U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1998
or
[ ] Transition report under Section 13 or 15(d) of the Exchange
Act
For the transition period from -------- to ---------
Commission file number: 333-17317
MICHIGAN HERITAGE BANCORP, INC.
(Exact name of small business issuer as specified in its charter)
Michigan 38-3318018
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
21211 Haggerty Road, Novi, MI 48375-5306
(Address of principal executive offices)
248-380-6590
(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed
by Section 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: [ ]
At November 12, 1998, there were 1,265,000 shares of Common Stock of
the Issuer issued and outstanding.
Traditional Small Business Disclosure Format (check one):
Yes: [ ] No: [X]
<PAGE>
<PAGE> 1
Part I--FINANCIAL INFORMATION
Item 1. Financial Statements
Michigan Heritage Bancorp, Inc.
Consolidated Balance Sheets
September 30, 1998, December 31, 1997 and September 30, 1997
(Unaudited, except for December 31, 1997)
<TABLE>
<CAPTION>
(dollars in thousands)
September 30, 1998 December 31, 1997 September 30, 1997
------------------ ----------------- ------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks, noninterest bearing $ 494 $ 283 $ 780
Interest bearing deposits with banks 2,286 1,764 1,361
Federal funds sold 5,200 2,600 5,300
------- ------- -------
Cash and cash equivalents 7,980 4,647 7,441
U.S. Treasury and agency securities 13,958 8,565 11,479
Other securities and stock 1,237 5,236 737
------- ------- -------
Total investments 15,195 13,801 12,216
Loans, gross 63,120 32,605 20,296
Less: allowances for loan losses 847 467 265
------- ------- -------
Net loans 62,273 32,138 20,031
Leasehold improvements, net 29 35 38
Furniture and equipment, net 390 349 355
Operating lease equipment, net 2,598 0 0
------- ------- -------
Total fixed assets 3,017 384 393
Accrued interest receivable 687 309 134
Other assets 355 159 156
------- ------- -------
Total assets $89,507 $51,438 $40,371
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Total deposits $78,618 $40,728 $29,779
Total federal funds borrowed 0 0 0
Other liabilities 516 565 343
------- ------- -------
Total liabilities 79,134 41,293 30,122
Stockholders' equity
Preferred stock--no par value; 500,000
shares authorized, none issued 0 0 0
Common stock--no par value; 4,500,000
shares authorized, shares issued and
outstanding--1,265,000 shares effective
June 15, 1998, and 1,150,000 shares
prior to June 15, 1998 12,482 10,815 10,815
Retained earnings (deficit) (2,082) (670) (566)
Unrealized gain (loss) on securities
available for sale (27) 0 0
------- ------- -------
Total stockholders' equity 10,373 10,145 10,249
------- ------- -------
Total liabilities and stockholders' equity $89,507 $51,438 $40,371
====== ====== ======
Total loan loss reserve ratio 1.34% 1.43% 1.31%
Total loans to deposits ratio 80% 80% 68%
</TABLE>
<PAGE>
<PAGE> 2
Michigan Heritage Bancorp, Inc.
Consolidated Statement of Earnings
Three and Nine Month Periods Ended
September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- -------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING INCOME:
Interest income $1,739 $ 626 $4,213 $ 979
Interest expense 1,071 352 2,485 490
------ ----- ----- -----
Net interest income before
provision for loan losses 668 274 1,728 489
Less provision for loan losses 155 132 380 265
------ ----- ----- ----
Net interest income after
provision for loan losses 513 142 1,348 224
Other operating income:
Operating lease income 206 0 206 0
Other income 5 2 35 3
------ ----- ----- -----
Total other operating income 211 2 241 3
------ ----- ----- -----
Total operating income 724 144 1,589 227
OTHER OPERATING EXPENSE:
Salaries and employee benefits 229 165 619 369
Occupancy expense 25 21 57 53
Equipment expense 209 26 261 57
Data processing expense 16 6 34 18
Insurance expense 5 4 13 9
Advertising/promotion expense 39 30 108 89
Office supplies and printing expense 7 7 16 19
Professional fees 47 22 105 44
Organization amortization expense 6 6 19 13
Other expenses 35 27 100 54
------ ----- ----- ----
Total other operating expense 618 314 1,332 725
------ ----- ----- ----
Net operating income (loss) 106 (170) 257 (498)
Provision for federal income taxes 0 0 0 0
------ ----- ----- ----
Net income (loss) $106 $(170) $ 257 $ (498)
====== ===== ===== ====
Average primary number of shares
outstanding 1,265,000 1,265,000 1,265,000 983,956
Average diluted number of shares
outstanding 1,334,025 1,308,008 1,329,148 1,020,728
Net income (loss) per primary share $ 0.08 $ (0.13) $ 0.20 $ (0.51)
Net income (loss) per diluted share $ 0.08 $ (0.13) $ 0.19 $ (0.49)
</TABLE>
<PAGE>
<PAGE> 3
Michigan Heritage Bancorp, Inc.
Consolidated Statement of Cash Flows
Nine Month Periods Ended September 30, 1998
and 1997
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1998 1997
---- ----
OPERATING ACTIVITIES:
Net income/(loss) $ 257 $ (498)
Adjustments to reconcile net income/(loss)
to net cash provided in operating activities:
Discount accretion and premium amortization
of investment securities 97 (111)
Provision for loan losses 380 265
Depreciation 250 50
Amortization of organizational costs 19 13
Increase in other assets (593) (160)
Increase (decrease) in other liabilities (49) 287
------ ------
Net cash provided by operating activities 104 344
INVESTING ACTIVITIES:
Purchase of U.S. Treasury and agency securities (19,120) (15,312)
Proceeds from matured or called U.S. Treasury
and agency securities 13,600 3,944
Purchase of other securities -- (500)
Proceeds from other securities sold 4,000 --
Purchase of Federal Reserve Bank and other stock -- (237)
Purchase of leasehold improvements, furniture
and equipment (2,883) (410)
Increase in gross loans (30,515) (20,296)
-------- --------
Net cash used in investing activities (34,918) (32,811)
FINANCING ACTIVITIES:
Proceeds from stock offering -- 10,815
Increase in related party loans -- 10
Repayment of related party loans -- (265)
Increase in deposits 37,890 29,779
------- -------
Net cash provided by financing activities 37,890 40,339
------- -------
Increase in cash and cash equivalents 3,333 7,374
Cash and cash equivalents at beginning of year 4,647 67
------- -------
Cash and cash equivalents at end of period $ 7,980 $ 7,441
======= =======
<PAGE>
<PAGE> 4
Michigan Heritage Bancorp, Inc.
Consolidated Statement of Changes in Stockholders' Equity
December 31, 1996 to September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
(in thousands)
Unrealized
Loss on
Securities
Common Retained Available
Shares Stock Deficit for Sale Total
------ ------ -------- ---------- -----
<S> <C> <C> <C> <C> <C>
December 31, 1996 -- -- $ (68) -- $ (68)
Issuance of Common Stock, net of offering costs 1,150 $10,815 -- -- 10,815
Net loss -- -- (602) -- (602)
----- ------- ------ ---- -------
December 31, 1997 1,150 $10,815 $(670) $ -- $10,145
Net income -- -- 257 -- 257
Unrealized loss on securities available for sale -- -- -- (27) (27)
Stock dividend paid (Note 6) 115 1,668 (1,668) -- --
Rounding adjustment -- (1) (1) -- (2)
----- ------- ------ ---- -------
September 30, 1998 1,265 $12,482 $(2,082) $(27) $10,373
===== ====== ==== === ======
</TABLE>
Michigan Heritage Bancorp, Inc.
Consolidated Statement of Comprehensive Income
Three and Nine Month Periods Ended
September 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income (loss) $ 106 $ (170) $ 257 $ (498)
Other comprehensive income (loss):
Unrealized holding loss for
period, net of tax (20) -- (27) --
--- --- --- ---
Comprehensive income (loss) $ 86 $ (170) $ 230 $ (498)
=== === === ===
</TABLE>
<PAGE>
<PAGE> 5
Michigan Heritage Bancorp, Inc.
Notes to Financial Statements
September 30, 1998
(Unaudited)
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Michigan Heritage Bancorp, Inc. (the "Company") was
incorporated in the State of Michigan on September 22, 1989. The
Company was inactive from that time until its Articles of
Incorporation were amended on November 6, 1996, into its current
form. The Company is a bank holding company whose primary purpose is
to own and operate Michigan Heritage Bank (the "Bank") as the Bank's
sole stockholder. Organizational and other start-up costs were
funded with loans from organizers. Proceeds from the Company's
initial public offering were primarily used to capitalize the Bank,
which is located in Novi, Michigan. The Company completed an initial
public offering of common stock during the first quarter of 1997,
realizing a total of $10.9 million (after payment of underwriters'
commissions and offering expenses). The consolidated financial
statements of the Company include its only subsidiary, the Bank. The
quarter ended September 30, 1998, was the Bank's sixth full quarter
of operations and the third consecutive quarter in which the Bank
realized net income. All adjustments, which in the opinion of
management are necessary in order to ensure that the interim
unaudited financial statements are not misleading, have been
included.
Basis of Presentation: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates and assumptions.
Note 2 ORGANIZATION COSTS
Organization costs were capitalized. Such costs include
incorporation costs, legal and accounting fees, and other costs
relating to the organization of the Company. All capitalized
organization costs are to be fully amortized no later than
1999 due to changes in accounting principles. The Company has chosen
to adopt the change during the fourth quarter of 1998 which will
result in an additional $81,000 in amortization.
Note 3 NOTES PAYABLE-RELATED PARTIES
Non-interest bearing demand loans were made to the Company by its
organizers. The loans were repaid from the proceeds of the common
stock offering.
Note 4 LEASE COMMITMENT
The Bank entered into a 69-month triple net lease commitment for its
current location. Total building improvement costs were $40,000.
The monthly lease payment of $3,750 was abated for the first 10
months with the first payment due for August 1997.
<PAGE>
<PAGE> 6
Future minimum lease payments are as follows:
Lease Payments
(in thousands)
1998 $ 11
1999 45
2000 45
2001 45
2002 22
----
Total lease payments $168
====
Note 5 DEFERRED OFFERING COSTS
Costs related to the Company's initial public stock offering which
included underwriting, legal, accounting, and other fees were netted
against stockholders' equity. The following is a summary of the
costs associated with the initial public stock offering:
(in thousands)
Proceeds from stock offering $11,500
Underwriting fees (595)
Legal, accounting and other fees ( 90)
-------
Initial capital $10,815
=======
Note 6 STOCK DIVIDEND
On April 16, 1998, the Board of Directors of the Company declared a
10% stock dividend on the common stock of the Company. One
additional share of common stock was distributed June 15, 1998, for
each ten shares of common stock owned on April 30, 1998, the record
date for the stock dividend. Fractional shares were disregarded.
The number of shares issued and outstanding following the stock
dividend is now 1,265,000. Accordingly, $1,668,000 was transferred
from Accumulated Deficit to Common Stock.
<PAGE>
<PAGE> 7
Item 2. Management's Discussion and Analysis or Plan of Operation
(a) PLAN OF OPERATION
PRELIMINARY NOTE: The Company wishes to caution readers not to place
undue reliance on any "forward-looking statements" contained in the
following discussion, and advises readers that various factors,
including regional and national economic conditions, substantial
changes in levels of market interest rates, credit and other risks
of lending and investment activities and competitive and regulatory
factors, could affect the Company's financial performance and could
cause the Company's actual results for future periods to differ
materially from those anticipated or projected. The Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
ORGANIZATION
The Company was incorporated in 1989 as a Michigan corporation. The
Company was inactive from the time of its formation until November
1996. The Bank is organized as a Michigan banking corporation with
depository accounts insured by the Bank Insurance Fund of the Federal
Deposit Insurance Corporation. The Bank provides a range of
commercial and consumer banking services primarily in Oakland and
western Wayne Counties, including Novi, Farmington, Farmington Hills,
Livonia, Northville, and Northville Township. Those services reflect
the Bank's intended strategy of serving small to medium size
businesses and individual customers in its market area. The Bank's
lending activities focused initially on commercial equipment
financing, and, to a lesser extent commercial term loans to
businesses secured by the assets of the borrower. The Bank
originates loans primarily through third party referral sources such
as leasing companies and mortgage brokers, many of whom are known to
management. The Bank's retail strategy focuses on single-family
mortgage loans, home equity loans, and to a lesser extent, other
forms of consumer lending. The Bank is offering ATM cards and
competitive rates on various deposit products.
MARKET AREA
The Bank's main office is located along the rapidly developing
Haggerty Road corridor in the southeast corner of Novi, Michigan.
The Bank leases and has renovated a former bank branch building. The
communities that comprise the Bank's primary service area are Novi,
Farmington, Farmington Hills, Livonia, Northville and Northville
Township. Management believes these communities have an expanding
and diverse economic base, which includes a wide range of small to
medium-sized businesses engaged in manufacturing, high technology
research and development, computer services and retail. The Bank's
secondary service area is the remaining portions of Wayne and Oakland
Counties not included within the primary service area.
<PAGE>
<PAGE> 8
REASON FOR STARTING THE BANK
The liberalization in recent years of Michigan's branch banking laws,
together with the expansion of interstate banking, has led to
substantial consolidation of the banking industry in Michigan,
particularly in the Bank's market area. According to Sheshunoff
Information Services, Inc. since 1990, over 70 bank branches have
closed within the Bank's primary and secondary service areas. In
many cases, when these consolidations occurred, local boards of
directors were dissolved and local management relocated or in some
cases terminated. In the opinion of the Company's management, this
situation has created a favorable opportunity for a new bank with
local management and directors. Management of the Company believes
that the Bank can attract those customers who wish to conduct
business with a locally managed institution that demonstrates an
active interest in their business and personal affairs. The
Company's management believes that the Bank will be able to deliver
more timely responses to customer requests, provide customized
financial products and services, and offer the personal attention of
the Bank's senior officers.
BANK LINES OF BUSINESS
The Bank's core business activities include attracting deposits from
the general public and using such deposits, together with borrowings
and equity capital, to originate and purchase:
-- commercial equipment leases,
-- commercial real estate loans,
-- residential mortgage loans,
-- consumer installment loans, and
-- home equity loans.
The Bank's results of operations are dependent primarily upon net
interest income, which is the difference between interest income from
interest earning assets and interest expense on interest bearing
liabilities. Results of operations will also be positively
influenced by non-interest income such as fees related to loan sales
and loan servicing and service charges associated with customer
deposit accounts which includes a full array of demand deposit
accounts, money market demand accounts, NOW accounts, savings
accounts, individual retirement accounts, certificates of deposits,
and ATM cards.
The Bank's primary financial goals are to:
-- Increase assets at a rate consistent with growth in equity
capital;
-- Augment earnings through generation of fee income;
-- Establish and maintain a reputation for customer service;
-- Achieve a superior rate of return on capital;
-- Maintain a "well-capitalized" institution providing services to
its local community.
Cash Requirements
The Company's current cash projections indicate more than adequate
cash balances over the next 12 months. The Bank has
<PAGE>
<PAGE> 9
negotiated additional line of credit facilities with national lending
institutions to add funding capacity to its existing capital and
deposit base. Management has also established a network of banks
that is being used to sell or participate a portion of its loan
portfolio. These techniques allow the Bank to service its business
relationships, build its own loan portfolio, and generate fee and
servicing revenue.
As of September 30, 1998, the Company had $8.0 million in cash and
cash equivalents. In addition, all U.S. Treasury and agency
securities are available for sale and have an amortized value of
$14.0 million at quarter-end and mature or expect to be called at par
within eight months.
Other securities held for sale are primarily Federal Reserve Stock of
$0.2 million and $1.0 million principal amount of variable rate
corporate debt lower floaters guaranteed by Comerica Bank with market
values at par. The lower floaters can be put at par (i.e., sold) at
any time.
The Company is considering the desirability and feasibility of
raising additional capital through a second public offering of Common
Stock or through corporate debt. The proceeds would be contributed
to the Bank to support the capital ratios required as a result of
anticipated continued growth of the Bank's loan portfolio and
deposits. Since beginning operations, the Bank has experienced
higher than expected growth of both loans and deposits, which has
reduced the Bank's leverage capital ratio (i.e., tier 1 capital
divided by total assets) to 11.6%. While banks in general are
considered "adequately capitalized" with a 4.0% leverage capital
ratio, the Federal banking regulators have required that the Bank
maintain a leverage capital ratio of at least 9.0% during its "de
novo" status. The Company has not yet decided whether or when to
proceed with this capital raising effort, and discussions with
outside advisors are in the preliminary stages.
Product Research and Development
Product development over the next 12 months may involve marketing and
generating account applications on the Internet, mutual funds,
insurance, and other innovative deposit products. During the next
three months, the Bank plans to open its second banking office. This
branch office will be leased, with leasehold improvements of
approximately $80,000. Furniture and equipment purchased for the new
location is estimated to be approximately $40,000. The Company is
also in the early planning stages to relocate its headquarters and
open a third branch sometime in 1999. The Company does not
anticipate selling substantial equipment over the next 12 months.
Number of Employees
At September 30, 1998, the Company employed 16 people on a full-time
basis. Over the next 12 months the Bank expects to add approximately
nine full-time people.
Year 2000 Readiness
The Bank, being a new business, is not burdened with older systems to
update. The recently acquired systems are primarily Year 2000
("Y2K") compliant.
The cost to become fully Y2K compliant for both the Company and the
Bank is not material. In addition, the Bank is communicating with
both vendors and appropriate customers concerning the Y2K compliance
issue to help ensure their smooth transition into the next century.<PAGE>
<PAGE> 10
(b) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company experienced its third quarter of positive earnings, with
net income of $106,000 for the quarter ending September 30, 1998,
which is only the sixth full quarter of operations for the Company.
Total assets at the end of the quarter were $89.5 million, which is a
year-to-date increase of $38.1 million from the $51.4 million of
total assets at December 31, 1997. Total loans outstanding grew to
$63.1 million, which is a year-to-date increase of $30.5 million.
Loan growth was funded primarily by a $37.9 million increase in
deposits, resulting in total outstanding deposits of $78.6 million at
September 30, 1998.
The $106,000 net income for the quarter ending September 30, 1998 was
an increase of $276,000 over the same quarter last year. Net
interest income before allowances for loan losses increased $394,000,
to $668,000, primarily due to an increase in volume in earning
assets. The provision for loan losses increased $23,000 to $155,000.
Other operating income went up $209,000 due mostly to operating lease
income of $206,000 resulting from a $2.8 million operating lease
recorded during the third quarter of 1998. Other operating expense
went up $304,000. Salaries and employee benefits went up $64,000 due
to additional employees. Equipment expense increased $183,000 due to
operating lease equipment depreciation expense of $177,000.
Professional fees went up $25,000 due to additional independent
auditor, mortgage consulting, and operating lease broker fees.
On a year-to-date basis, net income was $257,000, an increase of
$755,000 from the loss last year of $498,000 for the comparable nine-
month period. Net interest income before allowances for loan losses
increased $1,239,000 due primarily to increased loan volume. Last
year at this time, the Company had only been operational for less
than seven months and had only $20.3 million in loans, compared to
$63.1 million in loans at September 30, 1998. Provisions for loan
losses increased $115,000 to $380,000, also due to increased loan
volume. Other operating income went up $238,000, primarily due to
$206,000 operating lease income and additional loan participation
fees, official check fees and letters of credit fee income. Other
operating expense increased $607,000, to $1,332,000. Salaries and
employee benefits went up $250,000 due to additional employees and a
full nine months of operation this year as compared to less than
seven months of full operations for the same comparable time last
year. Equipment expense increased $204,000 due primarily to
operating lease depreciation of $206,000. Professional fees went up
$61,000 due mostly to increases in independent auditor, mortgage
consulting, and operating lease broker fees.
There have been no loan charge-offs to date. The Company is taking a
conservative position in allocating 1.34% in loan loss reserves to
its total loan portfolio.
Net income per average primary share outstanding was $0.08 for the
quarter ended September 30, 1998, and $0.20 per average primary share
outstanding on a year-to-date basis. On a fully diluted average share
outstanding basis, net income was $0.08 per share for the quarter
ended September 30, 1998 and $0.19 per share year-to-date.
The categories of loans outstanding at September 30, 1998, in dollars
and as a percentage of total loans outstanding are as follows:
<PAGE>
<PAGE> 11
(dollars in thousands)
Percentage of
Loan Category Amount Total Loans
- ------------- ------- -------------
Commercial loans discounted $ 47,286 74.9%
Commercial loans direct 7,329 11.6%
Lines of credit 3,190 5.1%
Commercial real estate 1,321 2.1%
Mortgage, home equity and
Installment loans 3,994 6.3%
------ -----
Total Loans $ 63,120 100.0%
====== =====
At September 30, 1998, there were no non-accrual loans and only four
loans totaling $91,000 that were 30 to 59 days past due, which
represented only 0.1% of total loans. There were only two loans
totaling $13,000 60 to 89 days past due and there were no loans past
due 90 days or more. There is one $8,000 loan classified as
substandard. The loan is current and has been fully reserved for.
No actual losses are anticipated from past due loans in the
substandard loan.
PART II--OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Description
- ------- ------------
27 Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
<PAGE>
<PAGE> 12
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
MICHIGAN HERITAGE BANCORP, INC.
By: /S/ ANTHONY S. ALBANESE
Anthony S. Albanese
President and Chief Operating Officer
And: /S/ DARRYLE J. PARKER
Darryle J. Parker
Secretary, Treasurer, and
Chief Financial Officer
(Duly authorized officer)
DATED: November 12, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
27 Financial Data Schedule (EDGAR filing only)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,000
<INT-BEARING-DEPOSITS> 494
<FED-FUNDS-SOLD> 5,200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 15,195
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 63,120
<ALLOWANCE> 847
<TOTAL-ASSETS> 89,507
<DEPOSITS> 78,618
<SHORT-TERM> 0
<LIABILITIES-OTHER> 516
<LONG-TERM> 0
0
0
<COMMON> 12,482
<OTHER-SE> (2,109)
<TOTAL-LIABILITIES-AND-EQUITY> 89,507
<INTEREST-LOAN> 3,437
<INTEREST-INVEST> 776
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 4,213
<INTEREST-DEPOSIT> 2,485
<INTEREST-EXPENSE> 2,485
<INTEREST-INCOME-NET> 1,728
<LOAN-LOSSES> 380
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,332
<INCOME-PRETAX> 257
<INCOME-PRE-EXTRAORDINARY> 257
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.19
<YIELD-ACTUAL> 3.50
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 8
<ALLOWANCE-OPEN> 467
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 847
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 847
</TABLE>
