<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934--For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-24131
------------
ENTERBANK HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 43-1706259
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
150 NORTH MERAMEC, CLAYTON, MO 63105
(Address of Principal Executive Offices) (Zip Code)
314-725-5500
(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
----- -----
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of October 31, 1998:
Common Stock, $.01 par value----2,365,412 shares outstanding.
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<PAGE> 2
<TABLE>
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<CAPTION>
Page
PART I - FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets at
September 30, 1998 and December 31, 1997 1
Consolidated Statements of Income
Three Months and Nine Months Ended September 30, 1998 and 1997 2
Consolidated Statements of Comprehensive Income
Three Months and Nine Months Ended September 30, 1998 and 1997 3
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1998 and 1997 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures Regarding
Market Risk - There have been no material changes from the
information provided in the December 31, 1997 Form 10-K
PART II - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K 18
Signatures 19
</TABLE>
<PAGE> 3
<TABLE>
PART I - ITEM 1
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
(Unaudited) (Audited)
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 21,566,499 $ 13,897,054
Federal funds sold 43,375,000 32,825,000
Interest-bearing deposits 43,940 148,349
Investments in debt and equity securities:
Available for sale, at estimated fair value 22,767,831 12,514,721
Held to maturity, at amortized cost
(estimated fair value of $707,495 at September 30,
1998, $920,154 at December 31, 1997) 703,641 919,163
------------ ------------
Total investments in debt and equity securities 23,471,472 13,433,884
------------ ------------
Loans held for sale 2,658,358 1,324,244
Loans, less unearned loan fees 262,101,319 225,560,208
Less allowance for loan losses 3,129,655 2,510,000
------------ ------------
Loans, net 258,971,664 223,050,208
------------ ------------
Other real estate owned 806,072 806,072
Office equipment and leasehold improvements 3,018,033 2,328,699
Accrued interest receivable 1,746,151 1,448,343
Investment in Enterprise Fund, L.P. 425,935 225,683
Prepaid expenses and other assets 1,845,060 1,877,320
------------ ------------
Total assets $357,928,184 $291,364,856
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Demand $ 59,572,960 $ 46,052,686
Interest-bearing transaction accounts 20,750,962 22,519,772
Money market accounts 136,624,479 98,639,345
Savings 1,342,987 1,429,316
Certificates of deposit:
$100,000 and over 45,060,987 32,824,697
Other 65,115,560 62,834,818
------------ ------------
Total deposits 328,467,935 264,300,634
Accrued Interest Payable 651,242 549,059
Accounts payable and accrued expenses 450,485 448,371
------------ ------------
Total liabilities 329,569,662 265,298,064
------------ ------------
Shareholders' equity:
Common stock, $.01 par value; authorized
3,000,000 shares; issued and outstanding
2,365,412 shares at September 30, 1998 and
2,298,412 shares at December 31, 1997 23,654 22,984
Surplus 19,221,939 18,879,210
Retained earnings 9,092,994 7,166,071
Accumulated other comprehensive income 19,935 (1,473)
------------ ------------
Total shareholders' equity 28,358,522 26,066,792
------------ ------------
Total liabilities and shareholders' equity $357,928,184 $291,364,856
============ ============
See accompanying notes to consolidated financial statements.
</TABLE>
1
<PAGE> 4
<TABLE>
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $5,978,595 $4,503,988 $16,970,395 $11,673,201
Interest on debt securities:
Taxable 204,589 243,115 496,733 806,687
Nontaxable 6,956 8,498 19,505 26,038
Interest on federal funds sold 508,851 63,677 1,032,336 543,084
Interest on interest earning deposits 1,848 403 5,322 761
------------------------------------------------------------
Total interest income 6,700,839 4,819,681 18,524,291 13,049,771
------------------------------------------------------------
Interest expense:
Interest-bearing transaction accounts 125,980 99,065 375,489 289,186
Money market accounts 1,457,902 897,824 3,721,467 2,506,173
Savings 9,531 7,643 27,423 22,937
Certificates of deposit:
$100,000 and over 562,605 439,906 1,558,271 1,183,601
Other 984,951 635,255 2,896,602 1,899,819
Federal funds purchased - 5,772 - 5,772
Notes payable - - - 2,888
------------------------------------------------------------
Total interest expense 3,140,969 2,085,465 8,579,252 5,910,376
------------------------------------------------------------
Net interest income 3,559,870 2,734,216 9,945,039 7,139,395
Provision for loan losses 121,106 193,215 642,035 570,972
------------------------------------------------------------
Net interest income after
provision for loan losses 3,438,764 2,541,001 9,303,004 6,568,423
------------------------------------------------------------
Noninterest income:
Service charges on deposit accounts 70,373 48,921 182,325 128,805
Other service charges and fee income 64,196 54,272 212,607 194,005
Gain on sale of mortgage loans 296,368 - 899,115 -
Loss on investment in Enterprise Fund, L.P. 327 662 (748) (3,351)
------------------------------------------------------------
Total noninterest income 431,264 103,855 1,293,299 319,459
------------------------------------------------------------
Noninterest expense:
Salaries 1,067,331 761,369 3,584,518 2,018,143
Payroll taxes and employee benefits 496,922 244,498 749,042 674,172
Occupancy 230,632 162,898 655,714 357,233
Furniture and equipment 102,927 51,513 279,800 152,014
FDIC insurance 7,845 6,040 22,810 15,364
Data processing 82,719 62,517 218,035 176,131
Other 623,089 399,182 1,682,626 931,809
------------------------------------------------------------
Total noninterest expense 2,611,465 1,688,017 7,192,545 4,324,866
------------------------------------------------------------
Income before income tax expense 1,258,563 956,839 3,403,758 2,563,016
Income tax expense 481,643 351,848 1,300,943 954,577
------------------------------------------------------------
Net income $ 776,920 $ 604,991 $ 2,102,815 $ 1,608,439
============================================================
Basic earnings per share $ 0.33 $ 0.28 $ 0.90 $ 0.79
Diluted earnings per share $ 0.31 $ 0.27 $ 0.84 $ 0.74
Basic weighted average common shares and
common stock equivalents outstanding 2,365,200 2,127,385 2,345,137 2,044,051
Diluted weighted average common shares and
common stock equivalents outstanding 2,518,033 2,250,472 2,510,436 2,173,205
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE> 5
<TABLE>
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(unaudited)
<CAPTION>
Three months ended September 30, Nine months ended September 30,
1998 1997 1998 1997
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Net income $776,920 $604,991 $2,102,815 $1,608,439
Other comprehensive income, before tax:
Unrealized gains on securities:
Unrealized holding gains arising
during period 34,342 13,387 32,436 9,414
-------- -------- ---------- ----------
Other comprehensive income, before tax 34,342 13,387 32,436 9,414
Income tax expense related to items of
other comprehensive income (11,676) (4,552) (11,028) (3,201)
-------- -------- ---------- ----------
Other comprehensive income, net of tax 22,666 8,835 21,408 6,213
-------- -------- ---------- ----------
Comprehensive income $799,856 $613,826 $2,124,223 $1,614,652
======== ======== ========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
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3
<PAGE> 6
<TABLE>
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
<CAPTION>
Nine months ended September 30,
1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,102,815 $ 1,608,439
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 343,456 226,781
Provision for loan losses 642,035 570,972
Write-downs and losses on other real estate owned - (25,728)
Net accretion of debt and equity securities (94,223) (181,310)
Loss on investment in Enterprise Fund, L.P. 748 3,351
Mortgage loans originated (64,128,620) -
Proceeds from mortgage loans sold 62,794,506 -
(Increase) decrease in accrued interest receivable (297,808) (424,953)
(Increase) decrease in prepaid expenses and other assets 32,260 (1,065,044)
Increase in accounts payable and accrued expenses 93,269 167,260
------------ ------------
Net cash provided by operating activities 1,488,438 879,768
------------ ------------
Cash flows from investing activities:
Purchases of interest-bearing deposits - (40,091)
Purchases of available-for-sale debt securities (21,795,027) (17,837,997)
Purchases of available-for-sale equity securities (320,000) (90,500)
Proceeds from maturities of available-for-sale debt securities 12,000,000 18,580,000
Purchases of equity securities (256,689) -
Proceeds from maturities & principal paydown on held-to-maturity debt securities 460,486 407,956
Proceeds from the maturity of interest-bearing deposits 104,409 -
Net increase in loans (36,661,272) (67,575,468)
Purchases of office equipment and leasehold improvements (1,035,742) (1,313,127)
Write-down of office equipment and leasehold improvements 3,252 -
Proceeds from sale of other real estate owned 97,781 184,093
(Investment in) contributions returned from Enterprise Fund, L.P. (201,000) 319,499
------------ ------------
Net cash used in investing activities (47,603,802) (67,365,635)
------------ ------------
Cash flows from financing activities:
Net increase in demand and savings accounts 49,650,269 35,222,619
Net increase in certificates of deposit 14,517,032 22,803,319
(Decrease) in notes payable - (300,000)
Cash dividends paid (175,892) (143,393)
Proceeds from the issuance of common stock - 7,011,518
Proceeds from the exercise of common stock options 343,400 -
------------ ------------
Net cash provided by financing activities 64,334,809 64,594,063
------------ ------------
Net increase in cash and due from banks 18,219,445 (1,891,804)
Cash and due from banks, beginning of year 46,722,054 32,511,035
------------ ------------
Cash and due from banks, end of period $ 64,941,499 $ 30,619,231
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 8,477,069 $ 5,869,541
Income taxes 1,480,266 1,095,258
============ ============
Noncash transactions:
Transfers to other real estate owned in settlement of loans 97,781 195,000
Loans made to facilitate the sale of other real estate owned - 104,987
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE> 7
ENTERBANK HOLDINGS, INC. AND SUBSIDIARIES
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements of Enterbank
Holdings, Inc. and subsidiaries (the "Company") are unaudited and
should be read in conjunction with the consolidated financial
statements and notes there to contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997. In the opinion of
management, all adjustments, consisting of normal recurring accruals
considered necessary for a fair presentation of the results of
operations for the interim periods presented herein, have been
included. Operating results for the nine month period ended September
30, 1998 are not necessarily indicative of the results that may be
expected for any other interim period or for the year ending December
31, 1998.
The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts
and transactions have been eliminated.
Certain amounts in the consolidated financial statements for the year
ended December 31, 1997 have been reclassified to conform to the 1998
presentation. Such reclassifications had no effect on previously
reported consolidated net income or shareholders' equity.
(2) CHANGE IN ACCOUNTING PRINCIPLES
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
This statement requires presentation of the components of comprehensive
earnings, including the changes in equity from non-owner sources such
as unrealized gains on securities. The company did not sell any
investments in debt and equity securities during the nine months ended
September 30, 1998 and 1997.
The Company's comprehensive earnings adjustments for the nine month
periods ending September 30, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1998
----------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount or Benefit Amount
---------- ------------- ----------
<S> <C> <C> <C>
Unrealized gains on securities:
Unrealized holding gains arising
during period $32,436 (11,028) 21,408
------- ------- ------
Other comprehensive income $32,436 (11,028) 21,408
======= ======= ======
1997
----------------------------------------
Before-Tax Tax (Expense) Net-of-Tax
Amount or Benefit Amount
---------- ------------- ----------
Unrealized gains on securities:
Unrealized holding gains arising
during period $ 9,414 (3,201) 6,213
------- ------- ------
Other comprehensive income $ 9,414 (3,201) 6,213
======= ======= ======
</TABLE>
5
<PAGE> 8
Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings Per
Share". SFAS No. 128 requires the reporting of basic and diluted earnings
per share. Basic earnings per share data is calculated by dividing net
income, after deducting dividends on preferred stock, by the weighted average
number of common shares outstanding during the period. Diluted earnings per
share gives effect to the increase in the average shares outstanding which
would have resulted from the exercise of dilutive stock options and warrants.
In accordance with the requirements of SFAS No. 128, basic and diluted
earnings per share have been restated for the nine months ended September 30,
1997.
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6
<PAGE> 9
PART I ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Readers should note that in addition to the historical information contained
herein, this Form 10-Q contains forward-looking statements which are
inherently subject to risks and uncertainties that could cause actual results
to differ materially from those contemplated by such statements. Factors
that could cause or contribute to such differences include, but are not
limited to, Enterbank Holdings, Inc.'s 1997 Annual Report on Form 10-K.
INTRODUCTION
The discussion summarizes the significant factors affecting the consolidated
financial condition, results of operations, liquidity and cash flows of
Enterbank Holdings, Inc. for the third quarter and first nine months ended
September 30, 1998 compared to the third quarter and first nine months ended
September 30, 1997. This discussion should be read in conjunction with the
consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
FINANCIAL CONDITION
Total assets at September 30, 1998 were $358 million, an increase of $67
million or 23%, over total assets of $291 million at December 31, 1997.
Loans and leases, net of unearned loan fees were $262 million, an increase of
$36 million, or 16% over total loans and leases of $226 million at December
31, 1997. Federal funds sold and investment securities were $67 million, an
increase of $21 million, or 46%, from total federal funds sold and investment
securities of $46 million at December 31, 1997.
Total deposits at September 30, 1998 were $328 million, an increase of $64
million or 24%, over total deposits of $264 million at December 31, 1997.
Total shareholders' equity increased $2.3 million from December 31, 1997.
The increase in equity is primarily due to an increase in retained earnings
of $1.9 million for the three months ended September 30, 1998, and the
exercise of incentive stock options by some employees for $343,000 and an
increase in net unrealized holdings on available-for-sale securities of
$21,000.
RESULTS OF OPERATIONS
Net income was $2,103,000 for the nine month period ended September 30, 1998,
an increase of 31% over net income of $1,608,000 for the same period in 1997.
Net income for the three month period ended September 30, 1998 was $777,000,
an increase of 28% over net income of $605,000 for the same period in 1997.
Basic earnings per share for the nine months ended September 30, 1998 and
1997 was $0.90 and $0.79, respectively. Diluted earnings per share for the
nine months ended September 30, 1998 and 1997 was $0.84 and $0.74,
respectively. Earnings per share did not increase in line with the increase
in net income due to the increase in diluted shares outstanding from
September 30, 1997 to September 30, 1998. Diluted shares increased primarily
from the issuance of 451,612 and 130,940 shares of common stock on February
14, 1997 and October 31, 1997, respectively, in two common stock offerings.
7
<PAGE> 10
NET INTEREST INCOME
Net interest income (presented on a tax equivalent basis) was $3.6 million,
or 4.62% of average earnings assets, for the three months ended September 30,
1998, compared to $2.7 million, or 5.19% of average earning assets, for the
same period in 1997. The $834,000, or 30% increase, in net interest income
resulted primarily from an increase in average earning assets offset by an
increase in average interest-bearing liabilities.
Average interest earning assets increased $97 million to $307 million for the
three months ended September 30, 1998, from $210 million during the same
period in 1997. The yield on average interest earning assets decreased from
9.14% for the three months ended September 30, 1997 to 8.69% for the same
period in 1998. The decrease in asset yield was primarily due to two factors.
First, a change in asset mix from higher yielding assets such as loans to
lower yielding assets such as federal funds sold. Second, the current yield
on loans decreased due to a general decrease in the rates charged on new
loans.
Average interest-bearing liabilities increased $85 million to $252 million
for the three months ended September 30, 1998, from $167 million during the
same period in 1997. This increase was offset by a slight decrease in the
yield on interest-bearing liabilities to 4.96% for the three months ended
September 30, 1998 compared to 4.97% for the same period in 1997.
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8
<PAGE> 11
The following table sets forth, on a tax-equivalent basis, certain
information relating to the Company's average balance sheet and reflects the
average yield earned on interest-earning assets, the average cost of
interest-bearing liabilities and the resulting net interest income for the
three month periods ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
Three months ended September 30,
-----------------------------------------------------------------------------------
1998 1997
----------------------------------------- -----------------------------------------
Percent Interest Average Percent Interest Average
Average of Total Income/ Yield/ Average of Total Income/ Yield/
Balance Assets Expense Rate Balance Assets Expense Rate
--------- ---------- --------- --------- --------- ---------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Loans<F1> $256,422 77.79% $6,005 9.29% $187,817 83.14% $4,517 9.54%
Taxable investments in debt securities 14,754 4.48 205 5.51 16,868 7.47 243 5.72
Non-taxable investments in debt
securities<F2> 663 0.20 11 6.59 825 0.37 13 6.25
Federal funds sold 35,242 10.69 508 5.72 4,419 1.96 64 5.75
Interest earning deposits 131 0.04 2 6.05 39 0.02 - 4.48
-------- ------ ------ -------- ------ ------
Total interest-earning assets 307,211 93.19 6,731 8.69 209,968 92.95 4,837 9.14
Non-interest-earning assets:
Cash and due from banks 17,887 5.43 12,243 5.42
Office equipment and leasehold
improvements 2,889 0.88 1,871 0.83
Prepaid expenses and other assets 4,713 1.43 3,988 1.77
Allowance for possible loan losses (3,048) (0.92) (2,171) (0.96)
-------- ------ -------- ------
Total assets $329,652 100.00% $225,899 100.00%
======== ====== ======== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Interest-bearing transaction accounts $ 20,321 6.16% $ 139 2.71% $ 16,303 7.22% $ 108 2.63%
Money market 123,999 37.62 1,457 4.66 75,782 33.55 898 4.70
Savings 1,534 0.47 9 2.33 1,222 0.54 8 2.60
Certificates of deposit 106,501 32.31 1,547 5.76 73,175 32.39 1,075 5.83
Federal funds purchased - - - - 416 0.18 3 2.86
-------- ------ ------ -------- ------ ------
Total interest-bearing liabilities 252,354 76.55 3,152 4.96 166,898 73.88 2,092 4.97
Noninterest-bearing liabilities:
Demand deposits 48,008 14.56 35,304 15.63
Other liabilities 1,167 0.35 839 0.37
-------- ------ -------- ------
Total liabilities 301,530 91.47 203,041 89.88
Shareholders' equity 28,121 8.53 22,858 10.12
-------- ------ -------- ------
Total liabilities and
shareholders' equity $329,652 100.00% $225,899 100.00%
======== ====== ======== ======
Net interest income $3,579 $2,745
====== ======
Net interest margin 4.62% 5.19%
==== ====
<FN>
<F1> Average balances include non-accrual loans. The income on such loans is
included in interest but is recognized only upon receipt. Loan fees
included in interest income are approximately $160,000 and $195,000, for
1998 and 1997, respectively.
<F2> Non-taxable investment income is presented on a fully tax-equivalent
basis assuming a tax rate of 34%.
</TABLE>
9
<PAGE> 12
Net interest income (presented on a tax equivalent basis) was $10 million, or
4.72% of average earnings assets, for the nine months ended September 30,
1998, compared to $7.1 million, or 4.82% of average earning assets, for the
same period in 1997. The $2.9 million, or 41% increase, in net interest
income resulted primarily from an increase in interest earning assets offset
by an increase in interest-bearing liabilities.
Average earning assets increased $84 million to $282 million for the nine
months ended September 30, 1998, from $198 million during the same period in
1997. The increase in the earning assets is attributable to the continued
calling efforts of the Company's relationship officers and sustained economic
growth in the local market served by the Company. The yield on average
earning assets decreased slightly from 8.83% for nine months ended September
30, 1997 to 8.80% for the same period in 1998. The decrease in asset yield
was primarily due to a decrease in average yield on loans offset by an
increase in loans as a percent of average assets.
Average interest bearing liabilities increased $72 million to $231 million
for the nine months ended September 30, 1998, from $159 million during the
same period in 1997. The yield on interest bearing liabilities remained
relatively constant for the nine month period ending September 30, 1998 and
1997 at 4.99% and 5.01% respectively.
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<PAGE> 13
The following table sets forth, on a tax-equivalent basis, certain
information relating to the Company's average balance sheet and reflects the
average yield earned on interest-earning assets, the average cost of
interest-bearing liabilities and the resulting net interest income for the
nine month periods ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
Nine months ended September 30,
-----------------------------------------------------------------------------------
1998 1997
----------------------------------------- -----------------------------------------
Percent Interest Average Percent Interest Average
Average of Total Income/ Yield/ Average of Total Income/ Yield/
Balance Assets Expense Rate Balance Assets Expense Rate
--------- ---------- --------- --------- --------- ---------- ---------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Loans<F1> $244,765 80.93% $17,023 9.30% $164,618 77.65% $11,692 9.50%
Taxable investments in debt securities 11,866 3.92 497 5.60 19,008 8.96 807 5.68
Non-taxable investments in debt
securities<F2> 602 0.20 30 6.66 851 0.40 40 6.28
Federal funds sold 24,954 8.25 1,031 5.52 13,539 6.39 543 5.36
Interest earning deposits 126 0.04 5 5.30 30 0.01 1 4.46
-------- ------ ------- -------- ------ -------
Total interest-earning assets 282,313 93.35 18,586 8.80 198,046 93.41 13,083 8.83
Non-interest-earning assets:
Cash and due from banks 15,967 5.28 10,751 5.07
Office equipment & leasehold
improvements 2,562 0.85 1,472 0.69
Prepaid expenses and other assets 4,519 1.49 3,755 1.77
Allowance for possible loan losses (2,924) (0.97) (1,984) (0.94)
-------- ------ -------- ------
Total assets $302,438 100.00% $212,040 100.00%
======== ====== ======== ======
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing transaction accounts $ 20,437 6.76% $ 413 2.70% $ 15,680 7.39% $ 317 2.70%
Money market 106,485 35.21 3,721 4.67 71,033 33.50 2,506 4.72
Savings 1,486 0.49 27 2.43 1,190 0.56 23 2.58
Certificates of deposit 102,261 33.81 4,455 5.82 70,473 33.24 3,084 5.85
Notes payable - - - - 33 0.02 3 12.15
Federal funds purchased - - - - 141 0.07 6 5.69
-------- ------ ------- -------- ------ -------
Total interest-bearing liabilities 230,669 76.27 8,616 4.99 158,550 74.78 5,939 5.01
Noninterest-bearing liabilities:
Demand deposits 43,377 14.34 31,356 14.78
Other liabilities 1,081 0.36 470 0.22
-------- ------ -------- ------
Total liabilities 275,127 90.97 190,376 89.78
Shareholders' equity 27,311 9.03 21,664 10.22
-------- ------ -------- ------
Total liabilities &
shareholders' equity $302,438 100.00% $212,040 100.00%
======== ====== ======== ======
Net interest income $ 9,970 $ 7,144
======= =======
Net interest margin 4.72% 4.82%
==== ====
<FN>
<F1> Average balances include non-accrual loans. The income on such loans is
included in interest but is recognized only upon receipt. Loan fees
included in interest income are approximately $462,000 and $500,000, for
1998 and 1997, respectively.
<F2> Non-taxable investment income is presented on a fully tax-equivalent
basis assuming a tax rate of 34%.
</TABLE>
11
<PAGE> 14
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $121,000 and $642,000 for the
three months and nine months ended September 30, 1998, respectively, compared
to $193,000 and $571,000 for the same periods in 1997. The decrease in
provision for the three month periods reflects a decrease in net loans
charged off to $18,000 from $49,000 for the three months ended September 30,
1998 and 1997, respectively and slower loan growth. The Company increased
the loan loss reserve during the first nine months of 1998 to reflect the
continued growth in the loan portfolio.
The following table summarizes changes in the allowance for loan losses
arising from loans charged off and recoveries on loans previously charged
off, by loan category, and additions to the allowance that have been charged
to expense for the nine months periods ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
Nine months ended September 30,
-----------------------------------
1998 1997
--------- ---------
(Dollars in Thousands)
<S> <C> <C>
Allowance at beginning of period $ 2,510 $ 1,765
Loans charged off:
Commercial and industrial 30 80
Real estate:
Commercial 19 27
Construction - 5
Residential - -
Consumer and other - -
--------- ---------
Total loans charged off 49 112
--------- ---------
Recoveries of loans previously charged off:
Commercial and industrial 18 20
Real estate:
Commercial 8 11
Construction - -
Residential - -
Consumer and other - -
--------- ---------
Total recoveries of loans previously charged off: 26 31
--------- ---------
Net loans charged off (recovered) 23 81
--------- ---------
Provisions charged to operations 642 571
--------- ---------
Allowance at end of period $ 3,129 $ 2,255
========= =========
Average loans $ 244,765 $ 164,618
Total loans $ 262,101 $ 201,538
Nonperforming loans $ 108 $ 183
Net charge-offs (recoveries) to average loans 0.01% 0.05%
Allowance for possible loan losses to loans 1.19% 1.12%
Allowance for possible loan losses to
non-performing loans 2,897.22% 1,232.24%
</TABLE>
The allowance for loan losses is maintained at a level considered adequate to
provide for potential losses. The provision for loan losses is based on a
periodic analysis which considers, among other factors, current economic
conditions, loan portfolio composition, past loan loss experience,
independent appraisals, loan collateral and payment experience. In addition
to the allowance for estimated losses on identified problem loans, an overall
unallocated allowance for loan losses is established to provide for
unidentified credit losses inherent in the portfolio. As increases to the
allowance become necessary, they are reflected in the results of operations
in the periods in which they become known.
12
<PAGE> 15
Management believes the allowance for loan losses is adequate to absorb
losses in the loan portfolio. While management uses available information to
recognize loan losses, future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process, periodically
review the allowance for loan losses. Such agencies may require the Company
to increase the allowance for loan losses based on their judgments and
interpretations about information available to them at the time of their
examinations.
While the Company has benefited from very low historical net charge-off
experience during an extended period of rapid loan growth, management remains
cognizant that historical loan loss and nonperforming asset experience may
not be indicative of future results. If the experience were to deteriorate
and additional provisions for loan losses were required, future operating
results would be negatively impacted. Both management and the Board of
Directors continually monitor changes in asset quality, market conditions,
concentration of credit and other factors which impact the credit risk
associated with the Company's loan portfolio.
The following table sets forth information concerning the Company's
nonperforming assets as of the dates indicated:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
(Dollars in Thousands)
<S> <C> <C>
Non-accrual loans $ 108 $ 50
Loans past due 90 days or more
and still accruing interest - -
Restructured loans - -
-------- --------
Total nonperforming loans 108 50
Foreclosed property 806 806
-------- --------
Total non-performing assets $ 914 $ 856
======== ========
Total assets $357,928 $291,365
Total loans $262,101 $225,560
Total loans plus foreclosed property $262,907 $226,366
Nonperforming loans to loans 0.04% 0.02%
Nonperforming assets to loans plus
Foreclosed property 0.35% 0.38%
Nonperforming assets to total assets 0.26% 0.29%
</TABLE>
13
<PAGE> 16
NONINTEREST INCOME
Noninterest income was $431,000 and $1,293,000 for the three month and nine
month periods ended September 30, 1998, respectively, compared to $104,000
and $319,000 for the same periods in 1997. The increase is primarily
attributed to the gain on sale of mortgage loans. The Company began offering
mortgage loan products during the third quarter of 1997. The gain on sale of
mortgage loans was $296,000 and $899,000 for the three and nine month periods
ended September 30, 1998, respectively, compared to $0 for the three and nine
month periods ended September 30, 1997. Noninterest income from other
sources consists primarily of service charges and other fees related to
deposit accounts and increased in line with the growth of deposits.
NONINTEREST EXPENSE
Noninterest expense was $2.6 and $7.2 million for the three month and nine
month periods ended September 30, 1998, respectively, compared to $1.7
million and $4.3 million for the same periods in 1997. Some noninterest
expenses are primarily attributable to: 1) a new merchant bank office in
Kansas City opened in March, 1998; 2) new banking facilities opened during
1997 in St. Peters and Sunset Hills; and 3) expenses related to the
origination and sale of mortgage loans. The following table depicts changes
in noninterest expenses in the above mentioned operations:
<TABLE>
<CAPTION>
3 months ended September 30, 9 months ended September 30,
1998 versus 1997 1998 versus 1997
----------------------------------- -----------------------------------
% Change 1998 1997 % Change 1998 1997
-------- ---------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Merchant Banking division 344.75% $ 148,723 $ 33,440 187.13% $ 392,779 $ 136,794
St. Peters and Sunset Hills Banking Units 79.83% 1,048,337 582,971 121.24% 2,828,996 1,278,722
Mortgage Operations N/A 164,941 - N/A 529,071 -
Other Operations 16.60% 1,249,464 1,071,606 18.30% 3,441,699 2,909,350
------ ---------- ---------- ------ ---------- ----------
Total Noninterest Expense 54.71% $2,611,465 $1,688,017 66.31% $7,192,545 $4,324,866
====== ========== ========== ====== ========== ==========
</TABLE>
The increases are primarily due to increases in salaries and benefits
expense, occupancy and equipment expense and other operating expenses related
to the above mentioned operations. Noninterest expenses attributable to
other operations increased 17% and 18% for the three month and nine month
periods ended September 30, 1998, respectively, as compared to the same
periods in 1997 and is due to normal increases related to growth.
YEAR 2000
In 1997 the Company organized a formal program to address the implications of
Year 2000 issues. This disclosure is intended to provide the reader with an
understanding of the Company's preparedness, expected costs, areas of
perceived risk and contingency plans.
The Company's State of Readiness:
The Company developed a program with five primary phases. These are:
1) Awareness, 2) Assessment, 3) Renovations, 4) Validation and 5)
Implementation. As of October 31, 1998 the Awareness and Assessment phases
were complete and all systems had been reviewed for Y2K compliance. The
scope of the assessment phase included all areas of technology for the
Company including, but not limited to, the phone system, voice mail system,
computer network, banking mainframe and related software. The Renovation
phase was approximately 75% complete, and the Validation and Implementation
phase were approximately 30% complete. Testing of the Company's hardware and
software applications will take place over the next six to nine months.
Management is comfortable that the plan will identify areas of exposure early
enough to address Y2K issues prior to year-end 1999. The Company feels the
primary exposure is in the core banking software, which is leased from a
third party bank software vendor providing the same software to hundreds of
other banks. This vendor is working closely with the Company to address any
Y2K issues that may be discovered and has indicated to the Company that there
will be no material Y2K problems.
14
<PAGE> 17
The Cost of Year 2000 Compliance:
The cost to the Company to assess, correct and verify Y2K issues is estimated
at $50,000, consisting of $24,000 in salaries and benefit costs allocated to
Y2K projects and $26,000 in software and hardware expenses required for
upgrading and testing of the Company's systems. This cost estimate does not
include the cost associated with regulatory reporting, legal review of
regulatory requirements, auditing requirements or other costs incurred
related only to the disclosure requirements and not actual software or
hardware issues. Such costs are difficult to determine as these requirements
change frequently. If these non-systems related costs become significant and
quantifiable, they will be disclosed at that time.
What Risks Exist for the Company:
The most likely risk the Company faces with respect to Y2K issues is in the
core banking software. This system identifies and calculates payments due
the Company's subsidiary bank for loans made to customers and amounts due to
the bank's customers for deposits in the bank. The loss of these records or
inability to accurately perform these calculations could cause the bank to
incur additional expenses such as loan losses, underpayments of amounts due
on loans, overpayments of amounts due to depositors or increased personnel
expenses required to track this information manually.
Contingency Plans:
Management feels the Company will be Y2K compliant by year-end 1999.
However, as a precautionary measure, the Company will create electronic and
paper based reports of every customer's account as a back up. The back up
reports will include the necessary information to calculate balance and
payment information. If necessary, the electronic version of this
information can be used by other common software applications such as Lotus
1-2-3 or Microsoft Excel to perform many of the calculations performed by the
bank's core software system. The back up reports can also be used to
manually calculate customer information indefinitely if needed.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Liquidity is provided by the Company's earning assets, including short-term
investments in federal funds sold, maturities in the loan portfolio,
maturities in the investment portfolio, amortization of term loans, deposit
inflows, proceeds from borrowings, and retained earnings.
Since inception, the Company has experienced rapid loan and deposit growth
primarily due to the aggressive direct calling efforts of the Company's
relationship officers and sustained economic growth in the local market
served by the Company. Management has pursued privately held businesses who
desire a close working relationship with a locally-managed, full service
bank. Due to the relationship developed with these customers, management
views deposits from this source as a stable deposit base. Additionally, the
Company belongs to a national network of time depositors (primarily credit
unions) who place time deposits with the Company, typically in increments of
$99,000. The Company has used this source of deposits for over five years and
considers it to be a stable source of deposits enabling the Company to
acquire funds at a cost below its alternative cost of funds. There were
$27million and $31 million of deposits from the national network with the
Company at September 30, 1998 and December 31, 1997, respectively.
15
<PAGE> 18
The following table sets forth the amount and maturity of certificates of
deposit that had balances of more than $100,000 at September 30, 1998:
<TABLE>
<CAPTION>
Remaining Maturity Amount
------------------------------ --------
(Dollars in Thousands)
<S> <C>
Three months or less $16,602
Over three through six months 15,048
Over six through twelve months 11,163
Over twelve months 2,248
-------
$45,061
=======
</TABLE>
The asset/liability management process, which involves management of the
components of the balance sheet to allow assets and liabilities to reprice at
approximately the same time, is an ever-changing process essential to
minimizing the effect of interest rate fluctuations on net interest income.
CAPITAL ADEQUACY
Risk-based capital guidelines for financial institutions were adopted by
regulatory authorities effective January 1, 1991. These guidelines were
designed to relate regulatory capital requirements to the risk profile of the
specific institution and to provide for uniform requirements among the
various regulators. Currently, the risk-based capital guidelines require the
Company to meet a minimum total capital ratio of 8.0% of which at least 4.0%
must consist of Tier 1 capital. Tier 1 capital generally consists of (a)
common shareholders' equity (excluding the unrealized market value
adjustments on the available-for-sale securities), (b) qualifying perpetual
preferred stock and related surplus subject to certain limitations specified
by the FDIC, and (c) minority interests in the equity accounts of
consolidated subsidiaries less (d) goodwill, (e) mortgage servicing rights
within certain limits, and (f) any other intangible assets and investments in
subsidiaries that the FDIC determines should be deducted from Tier 1 capital.
The FDIC also requires a minimum leverage ratio of 3.0%, defined as the ratio
of Tier 1 capital less purchased mortgage servicing rights to total assets,
for banking organizations deemed the strongest and most highly rated by
banking regulators. A higher minimum leverage ratio is required of less
highly rated banking organizations. Total capital, a measure of capital
adequacy, includes Tier 1 capital, allowance for possible loan losses, and
debt considered equity for regulatory capital purposes.
<Remainder of this page intentionally left blank>
16
<PAGE> 19
The following table summarizes the Company's risk-based capital and leverage
ratios at the dates indicated:
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
As of September 30, 1998:
Total Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $31,438,844 11.26% $22,340,525 8.00% $27,925,656 10.00%
Enterprise Bank $29,749,129 10.69% $22,258,468 8.00% $27,823,085 10.00%
Tier I Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $28,309,189 10.14% $11,170,262 4.00% $16,755,393 6.00%
Enterprise Bank $26,619,474 9.57% $11,129,234 4.00% $16,693,851 6.00%
Tier I Capital (to Average Assets)
Enterbank Holdings, Inc. $28,309,189 9.36% $12,097,519 4.00% $15,121,899 5.00%
Enterprise Bank $26,619,474 8.83% $12,055,161 4.00% $15,068,952 5.00%
As of December 31, 1997:
Total Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $28,538,743 12.28% $18,591,401 8.00% $23,239,251 10.00%
Enterprise Bank $25,915,000 11.19% $18,525,813 8.00% $23,157,266 10.00%
Tier I Capital (to Risk Weighted Assets)
Enterbank Holdings, Inc. $26,028,743 11.20% $ 9,295,700 4.00% $13,943,551 6.00%
Enterprise Bank $23,405,000 10.11% $ 9,262,906 4.00% $13,894,359 6.00%
Tier I Capital (to Average Assets)
Enterbank Holdings, Inc. $26,028,743 11.42% $ 9,116,560 4.00% $11,395,700 5.00%
Enterprise Bank $23,405,000 10.30% $ 9,085,351 4.00% $11,356,689 5.00%
</TABLE>
IMPLEMENTATION OF NEW ACCOUNTING PRONOUNCEMENTS
SFAS 130, Reporting Comprehensive Income, was issued in June, 1997.
Comprehensive income is defined as net income plus certain items that are
recorded directly to shareholders' equity, such as unrealized gains and
losses on available-for-sale securities. Components of the Company's
comprehensive income are reported in a financial statement that is displayed
with the same prominence as other financial statements starting in the first
quarter of 1998. The reporting requirements of SFAS 130 did not have a
material impact on the Company's financial condition or results of
operations.
SFAS 131, Disclosures about Segments of an Enterprise and Related
Information, is effective for financial statements for periods beginning
after December 15, 1997, but interim period reporting is not required in
1998. An operating segment is defined under FAS 131 as a component of an
enterprise that engages in business activities that generate revenue and
expense for which operating results are reviewed by the chief operating
decision maker in the determination of resource allocation and performance.
The Company is currently evaluating the impact of SFAS 131 on future
financial statement disclosures.
SFAS 133, Accounting for Derivative Instruments and Hedging Activities, is
effective for all fiscal years beginning after June 15, 1999. Earlier
application is encouraged but should not be applied retroactively to
financial statements of prior periods. SFAS 133 establishes standards for
derivative instruments embedded in other contracts, and for hedging
activities. It requires an entity to recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at
fair value. The Company is currently evaluating the requirements and impact
of SFAS 133.
17
<PAGE> 20
EFFECT OF INFLATION
Persistent high rates of inflation can have a significant effect on the
reported financial condition and results of operations of all industries.
However, the asset and liability structure of commercial banks is
substantially different from that of an industrial company in that virtually
all assets and liabilities of commercial banks are monetary in nature.
Accordingly, changes in interest rates may have a significant impact on a
commercial bank's performance. Interest rates do not necessarily move in the
same direction or in the same magnitude as the prices of goods and services.
Inflation does have an impact on the growth of total assets in the banking
industry, often resulting in a need to increase equity capital at higher than
normal rates to maintain an appropriate equity-to-assets ratio.
<Remainder of this page intentionally left blank>
18
<PAGE> 21
PART II ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
(a). The exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
11 Statement Regarding: Computation of Earnings Per Share
27 Financial Data Schedule (Edgar Version Only)
</TABLE>
(b). The Company filed no current reports on Form 8-K during the nine months
ended September 30, 1998.
19
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Clayton,
State of Missouri on the 14th day of November, 1998.
ENTERBANK HOLDINGS, INC.
By:
---------------------------------------
Fred H. Eller
Chief Executive Officer
By:
---------------------------------------
James C. Wagner
Chief Financial Officer
20
<PAGE> 1
EXHIBIT 11
----------
<TABLE>
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
Basic Diluted
EPS number EPS number Net Basic Diluted
of shares of shares Income EPS EPS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 months ended September 30, 1997 2,127,385 2,250,472 $604,991 $0.28 $0.27
3 months ended September 30, 1998 2,365,200 2,518,033 $776,920 $0.33 $0.31
3 MONTHS ENDED SEPTEMBER 30, 1997 Basic Diluted
------------ ------------
Average Shares Outstanding 2,127,385 2,127,385
Options - Plan 1 128,587
Average Option Price $ 5.31
Total Exercise Cost $ 682,797
Shares Repurchased 44,051
Net Shares from Option - Plan 1 84,536
Options - Plan 2 74,600
Average Option Price $ 7.49
Total Exercise Cost $ 558,754
Shares Repurchased 36,049
Net Shares from Option - Plan2 38,551
Options - Plan 3 196,389
Average Option Price $ 16.01
Total Exercise Cost $3,144,188
Shares Repurchased 202,851
Net Shares from Option - Plan 3 0
------------ ------------
Gross Shares 2,127,385 2,250,472
Price $ 15.50
3 MONTHS ENDED SEPTEMBER 30, 1998 Basic Diluted
------------ ------------
Average Shares Outstanding 2,365,200 2,365,200
Options - Plan 1 23,000
Average Option Price $ 6.74
Total Exercise Cost $ 155,020
Shares Repurchased 5,305
Net Shares from Option - Plan 1 17,695
Options - Plan 2 73,400
Average Option Price $ 7.64
Total Exercise Cost $ 560,776
Shares Repurchased 19,192
Net Shares from Option - Plan 2 54,208
Options - Plan 3 182,185
Average Option Price $ 16.24
Total Exercise Cost $2,958,684
Shares Repurchased 101,255
Net Shares from Option - Plan 3 80,930
------------ ------------
Gross Shares 2,365,200 2,518,033
Price $ 29.22
21
<PAGE> 2
<CAPTION>
EXHIBIT 11 (CONTINUED)
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
Basic Diluted
EPS number EPS number Net Basic Diluted
of shares of shares Income EPS EPS
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
9 months ended September 30, 1997 2,044,051 2,173,205 $1,608,439 $0.79 $0.74
9 months ended September 30, 1998 2,345,137 2,510,436 $2,102,815 $0.90 $0.84
9 MONTHS ENDED SEPTEMBER 30, 1997 Basic Diluted
------------ ------------
Average Shares Outstanding 2,044,051 2,044,051
Options - Plan 1 137,480
Average Option Price $ 5.29
Total Exercise Cost $ 727,269
Shares Repurchased 46,921
Net Shares from Option - Plan 1 90,559
Options - Plan 2 73,400
Average Option Price $ 7.35
Total Exercise Cost $ 539,490
Shares Repurchased 34,806
Net Shares from Option - Plan2 38,594
Options - Plan 3 129,281
Average Option Price $ 16.01
Total Exercise Cost $2,069,789
Shares Repurchased 133,535
Net Shares from Option - Plan 3 0
------------ ------------
Gross Shares 2,044,051 2,173,205
Price $ 15.50
9 MONTHS ENDED SEPTEMBER 30, 1998 Basic Diluted
------------ ------------
Average Shares Outstanding 2,345,137 2,345,137
Options - Plan 1 50,733
Average Option Price $ 5.79
Total Exercise Cost $ 293,744
Shares Repurchased 10,961
Net Shares from Option - Plan 1 39,772
Options - Plan 2 73,561
Average Option Price $ 7.61
Total Exercise Cost $ 559,799
Shares Repurchased 20,888
Net Shares from Option - Plan 2 52,673
Options - Plan 3 182,304
Average Option Price $ 16.09
Total Exercise Cost $2,933,271
Shares Repurchased 109,450
Net Shares from Option - Plan 3 72,854
------------ ------------
Gross Shares 2,345,137 2,510,436
Price $ 26.80
</TABLE>
22
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,566,499
<INT-BEARING-DEPOSITS> 43,940
<FED-FUNDS-SOLD> 43,375,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 22,767,831
<INVESTMENTS-CARRYING> 703,641
<INVESTMENTS-MARKET> 707,495
<LOANS> 262,101,319
<ALLOWANCE> 3,129,655
<TOTAL-ASSETS> 357,928,184
<DEPOSITS> 328,467,935
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,101,727
<LONG-TERM> 0
0
0
<COMMON> 23,654
<OTHER-SE> 28,334,868
<TOTAL-LIABILITIES-AND-EQUITY> 357,928,184
<INTEREST-LOAN> 16,970,395
<INTEREST-INVEST> 516,238
<INTEREST-OTHER> 1,037,658
<INTEREST-TOTAL> 18,524,291
<INTEREST-DEPOSIT> 8,579,252
<INTEREST-EXPENSE> 8,579,252
<INTEREST-INCOME-NET> 9,945,039
<LOAN-LOSSES> 642,035
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 7,192,545
<INCOME-PRETAX> 3,403,758
<INCOME-PRE-EXTRAORDINARY> 3,403,758
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,102,815
<EPS-PRIMARY> 0.90
<EPS-DILUTED> 0.84
<YIELD-ACTUAL> 8.80
<LOANS-NON> 108,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 893,511
<ALLOWANCE-OPEN> 2,510,000
<CHARGE-OFFS> 48,854
<RECOVERIES> 26,473
<ALLOWANCE-CLOSE> 3,129,655
<ALLOWANCE-DOMESTIC> 2,659,655
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 470,000
</TABLE>
