<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
----------------
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
( ) 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 0-22759
BANK OF THE OZARKS, INC.
(Exact name of registrant as specified in its charter)
ARKANSAS 71-0556208
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
425 WEST CAPITOL AVENUE, SUITE 3100, LITTLE ROCK, ARKANSAS 72201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (501) 374-4100
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ( ) No (X)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practical date.
Class Outstanding at:
- --------------------------------------- ---------------------------------
Common Stock, $0.01 par value per share June 30, 1997 August 8, 1997
------------- --------------
2,879,800 3,779,555
<PAGE>
BANK OF THE OZARKS, INC.
FORM 10-Q
June 30, 1997
INDEX
PART I. FINANCIAL INFORMATION:
Item 1. Consolidated Balance Sheets
June 30, 1997 and December 31, 1996 1
Consolidated Statements of Income for the
Three Months Ended June 30, 1997 and
1996 and the Six Months Ended June 30,
1997 and 1996 2
Consolidated Statements of Cash Flows for
the Six Months Ended June 30, 1997 and 1996 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Change in Securities 15
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Reference is made to the Exhibit Index
contained at the end of this report. Attached
(b). Reports on Form 8-K N/A
Signatures 17
Exhibit Index 18
<PAGE>
BANK OF THE OZARKS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 7,195 $ 6,711
Interest bearing deposits with FHLB 3,316 104
Securities - available for sale 32,531 36,883
Securities - held to maturity 2,669 2,725
Federal funds sold 4,630 350
Loans, net of unearned income 245,795 214,462
Allowance for loan losses (3,462) (3,019)
Bank premises and equipment, net 10,774 6,872
Foreclosed real estate held for sale, net 103 47
Interest receivable 2,760 2,552
Excess cost over fair value of net assets acquired, at amortized cost 1,366 1,394
Other 1,643 1,519
-------- --------
Total assets $309,320 $270,600
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand - non-interest bearing $ 25,552 $ 21,295
NOW, savings and MMDA's 58,826 56,929
Time 179,917 153,424
-------- --------
Total deposits 264,295 231,648
Notes payable 10,096 5,396
FHLB advances and federal funds purchased 12,017 12,727
Accrued interest and other liabilities 2,696 2,282
-------- --------
Total liabilities 289,104 252,053
Stockholders' equity
Common stock; $0.01 par value; Authorized 10,000,000
shares; 2,879,800 shares issued and outstanding 29 29
Additional paid in capital 1,168 1,168
Retained earnings 18,925 17,251
Unrealized appreciation on investment securities 94 99
-------- --------
Total stockholders' equity 20,216 18,547
-------- --------
Total liabilities and stockholders' equity $309,320 $270,600
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
BANK OF THE OZARKS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
Unaudited
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest income
Loans $ 5,898 $ 4,617 $ 11,206 $ 8,910
Investment securities - taxable 620 514 1,232 994
- nontaxable 57 97 112 201
Federal funds sold 24 33 42 76
Deposits with banks 39 49 59 106
---------- ---------- ---------- ----------
Total interest income 6,638 5,310 12,651 10,287
---------- ---------- ---------- ----------
Interest expense
Deposits 2,852 2,173 5,446 4,258
Interest on borrowed funds 367 199 669 397
Federal funds purchased 1 - 1 -
---------- ---------- ---------- ----------
Total interest expense 3,220 2,372 6,116 4,655
---------- ---------- ---------- ----------
Net interest income 3,418 2,938 6,535 5,632
Provision for loan losses 265 323 524 544
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses 3,153 2,615 6,011 5,088
---------- ---------- ---------- ----------
Other income
Income from fiduciary activities 78 57 137 104
Service charges on deposit accounts 242 176 452 319
Other service charges and fees 300 166 490 281
Gains (losses) on sale of securities 4 (123) 14 (101)
Other income 40 22 326 57
---------- ---------- ---------- ----------
Total other income 664 298 1,419 660
---------- ---------- ---------- ----------
Other expense
Salaries and employee benefits 1,283 978 2,521 1,910
Net occupancy and equipment 293 242 578 476
Other operating expenses 665 417 1,261 876
---------- ---------- ---------- ----------
Total other expense 2,241 1,637 4,360 3,262
---------- ---------- ---------- ----------
Income before income taxes 1,576 1,276 3,070 2,486
Income taxes 572 455 1,109 884
---------- ---------- ---------- ----------
Net income $ 1,004 $ 821 $ 1,961 $ 1,602
========== ========== ========== ==========
Weighted average number of shares
outstanding during period 2,879,800 2,879,800 2,879,800 2,879,800
Earnings per common share $0.35 $0.29 $0.68 $0.56
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
BANK OF THE OZARKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Unaudited
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1996
---------------- -----------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 1,961 $ 1,602
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 277 234
Amortization of goodwill 28 27
Provision for loan losses 524 544
Gain on sale of loans (68) -
Gain on disposition of premises and equipment (45) -
Gain on disposition of foreclosed assets (142) -
Deferred income tax provision (benefit) (111) (87)
Changes in assets and liabilities
Interest receivable (208) (225)
Other assets, net (9) 5
Accrued interest and other liabilites 414 248
-------- --------
Net cash provided (used) by operating activities $ 2,621 $ 2,348
-------- --------
Cash flows from investing activities
Proceeds from sales and maturities of securities
available for sale 11,158 21,030
Purchases of securities available for sale (6,807) (24,109)
Proceeds from maturities of securities held to maturity 56 101
Decrease (increase) in interest bearing deposits with FHLB (3,212) 2,703
Decrease (increase) in federal funds sold (4,280) 2,050
Net increase in loans (32,398) (22,680)
Proceeds from sale of loans 811 -
Proceeds from dispositions of bank premises and equipment 117 -
Purchase of bank premises and equipment (4,251) (317)
Proceeds from dispositions of foreclosed assets 320 28
-------- --------
Net cash provided (used) by investing activities (38,486) (21,194)
-------- --------
Cash flows from financing activities
Net increase in deposits 32,647 19,198
Payments of FHLB advances and federal funds purchased (710) -
Proceeds from notes payable 10,096 -
Payments of notes payable (5,396) -
Dividends paid (288) (864)
-------- --------
Net cash provided (used) by financing activities 36,349 18,334
-------- --------
Net increase (decrease) in cash and cash equivalents 484 (512)
Cash and due from banks - beginning of period 6,711 5,530
-------- --------
Cash and due from banks - end of period $ 7,195 $ 5,018
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION:
The consolidated financial statements of Bank of the Ozarks, Inc. include
the accounts of the parent company and its wholly-owned subsidiaries, Bank of
the Ozarks, wca, Bank of the Ozarks, nwa and Ozark Commercial Corporation
(collectively the "Company"). All material intercompany transactions have been
eliminated.
2. BASIS OF PRESENTATION:
The accompanying consolidated financial statements have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). Certain information, accounting
policies and footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in accordance with such rules and regulations. It
is therefore suggested that these consolidated financial statements be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company's final prospectus filed with the SEC (File No. 333-
27641) pursuant to Rule 424 (b) of the Securities Act of 1933 and used in
connection with the Company's initial public offering of its common stock.
In the opinion of management all adjustments necessary, consisting of only
normal recurring items, have been included for a fair presentation of the
accompanying consolidated financial statements. Operating results for the three
and six months ended June 30, 1997 are not necessarily indicative of the results
that may be expected for the full year.
3. SUPPLEMENTARY DATA FOR CASH FLOWS:
Cash payments for interest on notes payable during the six months ended
June 30, 1997 amounted to $182,000 and during the six months ended June 30, 1996
no payments were made. Cash payments for income taxes during the six months
ended June 30, 1997 and 1996 amounted to $1,147,000 and $882,000, respectively.
4. STOCKHOLDERS' EQUITY:
On July 17, 1997, the Company commenced the initial public offering of its
common stock. A total of 899,755 shares (including 199,755 over-allotment
shares) were sold by the Company at a price of $16.00 per share, yielding net
proceeds to the Company of approximately $13.2 million.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Net income was $1,004,000 ($0.35 per share) for the second quarter of 1997
increasing 22.3% from $821,000 ($0.29 per share) for the same period in 1996.
Net income was $1,961,000 ($0.68 per share) for the six months ended June 30,
1997 increasing 22.4% from $1,602,000 ($0.56 per share) for the same period in
1996. Annualized return on average assets for the first six months of 1997 was
1.35% compared with 1.43% for the first six months of 1996. In the first six
months of 1997, the Company's annualized return on average stockholders' equity
was 20.4% compared with 19.8% for the first six months of 1996. Annualized
results for these interim periods may not be indicative of full years results.
Total assets were $309.3 million at June 30, 1997 compared to $270.6
million at December 31, 1996. Net loans were $242.3 million at June 30, 1997
compared to $211.4 million at December 31, 1996. Total deposits were $264.3
million at June 30, 1997 compared to $231.6 million at December 31, 1996.
ANALYSIS OF RESULTS OF OPERATIONS
The Company's results of operations depend primarily on net interest
income, which is the difference between the interest income from earning assets,
such as loans and investments, and the interest expense incurred on interest
bearing liabilities, such as deposits and other borrowings. Factors that
determine the level of net interest income include the volume of earning assets
and interest bearing liabilities, yields earned and rates paid, fee income from
portfolio loans, the level of nonperforming loans and other non-earning assets
and the amount of non-interest bearing liabilities supporting earning assets.
The Company also generates non-interest income, including transactional fees,
real estate appraisal fees, trust fees, fees from origination of residential
mortgage loans for resale and commissions from the sale of credit related
insurance products. The Company's non-interest expenses primarily consist of
employee compensation and benefits, occupancy and equipment expenses, and other
operating expenses. The Company's results of operations are significantly
affected by its provision for loan losses. Results of operations may also be
significantly affected by many other factors including general economic and
competitive conditions, mergers and acquisitions of other financial institutions
within the market area, changes in market interest rates, government policies,
and actions of regulatory agencies.
(Remainder of this page intentionally left blank)
5
<PAGE>
NET INTEREST INCOME
Net interest income is analyzed in the discussion and tables below on a
fully taxable equivalent ("FTE") basis. The adjustment to convert certain income
to an FTE basis consists of dividing tax exempt income by one minus the federal
income tax rate (34%).
Three months ended June 30, 1997 compared to three months ended June 30, 1996
Net interest income (FTE) increased 15.3% to $3,446,000 for the three
months ended June 30, 1997 from $2,989,000 for the three months ended June 30,
1996. This increase primarily resulted from a 31.2% increase in average earning
assets to $281.6 million for the 1997 period from $214.7 million for the 1996
period. The increase in average earning assets resulted primarily from continued
growth in the Company's loan portfolio. The increased interest income resulting
from this growth was somewhat offset by a 67 basis point reduction in the net
interest margin to 4.91% in the three month 1997 period from 5.58% in the
comparable 1996 period. A substantial portion of this decrease in net interest
margin resulted from lower average balances for the 1997 period of a relatively
high-yielding portfolio of loans acquired from the Resolution Trust Corporation
("RTC").
Six months ended June 30, 1997 compared to six months ended June 30, 1996.
Net interest income (FTE) increased 14.9% to $6,593,000 for the six months
ended June 30, 1997 from $5,736,000 for the six months ended June 30, 1996.
This increase primarily resulted from a 29.6% increase in average earning assets
to $271.3 million for the 1997 period from $209.3 million for the 1996 period.
The increase in average earning assets resulted primarily from continued growth
in the Company's loan portfolio. The increased interest income resulting from
this growth was somewhat offset by a 63 basis point reduction in the net
interest margin to 4.90% in the 1997 period from 5.53% in the comparable 1996
period. A substantial portion of this decrease in net interest margin resulted
from lower average balances during the 1997 period of a relatively high-yielding
portfolio of loans acquired from the RTC .
ANALYSIS OF NET INTEREST INCOME
(FTE = FULLY TAXABLE EQUIVALENT)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Interest income............................... $ 6,638 $ 5,310 $12,651 $10,287
FTE adjustment................................ 28 51 58 104
------- ------- ------- -------
Interest income --FTE......................... 6,666 5,361 12,709 10,391
Interest expense.............................. 3,220 2,372 6,116 4,655
------- ------- ------- -------
Net interest income --FTE..................... $ 3,446 $ 2,989 $ 6,593 $ 5,736
======= ======= ======= =======
Yield on interest earning assets -- FTE....... 9.50% 10.02% 9.45% 10.01%
Cost of interest bearing liabilities.......... 5.10 4.98 5.06 5.02
Net interest spread -- FTE.................... 4.40 5.04 4.39 4.99
Net interest margin--FTE...................... 4.91 5.58 4.90 5.53
</TABLE>
6
<PAGE>
AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST ANALYSIS
(Dollars in Thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-------------------------------------------------------
1997 1996
-------------------------- -------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- ------- ------ -------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earnings assets:
Interest-earning deposits $ 2,976 $ 39 5.26% $ 3,780 $ 48 5.09%
Federal funds sold....... 1,909 24 5.04 2,616 34 5.21
Investment securities:
Taxable................ 36,151 620 6.88 32,817 514 6.28
Tax-exempt-FTE......... 3,387 85 10.02 5,486 148 10.86
Loans (net of unearned
income)............... 237,154 5,898 9.98 169,999 4,617 10.89
-------- ------ -------- ------- -----
Total earnings assets. 281,577 6,666 9.50 214,698 5,361 10.02
Non-earning assets......... 19,875 14,462
-------- --------
Total assets.......... $301,452 $229,160
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits
Interest bearing
transaction and
savings ........ $ 58,899 $ 431 2.94% $ 46,287 $ 298 2.58%
Certificates of
deposits $100,000 or
more.................. 47,118 662 5.64 33,155 474 5.73
Other time deposits.... 126,442 1,759 5.58 99,749 1,401 5.63
-------- ------ ------- ------ -----
Total interest bearing
deposits ............ 232,459 2,852 4.92 179,191 2,173 4.86
Federal funds and FHLB
borrowings................ 13,067 195 5.99 7,979 114 5.73
Holding company debt....... 7,589 173 9.14 3,920 85 8.70
-------- ------ -------- ------- -----
Total interest
bearing liabilities.. 253,115 3,220 5.10 191,090 2,372 4.98
Non-interest liabilities:
Non-interest bearing
deposits................ 25,283 19,457
Other non-interest
liabilities............. 3,408 2,094
-------- -------
Total liabilities.. 281,806 212,641
Stockholders' equity....... 19,646 16,519
-------- -------
Total liabilities
and stockholders'
equity $301,452 $229,160
======== ========
Interest rate spread....... 4.40% 5.04%
------ ------
Net interest income........ $3,446 $2,989
Net interest margin........ 4.91% 5.58%
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------------------------------
1997 1996
--------------------------- -----------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Earnings assets:
Interest-earning deposits $ 2,272 $ 59 5.24% $ 3,815 $ 106 5.06%
Federal funds sold....... 1,640 42 5.16 2,921 76 5.25
Investment securities:
Taxable................ 36,527 1,232 6.80 32,544 994 6.16
Tax-exempt-FTE......... 3,308 170 10.34 5,808 305 10.57
Loans (net of unearned
income)............... 227,582 1,206 9.93 164,212 8,910 10.94
-------- ------- -------- -------
Total earnings assets. 271,329 12,709 9.45 209,300 10,391 10.01
Non-earning assets......... 18,425 14,791
-------- --------
Total assets.......... $289,754 $224,091
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Deposits
Interest bearing
transaction and
savings ........ $ 58,385 $ 850 2.94% $ 44,785 $ 552 2.49%
Certificates of
deposits $100,000 or
more.................. 45,474 1,266 5.61 32,085 926 5.82
Other time deposits.... 120,836 3,330 5.56 98,158 2,780 5.71
-------- ------- ------- -------
Total interest bearing
deposits ............ 224,695 5,446 4.89 175,028 4,258 4.91
Federal funds and FHLB
borrowings................ 12,548 375 6.03 7,967 227 5.75
Holding company debt....... 6,565 295 9.06 3,920 170 8.75
-------- ------- -------- -------
Total interest
bearing liabilities.. 243,808 6,116 5.06 186,915 4,655 5.02
Non-interest liabilities:
Non-interest bearing
deposits................ 23,728 18,301
Other non-interest
liabilities............. 2,976 2,656
-------- -------
Total liabilities.. 270,512 207,872
Stockholders' equity....... 19,242 16,219
-------- -------
Total liabilities
and stockholders'
equity $289,754 $224,091
======== ========
Interest rate spread....... 4.39% 4.99%
------- -------
Net interest income........ $ 6,593 $ 5,736
Net interest margin........ 4.90% 5.53%
</TABLE>
7
<PAGE>
NON-INTEREST INCOME
Non-interest income can generally be broken down into four main sources: fee
income, which includes service and other charges on deposits; trust fees; income
on the sale of loans or other assets; and gain (or loss) on the sale of
securities. Non-interest income increased 115% to $1,419,000 for the six months
ended June 30, 1997 from $660,000 for the six months ended June 30, 1996.
The increase in non-interest income is a combination of an increase in fees
earned on deposit account service charges, fees from origination and sale of
secondary market residential loans, gains on sale of real estate, and gains on
sale of securities. A significant portion of the increase for the 1997 periods
is a result of the origination and sale of secondary market residential loans
which commenced in the third quarter of 1996.
The table below shows non-interest income for the three months and six months
ended June 30, 1997 and 1996.
NON-INTEREST INCOME
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------- --------------
1997 1996 1997 1996
-------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Trust income....................................... $ 78 $ 57 $ 137 $ 104
Service charges on deposit accounts................ 242 176 452 319
Other service charges and fees..................... 300 166 490 281
Gain on sale of loans.............................. - - 68 -
Gain on sale of previously foreclosed real estate.. 5 - 142 -
Gain on sale of other assets....................... - - 45 -
Securities gains (losses).......................... 4 (123) 14 (101)
Printed check sales................................ 29 21 55 40
Other income....................................... 6 1 16 17
----- ----- ------ -----
Total non-interest income........................ $ 664 $ 298 $1,419 $ 660
===== ===== ====== =====
</TABLE>
(Remainder of page intentionally left blank)
8
<PAGE>
NON-INTEREST EXPENSE
Non-interest expense consists of salaries and employee benefits, occupancy,
equipment and other operating expenses. Non-interest expense increased 33.7% to
$4,360,000 for the six months ended June 30, 1997 from $3,262,000 for the six
months ended June 30, 1996. The increases in non-interest expense is primarily
attributable to increases in salaries and employee benefits resulting from the
Company's continued growth and expansion, including opening and preparation for
opening of new branches.
The table below shows non-interest expense for the three months and six months
ended June 30, 1997 and 1996.
NON-INTEREST EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------- --------------
1997 1996 1997 1996
------ ------ ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Salaries and employee benefits............. $1,283 $ 978 $2,521 $1,910
Net occupancy expense...................... 126 111 259 219
Equipment expense.......................... 167 131 319 257
Other real estate and foreclosure expense.. 43 6 74 15
Other operating expense:
Professional services................. 9 - 49 48
Postage............................... 51 33 83 60
Telephone............................. 45 47 78 70
Operating supplies.................... 32 22 105 75
Advertising and public relations...... 101 22 146 39
Directors' fees....................... 29 18 52 38
Software expense...................... 27 17 54 33
Check printing charges................ 33 21 61 43
FDIC & state assessment............... 28 28 53 52
Amortization of goodwill.............. 14 14 28 28
Loss on sale of assets................ 22 2 36 4
Miscellaneous......................... 231 187 442 371
------ ------ ------ ------
Total non-interest expense $2,241 $1,637 $4,360 $3,262
====== ====== ====== ======
</TABLE>
INCOME TAXES
The provision for income taxes was $1,109,000 for the six months ended June
30, 1997 compared to $884,000 for the same period in 1996. The effective income
tax rates were 36.1% and 35.6% for the six months ended June 30, 1997 and 1996,
respectively.
9
<PAGE>
ANALYSIS OF FINANCIAL CONDITION
LOAN PORTFOLIO
At June 30, 1997, the Company's loan portfolio was $242.3 million, net of
allowance for loan losses, compared to $211.4 million at December 31, 1996. As
of June 30, 1997, the Company's loan portfolio consisted of approximately 63.6%
real estate loans, 19.3% consumer loans, 12.9% commercial and industrial loans
and 4.1% agricultural loans (non-real estate).
The amount and type of loans outstanding at June 30, 1997 and December 31,
1996 are reflected in the following table.
LOAN PORTFOLIO
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
<S> <C> <C>
Real Estate:
Single family residential....... $ 88,534 $ 78,124
Non-farm/non-residential........ 42,404 35,258
Agricultural.................... 10,640 11,583
Construction/land development... 12,060 8,808
Multifamily residential......... 2,616 3,743
-------- --------
Total real estate............... $156,254 $137,516
Consumer........................ 47,525 39,868
Commercial and industrial....... 31,750 28,154
Agricultural (non-real estate).. 10,130 8,363
Other........................... 136 561
-------- --------
Total loans..................... $245,795 $214,462
======== ========
</TABLE>
NONPERFORMING ASSETS
Nonperforming assets consist of (i) nonaccrual loans, (ii) loans for which the
terms have been restructured to provide a reduction or deferral of interest or
principal because of a deterioration in the financial position of the borrower
and (iii) real estate or other assets that have been acquired in partial or full
satisfaction of loan obligations or upon foreclosure. As of June 30, 1997, one
loan relationship for $1.3 million accounted for 73.1% of the total $1.8 million
nonaccrual loans. This large nonaccrual loan is secured by real estate.
The Company's policy generally is to place a loan on nonaccrual status when
payment of principal or interest is contractually past due 90 days, or earlier
when concern exists as to the ultimate collection of principal and interest. The
Company continues to accrue interest on certain loans contractually past due 90
days if such loans are both well secured and in the process of collection. At
the time a loan is placed on nonaccrual status, interest previously accrued but
uncollected is generally reversed and charged against interest income. If a loan
is determined to be uncollectible, the portion of the loan principal determined
to be uncollectible will be charged against the allowance for loan losses.
Interest income on nonaccrual loans is recognized on a cash basis when and if
actually collected.
10
<PAGE>
The following table presents information concerning nonperforming assets,
including nonaccrual and restructured loans and foreclosed assets held for sale.
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
<S> <C> <C>
Nonaccrual loans......................... $1,772 $2,057
Accruing loans 90 days or more past due.. 74 253
Restructured not included above.......... - -
------ ------
Total nonperforming loans.............. 1,846 2,310
Foreclosed assets held for sale.......... 103 47
------ ------
Total nonperforming assets............. $1,949 $2,357
====== ======
Nonperforming loans to total loans....... .75% 1.08%
Nonperforming assets to total assets..... .63 .87
</TABLE>
Foreclosed assets held for sale are generally written down to appraised value
at the time of transfer from the loan portfolio into repossessions or other real
estate owned. The value of such assets is reviewed from time to time throughout
the holding period, with the value being adjusted to the then market value, if
lower, until disposition. Under Arkansas banking law, other real estate owned
is generally required to be written off over a five year period unless approval
of the Arkansas State Bank Department can be obtained to write such assets off
over an extended period.
ALLOWANCE AND PROVISION FOR LOAN LOSSES
Allowance: The following table shows an analysis of the allowance for loan
losses for the six month period ended June 30, 1997 and year ended December 31,
1996.
<TABLE>
<CAPTION>
SIX MONTHS TWELVE MONTHS
ENDED JUNE 30, ENDED DECEMBER 31,
1997 1996
-------------- ------------------
<S> <C> <C>
Balance of allowance for loan losses at beginning of period.. $ 3,019 $ 1,909
Loans charged off:
Real estate................................................ 4 73
Consumer................................................... 101 216
Commercial and industrial.................................. - 128
------- -------
Total loans charged off.................................... 105 417
------- -------
Recoveries of loans previously charged off:
Real estate................................................ 2 2
Consumer................................................... 22 35
Commercial and industrial.................................. - 4
------- -------
Total recoveries........................................... 24 41
------- -------
Net loans charged off........................................ 81 376
Provision charged to operating expense....................... 524 1,486
------- -------
Balance, end of period....................................... $ 3,462 $ 3,019
======= =======
Net charge-offs to average loans outstanding during
the periods indicated...................................... .07% (1) .21%
Allowance for loan losses to total loans..................... 1.41 1.41
Allowance for loan losses to nonperforming loans............. 187.54 130.69
</TABLE>
(1) Annualized. Results for the six months ended June 30, 1997 may not be
indicative of full year results.
11
<PAGE>
The amounts of additions to the allowance for loan losses are based on
management's judgment and evaluation of the loan portfolio utilizing objective
and subjective criteria. The objective criteria utilized by the Company to
assess the adequacy of its allowance for loan losses and required additions to
such reserve are (i) an internal grading system, (ii) a peer group analysis and
(iii) a historical analysis. In addition to this objective criteria, the
Company subjectively assesses adequacy of the allowance for loan losses and the
need for additions thereto, with consideration given to the nature and volume of
the portfolio, overall portfolio quality, review of specific problem loans,
national, regional and local business and economic conditions that may affect
the borrowers' ability to pay or the value of collateral securing the loans, and
other relevant factors.
Based on these procedures, management is of the opinion that the allowance at
June 30, 1997 of $3,462,000 is adequate. While management believes this
allowance is adequate, changing economic conditions and other conditions may
require future additions to the allowance. Moreover, the allowance is subject
to regulatory examination and determinations as to adequacy. Although not
presently anticipated, adjustments to the allowance may result from regulatory
examinations.
Provision for Loan Losses: The loan loss provision reflects management's
ongoing assessment of the loan portfolio and is evaluated in light of risk
factors mentioned above. The provision for loan losses was $524,000 for the six
months ended June 30, 1997 compared to $544,000 for the same six month period in
1996.
INVESTMENTS AND SECURITIES
The Company's securities portfolio is the second largest component of earning
assets and provides a significant source of revenue for the Company. The table
below presents the amortized cost and the fair value of investment securities
for each of the dates indicated.
INVESTMENT SECURITIES
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------------- ---------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE(1) COST VALUE(1)
--------- -------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Securities of U.S. Government agencies............ $21,004 $20,948 $23,881 $23,896
Mortgage-backed securities........................ 9,811 10,021 10,119 10,256
Obligations of states and political subdivisions.. 2,784 2,785 4,094 4,119
Other securities.................................. 1,448 1,448 1,353 1,353
------- ------- ------- -------
Total..................................... $35,047 $35,202 $39,447 $39,624
======= ======= ======= =======
</TABLE>
(1) The fair value of the Company's financial instruments is determined
pursuant to Statement of Financial Accounting Standards No. 107.
LIQUIDITY AND CAPITAL RESOURCES
Credit Agreement. On May 16, 1997 the Company entered into a $10.0 million
term loan and revolving credit facility with Union Planters National Bank,
Memphis, Tennessee (the "Credit Agreement"). The proceeds from the Credit
Agreement were used to repay outstanding notes payable and to fund capital
investments in the Company's subsidiary banks. The term loan portion has a
principal balance of $5.0 million, payable in equal annual principal
installments of $500,000 commencing December 21, 1998 plus interest payable
annually at 8.804% per annum commencing December 21, 1997. The term loan
matures on December 21, 2007 and provides for prepayment penalties under certain
circumstances.
12
<PAGE>
The Credit Agreement also provides for a revolving line of credit of up to
$5.0 million. Advances remaining unpaid for any consecutive period of 365 days
are converted to term loans under the facility, with a corresponding reduction
in availability, and are payable in equal annual installments of principal
through December 21, 2007. Interest accrues on outstanding borrowings under the
revolving line of credit (including any amounts converted to term loans
thereunder) at a variable rate equal to average prime lending rate reported from
time to time by the Wall Street Journal minus 0.25% and is payable quarterly
commencing June 21, 1997. The revolving line of credit commitment is effective
through December 21, 2007, subject to an annual compliance review by the lender.
No standby or unused commitment fees are payable by the Company under the
revolving line of credit. The balance outstanding on the revolving line of
credit was $5.0 million at June 30, 1997.
The Credit Agreement requires the Company's bank subsidiaries to maintain
certain levels of return on assets, primary capital, loan charge offs and
debt/equity ratios. At June 30, 1997 the Company was in compliance with these
requirements. Borrowings under the Credit Agreement are secured by a pledge of
80% of the Company's stock in the subsidiary banks.
Initial Public Offering. On July 17, 1997, the Company commenced the initial
public offering of its common stock. The net proceeds to the Company from this
offering were approximately $13.2 million (including proceeds from over-
allotment shares). $5.0 Million of the proceeds from the offering were used to
repay the outstanding balance under the revolving line of credit described
above. $4.5 Million was used to make a capital infusion to a subsidary bank. The
remainder of the proceeds (including proceeds from exercise of the underwriters
over-allotment option) were or will be used for general corporate purposes,
including investments in and advances to the Company's subsidiaries, and
financing its continued expansion and branching strategy.
Bank Liquidity. Liquidity represents an institution's ability to provide
funds to satisfy demand from depositors and borrowers by either converting
assets into cash or accessing new or existing sources of incremental funds.
Generally, the Company's bank subsidiaries rely on customer deposits and loan
repayments as their primary sources of funds. These funds are used to make
loans, acquire investment securities and other assets and fund continuing
operations.
During the first six months of 1997, the Company's banking subsidiaries
invested approximately $4.2 million to construct two new branches in Alma and
Paris, Arkansas and to acquire sites for future construction in Little Rock and
Fort Smith, Arkansas. The Alma and Paris branches are expected to open during
the third quarter of 1997 and construction on the Little Rock and Fort Smith
facilities is expected to begin this year. The Fort Smith site will be utilized
as a branch and is expected to open in 1998. The Little Rock site will
initially be used as the Company's corporate offices and as a loan production
office. The Company expects to request regulatory approval to operate the
Little Rock facility as a full service banking facility in 1999.
The Company has experienced significant growth in its loan portfolio which has
resulted in a high loan to deposit ratio (93.0% at June 30, 1997). While
scheduled loan repayments are a relatively stable source of funds, such loans
generally are not readily convertible to cash. Additionally, deposit levels may
be affected by a number of factors, including rates paid by competitiors,
general interest rate levels, returns available to customers on alternative
investments and general economic conditions. Accordingly, the Company may be
required from time to time to rely on secondary sources of liquidity to meet
withdrawal demands or otherwise fund operations. Such sources include unsecured
and secured FHLB advances, federal funds lines of credit from correspondent
banks, and borrowings by the Company under its revolving credit facility, as
described above.
At June 30, 1997, the Company's bank subsidiaries had an aggregate of $36.0
million of unused blanket unsecured FHLB borrowing availability. Additionally,
at June 30, 1997 the bank subsidiaries maintained pre-approved unsecured federal
funds lines of credit in an amount of up to $14.9 million.
Management anticipates that the Company's bank subsidiaries will continue to
rely primarily on customer deposits and loan repayments to provide liquidity.
Additionally, where necessary, the above described borrowings (including
borrowings under the Company's Credit Agreement) will be used to augment the
Company's primary funding sources.
13
<PAGE>
Capital Compliance. Bank regulatory authorities in the United States impose
certain capital standards on all bank holding companies and banks. These
capital standards require compliance with certain minimum "risk-based capital
ratios" and a minimum "leverage ratio". The risk-based capital ratios consist
of (i) Tier 1 capital (i.e. common stockholders' equity excluding goodwill and
appreciation on investment securities, but including certain other qualifying
items) to total risk-weighted assets and (ii) total capital (Tier 1 capital plus
Tier 2 capital which is the qualifying portion of the allowance for loan losses)
to risk-weighted assets. The leverage ratio is measured as Tier 1 capital to
adjusted average assets.
The Company's risk-based and leverage capital ratios at June 30, 1997 and
December 31, 1996 are presented below, followed by the capital ratios of each of
the Company's two bank subsidiaries at June 30, 1997.
CONSOLIDATED CAPITAL RATIOS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
(Dollars in Thousands)
<S> <C> <C>
Tier 1 capital:
Stockholders' equity...................................... $ 20,216 $ 18,547
Add (less) net unrealized losses (gains) on available
for sale securities..................................... (94) (99)
Less goodwill............................................. (1,366) (1,394)
-------- --------
Total tier 1 capital................................ $ 18,756 $ 17,054
-------- --------
Tier 2 capital:
Qualifying allowance for loan losses...................... 2,889 2,529
-------- --------
Total risk-based capital............................ $ 21,645 $ 19,583
======== ========
Risk-weighted assets........................................ $230,573 $201,802
======== ========
Ratios at end of period:
Leverage 6.25% (1) 6.42% (1)
Tier 1 risk-based capital................................. 8.13 8.45
Total risk-based capital.................................. 9.38 9.70
Minimum ratio guidelines:
Leverage.................................................. 3.00% (2) 3.00% (2)
Tier 1 risk-based capital................................. 4.00 4.00
Total risk-based capital.................................. 8.00 8.00
</TABLE>
CAPITAL RATIOS OF SUBSIDIARY BANKS
<TABLE>
<CAPTION>
JUNE 30, 1997
--------------------------
OZARK WCA OZARK NWA
--------- -----------
(Dollars in Thousands)
<S> <C> <C>
Stockholders' equity...................................... $ 19,708 $ 8,707
Leverage ratio............................................ 9.77% (3) 8.87% (3)
Risk-based capital ratios:
Tier 1.................................................. 11.77 12.47
Total capital........................................... 13.02 13.72
</TABLE>
(1) Based upon quarterly average assets (excluding goodwill) of $300.1 million
and $265.5 million at June 30, 1997 and December 31, 1996, respectively.
(2) Regulatory authorities require institutions to operate at varying levels
(ranging from 100-200 basis points) above a minimum leverage ratio of 3%
depending upon capitalization classification.
(3) Based upon quarterly average assets of $201.7 million for Ozark WCA and
$98.1 million for Ozark NWA.
14
<PAGE>
PART II
Other Information
Item 1. LEGAL PROCEEDINGS
-----------------
Not Applicable
Item 2. CHANGES IN SECURITIES
---------------------
Reference is made to Item 4 (b) (Submission of Matters to Vote of
Security Holders) for a description of certain changes made to the Company's
Articles of Incorporation.
Item 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
(1) The Annual Meeting of Stockholders of the Company was held on May 22,
1997. The following matters were voted upon at the meeting with the voting
results as follows (the vote totals reflect shares of the Company's common
stock outstanding prior to giving effect to the 99-1 stock dividend which was
effected on May 22, 1997):
(a) Stockholders approved the election of the following three
directors:
George Gleason
Linda Gleason
Mark Ross
Voting: For 27,484, Against - none, Not Voting l,314
(b) Stockholders approved the adoption of the Company's Amended and
Restated Articles of Incorporation (the "Amended and Restated Articles")
which among other things; (i) changed the name of the Company to Bank of
the Ozarks, Inc., (ii) redesignated the "Series A Voting Common Stock"
of the Company as "Common Stock", (iii) increased the number of shares
of Common Stock authorized for issuance by the Company to 10,000,000
shares, (iv) eliminated the Series A Preferred Stock of the Company, (v)
authorized 1,000,000 shares of "Blank Check" Preferred Stock for
issuance from time to time in the discretion of this Board of Directors,
(vi) elected that the Company be governed by the Arkansas Business
Corporation Act of 1987, as amended (the "1987 Act"), (vii) implemented
certain changes as necessary to afford the Company, its officers,
directors, employees and agents the full benefits of the 1987 Act,
(viii) provided that the members of the board of directors may be
removed only for cause, and then only by the affirmative vote of two-
thirds (2/3) of the shareholders entitled to vote at a meeting of
shareholders called for that purpose, (ix) allowed the Board of
Directors to elect from time to time in its discretion to classify or
stagger the Board of Directors into 2 or 3 classes of directors, (x)
provided that the Board of Directors has the power to fix the size of
the Board of Directors and to create and fill any vacancies on the Board
of Directors for the remainder of the applicable term of such director,
(xi) required the affirmative vote of two-thirds (2/3) of the
shareholders entitled to vote at a meeting of shareholders in order to
amend, repeal or modify the foregoing provisions relating to the
election or removal of directors, classifying or staggering the board of
directors and creating or filling vacancies on the board of directors
and (xii) implemented certain other clarifying and miscellaneous
provisions.
Voting: For 27,424, Against 11, Not Voting l,363
(c) Stockholders ratified the Board of Director's prior approval of
the Company's Amended and Restated Bylaws of the Company.
Voting: For 27,719, Against - none, Not Voting l,079
15
<PAGE>
(2) In preparation for the Company's initial public offering of its common
stock, on May 22, 1997, certain stockholders, representing in excess of a
majority of the votes required for approval, adopted a written consent in lieu
of a meeting of stockholders. The total vote for each proposed action was
2,312,200, the total vote against was zero, and the total not voting was
567,600. The consent approved the following actions:
(a) Approved an increase of the number of members of the Board of
Directors of the Company from three (3) to ten (10) and the appointment
of the following persons to serve as Directors of the Company, each
effective on July 17, 1997, (which was the commencement date of the
Company's initial public offering of its common stock):
C. E. Dougan
Robert East
Henry Mariani
Roger Collins
Kennith Smith
Porter Hillard
R. L. Qualls
(b) Approved and adopted the proposed Stock Option Plan, Non-Employee
Director Stock Option Plan and 401(k) Retirement Savings Plan.
All foregoing actions of stockholders were taken before the registration of
the Company's common stock under section 12 (g) of the Securities Exchange Act
of 1934.
Item 5. OTHER MATTERS
-------------
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a). Exhibits
Reference is made to the Exhibit Index contained at the end of
this report.
(b). Reports on Form 8-K
Not Applicable
16
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Bank of the Ozarks, Inc.
DATE: August 11, 1997 /s/ Paul E. Moore
------------------------------------------------
Paul E. Moore
Chief Financial Officer
(Chief Accounting Officer)
17
<PAGE>
Bank of the Ozarks, Inc.
Exhibit Index
Exhibit
Number
- -------
3 (a) Amended and Restated Articles of Incorporation of the Company,
effective May 22, 1997 (previously filed as Exhibit 3.1 to the
Company's Form S-1 Registration Statement (File No. 333-27641)
and incorporated herein by reference.
3 (b) Amended and Restated Bylaws of the Company, dated as of March
13, 1997 (previously filed as Exhibit 3.2 to the Company's Form
S-1 Registration Statement (File No. 333-27641) and incorporated
herein by reference).
27.1 Amended and Restated Financial Data Schedule for the periods
ended December 31, 1996 and March 31, 1997 (attached).
27.2 Financial Data Schedule for the period ended June 30, 1997
(attached).
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE QUARTERLY REPORT ON FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 7,195
<INT-BEARING-DEPOSITS> 3,316
<FED-FUNDS-SOLD> 4,630
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 32,531
<INVESTMENTS-CARRYING> 2,669
<INVESTMENTS-MARKET> 2,671
<LOANS> 245,795
<ALLOWANCE> 3,462
<TOTAL-ASSETS> 309,320
<DEPOSITS> 264,295
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,696
<LONG-TERM> 22,113
0
0
<COMMON> 29
<OTHER-SE> 20,187
<TOTAL-LIABILITIES-AND-EQUITY> 309,320
<INTEREST-LOAN> 11,206
<INTEREST-INVEST> 1,344
<INTEREST-OTHER> 101
<INTEREST-TOTAL> 12,651
<INTEREST-DEPOSIT> 5,446
<INTEREST-EXPENSE> 6,116
<INTEREST-INCOME-NET> 6,535
<LOAN-LOSSES> 524
<SECURITIES-GAINS> 14
<EXPENSE-OTHER> 4,360
<INCOME-PRETAX> 3,070
<INCOME-PRE-EXTRAORDINARY> 1,961
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,961
<EPS-PRIMARY> .68
<EPS-DILUTED> .68
<YIELD-ACTUAL> 4.90
<LOANS-NON> 1,772
<LOANS-PAST> 74
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,479
<ALLOWANCE-OPEN> 3,019
<CHARGE-OFFS> 105
<RECOVERIES> 24
<ALLOWANCE-CLOSE> 3,462
<ALLOWANCE-DOMESTIC> 3,462
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, CONTAINED IN
THE PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> DEC-31-1996 MAR-31-1997
<CASH> 6,711 8,397
<INT-BEARING-DEPOSITS> 104 56
<FED-FUNDS-SOLD> 350 100
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 35,530 38,072
<INVESTMENTS-CARRYING> 4,078 4,098
<INVESTMENTS-MARKET> 4,094 4,111
<LOANS> 214,462 224,641
<ALLOWANCE> 3,019 3,240
<TOTAL-ASSETS> 270,600 286,942
<DEPOSITS> 231,648 247,263
<SHORT-TERM> 210 215
<LIABILITIES-OTHER> 2,282 2,975
<LONG-TERM> 17,413 17,413
0 0
0 0
<COMMON> 29 29
<OTHER-SE> 18,518 19,047
<TOTAL-LIABILITIES-AND-EQUITY> 270,600 286,942
<INTEREST-LOAN> 19,089 5,307
<INTEREST-INVEST> 2,433 667
<INTEREST-OTHER> 314 42
<INTEREST-TOTAL> 21,836 6,016
<INTEREST-DEPOSIT> 9,005 2,595
<INTEREST-EXPENSE> 10,031 2,900
<INTEREST-INCOME-NET> 11,805 3,116
<LOAN-LOSSES> 1,486 259
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 7,151 2,119
<INCOME-PRETAX> 5,033 1,494
<INCOME-PRE-EXTRAORDINARY> 3,027 957
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,027 957
<EPS-PRIMARY> 1.05 0.33
<EPS-DILUTED> 1.05 0.33
<YIELD-ACTUAL> 5.36 4.88
<LOANS-NON> 2,057 1,771
<LOANS-PAST> 253 22
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 1,553 1,537
<ALLOWANCE-OPEN> 1,909 3,019
<CHARGE-OFFS> 417 50
<RECOVERIES> 41 12
<ALLOWANCE-CLOSE> 3,019 3,240
<ALLOWANCE-DOMESTIC> 3,019 3,240
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
