SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File No. 0-23763
Quitman Bancorp, Inc.
- --------------------------------------------------------------------------------
(Exact name of Small Business Issuer as Specified in Its Charter)
Georgia 58-2365866
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
100 West Screven Street, Quitman, Georgia 31643
-----------------------------------------------
(Address of Principal Executive Offices)
(912) 263-7538
- --------------------------------------------------------------------------------
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 past 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 February 5, 1999: 569,950
Transitional Small Business Disclosure Format (check one)
YES NO X
--- ---
<PAGE>
QUITMAN BANCORP, INC.
Contents
--------
Page(s)
-------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.............................................3
Item 2. Management's Discussion and Analysis or Plan of Operation.......10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings...............................................13
Item 2. Changes in Securities and Use of Proceeds.......................13
Item 3. Defaults upon Senior Securities.................................13
Item 4. Submission of Matters to a Vote of Security Holders.............13
Item 5. Other Information...............................................13
Item 6. Exhibits and Reports on Form 8-K................................13
Signatures...............................................................14
- 2 -
<PAGE>
PART I. FINANCIAL INFORMATION
QUITMAN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
<TABLE>
<CAPTION>
ASSETS
------
DECEMBER 31, SEPTEMBER 30,
1998 1998
------------ ------------
(Unaudited)
<S> <C> <C>
Cash and Cash Equivalents:
Cash and amounts due from depository
institutions $ 498,662 168,404
Interest-bearing deposits in other banks 1,490,044 203,462
------------ ------------
Total Cash and Cash Equivalents 1,988,706 371,866
Investment securities:
Available-for-sale 5,848,771 5,640,709
Held-to-maturity -0- 200,000
Loans receivable - net of allowance for loan
losses and deferred origination fees 36,744,862 36,397,067
Office properties and equipment, at cost, net of
accumulated depreciation 1,028,552 681,453
Real estate and other property acquired
in settlement of loans 14,897 -0-
Accrued interest receivable 425,366 447,854
Investment required by law-stock in Federal
Home Loan Bank, at cost 239,800 239,800
Cash value of life insurance 397,072 337,813
Other assets 155,776 45,182
------------ ------------
Total Assets $ 46,843,802 44,361,744
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
Deposits $ 36,488,425 34,954,584
Advances from Federal Home Loan Bank 1,000,000 -0-
Accrued interest payable 328,344 275,028
Income taxes payable 100,705 24,660
Other liabilities 22,830 143,719
------------ ------------
Total Liabilities 37,940,304 35,397,991
------------ ------------
Stockholders' Equity:
Common stock, $.10 par value, 4,000,000
shares authorized, 661,250 shares
issued and 646,250 shares outstanding
December 31, 1998 (661,250 September 30,
1998) 66,125 66,125
Preferred stock, no par value, 1,000,000
shares authorized, no shares issued
or outstanding -0- -0-
Additional paid in capital 6,135,412 6,135,412
Retained Earnings 3,345,579 3,256,097
Accumulated other comprehensive income 23,932 35,119
9,571,048 9,492,753
Receivable from employee stock ownership plan (502,550) (529,000)
Treasury stock, 15,000 shares at cost (165,000) -0-
Total Stockholders' Equity 8,903,498 8,963,753
------------ ------------
Total Liabilities and Stockholders' Equity $ 46,843,802 44,361,744
============ ============
</TABLE>
- 3 -
<PAGE>
QUITMAN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
QUARTER ENDED
DECEMBER 31,
-------------------
1998 1997
-------- --------
(Unaudited) (Unaudited)
Interest Income:
Loans receivable:
First mortgage loans $788,680 757,630
Consumer and other loans 54,318 29,228
Interest on FHLMC Pool 50 74
Investment securities 88,880 62,728
Interest-bearing deposits 6,062 5,750
Federal funds sold 356 68
-------- --------
Total Interest Income 938,346 855,478
-------- --------
Interest Expense:
Deposits 519,152 511,891
Interest on Federal Home Loan
Bank advances 10,161 21,221
-------- --------
Total Interest Expense 529,313 533,112
-------- --------
Net Interest Income 409,033 322,366
Provision for loan losses 10,000 9,000
-------- --------
Net Interest Income After Provision for Losses 399,033 313,366
-------- --------
Non-Interest Income:
Gain (loss) on sale of securities 1,094 18
Other income 13,856 16,379
-------- --------
Total Non-Interest Income 14,950 16,397
-------- --------
Non-Interest Expense:
Compensation 87,307 72,745
Other personnel expenses 34,246 43,028
Occupancy expenses of premises 6,095 5,494
Furniture and equipment expenses 37,788 16,204
Federal deposit insurance 5,251 5,303
Other operating expenses 102,643 104,308
-------- --------
Total Non-Interest Expense 273,330 247,082
-------- --------
Income Before Income Taxes 140,653 82,681
Provision for Income Taxes 51,171 35,161
-------- --------
Net Income $ 89,482 47,520
======== ========
Earnings Per Share (Basic and Diluted) $ .15 N/A
======== ========
- 4 -
<PAGE>
QUITMAN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE RECEIVABLE
COMMON PAID IN RETAINED INCOME FROM TREASURY
STOCK CAPITAL EARNINGS (LOSS) ESOP STOCK TOTAL
----- ------- -------- ------ ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, September 30, 1997 $ -0- -0- 2,952,560 5,993 -0- -0- 2,958,553
Net income -0- -0- 47,520 -0- -0- -0- 47,520
Other comprehensive income -0- -0- -0- 4,253 -0- -0- 4,253
-------- ---------- -------- ------- ------- ------- ---------
Balances, December 31, 1997,
(Unaudited) $ -0- -0- 3,000,080 10,246 -0- -0- 3,010,326
======== ========== ========= ====== ======= ======= =========
Balances, September 30, 1998 $66,125 6,135,412 3,256,097 35,119 (529,000) -0- 8,963,753
Net income -0- -0- 89,482 -0- -0- -0- 89,482
Other comprehensive income (loss) -0- -0- -0- (11,187) -0- -0- (11,187)
Change in receivable from employee
stock ownership plan -0- -0- -0- -0- 26,450 -0- 26,450
Treasury stock acquired, 15,000
shares -0- -0- -0- -0- -0- (165,000) (165,000)
-------- --------- --------- ------ ------- ------- ---------
Balances, December 31, 1998,
(Unaudited) $ 66,125 6,135,412 3,345,579 23,932 (502,550) (165,000) 8,903,498
========= ========= ========= ====== ======== ======= =========
</TABLE>
- 5 -
<PAGE>
QUITMAN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31,
--------------------------
1998 1997
----------- ---------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
- -------------------------------------
Net income $ 89,482 47,520
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 20,941 14,185
Provision for loan losses 10,000 9,000
Amortization (Accretion) of securities 1,949 2,755
Gain on sale of foreclosed assets -0- (3,012)
Gain on sale of securities (1,094) -0-
Deferred income taxes (3,832) -0-
Change in Assets and Liabilities:
(Increase) Decrease in accrued interest receivable 22,488 (44,137)
Increase (Decrease) in accrued interest payable 53,316 24,007
Increase (Decrease) in other liabilities (135,923) (43,605)
Increase (Decrease) in income taxes payable 8,581 (11,500)
(Increase) Decrease in other assets (18,500) (73,644)
----------- -----------
Net cash provided (used) by operating activities 47,408 (78,431)
----------- -----------
Cash Flows From Investing Activities:
- -------------------------------------
Capital expenditures (368,040) (149,434)
Purchase of available-for-sale securities (1,766,388) (230,102)
Proceeds from sale of foreclosed property -0- 66,927
Proceeds from maturity of held-to-maturity securities 200,000 100,000
Proceeds from maturity of available-for-sale securities 100,000 -0-
Proceeds from sale of available-for-sale securities 1,400,000 -0-
Net (increase) decrease in loans (372,692) (478,032)
Principal collected on mortgage-backed securities 40,520 572
Increase in cash value of life insurance (59,259) (58,082)
----------- -----------
Net cash provided (used) by investing activities (825,859) (748,151)
----------- -----------
Cash Flows From Financing Activities:
- -------------------------------------
Net increase (decrease) in deposits 1,533,841 521,305
Proceeds from Federal Home Loan Bank advances 1,000,000 300,000
Principal collected on receivable from ESOP 26,450 -0-
Purchase of treasury stock (165,000) -0-
----------- -----------
Net cash provided (used) by financing activities 2,395,291 821,305
----------- -----------
Net Increase (Decrease) in cash and cash equivalents 1,616,840 (5,277)
Cash and Cash Equivalents at Beginning of Period 371,866 656,808
----------- -----------
Cash and Cash Equivalents at End of Period $ 1,988,706 651,531
=========== ===========
Supplemental Disclosures of Cash Flows Information:
- ---------------------------------------------------
Cash Paid During The Period:
Interest $ 475,997 509,105
Income taxes 56,848 48,700
Non-Cash Investing Activities:
Increase (Decrease) in unrealized gains on available-
for-sale securities (16,950) 6,444
</TABLE>
- 6 -
<PAGE>
QUITMAN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-----------------------------------------------
QUARTER ENDED DECEMBER 31,
--------------------------
1998 1997
---------- --------
(Unaudited) (Unaudited)
Net Income $ 89,482 47,520
-------- --------
Other Comprehensive Income, Net of Tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during the period (12,281) 4,271
Reclassification adjustment for (gains)
losses included in net income (1,094) (18)
-------- --------
Other Comprehensive Income (11,187) 4,253
-------- --------
Comprehensive Income $ 78,295 51,773
======== ========
- 7 -
<PAGE>
QUITMAN BANCORP, INC. AND SUBSIDIARY
Notes to Financial Statements
(Unaudited)
Note 1 - Basis of Preparation
- -----------------------------
The financial statements included herein for the periods ended December
31, 1998 are for Quitman Bancorp, Inc. and Subsidiary. The financial
statements included herein for the periods ended December 31, 1997 are
for Quitman Federal Savings Bank (the "Bank").
The accompanying unaudited financial statements were prepared in
accordance with instructions for Form 10-QSB and therefore do not
include all disclosures necessary for a complete presentation of the
statements of financial condition, statements of income, statements of
comprehensive income and statements of cash flow in conformity with
generally accepted accounting principles. However, all adjustments
which are, in the opinion of management, necessary for the fair
presentation of the interim financial statements have been included.
All such adjustments are of a normal recurring nature. The statement of
income for the three month period ended December 31, 1998 is not
necessarily indicative of the results which may be expected for the
entire year.
It is suggested that these unaudited financial statements be read in
conjunction with the audited consolidated financial statements and
notes thereto for Quitman Bancorp, Inc. and Subsidiary for the year
ended September 30, 1998.
Note 2 - Plan of Conversion
- ---------------------------
On October 14, 1997, the Bank's Board of Directors approved a plan
("Plan") to convert from a federally-chartered mutual savings bank to a
federally-chartered stock savings bank subject to approval by the
Bank's members. The Plan, which included formation of the holding
company, Quitman Bancorp, Inc., was subject to approval by the Office
of Thrift Supervision (OTS) and included the filing of a registration
statement with the SEC. The conversion was completed on April 2, 1998.
Actual conversion costs were accounted for as a reduction in gross
proceeds.
The Plan called for the common stock of the Bank to be purchased by the
holding company and for the common stock of the holding company to be
offered to various parties in an offering at a price of $10.00 per
share.
The stockholders of the holding company will be asked to approve a
proposed stock option plan and a proposed restricted stock plan at a
meeting of the stockholders after the conversion. Shares issued to
directors and employees under these plans may be from authorized but
unissued shares of common stock or they may be purchased in the open
market. In the event that options or shares are issued under these
plans, such issuances will be included in the earnings per share
calculation; thus, the interests of existing stockholders would be
diluted.
The Bank may not declare or pay a cash dividend if the effect thereof
would cause its net worth to be reduced below either the amounts
required for the liquidation account discussed below or the regulatory
capital requirements imposed by federal regulations.
At the time of conversion, the Bank established a liquidation account
(which is a memorandum account that does not appear on the balance
sheet) in an amount equal to its retained income as reflected in the
- 8 -
<PAGE>
latest balance sheet used in the final conversion
prospectus. The liquidation account will be maintained for the benefit
of eligible account holders who continue to maintain their deposit
accounts in the Bank after the conversion. In the event of a complete
liquidation of the Bank (and only in such an event), eligible
depositors who continue to maintain accounts shall be entitled to
receive a distribution from the liquidation account before any
liquidation may be made with respect to common stock.
Note 3 - Stock Repurchase
- -------------------------
The Company has adopted a stock repurchase program that allows for the
repurchase, from time to time, of up to 99,187 (15%) shares of common
stock. Any shares repurchased may be used for general and other
corporate purposes, including the issuance of shares upon the exercise
of stock options.
Note 4 - Earnings Per Share
- ---------------------------
The following table sets forth the reconciliation of the numerators and
denominators of the basic and diluted earnings per share (EPS)
computations:
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31,
-------------------------------
1998 1997
---- ----
<S> <C> <C>
(a) Net income available to shareholders $ 89,482 N/A
---------- -------
Denominator:
Weighted-average shares outstanding 655,598 N/A
Less: ESOP weighted-average shares outstanding 52,900 N/A
(b) Basic EPS weighted-average shares outstanding 602,698 N/A
Effect of dilutive securities -0- N/A
(c) Diluted EPS weighted-average shares outstanding 602,698 N/A
========== =======
Basic earnings per share (a/b) $ .15 N/A
========== =======
Diluted earnings per share (a/c) $ .15 N/A
========== =======
</TABLE>
- 9 -
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Comparison of Financial Condition at December 31, 1998 and September 30, 1998
Quitman Bancorp, Inc. (the "Company") may from time to time make written or oral
"forward-looking statements" including statements contained in the Company's
filings with the Securities and Exchange Commission (including this report on
Form 10-QSB), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in
forward-looking statements: the strength of the United States economy in general
and the strength of the local economies in which the Company conducts
operations; the effect of, and changes in, trade, monetary and fiscal policies
and laws, including interest rate policies of the Board of Governors of the
Federal Reserve System, inflation, interest rate and market and monetary
fluctuations; the timely development of and acceptance of new products and
services of the Company and the perceived overall value of these products and
services by users, including the features, pricing and quality compared to
competitors' products and services; the willingness of users to substitute
competitors' products and services for the Company's products and services; the
success of the Company in gaining regulatory approval of its products and
services, when required; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes, acquisitions; changes in consumer spending
and saving habits; and the success of the Company at managing the risks
described above involved in the foregoing.
The Company cautions that these important factors are not exclusive. The Company
does not undertake to update any forward-looking statement, whether written or
oral, that may be made from time to time by or on behalf to the Company.
Total assets increased by $2.5 million or 5.6% due primarily to the increase in
cash and cash equivalents, office properties and equipment, loans resulting from
funds received from capital stock issued by Quitman Bancorp, Inc., the Bank's
newly formed holding company, and advances from the Federal Home Loan Bank in
the amount of $1 million.
Total equity decreased by $60,255 as result of net income for the three months
ended December 31, 1998, changes in the unrealized gain or loss on
available-for-sale securities, reduction of a guaranty of a loan to the Bank's
employee stock ownership plan, and purchase of 15,000 shares of treasury stock
at a cost of $165,000.
Non-Performing Assets and Delinquencies
Loans accounted for on a non-accrual basis increased to $332,000 December 31,
1998 from $103,213 at September 30, 1998. The increase was the result of two
loans being reclassified to performing loans and nine loans being added to
non-accrual. The allowance for loan losses was $380,000 at December 31, 1998.
- 10 -
<PAGE>
Comparison of the Results of Operations for the Three Months Ended December 31,
1998 and 1997
Net Income. Net income increased by $42,000 or 88.4% from net income of $47,000
for the three months ended December 31, 1997 to net income of $89,000 for the
three months ended December 31, 1998. This increase is primarily the result of
increased interest income that was reduced by an increase in non-interest
expense. The return on average assets increased from .48% to .78% for the three
months ended December 31, 1997 and 1998, respectively.
Net Interest Income. Net interest income increased $87,000 or 26.9% from
$322,000 for the three months ended December 31, 1997 to $409,000 for the three
months ended December 31, 1998. The increase was primarily due to an increase in
loans resulting from the approximately $6.2 million in net proceeds received in
April, 1998 from our initial public offering.
Interest Income. Interest income increased $83,000 for the three months ended
December 31, 1998 compared to the same three months ended December 31, 1997. The
increase in interest income was primarily due to an increase in the average
balance of interest-earning assets. The average balance of interest-earning
assets increased by 13.85%. This increase in average interest-earning assets
added an additional $83,000 of interest income. The average yield on
interest-earning assets decreased moderately to 8.6% from 8.9% for the three
months ended December 31, 1998 and 1997, respectively.
Interest Expense. Interest expense decreased $4,000 from $533,000 for the three
months ended December 31, 1997 to $529,000 for the three months ended December
31, 1998. The decrease in interest expense was due to a decrease in
interest-bearing liabilities of $.7 million and a slight increase in the cost of
funds of 6 basis points (100 basis points equals 1%). The average balances of
deposits and advances from the Federal Home Loan bank decreased by $.5 million,
from the three months ended December 31, 1997 to the three months ended December
31, 1998.
Non-Interest Income. Non-interest income decreased by $1,400 primarily from a
decrease of $1,500 in miscellaneous income.
Non-Interest Expense. Non-interest expense increased by $26,000 primarily due to
increased compensation and other personnel expense, furniture and equipment
expense and other operating expenses. Our compensation and other personnel
expense increased an aggregate of $5,800 between the periods as a result of
year-end pay raises, and hiring of additional part-time employees. Our furniture
and equipment expense increased by $21,600 between the periods as a result of
acquisition of new equipment which increased our depreciation cost by $7,000 and
our repairs and maintenance cost increased by $13,000.
Once our new bank building is opened, we expect our non-interest expense to
increase. Also, we expect to submit benefit plans for consideration of the
stockholders. If these benefit plans are adopted, this will further increase our
non-interest expense.
Income Taxes. Income tax expense amounted to $35,000 for the three months ended
December 31, 1997 compared to $51,000 for the three months ended December 31,
1998.
Liquidity and Capital Resources
Management monitors our risk-based capital and leverage capital ratios in order
to asses compliance with regulatory guidelines. At December 31, 1998, the Bank
had tangible capital, leverage, and total risk-based capital of 12.96%, 12.96%
and 20.50%, respectively, which exceeded the OTS's minimum requirements of
1.50%, 3.00% and 8.00%, respectively.
- 11 -
<PAGE>
We are taking necessary steps to be certain our data processing equipment and
software will properly function on January 1, 2000, the date that computer
problems are expected to develop worldwide on computer systems that incorrectly
identify the year 2000 and incorrectly compute interest, payment or delinquency.
Accurate data processing is essential to our operations.
We have examined our computers to determine whether they will properly function
on January 1, 2000 and do not believe that we will experience material costs to
upgrade our computers. We have ordered and installed an upgrade to our computer
system that is intended to solve the Year 2000 Computer software issue. We
installed this upgrade during the first calendar quarter of 1998. Testing of
this software through December 31, 2000 has been completed.
There was no malfunction of the software during testing. If a malfunction of the
software is discovered, we plan to implement "manual processing" until our
software becomes Y2K compliant. We have ordered packages of all forms required
to handle loans, deposits and operations. Detailed plans for the manual
operation of Quitman Federal Savings bank are in progress.
Non-information technology such as: heating, air conditioning and door locks
have been tested. These areas will not be impacted.
We have made contact with our Commercial Borrowers regarding the Year 2000
issue, advising them of the potential problem. As the majority of our loan
portfolio is 1 to 4 family dwellings, we do not feel our commercial borrowers
will be an issue.
A new bank building is currently under construction, the estimated cost of the
new facility and land is $960,000. We are exploring whether to purchase land and
construct a branch. Although no definite plans have been made, if a new branch
is built, the land and construction costs could total approximately $600,000. We
have sufficient liquid assets to pay for these costs. These costs will partially
offset by the sale of our existing office. We also have sufficient capital
resources to install an ATM machine, if we decide to offer that service in the
future.
- 12 -
<PAGE>
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
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) None.
(b) A Form 8-K (Item 7) dated October 30, 1998 was filed during
the quarter ended December 31, 1998.
- 13 -
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
QUITMAN BANCORP, INC.
Date: February 12, 1999 By: /s/Melvin E. Plair
-------------------------------------
Melvin E. Plair
President and Chief Executive Officer
(Principal Executive and Financial
Officer)
(Duly Authorized Officer)
Date: February 12, 1999 By: /s/Peggy L. Forgione
-------------------------------------
Peggy L. Forgione
Vice President and Controller
(Chief Accounting Officer)
- 14 -
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 499
<INT-BEARING-DEPOSITS> 1,490
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,849
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 37,125
<ALLOWANCE> 380
<TOTAL-ASSETS> 46,844
<DEPOSITS> 36,488
<SHORT-TERM> 1,000
<LIABILITIES-OTHER> 452
<LONG-TERM> 0
0
0
<COMMON> 66
<OTHER-SE> 8,838
<TOTAL-LIABILITIES-AND-EQUITY> 46,844
<INTEREST-LOAN> 843
<INTEREST-INVEST> 89
<INTEREST-OTHER> 6
<INTEREST-TOTAL> 938
<INTEREST-DEPOSIT> 519
<INTEREST-EXPENSE> 10
<INTEREST-INCOME-NET> 409
<LOAN-LOSSES> 10
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 273
<INCOME-PRETAX> 141
<INCOME-PRE-EXTRAORDINARY> 89
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
<YIELD-ACTUAL> 2.67
<LOANS-NON> 332
<LOANS-PAST> 637
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 370
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 380
<ALLOWANCE-DOMESTIC> 380
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
