U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from ____ to ____.
Commission file number 0-22471
Luxemburg Bancshares, Inc.
(Exact name of small business issuer as specified in
its charter)
Wisconsin 39-1457904
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
630 Main Street, Luxemburg, Wisconsin 54217
(Address of principal executive offices)
(920) 845-2345
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months (or for such shorter period
that the registrant was required to file such reports),
and (2) has been subject to such filing requirements
for the past 90 days. Yes __X__ No _____
State the number of shares outstanding of each issuer's
classes of common equity, as of August 10, 1998:
243,501 shares were outstanding.
Transitional Small Business Disclosure Format (check
one): Yes _____ No __X__
<PAGE>
LUXEMBURG BANCSHARES, INC.
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets - June 30, 3
1998 and December 31, 1997
Consolidated Statements of Income - 4
Three and Six Months Ended June 30,
1998 and 1997
Consolidated Condensed Statements of 5
Changes in Stockholders' Equity - Six
Months Ended June 30, 1998 and 1997
Consolidated Statements of Cash Flow - 6
Six Months Ended June 30, 1998 and 1997
Notes to Consolidated Financial 7 - 8
Statements
Management's Discussion and Analysis 9 - 14
of Financial Condition and Results of
Operations
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a 15
Vote of Security Holders
Item 6 - Exhibits and Reports on Form 15
8-K
SIGNATURES 15
<PAGE>
PART I - FINANCIAL INFORMATION
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
June 30, 1998 and December 31, 1997
ASSETS
1998 1997
Cash and due from banks $2,284,635 $3,326,444
Interest-bearing deposits 478,676 639,264
Federal funds sold 5,001,000 1,167,000
Cash and cash equivalents 7,764,311 5,132,708
Investment securities available for 14,308,339 14,113,429
sale-Stated at fair value
Total loans 58,281,935 60,904,981
Allowance for credit losses (720,080) (677,101)
Net loans 57,561,855 60,227,880
Premises and equipment 1,656,539 1,711,350
Other investments at cost 275,050 253,050
Other assets 2,215,368 2,115,831
TOTAL ASSETS $83,781,462 $83,554,248
LIABILITIES AND STOCKHOLDERS' EQUITY
1998 1997
LIABILITIES:
Non-interest-bearing deposits $ 8,333,370 $ 9,103,744
Interest-bearing deposits 64,239,484 63,542,623
Total deposits 72,572,854 72,646,367
Short-term borrowings 371,407 640,002
Borrowed funds 605,919 632,828
Other liabilities
1,273,065 1,106,175
Total liabilities
74,823,245 75,025,372
STOCKHOLDERS' EQUITY:
Common stock- $1.00 par value:
Authorized - 2,400,000 shares, 270,500
Issued - 270,500 shares
Common stock- $.1667 par value:
Authorized - 300,000 shares, 45,083
Issued - 270,500 shares
Capital surplus 3,206,508 3,431,925
Retained earnings 5,723,087 5,293,023
Other comprehensive income - 102,472 103,195
Unrealized gain on investment
securities available for sale -
Net of tax
Less - 26,999 shares of treasury (344,350) (344,350)
common stock, at cost
Total stockholders' equity 8,958,217 8,528,876
TOTAL LIABILITIES AND STOCKHOLDERS' $83,781,462 $83,554,248
EQUITY
See accompanying notes to consolidated financial statements.
<PAGE>
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
Three Months Six Months Ended
Ended June 30, June 30,
1998 1997 1998 1997
INTEREST INCOME:
Interest and fees on loans $1,329,945 $1,302,161 $2,677,644 $2,540,032
Interest on investment
securities:
Taxable 163,892 182,773 338,273 354,178
Tax-exempt 50,706 30,292 95,789 59,822
Other interest and dividend 67,042 10,217 102,758 24,563
income
Total interest income 1,611,585 1,525,443 3,214,464 2,978,595
INTEREST EXPENSE:
Deposits 783,214 706,327 1,538,739 1,384,797
Short-term borrowings 2,901 18,383 5,934 26,961
Borrowed funds 10,936 8,395 22,137 13,521
Total interest expense 797,051 733,105 1,566,810 1,425,279
Net interest income 814,534 792,338 1,647,654 1,553,316
Provision for credit losses 37,500 30,000 75,000 60,000
Net interest income after 777,034 762,338 1,572,654 1,493,316
provision for credit losses
OTHER INCOME:
Service charges on deposit 50,814 46,971 93,488 92,370
accounts
Mortgage underwriting fees - 58,977 29,014 133,981 40,572
Secondary market
Loan servicing fee income 22,671 7,348 39,693 21,273
Other operating income 164,946 131,836 336,428 262,187
Total other income 297,408 215,169 603,590 416,402
OPERATING EXPENSES:
Salaries and related benefits 384,401 372,698 782,681 717,335
Net occupancy expense 38,930 41,071 83,339 84,611
Equipment rentals, 74,684 53,196 150,477 96,481
depreciation, and maintenance
Data processing 30,085 84,096 57,367 129,217
Other operating expenses 170,445 164,476 321,391 292,079
Total operating expenses 698,545 715,537 1,395,255 1,319,723
Income before provision for 375,897 261,970 780,989 589,995
income taxes
Provision for income taxes 113,159 73,260 236,480 172,775
Net income $ 262,738 $ 188,710 $ 544,509 $ 417,220
Basic earnings per common $1.08 $0.78 $2.24 $1.72
share
See accompanying notes to consolidated financial statements.
<PAGE>
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY - (UNAUDITED)
Six Months Ended June 30, 1998 and 1997
Six Months Ended Six Months Ended
June 30, 1998 June 30, 1997
Shares Equity Shares Equity
Total Total
Balance - Beginning of period 243,501 $8,528,876 242,736 $7,680,016
Comprehensive income:
Net income 544,509 417,220
Other comprehensive income (723) 11,738
- Change in net
unrealized gain/loss on
securities available for sale
Total comprehensive income 543,786 428,958
Dividends paid (114,445) (97,220)
Employee stock bonus 315 10,080
Balance - End of period 243,501 $8,958,217 243,051 $8,021,834
See accompanying notes to consolidated financial statements.
<PAGE>
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW - (UNAUDITED)
Six Months Ended June 30, 1998 and 1997
1998 1997
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income 544,509 417,220
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 154,783 96,701
Accretion of discounts on ( 16,602) (21,812)
securities
Amortization of premiums on 5,433 17,686
securities
Provision for credit losses 75,000 60,000
Employee stock bonus 10,080
Gain on sale of other real (164)
estate
Credit for deferred taxes (23,324) ( 31,222)
Change in other operating assets (140,124) (130,156)
Change in other operating 220,433 170,272
liabilities
Total adjustments 275,435 171,549
Net cash provided by operating 819,944 588,769
activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from maturities of 1,505,929 3,800,164
securities available for sale
Purchase of securities available (1,690,625) (4,117,287)
for sale
Net decrease (increase) in loans 2,591,025 (3,854,060)
Purchase of additional life (17,300) (17,300)
insurance
Proceeds from sale of other real 15,164
estate
Capital expenditures (87,072) (401,381)
Purchase of other investments (22,000) (1,400)
Net cash provided by (used in) 2,295,121 (4,591,264)
investing activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net increase (decrease) in (73,513) 2,962,977
deposits
Net increase (decrease) in short- (268,595) 187,199
term borrowings
Loan from FHLMC -0- 500,000
Principal payments on borrowed (26,909) (31,277)
funds
Dividends paid (114,445) (97,220)
Net cash provided by (used in) (483,462) 3,521,679
financing activities
Net increase (decrease) in cash and 2,631,603 (480,816)
cash equivalents
Cash and cash equivalents at 5,132,708 3,732,501
beginning
Cash and cash equivalents at end $7,764,311 $3,251,685
Supplemental information:
Cash paid during the period for:
Interest $1,484,239 $1,259,676
Income taxes 254,015 187,968
The Company entered into capital leases
of $73,931 in 1997 for the purchase of
computer equipment.
See accompanying notes to consolidated financial statements
<PAGE>
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
(UNAUDITED)
The consolidated financial statements for interim
periods are unaudited; however, in the opinion of the
management of Luxemburg Bancshares, Inc. ("Company"),
all adjustments (consisting of only normal recurring
adjustments) necessary for a fair presentation have
been included. Refer to the Notes to Consolidated
Financial Statements which appear in the Company's Form
10-KSB for the Fiscal Year ended December 31, 1997 for
the Company's accounting policies which are pertinent
to these financial statements.
NOTE 1: BASIS OF PRESENTATION
The consolidated financial statements of Company, a
bank holding company, include the accounts of Company
and Subsidiaries - Bank of Luxemburg, Luxemburg
Investment Corporation, and Area Development
Corporation. All significant intercompany balances and
transactions have been eliminated in consolidation.
Goodwill acquired in a business acquisition is being
amortized on a straight-line basis over five years.
The accompanying financial statements have been
prepared in accordance with the instructions for Form
10-QSB and, therefore, do not include all information
and footnotes necessary to be in conformity with
generally accepted accounting principles.
For purposes of reporting cash flows, the Company
considers cash on hand, interest-bearing and non-
interest bearing deposits in banks and federal funds
sold as cash and cash equivalents.
Earnings per common share are based upon the weighted
average number of common shares outstanding. The
weighted average number of shares outstanding was
243,501 in 1998 and 243,051 in 1997. The basic and
diluted earnings per share are the same for 1998 and
1997.
NOTE 2: FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET
RISK
The Bank of Luxemburg's ("Bank's") financial statements
do not reflect various commitments and contingent
liabilities which arise in the normal course of
business and which involve elements of credit risk,
interest rate risk, and liquidity risk. These
commitments and contingent liabilities are commitments
to extend credit and standby letters of credit. A
summary of the Bank's commitments and contingent
liabilities at each balance sheet date is as follows:
Notional Amount
June 30, 1998 December 31, 1997
Commitments to extend credit $4,271,000 $3,457,000
Credit card arrangements 603,000 590,000
Standby letters of credit 205,000 100,000
Commitments to extend credit and credit card
arrangements are agreements to lend to a customer as
long as there is no violation of any condition
established in the contract. Commitments generally
have fixed expiration dates or other termination
clauses and may require payment of a fee. A portion of
the commitments are expected to be drawn upon, thus
representing future cash requirements. The Bank
evaluates each customer's creditworthiness on a case-by-
case basis. The amount of collateral obtained upon
extension of credit is based on management's credit
evaluation of the counterparty. Collateral held varies
but may include accounts receivable; inventory;
property, plant, and equipment; real estate; and stocks
and bonds. Management does not anticipate any material
losses as a result of these commitments.
Standby letters of credit are conditional commitments
issued by the Bank to guarantee the performance of a
customer to a third party. The credit risk involved in
issuing letters of credit is essentially the same as
that involved in extending loan facilities to
customers. The Bank holds collateral supporting those
commitments for which collateral is deemed necessary.
Because these instruments have fixed maturity dates and
because many of them expire without being drawn upon,
they do not generally present any significant liquidity
risk to the Bank. Management does not anticipate any
material losses as a result of these letters of credit.
<PAGE>
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -
(UNAUDITED)
NOTE 3: ACCOUNTING CHANGES
In June 1997, the FASB issued SFAS No. 131,
"Disclosures About Segments of an Enterprises and
Related Information." This statement establishes
standards for the way that public business enterprises
report information about operating segments in annual
financial statements and requires that those
enterprises report selected information about operating
segments in interim financial reports issued to
stockholders. This statement supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business
enterprise," but retains the requirement to report
information about major customers. It also amends SFAS
No. 94, "Consolidation of All Majority-Owned
Subsidiaries," to remove the special disclosure
requirements for previously unconsolidated
subsidiaries. The statement is effective for fiscal
years beginning after December 15, 1997. In the initial
year of application, comparative information for
earlier years is to be restated. This statement need
not be applied to interim financial statements in the
initial year of application. The statement is not
expected to have an effect on the financial position or
operating results of the Company, but may require
additional disclosures in the consolidated financial
statements.
In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting
Standards ("FAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement
requires that all derivative financial instruments be
recognized as either assets or liabilities in the
consolidated balance sheet. Derivative financial
instruments not designated as hedges will be measured
at fair value with changes in fair value being
recognized in earnings in the period of change. If a
derivative is designated as a hedge, the accounting for
changes in fair value will depend on the specific
exposure being hedged. This statement is effective for
fiscal years beginning after June 15, 1999. Management,
at this time, cannot determine the effect the adoption
of this statement may have on the financial statements
of the Company, as the effect is dependent on the
amount and nature of derivatives and hedges held at the
time of adoption of the statement.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LUXEMBURG BANCSHARES, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Net Earnings 262,738 188,710 544,509 417,220
Average Consolidated
Balance Sheet Items:
Loans 56,826,343 56,029,822 57,280,629 55,287,700
Taxable Investment 10,043,996 11,754,898 10,338,974 11,716,639
Securities
Fed Funds Sold 4,242,374 149,590 3,152,346 281,617
Municipal Loans & 5,328,887 4,038,993 5,295,503 3,961,071
Investments
Other Earning Assets 687,294 580,812 616,805 618,087
Total Earning 77,128,894 72,554,115 76,684,257 71,865,114
Assets
Total Assets 82,923,315 78,073,540 82,401,483 77,159,052
Deposits 72,863,043 68,988,195 72,495,066 68,197,843
Shareholders' Equity 8,898,929 8,036,694 8,814,622 7,938,566
Key Ratios:
Average Equity to 10.73% 10.29% 10.70% 10.29%
Average Total Assets
Return on Average 1.27% .97% 1.32% 1.08%
Total Assets
Return on Average 11.81% 9.39% 12.35% 10.51%
Equity
Net Interest Margin 4.24% 4.38% 4.33% 4.38%
NET INTEREST INCOME
Net interest income, the principle source of earnings,
is the amount by which interest generated by earning
assets exceeds the interest costs of liabilities
obtained to fund them. As shown below, net interest
income has increased $22,196 or 2.80% to $814,534 for
the three months ended June 30, 1998, from $792,338 for
the three months ended June 30, 1997. The increase in
net interest income reflects a narrowing of the
Company's net interest margin due to a slackening of
loan demand, the investment of excess funds in fed
funds sold (which carry a lower interest rate compared
to loans) and an increase in the rates paid on the
banks certificates of deposit.
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Interest Income $1,611,585 $1,525,443 $3,214,464 $2,978,595
Interest Expense 797,051 733,105 1,566,810 1,425,279
Net Interest Income $ 814,534 $ 792,338 $1,647,654 $1,553,316
Net Interest Margin 4.24% 4.38% 4.33% 4.38%
RATE/VOLUME ANALYSIS
The impact of changes in volume and interest rates on
net interest income for the three and six months ended
June 30, 1998 is illustrated in the following table:
Three Months Ended June 30, 1998 Compared to Three
Months Ended June 30, 1997.
Increase (Decrease) in Net Interest Income
Net Change Due To Rate Due To Volume
Interest Income $ 86,142 $ 22,320 $ 63,822
Interest Expense 63,946 18,801 45,145
Net Interest Income $ 22,196 $ 3,519 $ 18,677
<PAGE>
Six Months Ended June 30, 1998 Compared to Six Months
Ended June 30, 1997.
Increase (Decrease) in Net Interest Income
Net Change Due To Rate Due To Volume
Interest Income $ 235,869 $ 78,513 $ 157,356
Interest Expense 141,531 47,881 93,650
Net Interest Income $ 94,338 $ 30,632 $ 63,706
As previously discussed, for the three months ended
June 30, 1998 compared to the three months ended June
30, 1997, the Company invested additional funds
obtained from the issuance of certificates of deposit
in fed funds sold at a negative spread. This caused the
average rate on earning assets to decrease to 8.38 %
for the three months ended June 30, 1998 compared to
8.43 % for the three months ended June 30, 1997. The
average rate on earning assets for the six months ended
June 30, 1998 was 8.45 % compared to 8.36 % for the six
months ended June 30, 1997. Also, for the six months
ended June 30, 1998 average loans increased 3.6 % to
$57,280,629 compared to $55,287,700 for the six months
ended June 30, 1997. For the three months ended June
30, 1998 average loans only increased 1.4% compared to
the three months ended June 30, 1997. This larger
percentage growth in loans and an increase in the
average yield on taxable investments from 6.10 % for
the six months ended June 30, 1997 to 6.60% for the six
months ended June 30, 1998 partially offset the
increased interest cost due to the 10.7 % growth in
other time deposits for the same period. Those factors
also resulted in a larger percentage increase in net
interest margin (6.07%) for the six months ended June
30, 1998 compared to the increase for the three months
ended June 30, 1998 ( 2.80%).
OPERATING RESULTS
Net income for the three months ended June 30, 1998,
increased $74,028 or 39.2% to $262,738 from $188,710
for the three months ended June 30, 1997. The increase
in net interest income is $22,196 for the three months
ended June 30, 1998, compared to the three months ended
June 30, 1997, and is discussed in "Net Interest
Income" and "Rate/Volume Analysis" elsewhere in this
report. Mortgage underwriting fees - Secondary market
increased $29,963 or 103.27% to $58,977 for the three
months ended June 30, 1998, compared to $29,014 for the
three months ended June 30, 1997. This increase is
primarily due to increased volume as for the three
months ended June 30, 1998, the Company originated
$3,267,500 of loans for the secondary market compared
to $849,000 for the three months ended June 30, 1997.
Other operating income increased $33,110 or 25.11% for
the three months ended June 30, 1998 compared to the
three months ended June 30, 1997. The main reason for
this increase was increased sales of alternative
investment products by the Company's Financial Resource
Center (FRC). Commission income for the FRC increased
$37,498 or 60.61% to $99,363 for the three months ended
June 30, 1998 compared to $61,865 for the three months
ended June 30, 1997.
Operating expenses for the three months ended June 30,
1998 decreased $16,992 or 2.4% to $698,545 compared to
$715,537 for the three months ended June 30, 1997.
Equipment rentals, depreciation, and maintenance for
the three months ended June 30, 1998 increased $21,488
or 40.39% to $74,684 compared to $53,196 for the three
months ended June 30, 1997. Included in this total is
equipment depreciation which increased $21,988 or 59.7%
to 58,800 for the three months ended June 30, 1998
compared to $36,812 for the three months ended June 30,
1997; This increase is due primarily to the purchase of
the banks in-house computer system in May, 1997. Data
Processing expense decreased $54,011 or 64.2% from
$84,096 for the three months ended June 30, 1997 to
$30,085 for the three months ended June 30, 1998.
Expenses in 1997 included deconversion costs for
converting the bank's data to it's in-house computer
system and data processing costs paid to it's service
bureau which were partially replaced by additional
equipment depreciation in 1998.
Net income for the six months ended June 30, 1998,
increased $127,289 or 30.5% to $544,509 from $417,220
for the six months ended June 30, 1997. The increase in
net interest income is $94,338 for the six months ended
June 30, 1998, compared to the six months ended June
30, 1997, and is discussed in "Net Interest Income" and
"Rate/Volume Analysis" elsewhere in this report.
Mortgage underwriting fees - Secondary market increased
$93,409 or 230.23% to $133,981 for the six months ended
June 30, 1998, compared to $40,572 for the six months
ended June 30, 1997. This increase is primarily due to
increased volume as for the six months ended June 30,
1998, the Company originated $8,487,700 of loans for
the secondary market compared to $1,398,000 for the six
months ended June 30, 1997. Other operating income
increased $74,241 or 28.32% for the six months ended
June 30, 1998 compared to the six months ended June 30,
1997. The main reason for this increase was increased
sales of alternative investment products by the
Company's Financial Resource Center (FRC). Commission
income for the FRC increased $65,508 or 50.48% to
$195,271 for the six months ended June 30, 1998
compared to $129,763 for the six months ended June 30,
1997.
<PAGE>
Operating expenses for the six months ended June 30,
1998 increased $75,532 or 5.7% to $1,395,255 compared
to $1,319,723 for the six months ended June 30, 1997.
Salaries and related benefits increased $65,346 or 9.1%
to $782,681 for the six months ended June 30, 1998
compared to $717,335 for the six months ended June 30,
1997. The increase is due to inflationary increases and
higher costs for employee benefit programs. Equipment
rentals, depreciation, and maintenance for the six
months ended June 30, 1998 increased $53,996 or 55.97%
to $150,477 compared to $96,481 for the six months
ended June 30, 1997. Included in this total is
equipment depreciation which increased $54,235 or 85.9%
to $117,350 for the six months ended June 30, 1998
compared to $63,115 for the six months ended June 30,
1997; This increase is due primarily to the purchase of
the banks in-house computer system in May, 1997. Data
Processing expense decreased $71,850 or 55.6% from
$129,217 for the six months ended June 30, 1997 to
$57,367 for the six months ended June 30, 1998.
Expenses in 1997 included deconversion costs for
converting the bank's data to it's in-house computer
system and data processing costs paid to it's service
bureau which were partially replaced by additional
equipment depreciation in 1998.
Year 2000 Risks. The Company is exposed to
future uncertainty, potential future reduction in
earnings, and future losses, including litigation, due
to business interruption or errors, if its computer
systems are not modified to ensure that dates after
December 31, 1999 are not misrepresented by those
systems. This eventuality is commonly referred to as
the Year 2000 problem.
The Bank uses computer-related technologies and
software throughout its business that will be affected
by the date change in the year 2000. The Bank's
directors, senior management and staff are aware of
these Year 2000 issues and have appointed a technology
committee to study and direct the project to bring all
of the computer-related systems into Year 2000
compliance during 1998 and 1999. The technology
committee is reviewing both Information Technology
systems and non-Information Technology Systems
including the bank's telephone systems, HVAC systems
and Security equipment. In accordance with the
guidelines of the FDIC, the technology committee is
addressing the issue using the following phases :
1) Awareness
2) Assessment
3) Renovation
4) Validation
5) Implementation
The Bank has established a Year 2000 plan which
established December 31, 1998 as the completion date
for all renovation and testing of the computer hardware
and software. The Company has contracted with Jack
Henry & Associates for proxy or group testing of it's
major computer system which is used to maintain
customer accounts and bank accounting records. In
accordance with the guidelines established by the FDIC
a written contingency plan has been approved by the
Board of Directors.
The Bank has recently converted it's main data
processing system. The vendor has provided the Bank
with a copy of its Year 2000 project plan and stated
that the software is Year 2000 compliant. The Bank is
in the process of obtaining similar information and
commitments from the Bank's other vendors. The Bank is
acting upon the belief and understanding that all
federal agencies are actively managing the Year 2000
problems which are inherent in the global banking and
payments system.
The loan and deposit customers identified as having
potential Year 2000 risks have been surveyed by the
Bank officers to determine the effect the Year 2000
problems may affect their business and the preparedness
of the companies affected. With most of the surveys
returned, the indication is that the companies with
potential Year 2000 risk, have established procedures
to address and implement changes necessary to mitigate
the Year 2000 problems.
The Bank has substantially completed the assessment
phase and has tentatively estimated total costs of
dealing with the Year 2000 problem at $50,000. The
Company had not incurred any out of pocket costs for
Y2K renovation as of June 30, 1998. These costs, when
incurred, will be capitalized or expensed by the
Company, as appropriate. Costs expensed will reduce the
Company's future reported earnings.
ALLOWANCE FOR LOAN LOSSES
The amount charged to the provision for loan losses by
the Bank is based on management's evaluation as to the
amounts required to maintain an allowance adequate to
provide for potential losses inherent in the loan
portfolio. The level of this allowance is dependent
upon the total amount of past due and non-performing
loans, general economic conditions and management's
assessment of potential losses based upon internal
credit evaluations of the loan portfolio and particular
loans. The Bank's credit customers are subject to
potential losses as a result of Year 2000 exposure in
their own computer systems as well as the computer
systems of their suppliers and customers. The Bank is
working with those customers that may be significantly
affected by the Year 2000 exposure. The exposure, if
not adequately addressed, will be taken into account in
assessing the loss potential, if any, associated with
each credit relationship. Loans are entirely to
borrowers in Northeast Wisconsin.
<PAGE>
The Bank generally places loans on non-accrual status
when the loan is past due as to the payment of interest
and/or principal in excess of 90 days. The bank also
places loans on a non-accrual status when it deems the
collection of such interest unlikely. Loans are
returned to full accrual status when the loan is
brought current according to all terms of the loan
agreement, all past due principal and interest is paid
and the bank deems its collateral position adequate to
warrant a return to accrual status.
At June 30, 1998 the Company had $44,000 of loans past
due 90 days or more that were still accruing interest.
At June 30, 1997 the Company did not have any loans
past due 90 days or more that were still accruing
interest. At June 30, 1998 and 1997 the Company did not
have any loans that meet the definition of "Troubled
Debt Restructuring" contained in SFAS No. 15. In
addition, there were no loans considered to be impaired
in accordance with the requirements of SFAS No. 114.
The Bank had $217,000 of nonaccrual loans at June 30,
1998 and $329,000 of nonaccrual loans at June 30, 1997.
During the three months ended June 30, 1998, $37,500
was charged to the provision for loan losses compared
to $30,000 for the three months ended June 30, 1997. At
June 30, 1998 the allowance was $720,000 or 1.24% of
total loans. This compares to an allowance of $702,000
or 1.19% of total loans as of June 30, 1997. For the
three months ended June 30, 1998 the Bank had net
charge-offs of $21,000 compared to net charge-offs of
$13,000 for the three months ended June 30, 1997.
The following table summarizes loan charge-offs and
recoveries by type of loan for the three months ended
June 30, 1998 and 1997:
Loan Type June 30, 1998 June 30, 1997
Charge-Off Recovery Charge-Off Recovery
Real Estate $ 0 $ 0 $ 0 $ 0
Commercial and 13,000 5,000 0 3,000
Industrial
Agricultural 0 0 0 0
Consumer 13,000 0 19,000 3,000
TOTALS $ 26,000 $ 5,000 $ 19,000 $ 6,000
The following table summarizes loan charge-offs and
recoveries by type of loan for the six months ended
June 30, 1998 and 1997:
Loan Type June 30, 1998 June 30, 1997
Charge-Off Recovery Charge-off Recovery
Real Estate $ 0 $ 0 $ 0 $ 0
Commercial and 13,000 5,000 0 3,000
Industrial
Agricultural 0 0 0 12,000
Consumer 31,000 7,000 31,000 5,000
TOTALS $ 44,000 $ 12,000 $ 31,000 $ 20,000
<PAGE>
The Bank has allocated its allowance for credit losses
at the end of each period presented as follows:
June 30, 1998 June 30, 1997
% of % of
loans loans
Balance at End of to to
Period Applicable to: total total
Amount Loans Amount Loans
Commercial and $ 3,000 49% $ 32,000 46%
agricultural
Real Estate- 5% 5%
construction
Real Estate-mortgage 34% 37%
Consumer 34,000 12% 15,000 12%
Total Domestic 37,000 100% 47,000 100%
Unallocated 683,000 655,000
TOTALS $ 720,000 100% $ 702,000 100%
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Company must maintain an adequate liquidity
position in order to respond to the short-term demand
for funds caused by withdrawals from deposit accounts,
extensions of credit and for the payment of operating
expenses. Maintaining this position of adequate
liquidity is accomplished through the management of a
combination of liquid assets; those which can be
converted into cash and access to additional sources of
funds. Primary liquid assets of the Company are cash
and due from banks, federal funds sold, investments
held as "available for sale" and maturing loans.
Federal funds purchased and loans from the Federal Home
Loan Bank system represent the Company's primary source
of immediate liquidity and were maintained at a level
to meet immediate needs. Federal Funds Sold averaged
approximately $4,242,000 and $150,000 for the three
months ended June 30, 1998 and 1997, respectively.
Maturities in the Company's loan and investment
portfolios are monitored regularly to avoid matching
short-term deposits with long-term loans and
investments. Other assets and liabilities are also
monitored to provide the proper balance between
liquidity, safety, and profitability. This monitoring
process must be continuous due to the constant flow of
cash that is inherent in a financial institution.
The Company actively manages its interest rate
sensitive assets and liabilities to reduce the impact
of interest rate fluctuations. In addition, the Bank
monitors the interest rates paid on Certificates of
Deposit as advertised by its competitors and strives to
pay competitive interest rates to retain and attract
Certificates of Deposit. Should competitive pressures
dictate, the bank may have to increase rates paid to
retain the Certificates of the Deposit that mature in
the next year and any increase in interest rates paid
on Certificates of Deposit may reduce future Company
Earnings. The Bank also monitors the assets and
liabilities that reprice each month to determine the
impact on future earnings from anticipated repricings.
At June 30, 1998, the Company's rate sensitive assets
exceed rate sensitive liabilities due within one year
by $7,251,000.
As part of managing liquidity, the Company monitors its
loan to deposit ratio on a daily basis. At June 30,
1998 the ratio was 80.3% which is within the Company's
acceptable range.
The Company experienced an increase in cash and cash
equivalents, its primary source of liquidity, of
$2,631,603 for the six months ended June 30, 1998. The
primary source of cash flow for the six months ended
June 30, 1998 was cash provided by operating activities
of $819,944 and a decrease in loans of $2,591,025. Cash
outflow for the six months ended June 30, 1998
primarily consisted of the following: Net security
purchases of $184,696, a decrease in deposits of
$73,513, a reduction in short-term borrowings of
$268,595, capital expenditures of $87,072 and dividends
paid of $114,445. Even though the Company experienced a
decrease in deposits for the first two quarters of
1998, the Company's management believes its liquidity
sources are adequate to meet its operating needs and
does not know of any trends, events or uncertainties that
may result in a significant adverse effect on the Company's
operations or liquidity position. In addition, at June
30, 1998, the company had Fed Funds Sold of $5,001,000
to meet the Company's short-term liquidity needs.
<PAGE>
The following table illustrates the projected
maturities and the repricing mechanisms of the major
asset/liability categories of the Company as of June
30, 1998, based on certain assumptions. No prepayment
rate assumptions have been made for the loan portfolio.
Maturities and repricing dates for investments have
been projected by applying the assumptions set forth
below to contractual maturities and repricing dates.
1 Year 1 - 5 5 - 10 After 10
or Less Years Years Years
Interest Earning
Assets:
Fed Funds Sold $ 5,001,000
Investment $ 951,000 $ 2,257,000 $5,728,000 $5,372,000
Securities
Loans
Variable Rate $ 7,888,000
Real Estate- $ 2,486,000 $ 576,000
Construction
Real Estate- $ 8,661,000 $ 4,643,000 $ 119,000 $ 327,000
Other
Commercial and $12,836,000 $ 5,070,000 $ 460,000 $ 161,000
Industrial
Agricultural $ 4,901,000 $ 590,000 $ 11,000 $ 212,000
Consumer $ 4,294,000 $ 5,037,000 $ 10,000
Other $ 754,000 -0- -0- -0-
Total Interest $47,772,000 $ 18,173,000 $ 6,328,000 $6,072,000
Earning Assets
Interest Bearing
Liabilities:
Interest Bearing $4,371,000
Demand
Savings Deposits $ 4,153,000 $9,806,000
Money Market $ 1,154,000 $2,692,000
Accounts
Certificates of $27,123,000 $ 6,883,000
Deposit
Jumbo CD's $ 2,634,000 $ 714,000
IRA's $ 4,529,000 $ 181,000
Other $ 928,000 $ 49,000 -0- -0-
Total Interest $40,521,000 $ 7,827,000 -0- $16,869,000
Bearing Liabilities
Interest Sensitivity $ 7,251,000 $10,346,000 $ 6,328,000 ($10,797,000)
Gap per Period
Cumulative Interest $ 7,251,000 $17,597,000 $23,925,000 $13,128,000
Sensitivity Gap
Interest Sensitivity 9.3% 13.2% 8.1% (13.8%)
Gap as a Percentage
of Earning Assets
Cumulative 9.3% 22.5% 30.6% 16.8%
Sensitivity Gap as a
Percentage of Earning
Assets
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders
The annual meeting of Luxemburg Bancshares, Inc.
was held on May 15, 1998. The following eight directors
were elected: Richard Dougherty, James Jadin, Ronald Ledvina,
Willard Marchant, Donald Pritzl, Thomas Rueckl, John Slatky and
Irvin Vincent. Each director received 172,491 shares for, none
against and 3070 shares abstained from voting. As detailed in the
Company's Definitive Proxy Statement, a proposal to amend and
restate the Company's Articles of Incorporation was voted on as
follows: 173,763 shares for, 344 shares against and 1,454 shares
abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3 Amended and Restated Articles of
Incorporation of the Company
27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter ended June 30, 1998, the
registrant did not file any reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto
duly authorized.
LUXEMBURG BANCSHARES, INC.
(Registrant)
/s/ John A. Slatky /s/ Thomas L. Lepinski
- ---------------------- -----------------------------
John A. Slatky, Thomas L. Lepinski, C. P. A.
President and Chief Treasurer
Executive Officer (Principal Accounting Officer)
Date August 13, 1998 Date August 13, 1998
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
LUXEMBURG BANCSHARES, INC.
Luxemburg Bancshares, Inc. (the "Corporation"), a
corporation organized under Chapter 180 of the
Wisconsin Statutes (the "WBCL"), hereby adopts the
following Amended and Restated Articles of
Incorporation, which supersede and take the place of
the Corporation's existing Articles of Incorporation
and any amendments thereto.
ARTICLE I
Name
The name of the Corporation is Luxemburg
Bancshares, Inc.
ARTICLE II
Duration
The period of existence of the Corporation shall
be perpetual.
ARTICLE III
Purposes
The purposes for which the Corporation is
organized are to engage in any lawful activity within
the purposes for which a Corporation may be organized
under the WBCL.
ARTICLE IV
Capital Stock
The aggregate number of shares which the
Corporation shall have the authority to issue, the
designation of each class of shares, the authorized
number of shares of each class and the par value
thereof per share shall be as follows:
Designation Par Value Authorized
Class Per Share Number
of Shares
Common Stock $ 1.00 2,400,000
Preferred Stock $ .01 400,000
The preferences, limitations and relative rights of
shares of each class of stock shall be as follows:
A. Common Stock.
(1) Voting. The shares of stock issued
under this class shall be entitled to one vote for each
share of stock issued and outstanding. Except as
provided by law and except as may be provided with
respect to Preferred Stock in accordance with Paragraph
(1) of Section B below, only the holders of shares of
Common Stock shall be entitled to vote for the election
of directors of the Corporation and for all other
corporate purposes. Except as otherwise provided by
law, upon any such vote, each holder of Common Stock
shall be entitled to one vote for each share of Common
Stock held of record by such shareholder.
(2) Dividends. Subject to the provisions of
Paragraph (4) of Section B, below, the holders of
Common Stock shall be entitled to receive such
dividends in accordance with the terms as may be
declared thereon from time to time by the Board of
Directors, in its discretion, out of any funds of the
Corporation at the time legally available for payment
of dividends on Common Stock.
(3) Liquidation. In the event of the
voluntary or involuntary dissolution, liquidation or
winding up of the Corporation, after there have been
paid to or set aside for the holders of shares of
Preferred Stock the full preferential amounts to which
they are entitled as provided in Paragraph (5) of
Section B below, the holders of outstanding shares of
Common Stock shall be entitled to share ratably,
according to the number of shares held by each, in the
remaining assets of the Corporation available for
distribution.
B. Preferred Stock.
(1) Series and Variations Between Series.
The Preferred stock may from time to time as
hereinafter provided be divided into and issued in one
or more series, and the Board of Directors is hereby
expressly authorized to establish one or more series,
to fix and determine the variations as among series and
to fix and determine, prior to the issuance of any
shares of a particular series, the following
designations, terms, limitations and relative rights
and preferences of such series:
(a) The designations of such series and
the number of shares which shall constitute such
series, which number may at any time, or from time to
time, be increased or decreased (but not below the
number of shares thereof then outstanding) by the Board
of Directors unless the Board of Directors shall have
otherwise provided in establishing such series;
(b) Whether and to what extent the
shares of that series shall have voting rights, in
addition to the voting rights provided by law, which
might include the right to elect a specified number of
directors in any case or if dividends on such series
were not paid for a specified period of time;
(c) The yearly rate of dividends, if
any, on the shares of such series, the dates in each
year upon which such dividend shall be payable and the
date or dates from which any such cumulative dividend
shall be cumulative;
(d) The amount per share payable on the
shares of such series in the event of the voluntary or
involuntary liquidation, dissolution or winding up of
the Corporation;
(e) The terms, if any, on which the
shares of such series shall be redeemable, and, if
redeemable, the amount per share payable thereon in the
case of the redemption thereof (which amount may vary
for (i) shares redeemed on different dates; and (ii)
shares redeemed through the operation of a sinking
fund, if any, applicable to such shares, from the
amount payable with respect to shares otherwise
redeemed);
(f) The extent to and manner in which a
sinking fund, if any, shall be applied to the
redemption or purchase of the shares of such series,
and the terms and provisions relative to the operation
of such fund;
(g) The terms, if any, on which the
shares of such series shall be convertible into shares
of any other class or of any other series of the same
or any other class and, if so convertible, the price or
prices or the rate or rates of conversion, including
the method, if any, for adjustments of such prices or
rates, and any other terms and conditions applicable
thereto; and
(h) Such other terms, limitations and
relative rights and preferences, if any, of such series
as the Board of Directors may lawfully fix and
determine and as shall not be inconsistent with the law
of the State of Wisconsin or these Articles of
Incorporation.
(2) Redemption Right. Shares of Preferred
Stock may be issued which are redeemable by the
Corporation at the price determined by the Board of
Directors for shares of each series as provided in
Subparagraph (e) of Paragraph (1) of this Section B,
above.
(3) Conversion of Preferred Stock. Shares
of Preferred Stock may be issued which are convertible
into shares of Common Stock or shares of any other
series of Preferred Stock on the terms and conditions
determined by the Board of Directors for shares of each
series as provided in Subparagraph (g) or Paragraph (1)
of this Section B, above.
(4) Dividends. Shares of Preferred Stock
may be issued which entitle the holders thereof to
cumulative, noncumulative or partially cumulative
dividends. The holders of Preferred Stock shall be
entitled to receive, when, as and if declared by the
Board of Directors, out of funds legally available
therefor, dividends at the annual rate fixed by the
Board of Directors with respect to each series of
shares and no more. Such dividends shall be payable on
such dates and in respect of such periods in such year
as may be fixed by the Board of Directors to the
holders of record thereof on such date as may be
determined by the Board of Directors. Such dividends
shall be paid or declared and set apart for payment for
each dividend period before any dividend (other than a
dividend payable solely in Common Stock) for the same
period shall be paid upon or set apart for payment on
the Common Stock, and, if dividends on the Preferred
Stock shall be cumulative or partially cumulative, all
unpaid dividends thereon for any past dividend period
shall be fully paid or declared and set apart for
payment, but without interest, before any dividend
(other than a dividend payable solely in Common Stock)
shall be paid upon or set apart for payment on the
Common Stock. The holders of Preferred Stock shall
not, however, be entitled to participate in any other
or additional earnings or profits of the Corporation,
except for such premiums, if any, as may be payable in
case of redemption, liquidation, dissolution or winding
up.
(5) Liquidation. In the event of
liquidation, dissolution or winding up (whether
voluntary or involuntary) of the Corporation, the
holders of shares of Preferred Stock shall be entitled
to be paid the full amount payable on such shares upon
the liquidation, dissolution or winding up of the
Corporation fixed by the Board of Directors with
respect to such shares as provided in Subparagraph (d)
of Paragraph (1) of this Section B, above, before any
amount shall be paid to the holders of the Common
Stock.
(6) Reissue of Shares. Shares of the
Preferred Stock which shall have been converted,
redeemed, purchased or otherwise acquired by the
Corporation, whether through the operation of a sinking
fund or otherwise, shall be retired and restored to the
status of authorized but unissued shares, but may be
reissued only as a part of the Preferred Stock other
than the series of which they were originally a part.
ARTICLE V
Preemptive Rights
No holder of any capital stock of the Corporation
shall have any preemptive right to purchase, subscribe
for, or otherwise acquire any shares of the Corporation
of any class now or hereafter authorized, or any
securities exchangeable for or convertible into such
shares.
ARTICLE VI
Board of Directors
(a) Number of Directors, Tenure and
Qualifications. The number of directors constituting
the Board of Directors of the Corporation shall be such
number, not less than 3 nor more than 20, as from time
to time shall be determined by the then authorized
number of directors; provided, however, that no
decrease in the number of directors shall have the
effect of shortening the term of any incumbent
director. The Board of Directors shall be and is
divided into three classes, designated Class I, Class
II and Class III. The initial Class I directors shall
be Richard Dougherty and Ronald Ledvina; the initial
Class II directors shall be Irvin Vincent, Thomas
Rueckl and James Jadin; and the initial Class III
directors shall be Willard Marchant, Donald Pritzl and
John Slatky. Each class shall consist, as nearly as
may be possible, of one-third of the total number of
directors constituting the entire Board of Directors,
with the term of office of the directors of one class
expiring each year. Each director shall serve for a
term ending on the date of the third annual meeting
following the annual meeting at which such director was
elected; provided, however, the initial Class I
directors shall serve for a term ending on the date of
the annual meeting of shareholders held in 1999, the
initial Class II directors shall serve for a term
ending on the date of the annual meeting of
shareholders held in 2000, and the initial Class III
directors shall serve for a term ending on the date of
the annual meeting of shareholders held in 2001. Each
director shall hold office until the annual meeting for
the year in which his term expires and until such
director's successor shall be elected and qualified,
subject, however, to such director's earlier death,
resignation, disqualification or removal from office.
(b) Vacancies. Any vacancy on the Board of
Directors, whether resulting from an increase in the
number of directors or resulting from death,
resignation, disqualification, removal or otherwise,
may be filled by a vote of the majority of the
directors then in office, even if less than a quorum,
or by a sole remaining director. If no director
remains in office, any vacancy may be filled by the
shareholders. Any director so elected to fill any
vacancy on the Board of Directors, including a vacancy
created by an increase in the number of directors,
shall hold office for the remaining term of directors
of the class to which he has been elected and until his
successor shall be elected and shall qualify.
(c) Removal of Directors. A director of the
Corporation may be removed from office prior to the
expiration of his term of office at any time, but only
for cause and only by the affirmative vote of a
majority of the outstanding shares of capital stock of
the Corporation entitled to vote with respect to the
election of such director at a meeting of the
shareholders duly called for such purpose.
(d) Shareholder Nominations. Advance notice of
shareholder nominations for the election of directors
shall be given in the manner provided in the Bylaws of
the Corporation.
(e) Amendment or Repeal. Notwithstanding any
other provisions of these Articles of Incorporation or
the Bylaws of the Corporation (and notwithstanding the
fact that a lesser percentage may be specified by law,
these Amended and Restated Articles of Incorporation or
the Bylaws of the Corporation), the affirmative vote of
the holders of 80% or more of the combined voting power
of the then outstanding shares of stock entitled to
vote on the matter, voting together as a single class,
shall be required to alter, amend, adopt any provision
inconsistent with, or repeal this Article VI.
ARTICLE VII
Shareholder Action
The shareholders shall not be entitled to take
action without a meeting by less than unanimous
consent. Except as otherwise required by law and
subject to the express rights of the holders of any
class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation,
annual and special meetings of the shareholders shall
be called, the record date or dates shall be determined
and notice shall be sent as set forth in the Bylaws of
the Corporation. Notwithstanding any other provisions
of these Amended and Restated Articles of Incorporation
or the Bylaws of the Corporation (and notwithstanding
the fact that a lesser affirmative vote may be
specified by law, these Articles of Incorporation or
the Bylaws of the Corporation), the affirmative vote of
the holders of 80% or more of the combined voting power
of the then outstanding shares of stock entitled to
vote on the matter, voting together as a single class,
shall be required to alter, amend, adopt any provision
inconsistent with, or repeal Articles II or VIII of the
Bylaws, or this Article VII, or any provision thereof
or hereof; provided, however, that the Board of
Directors may alter, amend, or adopt any provision
inconsistent with, or repeal Articles II or VIII of the
Bylaws, or any provision thereof, without a vote of
shareholders.
ARTICLE VIII
Registered Office and Agent
The address of the registered office of the
Corporation is 630 Main Street, Luxemburg, Kewaunee
County, Wisconsin 54217 and the name of its registered
agent at such address is John A. Slatky.
This instrument was drafted by:
Larry D. Lieberman
Godfrey & Kahn, S.C.
780 N. Water Street
Milwaukee, Wisconsin 53202
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,284,635
<INT-BEARING-DEPOSITS> 478,676
<FED-FUNDS-SOLD> 5,001,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,308,339
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 58,281,935
<ALLOWANCE> 720,080
<TOTAL-ASSETS> 83,781,462
<DEPOSITS> 72,572,854
<SHORT-TERM> 371,407
<LIABILITIES-OTHER> 1,273,065
<LONG-TERM> 605,919
0
0
<COMMON> 270,500
<OTHER-SE> 8,687,717
<TOTAL-LIABILITIES-AND-EQUITY> 83,781,462
<INTEREST-LOAN> 2,677,644
<INTEREST-INVEST> 434,062
<INTEREST-OTHER> 102,758
<INTEREST-TOTAL> 3,214,464
<INTEREST-DEPOSIT> 1,538,739
<INTEREST-EXPENSE> 1,566,810
<INTEREST-INCOME-NET> 1,647,654
<LOAN-LOSSES> 75,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,395,255
<INCOME-PRETAX> 780,989
<INCOME-PRE-EXTRAORDINARY> 780,989
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 544,509
<EPS-PRIMARY> 2.24
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.24
<LOANS-NON> 217,000
<LOANS-PAST> 44,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 677,101
<CHARGE-OFFS> 44,000
<RECOVERIES> 12,000
<ALLOWANCE-CLOSE> 720,080
<ALLOWANCE-DOMESTIC> 37,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 683,080
</TABLE>
