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FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______ TO ______
COMMISSION FILE NUMBER: 0-23299
BAY BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
TEXAS 76-0046244
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 HIGHWAY 146 SOUTH
LA PORTE, TEXAS 77571
(Address of principal executive offices)
(281) 471-4400
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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[X] No[ ]
As of May 5, 1998, there were 2,049,103 shares of the registrant's Common Stock,
par value $1.00 per share outstanding.
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<PAGE>
BAY BANCSHARES, INC. AND SUBSIDIARIES
INDEX TO FORM 10-QSB
PART I - FINANCIAL INFORMATION
ITEM 1. - Financial Statements
Consolidated Balance Sheets as of March 31, 1998 and December 31,
1998 Consolidated Statements of Earnings for Three Months ended
March 31, 1998 and 1997
Statement of Comprehensive Income for the Three Months ended
March 31, 1998 and 1997
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997
Notes to Interim Consolidated Financial Statements
ITEM 2. - Management's Discussion and Analysis or Plan of Operation
PART II - OTHER INFORMATION
ITEM 1. - Legal Proceedings
ITEM 2. - Changes in Securities and Use of Proceeds
ITEM 3. - Defaults Upon Senior Securities
ITEM 4. - Submission of Matters to a Vote of Security Holders
ITEM 5. - Other Information
ITEM 6. - Exhibits and Reports on Form 8-K
Signatures
<PAGE>
BAY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
1998 1997
------------- ------------
(Unaudited)
ASSETS
Cash and cash equivalents
Cash and due from banks ..................... $ 12,104 $ 18,165
Federal funds sold .......................... 15,400 21,900
--------- ---------
Total cash and cash equivalents .......... 27,504 40,065
Interest bearing deposits with banks ............. 492 492
Securities available-for-sale .................... 63,820 62,963
Loans, net of allowance for credit
losses of $2,011 and $1,999 ...................... 156,918 153,766
Bank premises and equipment, net ................. 7,269 7,241
Other assets ..................................... 11,590 11,767
--------- ---------
Total assets ............................. $ 267,593 $ 276,294
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing ...................... $ 59,499 $ 66,397
Interest-bearing deposits ................ 180,528 182,690
--------- ---------
Total deposits ........................... 240,027 249,087
Other liabilities ........................... 2,416 2,658
--------- ---------
Total liabilities ........................ 242,443 251,745
Stockholders' equity
Common stock ................................ 2,091 2,091
Additional paid-in capital .................. 17,541 17,541
Retained earnings ........................... 5,659 5,087
Accumulated other comprehensive income ........... 133 104
--------- ---------
25,424 24,823
Less: Treasury stock ............................ (274) (274)
Total stockholders' equity ............... 25,150 24,549
--------- ---------
Total liabilities and
stockholders' equity ................... $ 267,593 $ 276,294
========= =========
(See accompanying notes to interim consolidated financial statements)
2
<PAGE>
BAY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
---------------
1998 1997
------ ------
Interest income
Loans, including fees ................................. $3,559 $2,488
Securities ............................................ 955 685
Federal funds sold .................................... 316 118
------ ------
Total interest income ................................. 4,830 3,291
Interest expense
Deposits .............................................. 1,864 1,365
Other ................................................. -- 12
------ ------
Total interest expense ................................ 1,864 1,377
------ ------
Net interest income ................................ 2,966 1,914
Provision for credit losses ........................... 144 120
------ ------
Net interest income after provision for credit losses ...... 2,822 1,794
Noninterest income
Service charges ....................................... 678 371
Other ................................................. 446 265
------ ------
Total noninterest income ........................... 1,124 636
Noninterest expense
Salaries and employee benefits ........................ 1,539 826
Occupancy expense, net ................................ 435 303
Other noninterest expense ............................. 910 625
------ ------
Total noninterest expense ............................. 2,884 1,754
------ ------
Earnings before federal income taxes ....................... 1,062 676
Provision for income taxes ............................ 367 194
------ ------
Net earnings ....................................... $ 695 $ 482
====== ======
Net earnings per share (basic) ...................... $ 0.34 $ 0.36
Net earnings per share (diluted) ................... 0.33 0.34
(See accompanying notes to interim consolidated financial statements)
3
<PAGE>
BAY BANCSHARES, INC. AND SUBSIDIARIES
STATEMENT OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
----------------------
1998 1997
---------- ----------
Net earnings ......................................... $ 695 $ 482
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period .......................................... 31 (122)
Less: reclassification adjustment for gains
included in net earnings ........................ (2) 29 (8) (130)
---------- ----------
Comprehensive income ................................. $ 724 $ 352
========== ==========
(See accompanying notes to interim consolidated financial statements)
4
<PAGE>
BAY BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings ...................................... $ 695 $ 482
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Provision for credit losses ................... 144 120
Depreciation .................................. 304 239
Gain on sale of bank premises and equipment ... (74) 18
Gain on sale of available-for-sale securities . (3) (12)
Amortization of premiums, net of (accretion)
and discounts on securities ................ 34 (18)
Effect of phantom stock plan .................. 16 22
Decrease (increase) in other assets ........... 78 (338)
(Decrease) increase in other liabilities ...... (272) 22
-------- --------
Net cash provided by operating activities .. 922 535
Cash flows from investing activities:
Proceeds from sale of available-for-sale securities 14,861 1,643
Proceeds from principal repayments,
maturities, and calls of available-for-sale
securities .................................... 352 --
Purchases of available-for-sale securities ........ (16,061) (2,380)
Net (increase) decrease in loans, net of the
effects resulting from the purchase of
certain branch assets and liabilities ......... (3,364) 4,360
Proceeds from sales of bank premises and equipment 234 16
Purchases of bank premises and equipment .......... (322) (134)
-------- --------
Net cash (used) provided by investing
activities .............................. (4,300) 3,505
Cash flows from financing activities:
Issuance of common stock .......................... -- 50
Net decrease in securities sold under agreements
to repurchase .............................. -- (1,000)
Purchase of treasury stock ........................ -- 3
Net decrease in deposits .......................... (9,060) (4,963)
Dividends paid .................................... (123) (81)
-------- --------
Net cash used by financing activities ...... (9,183) (5,991)
Net decrease in cash and cash equivalents .. (12,561) (1,951)
Cash and cash equivalents at beginning of period ............ 40,065 18,472
-------- --------
Cash and cash equivalents at end of period .................. $ 27,504 $ 16,521
======== ========
</TABLE>
(See accompanying notes to interim consolidated financial statements)
5
<PAGE>
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Bay
Bancshares, Inc. (the "Company") and its wholly-owned subsidiaries Bayshore
National Bank (the "Bank") and Bay Bancshares of Delaware, Inc. ("BBDI"). All
significant intercompany transactions and balances have been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the statements reflect all
adjustments necessary for a fair presentation of the financial position, results
of operations and cash flows of the Company on a consolidated basis, and all
such adjustments are of a normal recurring nature. These financial statements
and the notes thereto should be read in conjunction with the Company's 1997
Annual Report on Form 10-KSB. Operating results for the three month period ended
March 31, 1998, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998.
(2) EARNINGS PER COMMON SHARE
Earnings per common and common equivalent share was computed based on
the following:
Three Months Ended
-------------------------
March 31,
1998 1997
----------- ----------
(Dollars in thousands
except per share data)
Net earnings available to common shareholders $ 695 $ 482
Basic weighted average shares outstanding $ 2,049 $ 1,356
Diluted weighed average shares
outstanding $ 2,138 $ 1,422
Basic earnings per common share $ 0.34 $ 0.36
Diluted earnings per common share $ 0.33 $ 0.34
(3) COMPREHENSIVE INCOME
Effective January 1, 1998, the Company has adopted Financial Accounting
Standards No. 130, Reporting Comprehensive Income, which requires an entity to
report and display comprehensive income and its components. Comprehensive income
includes net earnings plus unrealized gain or loss on securities.
The tax effects of comprehensive income are as follows:
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1998 March 31, 1997
------------------------------ -------------------------------
(Unaudited) (Unaudited)
Before Tax Net of Before Tax Net of
tax Expense Tax tax Expense Tax
amount (Benefit) amount amount (Benefit) amount
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Unrealized gains(losses on
securities:
Unrealized holding gains
(losses) arising during period .. 47 (16) 31 (185) 63 (122)
Less: reclassification
adjustments for gains
included in net earnings .. (3) 1 (2) (12) 4 (8)
------- ------- ------ ------- ----- -----
Comprehensive income ............ 44 (15) 29 (197) 67 (130)
======= ======= ====== ======= ===== =====
</TABLE>
<PAGE>
ITEM 2. -MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income represents the amount by which interest income on
interest-earning assets, including securities and loans, exceeds interest
expense incurred on interest-bearing liabilities, including deposits and other
borrowed funds. Net interest income is the principal source of the Company's
income. Interest rate fluctuations, as well as changes in the amount and type of
earning assets and liabilities, combine to affect net interest income.
Net interest income for the three months ended March 31, 1998 was $2.8
million compared with $1.8 million for the three months ended March 31, 1997, an
increase of $1.0 million or 55.6%. Net interest income increased as a result of
a higher dollar amount of interest-earning assets derived from the acquisitions
of Texas Bank, Baytown, Texas, Texas National Bank of Baytown and First Bank of
Deer Park completed in the fourth quarter of 1997 ("1997 Acquisitions") and
internal loan growth. Average interest-earning assets decreased from 93.4% of
total average assets at March 31, 1997 to 87.9% of total average assets at March
31, 1998. Average gross loans increased to $157.3 million for the three months
ended March 31, 1998 from $119.1 million for the three months ended March 31,
1997, an increase of $38.2 million or 32.1%.
Net interest income was improved by an increase in the yield on
interest-earning assets from 7.61% on March 31, 1997 to 7.93% for the three
months ended March 31, 1998. Average interest-bearing deposits increased to
$186.6 million for the three months ended March 31, 1998 from $137.4 million for
the three months ended March 31, 1997, an increase of $49.2 million or 35.8%.
This growth was primarily attributable to the fourth quarter 1997 Acquisitions.
The Company posted net interest margins of 4.87% and 4.43% and net
interest spreads of 3.93% and 3.60% for the periods ended March 31, 1998 and
March 31, 1997, respectively. The increase in net interest margin from the first
quarter of 1997 to the first quarter of 1998 reflects a thirty two basis point
increase in the yield on average interest-earning assets and a one basis point
reduction in the cost of interest-bearing liabilities.
7
<PAGE>
The following table presents for the periods indicated the total dollar
amount of average balances, interest income from average interest-earning assets
and the resultant yields, as well as the interest expense on average
interest-bearing liabilities, expressed both in dollars and rates. No tax
equivalent adjustments were made and all average balances are daily average
balances. There were no nonaccruing loans during the periods covered.
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------------------------------------------------------
1998 1997
-------------------------------------------------------------------------------
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning assets:
Loans ...................................... $ 157,258 $ 3,559 9.05% $ 119,077 $ 2,488 8.36%
Securities ................................. 64,292 955 5.94% 44,884 685 6.10%
Federal funds sold and other temporary
investments .................................... 22,161 316 5.70% 9,020 118 5.23%
----------- ---------- ---------- ---------- --------- --------
Total interest-earning assets .................. 243,711 4,830 7.93% 172,981 3,291 7.61%
----------- ---------- ---------- ---------- --------- --------
Less allowance for
credit losses .................................. (2,011) (1,480)
----------- ----------
Total interest-earning assets,
net of allowance ............................... 241,700 171,501
Nonearning assets .......................... 35,472 13,740
----------- ----------
Total assets ........................... $ 277,172 185,241
=========== ==========
Liabilities and stockholders' equity
Interest-bearing
liabilities:
Interest-bearing demand deposits ........... $ 27,567 $ 79 1.15% $ 18,929 $ 54 1.14%
Public fund deposits ....................... 5,567 38 2.73% 3,747 29 3.10%
Savings and money market accounts .......... 56,237 488 3.47% 42,289 354 3.35%
Certificates of deposit .................... 97,245 1,259 5.18% 71,656 928 5.18%
Federal funds purchased, FHLB
line of credit and other
borrowings ..................................... -- -- -- 778 12 6.17%
----------- ----------- -------- ---------- --------- --------
Total interest-bearing liabilities ............. 186,616 1,864 4.00% 137,399 1,377 4.01%
----------- ----------- -------- ---------- --------- --------
Noninterest-bearing
liabilities:
Noninterest-bearing
demand deposits ................................ 63,879 33,266
Other liabilities .......................... 4,796 1,418
----------- ----------
Total liabilities ...................... 255,291 172,083
----------- ----------
Stockholders' equity ........................... 21,881 13,158
Total liabilities ----------- ----------
and stockholders' equity ....................... $ 277,172 $ 185,241
=========== ==========
Net interest income ........................ $ 2,966 $ 1,914
=========== ==========
Net interest spread ........................ 3.93% 3.60%
========= ========
Net interest margin ........................ 4.87% 4.43%
========= ========
</TABLE>
Provision for Credit Losses
The provision for credit losses increased to $144,000 for the three
months ended March 31, 1998 from $120,000 for the same time period in 1997, an
increase of $24,000 or 20.0%.
Noninterest Income
Noninterest income is an important source of revenue for financial
institutions in a deregulated environment. The Company's primary source of
noninterest income is service charges on deposit accounts and other banking
service related fees. Noninterest income for the three months ended March 31,
1998 was $1.1 million compared with $636,000 for the three months ended March
31, 1997, an increase of $488,000 or 76.7%. The increase was primarily due to a
gain on sale of other real estate of
8
<PAGE>
$11,000, a gain on sale of Bank property of $63,000 and the income stream
generated from the integration of the 1997 Acquisitions.
The following table presents for the periods indicated the major
categories of noninterest income:
Three Months Ended
March 31,
-----------------------
1998 1997
---------- ----------
(Dollars in thousands)
(Unaudited)
Service charges on deposit accounts $ 678 $ 371
Gain on sale of SBA loans 134 87
ATM fee income 74 45
Alternative investments 19 50
Other noninterest income 219 83
---------- ----------
Total noninterest income $ 1,124 $ 636
========== ==========
Noninterest Expense
In the three month period ended March 31, 1998, noninterest expense
increased $1.1 million or 70.1% to $2.9 million from $1.8 million for the three
month period ended March 31,1997. The increase reflects the additional expenses,
including amortization of goodwill of $97,000, resulting from the 1997
Acquisitions and the Company's mainframe computer conversion in the first
quarter of 1998.
The following table presents for the periods indicted the major
categories of noninterest expense:
Three Months Ended
March 31,
-----------------------
1998 1997
---------- ----------
(Dollars in thousands)
(Unaudited)
Employee compensation and benefits $ 1,539 $ 826
Non-staff expense:
Net bank premises expense 212 148
Equipment rentals, depreciation and
maintenance 223 155
Data processing 61 36
Professional fees 105 98
Regulatory assessments/FDIC insurance 12 11
Ad valorem and franchise taxes 70 48
Other 662 432
---------- ----------
Total non-staff expenses 1,345 928
---------- ----------
Total noninterest expense $ 2,884 $ 1,754
========== ==========
9
<PAGE>
Employee compensation and benefit expense for the three months ended
March 31, 1998 was $1.5 million, an increase of $713,000 or 86.32% from $826,000
for the same period of 1998. The increase was principally due to additional
staff associated with the 1997 Acquisitions, the start up of the Mortgage
Lending Division and the hiring of additional staff.
Non-staff expense increased to $1.3 million for the three month period
ended March 31, 1998 from $928,000 for the same period in 1997, an increase of
$417,000 or 44.9%. This increase was due to additional expenses including the
amortization of goodwill associated with the fourth quarter 1997 Acquisitions,
increased advertising costs related to the Company's expansion, increased
professional fees related to the sales and service culture, expenses related to
the Company's mainframe computer conversion and higher data processing/software
costs.
Financial Condition
Total assets as of March 31, 1998 were $267.6 million compared with
$276.3 million at December 31, 1997 a decrease of $8.7 million or 3.1%. At March
31, 1998, investment securities totaled $63.8 million, an increase of $857,000
or 13.6% from $63.0 million at December 31, 1997. Net loans were $156.9 million
at March 31, 1998, an increase of $3.1 million or 2.1% from $153.8 million at
December 31, 1997.
The allowance for credit losses is a reserve established through charges
to earnings in the form of a provision for credit losses. Management has
established an allowance for credit losses which it believes is adequate for
estimated losses in the Company's loan portfolio. The Company follows a loan
review program to evaluate the credit risk in the loan portfolio. Through the
loan review process, the Company maintains an internally classified loan watch
list which, along with the delinquency list of loans, helps management assess
the overall quality of the loan portfolio and the adequacy of the allowance for
credit losses. Loans classified as "substandard" are those loans with clear and
defined weaknesses such as a highly-leveraged position, unfavorable financial
ratios, uncertain repayment sources, or poor financial condition, which may
jeopardize recoverability of the debt. The allowance for credit losses as of
March 31, 1998 was $2.0 million or 1.3% of outstanding loans.
The Company's total deposits for the three months ended March 31, 1998
were $240.0 million, a decrease of $9.1 million or 3.7% from $249.1 million at
December 31, 1997.
Stockholders' equity increased from $24.5 million at December 31, 1997
to $25.2 million at March 31, 1998, an increase of $601,000 or 24.5%. This
increase was primarily the result of net income of $695,000. As of March 31,
1998, the Company's ratio of stockholders' equity to total assets was 9.4% as
compared with 8.9% as of December 31, 1997.
Liquidity involves the Company's ability to raise funds to support asset
growth or reduce assets to meet deposit withdrawals and other payment
obligations, to maintain reserve requirements and otherwise to operate the
Company on an ongoing basis. The Company's liquidity needs are primarily met by
growth in core deposits. Although access to purchased funds from correspondent
banks is available and has been utilized on occasion to take advantage of
investment opportunities, the Company does not rely on these external funding
sources. The cash and federal funds sold position, supplemented by amortizing
investment along with payments and maturities within the loan portfolio, have
historically created an adequate liquidity position.
The Company's cash flows are composed of three classifications: cash
flows from operating activities, cash flows from investing activities and cash
flows from financing activities. Net cash provided by operating activities was
$918,000 and $535,000 for the three months ended March 31, 1998 and 1997
respectively. The net cash provided by operating activities for the three months
ended March 31, 1998 compared with the same period in 1997 was primarily due to
the increase in net earnings in 1998.
Net cash (used in) provided by investing activities was ($4.3) million
and $3.5 million for the three months ended March 31, 1998 and 1997,
respectively. The net cash (used in) provided by investing activities for the
three months ended March 31, 1998 compared with the same period in 1997 was
primarily due to the purchase of available-for-sale securities and an increase
in loans in 1998.
Net cash used in financing activities was ($9.2) million and ($6.0)
million for the three months ended March 31, 1998 and 1997, respectively. The
net cash used in financing activities for the three months ended March 31, 1998
compared with the same period in 1997 was primarily due to the decrease in
deposits in 1997 and a decrease in securities sold under agreement to repurchase
in 1998.
10
<PAGE>
Capital management consists of providing equity to support both current
and future operations. The Company is subject to capital adequacy requirements
imposed by the Board of Governors of the Federal Reserve System ("Federal
Reserve Board") and the Bank is subject to capital adequacy requirements imposed
by the Office of the Comptroller of Currency ("OCC"). Both the Federal Reserve
Board and the OCC have adopted risk-based capital requirements. The following
table provides a comparison of the Company's and the Bank's leverage and risk
weighted capital ratios as of March 31, 1998 and the regulatory standards.
Minimum Actual Ratio
Required March 31, 1998
--------------------------------
THE COMPANY
- -----------
Leverage ratio 3.00% 6.32%
Tier 1 risk-based capital 4.00% 9.59%
Risk-based capital ratio 8.00% 10.69%
THE BANK
- --------
Leverage ratio 3.00% 6.03%
Tier 1 risk-based capital 4.00% 9.16%
Risk-based capital ratio 8.00% 10.26%
Year 2000
The Company has established a Year 2000 Committee and has made an
assessment of its key financial, informational and operational systems. The Year
2000 Committee does not anticipate that the Company will encounter significant
operational issues or difficulties related to the Year 2000. Furthermore, the
financial impact of making systems changes is not expected to be material to the
Company's financial position, results of operations or cash flows, although no
assurances can be given in this regard.
PART II - Other Information
ITEM 1. - Legal Proceedings
Not Applicable
ITEM 2. - Changes in Securities and Use of Proceeds
Not Applicable
11
<PAGE>
ITEM 3. - Defaults Upon Senior Securities
Not Applicable
ITEM 4. - Submission of Matters to a Vote of Security Holders
Not Applicable
ITEM 5. - Other Information
Not Applicable
ITEM 6. - Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this report;
EXHIBIT
NUMBER DESCRIPTION
------ -----------
11 Computation of Earnings Per Share (included
as Note (2) to the Interim Consolidated
Financial Statements on page 6 of this Form
10-QSB.)
27 Financial Data Schedule
(b) No reports on Form 8-K were filed by the Company during the three
months ended March 31, 1998
SIGNATURES
Pursuant to 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 hereunto duly authorized.
BAY BANCSHARES, INC.
By:/s/ L.D. WRIGHT
---------------
Larry D. Wright
Chief Executive Officer
By:/s/ KIM LOVE
---------------
Kim Love
Controller
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 12,104
<INT-BEARING-DEPOSITS> 180,528
<FED-FUNDS-SOLD> 15,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 63,820
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 158,929
<ALLOWANCE> 2,011
<TOTAL-ASSETS> 267,593
<DEPOSITS> 240,027
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,416
<LONG-TERM> 0
0
0
<COMMON> 2,091
<OTHER-SE> 23,059
<TOTAL-LIABILITIES-AND-EQUITY> 267,593
<INTEREST-LOAN> 3,559
<INTEREST-INVEST> 955
<INTEREST-OTHER> 316
<INTEREST-TOTAL> 4,830
<INTEREST-DEPOSIT> 1,864
<INTEREST-EXPENSE> 1,864
<INTEREST-INCOME-NET> 2,966
<LOAN-LOSSES> 144
<SECURITIES-GAINS> 3
<EXPENSE-OTHER> 2,884
<INCOME-PRETAX> 1,062
<INCOME-PRE-EXTRAORDINARY> 1,062
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 695
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
<YIELD-ACTUAL> 7.93
<LOANS-NON> 0
<LOANS-PAST> 116
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 201
<ALLOWANCE-OPEN> 1,999
<CHARGE-OFFS> 155
<RECOVERIES> 167
<ALLOWANCE-CLOSE> 2,011
<ALLOWANCE-DOMESTIC> 2,011
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,466
</TABLE>
