<PAGE>
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 December 31, 1998.
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from .................. to
...............
Commission File Number: 1-13823
--------
HERITAGE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 58-2356162
.............................. ..............................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 West Main Street, Laurens, South Carolina 29360
................................................................................
(Address of principal executive offices)
(864) 984-4581
................................................................................
(Registrant's telephone number, including area code)
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.
[X] Yes [_] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Outstanding: 4,421,630 at February 5, 1999.
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Table of Contents
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Part I. Financial Information Page
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<S> <C>
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets at December 31, 1998 and September 30, 1998 1
Consolidated Statements of Income for the Three Month Periods Ended
December 31, 1998 and 1997 2
Consolidated Statements of Cash Flows for the Three Month Periods
Ended December 31, 1998 and 1997 3-4
Notes to Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7-9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
Part II. Other Information 9-10
SIGNATURES 11
EXHIBITS 12-13
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
HERITAGE BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS December 31, September 30,
1998 1998
<S> <C> <C>
Cash $ 1,929 $ 1,917
Federal funds sold and overnight interest-bearing deposits 67,280 72,003
--------- ---------
Total cash and cash equivalents 69,209 73,920
Investment securities:
Held-to-maturity - at amortized cost (market value:
December 31, 1998 - $11,152; September 30, 1998 - $17,208) 11,111 17,112
Available-for-sale - at fair value (amortized cost:
December 31, 1998 - $6,062; September 30, 1998 - $3,563) 10,403 6,898
Mortgage-backed securities - held to maturity - at amortized cost
(market value: December 31, 1998 - $398; September 30
1998 - $1,691) 400 1,695
Loans receivable - net 204,435 196,789
Loans held-for-sale - at lower of cost or market (market value:
December 31, 1998 - $730; September 30, 1998 - $869) 710 849
Office properties and equipment - net 4,103 4,103
Federal Home Loan Bank Stock - at cost 2,042 2,042
Accrued interest receivable 1,341 1,335
Other assets 135 178
--------- ---------
TOTAL ASSETS $ 303,889 $ 304,921
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposit accounts $ 207,141 $ 206,104
Accrued interest on deposit accounts 297 359
Other liabilities 3,144 3,128
--------- ---------
Total liabilities 210,582 209,591
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock of .01 par value per share. Authorized
10,000,000 shares: issued 4,628,750 at December 31, 1998
and September 30, 1998; outstanding: 4,446,630 and 4,628,750
at December 31, 1998 and September 30, 1998, respectively 46 46
Additional paid in capital 68,008 67,987
Unallocated shares (5,276) (5,369)
Treasury stock - at cost (182,120 shares at December 31, 1998) (3,736)
Retained income - substantially restricted 31,530 30,565
Accumulated other comprehensive income 2,735 2,101
--------- ---------
Total stockholders' equity 93,307 95,330
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 303,889 $ 304,921
========= =========
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
HERITAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars, Except Per Share Data)
(Unaudited)
Three Months Ended
December 31,
---------------------------
1998 1997
INTEREST INCOME:
Interest on loans $ 4,079 $ 3,874
Investment securities and other 1,279 562
Mortgage-backed securities 12 76
----------- -----------
Total interest income 5,370 4,512
----------- -----------
INTEREST EXPENSE:
Deposits 2,870 3,118
----------- -----------
Total interest expense 2,870 3,118
----------- -----------
NET INTEREST INCOME 2,500 1,394
PROVISION FOR LOAN LOSSES
(RECOVERY OF ALLOWANCE) 75 --
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 2,425 1,394
----------- -----------
OTHER INCOME:
Service charges and fees 46 49
Gain on sale of mortgage loans held-for sale 20
Other income (expense), net (1) (1)
----------- -----------
Total other income 65 48
----------- -----------
OTHER OPERATING EXPENSES:
Employee compensation and benefits 535 323
Deposit insurance premiums 45 33
Occupancy and equipment expense 105 104
Data processing - service bureau fees 67 33
Office supplies, postage, printing, etc 22 17
Professional fees 69 17
(Income) expense of real estate operations 1 26
Other 133 35
----------- -----------
Total other operating expenses 977 588
----------- -----------
INCOME BEFORE INCOME TAXES 1,513 854
PROVISION FOR INCOME TAXES 548 330
----------- -----------
NET INCOME $ 965 $ 524
=========== ===========
Basic and Diluted Earnings per Share $ 0.23 N/A
Weighted average shares outstanding 4,250,218 N/A
See notes to consolidated financial statements.
2
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HERITAGE BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------------------
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 965 $ 524
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income tax benefit (49) (2)
Accretion (amortization) of discount (premium) on
investment and mortgage-backed securities 1 (2)
Amortization of net deferred income (30) (31)
Provision for loan losses 75 --
Origination of loans held for sale (873) (85)
Principal repayments on loans held-for sale 139 27
Gain on sale of loans (20) --
Proceeds from the sale of loans held-for-sale 893 85
Depreciation on office properties and equipment 69 71
Allocation of ESOP shares 114 --
Provision for losses on real estate acquired in settlement of loans -- 14
Loss on sales of real estate acquired in settlement of loans -- 9
(Increase) decrease in accrued interest receivable and other assets 37 (132)
Increase (decrease) in accrued interest payable and other liabilities (369) 24
------- -------
Net cash provided by operating activities 952 502
------- -------
INVESTING ACTIVITIES:
Proceeds from maturities and calls of available-for-sale investment securities 1,500 --
Proceeds from maturities and calls of held-to-maturity investment securities 6,000 2,750
Purchases of held-to-maturity investment securities -- (3,500)
Purchase of available-for-sale investment securities (4,000) --
Principal repayments on mortgage-backed securities 1,296 1,558
Net loan (originations) and principal payments on loans (7,691) 497
Proceeds from sales of real estate acquired in settlement of loans -- 206
Capitalized costs of real estate acquired in settlement of loans -- (308)
Acquisition of office properties and equipment (69) (9)
------- -------
Net cash provided by (used in) investing activities (2,964) 1,194
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</TABLE>
3
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HERITAGE BANCORP, INC.
STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
----------------------------
1998 1997
<S> <C> <C>
FINANCING ACTIVITIES:
Net increase in deposits 1,037 3,818
Purchase of treasury stock (3,736) --
-------- --------
Net cash provided by (used in) financing activities (2,699) 3,818
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,711) 5,514
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 73,920 14,659
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 69,209 $ 20,173
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 2,214 $ 3,078
-------- --------
Income taxes $ 195 $ 10
-------- --------
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Transfers from loans to real estate acquired in settlement of loans $ -- $ 183
-------- --------
Increase in net unrealized gain on available-for-sale investment securities $ 634 $ 128
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</TABLE>
See notes to consolidated financial statements.
4
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HERITAGE BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
Heritage Bancorp, Inc. (the "Company") was incorporated under Delaware law
in November 1997 for the purpose of becoming the holding company for
Heritage Federal Bank (the "Bank") upon the Bank's conversion from a
federally chartered mutual savings and loan association to a federally
chartered stock savings bank (the "Conversion"). The Conversion was
completed on April 6, 1998 through the sale and issuance of 4,628,750
shares of common stock by the Company.
The accompanying consolidated financial statements of the Company have been
prepared in accordance with instructions to Form 10-Q. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However,
such information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management, necessary
for a fair statement of results for the interim periods.
The results of operations for the three months ended December 31, 1998 are
not necessarily indicative of the results to be expected for the year
ending September 30, 1999. These unaudited consolidated financial
statements and notes thereto should be read in conjunction with the audited
financial statements and notes thereto for the year ended September 30,
1998, contained in the Company's Form 10-K for the fiscal year ended
September 30, 1998.
2. EARNINGS PER SHARE
Earnings per share has been computed for the quarter ended December 31,
1998 based upon weighted average common shares outstanding of 4,250,218.
Earnings per share for the prior period is not presented as there was no
common stock issued or outstanding.
3. SHARES REPURCHASES
During the quarter ended December 31, 1998 the Company purchased 182,120
shares of its common stock at an average price of $20.52 per share.
4. COMPREHENSIVE INCOME
Effective October 1, 1998, the Company adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." In accordance with the provisions of SFAS No. 130,
comparative financial statements presented for earlier periods have been
reclassified to reflect the provisions of this Statement. Comprehensive
income is the change in the Company's equity during the period from
transactions and other event and circumstances. Comprehensive income is
divided into net income and other comprehensive income. The Company's
"other comprehensive income" for the three months ended December 31, 1998
and 1997 and the "accumulated other comprehensive income" as of December
31, 1998 and 1997 are comprised solely of unrealized gains on investment
securities available-for-sale.
5
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Comprehensive income for the three month periods ended December 31, 1998
and 1997 is as follows (in thousands):
Three Months Ended
December 31,
-------------------
1998 1997
-------------------
Net Income $ 965 $ 524
Other comprehensive income -
Unrealized gains on investment
securities available-for-sale arising
during the period, net of income taxes 634 294
-------------------
Total comprehensive income $1,599 $ 818
===================
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This report contains certain "forward-looking statements" concerning the future
operations of Heritage Bancorp, Inc. We have used forward-looking statements to
describe future plans and strategies, including expectations of our future
financial results. Management's ability to predict results or the effect of
future plans or strategies is inherently uncertain. Factors which could affect
actual results include interest rate trends, the general economic climate in our
market area and the country as a whole, our ability to control costs and
expenses, competitive products and pricing, loan delinquency rates, changes in
federal and state regulation, and the impact of year 2000 issues. These factors
should be considered in evaluating the forward-looking statements contained in
this report and undue reliance should not be placed on such statements.
Comparison of Financial Condition at December 31, 1998 and September 30, 1998
Total assets decreased $1.0 million, or 0.3% during the first three months of
fiscal 1999 to $303.9 million. The decrease resulted primarily from decreases in
cash and cash equivalents of $4.7 million, investment securities of $2.5
million, and mortgage-backed securities of $1.3 million offset by an increase in
loans receivable of $7.6 million. Following the strategy begun in 1997,
management continued to increase investment in loans and decrease investment in
mortgage-backed securities since loans offer the Company the opportunity to earn
higher yields. Mortgage-backed securities decreased to $0.4 million as a result
of prepayments. The Company used cash on hand and the cash generated by the
reduction in its investment and mortgage-backed securities portfolios to fund
loan growth and the repurchase of $3.7 million in treasury shares.
Deposit accounts decreased $1.0 million, or 0.5%, during the first three months
of fiscal 1999 to $207.1 million. Total equity decreased $2.0 million, or 2.1%,
to $93.3 million at December 31, 1998 from $95.3 million at September 30, 1998.
The decrease was primarily a result of the Company's repurchase of $3.7 million
shares in the open market offset by net income of $965,000 and an increase of
$634,000 in the unrealized gain on available-for-sale securities.
Non-accrual loans increased $330,000 to $1,117,000 at December 31, 1998 from
$787,000 at September 30, 1999. At December 31, 1998, total non-accrual loans
accounted for 0.5% of net loans receivable up from 0.4% as of September 30,
1998. The increase in non-accrual loans is chiefly due to retaining several
loans that would normally have been foreclosed and transferred to real estate
owned. These loans were paid in full by other lenders in January and February
1999.
6
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Comparison of Operating Results for the Three Months Ended December 31, 1998 and
1997
General. Net income increased $441,000, or 84.2%, to $965,000 for the three
months ended December 31, 1998 from $524,000 for the three months ended December
31, 1997. The increase in net income was primarily the result of an increase in
interest income and a decrease in interest expense offset by an increase in
other operating expenses and in the provision for income taxes.
Net Interest Income. Net interest income increased $1.1 million to $2.5 million
for the three months ended December 31, 1998 from $1.4 million for the three
months ended December 31, 1997. The Company's interest rate spread decreased 9
basis points to 1.61% for the three month ended December 31, 1998 from 1.70% for
the three months ended December 31, 1997 as the Company experienced a 26 basis
point decrease in the yield on its interest-earning assets and a 18 basis point
decrease in the cost of its interest-bearing liabilities.
Total interest income increased $858,000, or 19.0%, to $5.4 million for the
three months ended December 31, 1998 from $4.5 million for the three months
ended December 31, 1997 as a result of the increase in the average balances of
interest-earning assets to $298.2 million from $241.8 million. The increase in
interest-earning assets offset the decrease in average yield to 7.20% from
7.46%. The increase in interest-earning assets was due primarily to funds
received from the proceeds of the initial public offering. The decrease in
average yield is attributable to the decrease in prevailing market rates since
the quarter ended December 31, 1997 and to the effect of investing the proceeds
of the public offering in cash and cash equivalents.
Interest expense on deposits decreased $248,000, or 8.0%, to $2.9 million for
the three months ended December 31, 1998 from $3.1 million for the three months
ended December 31, 1997 as a result of a decrease in the average balance of
deposits to $205.4 million from $216.2 million and a decrease in the average
cost to 5.59% from 5.77%. Average savings deposit balances declined primarily
because depositors used funds from their accounts to purchase Heritage Bancorp
stock during the Company's public offering in April, 1998. The decrease in
average cost is attributable to the decrease in prevailing market rates since
the quarter ended December 31, 1997.
Provision for Loan Losses. Provisions for loan losses are charged to operations
to bring the total allowance for loan losses to a level considered by management
to be adequate to provide for estimated losses based on management's evaluation
of such factors as the delinquency status of loans, current economic conditions,
the net realizable value of the underlying collateral and prior loan loss
experience. The provision for loan losses was $75,000 for the three months ended
December 31, 1998 compared with none for the three months ended December 31,
1997. At December 31,1998, the Bank's allowance for loan losses totaled
$835,000, which equaled 0.4% of total net loans (including loans held-for-sale)
compared to an allowance for loan losses of $760,000 at September 30, 1998 of
0.4% of total net loans. There were no charge-offs or recoveries during the
quarter ended December 31, 1998.
Other Income. Other income increased $18,000, or 38%, to $66,000 for the three
months ended September 31, 1998 from $48,000 for the three months ended December
31, 1997. This increase was a result of gains on the sale of mortgage loans held
for sale.
Other Operating Expenses. Other operating expenses increased $389,000, or 66.2%,
to $977,000 for the three months ended December 31, 1998 from $588,000 for the
three months ended December 31, 1997, primarily as a result of normal wage
increases and new costs associated with the implementation of the Employee Stock
Ownership Plan. The increases in other categories of other operating expenses
generally are attributable to the growth of the Company, inflation and
additional costs of being a publicly-owned company.
7
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Income Taxes. The provision for income taxes was $548,000 for the three months
ended December 31, 1998 compared to $330,000 for the three months ended December
31, 1997. The income tax provision was higher in fiscal 1999 because of higher
taxable income.
Liquidity and Capital Resources
The Bank's primary source of funds are customer deposits, proceeds from
principal and interest payments on loans, the sale of loans, maturing or sale of
securities and advances from the FHLB of Atlanta. While maturities and scheduled
amortization of loans are a predictable source of funds, deposit flows,
securities and loan sales and mortgage prepayments are greatly influenced by
general interest rates, economic conditions and competition. The Bank must
maintain an adequate level of liquidity to ensure the availability of sufficient
funds to fund loan originations and deposit withdrawals, to satisfy other
financial commitments and to take advantage of investment opportunities. As of
December 31, 1998, the Company had loan commitments of $19.7 million. The Bank
generally maintains sufficient cash and short-term investments to meet
short-term liquidity needs. At December 31, 1998, cash and cash equivalents
totaled $69.2 million, or 22.8% of total assets, and investment securities
classified as available-for-sale totaled $10.4 million. At December 31, 1998 the
Bank also maintained, but did not draw upon, an uncommitted credit facility with
the FHLB of Atlanta.
Year 2000
As the year 2000 approaches, the Bank's information and data processing system
must be assessed to insure appropriate operation after December 31, 1999. Many
systems in use worldwide may not be able to interpret dates after December 31,
1999 properly because such systems allow only two digits to indicate the year in
a date. Programmers initially used a two-digit dating system that has become
integrated into applications and hardware which could cause systems to function
improperly or fail on January 1, 2000. The problem could reside in computer
programs, computer hardware, or electronic devices that reference dates in the
course of their functions. Also, the Bank must consider the potential problems
that Year 2000 could pose for third party service providers.
Year 2000 risk is present in virtually all of the Bank's normal operating
activities. To confront these risks, the Bank has developed a Year 2000 Plan,
which has been reviewed by senior management and the Board of Directors. The
plan contains a review of Bank systems that could be affected by Year 2000
problems along with an assessment of the potential impact that Year 2000 system
problems could pose to the Bank's normal operation. Management categorized Year
2000 potential risks as either critical, important, or noncritical. Critical
issues were those that would cause the Bank to lose its data communication and
data processing capability and thus render normal operations virtually
impossible. Noncritical issues were those that would pose an inconvenience but
could be readily remediated through a manual or alternate processing system.
Important issues were those that would cause a some disruption to administrative
or management functions but would cause no immediate operational problems and
could be handled easily in a non-automated manner.
Management has determined the most critical aspects of the Bank's operations
that could be affected are the Bank's interaction with its data processing
provider and the proper operation of its internal computer system. While other
areas of concern, such as payroll and accounting services and mortgage escrow
and tax services could pose some inconvenience and delays in normal operations,
problems in these areas would be noncritical and could be readily corrected.
The Bank has requested and received Year 2000 readiness certifications from
third party service providers, whose services have been deemed critical to Bank
operations. For critical systems, contingency plans have been developed that
make provisions for alternate and/or manual processing. These plans are being
prepared for four possible scenarios ranging from minor system anomalies to
complete system disfunctionality. The worst case scenario would be the inability
to use the internal computer system, the inability to communicate
8
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with the data processing provider, and the data processing provider's
disfunctionality. Management feels that its preparation exceeds what is
necessary for the most reasonably likely worst case scenario.
The Office of Thrift Supervision has conducted two independent audits of the
Bank's Year 2000 progress. As a part of their regulatory oversight, the OTS will
continue to monitor the Bank's progress through 1999.
The Bank's primary data processing provider is FiServ. FiServ has developed a
Year 2000 Plan and provides the Bank with periodic updates. FiServ completed all
program maintenance associated with its Year 2000 Plan in November, 1998.
FiServ's Year 2000 activities are also monitored by the OTS. The Bank began
testing its software and hardware interfaces in conjunction with FiServ's system
in November, 1998, and concluded that further testing would be beneficial. That
testing was begun in January, 1999 and will be concluded in April, 1999. Offline
testing of the interfaces was successfully completed in January, 1999. A new
accounts software upgrade will be completed and tested in February, 1999 and
final online testing with FiServ will be complete in April, 1999.
Heritage Federal has hired Eagle Business Systems to analyze its hardware and
local area network. Bright Consulting Service is upgrading the Bank's new
accounts interface and CFI has upgraded the Bank's teller interface.
FiServ is also monitoring the Year 2000 status of third party vendors providing
data exchange functions relating to the Bank. FiServ has developed a
comprehensive list of these vendors for its clients and evaluated the vendors as
to the critical nature of their functions relating to the Bank. Testing has
begun on vendors considered most critical with tests on important but not
critical vendors to be completed.
Heritage Federal has identified only one significant commercial borrower with
Year 2000 exposure. Heritage requested, received, and reviewed the borrower's
certification of compliance. Most of the company's loans are borrower owned,
single-family residences and involve minimal Year 2000 risk to the Bank.
The external costs associated with the Bank's Year 2000 compliance are expected
to be less than $50,000. The Bank does not track internal costs as these are
related to normal payroll costs. At this time, it is not possible to make a
reasonable estimate of the costs to the Company if the Bank or any critical
third party provider failed to complete Year 2000 measures as scheduled.
However, those costs would likely have a material impact on the Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the quantitative and qualitative
disclosures about market risks as of December 31, 1998 than presented in the
Company's Form 10-K for the fiscal year ended September 30, 1998.
9
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Part II. Other Information
Item 1. Legal Proceedings
-----------------
Not applicable
Item 2. Changes in Securities and Use of Proceeds
------------------------------------------
Not applicable
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
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K: None.
10
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HERITAGE BANCORP, INC.
Date: February 10, 1999 By: /s/ J. Edward Wells
------------------------------------
J. Edward Wells
President and Chief Executive Officer
Date: February 10, 1999 By: /s/ Edwin I. Shealy
-------------------------------------
Edwin I. Shealy
Treasurer and Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,929
<INT-BEARING-DEPOSITS> 63,055
<FED-FUNDS-SOLD> 4,225
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,403
<INVESTMENTS-CARRYING> 11,511
<INVESTMENTS-MARKET> 11,550
<LOANS> 205,145
<ALLOWANCE> 835
<TOTAL-ASSETS> 303,889
<DEPOSITS> 207,141
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,441
<LONG-TERM> 0
0
0
<COMMON> 46
<OTHER-SE> 93,261
<TOTAL-LIABILITIES-AND-EQUITY> 303,889
<INTEREST-LOAN> 4,079
<INTEREST-INVEST> 1,291
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 5,370
<INTEREST-DEPOSIT> 2,870
<INTEREST-EXPENSE> 2,870
<INTEREST-INCOME-NET> 2,500
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 977
<INCOME-PRETAX> 1,513
<INCOME-PRE-EXTRAORDINARY> 1,513
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 965
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0
<YIELD-ACTUAL> 3.35
<LOANS-NON> 1,117
<LOANS-PAST> 0
<LOANS-TROUBLED> 432
<LOANS-PROBLEM> 1,205
<ALLOWANCE-OPEN> 760
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 835
<ALLOWANCE-DOMESTIC> 835
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
