<PAGE>
<PAGE>
U.S. 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 June 30, 1999
[ ] Transition Report under Section 13 or 15(d) of the
Exchange Act
For the transition period from ______ to ______
Commission File Number: 0-24589
BCSB BANKCORP, INC.
--------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its
Charter)
UNITED STATES 52-2108333
- ------------------------------- ----------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
4111 E. JOPPA ROAD, SUITE 300, BALTIMORE, MARYLAND 21236
---------------------------------------------------------
(Address of Principal Executive Offices)
(410) 256-5000
-----------------------------------------------
Issuer's Telephone Number, Including Area Code)
N/A
- ----------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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
----- -----
As of August 13, 1999, the issuer had 6,116,562 shares of
Common Stock issued and outstanding.
Traditional Small Business Disclosure Format (check one):
Yes No X
----- -----
<PAGE>
<PAGE>
CONTENTS
PAGE
----
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
Consolidated Statements of Financial
Condition as of June 30, 1999
(unaudited) and September 30, 1998 . . . . . . 2
Consolidated Statements of Operations
for the Nine Months and Three Months
Ended June 30, 1999 and 1998 (unaudited) . . . 3
Consolidated Statements of Cash Flows
for the Nine Months Ended June 30, 1999
and 1998 (unaudited) . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . 7
Item 2. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities and Use of Proceeds . . . . 16
Item 3. Defaults Upon Senior Securities . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . 16
Item 5. Other Information . . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 18
1
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
<TABLE>
<CAPTION>
June 30, September 30,
1999 1998
------- -------------
(Unaudited)
Assets
------
<S> <C> <C>
Cash $ 3,825,242 $ 3,572,309
Interest bearing deposits in other banks 12,316,208 20,299,970
Federal funds sold 1,062,461 9,134,202
Investment securities, held to maturity 33,732,274 12,610,823
Loans receivable, net 202,338,992 181,969,226
Mortgage backed securities, held to maturity 24,757,261 34,197,844
Foreclosed real estate, net 89,091 370,690
Investment in real estate development and loans
to joint venture 6,045 8,195
Premises and equipment, net 3,411,808 2,988,558
Federal Home Loan Bank of Atlanta stock 1,650,300 1,511,900
Accrued interest receivable - loans 759,318 725,065
- investments 539,542 528,231
- mortgage backed securities 140,853 196,136
Prepaid income taxes 544,191 175,870
Intangible assets acquired, net 2,237 24,497
Other assets 1,491,428 526,733
------------- ------------
Total assets $ 286,667,251 $268,840,249
============= ============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities
- -----------
Deposits $ 231,493,173 $220,804,724
Borrowed money 3,000,000 --
Advance payments by borrowers for taxes and insurance 3,370,092 850,397
Income taxes payable 110,674 60,792
Deferred income taxes 50,906 143,929
Dividends payable 295,201 --
Payables to disbursing agents 49,132 249,430
Other liabilities 2,311,969 1,587,929
------------- ------------
Total liabilities 240,681,147 223,697,201
Commitments and contingencies
Stockholders' Equity
- --------------------
Common stock (Par value $.01 - 13,500,000 authorized,
6,116,562 shares issued and outstanding) 61,166 61,166
Additional paid-in capital 22,688,278 22,645,088
Retained earnings (substantially restricted) 25,689,052 25,221,308
Employee Stock Ownership Plan (1,554,888) (1,829,280)
Stock held by Rabbi Trust (897,504) (955,234)
------------- ------------
45,986,104 45,143,048
------------- ------------
Total liabilities and retained earnings $286,667,251 $268,840,249
============= ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
2
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
-------------------------------------------------
<TABLE>
<CAPTION>
For Nine Months Ended For Three Months Ended
June 30, June 30,
----------------------- -------------------------
1999 1998 1999 1998
------ ------ ------- --------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 10,852,836 $ 9,969,617 $ 3,699,671 $ 3,363,408
Interest on mortgage-backed securities 1,336,944 1,768,508 386,083 597,746
Interest and dividends on investment securities 1,066,517 1,077,975 501,131 335,573
Other interest income 1,126,885 1,163,690 234,743 472,093
------------- ------------ ------------ ------------
Total interest income 14,385,182 13,979,790 4,821,626 4,768,820
Interest Expense
Interest on deposits 7,228,521 7,314,047 2,374,372 2,429,635
Interest on borrowings - short term 12,282 -- 12,282 --
Other interest expense 6,456 8,917 2,917 4,852
------------- ------------ ------------ ------------
Total interest expense 7,247,259 7,322,964 2,389,571 2,434,487
------------- ------------ ------------ ------------
Net interest income 7,137,923 6,856,826 2,432,057 2,334,333
Provision for losses on loans 288,531 37,981 56,170 77,255
------------- ------------ ------------ ------------
Net interest income after provision
for losses on loans 6,849,392 6,618,845 2,375,887 2,257,078
Other Income (Loss)
Gain (loss) on sale of foreclosed real estate 4,318 (17,111) 3,311 --
Servicing fee income 374 9,263 93 3,411
Fees and charges on loans 114,493 142,595 36,902 41,051
Fees on transaction accounts 126,022 117,779 36,730 39,137
Rental income 84,604 93,968 20,744 31,313
Gain from real estate development and joint venture 6,110 -- 72 --
Gain on sale of branch deposits -- 339,000 -- --
Miscellaneous income 57,611 72,884 24,270 17,868
------------- ------------ ------------ ------------
Net other income (loss) 393,532 758,378 122,122 132,780
Non-Interest Expenses
Salaries and related expense 3,033,840 2,411,201 874,753 783,440
Occupancy expense 509,790 401,098 169,105 158,239
Deposit insurance premiums 118,014 159,152 49,071 52,020
Data processing expense 381,770 319,562 116,921 103,154
Property and equipment expense 452,655 283,279 204,372 105,097
Professional fees 139,246 90,646 26,417 30,764
Advertising 309,292 239,821 108,376 101,241
Telephone, postage and office supplies 259,814 231,510 93,061 78,064
Amortization of excess of cost over fair value
of net assets acquired 20,034 20,156 6,678 6,777
Other expenses 279,244 220,901 85,031 59,936
------------- ------------ ------------ ------------
Total non-interest expenses 5,503,699 4,377,326 1,733,785 1,478,732
------------- ------------ ------------ ------------
Income before tax provision 1,739,225 2,999,897 764,224 911,126
Income tax provision 681,079 1,171,035 298,679 345,992
------------- ------------ ------------ ------------
Net income $ 1,058,146 $ 1,828,862 $ 465,545 $ 565,134
============= ============ ============ ============
Basic and diluted earnings per share $ 0.18 $ 0.08
========== =========
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
3
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For Nine Months Ended
June 30,
-----------------------
1999 1998
------- -------
<S> <C> <C>
Operating Activities
Net Income $ 1,058,146 $ 1,828,862
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
------------------------------------
Accretion of discount on investments 5,368 30,722
Loans originated for sale -- (133,000)
Proceeds from loans originated for sale -- 133,000
Loan fees deferred, net 36,270 39,147
Amortization of deferred loan fees, net (160,676) (258,452)
Provision for losses on loans 288,531 37,981
Non-cash compensation under Stock-Based Benefit Plan 83,695 --
Amortization of premium on mortgage backed securities 31,414 22,858
(Gain) loss on sale of foreclosed real estate (4,318) 17,111
Gain from real estate development and joint venture (6,110) --
Provision for depreciation 281,256 212,529
(Increase)/decrease in accrued interest receivable
on loans (34,253) 37,368
Increase in accrued interest receivable on investments (11,311) (101,522)
Decrease in accrued interest receivable on mortgage
backed securities 55,283 10,501
Increase/(decrease) in prepaid income taxes (368,321) 313,684
Increase/(decrease) in deferred income tax liabilities (93,023) 52,915
Amortization of excess of cost over fair value of net
assets acquired 22,260 20,156
Increase in other assets (964,695) (772,814)
Gain on sale of branch deposits -- (339,000)
Decrease in accrued interest payable on deposits (35,342) (87,064)
Increase in income taxes payable 49,882 44,435
Increase/(decrease) in other liabilities and payables
to disbursing agents 523,742 (1,202,474)
----------- -----------
Net cash provided by operating activities 757,798 (93,057)
</TABLE>
4
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
-------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
------------------------------------------------
<TABLE>
<CAPTION>
For Nine Months Ended
June 30,
----------------------
1999 1998
------ ------
<S> <C> <C>
Cash Flows from Investing Activities
Proceeds from maturing interest bearing deposits $ 2,837,000 $ 198,000
Purchase of interest bearing deposits (8,694,000) (19,000,000)
Purchases of investment securities - held to maturity (32,052,819) (22,360,091)
Proceeds from maturities of investment securities
- held to maturity 10,926,000 31,792,824
Longer term loans originated (32,570,300) (34,221,141)
Principal collected on longer term loans 15,284,958 20,830,161
Net (increase) decrease in short-term loans (3,403,365) 157,118
Principal collected on mortgage backed securities 11,392,959 9,013,179
Purchase of mortgage backed securities (1,983,790) (6,872,223)
Proceeds from sales of foreclosed real estate 437,149 2,000
Investment in foreclosed real estate -- (77,365)
Proceeds from joint venture 8,260 --
Net investment and loans to joint venture -- 4,877
Investment in premises and equipment (704,506) (116,100)
Purchase of Federal Home Loan Bank of Atlanta stock 138,400) (78,700)
------------- ------------
Net cash provided (used) by investing activities (38,660,854) (20,727,461)
Cash Flows from Financing Activities
Proceeds from sale of branch deposits -- (5,827,235)
Proceeds from subscription offer -- 67,741,975
Net increase in demand deposits, money market, passbook
accounts and advances by borrowers for taxes and
insurance 11,919,878 4,276,381
Increase in Federal Home Loan Bank of Atlanta advances 3,000,000 --
Net increase in certificates of deposit 1,323,608 2,399,655
Increase in dividends payable 295,201 --
Dividends paid on stock (295,201) --
------------- ------------
Net cash provided by financing activities 16,243,486 68,590,776
------------- ------------
Increase (decrease) in cash and cash equivalents (21,659,570) 47,770,258
Cash and cash equivalents at beginning of period 31,074,481 12,136,626
------------- ------------
Cash and cash equivalents at end of period $ 9,414,911 $ 59,906,884
============= ============
</TABLE>
5
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
-------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------
<TABLE>
<CAPTION>
For Nine Months Ended
June 30,
----------------------
1999 1998
------ ------
<S> <C> <C>
The following is a summary of cash and cash equivalents:
Cash $ 3,825,242 $ 3,586,163
Interest bearing deposits in other banks 12,316,208 38,929,563
Federal funds sold 1,062,461 43,274,158
------------ ------------
Balance of cash items reflected on Statement of
Financial Condition 17,203,911 85,789,884
Less - certificate of deposit with a maturity of
more than three months 7,789,000 25,883,000
------------ ------------
Cash and cash equivalents reflected on the
Statement of Cash Flows $ 9,414,911 $ 59,906,884
============ ============
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Interest $ 7,285,012 $ 7,412,431
============ ============
Income taxes $ 554,661 $ 760,000
============ ============
Transfer from loans to real estate acquired through
foreclosure $ 110,161 $ 138,234
============ ============
Dividends declared on stock $ 590,402 $ --
============ ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
6
<PAGE>
<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
-------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
Note 1 - Principals of Consolidation
---------------------------
BCSB Bankcorp, Inc. (the "Company") owns 100% of
Baltimore County Savings Bank, F.S.B. and subsidiaries
(the "Bank") and also invests in federal funds sold,
interest-bearing deposits in other banks and U.S.
Agency bonds. The Bank owns 100% of Baltimore County
Service Corporation and Ebenezer Road, Inc. The
accompanying consolidated financial statements
include the accounts and transactions of these
companies on a consolidated basis since the date of
acquisition. All intercompany transactions have
been eliminated in the consolidated financia
statements. Ebenezer Road, Inc. sells insurance
products. Baltimore County Service Corporation has
invested in several joint ventures formed for the
purpose of developing real estate. These investments
have been accounted for on the equity method and
separate summary statements are not presented since
the data contained therein is not material in relation
to the consolidated financial statements.
Note 2 - Basis for Financial Statement Presentation
------------------------------------------
The accompanying consolidated financial statements
have been prepared in accordance with generally
accepted accounting principles and the instructions
to Form 10-QSB. Accordingly, they do not include all
of the disclosures required by generally accepted
accounting principles for complete financial
statements. In the opinion of management, all
adjustments (none of which were other than normal
recurring accruals) necessary for a fair presentation
of the financial position and results of operations
for the periods presented have been included. The
financial statements of the Company are presented on
a consolidated basis with those of the Bank. The
results for the three months and nine months ended
June 30, 1999 are not necessarily indicative of the
results of operations that may be expected for the
year ended September 30, 1999. The consolidated
financial statements should be read in conjunction
with the consolidated financial statements and related
notes which are incorporated by reference in the
Company's Annual Report on Form 10-KSB for the year
ended September 30, 1998.
Note 3 - Cash Flow Presentation
----------------------
For purposes of the statements of cash flows, cash
and cash equivalents include cash and amounts due
from depository institutions, investments in federal
funds, and certificates of deposit with maturities of
90 days or less.
Note 4 - Earnings Per Share
------------------
Basic per share amounts are based on the weighted
average shares of common stock outstanding. Diluted
earnings per share assume the conversion, exercise or
issuance of all potential common stock instruments
such as options, warrants and convertible securities,
unless the effect is to reduce a loss or increase
earnings per share. No adjustments were made to
net income (numerator) for all periods presented.
Earnings per share data is not presented for the three
months and nine months ended June 30, 1998, since the
Bank converted to the stock form in July 1998, and
such information would not be meaningful. The basic
and diluted weighted average shares outstanding for
the three months and nine months ended June 30, 1999
is as follows:
7
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<PAGE>
BCSB BANKCORP, INC. AND SUBSIDIARIES
------------------------------------
BALTIMORE, MARYLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
Note 4 - Earnings Per Share (Continued)
------------------
<TABLE>
<CAPTION>
For the Nine Months Ended June 30, 1999
-----------------------------------------
Income Shares Per Share
Basic EPS (Numerator) (Denominator) Amount
--------- ----------- ------------- ---------
<S> <C> <C> <C>
Income available to
shareholders $1,058,146 5,864,574 $ 0.18
Effect of dilutive shares -- 88,859 --
---------- --------- ------
Diluted EPS
-----------
Income available to common
stockholders plus assumed
conversions $1,058,146 5,953,435 $ 0.18
========== ========= ======
<CAPTION>
For the Three Months Ended June 30, 1999
-----------------------------------------
Income Shares Per Share
Basic EPS (Numerator) (Denominator) Amount
--------- ----------- ------------- ---------
<S> <C> <C> <C>
Income available to
shareholders $465,545 5,869,183 $ 0.08
Effect of dilutive shares -- 88,859 --
-------- --------- ------
Diluted EPS
-----------
Income available to common
stockholders plus assumed
conversions $465,545 5,958,042 $ 0.08
======== ========= ======
</TABLE>
Note 5 - Regulatory Capital
------------------
The following table sets forth the Bank's capital position at
June 30, 1999.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provision
------------------ -------------------- ------------------
% of % of % of
Amount Assets Amount Assets Amount Assets
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Tangible (1) $33,985,597 12.23% $ 4,168,260 1.50% N/A N/A
Tier 1 capital (2) 33,985,597 20.96 N/A N/A $ 9,729,727 6.00%
Core (1) 33,985,597 12.23 8,336,520 3.00 13,894,201 5.00
Risk-weighted (2) 35,216,006 21.72 12,972,969 8.00 16,216,211 10.00
<FN>
____________
(1) To adjusted total assets.
(2) To risk-weighted assets.
</FN>
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
GENERAL
The Company was formed in June 1998 by the Bank to become
the holding company of the Bank following the Bank's reorgani-
zation to the mutual holding company form of organization (the
"Reorganization"). The Reorganization was consummated on July
8, 1998. All references to the Company prior to July 8, 1998,
except where otherwise indicated, are to the Bank.
The Company's net income is dependent primarily on its net
interest income, which is the difference between interest income
earned on its loan, investment securities and mortgage-backed
securities portfolio and interest paid on interest-bearing
liabilities. Net interest income is determined by (i) the
difference between yields earned on interest-earning assets and
rates paid on interest-bearing liabilities ("interest rate
spread") and (ii) the relative amounts of interest-earning
assets and interest-bearing liabilities. The Company's interest
rate spread is affected by regulatory, economic and competitive
factors that influence interest rates, loan demand and deposit
flows. To a lesser extent, the Company's net income also is
affected by the level of other income, which primarily consists
of fees and charges, and levels of non-interest expenses such as
salaries and related expenses.
The operations of the Company are significantly affected by
prevailing economic conditions, competition and the monetary,
fiscal and regulatory policies of governmental agencies.
Lending activities are influenced by the demand for and supply
of housing, competition among lenders, the level of interest
rates and the availability of funds. Deposit flows and costs of
funds are influenced by prevailing market rates of interest,
primarily on competing investments, account maturities and the
levels of personal income and savings in the Company's market
area.
FORWARD-LOOKING STATEMENTS
When used in this Form 10-QSB, the words or phrases "will
likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project" or similar expressions are
intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are subject to certain risks and
uncertainties including changes in economic conditions in the
Company's market area, changes in policies by regulatory
agencies, fluctuations in interest rates, demand for loans in
the Company's market area, and competition that could cause
actual results to differ materially from historical earnings and
those presently anticipated or projected. The Company wishes to
caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date
made. The Company wishes to advise readers that the factors
listed above could affect the Company's financial performance
and could cause the Company's actual results for future periods
to differ materially from any opinions or statements expressed
with respect to future periods in any current statements.
The Company does not undertake, and specifically disclaims
any obligation, to publicly release the result of any revisions
which may be made to any forward-looking statements to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
YEAR 2000 READINESS DISCLOSURE
The following information constitutes "Year 2000 Readiness
Disclosure" under the Year 2000 Information and
Readiness Disclosure Act.
The Company's operations, like those of most financial
institutions, are substantially dependent upon computer
systems for lending and deposit activities. The Company is
addressing the potential problems associated with the
possibility that the computers which control its data processing
activities, facilities and networks may not be programmed to
read four-digit dates and, upon the arrival of the year 2000,
may recognize the two-digit code "00" as the year 1900 rather
than 2000. This could cause systems to fail to function or
generate erroneous information.
9
<PAGE>
<PAGE>
The Company has formed a Year 2000 Committee with senior
representatives from every functional area of the Company. At
the direction of the Board, this Committee is leading the
efforts to ensure that the Company is ready for the Year 2000.
The Board of Directors has approved the Company's five phase
Year 2000 Plan that was developed in accordance with the
guidelines set forth by the Federal Financial Institutions
Examination Council.
The first phase, awareness, was intended to provide
on-going information to employees, directors and customers of
the impact of the Year 2000 issue. The Company has conducted
Year 2000 training for all directors and employees.
The second phase, assessment, required the review of all
systems that are believed to be potential risks in order
to minimize any Year 2000 operating difficulties. This review
included all major computer and non-computer based systems, such
as vaults, security systems and telephone systems. This phase
is complete.
The third phase, renovation and/or replacement, includes
obtaining vendor certification and/or the necessary upgrades and
enhancements to ensure that existing systems are Year 2000
compliant. The Company is continuing to follow up with third
party vendors as necessary. At this time the Company believes
that all mission critical systems are compliant.
The fourth phase, testing, has been completed. The
hardware and software has been successfully tested. The
Company has received representations from mission critical third
party vendors that they are Year 2000 compliant. All mission
critical testing has been completed.
The last phase, implementation, has commenced and is
expected to be completed in the third quarter of calendar year
1999. The Company has developed contingency plans for processes
that are not yet Year 2000 compliant. This plan is updated as
test results are obtained. The contingency plan sets forth the
procedures that would allow the Company to conduct operations in
the event of one or more system failures, should such a failure
occur notwithstanding prior assurance from third party vendors.
The Company estimates that the total future cost of Year
2000 compliance, excluding internal staffing costs, will not
exceed $75,000. The Company believes that its policies, plans
and actions are in compliance with regulatory guidelines and
milestone dates.
The Bank's customers may also experience Year 2000
problems, which could adversely affect their ability to comply
with their obligations to the Bank. Management does not believe
that the failure of any single customer to be Year 2000
compliant would materially adversely affect the Company's
financial conditions or results of operations.
The Company believes that the potential effects on internal
operations from Year 2000 issues can and will be
addressed prior to the Year 2000. However, as unforeseen
circumstances arise, the Year 2000 issue could disrupt the
Company's normal business operations. The most reasonably
likely worst case Year 2000 scenarios foreseeable at this
time would include the inability to systematically process, in
some combination, various types of customer transactions.
This could affect the Company's ability to accept deposits or
process withdrawals, originate new loans or accept loan payments
in the automated manner currently utilized. Depending upon how
long this scenario lasted, this could have a material adverse
effect on the Company's operations. The contingency plan
addresses alternative methods to enable the Company to continue
to offer basic services to the Company's customers. The costs
of the Year 2000 project and the benchmark dates are based on
management's best estimates, which are based on a number of
assumptions including future events. The Company cannot
guarantee that these estimates will be achieved at the cost
disclosed or within the time frames indicated.
10
<PAGE>
<PAGE>
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1999 AND SEPTEMBER
30, 1998
During the nine months ended June 30, 1999, the Company's
assets increased by $17.8 million, or 6.6%, from $268.8 million
at September 30, 1998 to $286.7 million at June 30, 1999. The
Company has sought to increase loans in order to take advantage
of the higher yields on loans compared to investment securities
and mortgage-backed securities. Accordingly, the Company used
the proceeds from maturing mortgage-backed securities to fund
loan originations. Loans receivable, net increased by $20.4
million, or 11.2%, from $182.0 million at September 30, 1998 to
$202.3 million at June 30, 1999. The Company's mortgage-backed
securities decreased by $9.4 million, or 27.6%, from $34.2
million at September 30, 1998 to $24.8 million at June 30, 1999.
The Company's investment securities increased by $21.1 million,
or 167.5%, from $12.6 million at September 30, 1998 to $33.7
million at June 30, 1999 as the Company invested the net
proceeds from its initial public offering. The Company's
deposits increased by $10.7 million, or 4.8%, from $220.8
million at September 30, 1998 to $231.5 million at June 30,
1999. The increase in deposits was achieved through increased
advertising and promotion activities. The Company took
$3,000,000 in advances from the Federal Home Loan Bank of
Atlanta during the quarter ended June 30, 1999. The borrowed
money was used to fund loan demand.
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED JUNE
30, 1999 AND 1998
Net Income. Net income decreased by $771,000, or 42.2%,
from $1.8 million for the nine months ended June 30, 1998 to
$1.1 million for the nine months ended June 30, 1999. The
decrease in net income was primarily attributable to increased
non-interest expense, increased provisions for losses on loans
and decreased other income, which more than offset an increase
in net interest income.
Net Interest Income. Net interest income was $7.1 million
for the nine months ended June 30, 1999, compared to $6.7
million for the nine months ended June 30, 1998, representing an
increase of $480,000, or 7.2%. The increase was primarily due
to an increase in the ratio of average interest-earning assets
to average interest-bearing liabilities from 107.92% for the
nine months ended June 30, 1998 to 116.55% for the nine months
ended June 30, 1999 as a result of the Company's receipt of
$22.3 million in net proceeds from its initial public offering
completed on July 8, 1998. This increase more than offset the
decrease in the interest rate spread from 3.23% for the nine
months ended June 30, 1998 to 2.92% for the nine months ended
June 30, 1999. This decrease in the interest rate spread
reflects a decrease in the yield on interest-earning assets as
the net proceeds from the initial public offering were invested
in lower yielding assets such as interest-earning deposits and
short-term investments.
Interest Income. Interest income increased by $405,000, or
2.9%, from $14.0 million for the nine months ended June 30, 1998
to $14.4 million for the nine months ended June 30, 1999. This
increase was due primarily to a $883,000, or 8.9%, increase in
interest and fees on loans from $10.0 million for the nine
months ended June 30, 1998 to $10.9 million for the nine months
ended June 30, 1999. The increase in interest and fees on loans
was primarily due to a $28.0 million increase in the average
balance of loans receivable. This increase more than offset
decreases in interest on mortgage-backed securities, interest
and dividends on investment securities and other interest
income. Interest on mortgage-backed securities decreased by
$432,000, or 24.4%, from $1.8 million for the nine months ended
June 30, 1998 to $1.3 million for the nine months ended
June 30, 1999. This decrease was primarily due to a $8.5 million
decrease in the average balance of mortgage-backed securities.
Interest and dividends on investment securities decreased by
$11,000, or 1.0%, amounting to $1.1 million for the nine months
ended June 30, 1998 and 1999. This decrease was primarily
due to a 107 basis point decrease in the average yield on
investment securities, as a significant portion of the maturing
investment securities carried higher yields. Additionally,
interest on other interest-earning assets, which consist
of interest-bearing deposits in banks and Federal Funds sold,
decreased by $35,000, or 3.0%, from $1.2 million for the nine
months ended June 30, 1998 to $1.1 million for the nine months
ended June 30, 1999. This decrease was primarily due to a $3.1
million decrease in the average balance of other
interest-earning assets. Liquidity was reduced in order to fund
loan demand.
11
<PAGE>
<PAGE>
Interest Expense. Interest expense, which consists almost
entirely of interest on deposits, decreased by $76,000, or 1.0%,
from $7.3 million for the nine months ended June 30, 1998 to
$7.2 million for the nine months ended June 30, 1999, reflecting
a $883,000 decrease in the average volume of deposits and 4
basis point decrease in the average cost of deposits. Interest
on short-term borrowings was $12,000 for the nine months ended
June 30, 1999, as the Company borrowed $3.0 million from FHLB of
Atlanta during the quarter ended June 30, 1999 for the purpose
of funding loan demand.
Average Balance Sheet. The following tables sets forth
certain information relating to the Company's average balance
sheet and reflects the average yield on assets and cost of
liabilities for the periods indicated and the average yields
earned and rates paid. Such yield and costs are derived by
dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average
balances are computed using month-end balances.
The table also presents information for the periods
indicated with respect to the differences between the average
yield earned on interest-earning assets and average rate paid on
interest-bearing liabilities, or "interest rate spread,"
which banks have traditionally used as an indicator of
profitability. Another indicator of an institution's net
interest income is its "net interest margin," which is its net
interest income divided by the average balance of interest-
earning assets.
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 30,
----------------------------------------------------------------------
1999 1998
--------------------------- --------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ------ ------- -------- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans . . . . . . . . . . . . . $190,399 $10,854 7.60% $162,406 $9,970 8.19%
Mortgage-backed securities. . . . . . 27,787 1,337 6.42 36,298 1,768 6.49
Dividends and investment securities . 24,031 1,067 5.92 20,573 1,078 6.99
Other investments . . . . . . . . . . 28,756 1,129 5.23 31,858 1,164 4.87
-------- ------- -------- ------
Total interest-earning assets . . 270,973 14,387 7.08 251,135 13,980 7.42
Noninterest-earning assets . . . . . . . 9,742 9,413
-------- --------
Total assets. . . . . . . . . . . $280,715 $260,548
======== ========
Interest-bearing liabilities:
Deposits. . . . . . . . . . . . . . . $229,839 7,229 4.19 $230,722 7,314 4.23
Borrowings-short term . . . . . . . . 444 12 3.60 -- -- --
Other liabilities . . . . . . . . . . 2,210 6 0.36 1,980 9 0.61
-------- ------ -------- ------
Total interest-bearing liabilities . . . 232,493 7,247 4.16 232,702 7,323 4.20
------ ------ ------ ------
Noninterest-bearing liabilities. . . . . 2,594 3,050
-------- --------
Total liabilities . . . . . . . . 235,087 235,752
Stockholders' equity . . . . . . . . . . 45,628 24,796
-------- --------
Total liabilities and stockholders'
equity . . . . . . . . . . . $280,715 $260,548
======== ========
Net interest income. . . . . . . . . . . $7,140 $6,657
====== ======
Interest rate spread . . . . . . . . . . 2.92% 3.23%
====== ======
Net interest margin. . . . . . . . 3.51% 3.53%
====== ======
Ratio average interest earning assets/
interest bearing liabilities . . . . 116.55% 107.92%
====== ======
</TABLE>
12
<PAGE>
<PAGE>
Provision for Loan Losses. The Company established
provisions for loan losses of $289,000 for the nine months ended
June 30, 1999 as compared to a $38,000 provision for loan losses
for the nine months ended June 30, 1998, representing an
increase of $251,000. In establishing such provisions,
management considered the increased size of the loan portfolio,
as well as an analysis of the risk inherent in the loan
portfolio and the increased emphasis on home equity loans, which
entail higher credit risks than residential mortgage loans. In
November 1998, a builder who had ten loans with the Company
totaling $700,000 declared bankruptcy. The Bank foreclosed on
November 9, 1998, which resulted in an anticipated loss of
$50,000, requiring the Company to increase its provision for
loan losses.
Other Income. Other income decreased by $364,000, or
48.0%, from $758,000 for the nine months ended June 30, 1998 to
$394,000 for the nine months ended June 30, 1999. The decrease
in other income for the nine months ended June 30, 1999 was
attributable primarily to a $339,000 gain on sale of branch
deposits, as the Company sold the deposits of its Severna Park
branch in October 1997. In connection with such sale, the
Company sold deposits totaling $6.2 million and recognized a
gain of $339,000 representing a premium paid by the buyer on the
deposits sold. During the nine months ended June 30, 1999, the
Company recorded a $4,000 gain on the sale of foreclosed real
estate, as compared to a $17,000 loss during the nine months
ended June 30, 1998. Additionally, the decrease in other income
reflected a $29,000, or 20.3%, decrease in fees and charges on
loans from $143,000 for the nine months ended June 30, 1998 to
$114,000 for the nine months ended June 30, 1999. Fees were
higher in the 1998 period due to one-time fees carried on
letters of credit.
Non-interest Expenses. Total non-interest expenses
increased by $1.1 million, or 25.7%, from $4.4 million for the
nine months ended June 30, 1998 to $5.5 million for the nine
months ended June 30, 1999. The increase in non-interest
expenses was due to increases in salaries and related expenses,
occupancy expense, data processing expense, property and
equipment expense, professional fees and advertising expense.
The Company's salaries and related expenses increased by
$623,000, or 25.8%, due to the recruitment of personnel for
new offices and the payment of severance payments to the Bank's
former President. Occupancy expense increased by $109,000, or
27.2%, and property and equipment expense increased by $170,000,
or 60.1%, due to the expenses associated with the establishment
of new offices and the relocation of the Bel Air office. Data
processing expense increased by $62,000, or 19.4%, due to
expenses incurred in upgrading the Company's computer systems
and software to be prepared for Year 2000 issues. The Company
increased its advertising expense increased by $69,000, or
28.8%, in an effort to increase market share. The Company's
professional fees increased by $48,000, or 52.7%, due to the
increase in legal and accounting fees as a result of the
additional reporting requirements associated with becoming a
publically held company.
Income Taxes. The Company's income tax expense was
$681,000 and $1.2 million for the nine months ended June 30,
1999 and 1998, respectively. The Company's effective tax rates
were 39.2% and 39.0% for the nine months ended June 30, 1999 and
1998, respectively.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE
30, 1999 AND 1998
Net Income. Net income decreased by $99,000, or 17.5%,
from $565,000 for the three months ended June 30, 1998 to
$466,000 for the three months ended June 30, 1999. The decrease
in net income was primarily attributable to increased
non-interest expenses, which more than offset an increase in net
interest income and decreased provisions for losses on loans.
Net Interest Income. Net interest income was $2.4 million
for the three months ended June 30, 1999, compared to $2.3
million for the three months ended June 30, 1998, representing
an increase of $98,000, or 4.2%. The increase was primarily due
to an increase in the ratio of average interest-earning assets
to average interest-bearing liabilities from 100.96% for the
three months ended June 30, 1998 to 116.19% for the three months
ended June 30, 1999 as a result of the Company's receipt of the
net proceeds from its initial public offering. This increase
more than offset the decrease in interest rate spread from 3.67%
for the three months ended June 30, 1998 to 2.99% for the three
months ended June 30, 1999. This decrease in the interest rate
spread reflects a decrease in the yield on interest-earning
assets as the net proceeds from the initial public offering
were invested in lower yielding assets such as interest-earning
deposits and short-term investments.
13
<PAGE>
<PAGE>
Interest Income. Interest income increased by $53,000, or
1.1% totaling, $4.8 million for the three months ended June 30,
1999 and 1998. Interest and fees on loans increased by
$337,000, or 10.0%, from $3.4 million for the three months ended
June 30, 1998 to $3.7 million for the three months ended June
30, 1999 primarily due to a $31.3 million increase in the
average balance of loans receivable as the Company implemented
its strategy of increasing loan originations. The increase in
the average volume of loans receivable more than offset a 58
basis decrease in the average yield on loans. Additionally,
interest and dividends on investment securities increased by
$165,000, or 49.3%, from 336,000 for the three months ended June
30, 1998 to $501,000 for the three months ended June 30, 1999.
This increase was due to an increase in the investment
securities portfolio. These increases offset a $212,000, or
35.5%, decrease in interest on mortgage-backed securities from
$598,000 for the three months ended June 30, 1998 to $386,000
for the three months ended June 30, 1999. This decrease in
mortgage-backed securities was primarily due to a $11.3 million
decrease in the average volume of mortgage-backed securities, as
the Company pursued a strategy of using repayments of
mortgage-backed securities to fund loan originations.
Additionally, other interest income decreased by $237,000, or
50.2%, from $472,000 for the three months ended June 30, 1998 to
$235,000 for the three months ended June 30, 1999. This
decrease was due to a $12.4 million decrease in the average
balance of other investments.
Interest Expense. Interest expense, which consists almost
entirely of interest on deposits, was $2.4 million for the three
months ended June 30, 1998 and the three months ended June 30,
1999. Interest on short-term borrowings was $12,000 for the
three months ended June 30, 1999. This increase was primarily
due to the $3,000,000 in advances from the Federal Home Loan
Bank of Atlanta during the quarter ended June 30, 1999. The
borrowed money was used to fund loan demand.
Average Balance Sheet. The following tables sets forth
certain information relating to the Company's average balance
sheet and reflects the average yield on assets and cost of
liabilities for the periods indicated and the average yields
earned and rates paid. Such yield and costs are derived by
dividing income or expense by the average balance of assets or
liabilities, respectively, for the periods presented. Average
balances are computed using month-end balance.
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
----------------------------------------------------------------------
1999 1998
--------------------------- --------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ------ ------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans . . . . . . . . . . . . . . . . $199,166 $3,700 7.43% $167,845 $3,363 8.01%
Mortgage-backed securities. . . . . . 24,680 386 6.26 36,002 598 6.64
Dividends and investment securities . 33,716 501 5.94 19,327 336 6.95
Other investments . . . . . . . . . . 16,566 235 5.67 29,005 472 6.51
-------- ------ -------- ------
Total interest-earning assets . . 274,128 4,822 7.04 252,179 4,769 7.56
Noninterest-earning assets . . . . . . . 9,625 25,872
-------- --------
Total assets. . . . . . . . . . . $283,753 $278,051
======== ========
Interest-bearing liabilities:
Deposits. . . . . . . . . . . . . . . $231,523 2,374 4.10 $246,963 2,430 3.94
Borrowings-short term . . . . . . . . 1,333 12 3.60 -- -- --
Other liabilities . . . . . . . . . . 3,078 3 0.39 2,819 5 0.71
-------- ------ -------- ------
Total interest-bearing liabilities . . . $235,934 2,389 4.05 249,782 2,435 3.90
------ ------ ------ ------
Noninterest-bearing liabilities. . . . . 1,902 2,864
-------- --------
Total liabilities . . . . . . . . 237,836 252,646
Stockholders' equity . . . . . . . . . . 45,917 25,405
-------- --------
Total liabilities and stockholders'
equity . . . . . . . . . . . $283,753 $278,051
======== ========
Net interest income. . . . . . . . . . . $2,433 $2,334
====== ======
Interest rate spread . . . . . . . . . . 2.99% 3.67%
====== ======
Net interest margin. . . . . . . . . . . 3.55% 3.70%
====== ======
Ratio average interest earning assets/
interest bearing liabilities . . . . . 116.19% 100.96%
====== ======
</TABLE>
14
<PAGE>
<PAGE>
Provision for Loan Losses. The Company established
provisions for losses on loans of $56,000 for the three months
ended June 30, 1999, as compared to $77,000 for the three months
ended June 30, 1998, representing a decrease of $21,000. In
establishing such provisions, management considered an analysis
of the risk inherent in the loan portfolio.
Other Income. Other income decreased by $11,000, or 8.3%,
from $133,000 for the three months ended June 30, 1998 to
$122,000 for the three months ended June 30, 1999. The decrease
in other income for the three months ended June 30, 1999 was
attributable primarily to a $3,300 decrease in servicing fee
income and a $4,000, or 9.8%, decrease in fees and charges on
loans from $41,000 for the three months ended June 30, 1998 to
$37,000 for the three months ended June 30, 1999. Fees were
higher in the 1998 period due to one-time fees carried on
letters of credit. Additionally, rental income decreased by
$10,000, or 32.3%, from $31,000 for the three months ended June
30, 1998 to $21,000 for the three months ended June 30, 1999.
These decreases more than offset a $6,000 increase in
miscellaneous income.
Non-interest Expenses. Total non-interest expenses
increased by $255,000, or 17.2%, from $1.5 million for the three
months ended June 30, 1998 to $1.7 million for the three months
ended June 30, 1999. The increase in non-interest expenses was
due to increases in salaries and related expenses, occupancy
expense, data processing expense, property and equipment expense
and advertising expense. The Company's salaries and related
expenses increased by $92,000, or 11.7%, due to the recruitment
of personnel for the new offices. Occupancy expense increased
by $11,000, or 7.0%, and property and equipment expense
increased $99,000, or 94.3%, due to the expenses associated with
the establishment of new offices and the relocation of the Bel
Air office. Data processing expense increased $14,000, or
13.6%, due to expenses incurred in upgrading the Company's
computer systems and software to be prepared for Year 2000
issues. The Company increased its advertising expense by
$7,000, or 6.9%, in an effort to increase market share.
Income Taxes. The Company's income tax expense was
$299,000 and $346,000 for the three months ended June 30, 1999
and 1998, respectively. The Company's effective tax rates were
39.1% and 38.0% for the three months ended June 30, 1999
and 1998, respectively.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Bank exceeded all regulatory minimum
capital requirements. For information comparing the Bank's
tangible, core and risk-based capital levels to the regulatory
requirements, see Note 5 of Notes to Consolidated Financial
Statements.
The Company's primary sources of funds are deposits and
proceeds from maturing investment securities and mortgage-backed
securities and principal and interest payments on loans. While
maturities and scheduled amortization of mortgage-backed
securities and loans are a predictable source of funds, deposit
flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions, competition and other
factors.
The primary investing activities of the Company are the
origination of loans and the purchase of investment securities
and mortgage-backed securities. During the nine months ended
June 30, 1999 and 1998, the Company had $32.6 million and $34.2
million, respectively, of loan originations. During the nine
months ended June 30, 1999 and 1998, the Company purchased
investment securities in the amounts of $32.1 million and $22.4
million, respectively, and mortgage-backed securities in the
amounts of $2.0 million and $6.9 million, respectively. The
purchase of interest-bearing deposits increased from $19.0
million for the nine months ended June 30, 1998 to $8.7 million
for the nine months ended June 30, 1999. The primary financing
activity of the Company is the attraction of savings deposits.
The Company has other sources of liquidity if there is a
need for funds. The Bank has the ability to obtain advances
from the FHLB of Atlanta. In addition, the Company maintains a
portion of its investments in interest-bearing
deposits at other financial institutions that will be available,
if needed.
15
<PAGE>
<PAGE>
The Bank is required to maintain minimum levels of liquid
assets as defined by OTS regulations. This requirement, which
may be changed at the direction of the OTS depending upon
economic conditions and deposit flows, is based upon a
percentage of deposits and short-term borrowings. The required
minimum ratio is currently 4.0%. The Bank's average daily
liquidity ratio for the month of June was approximately 25.3%,
which exceeded the required level for such period. Management
seeks to maintain a relatively high level of liquidity in order
to retain flexibility in terms of investment opportunities and
deposit pricing. Because liquid assets generally provide for
lower rates of return, the Bank's relatively high liquidity
will, to a certain extent, result in lower rates of return on
assets.
The Company's most liquid assets are cash, interest-bearing
deposits in other banks and federal funds sold, which are
short-term, highly liquid investments with original maturities
of less than three months that are readily convertible to known
amounts of cash. The levels of these assets are dependent on
the Company's operating, financing and investing activities
during any given period. At June 30, 1999, cash,
interest-bearing deposits in other banks and federal funds sold
were $3.8 million, $12.3 million and $1.1 million, respectively.
The Company anticipates that it will have sufficient funds
available to meet its current commitments. Certificates of
deposit which are scheduled to mature in less than nine months
at June 30, 1999 totaled $95.2 million. Based on past
experience, management believes that a significant portion of
such deposits will remain with the Bank. The Bank is a party to
financial instruments with off-balance-sheet risk made in the
normal course of business to meet the financing needs of its
customers. These financial instruments are standby letters of
credit, lines of credit and commitments to fund mortgage loans
and involve to varying degrees elements of credit risk in excess
of the amount recognized in the statement of financial position.
The contract amounts of those instruments express the extent of
involvement the Company has in this class of financial
instruments and represents the Company's exposure to credit loss
from nonperformance by the other party.
The Company generally requires collateral or other security
to support financial instruments with off-balance-sheet credit
risk. At June 30, 1999, the Company had commitments under
standby letters of credit and lines of credit and commitments to
originate mortgage loans of $1.2 million, $14.1 million and $5.4
million, respectively.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY-HOLDERS
None.
<PAGE>
ITEM 5. OTHER INFORMATION
None.
16
<PAGE>
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
Exhibit 27 - Financial Data Schedule
(b) Form 8-K
No Reports on Form 8-K were filed during the quarter
ended June 30, 1999.
17
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
BCSB BANCORP, INC.
Date: August 13, 1999 /s/ Gary C. Loraditch
------------------------------
Gary C. Loraditch
President
(Principal Executive Officer)
Date: August 13, 1999 /s/ Bonnie M. Klein
------------------------------
Bonnie M. Klein
Vice President and Treasurer
(Principal Financial and
Accounting Officer)
18
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,825
<INT-BEARING-DEPOSITS> 12,316
<FED-FUNDS-SOLD> 1,062
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 58,490
<INVESTMENTS-MARKET> 58,153
<LOANS> 202,339
<ALLOWANCE> 1,230
<TOTAL-ASSETS> 286,667
<DEPOSITS> 231,493
<SHORT-TERM> 3,000
<LIABILITIES-OTHER> 2,312
<LONG-TERM> 0
0
0
<COMMON> 61
<OTHER-SE> 45,925
<TOTAL-LIABILITIES-AND-EQUITY> 286,667
<INTEREST-LOAN> 10,853
<INTEREST-INVEST> 1,067
<INTEREST-OTHER> 1,129
<INTEREST-TOTAL> 14,385
<INTEREST-DEPOSIT> 7,229
<INTEREST-EXPENSE> 7,247
<INTEREST-INCOME-NET> 7,138
<LOAN-LOSSES> 289
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,504
<INCOME-PRETAX> 1,739
<INCOME-PRE-EXTRAORDINARY> 1,739
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,058
<EPS-BASIC> .18
<EPS-DILUTED> .18
<YIELD-ACTUAL> 7.08
<LOANS-NON> 837
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,034
<CHARGE-OFFS> 123
<RECOVERIES> 30
<ALLOWANCE-CLOSE> 1,230
<ALLOWANCE-DOMESTIC> 1,230
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
