UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 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 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 July 31, 1998, registrant had outstanding
1,191,202 shares of common stock.
<PAGE>
INDEX
<TABLE>
<CAPTION>
Part I.
Item 1. Financial Statements Page
<S><C>
Condensed Consolidated Balance Sheets -
June 30, 1998 and 1997 (unaudited) and December 31, 1997 3
Condensed Consolidated Statements of Income -
Three and six months ended June 30, 1998 and 1997 (unaudited) 4
Condensed Consolidated Statements of changes in Stockholders' Equity -
For the six Month Period ended June 30, 1998 (unaudited) 5
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1998 and 1997 (unaudited) 6
Notes to Condensed Consolidated Financial Statements (unaudited) 7-8
Item 2. Managements Discussion and Analysis of Financial Condition
and results of Operations 9-11
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
Part II.
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
<PAGE>
Part I
Item 1. Financial Statements
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
June 30, June 30, December 31,
ASSETS: 1998 1997 1997
- ------- --------------- --------------- --------------
(unaudited) (unaudited)
<S><C>
Cash and due from banks $7,021 $ 5,139 $ 8,108
Federal funds sold 15,153 6,107 8,057
Investment in debt securities:
Held-to-maturity, at amortized cost (fair value of $16,727,
$29,760, $24,257, respectively) 16,668 29,678 24,149
Available for sale, at fair value 39,134 29,627 37,330
Loans, less allowance for credit losses ($2,524, $2,583,
$2,538, respectively) 186,157 172,243 182,755
Bank premise and equipment 3,078 3,103 3,144
Other real estate owned 318 124 114
Accrued interest receivable on loans and investment securities 1,838 2,054 1,949
Investments in unconsolidated subsidiary 159 167 174
Deferred income tax benefits 409 705 455
Other assets 909 689 794
-------- -------- --------
TOTAL ASSETS $270,844 $249,636 $267,029
======== ======== ========
LIABILITIES:
Deposits:
Non-interest bearing demand $ 21,768 $ 21,936 $ 23,696
NOW and Super NOW 50,769 43,429 51,159
Certificates of deposit $100,000 or more 25,054 18,336 25,763
Other time and savings 125,363 123,426 124,296
-------- -------- --------
Total Deposits 222,954 207,127 224,914
Securities sold under agreements to repurchase 14,676 12,347 10,264
Other liabilities 689 798 880
-------- -------- --------
TOTAL LIABILITIES 238,319 220,272 236,058
-------- -------- --------
STOCKHOLDERS' EQUITY:
Common Stock, Par Value $.01; authorized 25,000,000 shares; issued and
outstanding:
June 30, 1998 1,191,202
June 30, 1997 1,188,264
December 31, 1997 1,189,610 12 12 12
Surplus 12,611 12,491 12,548
Retained earnings 19,697 16,954 18,280
Accumulated other comprehensive income 205 (93) 131
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY 32,525 29,364 30,971
-------- -------- --------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $270,844 $249,636 $267,029
======== ======== ========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
------------- ---------------- -------------- -------------
<S><C>
INTEREST INCOME
Loans, including fees $ 4,159 $ 3,820 $ 8,202 $ 7,664
Interest and dividends on investment securities
Taxable 787 767 1,594 1,548
Tax-exempt 60 76 125 154
Federal funds sold 105 113 192 210
-------- -------- -------- --------
Total interest income 5,111 4,776 10,113 9,576
------- ------- ------- -------
INTEREST EXPENSE
Certificates of deposit, $100,000 or more 362 311 742 666
Other deposits 1,712 1,648 3,404 3,251
Other interest 151 117 262 219
------- ------- ------- -------
Total interest expense 2,225 2,076 4,408 4,136
------- ------ ------- ------
NET INTEREST INCOME 2,886 2,700 5,705 5,440
PROVISION FOR CREDIT LOSSES 60 45 120 150
-------- ------- ------- -------
NET INTEREST INCOME AFTER PROVISION FOR
CREDIT LOSSES 2,826 2,655 5,585 5,290
------- ------- ------- -------
NONINTEREST INCOME
Service charges on deposit accounts 154 143 289 274
Loss on sale of securities 9 0 9 0
Other noninterest income 44 21 64 46
------- ------- ------ ------
Total noninterest income 207 164 362 320
------ ----- ----- -----
NONINTEREST EXPENSES
Salaries and employee benefits 866 827 1,774 1,706
Expenses of premises and fixed assets 168 165 350 343
Other noninterest expense 465 477 945 937
------- ------- ------- -------
Total noninterest expense 1,499 1,469 3,069 2,986
------ ------ ------ ------
INCOME BEFORE TAXES ON INCOME 1,534 1,350 2,878 2,624
Federal and State income taxes 533 480 986 930
------- ------- ------- -------
NET INCOME $1,001 $ 870 $1,892 $1,694
====== ====== ====== ======
Diluted earnings per common share $ .82 $ .73 $ 1.56 $ 1.42
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Accumulated
other
Common Retained Comprehensive
Stock Surplus Earnings Income Total
----- ------- -------- ------------- -------
<S><C>
Balances, December 31, 1996 $ 12 $12,435 $15,616 ($143) $27,920
Net Income - - 1,694 - 1,694
Cash Dividends Paid $0.30 per share - - (356) - (356)
Comprehensive income, net of tax:
Net unrealized holding gain on
debt securities, available-for-sale - - - 50 50
-------
Other comprehensive income 50
-------
Shares issued - 56 - - 56
----------- ------- ------- ------------- -------
Balances, June 30, 1997 $ 12 $12,491 $16,954 ($93) $29,364
=========== ======= ======= ============= =======
Balances, December 31, 1997 $ 12 $12,548 $18,280 $131 $30,971
Net Income - - 1,892 - 1,892
Cash Dividends Paid $0.40 per share - - (475) - (475)
Comprehensive income, net of tax:
Net unrealized holding gain(loss) on
debt securities, available-for-sale - - - 74 74
-------
Other comprehensive income 74
-------
Shares issued - 63 - - 63
----------- ------- ------- ------------- -------
Balances, June 30, 1998 $ 12 $12,611 $19,697 $205 $32,525
=========== ======= ======= ============= =======
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
<PAGE>
TALBOT BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
1998 1997
---------- ----------
<S><C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,892 $ 1,694
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 235 217
Discount accretion on debt securities (35) (52)
Discount accretion on matured debt securities 91 3
Gain on sale of securities (9) -
Gain on sale of bank equipment - (3)
Provision for credit losses 120 150
Net changes in:
Accrued interest receivable 111 (226)
Other assets (100) (32)
Accrued interest payable on deposits (12) (37)
Other liabilities (179) (59)
-------------- -------------
Net cash provided by operating activities 2,114 1,655
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale 5,062 1,003
Proceeds from maturities and principal payments of securities
available for sale 1,181 4,522
Purchase of securities available for sale (8,107) (2,978)
Proceeds from maturities and principal payments of securities
held to maturity 8,532 2,351
Purchase of securities held to maturity (1,000) (1,341)
Net increase in loans (3,522) (3,533)
Purchase of loans - (700)
Proceeds from sale of loans - 812
Purchase of bank premises and equipment (87) (71)
Proceeds from sale of equipment - 20
Proceeds from sale of other real estate owned - 115
Purchase other real estate owned (204) -
-------------- -------------
Net cash provided by investing activities 1,855 200
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in demand, NOW, money market and
savings deposits (3,343) (756)
Net increase(decrease) in certificates of deposit 1,383 (7,219)
Net increase in securities sold under agreement to repurchase 4,412 3,079
Proceeds from issuance of common stock 63 56
Dividends paid (475) (356)
-------------- -------------
Net cash provided (used) by financing activities 2,040 (5,196)
-------------- -------------
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 6,009 (3,341)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 16,165 14,587
-------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,174 $ 11,246
============== =============
</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 June 30, 1998, the
results of operations for the three and six month periods ended June 30,
1998 and 1997, and cash flows for the six month period ended June 30,
1998 and 1997. The results of operations for the three and six months
ended June 30, 1998 are not necessarily indicative of the results to be
expected for the full year.
2) In February 1997, the Financial Accounting Standards Board issued SFAS
No 128, Earnings Per Share, which became effective for the Company for
reporting periods ending after December 31, 1998. Under the provisions
of SFAS No. 128, primary and fully-diluted earnings per share were
replaced with basic diluted earnings per share in an effort to simplify
the computation of these measures and align them more closely with the
methodology used internationally. Basic earnings per share is arrived
at by dividing net income available to common stockholders by the
weighted-average number of common shares outstanding and does not
include the impact of any potentially dilutive common stock equivalents.
The diluted earnings per share calculation method is arrived at by
dividing net income by the weighted-average number of shares
outstanding, adjusted for the dilutive effect of outstanding stock
options and warrants. For purposes of comparability, the prior-period
earnings per share data has been restated.
<TABLE>
<CAPTION>
June 30, June 30,
1998 1997
-------- --------
<S><C>
Basic:
Net income (applicable to common stock) 1,892,000 1,694,000
Average common shares outstanding 1,189,987 1,187,068
Basic net income per share 1.59 1.43
Diluted:
Net income (applicable to common stock) 1,892,000 1,694,000
Average common shares outstanding 1,189,987 1,187,068
Dilutive effect of stock options 20,286 7,578
---------- -----------
Average common shares outstanding diluted 1,210,273 1,194,646
Diluted net income per share 1.56 1.42
</TABLE>
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.
<PAGE>
Information with respect to impaired loans and the related valuation allowance
is shown below:
<TABLE>
<CAPTION>
June 30, June 30, December 31,
(Dollars in thousands) 1998 1997 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S><C>
Impaired loans with valuation allowance $ 90 $ 476 $ 587
Impaired loans with no valuation allowance 817 603 695
------- ------- -------
Total impaired loans $ 907 $ 1,079 $ 1,282
======= ======= =======
Allowance for credit losses applicable to impaired loans $ 40 $ 118 $ 122
Allowance for credit losses applicable to other than impaired loans 2,484 2,465 2,416
------ ------- -------
Total allowance for credit losses $ 2,524 $ 2,583 $ 2,538
======= ======= =======
</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 June 30, 1998 total commitments
to extend credit were approximately $41,785,000. Outstanding letters of
credit were approximately $4,872,000 at June 30, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
OVERVIEW
Net income for the second quarter of 1998 was $1,001,000 an increase of
15% over the $870,000 for the second quarter of 1997. On a per share
basis earnings were $0.82 compared to $0.73 for the same period last
year.
Net income for the six months ended June 30, 1998 was $1,892,000
compared to $1,694,000 for the same period in 1997. This represents an
11.7% increase. Net income per share was $1.56 and $1.42 for the six
months ended June 30, 1998 and 1997, respectively.
NET INTEREST INCOME
Net interest income for the six months ended June 30, 1998 was 4.9%
higher than the same period last year due to an increase in average
loans. The net interest margin decreased 6 basis points to 4.59%
compared to 4.65% one year ago. Loans comprised 73.7% and 71.5% of total
average earning assets at June 30, 1998 and 1997, respectively.
NON-INTEREST INCOME
Total non-interest income increased 26% and 13% for the quarter and six
months ended June 30, 1998 compared to the same periods in 1997. These
increases are a result of increases in service charges assessed on
deposit accounts, gains on sales investment securities and fees earned
on the sale of non-deposit investment products. Service charges on
deposit accounts increased 7.7% and 5.5%, respectively for the quarter
and six months ended June 30, 1998 when compared to the same periods in
1997.
NON-INTEREST EXPENSE
Total non-interest expense, excluding the provision for credit losses
increased $30,000 or 2% for the quarter ended June 30, 1998. For the six
months ended June 30, 1998 non-interest expense increased $83,000 or
2.8%. These increases are the result of general increase in salaries and
benefits, and other expenses, associated with the growth of the Bank and
expanded services being provided.
ANALYSIS OF FINANCIAL CONDITION
Loan growth and a decline in customer deposits during the six month
ended June 30, 1998 were funded through sales and maturities of
investment securities, as well as an increase in securities sold under
agreements to repurchase. Investment securities decreased $5,677,000 or
9.2% totalling $55,802,000 at June 30, 1998 from $61,479,000 at December
31, 1997. Total loans increased 1.8% to $188,681,000 at June 30, 1998
from $185,293,000 at December 31, 1997. Total deposits decreased
$1,960,000 to $222,954,000 from $224,914,000 at December 31, 1997.
Securities sold under agreements to repurchase increased $4,412,000 to
$14,676,000 at June 30, 1998 from $10,264,000 at December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company derives liquidity through increased customer deposits,
maturities in the investment portfolio, loan repayments and income from
earning assets. At June 30, 1998 the Company's liquidity ratio was
approximately 23%. There are no known trends or demands, commitments,
events or uncertainties that management is aware of which will
materially affect the Company's ability to maintain liquidity at
satisfactory levels.
Total Stockholders' equity was $32.5 million at June 30, 1998, 10.8%
higher than one year ago.
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.
<PAGE>
A comparison of the Company's capital as of June 30, 1998, with the
minimum requirements is presented below.
Minimum
Actual Requirements
------ ------------
Tier 1 Risk-based Capital 17.80% 4.00%
Total Risk-based Capital 19.06% 8.00%
Leverage Ratio 12.14% 3.00%
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 June 30, Six Months Ended June 30,
(Dollars in thousands) 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S><C>
Allowance balance - beginning $ 2,513 $ 2,646 $ 2,538 $ 2,728
Charge-offs:
Commercial and other 43 50 55 199
Real estate 38 18 127 60
Consumer 5 48 16 54
--------- --------- --------- ---------
Totals 86 116 198 313
--------- --------- --------- ---------
Recoveries:
Commercial 22 2 26 4
Real Estate 1 1 19 2
Consumer 14 5 19 12
--------- --------- --------- ---------
Totals 37 8 64 18
--------- --------- --------- ---------
Net Charge-offs: 49 108 134 295
Provision for loan losses 60 45 120 150
--------- --------- --------- ---------
Allowance balance-ending $ 2,524 $ 2,583 $ 2,524 $ 2,583
========= ========= ========= =========
Average Loans outstanding during period $188,553 $172,444 $187,323 $171,507
========= ========= ========= =========
Net charge-offs (annualized) as a percentage of
average loans outstanding during period .10% .25% .14% .34%
========= ========= ========= =========
Allowance for loan losses at period end as a
percentage of average loans 1.34% 1.50% 1.35% 1.51%
========= ========= ========= ========
</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 six months of the year.
<TABLE>
<CAPTION>
1998 1997
---- ----
Average Income* Yield* Average Income* Yield*
(dollars in thousands) Balance Expense Rate Balance Expense Rate
- ---------------------------------------------------------------------------------------------------------------------------------
<S><C>
Earning Assets
Investment Securities $ 59,972 $ 1,786 6.01% $ 60,491 $ 1,777 5.92%
Loans 187,323 8,215 8.84 171,438 7,677 9.03
Federal Funds Sold 6,947 192 5.49 7,774 210 5.37
-------- -------- ---- --------- ------- ----
Total earning assets $254,242 $10,193 8.08% $239,703 $9,664 8.13%
------- ------
Non-interest earning Assets $ 10,872 $ 9,510
-------- ---------
Total Assets $265,114 $249,213
======== ========
Interest bearing liabilities
Interest bearing deposits $198,778 $ 4,145 4.21% $190,178 $ 3,917 4.15%
Borrowings 12,659 264 4.15 10,254 219 4.26
-------- -------- ---- -------- ------ ----
Total interest bearing liabilities $211,437 $ 4,409 4.21% $200,432 $ 4,136 4.16%
-------- -------
Non-interest bearing liabilities $ 21,983 $ 20,220
Stockholders' equity 31,694 28,561
-------- --------
Total liabilities and Stockholders' equity $265,114 $249,213
======== ========
Net interest spread $ 5,784 3.88% $ 5,528 3.97%
======= =======
Net interest margin 4.59% 4.65%
</TABLE>
* Presented on a tax equivalent basis using its statutory federal corporate
income tax rate of 34%.
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company utilizes a simulation model to quantify the effect a hypothetical
plus or minus 200 basis point change in rates would have on net interest income
and the fair value of capital. The model takes into consideration the effect of
call features of investments as well as repayments of loans in periods of
declining rates. When actual changes in interest rates occur the changes in
interest earning assets and interest bearing liabilities may differ from the
assumptions used in the model. As of March 31, 1998 the model produced the
following sensitivity profile for net interest income and the fair value
capital:
<TABLE>
<CAPTION>
Immediate Change in Rates
------------------------------------------------------
+200 Basis Points -200 Basis Points Policy Limit
- ----------------------------------------------------------------------------------------------------
<S><C>
% Change in Net Interest Income 9.80% (11.6%) +/-25%
% Change in Fair Value of Capital 7.7% (12.6%) +/-15%
</TABLE>
Based on the composition of the Balance Sheet and the Current interest rate
environment the results of this simulation would not be materially different at
June 30, 1998.
Part II
Other Information
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
Exhibit 27 - Financial Data Schedule
b) No Forms 8-K filed.
<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: August 14, 1998 By: /s/ W. Moorhead Vermilye
________________________________________
President
Date: August 14, 1998 By: /s/ Susan E. Leaverton
________________________________________
Susan E. Leaverton, CPA
Treasurer/Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the period ended June 30, 1998, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0001043056
<NAME> Talbot Bancshares, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,021
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 15,153
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 39,134
<INVESTMENTS-CARRYING> 16,668
<INVESTMENTS-MARKET> 16,727
<LOANS> 188,681
<ALLOWANCE> 2,524
<TOTAL-ASSETS> 270,844
<DEPOSITS> 222,954
<SHORT-TERM> 14,676
<LIABILITIES-OTHER> 689
<LONG-TERM> 0
0
0
<COMMON> 12
<OTHER-SE> 32,513
<TOTAL-LIABILITIES-AND-EQUITY> 270,844
<INTEREST-LOAN> 8,202
<INTEREST-INVEST> 1,719
<INTEREST-OTHER> 192
<INTEREST-TOTAL> 10,113
<INTEREST-DEPOSIT> 4,146
<INTEREST-EXPENSE> 4,408
<INTEREST-INCOME-NET> 5,705
<LOAN-LOSSES> 120
<SECURITIES-GAINS> 9
<EXPENSE-OTHER> 3,069
<INCOME-PRETAX> 2,878
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,892
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.56
<YIELD-ACTUAL> 8.08
<LOANS-NON> 907
<LOANS-PAST> 1,333
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,602
<ALLOWANCE-OPEN> 2,538
<CHARGE-OFFS> 198
<RECOVERIES> 64
<ALLOWANCE-CLOSE> 2,524
<ALLOWANCE-DOMESTIC> 2,524
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
