<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ____________
Commission File Number 000-23129
NORTHWAY FINANCIAL, INC
(Exact name of registrant as specified in its charter)
New Hampshire 04-3368579
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 Main Street
Berlin, New Hampshire 03570
Address of principal executive offices (Zip Code)
(603) 752-1171
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed since last year)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (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 ninety (90) days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date. At April 30, 1998, there were
1,731,969 shares of common stock outstanding, par value $1.00 per share.
================================================================================
<PAGE>
INDEX
NORTHWAY FINANCIAL, INC.
PART I. FINANCIAL INFORMATION PAGE
Item 1.
Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 1998 and December
31, 1997............................................................ 3
Consolidated Statements of Income for the Three Months
Ended March 31, 1998 and 1997....................................... 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1998 and 1997....................................... 5
Notes to Consolidated Financial Statements.......................... 6
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 9
Item 3.
Quantitative and Qualitative Disclosures about Market Risk.......... 11
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings................................................... 12
Item 2.
Changes in Securities............................................... 12
Item 3.
Default Upon Senior Securities...................................... 12
Item 4.
Submission of Matters to a Vote of Security Holders................. 12
Item 5.
Other Information................................................... 12
Item 6.
Exhibits and Reports of Form 8-K.................................... 12
Signatures.................................................................. 13
-2-
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
NORTHWAY FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
MAR. 31, DEC. 31,
(Dollars in thousands, except per share data) 1998 1997
- -------------------------------------------------------------------------------
(Unaudited) (Audited)
Assets:
Cash and due from banks.................................. $ 15,129 $ 12,086
Federal funds sold....................................... 10,900 19,225
Interest bearing deposits................................ 113 85
Investment securities available-for-sale................. 56,113 55,103
Investment securities held-to-maturity................... 13,850 11,312
FRB stock................................................ 80 80
FHLB stock............................................... 1,958 1,958
Loans held for sale...................................... 400 292
Loans.................................................... 265,057 267,283
Unearned income........................................ (487) (526)
Allowance for possible loan losses..................... (4,225) (4,156)
-------- --------
Loans, net............................................. 260,345 262,601
-------- --------
Real estate acquired by foreclosure
or substantively repossessed........................... 278 222
Accrued interest receivable.............................. 1,920 1,971
Deferred income taxes.................................... 1,442 1,500
Premises and equipment, net.............................. 9,585 9,187
Deposit purchase premium................................. 1,085 1,161
Other assets............................................. 1,010 1,083
-------- --------
Total assets......................................... $374,208 $377,866
-------- --------
Liabilities and stockholders' equity:
Liabilities:
Interest bearing deposits................................ $283,283 $282,353
Non-interest bearing deposits............................ 33,332 39,710
Repurchase agreements.................................... 10,217 6,146
Federal Home Loan Bank advances ......................... 5,282 9,322
Other liabilities........................................ 3,300 2,809
-------- --------
Total liabilities.................................... 335,414 340,340
-------- --------
Stockholders' equity:
Preferred stock, $1 par value;
1,000,000 shares authorized: outstanding-none.......... -- --
Common stock, $1 par value; 9,000,000 shares
authorized: 1,731,969 shares issued and outstanding... 1,732 1,732
Additional paid in capital............................... 2,101 2,101
Retained earnings........................................ 34,951 33,744
Unrealized gain(loss) on investment securities available-
for-sale, net of tax.................................... 10 (51)
-------- --------
Total stockholders' equity........................... 38,794 37,526
-------- --------
Total liabilities and stockholders' equity........... $374,208 $377,866
======== ========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
Three Months
Ended March 31,
(Dollars in thousands, except per share data) 1998 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest and dividend income:
Loans.................................................... $ 5,904 $ 5,387
Investment securities available-for-sale................. 795 1,265
Investment securities held-to-maturity................... 218 225
Federal funds sold....................................... 250 81
Interest bearing deposits................................ 1 3
---------- ----------
Total interest and dividend income.................... 7,168 6,961
---------- ----------
Interest expense:
Deposits................................................ 2,677 2,691
Borrowed funds.......................................... 233 227
---------- ----------
Total interest expense................................ 2,910 2,918
---------- ----------
Net interest and dividend income...................... 4,258 4,043
Provision for possible loan losses......................... 135 120
---------- ----------
Net interest and dividend income after
provision for possible loan losses.................. 4,123 3,923
---------- ----------
Noninterest income:
Service charges on deposit accounts and fees............ 207 206
Securities gains, net................................... 318 220
Other................................................... 111 112
---------- ----------
Total noninterest income.............................. 636 538
---------- ----------
Noninterest expense:
Salaries and employee benefits.......................... 1,571 1,372
Office occupancy and equipment.......................... 424 428
Amortization of deposit purchase premium................ 75 75
Merger related expenses................................. -- 276
Other................................................... 829 819
---------- ----------
Total noninterest expense............................. 2,899 2,970
---------- ----------
Income before income tax expense...................... 1,860 1,491
Income tax expense......................................... 652 413
---------- ----------
Net income............................................ $ 1,208 $ 1,078
========== ==========
Per share data:
Net income.............................................. $ 0.70 $ 0.62
Weighted average number of common shares..... 1,731,969 1,731,969
The accompanying notes are an integral part of these financial statements.
</TABLE>
-4-
<PAGE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
1998 1997
--------------------------
(Dollars in Thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,208 $ 1,078
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for:
Possible loan losses 135 120
Depreciation and amortization 259 244
Deferred income taxes 20 (9)
Write down of real estate acquired by foreclosure -- 5
Gains on sales of investment securities available-for-sale, net (318) (220)
Loss on sale of premises and equipment, net -- 49
Accretion of (discount) and amortization of premium
on investment and mortgage-backed securities, net 36 75
Decrease in unearned income, net (39) (50)
Gains on sales of real estate acquired by foreclosure
or substantively repossessed (35) (15)
Net increase in loans held for sale (108) (89)
Decrease in accrued income receivable 51 440
Decrease in other assets 73 50
Increase in other liabilities 491 518
------- -------
Net cash provided by operating activities 1,773 2,196
------- -------
Cash flows from investing activities:
Net (increase) decrease in interest bearing deposits (28) 199
Proceeds from sales of investment securities available-for-sale 1,829 3,657
Proceeds from maturities of investment securities held-to-maturity 2,629 352
Proceeds from maturities of investment securities available-for-sale 5,398 5,012
Purchase of investment securities available-for-sale (8,881) (802)
Purchase of investment securities held-to-maturity (5,186) (4,000)
Principal payments received on investment securities held-to-maturity -- --
Principal payments received on investment securities available-for-sale 1,044 731
Net (increase) decrease in loans 2,115 (7,179)
Proceeds from sales of real estate acquired by foreclosure or
substantively repossessed and principal payments received on OREO 23 67
Proceeds from sale of premises and equipment -- 296
Additions to premises and equipment (581) (227)
------- -------
Net cash used in investing activities (1,638) (1,894)
------- -------
Cash flows from financing activities:
Net decrease in deposits (5,448) (5,627)
Advances from Federal Home Loan Bank -- 1,189
Repayment of Federal Home Loan Bank advances (4,040)
Net increase in repurchase agreements 4,071 3,043
Net increase in other borrowed funds -- (221)
Cash dividends paid -- (345)
------- -------
Net cash used in financing activities (5,417) (1,961)
------- -------
Net decrease in cash and cash equivalents (5,282) (1,659)
Cash and cash equivalents at beginning of period 31,311 17,282
------- -------
Cash and cash equivalents at end of period $26,029 $15,623
======= =======
Cash paid during the periiod for:
Interest $ 2,986 $ 3,079
======= =======
Income taxes $ 154 $ 138
======= =======
Supplemental disclosures of non-cash activities:
Loans transferred to real estate acquired by
foreclosure or substantively repossessed $ 167 $ 208
======= =======
Loans charged off, net of recoveries $ 66 $ 160
======= =======
Financed sales of real estate acquired by foreclosure $ 130 $ 33
======= =======
</TABLE>
-5-
<PAGE>
NORTHWAY FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1998
1. Basis of Presentation.
The unaudited consolidated financial statements of Northway Financial,
Inc. and its two wholly owned bank subsidiaries ("the Corporation") included
herein have been prepared by the Corporation in accordance with the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted in accordance with such rules and regulations. The Corporation, however,
believes that the disclosures are adequate to make the information presented not
misleading. All prior period amounts in the Form 10Q have been restated to
reflect the reorganization of the Corporation on September 30, 1997 into a
multi-bank holding company. Refer to Note 4 for further discussion of the
holding company reorganization and merger transactions. The amounts shown
reflect, in the opinion of management, all adjustments necessary for a fair
presentation of the financial statements for the periods reported.
The results of operations for the three months ended March 31, 1998 and
1997 are not necessarily indicative of the results of operations for the full
year or any other interim periods.
2. Allowance for Possible Loan Losses
Analysis of the allowance for possible loan losses for the three months
ended March 31, 1998 and 1997 is as follows:
1998 1997
---- ----
(Dollars in thousands)
Balance beginning of period $4,156 $3,941
Chargeoffs 131 204
Recoveries 65 44
------ ------
Net chargeoffs 66 160
Provision for possible loan losses 135 120
------ ------
Balance at end of period $4,225 $3,901
====== ======
-6-
<PAGE>
NORTHWAY FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1998
3. Commitments and Contingencies
At March 31, 1998, the Corporation had the following off-balance sheet
financial instruments with contract amounts which represent credit risk:
Contract or Notional Amount
(Dollars in thousands)
Commitments to extend credit $32,035
Standby letters of credit and
financial guarantees written $ 590
Commercial letters of credit $ -0-
Foreign exchange contracts $ -0-
4. Formation of Northway Financial, Inc.
Northway Financial, Inc. ("Northway") is a New Hampshire corporation
organized on March 7, 1997 for the purpose of becoming the holding company of
The Berlin City Bank ("BCB") pursuant to a reorganization transaction (the "BCB
Reorganization") by and among Northway, BCB and a subsidiary of BCB, and
thereafter, effecting the merger (the "Merger") between Northway and Pemi
Bancorp, Inc. ("PEMI"), pursuant to which Northway also became the holding
company for PEMI's wholly owned subsidiary, Pemigewasset National Bank ("PNB").
The BCB Reorganization and the Merger were consummated on September 30, 1997.
The Merger was treated as "pooling of interests" for accounting purposes. Other
than matters relating to corporate organization and capitalization, and other
matters incidental to completion of the BCB Reorganization and Merger, Northway
has not engaged in any business activity. As of September 30, 1997, Northway's
business is to own all of the common stock of BCB and PNB.
BCB is a trust company chartered under the laws of the State of New
Hampshire. BCB has seven banking offices in New Hampshire through which it
provides a range of bank-related services.
PNB is a national banking association organized under the laws of the
United States. PNB has five branches located in New Hampshire through which it
provides a range of bank-related services.
-7-
<PAGE>
NORTHWAY FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1998
The Merger was effected in accordance with the terms and conditions of
the Agreement and Plan of Merger, dated as of March 14, 1997, by and among BCB,
Northway, PEMI, and PNB (the "Merger Agreement"). Under the terms of the Merger
Agreement (i) Northway organized a New Hampshire trust company, Berlin Interim
Trust Company ("BITC"), (ii) BCB merged with and into BITC while retaining the
name "The Berlin City Bank" and, as a result of which, became a wholly owned
subsidiary of Northway, and (iii) following the BCB Reorganization, PEMI merged
with and into Northway, with Northway being the surviving corporation ("the
Merger"). As a result of the foregoing transactions, Northway is the bank
holding company for BCB and PNB and each of BCB and PNB are wholly owned
subsidiaries of Northway.
In connection with the BCB Reorganization and the Merger, respectively,
(i) each outstanding share of BCB common stock was converted into 16 shares of
Northway common stock, and (ii) each outstanding share of PEMI common stock was
converted into 1.0419 shares of Northway common stock.
5. Supplemental Disclosure of Separate Results
The financial statements reflect the combined results of The Berlin City
Bank and Pemi Bancorp, Inc. Supplemental disclosure of the separate results of
the two banks for periods prior
to the merger are as follows:
Berlin City Pemi Northway
Bank Bancorp Financial
----------- ------- ---------
(In thousands except per share data)
January 1, 1997 to March 31, 1997
Net interest income $2,568 $1,475 $4,043
Net income 799 279 1,078
Net income per share $ 0.46 $ 0.16 $ 0.62
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Introduction
The following discussion and analysis and related consolidated financial
statements include Northway Financial, Inc. and its wholly-owned subsidiaries,
The Berlin City Bank and Pemigewasset
National Bank (the "Corporation").
Certain statements in this Form 10-Q, in the Corporation's press
releases, and in oral statements made by or with the approval of an authorized
executive officer of the Corporation, constitute "forward-looking statements" as
that term is defined under the Private Securities Litigation Reform Act of 1995
(the "Act") and within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934 promulgated thereunder.
The words "believe," "expect," "anticipate," "intend," "estimate," "project" and
other expressions which are predictions of or indicate future events and trends
and which do not relate to historical matters identify forward-looking
statements. Reliance should not be placed on forward-looking statements because
they involve known and unknown risks, uncertainties and other factors, which may
cause the actual results, performance or achievements of the Corporation to
differ materially from anticipated future results, performance or achievements
expressed or implied by such forward-looking statements. The Corporation
undertakes no obligation to publicly update or revise any forward- looking
statement, whether as a result of new information, future events or otherwise.
The following important factors, among others, may have affected the
Corporation and its subsidiaries in the past and could in the future affect the
actual results of operations of the Corporation, and could cause the actual
results of operations for subsequent periods to differ materially from those set
forth in, contemplated by, or underlying any forward-looking statement made
herein: (i) the effect of changes in laws and regulations, including federal and
state banking laws and regulations, with which the Corporation must comply,
including the effect of the cost of such compliance; (ii) the effect of changes
in accounting policies and practices, as may be adopted by the regulatory
agencies as well as by the Financial Accounting Standards Board, or of changes
in the Corporation's organization, compensation and benefit plans; (iii) the
effect on the competitive position of the Corporation's subsidiaries within
their respective market areas resulting from increased consolidation within the
banking industry and increased competition from larger regional and out-of-state
banking organizations, as well as from nonbank providers of various financial
services; (iv) the effect of unforeseen changes in interest rates, loan default
and charge-off rates; (v) changes in deposit levels necessitating increased
borrowing to fund loans and investments; (vi) the effect of changes in the
business cycle and downturns in the New Hampshire, New England, and national
economies; (vii) the factors detailed in the section titled "Risk Factors" in
the Corporation's Proxy Statement/Prospectus, dated Aug. 12, 1997; and (viii)
changes in the assumptions used in making such forward-looking statements.
Though the Corporation has attempted to list comprehensively these important
factors, the Corporation wishes to caution investors that other factors may in
the future prove to be important in affecting the Corporation's results of
operations. New factors emerge from time to time and it is not possible for
management to predict all of such factors, nor can it assess the impact of
-9-
<PAGE>
each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from
forward looking statements.
Financial Condition
The Corporation's total assets at March 31, 1998 were $374 million
compared to $378 million at December 31, 1997, a $4 million, or 1%, decrease.
Net loans decreased $2.3 million during this period while investment securities
increased $3.5 million. Cash and cash equivalents decreased $5.3 million to $26
million. Total deposits decreased $5.4 million. Federal Home Loan Bank advances
decreased $4.0 million, which was offset by increases in repurchase agreements
of $4.1 million.
The Corporation maintains an allowance for possible loan losses to
absorb future chargeoffs of loans in the existing portfolio. The allowance is
increased when a loan loss provision is recorded in the income statement. When a
loan, or portion thereof, is considered uncollectible, it is charged against
this allowance. Recoveries on amounts previously charged off are added to the
allowance when collected. On March 31, 1998 the allowance for possible loan
losses was $4.2 million, or 1.59% of total loans, as compared to $4.1 million,
or 1.55% of total loans for December 31, 1997. The adequacy of the allowance for
possible loan losses was based on an evaluation by each bank's management and
Board of Directors of current and anticipated economic conditions, changes in
the diversification, size and risk within the loan portfolio, and other factors.
Nonperforming loans totaled $1.9 million as of March 31, 1998, compared
to $1.8 million at December 31, 1997. The ratio of nonperforming loans to total
loans was 0.72% as of March 31, 1998 compared to 0.70% at December 31, 1997 and
the ratio of nonperforming assets to total assets was 0.58% as of March 31, 1998
compared to 0.53% at December 31, 1997.
Results of Operations
The Corporation reported net income of $1.2 million, or $0.70 per share,
for the three months ended March 31, 1998 as compared with $1.1 million, or
$0.62 per share, for the same period in 1997. The increase reflects improvement
in net interest income of $215,000 resulting from the change in the mix of
assets. Specifically, federal funds sold and loan balances increased $25 million
and investment securities balances decreased $25 million.
Noninterest income increased $98,000 as a result of an increase in net
securities gains from $220,000 in the first quarter of 1997 to $318,000 in the
first quarter of 1998. Noninterest expense decreased $71,000 for the quarter
ended March 31, 1998 compared to the same period last year due primarily to the
fact that there were no merger related expenses in 1998 compared to expenses of
$276,000 in 1997. This decrease was partially offset by increases in salaries,
employee benefits, consolidation expenses and the expenses related to opening
the new Berlin City Bank branch in Conway.
The provision for possible loan losses increased slightly to $135,000
for the three months ended March 31, 1998 from the $120,000 reported for the
comparable period in 1997. The provision has been increased as a result of the
growth in the Company's loan portfolio.
-10-
<PAGE>
Liquidity
Liquidity risk management involves the Company's and its' subsidiaries
ability to raise funds in order to meet their existing and anticipated financial
obligations. These obligations are the withdrawal of deposits on demand or, at
their contractual maturity, the repayment of borrowings as they mature, the
ability to fund new and existing loan commitments and the ability to take
advantage of new business opportunities. Liquidity may be provided through
amortization, maturity or sale of assets such as loans and securities
available-for-sale, liability sources such as increased deposits, utilization of
the FHLB credit facility, purchased or other borrowed funds, and access to the
capital markets. Liquidity targets are subject to change based on economic and
market conditions and are controlled and monitored by the Company's
Asset/Liability Committee.
At the bank level, liquidity is managed by measuring the net amount of
marketable assets after deducting pledged assets, plus lines of credit,
primarily with the FHLB, which are available to fund liquidity requirements.
Management then measures the adequacy of that aggregate amount relative to the
aggregate amount of liabilities deemed to be sensitive or volatile liabilities.
These include brokered deposits, core deposits in excess of $100,000, term
deposits with short maturities, and credit commitments outstanding.
Additionally, the parent holding company requires cash for various
operating needs including dividends to shareholders, capital injections to the
subsidiary banks, and the payment of general corporate expenses. The primary
source of liquidity for the parent holding company is dividends from the
subsidiary banks.
Capital
The Corporation's Tier 1 and Total Risk Based Capital was 16.87% and
18.12%, respectively, at March 31, 1998. The Corporation's leverage ratio at
March 31,1998 was 10.10%.
As of March 31, 1998, the capital ratios of the Corporation and all of
it's banking subsidiaries exceeded the minimum capital ratio requirements of the
"well capitalized" category under the Federal
Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding quantitative and qualitative disclosures about
market risk, see the Corporation's discussion under Item 7A of its Annual Report
on Form 10-K for the fiscal year ended December 31, 1997. Between December 31,
1997 and March 31, 1998, there were no material
changes in the Corporation's market risk.
-11-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number
(27) Financial Data Schedule
(b) The Corporation did not file any Reports on Form 8-K during the
quarter ended March 31, 1998.
-12-
<PAGE>
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHWAY FINANCIAL, INC.
May 14, 1998 BY: \S\ William J. Woodward
------------------------
William J. Woodward
President & CEO
May 14, 1998 BY: \S\ David J. O'Connor
------------------------
David J. O'Connor
Exec. Vice President & CFO
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND INCOME STATEMENT AND FROM THE MANAGEMENT DISCUSSION AND ANALYSIS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
MANAGEMENT DISCUSSION.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 15,129
<INT-BEARING-DEPOSITS> 113
<FED-FUNDS-SOLD> 10,900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 56,113
<INVESTMENTS-CARRYING> 15,888
<INVESTMENTS-MARKET> 15,880
<LOANS> 265,057
<ALLOWANCE> 4,225
<TOTAL-ASSETS> 374,208
<DEPOSITS> 316,615
<SHORT-TERM> 10,217
<LIABILITIES-OTHER> 3,300
<LONG-TERM> 5,282
0
0
<COMMON> 1,732
<OTHER-SE> 37,062
<TOTAL-LIABILITIES-AND-EQUITY> 374,208
<INTEREST-LOAN> 5,904
<INTEREST-INVEST> 1,013
<INTEREST-OTHER> 251
<INTEREST-TOTAL> 7,168
<INTEREST-DEPOSIT> 2,677
<INTEREST-EXPENSE> 2,910
<INTEREST-INCOME-NET> 4,258
<LOAN-LOSSES> 135
<SECURITIES-GAINS> 318
<EXPENSE-OTHER> 2,899
<INCOME-PRETAX> 1,860
<INCOME-PRE-EXTRAORDINARY> 1,860
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,208
<EPS-PRIMARY> 0.70
<EPS-DILUTED> 0.70
<YIELD-ACTUAL> 8.25
<LOANS-NON> 1,911
<LOANS-PAST> 36
<LOANS-TROUBLED> 1,177
<LOANS-PROBLEM> 601
<ALLOWANCE-OPEN> 4,156
<CHARGE-OFFS> 131
<RECOVERIES> 65
<ALLOWANCE-CLOSE> 4,225
<ALLOWANCE-DOMESTIC> 3,585
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 640
</TABLE>
