SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
[ ] 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 01-13465
Falmouth Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3337685
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 Davis Straits, Falmouth, MA 02540
(Address of principal executive offices)
(Zip Code)
(508) 548-3500
(Registrant's telephone number including area code)
NA
(Former name, former address and former fiscal year,
if changed from last Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Outstanding at
Class December 31, 1997
----- -----------------
Common Stock, Par Value $.01 1,454,750
Transitional small business disclosure formate:
Yes [ ] No [X]
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
INDEX TO FORM 10-QSB/A
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Financial Condition December 31, 1997
and September 30, 1997 1
Consolidated Statements of Income For Three Months Ended December
31, 1997 and 1996 2
Consolidated Statements of Changes in Stockholders' Equity For
Three Months Ended December 31, 1997 and 1996 3
Consolidated Statements of Cash Flows For Three Months Ended
December 31, 1997 and 1996 4
Notes To Consolidated Financial Statements 5-6
Item 2 Management's Discussion and Analysis of Financial Condition 7-10
PART II. OTHER INFORMATION
Item 1 Legal Proceedings 11
Item 2 Changes in Securities 11
Item 3 Defaults Upon Senior Securities 11
Item 4 Submission of Matters to a Vote of Common Shareholders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on 8-K 11
Signatures
</TABLE>
Part I. Item I.
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1997
------------ -------------
(unaudited)
<S> <C> <C>
Assets
- ------
Cash and due from banks $ 359,484 $ 2,563,517
Federal funds sold 4,265,946 1,352,403
----------------------------
Total cash and cash equivalents 4,625,430 3,915,920
Investment securities 29,489,448 35,996,739
Federal Home Loan Bank stock, at cost 405,200 405,200
Loans, net 59,565,174 53,881,171
Premises and equipment 1,591,194 999,707
Investments in Real Estate 796,500 ---
Accrued Interest Receivable 600,257 614,289
Cooperative Central Bank Reserve Fund Deposit 285,680 285,680
Other assets 204,640 292,478
----------------------------
Total assets $ 97,563,523 $ 96,391,184
============================
Liabilities and Stockholders' Equity:
- -------------------------------------
Liabilities:
Demand deposits $ 3,146,100 $ 3,136,116
Savings and NOW deposits 30,231,476 31,922,355
Time deposits 39,022,487 37,132,618
----------------------------
Total deposits 72,400,063 72,191,089
Deferred income taxes 292,623 ---
Repurchase agreements 341,157 ---
Other liabilities 305,493 652,656
Due to broker 0 0
Income taxes payable 146,649 ---
Treasury tax and loan account 597 ---
Employee Stock Ownership Plan loan 720,102 741,923
----------------------------
Total liabilities 74,206,684 73,585,668
----------------------------
Stockholders' equity:
Preferred stock, par value $.01 per share, authorized 500,000
shares; none issued
Common stock, par value $.01 per share, authorized 2,500,000
shares; issued and outstanding 1,454,750 shares 14,547 145,475
Common stock purchased under RRP (38,449) ---
Paid-in capital 13,885,017 13,651,570
Retained earnings 9,613,257 9,334,011
Employee Stock Ownership Plan loan (720,102) (741,923)
Net unrealized holding gain on available-for-sale securities 602,569 416,383
----------------------------
Total stockholders' equity 23,356,839 22,805,516
----------------------------
Total liabilities and stockholders' equity $ 97,563,523 $ 96,391,184
============================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended December 31,
1997 1996
------------- -------------
<S> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 1,130,735 $ 852,345
Interest and dividends on investment securities 557,824 658,087
Interest on short-term investments 48,128 24,311
-----------------------------
Total interest and dividend income 1,736,687 1,534,743
-----------------------------
Interest expense:
Interest expense on deposits 710,036 703,094
Interest expense on borrowings 16,957 ---
-----------------------------
Total interest expense 726,993 703,094
-----------------------------
Net interest and dividend income 1,009,694 831,649
Provision for possible loan losses --- ---
-----------------------------
Net interest income after provision for possible
loan losses 1,009,694 831,649
-----------------------------
Other income:
Service charges 18,933 12,322
Other fee income 10,362 9,115
Gain (loss) on sale of investment securities, net 97,852 (1)
Other non-interest income 35,043 26,567
-----------------------------
Total other income 162,190 48,003
-----------------------------
Other expense:
Salaries and employee benefits 343,769 315,628
Deposit insurance expense 2,186 500
Other real estate owned expense --- ---
Data processing expense 44,513 29,764
Directors' fees 18,336 13,250
Legal and professional fees 44,808 62,161
Other operating expenses 181,998 155,476
-----------------------------
Total other expense 635,610 576,779
-----------------------------
Income before income taxes 536,274 302,873
Income taxes 188,000 113,100
-----------------------------
Net income $ 348,274 $ 189,773
=============================
Basic Earnings per share $ 0.25 $ 0.13
=============================
Diluted Earnings per share $ 0.25 $ 0.13
=============================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Net Unrealized Employee
Stock Additional Holding Gain on Stock
Common Purchased Paid-in Retained Available-for Ownership
Stock Under RRP Capital Earnings Sale Securities Plan Loan Total
------- --------- ----------- ---------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1996 as
restated $14,547 $13,729,102 $8,856,291 $143,685 $(829,208) $21,914,417
ESOP compensation expense 3,709 3,709
Dividends declared (68,591) (68,591)
Net Income 189,773 189,773
Net change in unrealized holding
gain on available-for-sale
securities 82,893 82,893
-------------------------------------------------------------------------------------------
Balance, December 31, 1996 as
restated $14,547 $13,732,811 $8,977,473 $226,578 $(829,209) $22,122,201
===========================================================================================
Balance, September 30, 1997 as
restated $14,547 $13,782,498 $9,334,011 $416,383 $(741,923) $22,805,516
Employee Stock Ownership Plan 25,407 25,407
Principal Payments on Employee
Stock Ownership Plan loan 21,821 21,821
Net Income 348,274 348,274
Dividends declared (69,028) (69,028)
Accrual for RRP 77,112 77,112
Purchase of shares to fund awards
under RRP (38,449) (38,449)
Net change in unrealized holding
gain on available-for-sale
securities 186,186 186,186
-------------------------------------------------------------------------------------------
Balance, December 31, 1997 $14,547 $(38,449) $13,885,017 $9,613,257 $602,569 $(720,102) $23,356,839
===========================================================================================
</TABLE>
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(unaudited)
Three months ended December 31,
1997 1996
------------- -------------
<S> <C> <C>
Operating Activities:
Net Income $ 348,274 $ 189,773
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Disposal of fixed assets --- 7,461
Provision for possible loan losses --- ---
Amortization of investment securities, net 6,886 12,801
Change in unearned income (8,814) 13,739
(Gain) loss on sales of investment securities, net (97,852) 1
Depreciation 36,612 15,673
Increase (Decrease) in other assets 101,870 (40,728)
Increase (Decrease) in other liabilities (16,641) (91,377)
-----------------------------
Net cash provided by (used in) operating activities 370,335 107,343
-----------------------------
Investing activities:
Purchases of available-for-sale securities (271,235) (1,279,534)
Proceeds from sales of available-for-sale securities 2,866,454 499,999
Proceeds from maturities of available-for-sale securities 2,056,627 2,720,529
Proceeds from maturities of held-to-maturity securities 2,241,944 2,059,317
Net increase in loans (5,675,189) (3,192,363)
Purchase of investment in real estate (796,500) ---
Purchase of premises and equipment (628,099) (193,948)
-----------------------------
Net cash provided by (used in) investing activities (205,998) (614,000)
-----------------------------
Financing activities:
Common stock purchased under RRP, net of accrual 38,663 ---
ESOP compensation expense 25,407 3,709
Dividends paid (69,028) (68,591)
Increase in repurchase agreements 341,157 ---
Net decrease in demand deposits, savings, and NOW deposits (1,680,895) (808,271)
Net increase (decrease) in time deposits 1,889,869 (377,347)
-----------------------------
Net cash provided by (used in) financing activities 545,173 (1,250,500)
-----------------------------
Increase (decrease) in cash and cash equivalents 709,510 (529,157)
Cash and cash equivalents at beginning of period 3,915,920 2,755,198
-----------------------------
Cash and cash equivalents at end of period $ 4,625,430 $ 2,226,041
=============================
Supplemental disclosures:
Interest paid on deposits $ 726,993 $ 703,094
=============================
Income taxes paid 206,159 188,999
=============================
</TABLE>
See Notes to Consolidated Condensed Financial Statements
FALMOUTH BANCORP, INC.
AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements
Note 1 - Basis of Presentation
The financial statements of Falmouth Bancorp, Inc. (the "Company") and its
subsidiaries presented herein should be read in conjunction with the financial
statements of the Falmouth Co-operative Bank (the "Bank") as of December 31,
1997 and September 30, 1997, and for the three months ended December 31, 1997
and December 31, 1996. Material intercompany accounts have been eliminated in
consolidation. The financial statements prior to December 31, 1997 include only
the accounts of the Bank unless otherwise adjusted. In the opinion of
management, the interim financial statements reflect all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of the three months ended December 31, 1997 and 1996.
Note 2 - Accounting Policies
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and should be read in
conjunction with the Company's Annual Report on Form 10-KSB for the year ended
September 30, 1997. Interim results are not necessarily indicative of results
to be expected for the entire year. Management is required to make estimates
and assumptions that affect amounts reported in the financial statements.
Actual results could differ significantly from those estimates.
Note 3 - Reorganization
The Company was reorganized on October 14, 1997 at the direction of the
Stockholders and the Directors of the Falmouth Co-operative Bank, whereby the
Company became the sole owner of the Bank. Upon completion of the
reorganization Falmouth Bancorp, Inc. issued 1,454,750 shares of common stock
at $.01 par value in exchange for all the Bank's 1,454,750 issued and
outstanding shares of $.10 par value common stock on a share for share basis.
In addition, the Company replaced the Bank as the issuer listed on the American
Stock Exchange (AMEX) retaining the symbol "FCB".
At this time the Company conducts business as a Massachusetts Co-operative Bank
and the principal business of the Company consists of the operation of its
wholly owned subsidiary, the Bank.
Note 4 - Earnings per Share(EPS)
In February 1997, the FASB issued Statement 128, "Earnings Per Share."
Statement 128 supersedes APB Opinion No. 15, "Earnings Per Share," and
specifies the computation, presentation and disclosure requirements for
earnings per share (EPS) for entities with publicly held common stock or
potential common stock. It replaces the presentation of primary EPS with
the presentation of basic EPS, and replaces fully diluted EPS with diluted
EPS. It also requires dual presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures,
and requires a reconciliation of the numerator and denominator of the basic
EPS computation to the numerator and denominator of the diluted EPS
calculation. EPS for the quarter ended December 31, 1997 has been calculated
according to the guidelines of Statement 128 and EPS for the quarter ended
December 31, 1996 has been restated to conform with Statement 128.
Reconciliation of the numerators and the denominators of the basic and
diluted per share comparison for net income are as follows:
<TABLE>
<CAPTION>
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Quarter ended December 31, 1997
Basic EPS
---------
Net income and income available to income
common stockholders $348,274 1,380,557 .25
Effect of dilutive securities options and warrants 37,387
-------------------------
Diluted EPS
-----------
Income available to common stockholders
and assumed conversions $348,274 1,417,944 .25
=========================
Quarter ended December 31, 1996-As restated
Basic EPS
---------
Net income and income available to common
stockholders $188,999 1,454,750 .13
Effect of dilutive securities, options 0 0
-------------------------
Diluted EPS
-----------
Income available to common stockholders
and assumed conversions $188,999 1,454,750 .13
=========================
</TABLE>
Note 5 - Dividends
On November 18, 1997, the Company declared a cash dividend on its common stock,
payable on December 22, 1997, equal to $0.05 per share.
Note 6 - Recent Developments
On October 21, 1997, the Company announced a repurchase program to proceed as
soon as practical and continue for a period of up to 12 months. The Repurchase
program authorizes the Company to repurchase into treasury stock up to 72,738
shares, or five percent, of its 1,454,750 outstanding shares of common stock.
During the quarter ended December 31, 1997, the Company did not repurchase any
shares of the Company's common stock.
Part I. Item 2.
Management's Discussion and
Analysis of Financial Condition
General
Falmouth Bancorp, Inc. (the "Company" or "Bancorp"), a Delaware
corporation, is the holding company for Falmouth Co-operative Bank (the "Bank"
or "Falmouth"), a Massachusetts chartered stock co-operative bank. The Bank
converted to stock form on March 28, 1996, and issued 1,454,750 shares of
common stock at $10.00 per share (the "Conversion"). On October 14, 1997, the
Company acquired all of the capital stock of Bank and stockholders of the Bank
became stockholders of the Company in a share for share exchange pursuant to a
plan of reorganization approved by the Bank's stockholders on January 21, 1997
(the "Reorganization"). At December 31, 1997, there were 1,454,750 shares
outstanding. The Company's stock trades on the American Stock Exchange under
the symbol "FCB".
The Company's sole business activity is ownership of the Bank. The
Company also makes investments in long and short-term marketable securities and
other liquid investments. The business of the Bank consists of attracting
deposits from the general public and using these funds to originate mortgage
loans secured by one to four-family residences located primarily in Falmouth,
Massachusetts and surrounding areas and to invest in United States Government
and Agency securities. To a lesser extent, the Bank engages in various forms of
consumer and home equity lending. The Bank's business strategy is to operate as
a well-capitalized, profitable and independent community bank dedicated to
financing home ownership and consumer needs in its market area and to provide
quality service to its customers. The Bank has one subsidiary, Falmouth
Securities Corporation, a Massachusetts corporation, which was established
solely for the purpose of acquiring and holding investments which are
permissible for banks to hold under Massachusetts law.
Comparison of Financial Condition at December 31, 1997 and September 30, 1997.
The Company's total assets increased by $1.2 million or 1.2% for the
three months ended December 31, 1997 from $96.4 million in September 30, 1997
to $97.6 million at December 31, 1997. Total assets increased primarily from an
increase in savings deposits, provided by the addition of two branches within
the past year. Total net loans were $59.6 million or 82.3% of total deposits at
December 31, 1997 as compared to $53.9 million or 74.6% of total deposits at
September 30, 1997, representing an increase of $5.7 million due to the efforts
of our loan originators and an active real estate market. Investment securities
were $29.5 million or 30.2% of total assets at December 31, 1997 as compared to
$36.0 million or 37.3% of total assets at September 30, 1997. The proceeds from
maturing securities were primarily redeployed to fund an increased volume of
loan production with the remainder placed into short-term securities
investments. Total deposits were $72.4 million at December 31, 1997 as compared
to $72.2 million at September 30, 1997. Total deposits increased by $209,000
for the three months ended December 31, 1997.
Stockholders' equity was $23.4 million at December 31, 1997 as compared
to $22.8 million at September 30, 1997, an increase of $551,000 which was
primarily the result of net earnings of $348,000, and an increase in the
unrealized gain on available-for-sale securities of $187,000.
The ratio of the allowance for loan losses to total loans was .92%.
Comparison of Operating Results
Three Months Ended December 31, 1997 and 1996.
Net Income. The Company's net income for the three months ended December
31, 1997 was $348,000 as compared to $190,000 for the three months ended
December 31, 1996. The $158,000 increase in net income was primarily the result
of a $202,000 increase in interest and dividend income due to increases in loan
originations which was partly offset by a $25,000 increase in interest expense,
a $59,000 increase in other expenses and a $75,000 increase in income taxes.
Interest Income. Total interest and dividend income for the three months
ended December 31, 1997 was $1,737,000, an increase of $202,000 as compared to
$1,535,000 for the three months ended December 31, 1996. The increase in
interest and dividend income was due primarily to a $279,000 increase in
interest income on loans and a $76,000 decrease in interest and dividends on
securities and short-term investments. The increases in interest income on
loans was, for the most part, the result of an increase in the volume of loans
funded by maturing securities.
Interest Expense. Interest expense for the three months ended December
31, 1997 was $727,000, a increase of $24,000 as compared to $703,000 for the
three months ended December 31, 1996. The increase in interest expense was due
primarily to interest paid on other borrowings during the period.
Net Interest Income. Net interest income for the three months ended
December 31, 1997 was $1,010,000 as compared to $832,000 for the three months
ended December 31, 1996. The $178,000 increase in net interest income was the
result of the increase in interest income on loans and securities that more
than offset the interest expense on deposits. The net interest margin for the
three months ended December 31, 1997 was 4.30%, an increase of .40% as compared
to 3.90% for the three months ended December 31, 1996. The annualized return on
average assets for the three months ended December 31, 1997 was 1.44%, an
increase of .59% as compared to .85% for the same period of the prior year. The
primary reason for the increase in the return on average assets was the
deployment of proceeds from maturing securities into an increased volume of
residential loans originated for portfolio during the quarter ended December
31, 1997.
Provision for Loan Losses. The loan loss reserves maintained by the Bank
were considered adequate, therefore no additional provisions for possible loan
losses were made for the three months ended December 31, 1997.
Non-Interest Income. Non-interest income or other income for the three
month ended December 31, 1997 was $162,000 as compared to $48,000 for the three
months ended December 31, 1996. The $114,000 increase was due to modest
increases in income from service charges and other non-interest income, but
primarily from the $98,000 gain on the sale of investment securities during the
period.
Operating Expenses. Operating expenses for the three months ended
December 31, 1997 were $636,000 as compared to $577,000 for the three months
ended December 31, 1996. The $59,000 increase was primarily due to an increase
in salaries, employee benefits and directors' fees of $33,000, an increase in
other operating expenses of $27,000, an increase in data processing expense of
$15,000 and a increase in deposit insurance expense of $2,000, offset by a
decrease in legal and professional fees of $17,000.
Liquidity and Capital Resources
The Bank's primary sources of funds consist of deposit, repayment and
prepayment of loans and mortgaged-backed securities, maturities of investments
and interest-bearing deposits, and funds provided from operations. While
scheduled repayments of loans and mortgage-backed securities and maturities of
investment securities are predictable sources of funds, deposit flows and loan
prepayments are greatly influenced by the general level of interest rates,
economic conditions and competition. The Bank uses its liquidity resources
principally to fund existing and future loan commitments, to fund net deposit
outflows, to invest in other interest-earning assets, to maintain liquidity,
and to meet operating expenses.
The Bank is required to maintain adequate levels of liquid assets. This
guideline, which may be varied depending upon economic conditions and deposit
flows, is based upon a percentage of deposits and short-term borrowings. The
Bank has historically maintained a level of liquid assets in excess of
regulatory requirements. The Bank's liquidity ratio at December 31, 1997 was
36.09%.
A major portion of the Bank's liquidity consists of short-term U.S.
Government obligations. The level of these assets is dependent on the Bank's
operating, investing, lending and financing activities during any given period.
At December 31, 1997, regulatory liquidity totaled $72.9 million. The primary
investing activities of the Bank include originations of loans and purchase of
investment securities.
Liquidity management is both a daily and long-term function of
management. If the Bank requires funds beyond its ability to generate them
internally, the Bank believes that it could borrow additional funds form the
FHLB of Boston. At December 31, 1997, the Bank had no outstanding advances from
the FHLB of Boston.
At December 31, 1997, the Bank had $2.7 million in outstanding
commitments to originate loans. The Bank anticipates that it will have
sufficient funds available to meet its current loan origination commitments.
Certificates of deposit which are scheduled to mature in one year or less
totaled $32.4 million at December 31, 1997. Based on historical experience,
management believes that a significant portion of such deposits will remain
with the Bank.
At December 31, 1997, the Bank exceeded all of its regulatory capital
requirements.
Year 2000
All of the material data processing of the Bank that could be affected by
the potential Year 2000 problem is provided by a third party service bureau.
The service bureau of the Bank has advised the Bank that it expects to resolve
any Year 2000 issues by December 31, 1998. However, if the service bureau is
unable to solve this potential problem in time, the Bank would likely
experience significant data processing delays, mistakes or failures. These
delays, mistakes or failures could have a significant adverse impact on the
financial condition and results of operation of the Bank.
Internally, the Bank has determined that continued monitoring of the
progress made by outside vendors will be key to a successful move into the next
millennium. The Bank does not believe that the costs associated with its
actions and those of its vendors will be material.
An FDIC off-site examination was conducted on September 9, 1997 and based
upon the examination results, the Bank was considered to be (1) aware of the
Year 2000 issues; (2) advanced in reviewing the issues with outside vendors;
(3) advanced in evaluating internal software and hardware; (4) in compliance
with Year 2000 Director awareness; and (5) making progress with its Year 2000
action plan.
OTHER INFORMATION
Part II.
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule*
(b) Reports on 8-K
None
* Submitted only with filing in electronic format.
Falmouth Bancorp, Inc. is a publicly owned bank holding company and the parent
corporation of Falmouth Co-operative Bank, a Massachusetts charted stock
co-operative bank offering traditional products and services. The Bank conducts
business through its main office located at 20 Davis Straits, Falmouth,
Massachusetts 02540, and its two branch locations in North and East Falmouth.
The telephone number is (508) 548-3500.
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FALMOUTH BANCORP, INC.
Date: February 23, 1998 By: /s/ SANTO P. PASQUALUCCI
--------------------- ------------------------------------------
Santo P. Pasqualucci
President and Chief Executive Officer
Date: February 23, 1998 By: /s/ GEORGE E. YOUNG, III
--------------------- ------------------------------------------
George E. Young, III
Vice-President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 359,484
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,265,946
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 21,925,909
<INVESTMENTS-CARRYING> 8,254,419
<INVESTMENTS-MARKET> 8,289,531
<LOANS> 59,565,174
<ALLOWANCE> 501,437
<TOTAL-ASSETS> 97,563,523
<DEPOSITS> 72,400,063
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,086,519
<LONG-TERM> 720,102
0
0
<COMMON> 14,547
<OTHER-SE> 23,342,292
<TOTAL-LIABILITIES-AND-EQUITY> 97,563,523
<INTEREST-LOAN> 1,130,735
<INTEREST-INVEST> 557,824
<INTEREST-OTHER> 48,128
<INTEREST-TOTAL> 1,736,687
<INTEREST-DEPOSIT> 710,036
<INTEREST-EXPENSE> 726,993
<INTEREST-INCOME-NET> 1,009,694
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 97,852
<EXPENSE-OTHER> 635,610
<INCOME-PRETAX> 536,274
<INCOME-PRE-EXTRAORDINARY> 536,274
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 348,274
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
<YIELD-ACTUAL> 7.39
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 501,437
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 501,437
<ALLOWANCE-DOMESTIC> 307,317
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 194,120
</TABLE>
