<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1999
Commission File Number: 0-27784
HUMBOLDT BANCORP
(Exact name of small business issuer as specified in its charter)
California 93-1175446
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
701 Fifth Street
Eureka, California
(Address of principal executive offices)
95501
(Zip Code)
(707) 445-3233
(Issuer's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding twelve 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.
X Yes No
-------- -------
Number of shares of common stock outstanding at March 31, 1999 is: 1,792,584
<PAGE>2
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
The information required by Rule 10-01 of Regulation S-X is attached hereto as
Exhibit A.
Item 2 - Management's Discussion and Analysis or Plan of Operation
The business operation of the Company is conducted through its wholly owned
subsidiaries, Humboldt Bank and Capitol Valley Bank, and a 50% interest in
Bancorp Financial Services, a company making automobile and small ticket leasing
loans. The following discussion, presented on a consolidated basis, analyzes the
financial condition and results of operations of the Company for the three month
period ended March 31, 1999.
Changes in Financial Condition
During the three month period ended March 31, 1999, deposits increased $5.7
million or 2.0% to $289.7 million compared with $284.0 million at December 31
1998. The increase in deposits is the result of increases in demand deposits and
time certificates of deposit of over $100,000 being partially offset by small
decreases in other time deposits and saving accounts. During the same period,
total loans increased $4.1 million or 2.2% to $193.2 million compared with
$189.1 million at December 31 1998. The increase in loans is the result of
increases in real estate loans, state and political subdivision loans, and other
loans, being partially offset by small decreases in commercial, industrial and
agricultural loans, lease financing loans, and consumer loans. Loans held for
sale decreased $3.2 million or 41.2% to $4.5 million compared with $7.7 million
at December 31 1998.
Investment securities decreased $1.3 million or 1.7% to $76.5 million compared
with $77.8 million at December 31 1998 and federal funds sold increased 6.9
million or 304.9% to 9.1 million compared with $2.3 million at December 31 1998.
The increase in federal funds sold was in anticipation of deposit withdrawals
related to real estate and IRS taxes due in April 1999.
During the three month period ending March 31, 1999, past due and non-accrual
loans increased 0.1 million or 3.6% to $2.9 million (0.9% of total assets),
compared with $2.8 million (0.9% of total assets) at December 31, 1998. The
Company's allowance for loan losses at March 31, 1999 was 1.6% of loans and
leases compared with 1.6% at December 31, 1998.
Earnings Summary
Net income for the quarter ended March 31, 1999 increased $122,000 to $997,000
or $0.55 per share (diluted $0.51), compared with net income of $875,000 or
$0.50 per share (diluted $0.45) in the same quarter a year ago. This increase
can be primarily attributed to an increase in non-interest income of $1,419,000
or 59.1%, an increase in Bancorp financial services income of $79,000 or 100.0%,
a decrease in interest expense of $179,000 or 9.1%, and a decrease in provision
for loan losses of $191,000 or 37.5%, offset by an increase in non-interest
expense of $1,671,000 or 38.7%.
<PAGE>3
Net Interest Income
During the quarter ended March 31, 1999, total interest income decreased $94,000
or 1.6% to $5,723,000 compared with $5,817.000 the prior year. During the same
period, total interest expense decreased $179,000 or 9.1% to $1,792,000 compared
with $1,971,000 the prior year. Net interest income for the quarter ended March
31, 1999 was $3.9 million compared with $3.8 million the prior year. Average
loans and leases as a percentage of average earning assets was 69.3% during the
quarter ended March 31, 1999, compared to 65.5% a year earlier. The average
balance of other earning assets as a percentage of average earning assets was
30.7% during the quarter ended March 31, 1999, compared to 34.5% a year earlier.
Provision for Loan Losses
The Company maintains its allowance for loan losses at a level considered
appropriate by management to provide for known and inherent risks in the loan
portfolio. This consideration includes an evaluation of various factors
affecting the collectability of loans, including current and projected economic
conditions, past credit experience and a periodic review of the Company's loan
portfolio. The Company recorded a provision to the allowance for loan losses for
the three month period ended March 31, 1999 of $318,000 compared to $509,000 for
the same period in 1998. Loans charged-off for the three-month period ended
March 31, 1999 were $310,000 compared to $345,000 for the same period in 1998.
Recoveries for the three-month period ended March 31, 1999 and 1998 were $32,000
each.
Non-Interest Income
Non-interest income consists of gain/loss on sale of loans and fixed assets,
service charges on deposit accounts and other service charges, commissions and
fees including Lease Department, Merchant BankCard Department and Issuing
BankCard Department income. During the quarter ended March 31, 1999, income from
these sources increased $1.4 million to $3.8 million compared with $2.4 million
in 1998. The increase was primarily attributable to an increase in Merchant
BankCard Department income of $1,457,000, a gain in FNMA servicing income of
$78,000, and a gain on sale of loans of $71,000, offset by a decrease in Issuing
Bankcard Department income of $116,000, and a decrease in Lease Department
income of $79,000.
Non-Interest Expense
During the quarter ended March 31, 1999, non-interest expenses increased $1.7
million or 38.7% to $6.0 million compared with $4.3 million in 1998. The
increase was due in part to increased personnel expenses of $518,000,
advertising expense of $35,000, outside audit expense of $34,000, outside
consulting expense of $48,000, office supplies expense of $84,000, telephone
expense of $57,000, ATM fee expense of $60,000, and merchant bankcard department
expense of $937,000. These increases were partially offset by decreases in other
outside service expense of $46,000, Oreo expense of $35,000, sundry loss expense
of $40,000, and issuing bankcard expense of $101,000. During the quarter ended
March 31, 1999, the Company had a total of 257 full-time equivalent employees,
compared to 223 full-time equivalent employees during the same quarter a year
earlier.
<PAGE>4
Capital Resources
Management seeks to maintain adequate capital to support anticipated asset
growth and credit risks and to ensure that the Company meets all regulatory
capital requirements.
The Company is required to maintain certain regulatory minimum capital ratios.
The following table outlines these ratios at March 31, 1999:
REQUIRED COMPANY'S
MINIMUM ACTUAL
---------------- -----------------
TIER 1 6.00 11.63
TOTAL CAPITAL 10.00 12.88
LEVERAGE 5.00 8.25
Future growth and earnings retention, as currently projected by management, is
expected to provide for the maintenance of capital ratios in conformity with the
requirements.
Income Taxes
The provision for income taxes was $536,000 for the quarter ended March 31,
1999, compared to $549,000 in the same quarter a year earlier. The provision is
classified as current tax liability for interim reporting purposes. The tax rate
was 36.9% for the quarter ended March 31, 1999, compared to 38.6% for the same
quarter in 1998.
Liquidity
The Company manages its liquidity to ensure that sufficient funds are available
to meet loan commitments and deposit fluctuations. Primary sources of liquidity
include cash and due from bank deposits, unpledged short-term U.S. Government
securities and federal funds sold. The Company's primary liquidity ratio, which
is the ratio of liquid assets to total assets, was 28.7% at March 31, 1999
compared with 32.5% at March 31, 1998 and 28.9% at December 31, 1998.
Year 2000 Issue
General
The Company formed a committee of senior company personnel in late 1997 to
address the issue of computer programs and embedded computer chips being unable
to distinguish between the year 1900 and the year 2000. The committee meets on a
regular basis to evaluate, review progress, and make recommendations on the
various phases of the Year 2000 project. The Company is satisfied with the
progress made to date and is on track to complete the project in time for the
Year 2000 date change.
<PAGE>5
Project
The Company-wide project is divided into seven major phases
1. The Awareness Phase
2. The Assessment Phase
3. The Vendor, Customer and Employee Notification Phase
4. The Vendor and Customer Response Review Phase
5. The Testing Phase
6. The Contingency Phase
7. The Renovation Phase
The Awareness Phase consisted of gaining executive level support for the
resources necessary to perform compliance work, for establishing a Year 2000
project team and for developing an overall strategy that encompassed the
in-house core system. In addition, it covered out-sourced systems, vendors,
customers, suppliers and correspondents. The Awareness Phases is fully
completed.
The Assessment Phase consisted of assessing the size, scope, and complexity of
the problem, detailing the magnitude of the effort necessary to address the Year
2000 project and the preparation of a Year 2000 action plan. This phase
identified all hardware, software, network, ATM and various other processing
platforms, and customers and vendor interdependencies affected by the year
2000-date change. The assessment went beyond informational systems to include
environmental systems that are dependent on embedded microchips such as security
systems, elevators and vaults. The Assessment Phase is fully completed.
The Vendor, Customer, and Employee Notification Phase consisted of the
following:
i. The mailing of letters to critical vendors requesting information on
their Year 2000 compliance plans and readiness.
ii. The mailing of letters to and personal contact with major customers
(with special emphasis given key loan customers), to ascertain their awareness,
preparations and compliance plans relative to the Year 2000 problem.
iii. Company staff members were guest speakers at several service clubs
in the area outlining the Year 2000 problem.
iv. Meetings were held with all staff members within the Company to
advise them of the Year 2000 problem, and the steps the Company was taking to
ensure compliance.
v. The Company's Year 2000 Policy statement, as well as other
informational items, has been made available to both customers and other
interested parties.
The Vendor, Customer, and Employee Notification Phases is completed. The
Company, however, will continue to keep vendors, customers and employees updated
on its compliance progress and general Year 2000 issues.
<PAGE>6
The Vendor and Customer Response Review Phase is ongoing. The Company is
continuing to follow up with vendors and customers who have not yet responded
and with those whose responses were deemed less than satisfactory. The Company
is continuing to require all loan officers to include in their loan write-ups a
discussion of the customer's Year 2000 preparedness. The Company is of the
opinion that this phase will be a continuing project throughout 1999.
The Testing Phase is a multifaceted process that is critical to the Year 2000
project and inherent in each phase of the project plan. This process includes
the testing of incremental changes to hardware and software components. In
addition to testing upgraded components, connections with other systems will be
verified to ensure that internal and external users accept all changes. The
committee will assure the effective and timely completion of all hardware and
software testing prior to final implementation and will have ongoing discussions
with their vendors of their testing efforts. The Company has prepared, and the
Board of Directors has approved, the Company's Year 2000 Test Plan. Nearly all
testing scripts are complete and well over 50% of the test scripts have been
executed without incident. Additional testing is ongoing and the Company intends
to continue testing throughout the rest of 1999 and into the year 2000 (Leap
Year). The Company's core system was unit tested in late December 1998, and one
end-to-end interface test was executed in late March. With the exception of a
few minor, unrelated and explainable anomalies, the system has proven to be
compliant. All additional interface testing of the Company's core system is
anticipated to be completed before the end of April 1999. As well, several of
the ancillary systems have been tested without incident. The Company is on pace
for the timely completion of the necessary testing as required by its regulatory
agencies.
The Contingency Phase will consist of a comprehensive plan to address
remediation and business resumption functions that rely on mission critical
systems. The initial version of the Contingency Plan was submitted to the Board
of Directors for review and was approved on January 21, 1998. The Company
anticipates that the Contingency Plan will be a living document, which will be
continually updated as necessary throughout 1999.
The Renovation Phase will consist of renovating, replacing and retiring
non-compliant systems, as well as evaluating Year 2000 code enhancements,
hardware and software upgrades, system replacements and other associated
changes. The Company anticipates that the Renovation Phase will continue
throughout 1999.
Costs
The total cost associated with required modifications to become Year 2000
compliant is not expected to be material to the Company's financial position.
The estimated total cost of the Year 2000 project is approximately $750,000. It
is anticipated that this amount will be used for the renovation of certain ATMs,
the voice mail system, the Lucent telephone system and employee time to complete
the testing and contingency phases of the Y2K plan. In addition the Company is
expensing and reserving $10,000 a month for possible loan losses resulting from
Year 2000 problems. The reserve as of March 31,1999, was $130,000 and will be
$220,000 by December 31, 1999.
<PAGE>7
Risks
The failure to correct material Year 2000 problems could result in the
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from
uncertainty of the Year 2000 readiness of third party suppliers and customers,
the Company is unable to specifically determine at this time whether the
consequences of Year 2000 failures will have a material impact on the Company's
results of operations, liquidity or financial condition. However, its ongoing
Year 2000 efforts are expected to significantly reduce the Company's level of
uncertainty about the Year 2000 problem and, in particular, about the Year 2000
compliance and readiness of its critical vendors. The Company believes that,
with implementation of new business systems, if necessary, and the completion of
the project as scheduled, the possibility of significant interruptions of normal
operations should be reduced to a minimum.
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
The Company is not involved in any legal proceedings that would have a material
adverse effect on its financial statements.
ITEM 2 - Changes in Securities - NONE
ITEM 3 - Defaults upon Senior Securities - NONE
<PAGE>8
ITEM 4 - Submission of Matters to a Vote of Security Holders
On or about April 16, 1999, a Proxy Statement of Humboldt Bancorp was mailed to
shareholders of record as of March 31, 1999 by the Board of Directors soliciting
proxies for use at the Annual Meeting of Shareholders to be held on May 20,
1999. At the meeting the shareholders will be asked to elect management's
nominees for Directors (12), to ratify the appointment of Richardson and Company
as independent certified accountants and to adopt amendments to the Amended
Humboldt Bancorp Stock Option Plan which would allow an optionee who retires to
exercise his or her options up until the expiration date of the original option
grant (as opposed to three months from the date of retirement), and also would
allow revisions to outstanding options consistent with such amendment.
ITEM 5 - Other Information
On September 17, 1998, the Board of Directors authorized management to file an
application with the appropriate regulators to establish a de novo bank in
Roseville, California. All required regulatory approvals were received and the
Capitol Valley Bank opened for business on March 3 1999.
On February 18, 1999 the Board of Directors authorized management to bid on the
Eureka and Ukiah branches of California Federal Bank ("Cal Fed"). Our bid was
accepted on March 2, 1999, a definitive agreement was executed with Cal Fed on
April 7 1999 and the company is in the process of filing for the necessary
regulatory approvals. It is anticipated that such approval will be forthcoming
and that the deal will be consummated in the third quarter of 1999.
ITEM 6 - Exhibits and Reports on Form 8-K
Exhibit (27) - Financial Data Schedule
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.
Date: May 14, 1999 HUMBOLDT BANCORP
ALAN J. SMYTH
Alan J. Smyth
Senior Vice President and
Chief Financial Officer
THEODORE S. MASON
Theodore S. Mason
President and Chief Executive Officer
<PAGE>9
<TABLE>
<CAPTION>
HUMBOLDT BANCORP AND SUBSIDIARIES CONSOLIDATED CONSOLIDATED
CONSOLIDATED BALANCE SHEETS UNAUDITED AUDITED
(IN THOUSANDS OF DOLLARS) 03-31-99 12-31-98
<S> <C> <C>
ASSETS:
Cash and Due From Banks 27,152 28,626
Interest Bearing Deposits in Banks 3,020 3,020
Federal Funds Sold 9,110 2,250
Investment Securities (At fair value of $76,501 and $77,802 76,501 77,802
respectively)
Loans Held For Sale 4,513 7,677
LOANS
Real Estate-Construction and Land Development 19,634 20,667
Real Estate-Commercial and Agriculture 84,431 80,197
Real Estate-Family and Multifamily Residential 34,142 27,549
Commercial, Industrial and Agriculture 32,420 33,981
Lease Financing 9,484 9,867
Consumer Loans 5,972 7,782
State and Political Subdivisions 651 1,512
Other 2,683 585
189,417 182,140
Less: Deferred Loan Fees (753) (724)
TOTAL LOANS 188,664 181,416
Less: Allowance for Credit Losses (3,095) (3,055)
NET LOANS 185,569 178,361
Premises and Equipment (net) 8,236 7,950
OREO 175 175
Investment in Associated Companies 2,360 2,281
Intangible Assets 1,741 1,760
Other Assets 10,699 10,073
TOTAL ASSETS 329,076 319,975
LIABILITIES
Deposits:
Demand 97,159 96,884
Demand-Interest Bearing 53,085 50,090
Time - $1000,000 and over 49,724 46,355
Other Time 68,988 69,478
Savings 20,723 21,160
289,679 283,967
Borrowed Funds 4,681 4,758
Other Liabilities 5,748 3,402
300,108 292,127
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 1,000,000 shares authorized,
none issued
Common stock, no par value; 20,000,000 shares authorized,
1,792,584 shares in 1999 and 1,596,952 in 1998, issued and 25,634 25,580
outstanding
Retained Earnings 2,482 1,485
Additional Paid in Capital 297 297
Unrealized Gain/Loss 555 486
TOTAL SHAREHOLDERS' EQUITY 28,968 27,848
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 329,076 319,975
</TABLE>
NOTE: Humboldt Bancorp became effective January 2, 1996. Capitol Valley Bank,
Roseville Ca. opened March 3 1999.
See notes to consolidated financial statements.
<PAGE>10
<TABLE>
<CAPTION>
HUMBOLDT BANCORP AND SUBSIDIARIES
STATEMENT OF INCOME AND COMPREHENSIVE INCOME UNAUDITED UNAUDITED
For The Three Months Ended March 31, 1999 and 1998 March 31, 1999 March 31, 1998
(In Thousands of Dollars)
<S> <C> <C>
Interest and Fees on Loans 4,637 4,472
Interest on Deposits in Banks 39 42
Interest and Dividends on Securities 934 1,213
Interest on Federal Funds Sold 113 90
Total Interest Income 5,723 5,817
INTEREST EXPENSE
Interest on Demand Deposits 40 52
Interest on Other Savings Deposits 259 388
Interest on Time Deposits $100,000+ 600 557
Interest on all Other Time Deposits 828 946
Interest on Other Borrowings 65 28
Total Interest Expense 1,792 1,971
Net Interest Income 3,931 3,846
Provision for Loan Losses 318 509
NON INTEREST INCOME
Service Charges on Deposit Accounts 542 546
Other Fee Income 2,797 1,609
All Other Non-Interest Income 481 246
Total Non-Interest Income 3,820 2,401
Realized Gain/Loss on Securities 6 0
NON INTEREST EXPENSE
Salaries and Employee Benefits 2,653 2,135
Premises and Fixed Asset Expense 610 611
Other Non-Interest Expense 2,722 1,568
Total Non-Interest Expense 5,985 4,314
INCOME BEFORE TAXES 1,454 1,424
Applicable Income Taxes 536 549
Bancorp Financial Services Income 79 0
NET INCOME 997 875
COMPREHENSIVE INCOME.
CHANGE IN UNREALIZED HOLDING GAINS FOR PERIOD 69 (166)
COMPREHENSIVE INCOME 1,066 709
NET INCOME PER SHARE $0.55 $0.50
NET INCOME PER SHARE ASSUMING DILUTION $0.51 $0.45
</TABLE>
<PAGE>11
<TABLE>
<CAPTION>
HUMBOLDT BANCORP STATEMENT OF CASH FLOWS CONSOLIDATED CONSOLIDATED
For the Three Months Ended March 31, 1999 and 1998 UNAUDITED UNAUDITED
(In Thousands of Dollars) March 31, 1999 March 31, 1998
<S> <C> <C>
OPERATING ACTIVITIES
Net Income - Adjustments to reconcile net income to net
cash provided by operating activities: 997 875
Provision for Loan Loss 318 509
Depreciation 335 343
Amortization and Other 404 513
(Gain)/Loss on Sale of Securities (6) 0
Equity in Income of Associated Company (79) (41)
Net Change in Other Assets (683) (495)
Net Change in Other Liabilities 990 533
Net Change in Loans Held for Sale 3,164 (1,297)
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,440 940
INVESTING ACTIVITIES
Net Change in Interest-bearing Deposits in Banks 0 0
Federal Funds Sold (Net) (6,860) (1,490)
Securities Held to Maturity
Investment Purchases 0 0
Proceeds from Maturities of Investments 0 0
Proceeds from Sale of Investments 0 0
Securities Available For Sale
Investment Purchases (6,905) (2,753)
Proceeds From Maturities of Investments 7,953 3,955
Proceeds From Sale of Investments 0 0
Net Change in Loans (7,526) (6,954)
Purchase of Premises and Equipment (621) (581)
Investment in Associated Company 0 0
NET CASH USED FOR INVESTING ACTIVITIES (13,959) (7,823)
FINANCING ACTIVITIES
Net Change in Deposits 5,712 5,710
Payments on Borrowed Funds (21) (3)
Proceeds from Borrowed Funds 1,300 0
Stock Options Exercised 54 121
NET CASH PROVIDED BY FINANCING ACTIVITIES 7,045 5,828
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,474) (1,055)
Cash and Due From Banks at Beginning of Period 28,626 21,442
CASH AND DUE FROM BANKS AT END OF PERIOD 27,152 20,387
SUPPLEMENTAL DISCLOSURES
Cash Paid During the Period For: Interest 1,828 1,958
Income Taxes 235 1,000
NON-CASH TRANSACTIONS
Unrealized Holding (Gains)losses on Securities (112) 283
Deferred Income Taxes on Unrealized Holding Losses on
Securities (43) 118
Deposit Liabilities Assumed in Exchange for Assets Acquired
in Connection with Purchase of Branches 0 0
</TABLE>
<PAGE>12
Humboldt Bancorp and Subsidiary
Notes to Consolidated Financial Statements
March 31, 1999
(Unaudited)
Note 1 - Basis of Presentation
In the opinion of Management, the unaudited interim consolidated financial
statements contain all adjustments of a normal recurring nature, which are
necessary to present fairly the financial condition of Humboldt Bancorp and
Subsidiaries at March 31, 1999 and results of operations for the three months
then ended.
Certain information and footnote disclosures presented in the Company's annual
financial statements are not included in these interim financial statements.
Accordingly, the accompanying unaudited interim consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1998 Annual Report on Form 10-KSB. The results
of operations for the three months ended March 31, 1999 are not necessarily
indicative of the operating results through December 31, 1999.
Note 2 - New Accounting Policies
On March 31, 1998 the Company adopted SFAS No. 130 "Reporting Comprehensive
Income." 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. This Statement
does not require a specific format for that financial statement but requires
that an enterprise display an amount representing total comprehensive income for
the period in that financial statement.
Comprehensive income is defined as "the change in equity [net assets] of a
business enterprise during a period from transactions and other events and
circumstances from nonowner sources. It includes all changes in equity during a
period except those resulting from investments by owners and distributions to
owners." The Company's only item of comprehensive income at this time is the
change in unrealized gains on securities available for sale, net of applicable
deferred income taxes.
This Statement is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes are required.
<PAGE>13
Note 3 - Consolidation
The consolidated financial statements include the accounts of Humboldt Bancorp
and its wholly owned subsidiaries, Humboldt Bank and Capitol Valley Bank and a
50% interest in Bancorp Financial Services. All material intercompany accounts
and transactions have been eliminated in consolidation.
Note 4 - Commitments
The company has outstanding performance letters of credit of $4.6 million at
March 31, 1999 compared to $4.0 million at March 31, 1998.
Note 5 - Net Income Per Common Share
Net income per share is calculated by using the weighted-average common shares
outstanding. The weighted-average number of common shares used in computing the
net income per common share for the period ending March 31, 1999 was 1,796,497
and for the period ending March 31, 1998 was 1,753,881.
Net income per share (diluted) is calculated by using the weighted-average
common shares (diluted) outstanding. The weighted average number of common
shares (diluted) used in computing the net income per common share (diluted) for
the period ending March 31, 1999 was 1,957,917 and for the period ending March
31, 1998 was 1,947,287.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
INTERNALLY GENERATED REPORTS 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-END> MAR-31-1999
<CASH> 27,152
<INT-BEARING-DEPOSITS> 3,020
<FED-FUNDS-SOLD> 9,110
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 76,501
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 197,690
<ALLOWANCE> (3,095)
<TOTAL-ASSETS> 329,076
<DEPOSITS> 289,679
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,748
<LONG-TERM> 4,681
0
0
<COMMON> 25,634
<OTHER-SE> 3,334
<TOTAL-LIABILITIES-AND-EQUITY> 329,076
<INTEREST-LOAN> 4,637
<INTEREST-INVEST> 934
<INTEREST-OTHER> 152
<INTEREST-TOTAL> 5,723
<INTEREST-DEPOSIT> 1,727
<INTEREST-EXPENSE> 1,792
<INTEREST-INCOME-NET> 3,931
<LOAN-LOSSES> 318
<SECURITIES-GAINS> 6
<EXPENSE-OTHER> 5,985
<INCOME-PRETAX> 1,454
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 997
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.51
<YIELD-ACTUAL> 1.22
<LOANS-NON> 750
<LOANS-PAST> 457
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,055
<CHARGE-OFFS> (310)
<RECOVERIES> 32
<ALLOWANCE-CLOSE> 3,095
<ALLOWANCE-DOMESTIC> 1,008
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,087
</TABLE>
