UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 0R 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended: June 30, 1997
-----------------------------
OR
( ) TRANSITION REPORT PURSANT TO SECTIONS 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 333-3296
UNITED COMMUNITY BANKSHARES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1801876
- -------------------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(757) 562-5184
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
100 East Fourth Avenue, Franklin, Virginia 23851
- --------------------------------------------------------------------------------
(Address of principalexecutive offices) (Zip Code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 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
Number of shares of common stock of registrant outstanding at June 30, 1997:
1,829,209
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE>
Item 1. Financial Statements (Continued)
UNITED COMMUNITY BANKSHARES, INC.
Consolidated Balance Sheet
(In thousands)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
June 30, December 31,
1997 1996
------------ ------------
<S> <C>
ASSETS:
Cash and cash equivalents:
Cash and due from banks $ 6,205 $ 7,262
Federal funds sold 540 3,890
-------- --------
6,745 11,152
Investment securities:
Securities available for sale 43,587 46,064
Securities held to maturity (market value of
$9,837 and $10,197, respectively) 9,952 10,326
-------- --------
53,539 56,390
Loans, net 83,614 76,954
Interest receivable 1,697 1,699
Property and equipment, net 1,950 1,975
Intangibles, net 694 719
Other assets 1,238 989
-------- --------
Total assets $149,477 $149,878
======== ========
LIABILITIES:
Deposits:
Noninterest-bearing $ 18,091 $ 20,292
Interest-bearing 107,266 109,534
-------- --------
125,357 129,826
Federal funds purchased and securities sold
under agreement to repurchase 3,297 229
Accrued interest 450 400
Deferred compensation 102 189
Other liabilities 481 254
-------- --------
Total liabilities 129,687 130,898
STOCKHOLDERS' EQUITY:
Common stock 1,829 1,829
Additional paid-in capital 3,059 3,059
Retained earnings 14,515 13,750
Net unrealized gains on securities available for
sale (net of income taxes) 387 342
-------- --------
Total stockholders' equity 19,790 18,980
-------- --------
Total liabilities & stockholder's equity $149,477 $149,878
======== ========
</TABLE>
<PAGE>
UNITED COMMUNITY BANKSHARES, INC.
Consolidated Statement of Income
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
3 Months Ended June 30, 6 Months Ended June 30,
-------------------------------- -------------------------
1997 1996 1997 1996
-------------- -------------- ------------ ----------
<S> <C>
Interest income:
Interest and fees on loans $1,891 $1,697 $3,633 $3,275
Interest on investment securities:
Taxable 570 589 1,139 1,194
Nontaxable 231 245 463 484
Interest on federal funds sold 24 34 95 124
------ ------ ------ ------
Total interest income 2,716 2,565 5,330 5,077
Interest expense:
Interest on deposits 1,171 1,161 2,328 2,343
Interest on federal funds purchased
and repurchase agreements 20 7 24 11
------ ------ ------ ------
Total interest expense 1,191 1,168 2,352 2,354
------ ------ ------ ------
Net interest income 1,525 1,397 2,978 2,723
Provision for loan losses 25 14 51 24
------ ------ ------ ------
Net interest income after provision
for loan losses 1,500 1,383 2,927 2,699
Noninterest income:
Gain (loss) on sale of securities -- 1 6 13
Service charges 178 175 346 348
Other 18 51 38 67
------ ------ ------ ------
Total other income 196 227 390 428
Noninterest expenses:
Salaries and employee benefits 544 505 1,093 1,038
Equipment 57 54 114 108
FDIC insurance 4 2 7 2
Occupancy 79 64 142 130
Professional fees 38 16 69 51
Postage 28 22 59 48
Other 224 211 405 388
------ ------ ------ ------
Total other expenses 974 874 1,889 1,765
------ ------ ------ ------
Income before income taxes 722 736 1,428 1,362
Provision for income taxes 187 193 389 358
------ ------ ------ ------
Net income $ 535 $ 543 $1,039 $1,004
====== ====== ====== ======
Net income per common share $ 0.29 $ 0.30 $ 0.57 $ 0.55
====== ====== ====== ======
</TABLE>
<PAGE>
Item 1. Financial Statements (Continued)
UNITED COMMUNITY BANKSHARES, INC.
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
6 Months Ended June 30,
------------------------------------
1997 1996
--------------- ---------------
<S> <C>
Operating activities:
Net income $ 1,039 $ 1,004
Adjustments to reconcile to net cash provided by
operating activities:
Provision for loan losses 51 24
(Gain)/loss on sale of investment securities (6) (14)
Depreciation and amortization 124 116
Amortization of investment securities premiums, net of discounts (3) (26)
Changes in:
Interest receivable 2 (144)
Interest payable 50 (90)
Other assets (249) (420)
Other liabilities 117 (488)
--------------- ---------------
Net cash provided (used) by operating activities 1,125 (38)
Investing activities:
Proceeds from maturities and sales of available-for-sale securities 5,964 6,691
Purchases of available-for-sale securities (3,409) (6,863)
Maturities of held-to-maturity securities 802 1,238
Purchases of held-to-maturity securities (429) (2,131)
Loan originations, net of principal repayments (6,711) (8,401)
Purchases of premises and equipment (74) (70)
--------------- ---------------
Net cash used by investing activities (3,857) (9,536)
Financing activities:
Net increase (decrease) in short-term borrowings 3,068 1,636
Cash dividends paid (274) (316)
Net increase (decrease) in noninterest bearing deposits (2,202) 374
Net increase in interest bearing deposits (2,268) (813)
--------------- ---------------
Net cash provided/(used) by financing activities (1,676) 881
DECREASE IN CASH AND CASH EQUIVALENTS (4,408) (8,693)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,153 14,062
--------------- ---------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,745 $ 5,369
=============== ===============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest on deposits and other borrowings $ 2,302 $ 2,444
Income taxes $ 518 $ 674
</TABLE>
Item 1. Financial Statements (Continued)
UNITED COMMUNITY BANKSHARES, INC.
Notes to Consolidated Financial Statements
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and, therefore, do
not include all of the disclosures and notes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The results of operations for the three month and six month
periods ended June 30, 1997 and 1996 are not necessarily indicative of the
results that may be expected for the entire year or any interim periods.
The accompanying unaudited consolidated financial statements include the
accounts of United Community Bankshares, Inc. ("UCB" or "the Company") and its
wholly-owned subsidiaries, The Bank of Franklin ("BOF"), The Bank of Sussex and
Surry ("BSS"), and their wholly-owned subsidiaries, The Bank of Franklin Service
Corporation and BSS Service Corporation, respectively. All significant
intercompany accounts and transactions have been eliminated.
BOF and BSS commenced operations in 1971 and 1902, respectively. The Bank of
Franklin Service Corporation and BSS Service Corporation were organized in 1996
and 1994, respectively, to facilitate investment in financial related services.
The consolidation has been prepared using the pooling of interests method of
accounting. All information included in the unaudited financial statements has
been combined as if the merger (discussed in Note C below) occurred at the
earliest date presented.
NOTE B - EARNINGS PER SHARE
Earnings per common share, for the periods ended June 30, 1997 and 1996, are
calculated by dividing net income by the average number of common shares
outstanding of 1,829,209 shares.
NOTE C - BUSINESS COMBINATION
On August 1, 1996, BOF and BSS became affiliated pursuant to an Agreement and
Plan of Reorganization (the "Agreement") dated January 25, 1996. The transaction
contemplated by the Agreement created a holding company, United Community
Bankshares, Inc., which facilitated a share exchange transaction between UCB and
each of the respective banks. The Agreement was approved by the stockholders of
BOF and BSS at annual meetings held on June 27, 1996. After the share exchange,
BOF and BSS became wholly-owned subsidiaries of UCB, and each shareholder of BOF
and BSS became a shareholder of UCB. Under the terms of the Agreement, BOF and
BSS shareholders received 4.806 and 3.0 shares, respectively, of UCB common
stock for each share previously held. This resulted in the issuance of 1,829,209
shares of UCB common stock. This combination was accounted for as a pooling of
interests. In connection with this transaction, merger expenses totaling
$189,758 were recognized in 1996. On July 31, 1996, BOF and BSS reported
unaudited total assets of $84.5 million and $62.5 million, respectively, and
unaudited stockholders' equity of $8.2 million and $9.8 million, respectively.
The banks retained their respective names, banking offices, executive officers
and board of directors. BOF has five banking offices, two in the City of
Franklin, and one each in the Towns of Courtland and Newsoms and the City of
Suffolk. BSS has three banking offices in the Towns of Wakefield, Ivor and
Surry.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Earnings Summary
UCB reported net income of $1.039 million for the six month period ending June
30, 1997, compared to $1.004 million for the same period in 1996, which
represents a $35,000 increase or 3.5%. This increase is primarily attributable
to an increase of $255,000 in net interest income which was partially offset by
a $124,000 increase in noninterest expenses ,a $31,000 increase in income taxes,
a $27,000 increase in provisions for loan losses, and a $38,000 decrease in
noninterest income.
For the second quarter of 1997, net income was $535,000, compared to $543,000
for the second quarter of 1996, a $8,000 decrease or 1.3%. A $128,000 increase
in net interest income was offset by a $100,000 increase in noninterest expenses
and a $31,000 decrease in noninterest income.
UCB's total assets as of June 30, 1997 were $149.5 million, down slightly by
$401,000 or 0.3% from $149.9 million at year end 1996. Net loans as of June 30,
1997 were $83.6 million, a increase of $6.6 million or 8.6% from $77.0 million
at year end 1996. Investment securities decreased $2.9 million or 5.1% to $53.5
million from $56.4 million as of June 30, 1997 and December 31, 1996,
respectively. Cash and cash equivalents totaled $6.7 million at June 30, 1997
and $11.2 million at December 31, 1996, a decrease of $4.4 million or 39.5%.
The annualized return on average equity (ROE) decreased to 10.86% for the six
month period ended June 30, 1997, down from 11.24% for the same period in 1996.
During the second quarter of 1997, ROE was 11.21%, compared to 12.14% during the
second quarter of 1996. The annualized return on average assets (ROA) was
unchanged at 1.40% for the first six months of 1997 and 1996. ROA decreased to
1.44% for the second quarter of 1997 compared to 1.52% for the same period in
1996.
UCB is not aware of any trends, future events or uncertainties that will have a
material adverse effect on the consolidated entity. Obviously, unforeseeable
changes in the local economies where UCB subsidiaries operate, which UCB is
unable to predict, may impact the overall communities and ultimately the
performance of the Company. UCB is not aware of any such changes.
Net Interest Income
Net interest income for the first six months of 1997 was $2.978 million, up from
$2.723 million for the same period in 1996, increasing by $255,000 or 9.4%. This
increase is attributable to the transition of assets from noninterest-earning
cash, federal funds sold and investment securities to higher yielding loans. For
the second quarter of 1997, net interest income was $1.525 million, up $128,000
or 9.2% from $1.397 million during the second quarter of 1996.
For the six months ended June 30, 1997, total interest and fees on loans
increased by $358,000 or 10.9%, from the six month period ended June 30, 1996. A
decrease in interest on investments of $76,000 or 4.5% and interest on federal
funds sold of $29,000 or 23.4% partially offset the increase in interest and
fees on loans. Interest expense decreased by $2,000 or 0.1% for the same period.
Total interest and fees on loans increased by $194,000 or 11.4%, from the second
quarter of 1996 to the second quarter of 1997. During this same period, interest
on investments decreased $33,000 or 4.0%, interest on federal funds sold
decreased $10,000 or 29.4% and interest expense increased $23,000 or 2.0%.
Allowance for Loan Losses
The allowance for loan losses provides for potential losses inherent in the loan
portfolio. Among other factors, management considers the Company's historical
loss experience, the size and composition of the loan portfolio, the value and
adequacy of collateral and guarantors, nonperforming credits and current and
anticipated economic conditions. There are additional risks of future loan
losses which cannot be precisely quantified or attributed to particular loans or
classes of loans. Since those risks include general economic trends, as well as
conditions affecting individual borrowers, the allowance for loan losses is an
estimate. The allowance is also subject to regulatory examinations and
determination as to adequacy, which may take into account such factors as the
methodology used to calculate the allowance, and the size of the allowance in
comparison to peer banks identified by regulatory agencies.
During the first six months of 1997, the Company had $51,000 in provision
expense compared to $24,000 in the first six months of 1996. Loans charged off,
which are charged directlyto the allowance when they occur, during the first six
months of 1997 amounted to $146,000 compared to $94,000 for the same period in
1996. Recoveries duringthe first quarters of 1997 and 1996 amounted to $52,000
and $50,000, respectively. The ratio of net charge-offs to average outstanding
loans was0.12% in 1997 and 0.06% in 1996. Management feels that the reserve is
adequate to absorb any losses on existing loans which may become uncollectible.
The following table presents the Company's loan loss and recovery experience for
the first quarters of the past two years.
Allowance For Loan Losses
(In thousands)
<TABLE>
<CAPTION>
6 Months Ended June 30,
------------------------------------
1997 1996
--------------- ---------------
<S> <C>
Balance, beginning of period $ 1,209 $ 1,250
Charge-offs:
Residential real-estate -- --
Commercial real-estate -- --
Commercial 2 2
Consumer 144 92
------- -------
Total charge-offs 146 94
------- -------
Recoveries:
Residential real-estate -- --
Commercial real-estate 13 4
Commercial 4 9
Consumer 35 37
------- -------
Total recoveries 52 50
------- -------
Net recoveries (charge-offs) (94) (44)
Provisions for losses 51 24
------- -------
Balance, end of period $ 1,166 $ 1,230
======= =======
Net charge-offs to average loans 0.12% 0.06%
Allowance for possible loan losses to total loans 1.38% 1.62%
</TABLE>
Noninterest Income
Total noninterest income decreased by $31,000, or 13.7%, from a level of
$227,000 in the second quarter of 1996 to $196,000 for the same period of 1997.
The largest component of this decrease is a reduction in one-time gains of the
sale of OREO. During the three month period ended June 30, 1997, a $3,000
increase in service charges partially offset a $1,000 decrease in gains on the
sale of securities, compared to the same period in 1996.
During the six month period ended June 30, 1997, total noninterest income
decreased by $38,000, or 8.9% to $390,000 from a level of $428,000 for the same
period of 1996. Gains on sales of investment securities decreased from $13,000
in 1996 to $6,000 in 1997. Other miscellaneous income decreased $33,000 or 64.7%
to $18,000 for the first six months of 1997 from $51,000 for the same period in
1996, the largest component of which was a $12,000 decrease in gains on the sale
of OREO.
Noninterest Expense
Total noninterest expenses for the second quarter of 1997 were $974,000, an
increase of $100,000 or 11.4% compared to $874,000 for the same period last
year. This increase is attributable to following factors: 1) an increase in
salaries and employee benefits of $39,000, or 7.7%, to $544,000 in 1997 from
$505,000 in 1996, arising from general pay increases and increased staffing
levels due to the continued growth of the Company; 2) a $22,000 or 137.5%
increase in professional fees arising from various initiatives by the Company to
standardize employee benefits and operations, to $38,000 in the second quarter
of 1997 from $16,000 in the second quarter of 1996; and 3) a $15,000 or 23.4%
increase in occupancy costs from $64,000 in the second quarter of 1996 to
$79,000 during the same period in 1997.
<PAGE>
Total noninterest expenses for the six month period ended June 30, 1997
increased $124,000 or 7.0% to $1.889 million from $1.765 million for the same
period in 1996. This increase is attributable to following factors: 1) an
increase in salaries and employee benefits of $55,000, or 5.3%, to $1.093
million in 1997 from $1.038 million in 1996, arising from general pay increases
and increased staffing levels due to the continued growth of the Company; 2) an
increase in other miscellaneous expenses of $17,000 or 4.4%, from $388,000
during the six month period ended June 30, 1996 to $405,000 for the same period
during 1997; 3) a $18,000 or 35.3% increase in professional fees, to $69,000 in
1997 from $51,000 in 1996; and 4) a $6,000 increase in occupancy costs from
$108,000 in the first six months of 1996 to $114,000 during the same period in
1997.
Nonperforming Assets
Total nonperforming assets increased from $347,000 at year end 1996 to $416,000
at June 30, 1997. Loans past due 90 days or more and still accruing interest
declined $152,000 or 30.5% to $347,000 as of June 30, 1997 from $499,000 at
December 31, 1996. The following table summarizes nonperforming assets as of
June 30, 1997 and year end 1996.
Nonperforming Assets
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -------------
<S> <C>
Nonaccrual loans $ 289 $ 182
Restructured loans - -
Other real estate owned 127 165
----------- -----------
Total nonperforming assets $ 416 $ 347
=========== ===========
Loans past due 90 days or more and still accruing $ 347 $ 499
Allowance for loan losses $ 1,167 $ 1,209
Allowance for possible loan loss to nonperforming loans 403.81% 664.29%
Allowance for possible loan loss to nonperforming assets 280.53% 348.41%
</TABLE>
Liquidity and Short-Term Borrowings
Liquidity represents an institution's ability to meet present and future
financial obligations through either the sale of existing assets or the
acquisition of additional funds through short-term borrowings. Liquid assets
include cash, interest-bearing deposits with banks, federal funds sold and
investments and loans maturing within one year. As a result of the Company's
management of liquid assets, and the ability to generate liquidity through
liability fundings, management believes that the Company maintains overall
liquidity which is sufficient to satisfy its depositors' requirements and to
meet customers' credit needs. The Company has no long-term debt and no material
commitments for capital expenditures.
Cash and cash equivalents totaled $6.7 million at June 30, 1997 and $11.2
million at December 31, 1996. At June 30, 1997, cash and due from banks,
securities classified as available for sale and federal funds sold were $50.3
million, 36.5% of total earning assets, compared to $57.2 million, 41.7% of
total earning assets at December 31, 1996. Asset liquidity is also provided by
managing both loan and securities maturities.
<PAGE>
Additional sources of liquidity available to the Company include its subsidiary
Banks' capacity to borrow additional funds through several established federal
funds arrangements and the Federal Home Loan Bank (the "FHLB"). As of June 30,
1997, UCB had $1.5 million in outstanding borrowings from the FHLB. UCB could
borrow approximately $6.5 million from the FHLB, if collateral acceptable to the
FHLB were provided. In addition, federal funds arrangements with other
institutions provide an additional $14.0 million of short-term borrowing
capacity. At June 30, 1997, the Company had an outstanding balances of
approximately $1.5 million on these federal funds lines of credit. Also, the
Company offers overnight repurchase agreements to a commercial customer, which
amounted to $316,000 at June 30, 1997.
Effects of Changing Prices and Seasonality
Because of the seasonality of the agricultural industry, the volume of loans and
deposits typically fluctuate during the year. Loans are typically heaviest from
April to December and deposits are typically their lowest during the same
period. At the end of the year and the beginning of the following year, loans
decrease as they are repaid and deposits increase as a result of the sale of the
fall harvest.
Capital Adequacy
Management reviews the adequacy of the Banks' capital on an ongoing basis with
reference to the size, composition, and quality of the Banks' resources and
compliance with regulatory requirements and industry standards. Management seeks
to maintain a capital structure that will assure an adequate level of capital to
support anticipated asset growth and absorb potential losses.
The Federal Reserve, along with the Comptroller of the Currency and the Federal
Deposit Insurance Corporation, have adopted new capital guidelines to supplement
the existing definitions of capital for regulatory purposes and to establish
minimum capital standards. Specifically, the guidelines categorize assets and
off-balance sheet items into four risk-weighted categories. At June 30, 1997 and
December 31, 1996, the required minimum ratio of qualifying total capital to
risk-weighted assets was 8.0%, of which 4.0% must be tier-one capital. Tier-one
capital generally includes stockholders' equity, retained earnings and a limited
amount of perpetual stock, less certain goodwill items. UCB's ratios
significantly exceed regulatory requirements adopted by the Federal Reserve Bank
regulatory agencies, as illustrated below.
<TABLE>
<CAPTION>
Capital Ratios
Regulatory June 30, 1997 December 31, 1996
------------------------------------- ------------------------------------
Minimum BOF BSS UCB BOF BSS UCB
------- --- --- --- --- --- ---
<S> <C>
Risk-based capital
Tier 1 4.00% 14.55% 26.22% 19.13% 14.40% 23.58% 18.27%
Total 8.00% 15.63% 27.47% 20.28% 15.58% 24.83% 19.48%
Leverage 4.00% 10.18% 15.64% 12.54% 9.58% 15.45% 12.08%
</TABLE>
New Accounting Pronouncements
The Financial Accounting Standards Board recently issued Statement of Financial
Accounting Standards No. 128 entitled Earnings per Share, which is effective for
financial statements for both interim and annual periods ending after December
31, 1997. Early adoption of the statement is not permitted. The Company has
applied this statement to the six-month periods ended June 30, 1997 and 1996,
and the year ended December 31, 1996, and has determined that the adoption of
this statement would not have a material impact on the earnings per calculations
for these periods. After adoption, all prior period earnings per share
calculations will be restated to comply with this statement.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the course of its operations, United Community Bankshares, Inc. and
its subsidiaries are not aware of any material pending or threatened
litigation, unasserted claims and/or assessments through June 30, 1997,
or subsequent thereto. The only litigation in which UCB and its
subsidiaries are involved are collection suits involving delinquent
loan accounts in the normal course of business.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submissions of Matters to a Vote of Security Holders.
During the Annual Meeting of Shareholders on May 13, 1997, the
following items were submitted to and approved by the security holders
of the Company:
ITEM 1: To elect the three (3) nominees for Director as set forth
in the Proxy Statement including voting for a lesser number,
if a vacancy occurs among the nominees, and voting in
respect to any substitute nominee or nominees designated by
the Board of Directors. These directors were Hunter Darden,
Jr., Gregor O. Huber and F. Bruce Stewart.
ITEM 2: To approve the Company's 1997 Incentive Stock Plan, the
material terms of which are described in the Proxy
Statement.
ITEM 3: To approve an amendment to the Articles of Incorporation
of the Corporation to provide for removal of directors under
certain circumstances, the terms of which are described in
the Proxy Statement accompanying this notice.
ITEM 4: To ratify the appointment of Goodman & Company, L.L.P. as
the Company's independent certified public accountants.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
None.
b. Form 8-K.
None.
<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.
UNITED COMMUNITY BANKSHARES, INC.
/s/ W.O. Pearce Date: August 13, 1997
- -------------------------------------------- ----------------
W.O. Pearce
President & Chief Executive Officer
/s/ Wayne C. Carruthers Date: August 13, 1997
- -------------------------------------------- ---------------
Wayne C. Carruthers, CPA
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 6,205
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 540
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 43,587
<INVESTMENTS-CARRYING> 9,952
<INVESTMENTS-MARKET> 9,837
<LOANS> 83,614
<ALLOWANCE> 1,166
<TOTAL-ASSETS> 149,477
<DEPOSITS> 125,357
<SHORT-TERM> 3,297
<LIABILITIES-OTHER> 481
<LONG-TERM> 0
0
0
<COMMON> 1,829
<OTHER-SE> 3,059
<TOTAL-LIABILITIES-AND-EQUITY> 149,477
<INTEREST-LOAN> 3,633
<INTEREST-INVEST> 1,602
<INTEREST-OTHER> 95
<INTEREST-TOTAL> 5,330
<INTEREST-DEPOSIT> 2,328
<INTEREST-EXPENSE> 2,352
<INTEREST-INCOME-NET> 2,978
<LOAN-LOSSES> 51
<SECURITIES-GAINS> 6
<EXPENSE-OTHER> 1,889
<INCOME-PRETAX> 1,428
<INCOME-PRE-EXTRAORDINARY> 1,428
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,039
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
<YIELD-ACTUAL> 0
<LOANS-NON> 289
<LOANS-PAST> 347
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,209
<CHARGE-OFFS> 146
<RECOVERIES> 52
<ALLOWANCE-CLOSE> 1,166
<ALLOWANCE-DOMESTIC> 1,166
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
