UNITED STATES
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 March 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to _____________.
COMMISSION FILE NUMBER: 0-24849
FIRST NILES FINANCIAL, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 34-1870418
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 North Main Street, Niles, Ohio 44446
- ---------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (330) 652-2539
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 issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Shares of common stock, par value $.01 per share, outstanding as of May 14,
1999: 1,754,411
Transitional Small business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
FIRST NILES FINANCIAL, INC. AND SUBSIDIARY
(In thousands, except share data)
March 31, December 31,
1999 1998
--------- ------------
ASSETS (Unaudited)
Cash and cash equivalents:
Noninterest bearing $ 876 $ 995
Interest bearing 9,511 16,129
------- -------
Total cash and equivalents 10,387 17,124
Securities available for sale -
at market 21,525 19,751
Securities to be held to maturity -
at cost 15,476 12,432
Loans receivable, net of allowance
for loan losses 36,844 36,132
Accrued interest receivable 342 282
Federal Home Loan Bank stock, at cost 323 317
Real estate investment, limited partnership -
at equity 373 383
Prepaid expenses and other assets 178 47
Prepaid federal income taxes 13 -
Premises and equipment, at cost less
accumulated depreciation 247 256
------- -------
TOTAL ASSETS $85,708 $86,724
======= =======
LIABILITIES
Deposits $54,174 $54,837
Accrued interest payable 109 110
Accounts payable and other liabilities 1,162 1,236
Note payable 300 300
Federal income tax payable - 46
Deferred federal income tax liability 135 272
------- -------
TOTAL LIABILITIES 55,880 56,801
======= =======
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, authorized
500,000 shares; none outstanding - -
Common stock, $.01 par value, authorized
6,000,000 shares; 1,754,411 shares issued
and outstanding 18 18
Paid in capital 16,897 16,897
Retained earnings 12,884 12,709
Net unrealized gains on securities
available for sale 1,316 1,586
Common stock purchased by the Employee
Stock Ownership Plan (1,287) (1,287)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 29,828 29,923
------- ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $85,708 $86,724
======= ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
FIRST NILES FINANCIAL, INC. AND SUBSIDIARY
(In thousands, except share data)
(Unaudited)
Three Months Ended March 31,
1999 1998
------------ ------------
Interest income:
Loans receivable
First mortgage loans: $ 692 $ 762
Consumer and other loans 23 25
Mortgage-backed and related securities 194 187
Investments 268 250
Interest-bearing deposits 173 56
----- -----
TOTAL INTEREST INCOME 1,350 1,280
Interest expense:
Deposits 497 610
Borrowings 6 9
----- ----
TOTAL INTEREST EXPENSE 503 619
NET INTEREST INCOME 847 661
Provision for loan losses - -
----- -----
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 847 661
Noninterest income:
Gain on sale of securities 55 -
Service fees and other 9 7
----- ----
TOTAL NONINTEREST INCOME 64 7
Noninterest expense:
Equity in loss of limited partnership 10 11
Loss on sale of real estate owned 9 -
General and administrative:
Compensation and benefits 260 206
Occupancy and equipment 19 24
Federal deposit insurance premiums 9 9
Legal and audit 46 5
Franchise taxes 81 35
Other operating expense 55 53
----- -----
TOTAL NONINTEREST EXPENSE 489 343
----- -----
INCOME BEFORE INCOME TAXES 422 325
Federal income taxes 125 87
----- -----
NET INCOME $ 297 $ 238
===== =====
BASIC EARNINGS PER SHARE $.18 N/A
=== ===
DILUTED EARNINGS PER SHARE $.18 N/A
=== ===
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FIRST NILES FINANCIAL, INC. AND SUBSIDIARY
(In thousands)
(Unaudited)
Three Months Ended March 31,
1999 1998
------------ ------------
Net income $ 297 $ 238
Other comprehensive income:
Unrealized gains (losses) on securities:
Unrealized gains (losses) arising for period (354) 246
Related income tax 120 (84)
----- -----
(234) 162
Reclassification adjustment:
Gain included in net income, net of
income tax (36) -
----- -----
Other comprehensive income (270) 162
----- -----
COMPREHENSIVE INCOME $ 27 $ 400
===== =====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
FIRST NILES FINANCIAL, INC. AND SUBSIDIARY
(In thousands)
(Unaudited)
Three Months Ended March 31,
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 297 $ 238
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Deferred income taxes 2 (15)
Depreciation 9 13
Amortization of discounts and premiums on
investments and mortgage-backed and
related securities - (6)
Gain on sale of securities (55) -
Equity in loss of limited partnership 10 11
Federal Home Loan Bank stock dividends (5) (5)
------ ------
258 236
Net increase in accrued interest receivable,
prepaid expenses and other assets (191) (65)
Net increase (decrease) in accrued interest,
accounts payable and other liabilities (134) 71
------ ------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (67) 242
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of securities available
for sale 56 -
Purchase of securities available for sale (2,194) -
Proceeds from principal payments on
mortgage-backed and related securities 1,973 2,285
Purchase of mortgage-backed and related
securities (5,007) (3,073)
Net decrease in interest-bearing
deposits with banks 6,618 825
Net increase in loans (712) (369)
Additions to premises and equipment - (10)
------ ------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 734 (342)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in savings accounts, MMDAs and (151) (463)
NOW accounts
Net increase (decrease) in certificates of (512) 508
deposits
Cash dividends paid (123) -
------ ------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES (786) 45
------ ------
NET DECREASE IN CASH (119) (55)
CASH AT BEGINNING OF PERIOD 995 819
------ ------
CASH AT END OF PERIOD $ 876 $ 764
====== ======
Cash paid during the period for:
Interest on deposits $ 504 $ 611
Income taxes $ 181 $ -
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST NILES FINANCIAL, INC. AND SUBSIDIARY
March 31, 1999 and 1998 (Unaudited)
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies followed by First Niles are in accordance
with generally accepted accounting principles and conform to general practices
within the savings and loan industry.
The accompanying unaudited financial statements were prepared in accordance with
instructions for Form 10-QSB and, therefore do not include information or
footnotes necessary for a complete presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. Management believes that all normal recurring adjustments that are
necessary for a fair representation of interim period financial information have
been reflected in these financial statements.
NOTE B -- STOCK CONVERSION
On October 26, 1998, First Niles Financial, Inc. began trading as a public
company on the Nasdaq SmallCap Market. First Niles issued 1,754,411 shares, $.01
par value common stock, at $10.00 per share, raising $15.5 million, net of
shares acquired by the newly formed Employee Stock Owner ship Plan (the "ESOP")
and net of the costs of the conversion. Home Federal Savings and Loan
Association of Niles converted to a federal stock savings and loan association
following the formation of the holding company and received proceeds of $8.5
million in exchange for all of its common stock to First Niles. This transaction
was accounted for using historical cost in a manner similar to that in a pooling
of interests.
NOTE C -- EARNINGS PER SHARE
Basic earnings per share is computed for the first quarter of 1999 based upon
the weighted-average shares outstanding less shares in the ESOP that are
unallocated and committed to be released. The weighted-average common shares
deemed outstanding, which gives effect to a reduction of 128,304
weighted-average unallocated shares held by the ESOP, totaled 1,626,107 for the
quarter ended March 31, 1999. First Niles has no potential dilution of earnings
per share arising from contracts or other securities which can be exercised or
converted into common stock.
Earnings per share is not presented for 1998 as First Niles completed its
conversion to stock form in October, 1998.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
First Niles Financial, Inc., a Delaware corporation, was formed in July 1998 to
act as the holding company for Home Federal Saving and Loan Association of Niles
upon the completion of Home Federal's conversion from mutual to stock form. The
conversion was completed on October 26, 1998. All references to First Niles or
Home Federal, unless otherwise indicated, on or before October 26, 1998, refer
to Home Federal before its conversion from mutual to stock form. References in
this Form 10-QSB to "we", "us", and "our" refer to First Niles and/or Home
Federal as the context requires.
Our principal business is attracting retail deposits from the general public and
investing those funds primarily in permanent and construction loans secured by
first mortgages on owner-occupied, one-to-four family residences. We also
originate, to a lesser extent, loans secured by first mortgages on
non-owner-occupied one-to-four family residences, permanent and construction
commercial and multi-family real estate loans, and consumer loans. Excess funds
are generally invested in investment securities and mortgage-backed and related
securities.
The following discussion compares our consolidated financial condition at March
31, 1999 to December 31, 1998 and the results of operations for the three month
period ended March 31, 1999 with the same period ended March 31, 1998. This
discussion should be read in conjunction with the consolidated financial
statements and footnotes included herein.
CHANGES IN FINANCIAL CONDITION FROM MARCH 31, 1999 TO DECEMBER 31, 1998
Total assets decreased by $1.0 million, or 1.2%, to $85.7 million at March 31,
1999 from $86.7 million at December 31, 1998. This decrease was primarily
attributable to a decrease of $6.7 million in cash and cash equivalents
partially offset by increases of $4.8 million in total securities, $712,000 in
net loans receivable and $191,000 in prepaid expenses and other assets and
accrued interest receivable.
The aforementioned decline in assets was related to a $921,000 decrease in total
liabilities and a $95,000 decrease in total equity. Deposits decreased by
$663,000, or 1.2% in the first three months of 1999. The decline in savings
accounts, money market deposit accounts and NOW accounts during the first
quarter amounted to $151,000. Additionally, certificates of deposit declined by
$512,000 during the quarter. Accounts payable and other liabilities decreased by
$74,000 and deferred federal income tax liability declined by $137,000 during
the first three months of 1999.
7
<PAGE>
Total equity at March 31, 1999 was $29.8 million, a $95,000, or 0.3% decrease
from December 31, 1998. The decrease in total equity, was the result of a
$270,000 decrease in net unrealized gains on securities available for sale and
the payment of $123,000 in common stock dividends, partially offset by $297,000
in net income. Book value per share was $17.00 at March 31, 1999, compared to
$17.06 at December 31, 1998. The dividend paid during the quarter was equivalent
to $.07 per common share. At both dates discussed above, there were 1,754,411
shares of common stock outstanding.
Nonperforming loans, consisting of nonaccruing loans and loans delinquent more
than 90 days, totaled $948,000 at March 31, 1999, or 1.1% of total assets,
compared to $955,000, or 1.1% of total assets as of December 31, 1998. The
allowance for loan losses was $784,000 at March 31, 1999, representing coverage
of 83.0% of non-performing loans and 2.1% of total loans. The allowance for loan
losses and associated ratios were relatively unchanged from December 31, 1998.
At March 31, 1999, we did not have any foreclosed assets.
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 1999
GENERAL. Our results of operations depend primarily on our net interest income,
which is determined by (i) the difference between interest earned on
interest-earning assets, consisting primarily of mortgage loans, collateralized
mortgage obligations, other investments and interest-bearing deposits in other
institutions, and interest expense on interest-bearing liabilities, primarily
deposits and (ii) the relative amounts of our interest-earning assets and
interest-bearing liabilities. The level of non-interest income, such as fees
received from customer deposit account service charges and gains on sales of
investments, and the level of non-interest expense, such as federal deposit
insurance premiums, salaries and benefits, office occupancy costs, and data
processing costs, also affect our results of operations. Finally, our results of
operations may also be affected significantly by general economic and
competitive conditions, particularly changes in market interest rates,
government policies and actions of regulatory authorities, all of which are
beyond our control.
NET INCOME. For the three months ended March 31, 1999 First Niles recorded net
income of $297,000. This net income resulted in an annualized return on average
assets of 1.37%. The annualized return on shareholders' equity for the three
months ended March 31, 1999 was 3.96%. Net income increased by $59,000, or 24.8%
for the three months ended March 31, 1999 as compared to the respective 1998
period. The increase in net income for the three months ended March 31, 1999 as
compared to the same period in 1998 was primarily due to a $186,000 increase in
net interest income and a $57,000 increase in noninterest income, partially
offset by a $146,000 increase in noninterest expense and a $38,000 increase in
federal income tax expense.
8
<PAGE>
NET INTEREST INCOME. Net interest income increased by $186,000, or 28.0% for the
three month period ended March 31, 1999 as compared to the respective 1998
period. For the three months ended March 31, 1999 total interest income
increased by $70,000 as compared to the same period in 1998. Specifically,
interest income on interest bearing deposits, mortgage-backed and related
securities and investments increased by $142,000 for the three month period
ended March 31, 1999 as compared to the same period in 1998. A $72,000 decrease
in interest on loans for the three month period ended March 31, 1999 as compared
to the same period in 1998 partially offset these increases. The infusion of
proceeds from Home Federal's mutual to stock conversion into non-loan
interest-earning assets was the primary reason for the increase in interest
income as described above. A general decline in market interest rates on
outstanding loans was the primary reason for the decrease in interest income on
loans. Total interest expense decreased by $116,000 as compared to the same
period one year prior. The primary reasons for the decline in interest expense
include a $3.2 million decrease in average deposits and a 58 basis point decline
in the cost of deposits for the three month period ended March 31, 1999 as
compared to the same period in 1998. There was no provision for loan losses in
either period being compared. For the three months ended March 31, 1999 the
interest rate spread was 2.64% and the net interest margin was 3.95%.
NONINTEREST INCOME. Noninterest income of $64,000 for the three months ended
March 31, 1999 was $57,000 higher than the same period in 1998. Gain on sale of
investment securities contributed $55,000 of the aforementioned increase, with a
$2,000 increase in service fees and other comprising the remainder. The gain
from the sale of 1,000 shares of Freddie Mac stock comprised the entire gain on
sale of investment securities during the quarter. At March 31, 1998 we still
owned 39,000 shares of Freddie Mac stock.
NONINTEREST EXPENSE. Noninterest expense increased $146,000, or 42.4%, for the
three months ended March 31, 1999 as compared to the same period in 1998.
Compensation and benefits increased by $54,000 from period to period, primarily
due to routine salary increases, the addition of an accounting officer and the
establishment of an Employee Stock Ownership Plan. Legal and audit fees,
franchise taxes and other operating expenses increased by $89,000, from period
to period, primarily due to higher franchise taxes associated with increased
capital levels, and increased professional service fees associated with
increased regulatory reporting related to being a public company.
FEDERAL INCOME TAXES. The provision for federal income taxes increased by
$38,000 in the three months ended March 31, 1999 as compared to the same period
in 1998. The increase in the provision for federal income taxes as compared to
the same period in 1998 was primarily due to an increase in pre-tax income of
$97,000. The effective tax rate was 29.5% in the current three month period
compared to 26.8% in the same period one year prior.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Our main source of funds are deposits, and loan and securities repayments. While
scheduled loan repayments and maturing investments are relatively predictable,
deposit flows and loan prepayments are more influenced by interest rates,
general economic conditions and competition. Federal regulations require us to
maintain cash and eligible investments at levels that assure our ability to meet
demands for deposit withdrawals and the repayment requirements of short-term
borrowings, if any. We believe that sufficient funds are available for us to
meet our current liquidity needs. Total cash and cash equivalents amounted to
$10.4 million at March 31, 1999. As of March 31, 1999 we had a regulatory
liquidity ratio of 19.46%.
We use our capital resources to meet ongoing commitments to fund various types
of deposit withdrawals, to invest in securities, to fund existing and future
loan commitments, to maintain liquidity, and to meet operating expenses. At
March 31, 1999 we had outstanding commitments to extend credit totaling $3.4
million.
Home Federal is required to maintain minimum regulatory capital sufficient to
meet tangible, core and risk-based capital ratios of 1.5%, 3.0% and 8.0%,
respectively. As of March 31, 1999, Home Federal significantly exceeded its
regulatory capital requirements, with tangible, core, and risk-based capital
ratios of 27.56%, 27.56% and 55.11%, respectively.
YEAR 2000 ISSUES
The approaching millennium is causing organizations of all types to review their
computer systems for the ability to properly accommodate the year 2000. When
computer systems were first developed, two digits were used to designate the
year in date calculations and "19" was assumed for the century. As a result,
there is significant concern about the integrity of date sensitive calculations
when the calendar reaches January 1, 2000. An antiquated system could interpret
01/01/00 as January 1, 1900, potentially causing major problems in the
calculation of interest as well as payment, delinquency and maturity dates.
An internal committee, comprised of two officers and an outside director of Home
Federal, has been formed to measure, monitor and address the potential risk that
the year 2000 computer situation poses to us. Additionally, we have been assured
by our data processing service bureau that their computer services will function
properly on and after January 1, 2000. While Home Federal is attempting to
ensure that its computer dependent operations are year 2000 compliant and it
does not anticipate any significant year 2000 issues with respect to its
premises or other non-information systems, it cannot assure that some year 2000
problems will not occur. If some year 2000 problems do occur, we cannot predict
the extent and effect of such problems on our business operations.
10
<PAGE>
However, as an additional safeguard, Home Federal has developed a contingency
plan that would allow it to operate using a manual customer transaction system
should the year 2000 problem render our data processing system inoperable. Under
the plan, general ledger and various other records will also be posted and
maintained manually. Management believes that such a manual system is
sustainable given our relatively small size, our one office location, the
relative simplicity of our products and the experience of our staff.
Through March 31, 1999 Home Federal had spent approximately $26,000 on computer
equipment and software in order to be year 2000 compliant. We do not expect any
further significant costs to be incurred in this area based on our current
evaluation of our year 2000 preparedness.
In addition to expenses related to our own operations, Home Federal could incur
losses if loan payments are delayed due to year 2000 problems affecting any of
our significant borrowers or if payroll systems of employers in our area become
impaired. We have been communicating with our vendors to assess their progress
in evaluating their data processing systems and their corrective action required
for them to be prepared for the year 2000. We have also corresponded with
selected borrowers regarding their year 2000 preparedness. These borrowers were
selected based on the aggregate amounts owed to Home Federal, the type of loans
outstanding and the perceived year 2000 risk based on our knowledge of their
operations. To date, such parties have yet to advise Home Federal that they do
not have plans in place to address and correct issues associated with the year
2000 problem; however no assurance can be given as to the adequacy of these
plans or to the timeliness of their implementation. Currently, due to the types
of borrowers doing business with Home Federal and the nature of our loans with
these borrowers, the year 2000 issue is not considered as part of our
underwriting criteria.
CAUTIONARY FORWARD-LOOKING STATEMENTS
First Niles Financial, Inc. and its wholly-owned subsidiary, Home Federal
Savings and Loan Association of Niles, may from time to time make written or
oral "forward-looking statements", including statements contained in its filings
with the Securities and Exchange Commission. These forward-looking statements
may be included in this quarterly report on Form 10-QSB and the exhibits
attached to it, in First Niles' reports to stockholders and in other
communications by the company, which are made in good faith by us pursuant to
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995.
These forward-looking statements include statements about our beliefs, plans,
objectives, goals, expectations, anticipations, estimates and intentions, that
are subject to significant risks and uncertainties, and are subject to change
based on various factors (some of which are beyond our control). The words
"may", "could", "should", "would", "believe", "anticipate", "estimate",
"expect", "intend", "plan" and similar expressions are intended to
11
<PAGE>
identify forward-looking statements. The following factors, among others, could
cause First Niles' and Home Federal's financial performance to differ materially
from the plans, objectives, expectations, estimates and intentions expressed in
the forward-looking statements:
* the strength of the United States economy in general and the
strength of the local economies in which we conduct operations;
* the effects of, and changes in, trade, monetary and fiscal
policies and laws, including interest rate policies of the
Federal Reserve Board;
* inflation, interest rate, market and monetary fluctuations;
* the timely development of and acceptance of our new products and
services and the perceived overall value of these products and
services by users, including the features, pricing and quality
compared to competitors' products and services;
* the willingness of users to substitute competitors' products and
services for our products and services;
* our success in gaining regulatory approval of our products and
services, when required;
* the impact of changes in financial services' laws and
regulations, including laws concerning taxes, banking, securities
and insurance;
* technological changes;
* acquisitions;
* changes in consumer spending and saving habits; and
* our success at managing the risks involved in the foregoing.
The list of important factors stated above is not exclusive. We incorporate by
reference those factors included in First Niles' Registration Statement on Form
SB-2 (Reg. No. 333-58883). We do not undertake to update any forward-looking
statement, whether written or oral, that may be made from time to time by or on
behalf of First Niles or Home Federal.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
There are no matters required to be reported under this item.
Item 2. Changes in Securities:
There are no matters required to be reported under this item.
Item 3. Defaults Upon Senior Securities:
There are no matters required to be reported under this item.
Item 4. Submission of Matters to a Vote of Security Holders:
There are no matters required to be reported under this item.
Item 5. Other Information:
There are no matters required to be reported under this item.
Item 6. Exhibits and Reports on Form 8-K:
(a) The following exhibit is filed herewith:
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the quarter
ended March 31, 1999.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
First Niles Financial, Inc.
Registrant
Date: May 14, 1999 By: /s/ WILLIAM L. STEPHENS
-------------------------------------
William L. Stephens
President and Chief Executive Officer
(Duly Authorized Representative)
Date: May 14, 1999 By: /s/ THOMAS G. MALEY
--------------------------------------
Thomas G. Maley
Controller
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The following schedule contains summary financial information extracted from the
financial statements contained in the Registrant's quarterly report on Form
10-QSB for the period ended March 31, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 876
<INT-BEARING-DEPOSITS> 4,061
<FED-FUNDS-SOLD> 5,450
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 21,525
<INVESTMENTS-CARRYING> 15,476
<INVESTMENTS-MARKET> 15,429
<LOANS> 37,628
<ALLOWANCE> 784
<TOTAL-ASSETS> 85,708
<DEPOSITS> 54,174
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,406
<LONG-TERM> 300
0
0
<COMMON> 15,628
<OTHER-SE> 14,200
<TOTAL-LIABILITIES-AND-EQUITY> 85,708
<INTEREST-LOAN> 715
<INTEREST-INVEST> 462
<INTEREST-OTHER> 173
<INTEREST-TOTAL> 1,350
<INTEREST-DEPOSIT> 497
<INTEREST-EXPENSE> 503
<INTEREST-INCOME-NET> 847
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 55
<EXPENSE-OTHER> 489
<INCOME-PRETAX> 422
<INCOME-PRE-EXTRAORDINARY> 422
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 297
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
<YIELD-ACTUAL> 6.33
<LOANS-NON> 603
<LOANS-PAST> 342
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,560
<ALLOWANCE-OPEN> 784
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 784
<ALLOWANCE-DOMESTIC> 784
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 561
</TABLE>
