- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d)
- ---- of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ____ to ____ Commission file number 333-19201
THE COMMERCIAL BANCORP, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 59-3396236
------- ----------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
258 North Nova Road
Ormond Beach, Florida 32174
----------------------------------------
(Address of Principal Executive Offices)
(904) 672-3003
----------------------------------------
(Issuer's Telephone Number, Including Area Code)
----------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Common stock, par value $.01 per share
--------------------------------------
(class)
464,791 shares outstanding at July 14, 1998
-------------------------------------------
- --------------------------------------------------------------------------------
CONFORMED COPY
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
At June 30, 1998 (unaudited) and At December 31, 1997................2
Condensed Consolidated Statements of Operations -
Three and Six Months ended June 30, 1998 and 1997 (unaudited)........3
Condensed Consolidated Statements of Comprehensive Income -
Three and Six Months ended June 30, 1998 and 1997 (unaudited)........4
Condensed Consolidated Statement of Stockholders' Equity -
Six Months ended June 30, 1998 (unaudited)...........................5
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1998 and 1997 (unaudited)..................6
Notes to Condensed Consolidated Financial Statements (unaudited).....7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................9-11
Part II. Other Information
Item 1. Legal Proceedings..............................................12
Item 4. Submission of Matters to a Vote of Security Holders............12
Item 6. Exhibits and Reports on Form 8-K...............................13
SIGNATURES.................................................................14
1
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
At
-----------------------------
June 30, December 31,
Assets 1998 1997
---- ----
(unaudited)
<S> <C> <C>
Cash and due from banks......................................................... $ 924,208 1,065,817
Federal funds sold.............................................................. 1,857,707 1,400,000
---------- ---------
Total cash and cash equivalents..................................... 2,781,915 2,465,817
Securities available for sale................................................... 4,956,698 -
Loans receivable, net of allowance for loan losses of
$90,000 in 1998 and $35,000 in 1997......................................... 8,738,514 3,745,577
Premises and equipment, net..................................................... 769,431 462,784
Accrued interest receivable and other assets.................................... 335,726 220,588
Deferred income taxes........................................................... 290,821 183,161
----------- ----------
Total assets........................................................ $ 17,873,105 7,077,927
========== =========
Liabilities and Stockholders' Equity
Liabilities:
Demand deposits............................................................. 415,687 832,396
Savings and NOW deposits.................................................... 3,357,012 1,040,454
Money-market deposits....................................................... 136,565 65,777
Time deposits............................................................... 9,624,088 739,433
---------- ----------
Total deposits...................................................... 13,533,352 2,678,060
Official checks............................................................. 63,475 54,138
Accrued interest payable and other liabilities 170,702 11,944
----------- -----------
Total liabilities................................................... 13,767,529 2,744,142
---------- ---------
Stockholders' equity:
Common stock, $.01 par value, 10,000,000 shares authorized,
464,791 shares issued and outstanding................................... 4,648 4,648
Additional paid-in capital.................................................. 4,628,542 4,628,542
Accumulated deficit......................................................... (520,337) (299,405)
Accumulated other comprehensive income, unrealized
loss on securities available for sale, net (7,277) -
------------ ---------
Total stockholders' equity.......................................... 4,105,576 4,333,785
---------- ---------
Total liabilities and stockholders' equity $ 17,873,105 7,077,927
========== =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
(unaudited) (unaudited)
Interest income:
<S> <C> <C> <C> <C>
Loans................................................... $ 164,782 - 287,439 -
Securities available for sale........................... 31,480 - 31,480 -
Other interest-earning assets........................... 60,705 - 106,999 -
-------- ---------- ------- --------
Total interest income........................... 256,967 - 425,918 -
------- ---------- ------- --------
Interest expense:
Deposits................................................ 154,288 - 235,130 -
Other................................................... 1,792 9,515 1,792 14,614
-------- -------- -------- -------
Total interest expense.......................... 156,080 9,515 236,922 14,614
------- -------- ------- -------
Net interest income (expense) 100,887 (9,515) 188,996 (14,614)
Provision for loan losses................................... 26,000 - 55,000 -
------- --------- ------- --------
Net interest income (expense) after
provision for loan losses 74,887 (9,515) 133,996 (14,614)
------- --------- ------- --------
Noninterest income-
Service charges and fees................................ 9,257 - 18,771 -
-------- --------- -------- --------
Noninterest expense:
Salaries and employee benefits.......................... 115,724 67,290 213,046 87,878
Occupancy expense....................................... 46,759 10,277 88,431 13,287
Advertising............................................. 20,761 - 49,200 -
Other 65,414 22,881 126,222 41,729
------- ------- ------- -------
Total noninterest expense....................... 248,658 100,448 476,899 142,894
------- ------- ------- -------
Loss before income tax benefit.............................. (164,514) (109,963) (324,132) (157,508)
Income tax benefit.............................. (53,500) (41,800) (103,200) (59,900)
------- ------- ------- -------
Net loss.................................................... $(111,014) (68,163) (220,932) (97,608)
======= ======= ======= =======
Loss per share, basic....................................... $ (.24) * (.48) *
========== ======= ======== =======
Dividends per share......................................... $ - - - -
============ ======= ======== =======
Weighted-average number of shares outstanding
for basic............................................... 464,791 6,500 464,791 6,500
======= ======= ======= ========
</TABLE>
* Not meaningful
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net loss .................... $(111,014) (68,163) (220,932) (97,608)
Other comprehensive income -
Change in unrealized loss on
securities available for sale
arising during period, net of
tax benefit of $4,460 for the
three and six months ended
June 30, 1998 (unaudited) (7,277) -- (7,277) --
--------- --------- --------- ---------
Comprehensive income ........ $(118,291) (68,163) (228,209) (97,608)
========= ========= ========= =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statement of Stockholders' Equity
Six Months Ended June 30, 1998
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income,
Unrealized
Loss on
Additional Securities Total
Common Paid-In Accumulated Available Stockholders'
Stock Capital Deficit for Sale Equity
----- ------- ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997......................... $ 4,648 4,628,542 (299,405) - 4,333,785
Net loss (unaudited)................................. - - (220,932) - (220,932)
Other comprehensive income, net
(unaudited)................................. - - - (7,277) (7,277)
-------- -------------- ----------- ----- -----------
Balance at June 30, 1998 (unaudited) $ 4,648 4,628,542 (520,337) (7,277) 4,105,576
===== ========= ======= ===== =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------
1998 1997
---- ----
(unaudited)
Cash flows from operating activities:
<S> <C> <C>
Net loss........................................................................ $ (220,932) (97,608)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation................................................................ 38,418 -
Provision for loan losses................................................... 55,000 -
Credit for deferred income taxes............................................ (103,200) (59,900)
Increase in accrued interest receivable and other assets (115,138) (110,248)
Increase in accrued interest payable and
other liabilities......................................................... 158,758 -
------------ -------
Net cash used in operating activities....................................... (187,094) (267,756)
------------ -------
Cash flows from investing activities:
Net increase in loans........................................................... (5,047,937) -
Purchases of securities available for sale...................................... (5,162,377) -
Principal repayments on securities available for sale 193,942 -
Purchases of premises and equipment............................................. (345,065) -
------------ -------
Net cash used in investing activities....................................... (10,361,437) -
------------ -------
Cash flows from financing activities:
Net increase in noninterest-bearing demand,
savings, money-market and NOW deposits...................................... 1,970,637 -
Net increase in time deposits................................................... 8,884,655 -
Net increase in official checks................................................. 9,337 -
Advances from organizers........................................................ - 365,678
------------ -------
Net cash provided by financing activities................................... 10,864,629 365,678
------------ -------
Net increase in cash and cash equivalents........................................... 316,098 97,922
Cash and cash equivalents at beginning of period 2,465,817 11,959
------------ -------
Cash and cash equivalents at end of period.......................................... $ 2,781,915 109,881
========== =======
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest.................................................................... $ 212,571 -
=========== ========
Income taxes................................................................ $ - -
=========== ========
Noncash transactions-
Accumulated other comprehensive income, change in
unrealized loss on securities available for sale, net $ (7,277) -
====== ========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Basis of Presentation. In the opinion of the management of The Commercial
Bancorp, Inc., the accompanying condensed consolidated financial
statements contain all adjustments (consisting of normal recurring
accruals) necessary to present fairly the financial position at June
30, 1998 and the results of operations and cash flows for the six
months ended June 30, 1998 and 1997. The results of operations and
other data for the three and six-month periods ended June 30, 1998, are
not necessarily indicative of results that may be expected for the year
ending December 31, 1998.
The condensed consolidated financial statements include the accounts of
The Commercial Bancorp, Inc. (the "Holding Company") and its
wholly-owned subsidiary, The Commercial Bank of Volusia County (the
"Bank") (together, the "Company"). All significant intercompany
accounts and transactions have been eliminated in consolidation.
(2) Loan Impairment and Loan Losses. No loans were identified as impaired at
June 30, 1998 or June 30, 1997. The activity in the allowance for loan
losses was as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Balance at beginning of period......................... $ 64,000 - 35,000 -
Provision for loan losses.............................. 26,000 - 55,000 -
------ ------ ------ ----
Balance at end of period............................... $ 90,000 - 90,000 -
====== ====== ====== ====
</TABLE>
(3) Impact of New Accounting Issues. In June, 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" ("SFAS No. 130"). That Standard
defines comprehensive income as the change in equity of an enterprise
except those resulting from stockholder transactions. All components of
comprehensive income are required to be reported in the financial
statements with equal prominence as existing financial statements. The
adoption of SFAS No. 130 had no significant effect on the Company's
financial position at June 30, 1998 or result of operations for the six
months then ended.
(4) Loss Per Share. Basic loss per share ("EPS") of common stock has been
computed on the basis of the weighted-average number of shares of
common stock outstanding. Diluted EPS is not computed due to the net
losses incurred by the Company during the three and six months ended
June 30, 1998 and 1997.
(continued)
7
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited), Continued
(5) Regulatory Matters. The Holding Company and the Bank are subject to various
regulatory capital requirements administered by various regulatory
banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory and possibly additional discretionary
actions by regulators that, if undertaken, could have a direct material
effect on the Company's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action,
the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classification are also
subject to qualitative judgements by the regulators about components,
risk weightings, and other factors.
Quantitative measures established by regulation to ensure capital
adequacy require the Bank to maintain minimum amounts and ratios (set
forth in the table below) of total and Tier I capital (as defined in
the regulations) to risk-weighted assets (as defined), and of Tier I
capital (as defined) to average assets (as defined). Management
believes, at June 30, 1998, that the Company meets all capital adequacy
requirements to which it is subject.
As of June 30, 1998, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as
well capitalized, the Bank must maintain minimum total risk-based, Tier
I risk-based, and Tier I leverage ratios as set forth in the table.
There are no conditions or events since that notification that
management believes have changed the Bank's category. The Bank's actual
capital amounts and ratios are also presented in the table (dollars in
thousands).
<TABLE>
<CAPTION>
To Be Well
Minimum Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes: Action Provisions:
------ ------------------ ------------------
Amount % Amount % Amount %
------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
At June 30, 1998:
Total capital (to Risk-
Weighted Assets)........... $ 3,387 35.5% $ 764 8.0% $ 955 10.0%
Tier I Capital (to Risk-
Weighted Assets)........... 3,530 37.0 382 4.0 573 6.0
Tier I Capital
(to Average Assets)........ 3,530 21.9 645 4.0 806 5.0
</TABLE>
8
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Comparison of June 30, 1998 (Unaudited) and December 31, 1997
General
The Commercial Bancorp, Inc. (the "Holding Company") was incorporated on
August 15, 1996. The Holding Company owns 100% of the outstanding common
stock of The Commercial Bank of Volusia County (the "Bank") (collectively,
the "Company"). The Holding Company was organized simultaneously with the
Bank and its only business is the ownership and operation of the Bank. The
Bank is a Florida state-chartered commercial bank and is insured by the
Federal Deposit Insurance Corporation. The Bank opened for business on
October 14, 1997, and provides community banking services to businesses and
individuals in Volusia County, Florida.
New Bank Charter
Management intends to organize and open a new state-chartered commercial
bank in Sebring, Highlands County, Florida. The new Bank will become a
wholly-owned subsidiary of the Holding Company. Management expects to raise
the required capital for the new bank from a public offering of the
Company's common stock.
Liquidity and Capital Resources
The Company's primary source of cash during the six months ended June 30,
1998 was from net deposit inflows of $10.9 million. Cash was used primarily
for loan originations of $5.0 million and to purchase securities available
for sale of $5.2 million. At June 30, 1998, the Company had unfunded lines
of credit of approximately $494,000. At June 30, 1998, the Bank exceeded
its regulatory liquidity requirements.
The following table shows selected ratios for the periods ended or at the
dates indicated:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, December 31,
1998 1997
-------------- ------------
<S> <C> <C>
Average equity as a percentage
of average assets................................................. 30.05% 77.02%
Total equity to total assets at end of period 22.97% 61.23%
Return on average assets (1)......................................... (3.15)% (9.18)%
Return on average equity (1)......................................... (10.49)% (11.91)%
Noninterest expense to average assets (1) 6.81% 16.85%
Nonperforming loans and foreclosed real estate
as a percentage of total assets at end of period.................. NIL NIL
Allowance for loan losses as a percentage of
total loans at end of period...................................... 1.03% .93%
</TABLE>
(1) Annualized for the six months ended June 30, 1998.
9
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations, Continued
Changes in Financial Condition
Total assets increased $10.8 million from $7.1 million at December 31, 1997
to $17.9 million at June 30, 1998, primarily as a result of increases in
securities available for sale of $5.0 million and loans receivable of $5.0
million. Deposits increased $10.9 million from $2.7 million at December
31, 1997 to $13.5 million at June 30, 1998. The decrease in stockholders'
equity was due to the net loss of $220,932 for the six months ended June
30, 1998.
Results of Operations
Comparison of the Three-Month Periods Ended June 30, 1998 and 1997
General. Net loss for the three months ended June 30, 1998 was $111,014, or
$.24 per basic share compared to a net loss for the three months ended
June 30, 1997 of $68,163. At June 30, 1997, the Bank had not commenced
operations and at June 30, 1998, the Bank had not achieved the asset size
to operate profitably.
Interest Income and Expense. Interest income totaled $256,967 for the three
months ended June 30, 1998. Interest income earned on loans was $164,782.
The average loan portfolio balance for the three months ended June 30,
1998 was $7.6 million with a weighted-average yield of 8.66%. Interest on
securities was $31,480. The average balance of these securities was $2.7
million and the weighted average yield was 4.73% for the three months
ended June 30, 1998. Interest on other interest-earning assets totaled
$60,705. The average balance of these assets for the three months ended
June 30, 1998 was $4.4 million with a weighted-average yield of 5.59%.
Interest expense on deposits amounted to $154,288 for the three months
ended June 30, 1998. The average balance for interest-bearing deposits for
the three months ended June 30, 1998 was $12.0 million and the
weighted-average rate was 5.07%.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to increase the total allowance to a level deemed appropriate by
management and is based upon the volume and type of lending conducted by
the Company, industry standards, the amount of nonperforming loans and
general economic conditions, particularly as they relate to the Company's
market areas, and other factors related to the collectibility of the
Company's loan portfolio. The provision for loan losses for the three
months ended June 30, 1998 was $26,000 and the allowance for loan losses
was $90,000 at June 30, 1998. Management believes the allowance is
adequate at June 30, 1998.
Noninterest Expense. Noninterest expense totaled $248,658 for the three
months ended June 30, 1998 compared to $100,448 for the three months ended
June 30, 1997. Salaries and employee and benefits was the largest
noninterest expense during 1998, amounting to $115,724. The Bank had not
commenced operations during the three months ended June 30, 1997.
Income Tax Benefit. The income tax benefit for the three months ended June
30, 1998 was $53,500 (an effective rate of 32.5%) compared to $41,800 (an
effective rate of 38.0%) for the three months ended June 30, 1997.
10
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations, Continued
Results of Operations
Comparison of the Six-Month Periods Ended June 30, 1998 and 1997
General. Net loss for the six months ended June 30, 1998 was $220,932, or
$.48 per basic share compared to a net loss for the six months ended June
30, 1997 of $97,608. At June 30, 1997, the Bank had not commenced
operations and at June 30, 1998, the Bank had not achieved the asset size
to operate profitably.
Interest Income and Expense. Interest income totaled $425,918 for the six
months ended June 30, 1998. Interest income earned on loans was $287,439.
The average loan portfolio balance for the six months ended June 30, 1998
was $6.7 million with a weighted-average yield of 8.60%. Interest on
securities was $31,480 for the six months ended June 30, 1998. The average
balance of securities was $1.4 million and the yield was 4.73% for the six
months ended June 30, 1998. Interest on other interest-earning assets
totaled $106,999. The average balance of these assets for the six months
ended June 30, 1998 was $3.9 million with a weighted-average yield of
5.51%.
Interest expense on deposits amounted to $235,130 for the six months ended
June 30, 1998. The average balance for interest-bearing deposits for the
six months ended June 30, 1998 was $9.2 million and the weighted-average
rate was 5.08%.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to increase the total allowance to a level deemed appropriate by
management and is based upon the volume and type of lending conducted by
the Company, industry standards, the amount of nonperforming loans and
general economic conditions, particularly as they relate to the Company's
market areas, and other factors related to the collectibility of the
Company's loan portfolio. The provision for loan losses for the six months
ended June 30, 1998 was $55,000 and the allowance for loan losses was
$90,000 at June 30, 1998. Management believes the allowance is adequate at
June 30, 1998.
Noninterest Expense. Noninterest expense totaled $476,899 for the six months
ended June 30, 1998 compared to $142,894 for the six months ended June 30,
1997. Salaries and employee and benefits was the largest noninterest
expense during 1998, amounting to $213,046. The Bank had not commenced
operations during the six months ended June 30, 1997.
Income Tax Benefit. The income tax benefit for the six months ended June 30,
1998 was $103,200 (an effective rate of 31.8%) compared to $59,900 (an
effective rate of 38.0%) for the six months ended June 30, 1997.
11
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which The Commercial
Bancorp, Inc. or its subsidiary is a party or to which any of their property
is subject.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders (the "Annual Meeting") of The Commercial
Bancorp, Inc., was held on April 21, 1998, to consider the election of seven
directors with various terms, the employee stock option and limited rights
plan and the ratification of the appointment of the Company's independent
auditors for the year ending December 31, 1998.
At the Annual Meeting, 273,911 shares were present in person or by proxy. The
following is a summary and tabulation of the matters that were voted upon at
the Annual Meeting:
Proposal I.
<TABLE>
<CAPTION>
The election of directors:
For Against Abstain Term
--- ------- ------- ----
<S> <C> <C> <C> <C>
Gary G. Campbell 273,911 - - 3 years
Richard R. Dwyer 273,911 - - 3 years
Norbert A. Walz 273,911 - - 3 years
James R. Peacock 273,911 - - 2 years
James F. McCollum 273,911 - - 2 years
H. Frederick Keiber 273,911 - - 1 year
Larry A. Kent 273,911 - - 1 year
</TABLE>
Proposal II:
To approve the 1997 Employee Stock Option and Limited Rights Plan:
For Against Abstain
------- ------- -------
252,611 10,000 11,300
======= ======= =======
Proposal III:
To ratify the appointment of the Company's independent auditors for the year
ending December 31, 1998:
For Against Abstain
------- ------- -------
269,361 - 4,550
======= ======= =======
12
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed with or incorporated by
reference into this report. The exhibits which are denominated by an
asterisk (*) were previously filed as a part of, and are hereby
incorporated by reference from the Company's Registration Statement on
Form SB-2 under the Securities Act of 1933 for the Company, as effective
with the Securities and Exchange Commission on April 28, 1997,
Registration No. 333-19201 (referred to as "Registration Statement").
The exhibit numbers correspond to the exhibit numbers in the referenced
documents.
Exhibit No. Description of Exhibit
----------- ----------------------
*3.1 Amended and Restated Articles of Incorporation of the Company
(Registration Statement)
*3.2 By-laws of the Company (Registration Statement)
*4.1 Specimen Common Stock Certificate (Registration Statement)
*4.2 Specimen Warrant Certificate (Registration Statement)
*4.4 Company's Warrant Plan (Registration Statement)
10.1 1997 Employee Stock Option and Limited Rights Plan
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. There were no reports on Form 8-K filed for the
three months ended June 30, 1998.
13
<PAGE>
THE COMMERCIAL BANCORP, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
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.
THE COMMERCIAL BANCORP, INC.
(Registrant)
Date: , 1998 By: /s/Gary G. Campbell
------------------------ -------------------
Gary G. Campbell, President and
Chief Executive Officer
Date: , 1998 By: /s/Harvey E. Buckmaster
------------------------ -----------------------
Harvey E. Buckmaster,
Chief Financial Officer
14
Exhibit 10.1
THE COMMERCIAL BANCORP, INC.
1997 EMPLOYEE STOCK OPTION AND LIMITED RIGHTS PLAN
1. PURPOSE
The purpose of The Commercial Bancorp, Inc. ("Company") 1997 Employee
Stock Option and Limited Rights Plan ("Plan") is to advance the interests of the
Company, its wholly owned subsidiary The Commercial Bank of Volusia County and
its shareholders by providing key employees of the Company and its affiliates,
upon whose judgment, initiative and efforts the successful conduct of the
business of the Company and its affiliates largely depends, with an additional
incentive to perform in a superior manner, as well as, to attract people of
experience and ability.
2. DEFINITIONS
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Affiliate" means (i) a member of a controlled group of
corporations of which the Company is a member or (ii) an
unincorporated trade or business which is under common control
with the Company as determined in accordance with Section
414(c) of the Internal Revenue Code 1986, as amended ("Code")
and the regulations issued thereunder. For purposes hereof, a
"controlled group of corporations" shall mean a controlled
group of corporations as defined in Section 1563(a) of the
Code determined without regard to Sections 1563(a)(4) and
(e)(3)(C).
(c) "Award" means an Award of Non-Statutory Stock Options,
Incentive Stock Options, and/or Limited Rights granted under
the provisions of the Plan.
(d) "Committee" means the Compensation Committee of the Board of
Directors.
(e) "Plan Year or Years" means a calendar year or years commencing
on or after January 1, 1997.
(f) "Date of Grant" means the actual date on which an Award is
granted by the Committee.
(g) "Common Stock" means the common stock of the Company, par
value, $0.01 per share.
(h) "Fair Market Value" means, when used in connection with the
Common Stock on a certain date, the reported closing price of
the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System (as published by
the Wall Street Journal, if published) on the day prior to
such date or if the Common Stock was not traded on such date,
on the next preceding day on which the Common Stock was traded
thereon. If the Common Stock is not traded on a national
market reported by the National Association of Securities
Dealers Automated Quotation System, the Fair Market Value
means the average of the closing bid and ask sale prices on
the last previous date on which a sale is reported in an
1
<PAGE>
over-the-counter transaction. In the absence of any
over-the-counter transactions, the Fair Market Value means the
highest price at which the stock has sold in an arms length
transaction during the 90 days immediately following the grant
date. In the absence of an arms length transaction during such
90 days, Fair Market Value means the book value of the common
stock or the issue price of $10.00 per share, whichever is
higher.
(i) "Limited Right" means the right to receive an amount of cash
based upon the terms set forth in Section 9 herein.
(j) "Disability" means the permanent and total inability by reason
of mental or physical infirmity, or both, of an employee to
perform the work customarily assigned to him. Additionally, a
medical doctor selected or approved by the Board of Directors
must advise the Committee that it is either not possible to
determine when such Disability will terminate or that it
appears probable that such Disability will be permanent during
the remainder of said participant's lifetime.
(k) "Termination for Cause" means the termination upon an
intentional failure to perform stated duties, breach of a
fiduciary duty involving personal dishonesty, which results in
material loss to the Company or one of its affiliates or
willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final
cease-and-desist order issued to the Company or one of its
affiliates.
(l) "Participant" means an employee of the Company or its
affiliates chosen by the Committee to participate in the Plan.
(m) "Change in Control" of the Company means a change in control
that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act")
or any successor disclosure item; provided that, without
limitation, such a Change in Control (as set forth in 12
U.S.C. Section 1841[a][2] of the Bank Holding Company Act of
1956, as amended) shall be deemed to have occurred if any
person (as such term is used in Sections 13[d] and 14[d] of
the Exchange Act in effect on the date first written above),
other than any person who on the date hereof is a director or
officer of the Company, (i) directly or indirectly, or acting
through one or more other persons, owns, controls or has power
to vote 25% or more of any class of the then outstanding
voting securities of the Company; or (ii) controls in any
manner the election of the directors of the Company. For
purposes of this Agreement, a "Change in Control" shall be
deemed not to have occurred in connection with a
reorganization, e.g. consolidation or merger of the Company
where the stockholders of the Company, immediately before the
consummation of the transaction, will own at least 50% of the
total combined voting power of all classes of stock entitled
to vote of the surviving entity immediately after the
transaction.
2
<PAGE>
(n) "Normal Retirement" means retirement at the normal or early
retirement date as set forth in any tax qualified plan of the
Company or its Affiliates.
3. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the
Board of Directors. The Committee is authorized, subject to the provisions of
the Plan, to establish such rules and regulations as it deems necessary for the
proper administration of the Plan and to make whatever determinations and
interpretations in connection with the Plan it deems as necessary or advisable.
All determinations and interpretations made by the Committee shall be binding
and conclusive on all Participants in the Plan and on their legal
representatives and beneficiaries.
4. TYPES OF AWARDS
Awards under the Plan may be granted in any one or a combination of the
following, as defined below in Sections 7 through 9 of the Plan:
(a) Incentive Stock Options;
(b) Non-Statutory Stock Options; and
(c) Limited Rights
5. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 13 herein, the maximum
number of shares which may be issued under the Plan is 10% of the number of
shares of Common Stock outstanding at any one time, from time to time. To the
extent that options or rights granted under the Plan are exercised, the shares
covered will be unavailable for future grants under the Plan; to the extent that
options together with any related rights granted under the Plan terminate,
expire or are canceled without having been exercised or, in the case of Limited
Rights exercised for cash, new Awards may be made with respect to these shares.
6. ELIGIBILITY
Officers and other employees of the Company or its affiliates shall be
eligible to receive Incentive Stock Options, Non-Statutory Stock Options and/or
Limited Rights under the Plan. Directors who are not employees or officers of
the Company or its affiliates shall not be eligible to receive Awards under the
Plan.
7. NON-STATUTORY STOCK OPTIONS
7.1 Grant of Non-Statutory Stock Options. The Committee may, from time to time,
grant Non-Statutory Stock Options to eligible employees. Non-Statutory Stock
Options granted under this Plan are subject to the following terms and
conditions:
(a) Price.
The purchase price per share of Common Stock deliverable upon the
exercise of each Non-Statutory Stock Option shall not be less than 100%
of the Fair Market Value of the Common Stock on the date the option is
granted. Shares may be purchased only upon full payment of the purchase
price. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock of the Company at
the Fair Market Value of such shares determined in the manner described
in Section 2(h).
3
<PAGE>
(b) Terms of Options.
The term during which each Non-Statutory Stock Option may be exercised
shall be determined by the Committee, but in no event shall a
Non-Statutory Stock Option be exercisable in whole or in part more than
10 years and one day from the Date of Grant.
The Committee shall determine the date on which each Non-Statutory
Stock Option shall become exercisable in installments. The shares comprising
each installment may be purchased in whole or in part at any time after such
installment becomes purchasable. The Committee, in its sole discretion, or the
Participant if so provided in his written agreement executed pursuant to Section
11, may accelerate the time at which any Non-Statutory Stock Option may be
exercised in whole or in part. Notwithstanding the above, (i) in the event of a
Change in Control of the Company all Non-Statutory Stock Options shall become
immediately exercisable and (ii) upon the termination of an employee's service
for any reason other than Disability, Normal Retirement, death or Termination
for Cause, all Non-Statutory Stock Options held by such employee, whether or not
exercisable at such time, shall become immediately exercisable, consistent with
the time period for exercise provided in Section 7.1(c).
(c) Termination of Employment.
Upon the termination of an employee's service for any reason other than
Disability, Normal Retirement, death or Termination for Cause, all
Non-Statutory Stock Options held by such employee, whether or not
exercisable at such time, shall become immediately exercisable, but
only for a period of six (6) months following termination, provided
that in no event shall the period extend beyond the expiration of the
Non-Statutory Stock Option term. In the event of Termination for Cause,
all rights of the terminated employee under his Non-Statutory Stock
Options shall expire upon termination. In the event of the death,
Disability or Normal Retirement of any employee, all Non-Statutory
Stock Options held by the employee, whether or not exercisable at such
time, shall be exercisable by the employee or his legal representatives
or beneficiaries for one year following the date of his death, Normal
Retirement or cessation of employment due to Disability, provided that
in no event shall the period extend beyond the expiration of the
Non-Statutory Stock Option term.
8. INCENTIVE STOCK OPTIONS
8.1 Grant of Incentive Stock Options. The Committee may, from time to time,
grant Incentive Stock Options to eligible employees. Incentive Stock Options
granted pursuant to the Plan shall be subject to the following terms and
conditions:
(a) Price.
The purchase price per share of Common Stock deliverable upon the
exercise of each Incentive Stock Option shall be not less than 100% of
the Fair Market Value of the Common Stock on the date the Incentive
Stock Option is granted. However, if an employee owns stock equal to
more than 10% of the total combined voting power of all classes of
Common Stock of the Company (or, under Section 424(d) of the Code, is
deemed to own Common Stock representing more than 10% of the total
combined voting power of all such classes of Common Stock), the
purchase price per share of Common Stock deliverable upon the exercise
of each Incentive Stock Option shall not be less than 110% of the Fair
Market Value of the Common Stock on the date the Incentive Stock Option
is granted. Shares may be purchased only upon payment of the full
4
<PAGE>
purchase price. Payment of the purchase price may be made, in whole or
in part, through the surrender of shares of the Common Stock of the
Company at the Fair Market Value of such shares determined in the
manner described in Section 2(h) herein.
(b) Amounts of Options.
Incentive Stock Options may be granted to any eligible employee in such
amounts as determined by the Committee; provided that the amount
granted is consistent with the terms of Section 422 of the Code. In the
case of an option intended to qualify as an Incentive Stock Option, the
aggregate Fair Market Value (determined as of the time the option is
granted) of the Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by the Participant
during any calendar year (under all plans of the Participant's employer
corporation and its parent and subsidiary corporations) shall not
exceed $100,000. The provisions of this Section 8.1(b) shall be
construed and applied in accordance with Section 422(d) of the Code and
the regulations, if any, promulgated thereunder.
(c) Terms of Options.
The term during which each Incentive Stock Option may be exercised
shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10
years from the Date of Grant. If any employee, at the time an Incentive
Stock Option is granted to him, owns Common Stock representing more
than 10% of the total combined voting power of the Company (or, under
Section 424(d) of the Code, is deemed to own Common Stock representing
more than 10% of the total combined voting power of all such classes of
Common Stock, by reason of the ownership of such classes of Common
Stock, directly or indirectly, by or for any brother, sister, spouse,
ancestor or lineal descendent of such employee, or by or for any
corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option
granted to him shall not be exercisable after the expiration of five
years from the Date of Grant. No Incentive Stock Option granted under
this Plan is transferable except by will or the laws of descent and
distribution and is exercisable in his lifetime only by the employee to
which it is granted.
The Committee shall determine the date on which each Incentive Stock
Option shall become exercisable and may provide that an Incentive Stock Option
shall become exercisable in installments. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable; provided, however, that, in the case of an Incentive Stock Option
intended to qualify for the tax treatment available pursuant to Section 422 of
the Code upon exercise, the amount able to be first exercised in a given year is
consistent with the terms of Section 422 of the Code. The Committee, in its sole
discretion, or the Participant if so provided in his written agreement executed
pursuant to Section 11, may accelerate the time at which any Incentive Stock
Option may be exercised in whole or in part. However, in the case of an
Incentive Stock Option intended to qualify for the tax treatment available
pursuant to Section 422 of the Code upon exercise, such acceleration must be
consistent with the terms of Section 422 of the Code. Notwithstanding the above,
(i) in the event of a Change in Control of the Company all Incentive Stock
Options shall become immediately exercisable, and (ii) upon the termination of
an employee's service for any reason other than Disability, Normal Retirement,
5
<PAGE>
death or Termination for Cause, all Incentive Stock Options held by such
employee, whether or not exercisable at such time, shall become immediately
exercisable, consistent with the time period for exercise provided in Section
8.1(d).
6
<PAGE>
(d) Termination of Employment.
Upon the termination of an employee's service for any reason other than
Disability, Normal Retirement, death or Termination for Cause, all
Incentive Stock Options held by such employee shall become immediately
exercisable, but only for: (i) a period of three months following
termination in the case of an Incentive Stock Option intended to
qualify for the tax treatment available pursuant to Section 422 of the
Code upon exercise, and (ii) a period of one year following termination
in the case of an Incentive Stock Option not intended to be eligible
for the tax treatment available pursuant to Section 422 of the Code
upon exercise. In the event of Termination for Cause, all rights of the
terminated employee under his Incentive Stock Options shall expire upon
termination. In no event shall the period extend beyond the expiration
of the Incentive Stock Option term.
In the event of death or Disability of any employee, all Incentive
Stock Options held by such employee, whether or not exercisable at such time,
shall be exercisable by the employee or his legal representatives or
beneficiaries for one year following the date of his death or cessation of
employment due to Disability. Upon termination of an employee's service due to
Normal Retirement, all Incentive Stock Options held by such employee, whether or
not exercisable at such time, shall be exercisable for a period of one year
following the date of his Normal Retirement; provided, however, that such option
shall not be eligible for treatment as an Incentive Stock Option in the event
such option is exercised more than three months following the date of his Normal
Retirement. In no event shall the period extend beyond the expiration of the
Incentive Stock Option term.
9. LIMITED RIGHTS
9.1 Grant of Limited Rights. The Committee may grant a Limited Right
simultaneously with the grant of any option, with respect to all or some of the
shares covered by such option. Limited Rights granted under this Plan are
subject to the following terms and conditions:
(a) Terms of Rights.
In no event shall a Limited Right be exercisable in whole or in part
before the expiration of six months from the date of grant of the
Limited Right. A Limited Right may be exercised only upon the
occurrence of all of the following conditions: (i) a Change in Control
of the Company; (ii) the underlying option is eligible to be exercised;
and (iii) the Fair Market Value of the underlying shares on the day of
exercise is greater than the exercise price of the related option.
Upon exercise of a Limited Right, the related option shall cease to be
exercisable. Upon exercise or termination of an option, any related
Limited Rights shall terminate. The Limited Rights may be for no more
than 100% of the difference between the exercise price and the Fair
Market Value of the Common Stock subject to the underlying option. The
Limited Right is transferable only when the underlying option is
transferable and under the same conditions.
(b) Payment.
Upon exercise of a Limited Right, the holder shall promptly receive
from the Company an amount of cash equal to the difference between the
Fair Market Value on the Date of Grant of the related option and the
7
<PAGE>
Fair Market Value of the underlying shares on the date the Limited
Right is exercised, multiplied by the number of shares with respect to
which such Limited Right is being exercised.
(c) Termination of Employment.
Upon the termination of an employee's service for any reason other than
Disability, Normal Retirement, death or Termination for Cause, any
Limited Rights held by him shall be exercisable only as to those shares
of the related option which were immediately purchasable at the date of
termination and for a period of three months following termination. In
the event of Termination for Cause, all Limited Rights held by him
shall expire immediately.
Upon termination of an employee's employment for reason of death, or
Disability, all Limited Rights held by such employee shall be
exercisable by the employee or his legal representative or
beneficiaries for a period of one year from the date of such
termination with respect to Limited Rights related to Incentive Stock
Options, as well as, with respect to Limited Rights related to
Non-Statutory Stock Options. Upon termination of an employee's
employment for reason of Normal Retirement, all Limited Rights held by
such employee shall be exercisable by the employee or his legal
representative or beneficiary for one year with respect to both Limited
Rights granted with respect to Incentive Stock Options and with respect
to Limited Rights granted with respect to Non-Statutory Stock Options.
In no event shall the period extend beyond the expiration of the term
of the related option.
10. RIGHTS OF A SHAREHOLDER: NONTRANSFERABILITY
An optionee shall have no rights as a shareholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its affiliates or to continue to perform services for the Company
or its affiliates or interferes in any way with the right of the Company or its
affiliates to terminate his services as an officer or other employee at any
time.
No Award under the Plan shall be transferable by the optionee other
than by will or the laws of descent and distribution and may only be exercised
during his lifetime by the optionee, or by a guardian or legal representative.
No such transfer of the Award by the Participant by will or the laws of descent
and distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and such other evidence as the
Committee administering the Plan may deem necessary or desirable to establish
the validity of the transfer. The Award shall not be pledged, hypothecated,
sold, assigned, transferred or otherwise encumbered or disposed of except as
provided herein. Any purported pledge, hypothecation, sale, assignment, transfer
or other encumbrance or disposition of the Award contrary to the provisions
hereof shall be null and void and without effect. The levy of any execution,
attachment, or similar process upon the Award shall be null and void and without
effect.
11. AGREEMENT WITH GRANTEES
Each Award of options, and/or Limited Rights will be evidenced by a
written agreement, executed by the Participant and the Company which describes
the conditions for receiving the Awards including the date of Award, the
purchase price if any, applicable periods, and any other terms and conditions as
may be required by the Board of Directors or applicable securities law.
8
<PAGE>
12. DESIGNATION OF BENEFICIARY
A Participant may, with the consent of the Committee, designate a
person or persons to receive, in the event of death, any stock option or Limited
Rights Award to which he would then be entitled. Such designation will be made
upon forms supplied by and delivered to the Company and may be revoked in
writing. If a Participant fails effectively to designate a beneficiary, then his
estate will be deemed to be the beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock of
the Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, the Committee will make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common
Stock which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common
Stock covered by Awards already made under the Plan;
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-Statutory Stock Options, or any Limited Rights attached to such
options.
No such adjustments may, however, materially change the value of
benefits available to a Participant under a previously granted Award.
14. WITHHOLDING
There will be deducted from each distribution of cash and/or Common
Stock under the Plan the amount of tax required to be withheld by any
governmental authority, if any.
15. AMENDMENT OF THE PLAN
The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect; provided however, that if necessary to
continue to qualify the Plan under the Securities and Exchange Commission Rule
16(b)-3, shareholder approval would be required for any such modification or
amendments which:
(a) increases the maximum number of shares for which options may be
granted under the Plan (subject, however, to the provisions of Section
13 hereof);
(b) reduces the exercise price at which Awards may be granted;
(c) extends the period during which options may be granted or exercised
beyond the times originally prescribed; or
(d) changes the persons eligible to participate in the Plan.
Failure to ratify or approve amendments or modifications to Subsections
(a) through (d) of this Section by shareholders shall be effective only as to
9
<PAGE>
the specific amendment or modification requiring such ratification. Other
provisions, sections, and subsections of this Plan will remain in full force and
effect.
No such termination, modification or amendment may affect the rights of
a Participant under an outstanding Award.
16. EFFECTIVE DATE OF PLAN
The Plan shall be adopted by the Board of Directors and shall become
effective upon such date of adoption, or other date as determined by the Board.
Following the Effective Date of the Plan, the Plan shall be submitted to
shareholders for approval. If the Plan shall not be approved by shareholders the
Plan and any Awards granted thereunder shall be null and void.
17. TERMINATION OF THE PLAN
The right to grant Awards under the Plan will terminate upon the
earlier of ten (10) years after the Effective Date of the Plan or the issuance
of Common Stock or the exercise of options or related rights equaling the
maximum number of shares reserved under the Plan as set forth in Section 5. The
Board of Directors has the right to suspend or terminate the Plan at any time,
provided that no such action will, without the consent of a Participant,
adversely affect his rights under a previously granted Award.
18. APPLICABLE LAW
The Plan will be administered in accordance with the laws of the State
of Florida.
Adopted this 18th day of December, 1997 by the Company's Board of
Directors.
/s/ Gary G. Campbell
--------------------
Gary G. Campbell, President
Adopted on the _____ day of ________________, 1998 by the Company's
Shareholders.
---------------------------------------
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from Form 10-QSB
for the period ended June 30, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 924
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,858
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 4,957
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 8,829
<ALLOWANCE> 90
<TOTAL-ASSETS> 17,873
<DEPOSITS> 13,533
<SHORT-TERM> 0
<LIABILITIES-OTHER> 234
<LONG-TERM> 0
0
0
<COMMON> 5
<OTHER-SE> 4,101
<TOTAL-LIABILITIES-AND-EQUITY> 17,873
<INTEREST-LOAN> 287
<INTEREST-INVEST> 32
<INTEREST-OTHER> 107
<INTEREST-TOTAL> 426
<INTEREST-DEPOSIT> 235
<INTEREST-EXPENSE> 237
<INTEREST-INCOME-NET> 189
<LOAN-LOSSES> 55
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 477<F1>
<INCOME-PRETAX> (324)
<INCOME-PRE-EXTRAORDINARY> (324)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (221)
<EPS-PRIMARY> (.48)
<EPS-DILUTED> (.48)
<YIELD-ACTUAL> 3.17
<LOANS-NON> 0<F2>
<LOANS-PAST> 0<F2>
<LOANS-TROUBLED> 0<F2>
<LOANS-PROBLEM> 0<F2>
<ALLOWANCE-OPEN> 35
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 90
<ALLOWANCE-DOMESTIC> 90
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Other expense includes: salaries and employee benefits of $213, occupancy of
$88, advertising of $49 and other expenses which totalted $127.
<F2>Items are only disclosed on an annual basis in the Company's Form 10-KSB, and
are, therefore, not included in this Financial Data Schedule.
</FN>
</TABLE>
