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 September 30, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
0-22929
-------
TALBOT BANCSHARES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Maryland 52-2033630
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
18 East Dover Street, Easton, Maryland 21601
- -------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(410) 822-1400
--------------
Registrant's Telephone Number, Including Area Code
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceeding 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 .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of October 31, 1997, registrant had outstanding 1,188,834 shares of common
stock.
<PAGE>
INDEX
Part I.
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
September 30, 1997 and 1996 (unaudited) and December 31, 1996 4
Condensed Consolidated Statements of Income -
Three and nine months ended September 30, 1997 and 1996 (unaudited) 5
Condensed Consolidated Statements of changes in Stockholders' Equity -
For the nine month period ended Setember 30, 1997 (unaudited) 6
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 1997 and 1996 (unaudited) 7
Notes to Condensed Consolidated Financial Statements (unaudited) 8-9
Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations 10-12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 13
Part II.
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
Part I
Item 1. Financial Statements
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
September 30, September 30, December 31,
ASSETS: 1997 1996 1996
- ------- --------------- --------------- ----------
(unaudited) (unaudited)
<S> <C> <C> <C>
Cash and due from banks $ 5,723 $ 6,769 $ 7,014
Federal funds sold 12,601 7,177 7,573
Investment in debt securities:
Held-to-maturity, at amortized cost (fair value of $28,678,
$29,937, $30,744, respectively) 28,559 29,967 30,608
Available for sale, at fair value 33,643 30,484 32,201
Loans, less allowance for credit losses ($2,553, $2,247,
$2,728, respectively) 176,541 170,011 168,972
Bank premise and equipment 3,057 3,173 3,188
Other real estate owned 216 312 299
Accrued interest receivable on loans and investment securities 2,084 1,804 1,828
Investments in unconsolidated subsidiary 145 170 182
Deferred income tax benefits 629 747 737
Other assets 737 483 582
---------- ---------- -----------
TOTAL ASSETS $263,935 $251,097 $253,184
======== ======== ========
LIABILITIES:
Deposits:
Non-interest bearing demand $ 20,946 $ 19,585 $ 22,141
NOW and Super NOW 40,952 40,294 43,038
Certificates of deposit $100,000 or more 34,052 28,000 28,352
Other time and savings 122,580 123,679 121,571
--------- --------- ---------
Total Deposits 218,530 211,558 215,102
Securities sold under agreements to repurchase 14,245 11,568 9,268
Other liabilities 925 837 894
----------- ---------- ----------
TOTAL LIABILITIES 233,700 223,963 225,264
-------- -------- --------
STOCKHOLDERS' EQUITY:
Common Stock, Par Value $.01; authorized 25,000,000 shares; issued and
outstanding:
September 30, 1997 1,188,834
September 30, 1996 1,184,658
December 31, 1996 1,186,242 12 12 12
Surplus 12,513 12,398 12,435
Retained earnings 17,682 15,031 15,616
Net unrealized holding gain(loss) on debt securities 28 (307) (143)
----------- ---------- ----------
available for sale
TOTAL STOCKHOLDERS' EQUITY 30,235 27,134 27,920
--------- --------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $263,935 $251,097 $253,184
======== ======== ========
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans, including fees $ 3,913 $ 3,748 $ 11,577 $ 11,015
U.S. Treasury securities and obligations of other
U.S. Government agencies and corporations 772 783 2,320 2,272
Obligations of States and political subdivisions 79 69 233 196
Federal funds sold 178 99 388 309
-------- -------- -------- ---------
Total interest income 4,942 4,699 14,518 13,792
------- ------- -------- --------
INTEREST EXPENSE
Certificates of deposit, $100,000 or more 384 348 1,050 994
Other deposits 1,694 1,655 4,945 4,864
Other interest 120 129 339 428
------- ------- ------- -------
Total interest expense 2,198 2,132 6,334 6,286
------ ------ ------ ------
NET INTEREST INCOME 2,744 2,567 8,184 7,506
PROVISION FOR CREDIT LOSSES 45 159 195 449
------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES 2,699 2,408 7,989 7,057
------ ------ ------ ------
NONINTEREST INCOME
Service charges on deposit accounts 145 122 419 365
Loss on sale of securities 1 (2) 1 (23)
Other noninterest income 20 27 66 66
------ ------ ------ ------
Total noninterest income 166 147 486 408
----- ----- ----- -----
NONINTEREST EXPENSES
Salaries and employee benefits 841 781 2,547 2,295
Expenses of premises and fixed assets 173 160 516 488
Other noninterest expense 436 400 1,373 1,190
------- ------- ------ ------
Total noninterest expense 1,450 1,341 4,436 3,973
------ ------ ------ ------
INCOME BEFORE TAXES ON INCOME 1,415 1,214 4,039 3,492
Federal and State income taxes 509 402 1,439 1,242
------- ------- ------- -------
NET INCOME $ 906 $ 812 $2,600 $2,250
====== ====== ====== ======
NET INCOME PER COMMON SHARE:
Net Income $ .76 $ .69 $ 2.19 $1.90
See accompanying notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Net Unrealized
Holding
Gain (Loss) on
Common Retained Debt Securities
Stock Surplus Earnings Available-for-sale
------ ------- -------- ------------------
<S> <C> <C> <C> <C>
Balances, December 31, 1995 $12 $12,331 $13,225 ($374)
Net Income - - 2,250 -
Cash Dividends Paid - - (444) -
Net unrealized holding gain on
debt securities, available-for-sale - - - 67
Shares issued - 67 - -
----------- --------- -------- --------------------
Balances, September 30, 1996 $12 $ 12,398 $ 15,031 ($307)
=========== ======== ======== ====================
Balances, December 31, 1996 $12 $12,435 $15,616 ($143)
Net Income - - 2,600 -
Cash Dividends Paid - - (534) -
Net unrealized holding gain on
debt securities, available-for-sale - - - 171
Shares issued - 78 - -
------------- ----------- -----------------------------------
Balances, September 30, 1997 $12 $12,513 $17,682 $28
=========== ======== ======== ====================
See accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine Months Ended September 30,
1997 1996
---- ----
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,600 $ 2,250
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 324 363
Discount accretion on debt securities (76) (55)
Discount accretion on matured debt securities 47 (6)
(Gain)Loss on sale of securities (1) 23
Gain on sale of bank equipment (1) -
Provision for credit losses, net (175) 169
Net changes in:
Accrued interest receivable (256) (50)
Other assets (58) (103)
Accrued interest payable on deposits 19 23
Accrued expenses 20 11
Other liabilities (8) (16)
------------------ -----------------
Net cash provided by operating activities 2,435 2,609
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale 2,973 4,981
Proceeds from maturities and principal payments of securities
available for sale 5,730 8,108
Purchase of securities available for sale (10,073) (12,968)
Proceeds from maturities and principal payments of securities
held to maturity 3,880 8,181
Purchase of securities held to maturity (1,709) (7,876)
Net increase in loans (7,884) (12,479)
Purchase of loans (700) (198)
Proceeds from sale of loans 1,098 2,539
Purchase of bank premises and equipment (97) (407)
Proceeds from sale of equipment 20 -
Proceeds from sale of other real estate owned 115 -
----------------- --------------------
Net cash used in investing activities (6,647) (10,119)
----------------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease)increase in demand, NOW, money market and
savings deposits (6,032) 7,077
Net increase in certificates of deposit 9,460 9,034
Net increase(decrease) in securities sold under agreement to repurchase 4,977 (1,378)
Proceeds from issuance of common stock 78 67
Dividends paid (534) (444)
----------------- -----------------
Net cash provided by financing activities 7,949 14,356
----------------- ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,737 6,846
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,587 7,100
---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,324 $ 13,946
=============== ==============
</TABLE>
<PAGE>
Talbot Bancshares, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1) Effective May 1, 1997, the common shareholders of The Talbot Bank of
Easton, Maryland (the "Bank") exchanged each one of their common shares of
the Bank for two shares of common stock of Talbot Bancshares, Inc (the
"Holding Company") and at that time the Bank became a wholly-owned
subsidiary of the Holding Company. The only current business of the Holding
Company is the ownership and operation of the Bank. The Holding Company and
the Bank are collectively referred to as the "Company." The formation of
the Holding Company and exchange of shares has been accounted for as a
pooling of interests.
In the opinion of the management of the Company the accompanying condensed
consolidated financial statements contain all adjustments necessary to
present fairly the financial position at September 30, 1997, the results of
operations for the three and nine month periods ended September 30, 1997
and 1996, and cash flows for the nine month period ended September 30, 1997
and 1996. The results of operations for the three and nine months ended
September 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
2) Net Income per common share has been calculated on the basis of the
weighted average number of shares outstanding for each year, as restated to
reflect the two for one stock split effective May 1, 1997 as a result of
the share exchange. Weighted average shares outstanding were 1,188,270 at
September 30, 1997 and 1,187,490 at September 30, 1996.
In February 1997, the Financial Accounting Standards Board issued Statement
No 128, Earnings Per Share, which is required to be adopted December 31,
1997. The adoption of this pronouncement is not expected to have a material
impact.
3) Under the provisions of Statements of Financial Accounting Standards (SFAS)
Nos. 114 and 118, "Accounting by Creditors for Impairment of a Loan" a loan
is considered impaired if it is probable that the Company will not collect
all principal and interest payments according to the loan's contracted
terms. The impairment of a loan is measured at the present value of
expected future cash flows using the loan's effective interest rate, or at
the loan's observable market price or the fair value of the collateral of
the loan is collateral dependent. Interest income on impaired loans is
recognized on a cash basis.
Information with respect to impaired loans and the related valuation
allowance is shown below:
<TABLE>
<CAPTION>
September 30, September 30, December 31,
(Dollars in thousands) 1997 1996 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Impaired loans with valuation allowance $ 403 $ 359 $ 302
Impaired loans with no valuation allowance 851 5,439 1,249
------- ------- -------
Total impaired loans $ 1,254 $ 5,798 $ 1,551
======= ======= =======
Allowance for credit losses applicable to impaired loans $ 88 $ 102 $ 77
Allowance for credit losses applicable to other than impaired loans 2,465 2,145 $ 2,651
------- ------- -------
Total allowance for credit losses $ 2,553 $ 2,247 $ 2,728
======= ======= =======
</TABLE>
Impaired loans do not include groups of smaller balance homogenous loans
such as residential mortgage and consumer installment loans that are
evaluated collectively for impairment. Reserves for probable future credit
losses related to these loans are based upon historical loss ratios and are
included in the allowance for credit losses.
4) In the normal course of business, to meet the financial needs of its
customers, the Bank is a party to financial instruments with off-balance
sheet risk. These financial instruments include commitments to extend
credit and standby letters of credit. At September 30, 1997 total
commitments to extend credit were approximately $50,056,000. Outstanding
letters of credit were approximately $5,269,000 at September 30, 1997.
<PAGE>
5) Recent FASB Pronouncements
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income, was issued in June 1997. This Statement establishes
standards for disclosing comprehensive income and its components in a full
set of general-purpose financial statements. Comprehensive income is
defined as the change in equity from transactions and other events and
circumstances from nonowner sources. Comprehensive income includes net
income which is adjusted for items such as unrealized gains and losses on
certain investment securities and minimum pension liability adjustments.
This Statement is effective for fiscal years beginning after December 15,
1997. Reclassification of financial statements for earlier periods provided
for comparative purposes is required.
Statement of Financial Accounting Standards No. 131, Disclosure about
Segments of an Enterprise and Related Information, was issued in June 1997.
This Statement establishes standards for disclosing information about
operating segments in financial statements. Operating segments are
components of a business about which separate financial information is
available that is evaluated by management in deciding how to allocate
resources and in assessing performance. Management has not determined yet
whether additional disclosure will be necessary under the requirements of
SFAS No. 131. For year-end disclosure, this Statement is effective for
fiscal years beginning after December 15, 1997. Interim reporting
disclosures would not be required in the first year of adoption, but would
begin the first quarter immediately after the first year of providing
year-end disclosures. For interim reporting, the preceding year's interim
information must be presented on a comparative basis.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
Net income for the third quarter of 1997 was $906,000 an increase of 11.6%
over the $812,000 for the third quarter of 1996. On a per share basis
earnings were $ .76 compared to $ .69 for the same period last year.
Net income for the nine months ended September 30, 1997 was $2,600,000
compared to $2,250,000 for the same period in 1996. This represents a 15.6%
increase. Net income per share was $2.19 and $1.90 for the nine months
ended September 30, 1997 and 1996, respectively.
Net Interest Income
Net interest income for the nine months ended September 30, 1997 was higher
than the same period last year due to both an increase in the average
earning assets and the yield on those assets. The net interest margin
increased 26 basis points to 4.57% compared to 4.31% one year ago. Growth
in average earning assets was concentrated in loans with an average yield
of 8.95%. Loans comprised 71.2% and 71.1% of total average earning assets
at September 30, 1997 and 1996, respectively.
Non-interest Income
Non-interest income increased 13% and 19% for the quarter and nine months
ended September 30, 1997 compared to the same periods in 1996. A
significant factor contributing to these increases was a reduction in the
losses from sales of investment securities and from decreased losses of an
unconsolidated subsidiary of the Bank. Service charges on deposit accounts
increased 19% and 15%, respectively for the quarter and nine months ended
September 30, 1997 when compared to the same periods in 1996.
Non-interest expense
Total non-interest expense, excluding the provision for loan losses,
increased 8% for the quarter ended September 30, 1997 from the comparable
period in 1996. For the nine month period ended September 30, 1997, the
percentage increase in non-interest expenses was also approximately 12%
when compared to the same period in 1996. Increases in salaries and
employee benefits, furniture and equipment, supplies and various operating
expenses associated with a new branch opened less than one year, were major
factors contributing to the increases.
Liquidity and Capital Resources
The Bank derives liquidity through increased customer deposits, maturities
in the investment portfolio, loan repayments and income from earning
assets. At September 30, 1997 the Company's liquidity ratio was
approximately 21%. There are no known trends or demands, commitments,
events or uncertainties that management is aware of which will materially
affect the Bank's ability to maintain liquidity at satisfactory levels.
Total Stockholders' equity was $30.2 million at September 30, 1997, 11.4%
higher than one year ago.
Bank regulatory agencies have adopted various capital standards for
financial institutions, including risk-based capital standards. The primary
objectives of the risk-based capital framework are to provide a more
consistent system for comparing capital positions of financial institutions
and to take into account the different risks among financial institutions'
assets and off-balance sheet items.
Risk-based capital standards have been supplemented with requirements for a
minimum Tier 1 capital to assets ratio (leverage ratio). In addition,
regulatory agencies consider the published capital levels as minimum levels
and may require a financial institution to maintain capital at higher
levels.
A comparison of the Bank's capital as of September 30, 1997, with the
minimum requirements is presented below.
<TABLE>
<CAPTION>
Minimum
Actual Requirements
------ ------------
<S> <C> <C>
Tier 1 Risk-based Capital 17.06% 4.00%
Total Risk-based Capital 18.31% 8.00%
Leverage Ratio 11.70% 3.00%
</TABLE>
<PAGE>
Provisions for Credit Losses
The Company is required to maintain an adequate allowance for credit
losses, therefore, the Board of Directors and management perform regular
reviews to assure its' adequacy. Significant credit exposures, non-accrual
and impaired loans and other real estate owned are examined to assure the
adequacy of the allowance.
The following table presents a summary of the activity in the Allowance for
Loan Losses.
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Allowance balance - beginning $ 2,583 $ 2,198 $ 2,728 $ 2,077
Charge-offs:
Commercial and other 37 73 235 232
Real estate 40 16 100 53
Consumer 13 42 68 53
--------- -------- --------- ---------
Totals 90 131 403 338
--------- -------- --------- ---------
Recoveries:
Commercial 4 16 8 20
Real Estate 2 1 4 11
Consumer 9 4 21 28
---------- --------- --------- --------
Totals 15 21 33 59
--------- -------- --------- --------
Net Charge-offs: 75 110 370 279
Provision for loan losses 45 159 195 449
---------- --------- --------- ---------
Allowance balance-ending $ 2,553 $ 2,247 $ 2,553 $ 2,247
======== ======== ======== ========
Average Loans outstanding during period $174,367 $170,212 $172,747 $167,559
======== ======== ======== ========
Net charge-offs (annualized) as a percentage of
average loans outstanding during period .17% .26% .29% .22%
========= ========= ========= ==========
Allowance for loan losses at period end as a
percentage of average loans 1.46% 1.32% 1.48% 1.34%
======== ======== ======== =========
</TABLE>
<PAGE>
Analysis of Interest Rates and Interest Differentials.
The following table presents the distribution of the average consolidated
balance sheets, interest income/expense and yields earned and rates paid
through the first nine months of the year.
<TABLE>
<CAPTION>
1997 1996
---- ----
Average Income* Yield* Average Income* Yield*
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets
Investment Securities $ 60,292 $ 2,667 5.90% $ 60,552 $ 2,565 5.65%
Loans 172,747 11,595 8.95 167,656 11,037 8.78
Federal Funds Sold 9,438 387 5.47 7,694 309 5.35
-------- -------- ---- -------- ------- ----
Total earning assets 242,477 14,649 8.06% 235,902 13,911 7.86%
-------- -------
Non-interest earning assets 9,648 9,193
-------- --------
Total Assets $252,125 $245,095
======== ========
Interest bearing liabilities
Interest bearing deposits $191,897 $ 5,995 4.17% $186,626 $ 5,859 4.19%
Borrowings 10,588 339 4.27 13,475 428 4.24
--------- ------- ---- -------- ------- ----
Total interest bearing liabilities 202,485 6,334 4.17% 200,101 6,287 4.19%
------ ------
Non-interest bearing liabilities 20,674 18,835
Stockholders' equity 28,966 26,159
-------- --------
Total liabilities and stockholders' equity $252,125 $245,095
======== ========
Net interest spread $ 8,315 3.89% $ 7,624 3.67%
======= =======
Net interest margin 4.57% 4.31%
* Presented on a tax equivalent basis using its statutory federal corporate
income tax rate of 34%.
</TABLE>
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company does not invest materially or substantially in derivative financial
instruments or other market rate sensitive instruments.
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Exhibit 27 - Financial Data Schedule
b) Form 8-K filed August 25, 1997.
Item 5 - other events include the filing of exhibits to supplement Form
8-A filed August 1, 1997. Financial statements included in this filing
were: Form F-2 Annual Report for the year ended December 31, 1996, of
The Talbot Bank of Easton, Maryland (as filed with the FDIC); Annual
Report to Stockholders for the year ended December 31, 1996, of The
Talbot Bank of Easton, Maryland (as filed with the FDIC); and Form F-4
Quarterly Report for the period ended March 31, 1997 of The Talbot Bank
of Easton, Maryland (as filed with the FDIC).
<PAGE>
Signatures
Under the requirements of the Securities Exchange Act of 1934, the Company has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
TALBOT BANCSHARES, INC.
Date: November 7, 1997 By: /s/ W. Moorhead Vermilye
------------------------
President
Date: November 7, 1997 By: /s/ Susan E. Leaverton
----------------------
Susan E. Leaverton, CPA
Treasurer/Principal Accounting Officer
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED SEPTEMBER 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001043056
<NAME> TALBOT BANCSHARES, INC.
<MULTIPLIER> 1000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,723
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 12,601
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 33,643
<INVESTMENTS-CARRYING> 28,559
<INVESTMENTS-MARKET> 28,678
<LOANS> 179,094
<ALLOWANCE> 2,553
<TOTAL-ASSETS> 263,935
<DEPOSITS> 218,530
<SHORT-TERM> 14,245
<LIABILITIES-OTHER> 925
<LONG-TERM> 0
0
0
<COMMON> 12
<OTHER-SE> 30,223
<TOTAL-LIABILITIES-AND-EQUITY> 263,935
<INTEREST-LOAN> 11,577
<INTEREST-INVEST> 2,553
<INTEREST-OTHER> 388
<INTEREST-TOTAL> 14,518
<INTEREST-DEPOSIT> 5,995
<INTEREST-EXPENSE> 6,334
<INTEREST-INCOME-NET> 8,184
<LOAN-LOSSES> 195
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 4,448
<INCOME-PRETAX> 4,038
<INCOME-PRE-EXTRAORDINARY> 2,600
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,600
<EPS-PRIMARY> 2.19
<EPS-DILUTED> 2.15
<YIELD-ACTUAL> 8.06
<LOANS-NON> 1,306
<LOANS-PAST> 1,143
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 6,736
<ALLOWANCE-OPEN> 2,728
<CHARGE-OFFS> 403
<RECOVERIES> 33
<ALLOWANCE-CLOSE> 2,553
<ALLOWANCE-DOMESTIC> 2,553
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
