<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Six Months Ended June 30, 1998. Commission file Number 0-8597
-----------------------------
THE REPUBLIC CORPORATION
------------------------
TEXAS 74-0911766
- ----- ----------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5340 Weslayan - P.O. Box 270462, Houston, TX 77277
- -------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713-993-9200
------------------
NONE
- ----
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such report(s), and (2) has been subject to such filing requirements for
the past 90 days.
YES X. NO .
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of
Common Stock, $1.00 par value Shares 356,844
- ----------------------------- ---------
Outstanding at June 30,
1998, (including 23,119
shares held as treasury
shares)
<PAGE>
THE REPUBLIC CORPORATION
Index to Quarterly Report on Form 10-Q
PAGE
----
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
December 31, 1997, and June 30, 1998. 1
Consolidated Statements of Income for the three months
and six months ended June 30, 1997 and 1998. 2
Consolidated Statements of Cash Flows for the six months
ended June 30, 1997 and 1998. 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis 5-9
Part II. Other Information 10
Signatures 11
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Balance Sheet
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1998 1997
- -------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks (demand). . . . . . . . . . . . $ 4,670,535 $ 3,467,302
Investment securities:
Held-to-maturity
Market value at 6-30-98 25,987,593
----------
Market value at 12-31-97 27,985,306 . . . . . 25,974,393 27,988,290
----------
Available-for-sale
Market value at 6-30-98 24,000
----------
Market value at 12-31-97 24,000 . . . . . 24,000 24,000
---------- ------------ ------------
$ 30,668,928 $ 31,479,592
Loans . . . . . . . . . . . . . . . . . . . . . . . . . 86,325,658 79,608,471
Plus: Uncollected earned interest . . . . . . . . 735,699 653,441
Less: Allowance for losses . . . . . . . . . . . . (1,118,398) (1,070,000)
Net loans and other receivables. . . . . . . . . . 85,942,959 79,191,912
------------ ------------
Federal funds sold . . . . . . . . . . . . . . . . . . 8,600,000 11,150,000
Property, equipment and vehicles (net). . . . . . . . . 2,340,726 1,842,555
Other real estate . . . . . . . . . . . . . . . . . . . 73,054 9,000
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . 436,079 436,079
Other assets. . . . . . . . . . . . . . . . . . . . . . 813,250 1,080,644
------------ ------------
Total assets . . . . . . . . . . . . . . . . . . . $128,874,996 $125,189,782
------------ ------------
------------ ------------
Liabilities and Stockholders' Equity
Deposits (Domestic):
Demand (non-interest bearing). . . . . . . . . . . $ 19,755,713 $ 14,999,271
Savings, time and demand (Interest-bearing). . . . 95,721,162 96,958,122
------------ ------------
$115,476,875 $111,957,393
Accounts payable and accrued interest payable . . . . . 1,064,992 1,153,610
Accrued taxes payable . . . . . . . . . . . . . . . . . 390,152 747,184
------------ ------------
Total liabilities. . . . . . . . . . . . . . . . . $116,932,019 $113,858,187
------------ ------------
Minority Interest in Consolidated Subsidiary. . . . . . 257,091 242,912
------------ ------------
Stockholders'Equity
Common stock (par value $1; 750,000 shares
authorized, 356,844 shares issued including
stock held in treasury). . . . . . . . . . . . . . 356,844 356,844
Additional paid-in capital. . . . . . . . . . . . . . . 234,931 234,931
Less cost of treasury stock (23,119 shares at
6-30-98 and 23,119 at 12-31-97). . . . . . . . . . (91,303) (91,303)
------------ ------------
Total contributed capital. . . . . . . . . . 500,472 500,472
------------ ------------
Retained earnings . . . . . . . . . . . . . . . . . . . 11,185,414 10,588,211
------------ ------------
Net Unrealized Gain (Loss) on Securities
Available-for-Sale (Net of Taxes). . . . . . . . . -0- -0-
Stockholders'equity . . . . . . . . . . . . . 11,685,886 11,088,683
------------ ------------
Total liabilities and stockholders equity, . . . . $128,874,996 $125,189,782
------------ ------------
------------ ------------
</TABLE>
The accompanying note is an integral part of these financial statements.
(1)
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Statement of Income
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- -------------------------
June 30 June 30 June 30 June 30
1998 1997 1998 1997
<S> <C> <C> <C>
Interest Income
Interest and fees on loans . . . . . . . . . . . . . . . . $1,909,769 $1,667,366 $3,684,687 $3,264,513
Interest on funds sold and securities
purchased under agreement to resell . . . . . . . . . 156,246 310,872 293,052 690,548
Interest and dividends on investments
Securities of U.S. Government and
government agencies. . . . . . . . . . . . . . . 361,454 254,693 741,778 391,342
Obligations of states, political
subdivisions and other obligations
secured by the government. . . . . . . . . . . . -0- -0- -0- -0-
---------- ---------- ---------- ----------
Total interest on investments . . . . . . . . . . . . 517,700 565,565 1,034,830 1,081,890
---------- ---------- ---------- ----------
Total inte rest income. . . . . . . . . . . . . . . . 2,427,469 2,232,931 4,719,517 4,346,403
---------- ---------- ---------- ----------
Interest expense:
Interest on deposits . . . . . . . . . . . . . . . . . . . 1,118,535 1,097,086 2,245,408 2,114,544
---------- ---------- ---------- ----------
Total Interest expense. . . . . . . . . . . . . . . . 1,118,535 1,097,086 2,245,408 2,114,544
---------- ---------- ---------- ----------
Net interest income. . . . . . . . . . . . . . . . . . . . 1,308,934 1,135,845 2,474,109 2,231,859
Provision for loan losses . . . . . . . . . . . . . . . . . . . (69,823) (41,875) (118,181) (142,789)
---------- ---------- ---------- ----------
Net interest income after provision for
loan losses . . . . . . . . . . . . . . . . . . . . . 1,239,111 1,093,970 2,355,928 2,089,072
---------- ---------- ---------- ----------
Other income:
Service charges on deposit accounts. . . . . . . . . . . . 50,845 47,749 99,965 93,102
Other service charges, commission and fees . . . . . . . . 63,083 62,103 119,905 118,013
Gain on sale of securities . . . . . . . . . . . . . . . . -0- -0- -0- -0-
Net income- other real estate. . . . . . . . . . . . . . . 33,277 9,564 33,277 30,170
Other income . . . . . . . . . . . . . . . . . . . . . . . 17,859 33,353 31,409 47,588
---------- ---------- ---------- ----------
Total other income . . . . . . . . . . . . . . . . . 165,064 152,769 284,556 288,873
---------- ---------- ---------- ----------
Other expenses:
Salaries and wages . . . . . . . . . . . . . . . . . . . . 353,257 289,923 685,108 580,686
Employee benefits . . . . . . . . . . . . . . . . . . . . 87,656 67,673 160,370 133,331
Net occupancy expenses . . . . . . . . . . . . . . . . . . 73,573 46,564 133,037 98,857
Furniture and equipment expenses . . . . . . . . . . . . . 18,402 15,381 53,133 32,766
Depreciation other than rental property. . . . . . . . . . 50,980 35,163 88,413 70,374
Net cost-other real estate . . . . . . . . . . . . . . . . -0- -0- -0- -0-
Computer service center. . . . . . . . . . . . . . . . . . 56,379 38,766 102,768 79,142
FDIC-insurance . . . . . . . . . . . . . . . . . . . . . . 10,023 -0- 13,424 6,021
Professional services. . . . . . . . . . . . . . . . . . . 33,960 51,508 67,806 82,656
Advertising . . . . . . . . . . . . . . . . . . . . 29,847 14,021 43,234 26,574
Other operating expenses . . . . . . . . . . . . . . . . . 156,795 141,840 316,809 299,856
---------- ---------- ---------- ----------
Total other expenses. . . . . . . . . . . . . . . . . 870,872 700,839 1,664,102 1,410,263
---------- ---------- ---------- ----------
Income before inco me taxes . . . . . . . . . . . . . 533,303 545,900 976,382 967,680
Less applicable income taxes (Current) . . . . . . . . . . 208,000 192,000 365,000 376.000
---------- ---------- ---------- ----------
Income before reduction for minority interest . . . . 325,303 353,900 611,382 591,680
Less minority interest income (loss) . . . . . . . . . . . 7,665 8,248 14,179 13,665
---------- ---------- ---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . $ 317,638 $ 345,652 $ 597,203 $ 578,015
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Earnings per share. . . . . . . . . . . . . . . . . . $ .95 $ 1.04 $ 1.79 $ 1.73
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying note is an integral part of these financial statements.
(2)
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Statement of Cash Flows
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows and operating activities:
Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 597,203 $ 578,015
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 122,037 93,552
Provision for loan losses. . . . . . . . . . . . . . . . . . 118,181 142,789
Amortization (accretion) of discounts and
Premium . . . . . . . . . . . . . . . . . . . . . . . . (377,597) (112,488)
Other real estate gains/net . . . . . . . . . . . . . . . . (33,277) (30,172)
Investment securities gains/net. . . . . . . . . . . . . . . -0- -0-
Re-appraisal - other real estate . . . . . . . . . . . . . . -0- 12,500
(Decrease) increase in interest payable . . . . . . . . . . 317,808 199,286
(Increase) decrease in interest receivable . . . . . . . . . (82,258) (71,569)
(Increase) decrease in other assets. . . . . . . . . . . . . 267,394 251,131
Increase (decrease) in other liabilities . . . . . . . . . . (749,279) (147,326)
------------ ------------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (416,991) 337,703
------------ ------------
Net cash provided by (used in) operating activities . . . . . . . . . . . . 180,212 915,718
------------ ------------
Cash flows from investing activities
Proceeds from sales of investment securities . . . . . . . . . . . . . -0- -0-
Proceeds from maturities of investment securities. . . . . . . . . . . 32,000,000 17,000,000
Purchase of investment securities. . . . . . . . . . . . . . . . . . . (29,608,507) (34,762,586)
Loans made to customers net cash activity. . . . . . . . . . . . . . . (6,831,695) (4,033,640)
Capital expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . (620,208) (32,798)
Proceeds from sale of other real estate. . . . . . . . . . . . . . . . 13,949 67,229
------------ ------------
Net cash provided by (used in) investing activities . . . . . . . . . . . . (5,046,463) (21,761,795)
------------ ------------
Cash flows from financing activities
Net increase (descrease) in demand deposits, NOW
account, savings accounts and certificates of deposit. . . . . . . . . 3,519,482 6,670,808
Purchase of treasury stock. . . . . . . . . . . . . . . . . . . . . . . . . -0- -0-
------------ ------------
Net cash provided by (used in) financing. . . . . . . . . . . . . . . . . . 3,519,482 6,670,808
------------ ------------
Net increase (descrease) in cash and cash equivalents . . . . . . . . . . . (1,346,767) (14,175,269)
------------ ------------
Cash and cash equivalents at beginning of year:
Cash and due from banks. . . . . . . . . . . . . . . . . . . . . . . . 3,467,302 3,273,580
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . 11,150,000 27,125,000
------------ ------------
Cash and cash equivalents at beginning of year. . . . . . . . . . . . . . . 14,617,302 30,398,580
------------ ------------
Cash and cash equivalents at June 30, 1998
Cash and due from banks. . . . . . . . . . . . . . . . . . . . . . . . 4,670,535 3,098,311
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . 8,600,000 13,125,000
------------ ------------
Cash and cash equivalents at June 30, 1998. . . . . . . . . . . . . . . . . $ 13,270,535 $ 16,223,311
------------ ------------
------------ ------------
Supplemental disclosures of cash flow information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . 1,927,599 1,915,258
Cash paid for income tax . . . . . . . . . . . . . . . . . . . . . . . 374,414 312,814
</TABLE>
The accompanying note is an integral part of these financial statements.
(3)
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 1998
Note 1 -- BASIS OF PREPARATION AND PRESENTATION
The consolidated financial statements included herein have been prepared by
The Republic Corporation, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission and include all adjustments which are,
in the opinion of management, necessary for a fair presentation. The condensed
consolidated financial statements include the accounts of the company and its
subsidiaries. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. The Republic Corporation believes that the disclosures are
adequate to make the information presented not misleading; however, it is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto which are on Form 10-K for the fiscal
year ended December 31, 1997. The financial data for the interim periods may
not necessarily be indicative of results to be expected for the year.
Securities that will be held for indefinite periods of time, including
securities that will be used as part of the Company's asset/liability management
strategy and that may be sold in response to changes in interest rates,
prepayments, and similar factors, are classified as Available-for-Sale and
accounted for at fair value.
(4)
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION
ASSET QUALITY
Non-accrual loans declined over the first half of 1998 as a result of
foreclosures on loans secured by real property and as a result of one larger
loan being placed on accrual status. Restructured loans declined over the
same period and the three remaining are agricultural purpose loans that will
likely be repriced to prevailing levels within a year.
<TABLE>
<CAPTION>
TABLE 1 PROBLEM ASSETS
(dollars in thousands) JUNE 30 DECEMBER 31
------- -----------------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Nonaccrual loans $ 472 $ 809 $ 759 $ 183
Past-due loans (over 90 days) -0- -0- -0- -0-
Restructured loans 787 2,465 2,148 593
------- ------ ------ -----
Total problem loans $ 1,259 $3,274 $2,907 $ 776
Foreclosed assets
Real estate 73 9 300 -0-
In-substance foreclosures -0- -0- -0- -0-
Other 6 5 34 -0-
------- ------ ------ -----
Total Problem Assets $ 1,338 $3,288 $3,241 $ 776
Total problem loans as
a percentage of total loans 1.46% 4.1% 4.1% 1.2%
Total problem assets as a
percentage of total loans
and foreclosed assets 1.55% 4.1% 4.5% 1.2%
</TABLE>
<TABLE>
<CAPTION>
TABLE 2 LOAN CONCENTRATIONS
(dollars in thousands) JUNE 30 DECEMBER 31
------- -----------------------------
1998 1997 1996
<S> <C> <C> <C>
Commercial $ 6,516 $ 5,762 $ 5,716
Agricultural 4,213 3,459 3,787
Real Estate-Construction 3,273 1,960 3,087
Real Estate-Mortgage 63,275 59,562 50,228
Installment loans to Individuals 9,048 8,865 8,775
------- ------- -------
Totals $86,325 $79,608 $71,593
</TABLE>
(5)
<PAGE>
SOURCES AND USES OF FUNDS
Deposit growth, and to a similar extent reduction in cash and cash
equivalents, substantially funded the $6,831,695 growth in outstanding loans
in the current period. This contrasted with the prior-year period wherein
deposit growth was higher and loan growth lower. (Please see Statement of
Cash Flows, P-3 and Balance Sheet, P-1).
LIQUIDITY
Liquidity declined in the first six months of 1998. Cash and due from
banks, federal funds sold and short term securities represented 33.56% of
total liabilities on June 30, 1998, compared with 37.42% on December 31,
1997. Loan growth in excess of deposit growth is the primary reason for the
decline.
INTEREST RATE SENSITIVITY MANAGEMENT
Near term bank earnings are most at risk if market interest rates
increase. A parallel shift of 200 basis points on the upside would cause a
20% decrease in budgeted, after tax net income for 1998, based upon the asset
and liability mix depicted in Table 3 on Page 7.
(6)
<PAGE>
INTEREST RATE SENSITIVITY MANAGEMENT
Table 3 - REPRICING SCHEDULE
6-30-98
<TABLE>
<CAPTION>
3 MO 3-12 1-5 OVER
OR LESS MONTHS YEARS 5 YEARS
--------- --------- --------- --------
<S> <C> <C> <C> <C>
RATE SENSITIVE ASSETS
(Assets that can be
repriced within X days)
Loans * 9,216 32,615 43,582 414
Federal Funds Sold 8,600 -0- -0- -0-
Taxable Securities ** 26,000 -0- -0- -0-
Municipal Bonds -0- -0- -0- -0-
TOTAL 43,816 32,615 43,582 414
RATE SENSITIVE LIABILITIES
(Liabilities that can be
repriced within X days)
Time Certificates of Deposit 22,107 27,276 5,830 -0-
NOW Accounts 1,693 -0- -0- -0-
Super NOW Accounts 18,391 -0- -0- -0-
Savings Accounts 9,371 -0- -0- -0-
MMDA Accounts 11,056 -0- -0- -0-
TOTAL 62,618 27,276 5,830 -0-
Interest Rate Sensitivity Gap (18,802) 5,339 37,752 414
Cumulative Interest Rate
Sensitivity Gap (18,802) (13,463) 24,289 24,703
</TABLE>
* Does not include $472,000 in nonaccruing loans or overdrawn demand
deposits of $27,000
** Does not include $24,000 in Federal Reserve Bank stock
(7)
<PAGE>
INVESTMENT SECURITIES
TABLE 4
<TABLE>
<CAPTION>
CARRYING UNREALIZED UNREALIZED MARKET
VALUE GAINS LOSSES VALUE
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
JUNE 30, 1998
(1) Held-to-Maturity:
U.S. Treasury Securities 12,009,300 13,200 -- 12,022,500
Other 13,965,093 -- -- 13,965,093
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
----------- ---------- ---------- ----------
25,998,393 13,200 -- 26,011,593
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
DECEMBER 31, 1997
(1) Held-to-Maturity:
U.S. Treasury Securities 12,036,450 -- 2,700 12,033,750
Other 12,951,840 -- 284 15,951,556
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
----------- ---------- ---------- ----------
28,012,290 -- 2,984 28,009,306
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
DECEMBER 31, 1996
(1) Held-to-Maturity:
U.S. Treasury Securities 10,006,368 -- 21,993 9,984,375
Other -- -- -- --
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
----------- ---------- ---------- ----------
10,030,368 -- 21,993 10,008,375
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
</TABLE>
(1) Securities which the Bank has the ability and intent to hold to
maturity. These securities are stated at cost, adjusted for amortization of
premiums and accretion of discounts, computed by the interest method.
Because securities are purchased for investment purposes and quoted market
values fluctuate during the investment period, gains and losses are
recognized upon disposition or at such time as management determines that a
permanent impairment of value has occurred. Cost of securities sold is
determined on the specific identification method.
(2) Securities that the bank may sell in response to changes in market
conditions or in the balance sheet objectives of the bank. Securities in
this category will be reported at fair market value. Unrealized gains or
losses (net of tax) will be reported as a separate item in the shareholder's
equity section of the balance sheet. Adjustments will be recorded at least
quarterly.
(8)
<PAGE>
CAPITALIZATION:
Retained earnings growth was strong in relation to asset growth during
the first half of 1998 and caused a significant increase in Tier 1 leverage
capital. Both risk-based capital ratios declined, however, due to the
substantial migration of low risk, cash-equivalent assets to higher risk loan
portfolio assets. (Please see Table 5, P-9 and Balance Sheet, P-1.)
Table 5 - CAPITAL
<TABLE>
<CAPTION>
* JUNE 30 DECEMBER
1998 1997
--------- --------
<S> <C> <C>
Tier 1 risk-based capital
(minimum is 4%) 15.27% 15.34%
Tier 1 + Tier 2 risk based capital
(minimum is 8%) 16.52% 16.60%
Tier 1 leverage (minimum is 3%) 8.90% 8.66%
*ESTIMATE
</TABLE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income grew in both the three and six month periods ending
June 30, 1998 when compared with the year-ago periods. The primary reason
for this is the significant conversion of lower yielding, cash equivalent
assets into higher yielding loan products and occurred in spite of lowered
offering and renewal rates on single family mortgages and higher deposit
costs. (Please see Statement of Income, P-2)
OTHER INCOME AND EXPENSE
A decline in problem loans is the primary reason for the slightly lower
loan loss provision in the first half of 1998.
Non interest income was comparable with year-ago performance, with both
periods experiencing above average gains on the liquidation of foreclosed
real property..
Practically all expense categories were higher in the current period due
to increased staffing and operating levels tied to growth. (Please see
Statement of Income, P-2)
(9)
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
not applicable
Item 2. CHANGES IN SECURITIES
not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
not applicable
Item 5. OTHER INFORMATION
not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a). Exhibits
none
b). No reports on Form 8-K have been filed during the quarter for
which this report was filed.
(10)
<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.
THE REPUBLIC CORPORATION
Date: July 16, 1998 /S/ J. ED EISEMANN, IV
--------------------------
Chairman of the Board
Date: July 16, 1998 /S/ CATHERINE G. EISEMANN
--------------------------
Director
(11)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
FORM 10-Q, DATED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,670,535
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,600,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 24,000
<INVESTMENTS-CARRYING> 25,974,393
<INVESTMENTS-MARKET> 25,987,593
<LOANS> 86,325,658
<ALLOWANCE> 1,118,398
<TOTAL-ASSETS> 128,874,996
<DEPOSITS> 115,476,875
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,712,235
<LONG-TERM> 0
0
0
<COMMON> 356,844
<OTHER-SE> 11,329,042
<TOTAL-LIABILITIES-AND-EQUITY> 128,874,996
<INTEREST-LOAN> 3,684,687
<INTEREST-INVEST> 741,778
<INTEREST-OTHER> 293,052
<INTEREST-TOTAL> 4,719,517
<INTEREST-DEPOSIT> 2,245,408
<INTEREST-EXPENSE> 2,245,408
<INTEREST-INCOME-NET> 2,474,109
<LOAN-LOSSES> 118,181
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,664,102
<INCOME-PRETAX> 976,382
<INCOME-PRE-EXTRAORDINARY> 976,382
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 597,203
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.79
<YIELD-ACTUAL> .078
<LOANS-NON> 472,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 787,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,070,000
<CHARGE-OFFS> 101,000
<RECOVERIES> 31,000
<ALLOWANCE-CLOSE> 1,118,000
<ALLOWANCE-DOMESTIC> 70,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,048,000
</TABLE>
