 million for the same period in
1997. The decrease was attributable to a reduced level of interest-earning
assets outstanding during the first quarter of this year in comparison to the
same quarter a year earlier and to a lower yield on those assets. In the quarter
ended June 30, 1998, the Company repurchased approximately $3.5 million of its
common stock using interest-earning assets to complete the transaction.
Interest expense. Interest expense decreased by $113,000 to $1.4 million for the
three months ended December 31, 1998, from $1.5 million for the same period in
1997. The primary cause for this decrease was the decrease in savings deposits
from $114.3 million at December 31, 1997 to $109.1 million at December 31, 1998.
In addition, the Association's average cost of funds, which approximated 5.12%
for the quarter ended December 31, 1997, was approximately 22 basis points lower
in the quarter ended December 31, 1998.
Noninterest income. Noninterest income has historically been immaterial in
relation to the Association's overall operations. Noninterest income amounted to
$21,000 and $36,000 for the quarters ended December 31, 1997 and 1998,
respectively.
Noninterest expense. Noninterest expense decreased by $38,000 to $769,000 for
the three month period ended December 31, 1998 from $807,000 for the comparable
quarter in 1997. The decrease in noninterest expense is principally due to a
decrease in compensation expense. Compensation expense includes the cash
contribution necessary to fund the Employee Stock Ownership Plan (ESOP), which
represents the difference between the fair market value of the shares which have
been released or committed to be released to participants, and the cost of these
shares. The fair market value declined for the three month period ended December
31, 1998 in comparison to the same period for 1997.
Year 2000 Issue. The "Year 2000 Problem" centers on the inability of computer
systems to recognize the Year 2000. Many existing computer programs and systems
were originally programmed with six digit dates that provided only two digits to
identify the calendar year in the date field, without considering the upcoming
change in the century. With the impending millennium, these programs and
computers will recognize "00" as the year 1900 rather than the year 2000. Like
most financial service providers, the Association and its operations may be
affected by the Year 2000 Problem due to the nature of financial information.
Software, hardware, and equipment both within and outside the Association's
direct control and with whom the Association electronically or operationally
interfaces (e.g. third party vendors providing data processing, information
system management, maintenance of computer systems, and credit bureau
information) are likely to be affected. Furthermore, if computer systems are not
9
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
- --------------------------------------------------------------------------------
Year 2000 Issue (Continued)
adequately changed to identify the Year 2000, many computer applications could
fail or create erroneous results. As a result, many calculations which rely on
the date field information, such as interest, payment or due dates and other
operating functions, will generate results which could be significantly
misstated, and the Association could experience a temporary inability to process
transactions, send invoices or engage in similar normal business activities.
In addition, non-information technology systems, such as equipment like
telephones and copiers may also contain embedded technology which controls its
operation and which may be affected by the Year 2000 Problem. When the Year 2000
arrives, systems, including some of those with embedded chips, may not work
properly because of the way they store date information. They may not be able to
deal with the date 01/01/00. Thus, even non-information technology systems may
affect the normal operations of the Association upon the arrival of the Year
2000.
Under certain circumstances, failure to adequately address the Year 2000 Problem
could adversely affect the viability of the Association's suppliers and
creditors and the creditworthiness of its borrowers. Thus, if not adequately
addressed, the Year 2000 Problem could result in a significant adverse impact on
the Association's products, services and competitive condition.
In order to address the Year 2000 Issue and to minimize its potential adverse
impact, management has begun a process to identify areas that will be affected
by the Year 2000 Problem, assess its potential impact on the operations of the
Association, monitor the progress of third party software vendors in addressing
the matter, test changes provided by these vendors, and develop contingency
plans for any critical systems which are not effectively reprogrammed. A
committee of senior officers of the Association has been formed to evaluate the
effects that the upcoming Year 2000 could have on computer programs utilized by
the Association. The Association's plan is divided into the five phases:
(1) Awareness. Define the problem, obtain executive level support and
develop an overall strategy. This phase was completed in April 1998.
(2) Assessment. Identify all systems and the criticality of the systems.
This phase was completed June 1998.
(3) Renovation. Program enhancements, hardware and software upgrades,
system replacements, and vendor certifications. This phase is in
process with a scheduled completion date of February 1999.
(4) Validation. Test and verify system changes and coordinate with outside
parties. This phase is in process with a scheduled completion date of
April 1999.
(5) Implementation. Components certified as Year 2000 compliant and moved
to production. This phase is in process with a scheduled completion
date of July 1999.
10
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULT OF OPERATIONS
- --------------------------------------------------------------------------------
Year 2000 Issue (Continued)
Third party vendors provide the majority of software used by the Association.
All of the Association's vendors are aware of the Year 2000 situation, and each
has assured the Association that it is currently working to have its software
compliant by July 1999, and testing for the critical applications began in April
1998. This will enable the Association to devote substantial time to the testing
to the upgraded systems prior to the arrival of the millennium. The Association
utilizes the service of a third party vendor to provide the software which is
used to process and maintain most mortgage and deposit customer-related
accounts. This vendor has provided the Company with a software version which has
been certified to be Year 2000 compliant. Testing by the Association is underway
to verify compliance for its application and usage. The Association presently
believes that with modifications to existing software and conversions to new
software that it is currently undertaking, the Year 2000 Problem will be
mitigated without causing an adverse impact on the operations of the
Association.
In addition, monitoring and managing the Year 2000 project will result in
additional direct and indirect costs to the Association. Direct costs include
potential charges by third party software vendors for product enhancements,
costs involved in testing software products for Year 2000 compliance, and any
resulting costs for developing and implementing contingency plans for critical
software products which are not enhances. Indirect costs will principally
consist of the time devoted by existing employees in monitoring software vendor
progress, testing enhanced software products and implementing any necessary
contingency plans. The Association has spent approximately $25,000 on Year 2000
related costs to date and estimates that it will spend an additional $2,500 for
Year 2000 compliance. Both direct and indirect costs of addressing the Year 2000
Problem will be charged to earnings as incurred. The Association does not
believe that such costs will have a material effect on results of operations.
However, there can be no guarantee that the systems of other companies on which
the Association's systems rely will be timely converted, or that a failure to
convert by another company or a conversion that is incompatible with the
Association's systems, would not have material adverse effect on the
Association.
The costs of the project and the date on which the Association plans to complete
the Year 2000 modifications are based on management's best estimates, which were
derived utilizing numerous assumptions of future events including the continued
availability of certain resources, third party modification plans and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ from those plans. Specific factors that
might cause such differences include, but are not limited to, the availability
and cost of personnel trained in this area, the ability to locate and correct
all relevant computer codes, and similar uncertainties.
11
<PAGE>
GREEN STREET FINANCIAL CORP AND SUBSIDIARY
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- --------------------------------------------------------------------------------
There were no significant changes for the three months ended December 31, 1998
from the information presented in the annual report on Form 10-K for the year
ended September 30, 1998, concerning quantitative and qualitative disclosures
about market risk.
12
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not engaged in any legal proceedings at the
present time. From time to time, the Association is a party to
legal proceedings within the normal course of business wherein
it enforces its security interest in loans made by it, and
other matters of a similar nature.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) 27. Financial Data Schedule
(b) No reports on 8-K were filed for the period covered by
This report.
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Green Street Financial Corp
Dated February 10, 1999 By: s/s H. D. Reaves, Jr.
-----------------------------------
H. D. Reaves, Jr.
President and CEO
Dated February 10, 1999 By: s/s John C. Pate
-----------------------------
John C. Pate
Senior Vice President and CFO
14
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE
QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 668
<INT-BEARING-DEPOSITS> 32,168
<FED-FUNDS-SOLD> 3,930
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 4,145
<INVESTMENTS-MARKET> 4,167
<LOANS> 129,868
<ALLOWANCE> 255
<TOTAL-ASSETS> 171,721
<DEPOSITS> 109,133
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,993
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 60,595
<TOTAL-LIABILITIES-AND-EQUITY> 171,721
<INTEREST-LOAN> 2,574
<INTEREST-INVEST> 524
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 3,098
<INTEREST-DEPOSIT> 1,347
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,751
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 771
<INCOME-PRETAX> 1,018
<INCOME-PRE-EXTRAORDINARY> 1,018
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 643
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
<YIELD-ACTUAL> 4.13
<LOANS-NON> 127
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 255
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 255
<ALLOWANCE-DOMESTIC> 255
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
