<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the period ended September 30, 1997
[ ] Transition report under Section 13 or 15(d) of the Exchange Act for
the transition period from _____ to _____
Commission file number: 33-80855
GATEWAY BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
Georgia 58-2202210
(State of Incorporation) (I.R.S. Employer Identification No.)
5102 Alabama Highway
Ringgold, Georgia 30736
(Address of principal executive offices)
(706) 965-5500
(Issuer's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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
-----
Common Stock, $5.00 par value 679,048
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
<PAGE> 2
GATEWAY BANCSHARES, INC.
September 30, 1997 Form 10-QSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows. . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . 12
</TABLE>
* * * * *
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GATEWAY BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 December 31,
UNAUDITED 1996
------------ -------------
<S> <C> <C>
ASSETS
Cash $ 181,259 $ -0-
Due from banks 407,206 30,615
Federal funds sold 650,000 850,000
Securities available for sale 6,897,550 1,491,574
Securities held to maturity 1,444,472 3,682,579
Loans 10,361,654 -0-
Allowance for loan losses (102,000) -0-
------------ -------------
Net loans 10,259,654 -0-
Premises and equipment, net 1,670,056 548,390
Accrued interest 194,378 42,844
Other assets 206,082 58,208
------------ -------------
TOTAL ASSETS $ 21,910,657 $ 6,704,210
============ =============
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing $ 2,162,304 $ -0-
Interest-bearing 13,277,412 -0-
------------ -------------
TOTAL DEPOSITS 15,439,716 -0-
Accrued interest 60,777 -0-
Other liabilities 32,513 88,870
------------ -------------
TOTAL LIABILITIES 15,533,006 88,870
------------ -------------
SHAREHOLDER'S EQUITY:
Common stock ($5 par value; 10,000,000 shares
authorized, 679,048 shares issued and outstanding) 3,395,240 3,395,240
Capital surplus 3,357,637 3,357,637
Accumulated deficit (387,360) (133,590)
Unrealized gains (losses) on investment securities
available for sale, net of deferred tax or tax benefit 12,134 (3,947)
------------ -------------
TOTAL SHAREHOLDER'S EQUITY 6,377,651 6,615,340
------------ -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 21,910,657 $ 6,704,210
============ =============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
GATEWAY BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE FROM EARNING ASSETS:
Interest on investment securities:
Loans $ 255,897 $ -0- $ 324,272 $ -0-
Taxable securities 112,940 74,732 254,401 77,928
Interest on federal funds sold 18,085 12,942 51,976 16,567
Interest on deposits in other banks -0- 272 -0- 36,059
--------- -------- ---------- ---------
TOTAL REVENUE FROM EARNING ASSETS 386,922 87,946 630,649 130,554
INTEREST EXPENSE:
Interest on deposits 146,158 -0- 188,121 -0-
Interest on federal funds purchased 108 -0- 108 -0-
Interest on notes payable -0- -0- -0- 4,572
--------- -------- ---------- ---------
TOTAL INTEREST EXPENSE 146,266 -0- 188,229 4,572
INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES 240,656 87,946 442,420 125,982
Provision for loan losses 58,500 -0- 102,000 -0-
--------- -------- ---------- ---------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 182,156 87,946 340,420 125,982
NON INTEREST INCOME:
Service charges 14,316 -0- 17,820 -0-
Other income 3,899 -0- 7,963 -0-
--------- -------- ---------- ---------
TOTAL NONINTEREST INCOME 18,215 -0- 25,783 -0-
NONINTEREST EXPENSES:
Salaries and employee benefits 151,522 60,992 400,874 160,101
Occupancy expense 25,387 5,634 51,819 11,441
Furniture and equipment expense 19,171 -0- 38,097 -0-
Other operating expenses 100,776 40,998 263,182 75,884
--------- -------- ---------- ---------
TOTAL NONINTEREST EXPENSES 296,856 107,624 753,972 247,426
Loss before income taxes (96,485) (19,678) (387,769) (121,444)
Income tax (provision) benefit 33,500 -0- 134,000 -0-
--------- -------- ---------- ---------
NET INCOME (LOSS) $ (62,985) $(19,678) $ (253,769) $(121,444)
========= ======== ========== =========
EARNINGS (LOSS) PER COMMON SHARE - PRIMARY
AND FULLY DILUTED
Net income (loss) per common share $ (.09) $ (.03) $ (.37) $ (18)
Weighted average common shares outstanding 679,048 679,048 679,048 679,048
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
GATEWAY BANCSHARES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
---------------------------- -----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (62,985) $ (19,678) $ (253,769) $ (121,444)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Provision for loan losses 58,500 -0- 102,000 -0-
Provision for depreciation and amortization 30,499 -0- 59,088 -0-
Amortization of investment security
premiums and accretion of discounts (2,966) -0- (22,625) -0-
Deferred tax provision (33,500) -0- (134,000) -0-
Increase in accrued interest receivable (65,452) -0- (151,534) -0-
Increase in accrued interest payable 34,399 -0- 60,777 -0-
Other (9,912) (33,177) (90,226) (36,068)
----------- ----------- ------------ -----------
NET CASH USED IN OPERATING ACTIVITIES (51,417) (52,855) (430,289) (157,512)
----------- ----------- ------------ -----------
INVESTING ACTIVITIES:
Net increase in loans (5,852,260) -0- (10,361,654) -0-
Proceeds from maturities of securities 400,000 -0- 3,431,058 -0-
Purchase of available for sale securities (2,429,446) (1,044,410) (5,802,727) (5,179,902)
Purchase of held to maturity securities -0- -0- (743,574) -0-
Capital expenditures (24,866) (76,227) (1,174,680) (153,304)
----------- ----------- ------------ -----------
NET CASH USED IN INVESTING ACTIVITIES (7,906,572) (1,120,637) (14,651,577) (5,333,206)
----------- ----------- ------------ -----------
FINANCING ACTIVITIES:
Net increase in demand deposits, NOW accounts,
and savings accounts 2,629,332 -0- 8,147,253 -0-
Net increase in certificates of deposit 3,758,976 -0- 7,292,463 -0-
Borrowing under line of credit -0- -0- -0- 93,000
Issuance of common stock -0- 432,530 -0- 6,790,470
Stock issue costs -0- -0- -0- (20,677)
Payments to organizers -0- -0- -0- (40,500)
Payments on line of credit -0- -0- -0- (130,500)
Retirement of common stock -0- -0- -0- -0-
----------- ----------- ------------ -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 6,388,308 432,530 15,439,716 6,691,793
----------- ----------- ------------ -----------
Net increase in cash and cash equivalents (1,569,681) (740,962) 357,850 1,201,075
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,808,146 1,942,233 880,615 196
----------- ----------- ------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,238,465 $ 1,201,271 $ 1,238,465 $ 1,201,271
=========== ============ ============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 111,867 $ -0- $ 127,452 $ 4,572
Income taxes -0- -0- -0- -0-
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
GATEWAY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
September 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Gateway
Bancshares, Inc., and its wholly-owned subsidiary, Gateway Bank & Trust. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Certain items in prior period's financial statements have been
reclassified to conform with the current financial statement presentation.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Regulation
S-B. 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 nine-month period ended September 30, 1997
and the three-month period ended September 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the financial statements and footnotes
thereto included in the Company's annual financial report filed under cover Form
10-KSB for the year ended December 31, 1996.
NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Organization
Gateway Bancshares, Inc., (the "Company") was formed to acquire all the stock of
a new bank in Ringgold, Georgia, called Gateway Bank & Trust (the "Bank").
The Company is a one-bank holding company which provides a full range of banking
services to individual and business customers in the Catoosa County, Georgia and
surrounding areas through its wholly owned subsidiary, the Bank. The Bank was
granted a charter by the Georgia Department of Banking and Finance, and began
full operation on April 21, 1997. The Company is funding operations from
deposits and from capital raised through the issue of its common stock in 1996.
Further discussion of the Company's financial condition and results of operation
is included in the Company's consolidated financial statements presented in the
Company's annual report on Form 10-KSB for the year ended December 31, 1996.
Premises and Equipment
Premises and equipment are stated at cost less depreciation of $58,191. The
provision for depreciation charged to expense for the nine months ended
September 30, 1997 was $53,014.
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, concluded)
Pre-Opening, Organization and Stock Offering Costs
Organization costs are primarily consulting, legal and regulatory fees related
to the incorporation and initial organization of the Company and the Bank.
Pre-opening costs are initial expenses incurred to prepare the Bank to commence
business as a financial institution. Organization costs have been capitalized
and are being amortized on a straight-line basis over five years. Stock offering
costs were charged to additional paid-in capital when the stock offering was
completed during the second quarter of 1996.
Income Taxes
The Company and the Bank are subject to federal and state income taxes. An
income tax benefit approximating 34 percent of the Company's current year
operating losses has been recognized as the Company is expected to apply the
losses against future taxable income.
Net Loss Per Common Share
Net loss per common share is based on the number of shares outstanding for the
periods presented.
NOTE 3 - INVESTMENT SECURITIES
The Company is subject to the accounting and reporting requirements of Statement
of Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("SFAS 115"). This pronouncement requires that all
investments in debt securities be classified as either "held-to-maturity"
securities, which are reported at amortized cost; trading securities, which are
reported at fair value, with unrealized gains and losses included in earnings;
or "available-for- sale" securities, which are reported at fair value, with
unrealized gains and losses excluded from earnings and reported in a separate
component of shareholder's equity (net of deferred tax effect).
At September 30, 1997, the Company had net unrealized gains of $18,392 in
available-for-sale securities which are reflected in the presented assets and
resulted in an increase in shareholder's equity of $12,134, net of deferred tax
liability. There were no trading securities. The net increase in shareholder's
equity as a result of the SFAS 115 adjustment from December 31, 1996 to
September 30, 1997 was $16,081.
NOTE 4 - RECENTLY ISSUED ACCOUNTING STANDARDS
In 1997, the Financial Accounting Standards Board (FASB) issued Statements on
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
Financial Statements and Extinguishments of Liabilities", No. 128, "Earnings Per
Share" and No. 129, "Disclosure of Information about Capital Structure". These
standards are effective for periods ending after December 15, 1997 (and interim
periods for SFAS No. 125 and No. 128). They clarify accounting practices for
financial asset transfers and debt extinguishments, simplify reporting of
earnings per share and require the disclosure of certain information about the
entity's capital structure. Management does not expect these new standards to
have a material impact on the consolidated financial statements.
7
<PAGE> 8
Part I.- Financial Information
Item 2. Management's Discussion and Analysis or Plan of Operation
This discussion is intended to assist in an understanding of the Company's
financial condition and results of operations. This analysis should be read in
conjunction with the financial statements and related notes appearing in Item 1
of the March 31, 1997 and June 30, 1997 Forms 10-QSB and Management's Discussion
and Analysis of Financial Condition and Results of Operations for the Year ended
December 31, 1996 appearing in the Company's Form 10-KSB.
EARNINGS SUMMARY
The Company's loss for the quarter ended September 30, 1997 of $62,985 resulted
from the effect of start up costs, salaries and overhead costs incurred after
the opening of the Bank. However, the reported loss of $62,985 for third quarter
1997 decreased from the loss of $129,353 for second quarter which demonstrates
the Company's movement toward profitability through its loan and deposit growth.
The Company's loss per share for third quarter 1997 was $0.09.
RESULTS OF OPERATIONS
INTEREST INCOME
Interest income on loans and investment securities is the principal source of
the Company's earnings stream. Fluctuations in interest rates as well as volume
and mix changes in earning assets materially affect interest income. Interest
income was $386,922 and $630,649 for the third quarter 1997 and the nine months
ended September 30, 1997, respectively, compared to $87,946 and $130, 554 for
the same periods in 1996. The increases primarily reflect the growth in the loan
and investment security portfolios.
INTEREST EXPENSE
Interest expense for the third quarter 1997 and nine months ended September 30,
1997 reflect interest expense on deposits that the Bank has accepted since
opening April 21, 1997 and were $146,266 and $188,229 respectively. In 1996, the
Company incurred interest expense on temporary organizational loans to fund
pre-opening expenses until such time as the offering of its common stock was
complete. These loans were paid in June, 1996, from proceeds of the stock
offering.
NON-INTEREST EXPENSE
Non-interest expense totaled $296,856 and $753,972 for third quarter 1997 and
the nine months ended September 30, 1997 respectively, compared to $107,624 and
$247,426 for the same periods in 1996. The increases reflect the hiring of
additional staff, and other expenses necessary for the operation of the Bank
which opened April 21, 1997. The Company currently has a staff of sixteen full
time people.
8
<PAGE> 9
INCOME TAXES
The Company's accumulated deficit incurred to date totaling $387,360 is expected
to be utilized in subsequent years to offset future taxable income.
FINANCIAL CONDITION
EARNING ASSETS
The Company's earning assets include loans, investment securities and federal
funds sold.
The mix of earning assets reflects management's attempt to maximize interest
income while maintaining acceptable levels of risk.
NON-EARNING ASSETS
Non-earning assets include premises and equipment of $1,670,056 at September 30,
1997, an increase of $1,121,666 from December 31, 1996. The Company's premises
were completed prior to opening on April 21, 1997. Depreciation has been
provided for those assets based on their estimated useful lives.
The Company began leasing the site for the Bank beginning in September, 1996, at
the rate of $1,707 per month. The lease term is for a maximum of fifty years,
including extensions after the initial twenty-year period, and subject to
certain conditions after the initial forty-year period.
Accrued interest was $194,378 at September 30, 1997, an increase of $151,534
from December 31, 1996. The increase is due to related increases in investment
securities since year end and the increase in loans since opening April 21,
1997.
Other assets consist of the organization costs of the Company and the Bank and
the deferred tax asset. Organization costs are primarily consulting, legal and
regulatory fees related to the incorporation and initial organization of the
Company and the Bank. Organization costs have been capitalized and are amortized
on a straight line basis over a period of five years. The deferred tax asset
consists primarily of tax benefits related to the net operating losses and are
expected to be realized when the Company becomes profitable.
LOANS
Since opening on April 21, 1997, the Company has made loans amounting to
$10,259,654 net of its reserve for loan losses, or 46.8 percent of total assets.
The Company will continue to search for loan opportunities in its market area
while assuming acceptable levels of risk.
PROVISION FOR LOAN LOSSES
The provisions for loan losses for the third quarter 1997 and for the nine
months ended September 30, 1997 were $58,500 and $102,000, respectively. Since
the Bank's loan portfolio is only five months old, the Bank has no historical
data about loan losses in his portfolio on which to base projections for future
losses.
9
<PAGE> 10
Current loan quality analysis does not indicate potential loan losses. Until
more substantial evidence about potential loan losses is developed, management
believes the Bank should establish an allowance for loan losses that will
approximate 1% of total loans. At September 30, 1997, the allowance for loan
losses was $102,000, which represented .98% of total loans. Management expects
the allowance for loan losses to remain at the 1% level in the next nine to
fifteen months.
INVESTMENT SECURITIES AND FEDERAL FUNDS SOLD
The composition of the Company's investment securities portfolio reflects the
Company's investment strategy of maximizing portfolio yields subject to risk and
liquidity considerations. The primary objectives of the Company's investment
strategy are to maintain an appropriate level of liquidity and provide a tool to
assist in controlling the Company's interest rate position while at the same
time producing adequate levels of interest income. For securities classified as
available for sale, it is the intention to hold such securities for the
foreseeable future except for providing funds for increases in loan demand.
Management of the maturity of the portfolio is necessary to provide liquidity
and to control interest rate risk.
Federal funds sold decreased $200,000 from December 31, 1996 to September 30,
1997. The investment securities portfolio is adjusted to make various term
investments, to provide a source of liquidity and to serve as collateral to
secure certain government deposits. Investment securities at September 30, 1997
were $8,342,022 compared with $5,174,153 at December 31, 1996, reflecting a 61.2
percent increase of $3,167,869. The increase in investment securities has
resulted from the Company's growth in deposits since opening on April 21, 1997.
DEPOSITS
Since opening on April 21, 1997, the Company's deposits have grown to
$15,439,716 as of September 30, 1997. Of this amount, $2,162,304 relates to
non-interest bearing accounts. Time deposits over $100,000 amounted to
$3,185,385 at September 30, 1997.
LIABILITIES
Liabilities consisted primarily of building construction contract amounts
payable at December 31, 1996 and accrued interest payable and miscellaneous
accounts payable at September 30, 1997.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL RESOURCES
A strong capital position is vital to the profitability of the Company because
it promotes depositor and investor confidence and provides a solid foundation
for future growth of the organization. The Company has provided for its capital
requirements with proceeds from its initial stock offering. During 1996, the
Company issued 679,048 shares of its common stock at $10 per share. The Company
allocated $3,395,240 to common stock, and $3,357,637, (after the payment of
$37,603 in stock issue costs), to additional paid in capital. In 1996, the
Company capitalized the Bank by the purchase of all the Bank's outstanding
common stock for $6,000,000.
10
<PAGE> 11
Bank regulatory authorities are placing increased emphasis on the maintenance of
adequate capital. In 1990, risk-based capital requirements became effective. The
guidelines take into consideration risk factors, as defined by regulators,
associated with various categories of assets, both on and off the balance sheet.
Under the guidelines, capital strength is measured in two tiers which are used
in conjunction with risk-adjusted assets to determine the risk-based capital
ratios. The Bank's capital exceeds the required ratios at September 30, 1997. In
addition to the capital standards imposed by federal banking regulators, the
Georgia Department of Banking and Finance has imposed an 8% capital ratio for
the first three years of operation as a condition to the approval of the Bank's
charter. This standard, which exceeds the requirements discussed above, is
calculated as the ratio of total equity to total assets, each as adjusted for
unrealized gains and losses on securities and the allowance for loan losses.
After the initial three years of operation, the Bank will be subject to a 6%
minimum ratio.
Other important indicators of capital adequacy in the banking industry are the
leverage ratio and the tangible leverage ratio. The leverage ratio is defined as
the ratio that the Bank's shareholders equity minus goodwill bears to total
assets minus goodwill. The tangible leverage ratio is defined as the Bank's
shareholders equity minus all intangibles, divided by total assets minus all
intangibles. The Bank's leverage ratios as of September 30, 1997 exceeded the
regulatory minimum requirements which are generally 3% plus an additional
cushion of at least 100-200 basis points depending on risk profiles and other
factors.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORT ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit Page number
-------------- ---------------------- -----------
<S> <C> <C>
11 Computation of Earnings 15
Per Share
27 Financial Data Schedule
(for the SEC use only )
</TABLE>
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter ended
September 30, 1997.
12
<PAGE> 13
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.
Dated: November 10, 1997
GATEWAY BANCSHARES, INC.
/s/ Robert G. Peck
---------------------------
Robert G. Peck,
President and CEO
(Duly authorized officer)
/s/ Harle B. Green
---------------------------
Harle B. Green,
Chairman and Chief Financial Officer
(Principal Financial Officer)
13
<PAGE> 1
Exhibit 11 - Computation of Earnings per Share
The following tabulation presents the calculation of primary and fully diluted
earnings per common share for the three month periods ended September 30, 1997
and 1996.
<TABLE>
<CAPTION>
THREE MONTHS Three Months
ENDED Ended
SEPTEMBER 30, 1997 September 30, 1996
------------------ ------------------
<S> <C> <C>
Reported net income (loss) $ (62,985) $ (19,678)
============= ===========
Earnings (loss) on common shares $ (62,985) $ (19,678)
============= ===========
Weighted average common shares outstanding 679,048 679,048
============= ===========
Loss per common share - primary and fully diluted
Loss from continuing operations $ (.09) $ (.03)
============= ===========
Net income (loss) $ (.09) $ (.03)
============= ===========
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 588,465
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 650,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 6,897,550
<INVESTMENTS-CARRYING> 1,444,472
<INVESTMENTS-MARKET> 1,446,026
<LOANS> 10,361,654
<ALLOWANCE> (102,000)
<TOTAL-ASSETS> 21,910,657
<DEPOSITS> 15,439,716
<SHORT-TERM> 0
<LIABILITIES-OTHER> 93,290
<LONG-TERM> 0
0
0
<COMMON> 3,395,240
<OTHER-SE> 2,982,411
<TOTAL-LIABILITIES-AND-EQUITY> 21,910,657
<INTEREST-LOAN> 324,272
<INTEREST-INVEST> 254,401
<INTEREST-OTHER> 51,976
<INTEREST-TOTAL> 630,649
<INTEREST-DEPOSIT> 188,121
<INTEREST-EXPENSE> 188,229
<INTEREST-INCOME-NET> 442,420
<LOAN-LOSSES> 102,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 753,972
<INCOME-PRETAX> (387,769)
<INCOME-PRE-EXTRAORDINARY> (387,769)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (253,769)
<EPS-PRIMARY> (.37)
<EPS-DILUTED> (.37)
<YIELD-ACTUAL> 10.39
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,075
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 102,000
<ALLOWANCE-DOMESTIC> 102,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
