<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 June 30, 1998
Commission File Number: 0-21385
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
----------------------------------------
(Exact name of small business issuer as specified in its charter)
INDIANA 31-1463057
- ------------------------ ----------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
3002 HARRISON AVENUE, CINCINNATI, OHIO 45211-5789
- -------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (513) 661-5735
---------------
Indicate by checkmark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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 .
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date. Shares outstanding at
June 30, 1998 common stock, $.01 par value: 2,559,118.
<PAGE> 2
CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
Consolidated Statements of Financial Condition as of
June 30, 1998 (Unaudited) and December 31, 1997 ......................1
Consolidated Statements of Income for the Three Months
and Six Months Ended June 30, 1998 and 1997 (Unaudited) ..............2
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1998 and 1997 (Unaudited) ......................3
Notes to Consolidated Financial Statements (Unaudited) ...............4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................................5
Item 3. Quantitative and Qualitative Disclosures About Market Risk .........8
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings ..................................................9
Item 2. Changes in Securities ..............................................9
Item 3. Defaults Upon Senior Securities ....................................9
Item 4. Submission of Matters to a Vote of Security-Holders ................9
Item 5. Other Information ..................................................9
Item 6. Exhibits and Reports on Form 8-K ...................................9
SIGNATURES
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
(Unaudited)
June 30, 1998 December 31, 1997
------------- -----------------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 9,612,245 10,368,279
Securities available for sale -- 999,690
Mortgage backed securities available for sale 1,770,686 2,150,618
Loans receivable, net 111,131,197 117,648,013
Stock in Federal Home Loan Bank 1,101,600 1,023,800
Accrued interest receivable 712,089 712,797
Premises and equipment, net 1,379,743 1,082,978
Income taxes 24,910 177,416
Prepaid expenses and other assets 606,318 95,190
------------- -------------
Total assets $ 126,338,788 134,258,781
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 83,919,906 88,234,007
Federal Home Loan Bank advances 15,760,206 14,764,818
Advances from borrowers for taxes and insurance 246,966 865,808
Income taxes 281,530 162,975
Accrued expenses and other liabilities 120,934 85,461
------------- -------------
Total liabilities 100,329,542 104,113,069
Contingencies (Note 4)
Stockholders' equity: (Note 6)
Common stock, $.01 par value, 15,000,000 shares 28,434 28,434
authorized, 2,559,118 and 2,843,375 shares outstanding
at June 30, 1998 and December 31, 1997, respectively
Additional paid in capital 18,924,583 18,789,500
Retained income 15,235,078 14,962,966
Employee Stock Ownership Plan (2,553,253) (2,686,661)
Management recognition plan (1,453,234) (975,484)
Treasury Stock, at cost; 284,257 shares (4,192,791) --
Accumulated other comprehensive income 20,429 26,957
------------- -------------
Total stockholders' equity 26,009,246 30,145,712
============= =============
Total liabilities and stockholders' equity $ 126,338,788 134,258,781
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 4
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
--------------------------- --------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $2,367,306 2,005,471 4,899,924 3,836,637
Mortgage-backed securities 32,276 236,317 66,855 483,317
Investment securities -- 46,965 10,254 105,500
Interest-bearing deposits with banks 120,850 181,211 190,383 366,573
--------------------------- --------------------------
Total interest income 2,520,432 2,469,964 5,167,416 4,792,027
--------------------------- --------------------------
Interest expense:
Deposits 1,135,402 1,183,578 2,302,876 2,315,216
Borrowings 249,211 155,673 481,385 216,971
--------------------------- --------------------------
Total interest expense 1,384,613 1,339,251 2,784,261 2,532,187
--------------------------- --------------------------
Net interest income 1,135,819 1,130,713 2,383,155 2,259,840
Provision for loan losses 3,657 35,507 13,711 53,993
--------------------------- --------------------------
Net interest income after provision for loan losses 1,132,162 1,095,206 2,369,444 2,205,847
--------------------------- --------------------------
Non-interest income:
Gain on loan sales 289,307 -- 333,995 --
Service charges and fees 40,951 33,109 71,521 62,567
--------------------------- --------------------------
Total non-interest income 330,258 33,109 405,516 62,567
--------------------------- --------------------------
Non-interest expenses:
Compensation and benefits 427,216 280,306 924,344 563,291
Occupancy costs 62,462 39,285 114,348 81,310
Franchise tax 113,590 119,771 227,580 240,042
Federal deposit insurance premiums 13,682 12,800 27,098 25,530
Data processing 23,936 29,747 54,069 55,086
Legal, accounting and examination fees 44,043 76,074 78,655 100,079
Consulting fees 22,357 9,314 28,271 16,792
Advertising 11,442 10,746 23,446 19,139
Other 85,011 55,314 164,424 124,704
--------------------------- --------------------------
Total non-interest expenses 803,739 633,357 1,642,235 1,225,973
--------------------------- --------------------------
Income before income tax expense 658,681 494,958 1,132,725 1,042,441
Income tax expense 242,000 169,600 410,000 356,000
--------------------------- --------------------------
Net income $416,681 325,358 722,725 686,441
=========================== ==========================
Earnings per share, basic and diluted $0.18 $0.12 $.30 $0.26
===== ===== ==== =====
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 5
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 722,725 686,441
Adjustments to reconcile net income to net cash provided by
operating activities:
Net amortization of premium and discounts 7,146 (19,843)
Depreciation of premises and equipment 80,900 51,640
Federal Home Loan Bank stock dividend (37,700) (33,900)
Deferred income taxes (13,452) (23,158)
Accretion of net loan fees deferred 8,203 35,697
Provision for loan loss 13,711 53,993
Gain on loan sales (333,995) --
Net loans repaid held for sale -- 10,495
Proceeds from sale of loans 15,655,380 --
Management Recognition Plan amortization 129,871 --
Employee Stock Ownership Plan amortization 163,881 124,851
Change in:
Accrued interest receivable 708 (160,098)
Prepaid expenses and other assets (511,128) (219,601)
Accrued expenses 35,473 85,562
Income taxes 287,891 163,648
------------ ------------
Net cash provided by operating activities 16,209,614 755,727
------------ ------------
Cash flows from investing activities:
Proceeds from maturing investment security 1,000,000 --
Principal payments on mortgage backed securities 362,569 1,585,349
Purchase of Federal Home Loan Bank Stock (40,100) --
Net increase in loans receivable (8,826,483) (17,741,718)
Additions to premises and equipment (377,665) (9,641)
------------ ------------
Net cash used in investing activities (7,881,679) (16,166,010)
------------ ------------
Cash flows from financing activities
Net (decrease) increase in deposits (4,314,101) 3,448,760
Cash dividends (346,001) (398,072)
Purchase of common stock for treasury (4,192,791) (641,006)
Purchase of common stock for MRP (607,622) --
Short term Federal Home Loan Bank advances & Federal Funds 1,000,000 5,000,000
Long term Federal Home Loan Bank advance repayments (4,612) (5,691)
Long term Federal Home Loan Bank advances -- 7,000,000
Net decrease in advances from borrowers for taxes and insurance (618,842) (497,621)
------------ ------------
Net cash (used) provided by financing activities (9,083,969) 13,906,370
------------ ------------
Net decrease in cash and cash equivalents (756,034) (1,503,913)
Beginning cash and cash equivalents 10,368,279 13,420,389
------------ ------------
Ending cash and cash equivalents $ 9,612,245 11,916,476
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 6
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 1998 and December 31, 1997
(1) Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-Q and therefore,
do not include all disclosures necessary for a complete presentation of
the consolidated statements of financial condition, income and cash
flows in conformity with generally accepted accounting principles, and
should be read in conjunction with the consolidated financial
statements and notes thereto for the fiscal year ended December 31,
1997 as filed on Form 10K. All adjustments which are, in the opinion of
management, necessary for the fair presentation of the interim
financial statements have been included. The consolidated statements of
income for the quarter and six months ended June 30, 1998 are not
necessarily indicative of the results which may be expected for the
entire year.
(2) Comprehensive Income
--------------------
The Company adopted FASB Statement No. 130, Reporting Comprehensive
Income", during the first quarter of 1998. The statement establishes
standards for reporting and display of comprehensive income and its
components. Comprehensive income includes net income and other
comprehensive income, which for the Company includes unrealized gains
and losses on securities available for sale.
<TABLE>
<CAPTION>
Three months ended June 30
----------------------------------
1998 1997
---- ----
<S> <C> <C>
Net Income 416,681 325,358
Other comprehensive income, net of tax:
Unrealized holding losses arising during the period (3,107) (174,063)
------------ -------------
Comprehensive income 413,574 151,295
============ =============
</TABLE>
(3) Earnings Per Share
------------------
The following table presents the numerators (net income) and
denominators (average shares outstanding) for the basic and diluted net
income per share computations for the three months ended June 30:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net income, basic and diluted $416,681 $325,358
Average shares outstanding 2,384,864 2,615,358
Effect of dilutive securities 1,463 --
---------------- ----------------
Average shares outstanding including dilutive shares 2,386,327 2,615,358
================ ================
Net income per share, basic $0.18 $0.12
================ ================
Net income per share, diluted $0.18 $0.12
================ ================
</TABLE>
(4) Contingencies
-------------
Although the Bank, from time to time, is involved in various legal
proceedings in the normal course of business, there are no material
legal proceedings to which the Bank is a party or to which any of its
property is subject.
4
<PAGE> 7
(5) Allowance for loan losses
-------------------------
Activity in the allowance for loan losses as follows:
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
<S> <C> <C>
Balance, January 1 266,263 165,513
Loan charge-offs -- --
Recoveries -- --
Provision for loan losses 13,711 100,750
--------------------- ------------------------
Balance, end of period 279,974 266,263
===================== ========================
</TABLE>
(6) Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
----------------------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended June 30,
--------------- ---------------
1998 1997
--------------- ---------------
<S> <C> <C>
Balance, January 1 30,145,712 39,982,418
Net Income 722,726 686,441
Dividends on common stock (346,001) (398,072)
Purchase of shares by management recognition plan (607,622) --
Amortization of management recognition plan 129,871 --
Amortization of employee stock ownership plan 163,879 124,851
Purchase of treasury stock (4,192,791) (641,006)
Unrealized loss on securities available for sale, net of tax (6,528) (156,379)
--------------- ---------------
Balance, end of period 26,009,246 39,598,253
=============== ===============
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1998 AND DECEMBER 31, 1997
Westwood Homestead Savings Bank (the "Bank") converted from a state
chartered mutual savings bank to a state chartered stock savings bank on
September 27, 1996. In the conversion, 2,843,375 shares of common stock of
Westwood Homestead Financial Corporation (the "Company") were sold, generating
net proceeds after conversion expenses of $27.7 million. Of this amount, $13.9
million was used to purchase 100% of the common stock of the Bank, $2.4 million
to fund the stock purchase made by the Employee Stock Ownership Plan and the
balance was used to purchase investments and for other corporate purposes.
Total assets decreased $8.0 million, or 6.0% from $134.3 million at
December 31, 1997 to $126.3 million at June 30, 1998. Loans receivable decreased
$6.5 million, or 5.5% from $117.6 million at December 31, 1997 to $111.1 million
at June 30, 1998. In managing the Company's interest rate risk and liquidity
portfolio, $9.1 million of fixed rate loans were sold with servicing retained.
5
<PAGE> 8
Total liabilities decreased $3.8 million from $104.1 million at
December 31, 1997 to $100.3 million at June 30, 1998. Deposits decreased $4.3
million during the period primarily due to withdrawals of the $6.3 million in
maturing high rate long term C.Ds. At June 30, 1998, the Bank had $3.4 million
remaining in ten year C.Ds with interest rates between 9.0% and 10.0% of which
$865,000 will mature by December 31, 1998.
Stockholders' equity decreased $4.1 million as a result of the stock
repurchase program announced on April 15, 1998. A total of 284,257 shares were
purchased by the Company for a total cost of $4.2 million and will be held as
treasury shares. This repurchase program combined with the special dividend paid
on December 22, 1997 and the quarterly dividends reflects management's
commitment to increasing shareholder value. The Company's equity to asset ratio
has been reduced from 33.3% at September 30, 1996 to 20.6% at June 30, 1998.
COMPARISON OF OPERATING RESULTS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30,
1998 AND 1997
Net Income. Net income for the quarter ended June 30, 1998 was
$417,000, or 18 cents per share, as compared with $325,000, or 12 cents per
share, for the quarter ended June 30, 1997. Return on average equity and return
on average assets were 5.93% and 1.30%, respectively, for the quarter ended June
30, 1998 compared to 3.23% and .99%, respectively, for the same quarter in 1997.
Net income for the six months ended June 30, 1998 was $723,000, or 30 cents per
share, as compared with $686,000, or 26 cents per share, for the six months
ended June 30, 1997.
Net Interest Income. Net interest income increased $5,000 to $1,136,000
for the quarter ended June 30, 1998 from $1,131,000 for the quarter ended June
30, 1997. This increase was achieved despite a $12.2 million decrease in average
equity. Average net interest spread increased 80 basis points to 2.49% for the
quarter ended June 30, 1998 as compared to 1.69% for the same quarter in 1997.
Net interest income increased $123,000 to $2,383,000 for the six months ended
June 30, 1998 from $2,260,000 for the six months ended June 30, 1997.
Interest Income. Interest income increased $50,000 to $2.5 million for
the quarter ended June 30, 1998 despite a $4.9 million decrease in average
interest earning assets from the same quarter last year. As a result of the
balance sheet realignment in December 1997, the average yield on interest
earning assets increased 46 basis points to 8.06% for the quarter ended June 30,
1998. Interest income on loans receivable increased $362,000, or 18.1%, to
$2,367,000 for the quarter ended June 30, 1998 from $2,005,000 for the quarter
ended June 30, 1997. The average balance of loans receivable increased 16.2% to
$114.6 million for the quarter ended June 30, 1998 from the same quarter a year
ago while the average yield increased 13 basis points to 8.26%. The average
balance of investments and other earning assets decreased $20.9 million from the
year ago quarter resulting in $311,000 less in other interest income. Interest
income increased $375,000, or 7.8%, to $5.2 million for the six months ended
June 30, 1998 from $4.8 million for the six months ended June 30, 1997. As of
June 30, 1998 loans receivable represented 88.0% of total assets as compared to
76.3% at June 30, 1997.
Interest Expense. Interest expense increased $45,000 to $1,384,000 for
the quarter ended June 30, 1998 from $1,339,000 for the quarter ended June 30,
1997. This increase is due to $8.8 million more in average interest bearing
liabilities and a decrease in the average cost to 5.57% for the quarter ended
June 30, 1998 from 5.91% for the quarter ended June 30, 1997. The decrease in
cost was primarily the result of maturing high rate long term C.Ds. Interest
expense increased $252,000 to $2,784,000 for the six months ended June 30, 1998
from $2,532,000 for the six months ended June 30, 1997.
Provision for Loan Losses. The Bank established provisions for loan
losses of $4,000 and $36,000 during the quarters ended June 30, 1998 and 1997,
respectively. The loan portfolio is regularly reviewed by management, including
problem loans, and changes in the relative makeup to determine whether any loans
require classification or the establishment of additional reserves.
6
<PAGE> 9
Non-Interest Income. Non-interest income increased $297,000 to $330,000
for the quarter ended June 30, 1998 from $33,000 for the quarter ended June 30,
1997. Loan sales of $13.1 million generated gains of $289,000. Service charges
and fees increased $8,000 to $41,000 for the quarter ended June 30, 1998 from
$33,000 for the quarter ended June 30, 1997. This increase reflects the Bank's
emphasis on attracting new checking accounts in the last year. Non-interest
income increased $343,000 to $406,000 for the six months ended June 30, 1998
from $63,000 for the six months ended June 30, 1997 due to a $334,000 gain on
loan sales recorded during the six months ended June 30, 1998 while no loans
were sold during the same period last year.
Non-Interest Expense. Non-interest expense increased $171,000 to
$804,000 for the quarter ended June 30, 1998 from $633,000 for the quarter ended
June 30, 1997. Compensation and benefits increased $147,000, or 52.5%, during
the quarter ended June 30, 1998 as compared to the quarter ended June 30, 1997
primarily due to the MRP amortization of $65,000 and increased staffing.
Investments in the technology infrastructure of the Bank has increased the
occupancy costs from last year. The ratio of non-interest expense to average
assets was 2.50% for the quarter ended June 30, 1998 as compared to 1.93% for
the same quarter a year ago. Non-interest expense increased $416,000 to
$1,642,000 for the six months ended June 30, 1998 from $1,226,000 for the six
months ended June 30, 1997.
Income Taxes. The Company recorded income tax expense of $410,000 and
$356,000 for the six months ended June 30, 1998 and 1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $9.6 million at June 30, 1998 which
consisted primarily of overnight federal funds and Federal Home Loan Bank term
deposits. In order for the Company to enhance shareholder returns and generate a
competitive return on equity, management plans to expand the Bank's lending
activities and pursue other capital management measures. Due to the current
interest rate environment management has adjusted these lending activities to
emphasize mortgage banking. At June 30, 1998 the Bank's servicing portfolio
totaled $17.2 million.
The Company will also attempt to pursue growth externally through the
selective acquisition of other financial institutions. Due to the highly
competitive market for financial institution acquisitions in the Bank's market
areas, however, the Company has not succeeded to date, and there can be no
assurance that the Company will be successful in the future in identifying
attractive acquisition candidates or in acquiring such candidates on favorable
terms. Management believes that current liquidity levels are adequate to fund
daily operations.
The Bank is subject to various regulatory capital requirements
administered by the federal banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory - and possibly additional
discretionary - actions by regulators that, if undertaken, could have a direct
material effect on the Company's consolidated financial statements. Quantitative
measures established by regulation to ensure capital adequacy require the Bank
to maintain minimum amounts and ratios ( set forth in the table below ) of
Tangible, Tier I/Core and Risk-based capital (as defined in the regulations).
Management believes, as of June 30, 1998, that the Bank meets all capital
adequacy requirements to which it is subject.
<TABLE>
<CAPTION>
To Be Well Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Provision
--------------------------- ------------------------- -----------------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Tangible Capital $ 25,150,259 19.72% 1,913,090 1.50% 6,376,966 5.00%
Tier I/Core Capital 25,150,259 19.72% 3,826,180 3.00% 7,652,360 6.00%
Risk-based Capital 25,430,233 36.19% 5,621,520 8.00% 7,026,900 10.00%
</TABLE>
7
<PAGE> 10
YEAR 2000 COMPLIANCE
The Bank has established a Year 2000 Action Plan to review the
internal information systems as well as the efforts of the outside data
processing service provider. The progress of the Action Plan is monitored by the
Board of Directors and is currently on schedule according to the original plan.
Most of the material data processing that could be affected by this
problem is provided by a third party service bureau who provides quarterly
updates on compliance progress. They have informed the Bank that code renovation
is 100% complete and client testing will commence in September 1998. If the
service bureau is unable to resolve this problem in time and the Bank is unable
to engage another provider, we would likely experience significant data
processing delays, mistakes or failures.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Bank's June 30, 1998 analysis of the impact of changes in interest
rates on net interest income over the next 12 months indicate no significant
changes in the Bank's exposure to interest rate changes since December 31, 1997.
The table below illustrates the simulation analysis of the impact of a 100 or
200 basis point upward or downward movement in interest rates. The impact of the
rate movement was simulated as if rates changes immediately from June 30, 1998
levels, and remained constant at those levels thereafter. Loan prepayment speeds
and deposit decay rates published by the Office of Thrift Supervision were used
in the simulation.
<TABLE>
<CAPTION>
Movement in June 30, 1998 interest rates
-------------------------------------------------------
+100 bps +200 bps -100 bps -200 bps
<S> <C> <C> <C> <C>
Net interest income (decrease) increase ($93,000) ($193,000) $91,000 $187,000
Net income per share (decrease) increase ($0.04) ($0.08) $0.04 $0.08
</TABLE>
8
<PAGE> 11
I.AB PART I OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Although the Bank, from time to time, is involved in various legal
proceedings in the normal course of business, there are no material legal
proceedings to which the Bank is a party or to which any of its property is
subject.
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) EXHIBITS. The following exhibits are being filed with this report.
Exhibit Description
------- -----------
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K. None
9
<PAGE> 12
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.
WESTWOOD HOMESTEAD FINANCIAL CORPORATION
Date: August 13, 1998 By: /s/ Michael P. Brennan
-------------------------------------
Michael P. Brennan
(Principal Executive Officer)
Date: August 13, 1998 By: /s/ John E. Essen
-------------------------------------
John E. Essen
(Principal Financial Officer)
10
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 802
<INT-BEARING-DEPOSITS> 7,179
<FED-FUNDS-SOLD> 1,630
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,771
<INVESTMENTS-CARRYING> 1,771
<INVESTMENTS-MARKET> 0
<LOANS> 111,131
<ALLOWANCE> 280
<TOTAL-ASSETS> 126,339
<DEPOSITS> 83,920
<SHORT-TERM> 1,000
<LIABILITIES-OTHER> 650
<LONG-TERM> 14,760
0
0
<COMMON> 28
<OTHER-SE> 25,981
<TOTAL-LIABILITIES-AND-EQUITY> 126,339
<INTEREST-LOAN> 4,900
<INTEREST-INVEST> 77
<INTEREST-OTHER> 190
<INTEREST-TOTAL> 5,167
<INTEREST-DEPOSIT> 2,303
<INTEREST-EXPENSE> 2,784
<INTEREST-INCOME-NET> 2,383
<LOAN-LOSSES> 14
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,642
<INCOME-PRETAX> 1,133
<INCOME-PRE-EXTRAORDINARY> 1,133
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 723
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 2.58
<LOANS-NON> 100
<LOANS-PAST> 135
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 266
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 280
<ALLOWANCE-DOMESTIC> 280
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
