U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-24037
FIRST KANSAS FINANCIAL CORPORATION
----------------------------------
(Exact name of Registrant as specified in its Charter)
Kansas 48-1198888
- ------------------------------- -------------------------------------
(State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization)
600 Main Street, Osawatomie, Kansas 66064
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 755-3033
--------------
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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.
X Yes No
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
As of November 5, 1998, there were 1,553,938 shares of the Registrant's
common stock, par value $0.10 per share, outstanding. The Registrant has no
other classes of common equity outstanding.
Transitional Small Business Disclosure Format (check one):
Yes X No
--- ---
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION
OSAWATOMIE, KANSAS
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - as of September 30, 1998 (Unaudited)
and December 31, 1997 2
Consolidated Statements of Earnings - (Unaudited) for
The three months and nine months ended September 30, 1998 and 1997 3
Consolidated Statements of Cash Flows - (Unaudited) for
The nine months ended September 30, 1998 and 1997 4
Notes to (unaudited) Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities and Use of Proceeds 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
OSAWATOMIE, KANSAS
Consolidated Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Sepetmber 30, December 31,
1998 1997
Assets (unaudited)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents $ 7,925 4,600
Investment securities held-to-maturity 3,373 3,852
Mortgage-backed securities available-for-sale 25,025 16,833
Mortgage-backed securities held-to-maturity 21,769 20,937
Loans receivable, net 43,680 46,563
Stock in Federal Home Loan Bank (FHLB) of Topeka, at cost 698 661
Premises and equipment, net 1,755 990
Real estate held for development 357 355
Accrued interest receivable, prepaid expenses and other assets 914 864
- --------------------------------------------------------------------------------------------------------------------
Total assets $ 105,496 95,655
- --------------------------------------------------------------------------------------------------------------------
Liabilities and Equity
- --------------------------------------------------------------------------------------------------------------------
Liabilities:
Deposits $ 81,336 85,651
Advances from borrowers for property taxes and insurance 310 128
Borrowings from FHLB of Topeka 650 2,550
Accrued interest payable and other liabilities 1,997 716
- --------------------------------------------------------------------------------------------------------------------
Total liabilities 84,293 89,045
- --------------------------------------------------------------------------------------------------------------------
Stockholders' equity:
Common stock, $.10 par value, 8,000,000 shares authorized, 1,553,938
shares issued and outstanding at September 30, 1998 155 --
Additional paid-in capital 14,834 --
Retained earnings 7,519 6,935
Accumulated other comprehensive income (93) (325)
Unearned compensation (1,212) --
- --------------------------------------------------------------------------------------------------------------------
Total equity 21,203 6,610
Commitments
- --------------------------------------------------------------------------------------------------------------------
Total liabilities and equity $ 105,496 95,655
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
OSAWATOMIE, KANSAS
Consolidated Statements of Earnings
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
For the three months For the nine months
ended September 30, ended September 30,
------------------- -------------------
1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Loans $ 888 921 2,685 2,658
Investment securities 74 41 196 123
Mortgage-backed securities 663 698 1,850 2,236
Interest-bearing deposits 141 55 311 136
Dividends on FHLB stock 13 12 38 33
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest income 1,779 1,727 5,080 5,186
Interest expense:
Deposits 917 955 2,832 2,790
Borrowings 10 113 43 401
- ------------------------------------------------------------------------------------------------------------------------------------
Total interest expense 927 1,068 2,875 3,191
Net interest income 852 659 2,205 1,995
Provision for loan losses 8 - 23 -
- ------------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 844 659 2,182 1,995
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest income:
Deposit account service fees 165 157 508 447
Gain on sales of loans - 24 9 57
Gain on sales of available-for-sale mortgage-backed securities, net - 26 3 26
Other 47 41 101 87
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest income 212 248 621 617
- ------------------------------------------------------------------------------------------------------------------------------------
Noninterest expense:
Compensation and benefits 328 290 918 853
Occupancy and equipment 86 65 216 196
Federal deposit insurance premiums and assessments 21 21 63 53
Data processing 49 40 138 124
Amortization of premium on deposits assumed 15 15 46 46
Advertising 51 40 120 111
Other 124 110 337 322
- ------------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 674 581 1,838 1,705
- ------------------------------------------------------------------------------------------------------------------------------------
Earnings before income tax expense 382 326 965 907
Income tax expense 150 140 381 365
- ------------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 232 186 584 542
Net earnings per share - basic and diluted $ 0.16 0.13 0.41 0.38
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
OSAWATOMIE, KANSAS
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
1998 1997
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 584 542
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Provision for loan losses 23 -
Depreciation 97 83
Amortization of premium on deposits assumed 46 46
FHLB stock dividends (38) (33)
Amortization of loan fees (40) (26)
Accretion of discounts and amortization of premiums on
investment and mortgage-backed securities, net (68) (27)
Gain on sales of loans, net (8) (83)
Gain on sales of mortgage-backed securities available-for-sale (3) -
Proceeds from sales of loans 560 2,924
Origination of loans for sale (552) (3,021)
Change in accrued interest receivable, prepaids and other assets (95) (89)
Change in accrued interest payable and other liabilities 1,162 1,814
Gain on sale of real estate held for development 17
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,668 2,147
- -------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Decrease (increase) in loans, net 3,113 (1,428)
Loans purchased (213) (2,312)
Maturities of investment securities held-to-maturity 3,800 -
Paydowns and maturities of mortgage-backed securities available-for-sale 1,607 5,734
Paydowns and maturities of mortgage-backed securities held-to-maturity 4,679 2,529
Purchases of mortgage backed securities available-for-sale (10,873) -
Purchases of investment securities held-to-maturity (3,259) (1,000)
Purchases of mortgage-backed securities held-to-maturity (5,507) -
Proceeds from sales of mortgage-backed securities available-for-sale 1,430 -
Acquisition and development of real estate held for development (2) -
Additions of premises and equipment, net (862) (136)
Proceeds from sale of real estate held for development 74
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by investing activities $ (6,087) 3,461
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIARY
OSAWATOMIE, KANSAS
Consolidated Statements of Cash Flows, Continued
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
1998 1997
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from financing activities:
Net decrease in deposits $ (4,315) (89)
Repayment of borrowings from FHLB (1,900) (5,200)
Proceeds from issuance of common stock, net of costs 13,777 -
Net decrease in advances from borrowers for taxes and insurance 182 210
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 7,744 (5,079)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 3,325 529
Cash and cash equivalents at beginning of year 4,600 4,222
- -------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 7,925 4,751
- -------------------------------------------------------------------------------------------------------------------------
Supplemental schedule of noncash investing and financing activities:
Conversion of land from Real estate held for development to
property and equipment $ - 118
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION
OSAWATOMIE, KANSAS
Notes to Unaudited Consolidated Financial Statements
September 30, 1998 and 1997
(1) Basis of presentation
The accompanying consolidated financial statements have been prepared in
accordance with the instructions for Form 10-QSB. The consolidated
financial statements should be read in conjunction with the audited
financial statements included in the Company's prospectus dated May 8,
1998.
The consolidated financial statements include the accounts of First Kansas
Financial Corporation (the "Company") and its wholly-owned subsidiary,
First Kansas Federal Savings Bank (the "Bank"). Intercompany balances and
transactions have been eliminated. The December 31, 1997 consolidated
balance sheet has been derived from the audited consolidated financial
statements as of that date. In the opinion of management, all adjustments,
including normal recurring accruals, considered necessary for a fair
presentation of financial statements have been reflected herein. The
results of the interim period ended September 30, 1998 are not necessarily
indicative of the results expected for the year ended December 31, 1998 or
for any other period.
(2) Initial Public Offering
On June 25, 1998, the Company completed an initial public offering selling
1,553,938 shares of its common stock at $10.00 per share. Total expenses of
the offering approximated $548,000. The Company is considered by the
Securities and Exchange Commission as a small business enterprise and,
accordingly, files SEC-related items as such. The Company's shares are
registered on the Nasdaq National Market under the symbol FKAN.
(3) Earnings Per Common Share
Earnings per share are computed in accordance with SFAS No. 128, Earnings
per Share. Basic earnings per share is based upon the weighted average
number of common shares outstanding during the periods presented. Earnings
per share for the nine months and three months ended September 30, 1998 and
1997 are pro forma as if the conversion and acquisition occurred on January
1, 1997. Common shares issued to the Employee Stock Ownership Plan are not
included in this computation until they are allocated to plan participants.
For the periods ended September 30, 1998 and 1997, there were no dilutive
potential common shares outstanding.
(4) Employee Stock Ownership Plan
In connection with the offering described in note 2, the Company
established an Employee Stock Ownership Plan ("the ESOP"). Through a loan
from the Company, the ESOP acquired 124,315 shares of the Company's common
stock. In accordance with Statement of Position 93-6 "Employers' Accounting
for Employee Stock Ownership Plans," the unearned compensation is presented
as a reduction of stockholders' equity in the accompanying September 30,
1998 consolidated balance sheet. Contributions made by the Company to the
ESOP will be allocated to participants by a formula based on total
compensation. Participants become 100 percent vested after five years.
Employees age 21 or older who have completed one year of service with the
Company or the Bank will be eligible to participate in the ESOP.
6
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION
OSAWATOMIE, KANSAS
Notes to Unaudited Consolidated Financial Statements
September 30, 1998 and 1997
(5) Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income", in the
first quarter of 1998. SFAS No. 130 requires the reporting of comprehensive
income and its components. Comprehensive income is defined as the change in
equity from transactions and other events and circumstances from non-owner
sources and excludes investments by and distributions to owners.
Comprehensive income includes net income and other items of comprehensive
income meeting the above criteria. The Company's only component of other
comprehensive income is the unrealized holding gains and losses on
available for sale securities.
<TABLE>
<CAPTION>
For the three months For the nine months ended
ended September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 232,000 $ 186,000 $ 584,000 $ 542,000
Change in unrealized security loss, net 29,000 22,000 232,000 45,000
Comprehensive income $ 261,000 $ 208,000 $ 816,000 $ 587,000
</TABLE>
(6) New Accounting Pronouncements
The Financial Accounting Standards Board (FASB) issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, in June 1998.
SFAS No. 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. This
Statement is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. Management believes adoption of SFAS No. 133 will not
have a material effect on the Company's financial position or results of
operations, nor will adoption require additional capital resources.
7
<PAGE>
FIRST KANSAS FINANCIAL CORPORATION AND SUBSIDIDARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General. First Kansas Financial Corporation (the "Company") was formed on
February 9, 1998, to become the holding company for First Kansas Federal Savings
Association (the "Bank") in the conversion of the Bank from a federal mutual
savings association to a federal stock savings bank (the "Conversion"). The
Conversion to a federal stock savings bank was completed on June 25, 1998, and
the Bank now operates as the First Kansas Federal Savings Bank, which accounts
for virtually all of the Company's business. It should be noted that the Company
had no assets prior to the Conversion on June 25, 1998, and all prior financial
statements refer to the Bank.
The Company's results of operations depend primarily on net interest income,
which is the difference between interest income from interest-bearing assets and
interest expense from interest-bearing liabilities. The Company's operations are
also affected by noninterest income, such as service charges, loan fees and
gains and losses from the sale of newly originated loans. The Company's
principal operating expenses, aside from interest expense, consist of
compensation and employee benefits, occupancy costs, provisions for loan losses
and general and administration (G&A) expenses.
Net earnings for the nine months of 1998 increased $42,000, or 7.75%, to
$584,000 as compared to the first nine months of 1997. Net interest margin
increased by $210,000 primarily due to investment of the proceeds of the
Conversion. Noninterest income was stable for the two periods involved while
noninterest expense increased due to increased compensation expense related to
the Company's recently established Employee Stock Ownership Plan (ESOP) and the
opening of a new branch office in Paola, Kansas.
Interest Income. Interest income decreased $106,000, or 2.04%, to $5.1 million
during the first three quarters of 1998. The decrease is the result of lower
yields realized on the Company's mortgage-backed securities portfolio due to
significant prepayments offset by additional interest income earned on the
investment of the Company's proceeds from the Conversion in mortgage-backed
securities.
Interest Expense. Interest expense decreased $316,000, or 9.9%, to $2.9 million
during the first nine months of 1998 due primarily to the paydown on Federal
Home Loan Bank advances.
Interest expense on deposits was stable for the time periods involved.
Provision for Loan Losses. The provision for loan losses was $23,000 for the
nine months ended September 30, 1998. The increase is the result of management's
conscious effort to increase reserves for changes in the loan portfolio mix. No
provision was made for the first three quarters of 1997. The loan loss reserve
at September 30, 1998 was $192,000, or .44% of gross loans outstanding which is
comparable to the .37% reserve at December 31, 1997.
8
<PAGE>
Noninterest Income. Noninterest income increased by $4,000, or .65%, to $621,000
for the first nine months of 1998 as compared to the same time period in 1997.
Increases in fees earned on transaction accounts were almost entirely offset by
a decrease in income earned by the mortgage banking operation.
Noninterest Expense. Noninterest expense increased by $133,000, or 7.80%, to
$1.8 million for the first three quarters of 1998 compared to 1997. Compensation
increased due to the implementation of the Company's ESOP. Other expenses also
increased as a direct result of the new Paola branch building opening.
Income Tax Expense. Income tax expense was relatively stable in 1998 versus 1997
with effective tax rates of 39.48% and 40.24%, respectively.
Asset Quality and Distribution. The Company's assets increased $9.8 million from
December 31, 1997 to September 30, 1998 as a direct result of the stock
conversion in the second quarter of 1998. The Company's primary ongoing sources
of funds are deposits and proceeds from principal and interest payments on loans
and mortgage-backed securities. While maturities and scheduled amortization of
loans are a predictable source of funds, deposit flows and mortgage prepayments
are greatly influenced by general interest rates, economic conditions and
competition.
The primary investing activities of the Company are the origination of mortgage
loans and the purchase of investment securities. During the first nine months of
1998, gross loan purchases and originations totaled $5.0 million compared to
$6.5 million for the first nine months of 1997 as market conditions have reduced
the opportunity to originate and purchase mortgage loans. Gross consumer and
commercial originations were $2.1 million in the first three quarters of 1998
compared to $1.6 million for the same time period of 1997. In the third quarter
of 1998, the Company purchased approximately $11.5 million of mortgage backed
securities as it redeployed proceeds of the Conversion.
Liability Distribution. Deposits decreased $4.3 million at September 30, 1998 as
compared to December 31, 1997. The decrease is a result of the withdrawal of
deposits from the Bank to purchase stock in the Conversion and the Bank's
decreased demand for funding resulting from the capital infusion from the
Conversion, which has effected deposit pricing. Additionally, a portion of the
proceeds were used to pay down Federal Home Loan Bank advances.
Liquidity. The Company's most liquid assets are cash equivalents and short-term
government agency investments. It has also invested in liquidity-qualifying
mortgage backed securities. The Bank's liquidity as of September 30, 1998 was
$24.1 million or 29.54%.
9
<PAGE>
Capital. At September 30, 1998, the Bank had a Tier 1 capital ratio of 12.50%
and a risk based capital ratio of 36.75%. As shown by the following table, the
Bank's capital exceeded the minimum capital requirement: (dollars in thousands)
September 30, 1998 September 30, 1997
------------------ ------------------
Amount Percent Required Amount Percent
------ ------- -------- ------ -------
Tier I Capital $13,119 12.50% 4.00% $6,034 6.14%
Risk Based Capital 13,310 36.75% 8.00% 6,165 17.27%
Savings associations and their holding companies are generally expected to
operate at or above the minimum capital requirements and the above ratios are
well in excess of regulatory minimums.
Year 2000 Compliance. In 1997, the Company initiated a review and assessment of
all hardware and software to determine its Year 2000 readiness. The Company
utilizes and is dependent upon data processing systems and software to conduct
its business. The data processing systems and software include those developed
and maintained by the Company's data processing provider and other commercial
software. The Company's data processing provider and other "mission critical"
vendors have indicated that their hardware and/or software will be Year 2000
compliant by the end of 1998. The Company's state of readiness: The Company has
now completed the installation of its renovated hardware and software
applications and is in the early stages of testing. Two significant tests are
planned with the Company's data processing provider, one in the fourth quarter
of 1998 and the other in the first quarter of 1999. The costs to address the
Company's Year 2000 issues: While there will be expenses incurred during the
next two years, the Company has not identified any situations at this time that
will require material cost expenditures to become fully compliant. Total costs
to become Year 2000 compliant are estimated to be less than $100,000. The risks
of the Company's Year 2000 issues: A "worst case" Year 2000 scenario for the
Company would be the absence of electrical power and/or communications to the
data processing center which supports the majority of the "mission critical"
systems to the Company . The Company has considered this and other scenarios in
plans for Year 2000 readiness. The Company's Contingency Plans: The Company has
developed a Contingency Plan to address "mission critical" systems failures
caused by the Year 2000. The plan provides for procedures and resources
necessary for the Company to provide continued services to its customers for a
period of time under a "worst case" scenario.
Cautionary Statement. This Quarterly Report on Form 10-QSB contains or may
contain forward-looking statements with respect to the financial condition,
results of operations, plans, objectives, future performance and business of the
Company, including statements preceded by, followed by or that include the
words, "believes", "expects", "anticipates" or similar expressions. These
forward-looking statements involve certain risks and uncertainties and may
relate to future operating results of the company. Factors that may cause actual
results to differ materially from those contemplated by such forward-looking
statements include, among others,
10
<PAGE>
the following possibilities: (1) a significant increase in competitive pressures
among depository and other financial institutions; (2) changes in the interest
rate environment resulting in reduced margins; (3) general economic or business
conditions, either nationally or in the states in which the Company will be
doing business, being less favorable than expected, resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit; (4)
legislative or regulatory changes adversely affecting the businesses in which
the Company will be engaged; (5) changes in the securities markets; and (6)
changes in the banking industry including the effects of consolidation resulting
from possible mergers of financial institutions.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and its subsidiaries may be a party to
various legal proceedings incident to its or their business. At
September 30, 1998, there were no legal proceedings to which the
Company or any subsidiary was a party, or to which any of their
property was subject, which were expected by management to result in a
material loss.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(27) Financial Data Schedule (electronic filing only)
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST KANSAS FINANCIAL CORPORATION
Date: 11/12/98 By: /s/Larry V. Bailey
--------------------- -----------------------------------
Larry V. Bailey, President
Date: 11/12/98 By: /s/James J. Casaert
--------------------- -----------------------------------
James J. Casaert
Vice President and Treasurer
(Principal Accounting Officer)
<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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,925
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 25,025
<INVESTMENTS-CARRYING> 25,142
<INVESTMENTS-MARKET> 25,438
<LOANS> 43,680
<ALLOWANCE> 191
<TOTAL-ASSETS> 105,496
<DEPOSITS> 81,336
<SHORT-TERM> 6,200
<LIABILITIES-OTHER> 1,997
<LONG-TERM> 1,893
0
0
<COMMON> 155
<OTHER-SE> 21,048
<TOTAL-LIABILITIES-AND-EQUITY> 105,496
<INTEREST-LOAN> 2,685
<INTEREST-INVEST> 2,046
<INTEREST-OTHER> 349
<INTEREST-TOTAL> 5,080
<INTEREST-DEPOSIT> 2,832
<INTEREST-EXPENSE> 2,875
<INTEREST-INCOME-NET> 2,205
<LOAN-LOSSES> 23
<SECURITIES-GAINS> 3
<EXPENSE-OTHER> 1,838
<INCOME-PRETAX> 965
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 584
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
<YIELD-ACTUAL> 0
<LOANS-NON> 9
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 7
<ALLOWANCE-OPEN> 190
<CHARGE-OFFS> 0
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 198
<ALLOWANCE-DOMESTIC> 198
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 198
</TABLE>
