CHEVY CHASE
PREFERRED CAPITAL CORPORATION
FORM 10-Q
March 31, 1999
<PAGE>
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 March 31, 1999
Commission File Number: 333-10495
CHEVY CHASE PREFERRED CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-1998335
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
(Address of principal executive offices) (Zip Code)
(301) 986-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
The number of shares outstanding of the registrant's sole class of common stock
was 100 shares, $1 par value, as of April 30, 1999.
<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements: 1
(a) Statements of Financial Condition at March 31, 1999 and
December 31, 1998 2
(b) Statements of Operations for the Three Months Ended
March 31, 1999 and 1998 3
(c) Statement of Stockholders' Equity for the Three Months Ended
March 31, 1999 4
(d) Statements of Cash Flows for the Three Months Ended
March 31, 1999 and 1998 5
(e) Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
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<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements and notes of Chevy Chase Preferred
Capital Corporation (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information. In
the opinion of management, all adjustments necessary for a fair presentation of
the financial position and the results of operations for the interim period
presented have been included. Such unaudited financial statements and notes
should be read in conjunction with the Company's financial statements and notes
for the year ended December 31, 1998, included in the Company's Annual Report on
Form 10-K (File No. 333-10495) filed with the Securities and Exchange Commission
on March 31, 1999 (the "1998 10-K").
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
March 31, December 31,
1999 1998
-------------- --------------
ASSETS
Cash and interest-bearing deposits $ 2,883,346 $ 4,861,984
Residential mortgage loans (net of allowance for
losses of $27,539 and $40,333, respectively) 293,383,635 292,682,032
Real estate acquired in settlement of loans, net 305,834 272,197
Accounts receivable from parent 7,037,070 8,004,120
Accrued interest receivable 1,517,337 1,437,626
Prepaid expenses 237,471 335,850
-------------- --------------
Total assets $ 305,364,693 $ 307,593,809
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable to parent $ 237,898 $ 234,923
Accounts payable to others and accrued expenses 73,447 11,810
Dividends payable to parent 190,000 3,460,000
Dividends payable to others 3,890,625 3,890,625
-------------- --------------
Total liabilities 4,391,970 7,597,358
-------------- --------------
10 3/8% Noncumulative Exchangeable
Preferred Stock, $5 par value,
10,000,000 shares authorized, 3,000,000
shares issued and outstanding
(liquidation value of $150,000,000 plus
accrued and unpaid dividends) 15,000,000 15,000,000
Common stock, $1 par value,
1,000 shares authorized, 100 shares
issued and outstanding 100 100
Capital contributed in excess of par 284,999,900 284,996,351
Retained earnings 972,723 -
-------------- --------------
Total stockholders' equity 300,972,723 299,996,451
-------------- --------------
Total liabilities and stockholders' equity $ 305,364,693 $ 307,593,809
============== ==============
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
------------------------------------
1999 1998
---------------- ----------------
Interest Income
Residential mortgage loans $ 5,484,652 $ 5,701,251
Other 40,904 45,337
---------------- ----------------
Total interest income 5,525,556 5,746,588
Provision for loan losses 13,520 -
---------------- ----------------
Total interest income after
provision for loan losses 5,512,036 5,746,588
Gain on sale of real estate acquired in
settlement of loans, net 1,385 960
---------------- ----------------
Total income 5,513,421 5,747,548
---------------- ----------------
Operating Expenses
Loan servicing fees paid to parent 272,904 272,065
Advisory fees paid to parent 50,000 50,000
Directors fees 6,500 7,000
General and administrative 130,669 37,087
---------------- ----------------
Total operating expenses 460,073 366,152
---------------- ----------------
NET INCOME $ 5,053,348 $ 5,381,396
================ ================
PREFERRED STOCK DIVIDENDS 3,890,625 3,890,625
---------------- ----------------
EARNINGS AVAILABLE TO
COMMON STOCKHOLDER $ 1,162,723 $ 1,490,771
================ ================
EARNINGS PER COMMON SHARE $ 11,627.23 $ 14,907.71
================ ================
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
Capital
Contributed Total
Preferred Common in Excess Retained Stockholders'
Stock Stock of Par Earnings Equity
------------ ----- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $15,000,000 $100 $284,996,351 $ - $299,996,451
Net income - - - 5,053,348 5,053,348
Capital contribution from
common stockholder - - 3,549 - 3,549
Dividends on 10 3/8%
Noncumulative Exchangeable
Preferred Stock, Series A - - - (3,890,625) (3,890,625)
Dividends on Common Stock - - - (190,000) (190,000)
------------ ----- ------------- ------------ -------------
Balance, March 31, 1999 $15,000,000 $100 $284,999,900 $ 972,723 $300,972,723
============ ===== ============= ============ =============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
--------------------------------
1999 1998
-------------- --------------
Cash flows from operating activities:
Net income $ 5,053,348 $ 5,381,396
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 13,520 -
Gain on sale of real estate acquired in
settlement of loans, net (1,385) (960)
(Increase) decrease in accounts receivable
from parent 967,050 (4,008,646)
Increase in accrued interest receivable (79,711) (43,126)
Decrease in prepaid expenses 98,379 23,433
Increase in accounts payable to parent 2,975 18,561
Increase in accounts payable to others
and accrued expenses 61,637 4,298
-------------- --------------
Net cash provided by operating activities 6,115,813 1,374,956
-------------- --------------
Cash flows from investing activities:
Purchases of residential mortgage loans (23,292,328) (41,413,498)
Repayments of residential mortgage loans 22,284,891 45,329,341
Net proceeds on sale of real estate acquired
in settlement of loans 260,062 146,516
-------------- --------------
Net cash provided by(used in)investing
activities (747,375) 4,062,359
-------------- --------------
Cash flows from financing activities:
Capital contribution from common stockholder 3,549 84,851
Dividends paid on preferred stock (3,890,625) (3,890,625)
Dividends paid on common stock (3,460,000) (2,850,000)
-------------- --------------
Net cash used in financing activities (7,347,076) (6,655,774)
-------------- --------------
Net decrease in cash and cash equivalents (1,978,638) (1,218,459)
Cash and cash equivalents at beginning of period 4,861,984 3,894,269
-------------- --------------
Cash and cash equivalents at end of period $ 2,883,346 $ 2,675,810
============== ==============
Supplemental disclosures of non-cash activities:
Loans receivable transferred to real estate
acquired in settlement of loans $ 292,314 $ 342,664
============== ==============
The Notes to Financial Statements are an integral part of these statements.
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:
The Company is a Maryland corporation which acquires, holds and manages real
estate assets. Chevy Chase Bank, F.S.B. (the "Bank"), a federally insured stock
savings bank, owns all of the Company's common stock. The Bank is in compliance
with its regulatory capital requirements.
NOTE 2 - RESIDENTIAL MORTGAGE LOANS:
Residential mortgage loans consist of one-year adjustable rate mortgages
("ARMs"), three-year ARMs and five-year, seven-year and ten-year fixed-rate
loans with automatic adjustment to one-year ARMs after the respective fixed rate
period, and 30 year fixed-rate mortgages. Each of the mortgage loans is secured
by a mortgage, deed of trust or other security instrument which created a first
lien on the residential dwellings located in their respective jurisdictions. The
following table shows the residential mortgage loan portfolio by type at the
dates indicated:
March 31, December 31,
1999 1998
-------------------- --------------------
One-year ARMs $ 15,615,322 $ 16,159,185
Three-year ARMs 30,246,643 35,684,740
5/1 ARMs 98,720,374 100,108,907
7/1 ARMs 1,072,835 -
10/1 ARMs 142,500,203 135,436,966
30 year fixed-rate 5,255,797 5,332,567
-------------------- --------------------
Total 293,411,174 292,722,365
Less:
Allowance for loan losses 27,539 40,333
-------------------- --------------------
Total $ 293,383,635 $ 292,682,032
==================== ====================
NOTE 3 - PREFERRED STOCK
Cash dividends on the Company's 10 3/8% Noncumulative Exchangeable Preferred
Stock, Series A ("the Series A Preferred Shares") are payable quarterly in
arrears. The liquidation value of each Series A Preferred Share is $50 plus
accrued and unpaid dividends. The Series A Preferred Shares are not redeemable
until January 15, 2007 (except upon the occurrence of certain tax events), and
are redeemable thereafter at the option of the Company. Except under certain
limited circumstances, the holders of the Series A Preferred Shares have no
voting rights. The Series A Preferred Shares are automatically exchangeable for
a new series of preferred stock of the Bank upon the occurrence of certain
events relating to the Bank.
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<PAGE>
CHEVY CHASE PREFERRED CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - DIVIDENDS:
During the three months ended March 31, 1999, the Company's Board of Directors
declared $3,890,625 and $190,000 of preferred stock and common stock dividends,
respectively, out of the retained earnings of the Company. These dividends were
paid in April 1999.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Residential Mortgage Loans
At March 31, 1999, the Company had $293,383,635 invested in loans secured by
first mortgages or deeds of trust on single-family residential real estate
properties ("Residential Mortgage Loans"). The $701,603 increase from the
balance at December 31, 1998, resulted from Residential Mortgage Loan purchases
of $23,292,328, which were offset by principal collections of $22,284,891 and
provisions for loan losses of $13,520. The Company transferred two loans with an
aggregate principal balance of $292,314 to real estate acquired in settlement of
loans ("REO") during the three months ended March 31, 1999. In addition, the
Company received proceeds of $260,062 on the sale of one REO property during the
three months ended March 31, 1999. Management intends to continue to reinvest
proceeds received from repayments of loans in additional Residential Mortgage
Loans to be purchased from either the Bank or its affiliates.
At March 31, 1999, the Company had two non-accrual loans (contractually past due
90 days or more or with respect to which other factors indicate that full
payment of principal and interest is unlikely) with an aggregate principal
balance of $399,868.
At March 31, 1999, the Company had three loans which were delinquent 30-89 days
with an aggregate principal balance of $484,012 (or 0.16% of loans).
Allowance for Loan Losses
An analysis is performed periodically to determine whether an allowance for loan
losses is required. An allowance may be provided after considering such factors
as the economy in lending areas, delinquency statistics and past loss
experience. The allowance for loan losses is based on estimates, and ultimate
losses may vary from current estimates. As adjustments to the allowance become
necessary, provisions for loan losses are reported in operations in the periods
they are determined to be necessary. The activity in the allowance for loan
losses is as follows:
Three Months
Ended
March 31,
------------------------------------------
1999 1998
--------------- ---------------
Balance at beginning of period $ 40,333 $ 39,999
Provision for loan losses 13,520 -
Charge-offs (26,314) -
Recoveries - 334
--------------- ---------------
Balance at end of period $ 27,539 $ 40,333
=============== ===============
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<PAGE>
Interest Rate Risk
The Company's income consists primarily of interest payments on Residential
Mortgage Loans. If there is a decline in interest rates then the Company will
experience a decrease in income available to be distributed to its stockholders.
Certain Residential Mortgage Loans which the Company holds allow borrowers to
convert an ARM to a fixed-rate mortgage, thus "locking in" a fixed interest rate
at a time when interest rates have declined. In addition, when interest rates
decline, holders of fixed-rate mortgages are more likely to prepay such
mortgages. During recent periods, primarily as a result of a decline in interest
rates, the Company experienced an increase in prepayments on its Residential
Mortgage Loans. In response, the Company altered the mix of the loans that it
purchases. Specifically, the Company purchased more 10/1 ARMs from the Bank,
which typically have higher yields than other adjustable rate loan types.
Based on the outstanding balance of the Company's Residential Mortgage Loans at
March 31, 1999 and the interest rates on such loans, anticipated annual interest
income, net of servicing fees, on the Company's loan portfolio was approximately
132.9% of the projected annual dividend on the Series A Preferred Shares. There
can be no assurance that an interest rate environment in which there is a
continued decline in interest rates would not adversely affect the Company's
ability to pay dividends on the Series A Preferred Shares. The Company, to date,
has not used any derivative instruments to manage its interest rate risk.
There have been no material changes to the Company's market risk disclosures for
the year ended December 31, 1998 included in the 1998 10-K.
Significant Concentration of Credit Risk
Concentration of credit risk arises when a number of customers engage in similar
business activities, or activities in the same geographical region, or have
similar economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic conditions.
Concentration of credit risk indicates the relative sensitivity of the
Company's performance to both positive and negative developments affecting
a particular industry.
The Company's exposure to geographic concentrations directly affects the credit
risk of the Residential Mortgage Loans within the portfolio. Substantially all
of the Company's Residential Mortgage Loans are secured by residential real
estate properties located in the Washington, D.C. metropolitan area.
Consequently, these loans may be subject to a greater risk of default than other
comparable residential mortgage loans in the event of adverse economic,
political or business developments and natural hazards in the region that may
affect the ability of residential property owners in the region to make payments
of principal and interest on the underlying mortgages.
Liquidity and Capital Resources
The objective of liquidity management is to ensure the availability of
sufficient cash flows to meet all of the Company's financial commitments. In
managing liquidity, the Company takes into account various legal limitations
placed on a real estate investment trust (a "REIT"), as discussed below in "Tax
Status of the Company."
The Company's principal liquidity need will be to fund the acquisition of
additional mortgage assets as mortgage assets held by the Company are repaid and
to pay dividends on the Series A Preferred Shares. The acquisition of such
additional mortgage assets will be funded with the proceeds of principal
repayments on its current portfolio of mortgage assets. The Company does not
anticipate that it will have any other material capital expenditures. The
Company believes that cash generated from the payment of principal and interest
on its mortgage asset portfolio will provide sufficient funds to meet its
operating requirements and to pay dividends in accordance with the requirements
to be treated as a REIT for income tax purposes for the foreseeable future. The
Company may borrow funds as it deems necessary.
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<PAGE>
Tax Status of the Company
The Company has elected to be taxed as a REIT under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally
will not be subject to Federal income tax on its net income (excluding capital
gains) provided that it distributes annually 100 percent of its annual REIT
taxable income to its stockholders, meets certain organizational, stock
ownership and operational requirements and meets certain income and asset tests.
If in any taxable year the Company fails to qualify as a REIT, the Company would
not be allowed a deduction for distributions to stockholders in computing its
taxable income and would be subject to Federal and state income tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. In addition, the Company would also be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification was lost.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
During the three months ended March 31, 1999 and 1998, the Company reported net
income of $5,053,348 and $5,381,396, respectively.
Interest income on Residential Mortgage Loans totaled $5,484,652 and $5,701,251
for the three months ended March 31, 1999 and 1998, respectively, which
represents an average yield on such loans of 7.50% and 7.94%, respectively. The
average loan balance of the Residential Mortgage Loan portfolio was $292,637,062
and $287,187,664 for the three months ended March 31, 1999 and 1998,
respectively. The Company would have recorded an additional $10,715 and $26,094
in interest income for the three months ended March 31, 1999 and 1998,
respectively, had its non-accrual loans been current in accordance with their
original terms.
Other interest income of $40,904 and $45,337 was recognized on the Company's
interest bearing deposits during the three months ended March 31, 1999 and 1998,
respectively.
A provision for loan losses of $13,520 was recorded on the Company's loan
portfolio during the three months ended March 31, 1999. No provision for loan
losses was recorded during the three months ended March 31, 1998.
The Company recognized a gain of $1,385 on the sale of one REO property during
the three months ended March 31, 1999. The Company recognized a gain of $960 on
the sale of one REO property during the three months ended March 31, 1998.
Operating expenses totaling $460,073 and $366,152 for the three months ended
March 31, 1999 and 1998, respectively, were comprised of loan servicing fees
paid to parent, advisory fees paid to parent, directors fees and general and
administrative expenses. Loan servicing fees paid to parent of $272,904 and
$272,065, for the three months ended March 31 1999 and 1998, respectively, were
based on a servicing fee rate of 0.375% per annum of the outstanding principal
balances of Residential Mortgage Loans, pursuant to a servicing agreement
between the Company and the Bank. Advisory fees paid to parent for the three
months ended March 31, 1999 and 1998 totaled $50,000 for each period. Directors
fees totaled $6,500 and $7,000 for the three months ended March 31, 1999 and
1998, respectively, and represent compensation to the two independent members of
the Board of Directors. General and administrative expenses totaled $130,669 and
$37,087 for the three months ended March 31, 1999 and 1998, respectively, and
consist primarily of the amortization of organizational costs. The increase in
general and administrative expenses is due primarily to the acceleration of the
amortization of organizational costs in accordance with the American Institute
of Certified Public Accountants' Statement of Position 98-5
"Reporting on the Costs of Start-Up Activities," which the Company
adopted effective January 1, 1999.
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<PAGE>
On March 23, 1999, the Company declared, out of the retained earnings of the
Company, a cash dividend of $1.296875 per share on the outstanding Series A
Preferred Shares. Dividends of $3,890,625 were subsequently paid on April 15,
1999.
The Company also declared on March 23, 1999, out of the retained earnings of the
Company, a cash dividend of $1,900 per share of common stock. The $190,000
dividend was paid on April 15, 1999.
YEAR 2000 ISSUES
As the year 2000 approaches, companies are beginning to face "Year 2000
Compliance" issues in at least three critical areas: internal systems,
dependencies with suppliers and service providers, and dependencies with
customers (or, in the Company's case, payors on the mortgage loans held by the
Company). Year 2000 Compliance means the ability of hardware, software and other
processing capabilities to interpret and manipulate correctly all date data up
to and through the year 2000, including the computation of leap years. Year 2000
Compliance issues arise because many commonly used software and hardware systems
were programmed to use two-digit year representations with the century of 19
implied. Thus, in the year 2000, those systems will treat 00 as 1900 instead of
2000 and may fail to produce proper results.
Because the Company's operations are performed in their entirety under contract
with the Bank, the Company has no equipment or systems of its own. Therefore,
the Company does not believe that it faces any internal Year 2000 Compliance
risk.
For the same reason, the Company is heavily dependent on the Year 2000
Compliance of its sole service provider, the Bank. However, the Bank has advised
the Company that it is subject to strict deadlines for Year 2000 Compliance and
other detailed Year 2000 Compliance guidelines established by the Office of
Thrift Supervision and the Federal Financial Institutions Examination Council
and that the Bank believes it has taken appropriate steps to meet all such
deadlines. Accordingly, the Company does not expect to suffer any material
adverse impact from the year 2000 on the services provided by the Bank.
With respect to the payors of the mortgage loans held by the Company, the
Company also does not expect any material impact from the year 2000. Potential
Year 2000 Compliance risk in this area could arise from the inability of such
payors to timely make their payments because of problems with their own internal
payment systems. This would result in decreased revenues for the Company, which
could have an adverse effect on the payment of dividends by the Company and the
market price of the Company's stock. However, the investment policy of the
Company is to have 95% of its portfolio in mortgage assets consisting of either
Residential Mortgage Loans or mortgage-backed securities. As of March 31, 1999,
all of the assets of the Company consisted of Residential Mortgage Loans. The
Company believes that Residential Mortgage Loans are not likely to be materially
affected by the year 2000 because the payments are made by individuals rather
than organizations that are more heavily dependent on technology.
To date, the Company has made no expenditures in connection with Year 2000
Compliance because of its ability to rely on the Bank's Year 2000 Compliance
program. For the same reason, the Company does not expect to face any Year 2000
Compliance expenses in the future.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
Information required by this item is included in Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Interest Rate Risk", which is hereby incorporated herein by reference.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not the subject of any material litigation. None of the Company,
the Bank or any affiliate of the Bank is currently involved in nor, to the
Company's knowledge, is currently threatened with any material litigation with
respect to the Residential Mortgage Loans included in the portfolio, other than
routine litigation arising in the ordinary course of business, most of which is
covered by liability insurance.
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 required by Item 601 of Regulation S-K are set forth below.
Exhibit
No. Exhibit
11 Computation of Earnings Per Common Share included in Part I,
Item 1 of this report
27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the three months ended March 31,
1999.
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<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.
CHEVY CHASE PREFERRED CAPITAL CORPORATION
(Registrant)
May 13, 1999 By: /s/ Stephen R. Halpin, Jr.
--------------------------
Stephen R. Halpin, Jr.
Director,
Executive Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
May 13, 1999 By: /s/ Joel A. Friedman
--------------------
Joel A. Friedman
Senior Vice President and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit Index
Exhibit
No. Exhibit
11 Computation of Earnings Per Common Share included in Part I, Item 1
of this report.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 5,393
<INT-BEARING-DEPOSITS> 2,877,953
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 293,383,635
<ALLOWANCE> 27,539
<TOTAL-ASSETS> 305,364,693
<DEPOSITS> 0
<SHORT-TERM> 4,318,523
<LIABILITIES-OTHER> 73,447
<LONG-TERM> 0
0
15,000,000
<COMMON> 100
<OTHER-SE> 284,999,900
<TOTAL-LIABILITIES-AND-EQUITY> 305,364,693
<INTEREST-LOAN> 5,484,652
<INTEREST-INVEST> 0
<INTEREST-OTHER> 40,904
<INTEREST-TOTAL> 5,525,556
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 5,525,556
<LOAN-LOSSES> 13,520
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 460,073
<INCOME-PRETAX> 5,053,348
<INCOME-PRE-EXTRAORDINARY> 5,053,348
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,053,348
<EPS-PRIMARY> 11,627.23
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 399,868
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 40,333
<CHARGE-OFFS> (26,314)
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 27,539
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
