UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-QSB
(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
|_| TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number 0-23971
GASTON FEDERAL BANCORP, INC.
----------------------------
(Exact name of registrant as specified in its charter)
United States 56-2063438
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
245 West Main Avenue, Gastonia, North Carolina 28052-4140
---------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (704)-868-5200
--------------
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check |X| 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 |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: There were 4,455,500 shares
of the Registrant's common stock outstanding as of February 3, 1999.
<PAGE>
GASTON FEDERAL BANCORP, INC.
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements....................... 3
Consolidated Statements of Financial Condition................. 3
Consolidated Statements of Operations for the three
months ended December 31, 1998 and 1997..................... 4
Consolidated Statements of Comprehensive Income of the three
months ended December 31, 1998 and 1997..................... 5
Consolidated Statements of Cash Flows for the three months
ended December 31, 1998 and 1997............................ 6
Notes to Consolidated Financial Statements..................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 8
PART II. OTHER INFORMATION.............................................. 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Gaston Federal Bancorp, Inc. and Subsidiary
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
----------- -----------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C>
Assets
Cash and due from banks .......................................... $ 3,251 $ 2,272
Interest-earning bank balances ................................... 734 2,625
-------- --------
Cash and cash equivalents ........................................ 3,985 4,897
Investment securities available-for-sale, at fair market ......... 26,689 8,622
Investment securities held-to-maturity, at amortized cost ........ 14,616 10,030
Mortgage-backed securities available-for-sale, at fair value ..... 7,151 0
Mortgage-backed securities held-to-maturity, at amortized cost ... 5,796 9,547
Loans, net ....................................................... 156,222 134,530
Premises and equipment, net ...................................... 2,296 2,184
Accrued interest receivable ...................................... 975 878
Federal Home Loan Bank stock ..................................... 1,375 1,276
Other assets ..................................................... 1,813 1,473
-------- --------
Total assets ................................................... $220,918 $173,437
======== ========
Liabilities and Equity
Deposits ......................................................... $148,992 $146,306
Advances from borrowers for taxes and insurance .................. 388 690
Advances from Federal Home Loan Bank ............................. 27,500 3,500
Other liabilities ................................................ 2,363 1,518
-------- --------
Total liabilities .............................................. 179,243 152,014
Retained earnings (substantially restricted) ..................... 21,731 20,147
Capital stock and paid in capital, net of $1,578 ESOP loan ....... 18,132 0
Unrealized gain on securities available-for-sale, net of tax ..... 1,812 1,276
-------- --------
Total equity ................................................... 41,675 21,423
-------- --------
Total liabilities and equity ..................................... $220,918 $173,437
======== ========
</TABLE>
3
<PAGE>
Gaston Federal Bancorp, Inc. and Subsidiary
Consolidated Statements of Operations (unaudited)
Three Months
Ended December 31,
------------------
1998 1997
----- -----
(in thousands, except
per share data)
Interest income
Loans .................................................. $ 2,850 $ 2,731
Investment securities .................................. 672 334
Mortgage-backed and related securities ................. 186 164
---------- --------
Total interest income ................................ 3,708 3,229
Interest Expense
Deposits ............................................... 1,580 1,686
Borrowed funds ......................................... 307 52
---------- --------
Total interest expense ................................. 1,887 1,738
---------- --------
Net interest income .................................... 1,821 1,491
Provision for loan losses .............................. 15 75
---------- --------
Net interest income after provision for loan losses .. 1,806 1,416
Noninterest Income
Service charges on deposit accounts .................... 75 59
Loan fees and related income ........................... 51 20
Gain on sale of securities ............................. 6 80
Gain on sale of assets ................................. 0 0
Other income ........................................... 91 58
---------- --------
Total noninterest income ............................. 223 217
Noninterest Expense
Compensation and benefits .............................. 676 601
Occupancy and equipment expense ........................ 86 94
Other expenses ......................................... 441 341
---------- --------
Total noninterest expense ............................ 1,203 1,036
Income before income taxes ............................. 826 597
Provision for income taxes ............................. 300 219
---------- --------
Net income ............................................. $ 526 $ 378
========== ========
Earnings per share ..................................... $ 0.12 NA
Weighted average outstanding shares .................... 4,484,600 NA
4
<PAGE>
Gaston Federal Bancorp, Inc. and Subsidiary
Consolidated Statements of Comprehensive Income (unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
---------------
1998 1997
------ ------
(in thousands)
<S> <C> <C>
Net income .................................................................. $ 526 $ 378
Other comprehensive income, net of tax:
Unrealized gains on securities:
Unrealized holding gains arising during period ..................... 278 185
Less: Reclassification adjustment for gains included in net income .. 4 8
------ ------
Other comprehensive income .............................................. 274 177
Comprehensive income ........................................................ $ 800 $ 555
</TABLE>
5
<PAGE>
Gaston Federal Bancorp, Inc. and Subsidiary
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
--------------------
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................................................... $ 526 $ 378
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses ...................................................... 15 75
Depreciation ................................................................... 138 46
Loss (gain) on sale of investment securities ................................... (6) (80)
Loss (gain) on sale of other assets ............................................ 0 0
Decrease (increase) in other assets ............................................ 149 (218)
Increase (decrease) in other liabilities ....................................... 59 (384)
-------- --------
Net cash provided (used) by operating activities ............................. 881 (183)
-------- --------
Cash flows from investing activities:
Net increase in loans made to customers ............................................ (19,657) (101)
Proceeds from sale of investment securities ........................................ 2,000 970
Proceeds from maturities of investment securities .................................. 975 2,456
Purchases of investments ........................................................... (5,483) (3,360)
Maturities and prepayments of mortgage-backed securities ........................... 1,235 540
Purchases of mortgage-backed securities ............................................ (1,485) 0
Net cash flows from other investing activities ..................................... (286) (91)
-------- --------
Net cash provided by (used in) investment activities ......................... (22,701) 414
-------- --------
Cash flows from financing activities:
Net increase (decrease) in deposits ................................................ 5,091 1,010
Net increase (decrease) in borrowed money .......................................... 8,000 0
Increase (decrease) in advances from borrowers for insurance and taxes ............. (340) (969)
Dividends paid on common stock ..................................................... (225) 0
Repurchase of common stock ......................................................... (519) 0
Net proceeds from sale of common stock ............................................. 0 0
-------- --------
Net cash provided by (used in) financing activities .......................... 12,007 41
-------- --------
Net increase (decrease) in cash and cash equivalents ................................. (9,813) 272
Cash and cash equivalents at beginning of period ..................................... 13,798 4,625
-------- --------
Cash and cash equivalents at end of period ........................................... $ 3,985 $ 4,897
======== ========
</TABLE>
6
<PAGE>
GASTON FEDERAL BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
In management's opinion, the financial information, which is unaudited,
reflects all adjustments (consisting solely of normal recurring adjustments)
necessary for a fair presentation of the financial information as of and for the
three month periods ended December 31, 1998 and 1997, in conformity with
generally accepted accounting principles. The financial statements include the
accounts of Gaston Federal Bancorp, Inc. (the "Company") and its wholly owned
subsidiary, Gaston Federal Bank (the "Bank"). Operating results for the three
month period ended December 31, 1998, are not necessarily indicative of the
results that may be expected for future periods.
The organization and business of the Company, accounting policies
followed, and other information are contained in the notes to the consolidated
financial statements of the Company as of and for the years ended September 30,
1998 and 1997, filed as part of the Company's annual report on Form 10-KSB.
These consolidated financial statements should be read in conjunction with the
annual consolidated financial statements.
Note B - Plan of Reorganization and Stock Offering
On April 9, 1998, the Bank converted from a federally chartered mutual
savings and loan association to a federally chartered stock savings bank and
became the wholly-owned subsidiary of Gaston Federal Bancorp, Inc., a Federal
corporation (the "Reorganization"). The Company was incorporated on March 18,
1998, to serve as the Bank's holding company, and prior to April 9, 1998, had no
operations and insignificant assets and liabilities. In addition, the Company
sold 2,113,355 shares of its common stock to the Bank's customers for $10.00 per
share (the "Offering"), and issued 2,383,145 shares of its common stock to
Gaston Federal Holdings, MHC (the "Mutual Holding Company"), a federal mutual
holding company formed as part of the Reorganization. At the conclusion of the
Offering, the Mutual Holding Company owned 53.0% of the Company's outstanding
shares of common stock and purchasers in the Offering owned 47.0%. Gross
proceeds of the Offering totaled $21,133,550, expenses totaled approximately
$853,000, and purchases by the Bank's employee stock ownership plan formed in
connection with the Offering totaled $1,690,680 for net proceeds of
approximately $18,590,000.
Note C - Earnings per Share
Earnings per share has been determined under the provisions of the
Statement of Financial Accounting Standards No. 128, Earnings Per Share. For the
quarter ended December 31, 1998, earnings per share has been computed based upon
the weighted average common shares outstanding of 4,484,600. Earnings per share
for the quarter ended December 31, 1997, is not presented since there was no
common stock issued or outstanding.
The Company has no outstanding potential stock as defined in the Statement of
Financial Accounting Standards No. 128, Earnings Per Share.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, technological developments, new products, and similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements provided that the Company notes that a variety of
factors could cause the Company's actual results to differ materially from the
anticipated results expressed in the Company's forward-looking statements. The
risks and uncertainties that may affect the operations, performance, and results
of the Company's business include, but are not limited to, changes in economic
conditions, changes in interest rates, and changes in laws and regulations.
Accordingly, past results and trends should not be used by investors to
anticipate future results or trends. Statements included in this report should
be read in conjunction with the Company's Annual Report on Form 10-KSB and are
incorporated into this discussion by this reference.
Comparison of Financial Condition
Assets. Total assets of the Company increased by $47.5 million, or 27.4%,
from $173.4 million as of December 31, 1997, to $220.9 million as of December
31, 1998. One reason for the increase was the receipt of $18.6 million in net
proceeds from the stock offering. Also, various leverage strategies totaling
$24.0 million were implemented whereby borrowed funds were used to purchase
investment and mortgage-backed securities and to fund loans. As a result of the
stock conversion and leverage strategies, investment securities increased by
$22.6 million, or 121.5%, from $18.7 million to $41.3 million, and
mortgage-backed securities increased $3.4 million, or 35.6% from $9.5 million to
$12.9 million. Management plans that from time to time it may continue to pursue
attractive leverage strategies, which will increase the Company's total assets.
Loans receivable, net, increased by $21.7 million, or 16.1%, from $134.5 million
to $156.2 million due, in part, to the addition of our wholesale lending
department. Residential mortgage loans increased by $17.2 million, or 16.2% and
commercial business and consumer loans increased by $5.2 million, or 33.4%.
Management plans to continue to grow the loan portfolio in a safe and sound
manner with an emphasis on short-term, high-yielding non-mortgage loans.
Total assets of the Company increased by $12.9 million, or 6.2%, from
$208.0 million as of September 30, 1998, to $220.9 million as of December 31,
1998. This increase was primarily due to a $19.7 million, or 14.4%, increase in
net loans and a $3.7 million or 8.2% increase in investment and mortgage backed
securities. These increases were offset by a $9.7 million decrease in cash and
cash equivalents.
Liabilities. Total liabilities increased by $27.2 million, or 17.9%, from
$152.0 million as of December 31, 1997, to $179.2 million as of December 31,
1998. The primary reason for the change was a $24.0 million increase in borrowed
money from $3.5 million to $27.5 million. This increase in borrowed money was
used as part of a leverage strategy in which the funds were used to purchase
investment and mortgage-backed securities and to fund loans. The borrowed money
is comprised of various callable and fixed-term Federal Home Loan Bank advances
at fixed interest rates ranging from 4.69% to 5.75%. Total deposits increased by
$2.7 million, or 1.8%, from $146.3 million to $149.0 million. This increase was
primarily the result of the introduction of a new menu of personal and business
demand accounts, which have been marketed aggressively in order to gain market
share in the local community. Management plans to continue in its efforts to
gain deposit market share through new product innovation and aggressive
marketing.
8
<PAGE>
Total liabilities increased by $12.8 million, or 7.7%, from $166.4 million
as of September 31, 1998, to $179.2 million as of December 31, 1998. The primary
reason for the increase was an $8.0 million increase in borrowed money and a
$5.1 million increase in deposits.
Equity. Total equity increased by $20.3 million, or 94.5%, from $21.4
million as of December 31, 1997, to $41.7 million as of December 31, 1998. This
increase was primarily due to the receipt of $18.6 million in net proceeds from
the sale of stock, $1.9 million in earnings, and a $536,000 increase in the
unrealized gain on securities classified as available-for-sale. This increase
was partly offset by the payment of $225,000 in dividends ($0.05 per share) and
the repurchase of 31,000 shares of common stock for $519,000.
Total equity increased by $105,000, or 0.25%, from $41.6 million as of
September 30, 1998, to $41.7 million as of December 31, 1998. During the
quarter, the Company paid dividends of $225,000, repurchased $519,000 of the
Company's common stock, earned $526,000 in net income and recognized a $274,000
increase in unrealized gains on investments designated as available-for-sale.
9
<PAGE>
Comparison of Results of Operations for the Three Months Ended December 31, 1997
and 1998
General. Net income for the Company for the three months ended December
31, 1998, amounted to $526,000, as compared to $378,000 for the three months
ended December 31, 1997. This represents an increase of $148,000, or 39.2%.
Net interest income. Net interest income amounted to $1.8 million for the
three months ended December 31, 1998, as compared to $1.5 million for the three
months ended December 31, 1997. This represents an increase of $330,000, or
22.1%. This increase was due to a $479,000 increase in total interest income
that was offset by a $149,000 increase in interest expense. Interest income
improved as a result of an increase in the amount of interest-earning assets.
This increase was due to the deployment of $18.6 million from the proceeds of
the stock offering and the investment of $24.0 million in additional borrowed
money. The increase in interest expense was primarily due to the $24.0 million
increase in borrowed money. This resulted in a $255,000 increase in interest
expense. Interest expense on deposits decreased by $106,000, despite a $2.7
million increase in total deposits. This was primarily due to a reduction in the
rate of interest paid on deposit accounts during the period.
Provision for loan losses. The provision for loan losses amounted to
$15,000 for the three months ended December 31, 1998, as compared to $75,000 for
the three months ended December 31, 1997. This represents a decrease of $60,000.
The ratio of loan loss reserves to gross loans was 0.90% as of December 31,
1998, and 0.87% as of December 31, 1997. The provision for loan losses is
expected to increase as the Company grows its loan portfolio.
Noninterest income. Total noninterest income amounted to $223,000 for the
three months ended December 31, 1998, as compared to $217,000 for the three
months ended December 31, 1997. This represents an increase of $6,000, or 2.8%.
Gains on sale of assets amounted to $6,000 in 1998 and $80,000 in 1997. Without
these nonrecurring items, noninterest income would have increased by $80,000, or
58.4%. This increase was primarily due to additional fee income derived from
loan and deposit products and commissions on the sale of financial products
through the Bank's wholly owned subsidiary.
Noninterest expense. Total noninterest expense amounted to $1.2 million
for the three months ended December 31, 1998, as compared to $1.0 million for
the three months ended December 31, 1997. This represents an increase of
$167,000 or 16.1%. This difference was primarily due to an increase in the
number of personnel, increased cost of professional services as a result of
being a public company, and additional expenses associated with implementing new
products and services.
Income taxes. Income taxes amounted to $300,000, or 36.3% of taxable
income, for the three month period ended December 31, 1998, as compared to
$219,000, or 36.7% of taxable income, for the three month period ended December
31, 1997. This represents an increase of $81,000, or 37.0%. This difference was
primarily due to a $229,000 increase in net income before taxes for the three
months ended December 31, 1998.
10
<PAGE>
Liquidity and Capital Resources
The objective of the Bank's liquidity management is to ensure the
availability of sufficient cash flows to meet all financial commitments and to
capitalize on opportunities for expansion. Liquidity management addresses the
Bank's ability to meet deposit withdrawals on demand or at contractual maturity,
to repay borrowings as they mature, and to fund new loans and investments as
opportunities arise.
The Bank's primary sources of internally generated funds are principal and
interest payments on loans receivable and cash flows generated from operations.
External sources of funds include increases in deposits and advances from the
Federal Home Loan Bank of Atlanta.
The Bank is required under applicable federal regulations to maintain
specified levels of liquid investments in qualifying types of investments having
maturities of five years or less. Current OTS regulations require that a savings
bank maintain liquid assets of not less that 4% of its average daily balance of
net withdrawable deposit accounts and borrowings payable in one year or less.
Monetary penalties may be imposed for failure to meet applicable liquidity
requirements. At December 31, 1998, the Bank's liquidity, as measured for
regulatory purposes, was 20.9%, or $25.0 million in excess of the minimum OTS
requirement.
The Bank is subject to various regulatory capital requirements
administered by the banking regulatory agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly discretionary actions
by the regulators that, if undertaken, could have a direct material effect on
the Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classifications are subject
to qualitative judgments by the regulators about components, risk-weightings,
and other factors. As of December 31, 1998, Gaston Federal Bank's level of
capital substantially exceeded all applicable regulatory requirements.
The Year 2000
Like many financial institutions, the Bank relies upon computers for conducting
its daily operations. There is concern among industry experts that on January 1,
2000, computers will be unable to "read" the new year and, as a consequence,
there may be widespread computer malfunctions. Since the Bank processes all of
its loan, deposit, and accounting operations on an internal data processing
system, the Year 2000 issue could have a material adverse effect on the
operations of the Bank if proper modifications and conversions are not made in a
timely manner. As a result, Management has conducted a comprehensive review of
its computer systems to identify systems that could be affected by the Year
2000, and has developed a Year 2000 Plan to modify or replace the affected
systems and test them for Year 2000 readiness. To date, the Company has taken
the following actions to mitigate the potential effects of the Year 2000 issue:
o The Bank has upgraded its mainframe computer system (including hardware
and software) to be Year 2000 ready. Management has successfully tested
the new computer system to ensure that there were no material Year 2000
problems;
o The Board of Directors has adopted a Year 2000 Plan that has been
implemented by Management. The Plan addresses the overall status of the
Year 2000 project, details the Bank's contingency plan, describes mission
critical systems and non-mission critical systems, and identifies test
dates. The Company also has a written Year 2000 Business Resumption
Contingency Plan which contains all mission critical systems and services
and details policy, public relations statements, and workaround procedures
for each system.
11
<PAGE>
A general contingency plan has been developed for non-mission critical
systems;
o The Board of Directors has engaged an outside technology consultant to
assist Management in identifying any and all exposures that the Bank may
have and help make all appropriate changes necessary to allow a smooth
transition to the new millennium. The technology consultant will also
coordinate the Bank's Year 2000 contingency planning;
o The Company has established a Year 2000 Committee consisting of members of
senior management that currently meets on a weekly basis to discuss
progress on the Year 2000 Plan; and
o A Year 2000 budget has been developed which estimates the cost associated
with Year 2000 readiness to be less than $200,000. To date, the Company
has expensed approximately $150,000 on Year 2000 readiness, including
$125,000 for a new mainframe computer system (hardware and software) which
is being depreciated over a three-year period.
While the Bank expects to complete its Year 2000 plan on a timely basis,
there can be no assurance that the systems of the other companies on which the
Bank's systems may rely also will be completed in a timely fashion. The failure
of such outside entities to address the Year 2000 issue adequately could have an
adverse effect on the Bank's ability to conduct its business. Workaround
procedures for these possible scenarios are detailed in the Company's Year 2000
Business Resumption Contingency Plan.
PART II. OTHER INFORMATION
Legal Proceedings
There are various claims and lawsuits in which the Bank is periodically
involved incidental to the Bank's business. In the opinion of management, no
material loss is expected from any of such pending claims or lawsuits.
Use of Proceeds From Registered Securities
Not applicable.
Defaults Upon Senior Securities
Not applicable.
Submission of Matters to a Vote of Security Holders
There were no meetings of the Company's stockholders during the fiscal
quarter ended December 31, 1998.
Exhibits and Report on Form 8-K.
No Form 8-K reports were filed during the quarter.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
GASTON FEDERAL BANCORP, INC.
Date: February 12, 1999 By: /s/ Kim S. Price
-------------------------------------
Kim S. Price
President and Chief Executive Officer
Date: February 12, 1999 By: /s/ Gary F. Hoskins
-------------------------------------
Gary F. Hoskins
Treasurer and Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 3,251
<INT-BEARING-DEPOSITS> 734
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 26,689
<INVESTMENTS-CARRYING> 14,616
<INVESTMENTS-MARKET> 14,816
<LOANS> 156,222
<ALLOWANCE> 1,428
<TOTAL-ASSETS> 202,615
<DEPOSITS> 148,992
<SHORT-TERM> 10,000
<LIABILITIES-OTHER> 2,751
<LONG-TERM> 17,500
0
0
<COMMON> 18,132
<OTHER-SE> 23,543
<TOTAL-LIABILITIES-AND-EQUITY> 220,918
<INTEREST-LOAN> 2,850
<INTEREST-INVEST> 672
<INTEREST-OTHER> 186
<INTEREST-TOTAL> 3,708
<INTEREST-DEPOSIT> 1,580
<INTEREST-EXPENSE> 1,887
<INTEREST-INCOME-NET> 1,821
<LOAN-LOSSES> 15
<SECURITIES-GAINS> 6
<EXPENSE-OTHER> 1,203
<INCOME-PRETAX> 826
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 526
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
<YIELD-ACTUAL> 2.8
<LOANS-NON> 215
<LOANS-PAST> 0
<LOANS-TROUBLED> 247
<LOANS-PROBLEM> 869
<ALLOWANCE-OPEN> 1,411
<CHARGE-OFFS> 0
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 1,428
<ALLOWANCE-DOMESTIC> 1,428
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
