<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File Number
JUNE 30, 1999 0-29132
TIB FINANCIAL CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 65-0655973
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99451 OVERSEAS HIGHWAY, KEY LARGO, FLORIDA 33037-7808
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 305-451-4660
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $0.10 Par Value 4,395,162
- ----------------------------- -------------------------------
Class Outstanding as of July 31, 1999
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
JUNE 30, 1999 DECEMBER 31, 1998
------------- -----------------
ASSETS (UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 17,147,788 $ 18,089,325
Federal funds sold 11,128,000 6,565,000
Interest bearing deposits in other banks 10,285,086 47,410
Investment securities held to maturity (market value of $45,044,740
and $48,467,772, respectively) 46,384,044 48,152,543
Investment securities available for sale 25,706,890 17,848,010
Investment in ERAS Joint Venture 753,347 789,752
Loans, net of deferred loan fees 261,904,097 246,298,179
Less: Allowance for loan losses 2,780,966 2,517,234
------------- -------------
Loans, net 259,123,131 243,780,945
Premises and equipment, net 14,037,797 12,880,360
Accrued interest receivable 2,638,645 2,614,662
Intangible assets 1,634,653 1,791,780
Other assets 3,292,146 2,916,063
------------- -------------
TOTAL ASSETS $ 392,131,527 $ 355,475,850
============= =============
LIABILITIES
Deposits:
Noninterest-bearing demand 76,189,075 68,370,649
Interest-bearing demand and money market 171,537,055 166,837,456
Savings 17,036,144 14,685,319
Time deposits of $100,000 or more 34,060,770 24,693,379
Other time deposits 59,221,063 50,469,928
------------- -------------
Total Deposits 358,044,107 325,056,731
Short-term borrowings 2,704,282 669,569
Accrued interest payable 2,191,204 1,984,516
Other liabilities 2,060,077 1,197,500
------------- -------------
TOTAL LIABILITIES 364,999,670 328,908,316
------------- -------------
STOCKHOLDERS' EQUITY
Common stock - $.10 par value: 7,500,000 shares authorized,
4,480,162 and 4,449,795 shares issued 448,016 444,979
Surplus 7,485,051 7,202,321
Retained earnings 20,321,371 19,328,022
Accumulated other comprehensive income (loss) - market valuation
reserve on investment securities (177,200) 150,000
Less: Treasury stock, 85,000 and 50,000 shares at cost (945,381) (557,788)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 27,131,857 26,567,534
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 392,131,527 $ 355,475,850
============= =============
</TABLE>
(See notes to consolidated financial statements)
1
<PAGE> 3
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
INTEREST INCOME 1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Loans, including fees $ 5,652,647 $ 4,496,399 $ 11,068,276 $ 8,822,185
Investment securities:
U.S. Treasury securities 395,955 335,061 740,493 693,154
U.S. Government agencies and corporations 559,217 629,012 1,126,267 990,705
States and political subdivisions 90,303 160,533 189,776 278,230
Other investments 27,486 26,000 54,303 51,343
Interest bearing deposits in other banks 152,768 193 236,494 365
Federal funds sold 145,012 274,039 361,925 619,711
------------ ------------ ------------ ------------
TOTAL INTEREST INCOME 7,023,388 5,921,237 13,777,534 11,455,693
------------ ------------ ------------ ------------
INTEREST EXPENSE
Interest-bearing demand and money market 1,384,135 1,305,592 2,815,172 2,453,998
Savings 159,146 138,987 309,087 283,799
Time deposits of $100,000 or more 430,143 412,083 820,391 724,093
Other time deposits 791,949 616,098 1,495,362 1,232,976
Short-term borrowings 20,568 9,741 32,450 23,077
------------ ------------ ------------ ------------
TOTAL INTEREST EXPENSE 2,785,941 2,482,501 5,472,462 4,717,943
------------ ------------ ------------ ------------
NET INTEREST INCOME 4,237,447 3,438,736 8,305,072 6,737,750
------------ ------------ ------------ ------------
PROVISION FOR LOAN LOSSES 120,000 90,000 300,000 180,000
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,117,447 3,348,736 8,005,072 6,557,750
OTHER INCOME
Service charges on deposit accounts 473,647 397,807 955,354 827,650
Merchant bankcard processing income 744,573 571,578 1,574,414 1,226,440
Gain on sale of government guaranteed loans 280,621 106,698 390,151 455,987
Fees on mortgage loans sold at origination 103,522 168,276 215,582 262,732
Retail investment services 69,633 196,512 130,545 277,401
Equity in undistributed losses of ERAS Joint Venture (18,063) -- (4,881) --
Other income 175,069 116,478 325,895 221,535
------------ ------------ ------------ ------------
TOTAL OTHER INCOME 1,829,002 1,557,349 3,587,060 3,271,745
------------ ------------ ------------ ------------
OTHER EXPENSE
Salaries and employee benefits 1,956,146 1,703,805 3,801,396 3,604,411
Net occupancy expense 666,876 529,886 1,281,080 1,045,860
Other expense 1,818,102 1,326,130 3,469,145 2,553,304
------------ ------------ ------------ ------------
TOTAL OTHER EXPENSE 4,441,124 3,559,821 8,551,621 7,203,575
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAX EXPENSE 1,505,325 1,346,264 3,040,511 2,625,920
INCOME TAX EXPENSE 544,700 475,000 1,101,000 929,600
------------ ------------ ------------ ------------
NET INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 960,625 871,264 1,939,511 1,696,320
</TABLE>
(Continued)
2
<PAGE> 4
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- --------------------------------
1999 1998 1999 1998
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE FOR DEFERRED
ORGANIZATION COSTS, NET OF TAX BENEFIT
OF $28,300 -- -- 47,047 --
----------- ----------- ------------- -------------
NET INCOME $ 960,625 $ 871,264 $ 1,892,464 $ 1,696,320
=========== =========== ============= =============
BASIC EARNINGS PER SHARE:
Income before cumulative effect of change in accounting
principle $ 0.22 $ 0.20 $ 0.44 $ 0.39
Cumulative effect of change in accounting principle for
deferred organization costs, net of tax -- -- (0.01) --
----------- ----------- ------------- -------------
BASIC EARNINGS PER SHARE $ 0.22 $ 0.20 $ 0.43 $ 0.39
=========== =========== ============= =============
DILUTED EARNINGS PER SHARE:
Income before cumulative effect of change in accounting
principle $ 0.21 $ 0.19 $ 0.43 $ 0.37
Cumulative effect of change in accounting principle for
deferred organization costs, net of tax -- -- (0.01) --
----------- ----------- ------------- -------------
DILUTED EARNINGS PER SHARE $ 0.21 $ 0.19 $ 0.42 $ 0.37
=========== =========== ============= =============
</TABLE>
(See notes to consolidated financial statements)
3
<PAGE> 5
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income (Loss) -
Market
Comprehensive Retained Treasury Valuation Common
Total Income Earnings Stock Reserve Stock Surplus
----------- ------------- ----------- ---------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $26,567,534 $19,328,022 $(557,788) $150,000 $444,979 $7,202,321
Comprehensive Income
Net Income 1,892,464 $1,892,464 1,892,464
Other comprehensive
income, net of tax
benefit of $196,800:
Net market valuation
adjustment on
securities available
for sale (327,200) (327,200) (327,200)
----------
Comprehensive income $1,565,264
==========
Exercise of stock options 88,469 1,370 87,099
Income tax benefit from stock
options exercised 13,961 13,961
Compensation paid thru issuance of
common stock 183,337 1,667 181,670
Purchase of treasury stock (387,593) (387,593)
Cash dividends declared,
$.205 per share (899,115) (899,115)
----------- ----------- --------- --------- -------- ----------
Balance at June 30, 1999 $27,131,857 $20,321,371 $(945,381) $(177,200) $448,016 $7,485,051
=========== =========== ========= ========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income (Loss) -
Market
Comprehensive Retained Treasury Valuation Common
Total Income Earnings Stock Reserve Stock Surplus
----------- ------------- ----------- ---------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 $24,563,557 $17,668,290 $ -- $(49,000) $437,195 $6,507,072
Comprehensive Income
Net Income 1,696,320 $ 1,696,320 1,696,320
Other comprehensive
income, net of
tax expense of
$35,600:
Net market valuation
adjustment on
securities available
for sale 58,400 58,400 58,400
-----------
Comprehensive income $ 1,754,720
===========
Exercise of stock options 302,867 5,353 297,514
Income tax benefit from stock
options exercised 120,659 120,659
Compensation paid thru issuance
of common stock 214,575 1,667 212,908
Cash dividends declared,
$.20 per share (886,070) (886,070)
----------- ---------- ------ -------- -------- ----------
Balance at June 30, 1998 $26,070,308 $18,478,540 $ -- $ 9,400 $444,215 $7,138,153
=========== =========== ====== ======== ======== ==========
</TABLE>
4
<PAGE> 6
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTH PERIOD ENDED JUNE 30,
1999 1998
----------------- ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 1,892,464 $ 1,696,320
Adjustments to reconcile net income to net cash provided by operating
activities:
Net amortization of investments 96,094 5,842
Amortization of intangible assets 89,481 30,344
Depreciation of premises and equipment 592,789 490,495
Write-off of unamortized leasehold improvements on
abandoned property 133,546 --
Compensation paid thru issuance of common stock 183,337 214,575
Provision for loan losses 300,000 180,000
Cumulative effect of change in accounting principle
for organization costs 75,347 --
Deferred income tax benefit (105,346) (29,070)
Deferred net loan fees 3,382 (30,009)
Gain on sales of premises and equipment (3,342) (999)
Gain on sales of government guaranteed loans, net (390,151) (455,987)
Increase in accrued interest receivable (23,983) (317,085)
Increase in accrued interest payable 199,767 253,169
Increase in intangible assets (6,498) (34,299)
Increase in other assets (75,140) (2,041,512)
Increase in other liabilities 883,934 675,300
Other 58,268 --
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,903,949 637,084
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities held to maturity (230,400) (34,716,116)
Purchases of investment securities available for sale (11,092,104) --
Repayments of principal and maturities of investment securities
available for sale 2,612,029 1,427,329
Maturities of investment securities held to maturity 2,000,000 7,000,000
Proceeds from sales of government guaranteed loans 6,945,350 1,823,197
Loans originated or acquired, net of principal repayments (22,200,767) (16,950,027)
Purchases of premises and equipment (1,910,578) (399,003)
Sales of premises and equipment 8,285 2,200
------------ ------------
NET CASH USED BY INVESTING ACTIVITIES (23,868,185) (41,812,420)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in federal funds purchased and securities
sold under agreements to repurchase 1,635,088 (16,211)
Net increase in demand, money market and savings accounts 14,868,850 38,413,992
Time deposits accepted, net of repayments 18,118,526 5,980,366
Advances on line of credit 399,625
Proceeds from exercise of stock options 88,469 302,867
Treasury stock repurchased (387,593) --
Cash dividends paid (899,590) (879,050)
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 33,823,375 43,801,964
------------ ------------
</TABLE>
(Continued)
5
<PAGE> 7
TIB FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTH PERIOD ENDED JUNE 30,
1999 1998
--------------- -------------
<S> <C> <C>
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,859,139 2,626,628
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 24,701,735 24,829,285
----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $38,560,874 $27,455,913
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Cash paid for:
Interest $ 5,265,774 $ 4,464,774
Income taxes $ 1,395,927 $ 960,000
</TABLE>
(See notes to consolidated financial statements)
6
<PAGE> 8
TIB FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements for TIB Financial
Corp. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statement
presentation. 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 six months ended June 30, 1999 are not
necessarily indicative of trends or results to be expected for the year ended
December 31, 1999. For further information, refer to the Company's consolidated
financial statements and footnotes thereto for the year ended December 31,
1998.
The consolidated statements include the accounts of TIB Financial Corp. and its
wholly-owned subsidiaries, TIB Bank of the Keys and TIB Software and Services,
Inc., and the Bank's two subsidiaries, TIB Government Loan Specialists, Inc.
and TIB Investment & Insurance Center Inc., collectively known as the Company.
All significant intercompany accounts and transactions have been eliminated in
consolidation.
Certain amounts previously reported on have been reclassified to conform with
current period presentation.
NOTE 2 - LOANS
Loans are reported at the gross amount outstanding, reduced by net deferred
loan fees and a valuation allowance for loan losses. Interest income on loans
is recognized over the terms of the loans based on the unpaid daily principal
amount outstanding. If the collectibility of interest appears doubtful, the
accrual thereof is discontinued. Loan origination fees, net of direct loan
origination costs, are deferred and recognized as income over the life of the
related loan on a level-yield basis. Gains on sales of government guaranteed
loans are recognized as income when the sale occurs.
Major classifications of loans are as follows:
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
------------- -----------------
<S> <C> <C>
Commercial, financial and agricultural $165,653,024 $163,798,992
Real estate - construction 8,384,409 5,960,092
Real estate - individual 75,158,005 62,544,350
Installment and simple interest individual 12,926,639 13,810,146
Other 155,632 554,830
------------ ------------
Total loans 262,277,709 246,668,410
Net deferred loan fees 373,612 370,231
------------ ------------
Loans, net of deferred loan fees $261,904,097 $246,298,179
============ ============
</TABLE>
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
The financial statements include an allowance for estimated losses on loans
based upon management's evaluation of potential losses in the loan portfolio.
The allowance for loan losses is established through a provision for loan
losses charged to expense. Management's judgment in determining the adequacy of
the allowance is based on evaluations of the collectibility of loans and takes
into consideration such factors as changes in the nature and volume of the loan
portfolio, current economic conditions that may affect the borrower's ability
to pay, overall portfolio quality and review of specific problem loans.
Periodic revisions are made to the allowance when circumstances which
necessitate such revisions become known. Recognized losses are charged to the
allowance for loan losses, while subsequent recoveries are added to the
allowance.
7
<PAGE> 9
Activity in the allowance for loan losses for the six months ended June 30,
1999 and June 30, 1998 follows:
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
Balance, January 1 $ 2,517,234 $ 2,201,974
Provision charged to expense 300,000 180,000
Loans charged off (78,675) (21,897)
Recoveries of loans previously charged off 42,407 5,511
----------- -----------
Balance, June 30 $ 2,780,966 $ 2,365,588
=========== ===========
</TABLE>
NOTE 4 - INVESTMENT SECURITIES
Securities available-for-sale are securities which management believes may be
sold prior to maturity for liquidity or other reasons and are reported at fair
value, with unrealized gains and losses, net of related income taxes, reported
as a separate component of stockholders' equity. Securities held-to-maturity
are those securities for which management has both the ability and intent to
hold to maturity and are carried at amortized cost.
The amortized cost and estimated market value of investment securities
held-to-maturity at June 30, 1999 and December 31, 1998 are presented below:
<TABLE>
<CAPTION>
June 30, 1999
--------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Securities $12,083,632 $ 87,093 $ 1,151 $12,169,574
U.S. Government agencies and corporations 33,161,912 -- 1,425,246 31,736,666
Other investments 1,138,500 -- -- 1,138,500
----------- ----------- ----------- -----------
$46,384,044 $ 87,093 $ 1,426,397 $45,044,740
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
--------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Securities $14,083,195 $ 247,542 $ -- $14,330,737
U.S. Government agencies and corporations 33,161,248 177,062 109,375 33,228,935
Other investments 908,100 -- -- 908,100
----------- ----------- ----------- -----------
$48,152,543 $ 424,604 $ 109,375 $48,467,772
=========== =========== =========== ===========
</TABLE>
The amortized cost and estimated market value of investment securities
available for sale at June 30, 1999 and December 31, 1998 are presented below:
<TABLE>
<CAPTION>
June 30, 1999
--------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Securities $16,016,225 $ 8,260 $ 240,145 $15,784,340
States and political subdivisions 6,927,427 74,734 103,993 6,898,168
Mortgage-backed securities 3,047,237 3,333 26,188 3,024,382
----------- ----------- ----------- -----------
$25,990,889 $ 86,327 $ 370,326 $25,706,890
=========== =========== =========== ===========
</TABLE>
8
<PAGE> 10
<TABLE>
<CAPTION>
December 31, 1998
--------------------------------------------------------------
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury Securities $ 5,021,513 $ 21,437 $ -- $ 5,042,950
States and political subdivisions 8,114,069 219,112 8,333,181
Mortgage-backed securities 4,022,557 4,020 12,379 4,014,198
Other debt securities 449,871 7,810 -- 457,681
----------- ----------- ----------- -----------
$17,608,010 $ 252,379 $ 12,379 $17,848,010
=========== =========== =========== ===========
</TABLE>
Other investments at June 30, 1999 and December 31, 1998 consist of stock in
the Independent Bankers Bank of Florida and the Federal Home Loan Bank of
Atlanta. Other debt securities at December 31, 1998 consist of corporate debt
securities.
NOTE 5 - EARNINGS PER SHARE AND COMMON STOCK
Basic earnings per share has been computed based on the weighted average number
of common equivalent shares outstanding during the period. Stock options are
considered to be common stock equivalents for purposes of calculating diluted
earnings per share.
The reconciliation of basic earnings per share to diluted earnings per share is
as follows:
<TABLE>
<CAPTION>
Net Earnings Common Shares Per Share Amount
------------ ------------- ----------------
<S> <C> <C> <C>
For the six months ended June 30, 1999:
Basic earnings per common share $1,892,464 4,377,492 $ .43
Effect of dilutive stock options -- 164,548 (.01)
---------- ---------- -------
Diluted earnings per common share $1,892,464 4,542,040 $ .42
========== ========== =======
For the six months ended June 30, 1998:
Basic earnings per common share $1,696,320 4,404,813 $ .39
Effect of dilutive stock options -- 232,818 (.02)
---------- ---------- -------
Diluted earnings per common share $1,696,320 4,637,631 $ .37
========== ========== =======
</TABLE>
<TABLE>
<CAPTION>
Net Earnings Common Shares Per Share Amount
------------ ------------- ----------------
<S> <C> <C> <C>
For the three months ended June 30, 1999:
Basic earnings per common share $ 960,625 4,380,885 $ .22
Effect of dilutive stock options -- 159,031 (.01)
--------- --------- -------
Diluted earnings per common share $ 960,625 4,539,916 $ .21
========= ========= =======
For the three months ended June 30, 1998:
Basic earnings per common share $ 871,264 4,424,462 $ .20
Effect of dilutive stock options -- 225,744 (.01)
--------- --------- -------
Diluted earnings per common share $ 871,264 4,650,206 $ .19
========= ========= =======
</TABLE>
NOTE 6 - STOCK BASED COMPENSATION
Under the Bank's 1994 Incentive Stock Option and Nonstatutory Stock Option Plan
("the Plan"), the Company may grant stock options to persons who are now or who
during the term of the Plan become directors, officers, or key executives as
defined by the Plan. Stock options granted under the Plan may either be
incentive stock options or nonqualified stock options for federal income tax
purposes. The Company's Board of Directors may grant nonqualified stock options
to any director, and incentive stock options or nonqualified stock options to
any officer, key executive, administrative, or other employee including an
employee who is a director of the Company. Subject to the provisions of the
Plan, the maximum number of shares of
9
<PAGE> 11
Company common stock that may be optioned or sold is 978,000 shares. Such
shares may either be treasury or authorized, but unissued shares of common
stock of the Company.
Total options granted, exercised, and expired during the six months ended June
30, 1999 were 23,000, 13,700, and 15,100, respectively. As of June 30, 1999,
605,285 options were outstanding.
NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive Income."
Under SFAS 130, a company is required to show changes in assets and liabilities
in a new comprehensive income statement or alternative presentation, as opposed
to showing some of the items as transactions in shareholders' equity accounts.
Since SFAS 130 solely relates to display and disclosure requirements, it had no
effect on the Company's financial results.
Effective December 31, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), "Disclosures About Segments of an
Enterprise and Related Information." The provisions of this statement require
disclosure of financial and descriptive information about an enterprise's
operating segments in annual and interim financial reports issued to
stockholders. SFAS 131 defines an operating segment as a component of an
enterprise that engages in business activities that generate revenue and incur
expense, whose operating results are reviewed by the chief operating decision
maker in the determination of resource allocation and performance, and for
which discrete financial information is available. The disclosure requirements
of SFAS 131 had no impact on the Company's financial condition or results of
operations.
In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
requires companies to recognize all derivatives contracts as either assets or
liabilities in the balance sheet and to measure them at fair value. If certain
conditions are met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of (i) the changes in the fair value of
the hedged asset or liability that are attributable to the hedged risk or (ii)
the earnings effect of the hedged forecasted transaction. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in income in
the period of change. SFAS 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000, however, early adoption is allowed.
Historically, the Company has not entered into derivatives contracts either to
hedge existing risks or for speculative purposes. The Company adopted the new
standard as of July 1, 1998. The effect on the financial statements at July 1,
1998 which resulted from the transfer of certain investment securities, with an
amortized cost of $11,898,815, from the held to maturity category to the
available for sale category was an increase in other comprehensive income
market valuation reserve of approximately $176,000.
Effective January 1, 1999, the Company adopted American Institute of Certified
Public Accountants Statement of Position 98-5 (SOP 98-5), "Reporting the Costs
of Start-Up Activities." SOP 98-5 applies to all nongovernmental entities and
requires that costs of start-up activities and organization costs be expensed
as incurred. The adoption of SOP 98-5 is described in Management's Discussion
and Analysis of Financial Condition and Results of Operations below.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion addresses the factors that have affected the financial
condition and results of operations of TIB Financial Corp. (the "Company") as
reflected in the unaudited consolidated statement of condition as of June 30,
1999, and statements of income for the three and six months ended June 30,
1999.
The Company's net income of $960,625 for the second quarter of 1999 was a 10.3%
increase compared to $871,264 for the same period last year. The increase in
net income is attributed to an increase of $798,711, or 23.2%, in net interest
income; an increase of $271,653, or 17.4%, in other income; offset by an
increase of $30,000 in the provision for loan losses; an increase in other
expense of $881,303, or 24.8%; an increase in income tax expense of $69,700 or
14.7%. Net income for the six months ended June 30, 1999 was $1,892,464 up
11.6% from $1,696,320 for the comparable period in 1998. Basic and diluted
earnings per share for the second quarter of 1999 were $0.22 and $0.21
respectively as compared to $0.20 and $0.19 per share in the previous year's
quarter. Basic and diluted earnings per share for the six months ended June 30,
1999 were $0.43 and
10
<PAGE> 12
$0.42 respectively compared to $0.39 and $0.37 for the corresponding period
ended June 30, 1998. Book value per share increased to $6.17 at June 30, 1999
from $6.04 at December 31, 1998. The Company paid a quarterly dividend of
$0.1025 per share for both the first and second quarters of 1999, as compared
to $0.10 per share in both the first and second quarters of 1998.
Performance of banks is often measured by various ratio analyses. Two widely
recognized indicators are return on average equity and return on average
assets. Annualized return on average equity for the six months ended June 30,
1999 was 14.1% on average equity of $26,906,176, compared to 13.4% on average
equity of $25,257,338 for the same period in 1998. Annualized return on average
assets of $386,233,400 for the six months ended June 30, 1999 was 0.98%,
compared to 1.12% on average assets of $302,701,479 for the same period in
1998. This decrease is attributed to the accelerated increase in assets over a
twelve month period. This asset growth was the result of the funds generated
from the deposit increases which were primarily caused by the following
factors: the purchase of the deposits of another bank's branch in Homestead,
Florida; the continuing effects of the consolidation of financial institutions
in the South Florida market area; and the Company's ongoing effort to offer
competitive products and gain market share.
Net interest income is one measurement of how management has balanced the
Company's interest rate sensitive assets and liabilities. The Company's net
interest income is its principal source of income. Interest earning assets for
the Company include loans, federal funds sold, interest bearing deposits in the
Federal Home Loan Bank, and investment securities. The Company's
interest-bearing liabilities include its deposits, federal funds purchased, and
other short-term borrowings. Net interest income increased 23.3% to $8.3
million, in the six months ended June 30, 1999 as compared to the same period
last year primarily as a result of a higher level of earning assets. Interest
from loans increased to $11.1 million for the first six months of 1999 compared
to $8.8 million for the comparable period last year. The Bank's net interest
margin declined to 4.73% in the first six months of 1999 compared to 4.91% in
the first six months of 1998. Margins are under pressure from both the asset
yield and deposit cost sides. High quality assets, primarily loans, require
offering very competitive rates to acquire and retain. Average deposit cost
increases reflect changes in the mix of deposit liabilities. Customers are less
likely to leave their funds in the lower yielding deposit accounts. These are
general industry conditions which the Bank is subject to.
Provision for loan losses increased to $300,000 from $180,000 for the
respective first six months of 1999 and 1998 due to increased loan growth of
approximately $60.4 million. Gross charged off loans for the first six months
were $78,675 offset by recoveries of $42,407, resulting in an annualized net
charge-off rate of 0.03% of total loans. This compares to net charge offs
during the same period last year of $16,386. At June 30, 1999, the Company had
aggregate non-accrual loans of $130,186 compared to $520,866 at December 31,
1998. The ratio of non-performing loans (including loans 90 days or more past
due and still accruing) to total outstanding loans was 0.05% at June 30, 1999
compared to 0.21% at December 31, 1998.
Other income increased $315,315 to $3,587,060 for the six month period ended
June 30, 1999 from $3,271,745 in the comparable period last year. The increase
in other income is attributed to an increase of $347,974 in merchant bankcard
processing income; an increase of $127,704 in service charges on deposit
accounts; an increase of $104,360 in other income; offset by a $47,150 decrease
in fees on mortgage loans sold at origination; a $146,856 decrease in
commissions on retail sales of investment products; $4,881 related to the
equity in the undistributed losses of ERAS Joint Venture; and a $65,836
decrease in gains on sales of government guaranteed loans. Government loan fees
result from a relatively small number of significant transactions. The timing
of the closing of these transactions will not generally be evenly distributed
during the year and, therefore, the revenue recognition from these transactions
can vary considerably from quarter to quarter.
Other expense increased $1,348,046, or 18.7%, in the first six months of 1999
as compared to the prior year period. In the second quarter of 1999, other
expense increased $881,303. The major areas of increased expenses during these
time periods relate to interchange fees and other expenses for processing
merchant bankcard transactions, computer services, supplies, amortization of
purchased deposits, charge-off of unamortized leasehold improvements, and the
additional operating costs associated with the new branch established in
September 1998. Bankcard costs are volume driven and are more than offset by
higher revenues reported in other income. Computer services and supplies
reflect the costs associated with the larger number and activity in account
relationships. The premium paid in the acquisition of the branch deposits in
Homestead required $72,523 in current charges to amortization expense for the
six months ended June 30, 1999. Finally, there was a $133,546
11
<PAGE> 13
charge taken in the second quarter related to the write-off of the unamortized
leasehold improvements associated with the leased facility that was abandoned
upon the opening of the newly constructed branch in Key West.
Effective January 1, 1999, the Company changed its method of accounting for
organization costs in order to expense these costs in the period incurred.
Prior to 1999, the Company capitalized organization costs and amortized them to
expense over a five-year period. This change in accounting method was made in
order for the Company to be in compliance with AICPA Statement of Position 98-5
(SOP 98-5), which states that the costs of start-up activities, which include
organization costs, be expensed as incurred. SOP 98-5 is effective for fiscal
years beginning after December 15, 1998. The Company recorded a charge net of
tax of $47,047, or $0.01 per share, in the first quarter of 1999 as the
cumulative effect of this accounting change.
Total assets at June 30, 1999 were $392,131,527, up from total assets of
$355,475,850 at December 31, 1998. Loans net of deferred loan fees increased
$15,605,918 for the first six months of 1999 from year end 1998. Also, in the
same period, investment securities increased $6,090,381, federal funds sold
increased $4,563,000, and interest bearing deposits in other banks increased
$10,237,676. The interest bearing deposits are at the Federal Home Loan Bank of
Atlanta and is a slight yield enhancement to average Federal Funds rates and
this also helps diversify the placement of the Company's excess funds. The
increase in fixed assets of $1,157,437 in the first six months of 1999 is
primarily due to the construction of a branch facility in Key West, Florida
that replaced an existing leased facility. This branch opened in April and
allows for easier access for the Bank's customers.
At June 30, 1999, the Company had $2,704,282 in short-term borrowings compared
to $669,569 at December 31, 1998. Short-term borrowings include $526,758 in
securities sold under agreements to repurchase, $399,625 in advances on a
revolving credit facility, and $1,777,899 in Treasury tax deposits. This
increase in short-term borrowings reflects the government and some individual
entities keeping more funds with the Bank at quarter end, and the addition of a
revolving credit facility obtained in April 1999 from Independent Bankers' Bank
of Florida for a line of credit up to $2,000,000. The rate of interest on this
agreement is Wall Street Journal Prime minus 1/2% and as of July 31, 1999,
$659,625 has been drawn on this line.
YEAR 2000
The Company and its subsidiaries are currently addressing a universal situation
commonly referred to as the "Year 2000 Problem" or "Y2K." The Bank subsidiary
has the most significant exposure to the Year 2000 problem. The Year 2000
Problem relates to the inability of certain computer software programs and
equipment to properly recognize and process date-sensitive information relative
to the Year 2000 and beyond. During 1997, the Company developed a plan to
devote the necessary resources to identify and modify systems impacted by the
Year 2000 problem and if necessary, implement new systems to become Year 2000
compliant in a timely manner. Year 2000 efforts are progressing as scheduled.
All mission critical vendors and servicers have been identified.
Certifications/assurances have been received from major data processing and
item processing vendors. Independent testing of all mission critical systems
commenced in June 1998 and will be completed no later than August 1999.
The Bank has evaluated most of its significant borrowers and does not believe
the Year 2000 problems should, on an aggregate basis, impact their ability to
make payments to the Bank. The Bank is monitoring its service bureau to
evaluate whether the bureau's data processing system will fail and is being
provided with periodic updates on the status of testing and upgrades being made
by the service bureau. If the Bank's service bureau fails, the Bank will
calculate loan and deposit balances and interest using manual ledgers. If this
labor intensive approach is necessary, management and employees will become
much less efficient. However, the Bank believes that it would be able to
operate in this manner indefinitely, until its existing service bureau is able
to again provide data processing services.
To determine the readiness of its vendors, the Bank has sent out a letter to
each vendor inquiring about their compliance with Year 2000. For those vendors
that have responded that they are Year 2000 compliant and that the Bank has
determined to not have a material impact on the Bank's operations, no further
work is performed. For those vendors that have responded they are working
towards Year 2000 compliance and that the Bank has determined to be
significant, including mission critical vendors, the Bank will follow up on a
regular basis through 1999. These vendors have advised the Bank that they
expect to be Year 2000 compliant prior to December 31, 1999. If those vendors
do not demonstrate compliance by a certain date, the Bank will seek other
alternatives in accordance with the Bank's contingency plan, which may include
seeking replacement vendors.
The most significant expenditures related to the Year 2000 issue have involved
system upgrades, both hardware and software, which would have been implemented
at some point even without the Y2K issue. However, because of Y2K, some of
these expenditures have been accelerated. These expenditures are capital in
nature and the cost will be amortized over their useful lives. The amount of
these items totaled approximately $300,000 in 1998 and are budgeted to be about
$100,000 in 1999. The
12
<PAGE> 14
amount spent on testing and compliance issues of existing systems was about
$2,000 in 1998 and will be approximately $50,000 in 1999 and is recorded in
other expense. None of these costs are expected to materially impact the
Company's results of operations in any one reporting period.
Ultimately, the potential impact of the Year 2000 issue will depend not only on
the corrective measures the Bank undertakes, but also on the way in which the
Year 2000 issue is addressed by governmental agencies, businesses, and other
entities who provide data to the Bank, receive data from the Bank, or whose
financial condition or operational capability is important to the Bank, such as
suppliers or customers. At worst, the Bank customers and vendors will face
severe Year 2000 issues, which may cause borrowers to become unable to service
their loans. The Bank may also be required to replace non-compliant vendors
with more expensive Year 2000-compliant vendors. At this time the Bank cannot
determine the financial effect on it if significant customer and/or vendor
remediation efforts are not resolved in a timely manner.
CAPITAL ADEQUACY
Federal banking regulators have established certain capital adequacy standards
required to be maintained by banks and bank holding companies. The minimum
requirements established in the regulations are set forth in the table below,
along with the actual ratios at June 30, 1999 and December 31, 1998:
<TABLE>
<CAPTION>
Well Adequately
Capitalized Capitalized June 30, 1999 December 31, 1998
Requirement Requirement Actual Actual
--------------- ---------- ------------- -----------------
<S> <C> <C> <C> <C>
Tier 1 Capital (to Average Assets)
Consolidated >= 5% 3% 6.7% 7.9%
Bank >= 5% 3% 6.6% 7.6%
Tier 1 Capital (to Risk Weighted Assets)
Consolidated >= 6% 4% 9.5% 9.8%
Bank >= 6% 4% 9.4% 9.4%
Total Capital (to Risk Weighted Assets)
Consolidated >= 10% 8% 10.5% 10.7%
Bank >= 10% 8% 10.4% 10.4%
</TABLE>
Management believes, as of June 30, 1999, that the Company and the Bank met all
capital requirements to which they are subject.
LIQUIDITY
The goal of liquidity management is to ensure the availability of an adequate
level of funds to meet the loan demand and deposit withdrawal needs of the
Company's customers. The Company actively manages the levels, types and
maturities of earning assets in relation to the sources available to fund
current and future needs to ensure that adequate funding will be available at
all times.
In 1997, the Bank invested in Federal Home Loan Bank stock for the purpose of
establishing credit lines with the Federal Home Loan Bank. The credit
availability to the Bank is $47 million, and any advances are secured by the
Bank's one-to-four family residential mortgage loans. No advances were made on
the credit line in 1998 or thus far in 1999.
The Bank has unsecured lines of credit for federal funds purchased from other
banks totaling $5,000,000. Securities sold under agreements to repurchase
(wholesale) represent a wholesale agreement with a correspondent bank which is
collateralized by a U.S. Treasury note. The Bank also has several securities
sold under repurchase agreements (retail) with commercial account
13
<PAGE> 15
holders whereby the Bank sweeps the customer's accounts on a daily basis and
pays interest on these amounts. These agreements are collateralized by
investment securities chosen by the Bank.
SEGMENT REPORTING
TIB Financial Corp. has three reportable segments: community banking, merchant
bankcard processing, and government guaranteed loan sales and servicing. The
community banking segment's business is to attract deposits from the public and
to use such deposits to make real estate, business and consumer loans in its
primary service area. The merchant bankcard processing segment processes credit
card transactions for local merchants. The government guaranteed loan segment
originates and sells the government guaranteed portion of loans that qualify
for government guaranteed loan programs, such as those offered by the Small
Business Administration and the U.S. Department of Agricultural Rural
Development Business and Industry Program. The results of the Company's
segments are as follows:
<TABLE>
<CAPTION>
Government
Merchant Guaranteed
Community Bankcard Loans Sales and All
Six months ended June 30, 1999 Banking Processing Servicing Other Totals
- ------------------------------ ------------- ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Interest income $ 13,777,534 $ -- $ -- $ -- $ 13,777,534
Interest expense 5,472,462 -- -- -- 5,472,462
------------- ------------- ------------- ------------- -------------
Net interest income 8,305,072 -- -- -- 8,305,072
Other income 1,439,940 1,574,414 447,042 130,545 3,591,941
Equity in income (loss) of ERAS JV -- -- -- (4,881) (4,881)
Depreciation and amortization (557,633) (26,712) (7,318) (1,126) (592,789)
Other expense (6,625,640) (1,263,730) (221,927) (147,535) (8,258,832)
------------- ------------- ------------- ------------- -------------
Pretax segment profit (excluding
effect of change in
accounting principle) $ 2,561,739 $ 283,972 $ 217,797 $ (22,997) $ 3,040,511
============= ============= ============= ============= =============
Segment assets $ 390,990,753 $ 141,360 $ 238,602 $ 760,812 $ 392,131,527
============= ============= ============= ============= =============
</TABLE>
14
<PAGE> 16
<TABLE>
<CAPTION>
Government
Merchant Guaranteed
Community Bankcard Loans Sales and All
Six months ended June 30, 1998 Banking Processing Servicing Other Totals
- ------------------------------ ------------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Interest income $ 11,455,693 $ -- $ -- $ -- $ 11,455,693
Interest expense 4,717,943 -- -- -- 4,717,943
------------- ------------- ------------- ------------- -------------
Net interest income 6,737,750 -- -- -- 6,737,750
Other income 1,255,026 1,226,440 512,878 277,401 3,271,745
Depreciation and amortization (458,156) (24,488) (6,873) (978) (490,495)
Other expense (5,431,850) (977,290) (293,365) (190,575) (6,893,080)
------------- ------------- ------------- ------------- -------------
Pretax segment profit $ 2,102,770 $ 224,662 $ 212,640 $ 85,848 $ 2,625,920
============= ============= ============= ============= =============
Segment assets $ 324,269,431 $ 125,930 $ 260,390 $ 8,397 $ 324,664,148
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
Government
Merchant Guaranteed
Community Bankcard Loans Sales and All
Three months ended June 30, 1999 Banking Processing Servicing Other Totals
- -------------------------------- ------------- ----------- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Interest income $ 7,023,388 $ -- $ -- $ -- $ 7,023,388
Interest expense 2,785,941 -- -- -- 2,785,941
----------- ----------- ----------- ----------- -----------
Net interest income 4,237,447 -- -- -- 4,237,447
Other income 722,158 744,573 310,701 69,633 1,847,065
Equity in income (loss) of ERAS JV -- -- -- (18,063) (18,063)
Depreciation and amortization (291,236) (13,356) (3,764) (563) (308,919)
Other expense (3,465,103) (590,238) (126,640) (70,224) (4,252,205)
----------- ----------- ----------- ----------- -----------
Pretax segment profit $ 1,203,266 $ 140,979 $ 180,297 $ (19,217) $ 1,505,325
=========== =========== =========== =========== ===========
</TABLE>
15
<PAGE> 17
<TABLE>
<CAPTION>
Government
Merchant Guaranteed
Community Bankcard Loans Sales and All
Three months ended June 30, 1998 Banking Processing Servicing Other Totals
- -------------------------------- ----------- ----------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Interest income $ 5,921,237 $ -- $ -- $ -- $ 5,921,237
Interest expense 2,482,501 -- -- -- 2,482,501
----------- ----------- ----------- ----------- -----------
Net interest income 3,438,736 -- -- -- 3,438,736
Other income 646,743 571,578 142,516 196,512 1,557,349
Depreciation and amortization (233,322) (12,244) (3,473) (515) (249,554)
Other expense (2,726,536) (491,418) (57,172) (125,141) (3,400,267)
----------- ----------- ----------- ----------- -----------
Pretax segment profit $ 1,125,621 $ 67,916 $ 81,871 $ 70,856 $ 1,346,264
=========== =========== =========== =========== ===========
</TABLE>
Revenues are almost exclusively derived from customers within the United
States. The Company does not have a single customer that accounts for ten
percent or more of the Company's revenue.
16
<PAGE> 18
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 25, 1999, at the annual meeting of Company shareholders, the
shareholders reelected the following directors: Edward V. Lett, Scott
A. Marr, Derek D. Martin-Vegue, and also approved the engagement of
BDO Seidman, LLP as independent certified public accountants for the
Company. The directors continuing in office following the meeting
were: Edward V. Lett, Scott A. Marr, Derek D. Martin-Vegue, Joseph H.
Roth, Jr., Marvin F. Schindler, Richard J. Williams, Gretchen K.
Holland, BG Carter, Armando J. Henriquez, and James R. Lawson, III.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule (SEC use only)
(b) No reports on Form 8-K were filed during the quarter ended June
30, 1999.
SIGNATURES
In accordance with 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.
TIB FINANCIAL CORP.
/s/ Edward V. Lett
-------------------------------------
Date: August 13, 1999 Edward V. Lett
--------------- President and Chief Executive Officer
17
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TIB FINANCIAL CORP. FOR THE SIX MONTHS ENDED JUNE 30,
1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 17,147,788
<INT-BEARING-DEPOSITS> 10,285,086
<FED-FUNDS-SOLD> 11,128,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,706,890
<INVESTMENTS-CARRYING> 46,384,044
<INVESTMENTS-MARKET> 45,044,740
<LOANS> 261,904,097
<ALLOWANCE> 2,780,966
<TOTAL-ASSETS> 392,131,527
<DEPOSITS> 358,044,107
<SHORT-TERM> 2,304,657
<LIABILITIES-OTHER> 4,251,281
<LONG-TERM> 399,625
0
0
<COMMON> 448,016
<OTHER-SE> 26,683,841
<TOTAL-LIABILITIES-AND-EQUITY> 392,131,527
<INTEREST-LOAN> 11,068,276
<INTEREST-INVEST> 2,110,839
<INTEREST-OTHER> 598,419
<INTEREST-TOTAL> 13,777,534
<INTEREST-DEPOSIT> 5,440,012
<INTEREST-EXPENSE> 5,472,462
<INTEREST-INCOME-NET> 8,305,072
<LOAN-LOSSES> 300,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 8,551,621
<INCOME-PRETAX> 3,040,511
<INCOME-PRE-EXTRAORDINARY> 1,939,511
<EXTRAORDINARY> 0
<CHANGES> 47,047
<NET-INCOME> 1,892,464
<EPS-BASIC> .43
<EPS-DILUTED> .42
<YIELD-ACTUAL> 4.73
<LOANS-NON> 130,186
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,517,234
<CHARGE-OFFS> 78,675
<RECOVERIES> 42,407
<ALLOWANCE-CLOSE> 2,780,966
<ALLOWANCE-DOMESTIC> 2,780,966
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
