================================================================================
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
----------
PEAPACK-GLADSTONE FINANCIAL CORPORATION
------------------------------------------------------
(Exact Name of registrant as specified in its charter)
NEW JERSEY 22-3537895
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
158 ROUTE 206 NORTH, GLADSTONE, NEW JERSEY 07934
- ------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number (908) 234-0700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Number of shares of Common stock outstanding as of September 30, 1998:
2,320,139
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<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
PART I. FINANCIAL INFORMATION
Certain information and footnote disclosures normally included in the
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the consolidated financial statements and notes thereto included in the December
31, 1997 Annual Report on Form 10-K for Peapack-Gladstone Financial Corporation
(the "Corporation").
The Corporation considers that all adjustments (all of which are normal
recurring accruals) necessary for a fair statement of the financial position and
results of operations for these periods have been made; however, results for
such interim periods are subject to year-end adjustments. Results for such
interim periods are not necessarily indicative of results for a full year.
2
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars in thousands)
(Unaudited)
September 30, December 31,
1998 1997
------------- ------------
ASSETS
Cash and due from banks ............................ $ 10.832 $ 17,740
Federal funds sold ................................. 8,900 15,500
--------- ---------
Total cash and cash equivalents ............... 19,732 33,240
Investment Securities:(approximate market value
$49,802 in 1998 and $54,452 in 1997)
U.S. Treasury and Government agencies .............. 39,824 44,557
State and political subdivisions ................... 9,133 9,421
--------- ---------
Total Investment Securities ................... 48,957 53,978
Securities Available for Sale:(amortized cost
$90,958 in 1998 and $90,817 in 1997)
U.S. Treasury and Government agencies .............. 83,859 86,799
Other securities available for sale ................ 9,708 4,781
--------- ---------
Total Securities Available for Sale ........... 93,567 91,580
Loans:
Loans secured by real estate ..................... 182,038 149,684
Other loans ...................................... 23,262 24,690
--------- ---------
Total loans ................................... 205,300 174,374
Less: Allowance for loan losses .............. 2,097 1,893
--------- ---------
Net loans ....................................... 203,203 172,481
Premises and equipment ............................. 8,974 8,595
Other real estate owned ............................ 0 340
Accrued interest receivable ........................ 2,961 3,006
Other assets ....................................... 247 445
========= =========
TOTAL ASSETS ................................. $ 377,641 $ 363,665
========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand deposits .............. $ 73,208 $ 74,712
Interest-bearing deposits:
Checking ...................................... 66,178 70,745
Savings ....................................... 70,329 70,419
Money market accounts ......................... 23,056 24,624
Certificates of deposit over $100,000 ......... 33,953 18,243
Certificates of deposit less than $100,000 .... 71,094 69,730
--------- ---------
Total deposits ..................................... 337,818 328,473
Accrued expenses and other liabilities ............. 2,662 1,553
========= =========
TOTAL LIABILITIES ............................. 340,480 330,026
========= =========
STOCKHOLDERS' EQUITY
Common stock (no par value; stated value
$1-2/3 per share; authorized 10,000,000
shares; issued 2,335,238 shares.) ................ 3,892 3,892
Surplus ............................................ 6,225 6,218
Treasury Stock at cost, 15,099 shares
in 1998 and 11,178 shares in 1997 ................ (812) (367)
Retained Earnings .................................. 26,718 23,420
Accumulated other comprehensive income--
net unrealized gains on securities
available for sale (net of income taxes) ......... 1,138 476
--------- ---------
TOTAL STOCKHOLDERS' EQUITY ................... 37,161 33,639
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY ..... $ 377,641 $ 363,665
========= =========
See accompanying notes to consolidated financial statements.
3
<PAGE>
<TABLE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
(Unaudited)
<CAPTION>
Nine months ended Three months ended
September 30, September 30,
--------------------------- ---------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans ............................... $ 11,339 $ 9,528 $ 3,995 $ 3,282
Interest on investment securities:
Taxable ............................................. 2,016 1,929 650 575
Tax-exempt .......................................... 329 404 113 133
Interest on securities available for sale: Taxable ....... 4,115 4,385 1,346 1,573
Dividends ................................................ 3 0 3 0
Interest on federal funds sold ........................... 648 668 266 201
---------- ---------- ---------- ----------
Total interest income .................................... 18,450 16,914 6,373 5,764
INTEREST EXPENSE
Interest on savings account deposits ..................... 2,434 2,580 821 847
Interest on certificates of deposit over $100,000 ........ 996 702 419 244
Interest on other time deposits .......................... 2,807 2,391 955 814
---------- ---------- ---------- ----------
Total interest expense ................................... 6,237 5,673 2,195 1,905
---------- ---------- ---------- ----------
NET INTEREST INCOME BEFORE
PROVISION FOR LOAN LOSSES ........................... 12,213 11,241 4,178 3,859
Provision for loan losses ................................ 273 300 91 100
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ........................... 11,940 10,941 4,087 3,759
---------- ---------- ---------- ----------
OTHER INCOME
Service charges and fees for other services .............. 3,063 2,423 910 706
Securities gains ......................................... 118 24 5 9
Other income ............................................. 78 79 24 29
---------- ---------- ---------- ----------
Total other income .................................. 3,259 2,526 939 744
OTHER EXPENSES
Salaries and employee benefits ........................... 4,773 4,540 1,569 1,523
Premises and equipment ................................... 1,725 1,668 612 532
Other expense ............................................ 2,201 1,835 731 534
---------- ---------- ---------- ----------
Total other expenses ..................................... 8,699 8,043 2,912 2,589
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAX EXPENSE ......................... 6,500 5,424 2,114 1,914
Income tax expense ....................................... 2,398 1,965 798 718
========== ========== ========== ==========
NET INCOME .......................................... $ 4,102 $ 3,459 $ 1,316 $ 1,196
========== ========== ========== ==========
EARNINGS PER SHARE (Reflects a 2:1 stock
split in December, 1997.)
Basic .................................................... 1.76 1.47 0.56 0.50
Diluted .................................................. 1.71 1.46 0.55 0.50
Average basic shares outstanding ......................... 2,326,791 2,353,090 2,323,656 2,371,345
Average diluted shares outstanding ....................... 2,403,624 2,376,552 2,405,218 2,403,654
See accompanying notes to consolidated financial statements
</TABLE>
4
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
(Unaudited)
Nine Months Ended
September 30,
---------------------
1998 1997
-------- --------
Balance, Beginning of Period ......................... $ 33,639 $ 30,208
Comprehensive income:
Net Income ...................................... 4,102 3,459
Change in net unrealized gains on securities
available for sale .......................... 662 77
-------- --------
Total Comprehensive income ...................... 4,764 3,536
Common Stock Options Exercised ....................... (52) (13)
Treasury Stock Transactions, net ..................... (389) (150)
Cash Dividends Declared .............................. (801) (722)
-------- --------
Balance, September 30, ............................... $ 37,161 $ 32,859
======== ========
See accompanying notes to consolidated financial statements.
5
<PAGE>
<TABLE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
----------------------
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income ................................................... $ 4,102 $ 3,459
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation ................................................. 593 520
Amortization of premium and accretion of
discount on securities, net ............................... 48 37
Provision for loan losses .................................... 273 300
Provision for deferred taxes ................................. (70) (42)
Gains on securities .......................................... (118) (24)
Decrease (increase) in interest receivable ................... 45 (266)
Increase in other assets ..................................... (113) 182
Increase in other liabilities ................................ 1,109 233
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES ................. 5,869 4,399
-------- --------
INVESTING ACTIVITIES:
Proceeds from maturities of investment securities ............ 8,180 7,971
Proceeds from maturities of securities available
for sale .................................................. 10,000 7,500
Proceeds from calls of investment securities ................. 7,000 1,000
Proceeds from sales and calls of securities
available for sale ........................................ 27,020 4,340
Purchase of investment securities ............................ (10,174) (7,174)
Purchase of securities available for sale .................... (32,269) (20,975)
Net (increase) decrease in short term investments ............ (5,610) 798
Net increase in loans ........................................ (30,995) (11,712)
Net decrease in other real estate ............................ 340 352
Purchase of premises and equipment ........................... (972) (432)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES ..................... (27,480) (18,332)
-------- --------
FINANCING ACTIVITIES:
Net increase in deposits ..................................... 9,345 16,078
Dividends paid ............................................... (801) (722)
Exercise of stock options .................................... (52) (13)
Treasury stock transactions, net ............................. (389) (150)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES ..................... 8,103 15,193
-------- --------
Net (decrease) increase in cash and cash equivalents ...... (13,508) 1,260
-------- --------
Cash and cash equivalents at beginning of period ............. 33,240 26,762
======== ========
Cash and cash equivalents at end of period ................... $ 19,732 $ 28,022
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest on deposits ...................................... $ 6,182 $ 5,893
Income taxes .............................................. 2,398 1,795
Noncash investing activities:
Transfer of loans to Other Real Estate .................... 0 248
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
PEAPACK-GLADSTONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of Peapack-Gladstone Financial Corporation
are prepared on the accrual basis and include the accounts of the Corporation
and its wholly-owned subsidiary, the Peapack-Gladstone Bank. All significant
intercompany balances and transactions have been eliminated from the
accompanying consolidated financial statements.
2. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is maintained at a level that management considers
adequate to reflect the risk of future losses inherent in the Corporation's loan
portfolio. In its evaluation of the adequacy of the allowance for loan losses,
management considers past loan loss experience, changes in the composition of
non-performing loans, the condition of borrowers facing financial pressure, the
relationship of the current level of the allowance to the credit portfolio and
to non-performing loans and existing economic conditions. The process of
determining the adequacy of the allowance is necessarily judgmental and subject
to changes in external conditions. The allowance is increased by provisions
charged to expense and reduced by net charge-offs.
3. EARNINGS PER COMMON SHARE - BASIC AND DILUTED
Basic earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
Diluted earnings per share includes any additional common shares as if all
potentially dilutive common shares were issued (i.e., stock options).
4. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
During the first quarter of 1998, the Corporation adopted the provisions of
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS 130). SFAS 130 establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general purpose financial statements. This Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. This Statement
requires that an enterprise (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of a statement of financial position. In
accordance with the provisions of SFAS 130 for interim period reporting, the
Corporation's total comprehensive income for the nine months ended September 30,
1998 and 1997 was $4,764,000 and $3,536,000. The difference between the
Corporation's net income and total comprehensive income for the three months
ended and nine months ended September 30, 1998 and 1997 relates to the change in
the net unrealized gains on securities available for sale during the applicable
period of time.
5. NEW ACCOUNTING PRONOUNCEMENT
In June 1998, the FASB issued SAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities." This Statement establishes accounting and reporting
standards requiring that every derivative instrument be recorded in the balance
sheet, either as an asset, or as a liability, measured at its fair value. The
Statement requires that changes in the derivative's fair value shall be
recognized in current earnings unless specific hedge accounting criteria are
met. Special accounting for qualifying hedges allows a derivative's gains and
losses to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting.
SAS No. 133 is effective for fiscal years beginning after June 15, 1999. A
company may also implement the Statement as of the beginning of any fiscal
quarter after issuance but cannot be applied retroactively. SAS No. 133 must be
applied to derivative instruments and certain derivative instruments embedded in
hybrid contracts that were issued, acquired or substantively modified after
December 31, 1997.
The Corporation does not currently have derivative or hedged instruments and
management does not anticipate the statement having a material impact on its
financial position or results of operations. However, management continues to
closely evaluate the use of derivatives to reduce interest rate risk.
7
<PAGE>
6. YEAR 2000 COMPLIANCE
During fiscal 1998, the Corporation adopted a Year 2000 Compliance Plan (the
"Plan") and established a Year 2000 Compliance Committee (the "Committee"). The
objectives of the Plan and the Committee are to prepare the Corporation for the
new millennium. As recommended by the Federal Financial Institutions Examination
Council, the Plan encompasses the following phases: Awareness, Assessment,
Renovation, Validation and Implementation. These phases will enable the
Corporation to identify risks, develop an action plan, perform adequate testing
and complete certification that its processing systems will be Year 2000 ready.
Execution of the Plan is currently on target. The Corporation is currently in
Phase 4, Validation, for our core processing software. This phase involves
testing of changes to hardware and software, accompanied by monitoring and
testing with vendors. Concurrently, the Corporation is also addressing some
issues related to subsequent phases. Prioritization of the most critical
applications has been addressed, along with contract and service agreements. The
primary operating software for the Corporation is obtained and maintained by an
external provider of software (the "External Provider"). The Corporation has
maintained ongoing contact with this vendor so that modification of the software
for Year 2000 readiness is a top priority and is expected to be accomplished,
though there is no assurance, by December 31, 1998. The Corporation has
contacted all other material vendors and suppliers regarding their Year 2000
state of readiness. Each of these third parties has delivered written assurance
to the Corporation that they expect to be Year 2000 compliant prior to the Year
2000. The Corporation is in the process of contacting all material customers and
non-information technology suppliers (i.e., utility systems, telephone systems
and security systems), regarding their Year 2000 state of readiness. The
Validation Phase is targeted for completion by June 30, 1999. The Implementation
Phase is to certify that systems are Year 2000 ready, along with assurances that
any new systems are compliant on a going-forward basis. The Implementation Phase
is targeted for completion by September 30, 1999.
Costs will be incurred due to the replacement of non-compliant hardware and
software. The Corporation does not anticipate that the related overall costs
will be material in any single year. In total, the Corporation estimates that
its cost for compliance will amount to approximately $150,000 over the two-year
period from 1998-1999, of which approximately $75,000 was incurred as of
September 30, 1998. No assurance can be given that the Year 2000 Compliance Plan
will be completed successfully by the Year 2000, in which event the Corporation
could incur significant costs. If the External Provider is unable to resolve the
potential problem in time, the Corporation would likely experience significant
data processing delays, mistakes or failures. These delays, mistakes or failures
could have a significant adverse impact on the financial statements of the
Corporation.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events,
which are inherently uncertain, including the progress and results of the
Corporation's External Provider, testing plans, and all vendors, suppliers and
customer readiness.
8
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS: Net income for the nine month period ended September 30,
1998 was $4,102,000, as compared to net income of $3,459,000 in 1997. On a
diluted per share basis, the Corporation earned $1.71 and $1.46 during the first
nine months of 1998 and 1997, respectively. Higher net interest income and
higher other income, offset in part by increased other expenses and higher
income taxes were the primary factors contributing to the increase in net
income.
Net income for the quarter ended September 30, 1998 was $1,316,000, representing
a $120,000 increase from the third quarter net income in 1997. Higher net
interest income and higher other income contributed to the increase in net
income.
NET INTEREST INCOME: Net interest income after provision for loan losses for the
first nine months of 1998 increased 9% to $11,940,000 from $10,941,000 in 1997.
The increase in net interest income was primarily due to increased loan volume,
which was funded by increased low cost core deposits.
Average loans for the nine month period were $189,652,000, an increase of
$34,890,000 or 23% over the previous year. Average interest-earning assets
during the first nine months of 1998 were $344,715,000, representing an increase
of $31,198,000 or 10% over the previous year. Average interest-bearing
liabilities rose to $260,698,000 for the first nine months of 1998 as compared
with $247,604,000 during the same period in 1997.
The yield on interest-earning assets, including securities, federal funds sold
and loans, was lower during the first nine months of 1998 as compared with the
first nine months of 1997. This decrease was primarily due to lower rates on the
earned investment and loan portfolios in concert with a lower interest rate
environment.
The rate paid on interest-bearing liabilities increased to 3.20% during the
first nine months of 1998 from 3.06% over the previous year. Higher rates paid
on Certificates of Deposits were offset by lower rates paid on interest-bearing
checking and money market accounts. Contributing to the overall increase in the
net interest margin was strong growth in noninterest-bearing demand deposits.
Average noninterest-bearing demand deposits increased to $71,208,000,
representing a 20% increase over the previous year.
During the third quarter of 1998, net interest income was $4,087,000 as compared
to $3,759,000 in 1997. The increase in net interest income for the quarter was
primarily due to an increase in residential mortgage loan volume, offset in part
by higher interest expense.
OTHER INCOME: Other income before gains on securities was $3,141,000 and
$2,502,000 for the first nine months of 1998 and 1997, respectively. This
increase was primarily due to higher trust fees, up $561,000 from 1997.
During the third quarter, other income before securities gains was $934,000 as
compared to $735,000 a year earlier. Trust Department fees accounted for the
majority of this increase, up $177,000 for the period.
During the first nine months of 1998, gains on sale of securities amounted to
$118,000 as compared to $24,000 a year earlier.
OTHER EXPENSES: Other expenses for the first nine months of 1998 increased from
$8,043,000 in 1997 to $8,699,000 in 1998. Salary and employee benefit expenses
for the first nine months of 1998 increased $233,000 as compared with the same
period in 1997. Merit and promotional raises plus several additions to the
professional staff contributed to this increase. Other operating expenses
increased $366,000 or 20% in the first nine months as compared with the same
period in 1997. Higher Trust Department expenses and professional fees accounted
for a majority of this increase.
During the third quarter of 1998, other expenses increased $323,000 from the
same period in 1997, representing an increase of 12%. Higher salary and employee
benefit expenses, professional fees and Trust Department expenses accounted for
the increase.
9
<PAGE>
PROVISION FOR LOAN LOSSES: At September 30, 1998, the allowance for loan losses
amounted to $2,097,000 as compared with $1,886,000 a year earlier.
Non-performing loans (consisting of all non-accrual loans and loans over 90 days
past due and still accruing interest) were $1,182,000 and $1,175,000 at
September 30, 1998 and 1997, respectively. A provision of $273,000 and $300,000
for loan losses was recorded for the period ended September 30, 1998 and 1997,
respectively. Net charge-offs were $69,000 during the first nine months of 1998
as compared with net charge-offs of $50,000 during the same period in 1997.
A provision for loan losses of $91,000 was recorded in the third quarter of
1998, as compared to $100,000 in the third quarter of 1997. Net charge-offs were
$48,000 during the third quarter of 1998 as compared to net charge-offs of
$6,000 during the third quarter of 1997.
A summary of the allowance for loan losses for the nine month period ending
September 30, follows:
1998 1997
------- -------
(In thousands)
Balance, January 1, ...................... $ 1,893 $ 1,636
Provision charged to expense ............. 273 300
Loans charged off ........................ (108) (177)
Recoveries ............................... 39 127
------- -------
Balance, September 30 .................... $ 2,097 $ 1,886
======= =======
CAPITAL RESOURCES: Maintaining a strong capital position is an important goal of
the Corporation. At September 30, 1998, total shareholders' equity (including
net unrealized gains) was $37,161,000, representing a 13% increase over the same
period in 1997. The Federal Reserve Board has adopted risk-based capital
guidelines for banks. The minimum guidelines for the ratio of total capital to
risk-weighted assets is 8%. At least half of the total capital is to be
comprised of common stock, retained earnings, minority interests in the equity
accounts of consolidated subsidiaries, non-cumulative preferred stock, less
goodwill and certain other intangibles ("Tier 1 Capital"). The remainder may
consist of other preferred stock, certain other instruments and a portion of the
loan loss allowance. At September 30, 1998, the Bank's Tier 1 Capital and Total
Capital ratios were 19.51% and 20.69%, respectively.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for banks. These guidelines provide for a minimum ratio of Tier 1
Capital to average total assets of 3% for banks that meet certain specified
criteria, including having the highest regulatory rating. All other banks are
generally required to maintain a leverage ratio of at least 3% plus an
additional cushion of 100 to 200 basis points. The Bank's leverage ratio at
September 30, 1998 was 9.39%.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No information is reported under this item.
ITEM 2. CHANGES IN SECURITIES
No changes have been made to the rights of holders of any class of
securities during the third quarter of 1998.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No default has occurred with respect to any of the Corporation's
securities during 1998.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
No information is reported under this item.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the tenth day of November 1998.
PEAPACK-GLADSTONE FINANCIAL CORPORATION
(Registrant)
By: /s/ FRANK A. KISSEL
------------------------------------
(Frank A. Kissel, President
and Chief Executive Officer)
/s/ ARTHUR F. BIRMINGHAM
------------------------------------
(Arthur F. Birmingham, Senior
Vice President and Treasurer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> SEP-30-1998 DEC-31-1997
<CASH> 19,732 33,240
<SECURITIES> 142,524 145,558
<RECEIVABLES> 208,261 177,380
<ALLOWANCES> 2,097 1,893
<INVENTORY> 0 0
<CURRENT-ASSETS> 247 785
<PP&E> 8,974 8,595
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 377,641 363,665
<CURRENT-LIABILITIES> 340,480 330,026
<BONDS> 0 0
0 0
0 0
<COMMON> 3,892 3,892
<OTHER-SE> 33,269 29,747
<TOTAL-LIABILITY-AND-EQUITY> 377,641 363,665
<SALES> 0 0
<TOTAL-REVENUES> 21,709 26,138
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 8,699 10,726
<LOSS-PROVISION> 273 400
<INTEREST-EXPENSE> 6,237 7,698
<INCOME-PRETAX> 6,500 7,314
<INCOME-TAX> 2,398 2,822
<INCOME-CONTINUING> 4,102 4,492
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4,102 4,492
<EPS-PRIMARY> 1.76 1.93
<EPS-DILUTED> 1.71 1.90
</TABLE>
