<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 Three Months Ended March 31, 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 March 31,
1998, (excluding 23,119
shares held as treasury
shares)
<PAGE>
THE REPUBLIC CORPORATION
Index to Quarterly Report on Form 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
December 31, 1997, and March 31, 1998. 1
Consolidated Statements of Income for the three
months Ended March 31, 1997 and 1998. 2
Consolidated Statements of Cash Flows for the
three months Ended March 31, 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
</TABLE>
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Balance Sheet
<TABLE>
<CAPTION>
March 31 December 31
1998 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks (demand) . . . . . . . . . . . . . . $ 3,923,873 $ 3,467,302
Investment securities:
Held-to-maturity
Market value at 3-31-98 27,979,405
----------
Market value at 12-31-97 27,985,306. . . . . . . . . . . 27,976,106 27,988,290
----------
Available-for-sale
Market value at 3-31-98 24,000
----------
Market value at 12-31-97 24,000. . . . . . . . . . . 24,000 24,000
---------- ------------- -------------
$ 31,923,979 $ 31,479,592
Loans . . . . . . . . . . . . . . . . . . . . . . . 82,012,081 79,608,471
Plus: Uncollected earned interest. . . . . . . . . . . . . 614,600 653,441
Less: Allowance for losses . . . . . . . . . . . . . . . . (1,080,000) (1,070,000)
Net loans and other receivables. . . . . . . . . . . . . . 81,546,681 79,191,912
------------- -------------
Federal funds sold . . . . . . . . . . . . . . . . . . . . . 8,875,000 11,150,000
Property, equipment and vehicles (net) . . . . . . . . . . . 2,164,609 1,842,555
Other real estate. . . . . . . . . . . . . . . . . . . . . . 133,068 9,000
Goodwill . . . . . . . . . . . . . . . . . . . . . . . 436,079 436,079
Other assets . . . . . . . . . . . . . . . . . . . . . . . 194,997 1,080,644
------------- -------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . $ 125,274,413 $ 125,189,782
------------- -------------
Liabilities and Stockholders' Equity
Deposits (Domestic):
Demand (non-interest bearing). . . . . . . . . . . . . . . $ 17,494,662 $ 14,999,271
Savings, time and demand (Interest-bearing). . . . . . . . 94,826,674 96,958,122
------------- -------------
$ 112,321,336 $ 111,957,393
Accounts payable and accrued interest payable. . . . . . . . 1,164,752 1,153,610
Accrued taxes payable. . . . . . . . . . . . . . . . . . . . 170,651 747,184
------------- -------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . $113,656,739 $113,858,187
------------- -------------
Minority Interest in Consolidated Subsidiary . . . . . . . . 249,426 242,912
------------- -------------
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 3-31-98 and
23,119 at 12-31-97). . . . . . . . . . . . . . . . . . . . (91,303) (91,303)
------------- -------------
Total contributed capital. . . . . . . . . . . . . . . . 500,472 500,472
------------- -------------
Retained earnings. . . . . . . . . . . . . . . . . . . . . . 10,867,776 10,588,211
------------- -------------
Net Unrealized Gain (Loss) on Securities
Available-for-Sale (Net of Taxes). . . . . . . . . . . . . -0- -0-
Stockholders'equity. . . . . . . . . . . . . . . . . . . 11,368,248 11,088,683
------------- -------------
Total liabilities and stockholders equity. . . . . . . . . $125,274,413 $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
------------------------------
March 31 March 31
1998 1997
<S> <C> <C>
Interest Income:
Interest and fees on loans. . . . . . . . . . . . . . . . . . . . . . $1,774,918 $1,597,147
Interest on funds sold and securities
purchased under agreement to resell. . . . . . . . . . . . . . . 136,806 379,676
Interest and dividends on investments
Securities of U.S. Government and
government agencies . . . . . . . . . . . . . . . . . . . . 380,324 136,649
Obligations of states, political
subdivisions and other obligations
secured by the government . . . . . . . . . . . . . . . . . -0- -0-
---------- ----------
Total interest on investments. . . . . . . . . . . . . . . . . . 517,130 516,325
---------- ----------
Total interest income. . . . . . . . . . . . . . . . . . . . . . $2,292,048 $2,113,472
---------- ----------
Interest expense:
Interest on deposits. . . . . . . . . . . . . . . . . . . . . . . . . 1,126,873 1,017,458
---------- ----------
Total Interest expense . . . . . . . . . . . . . . . . . . . . . 1,126,873 1,017,458
---------- ----------
Net interest income. . . . . . . . . . . . . . . . . . . . . . . 1,165,175 1,096,014
Provision for loan losses. . . . . . . . . . . . . . . . . . . . . . . . . (48,358) (100,914)
---------- ----------
Net interest income after provision for
loan losses. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,116,817 995,100
---------- ----------
Other income:
Service charges on deposit accounts . . . . . . . . . . . . . . . . . 49,120 45,353
Other service charges, commission and fees. . . . . . . . . . . . . . 56,822 55,910
Gain on sale of securities. . . . . . . . . . . . . . . . . . . . . . -0- -0-
Net income- other real estate . . . . . . . . . . . . . . . . . . . . -0- 20,606
Other income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,550 14,235
---------- ----------
Total other income . . . . . . . . . . . . . . . . . . . . . . . 119,492 136,104
---------- ----------
Other expenses:
Salaries and wages. . . . . . . . . . . . . . . . . . . . . . . . . . 331,851 290,763
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 72,714 65,658
Net occupancy expenses. . . . . . . . . . . . . . . . . . . . . . . . 59,464 52,293
Furniture and equipment expenses. . . . . . . . . . . . . . . . . . . 34,731 17,385
Depreciation other than rental property . . . . . . . . . . . . . . . 37,433 35,211
Net cost-other real estate. . . . . . . . . . . . . . . . . . . . . . -0- -0-
Computer service center . . . . . . . . . . . . . . . . . . . . . . . 46,389 40,376
FDIC-insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,401 6,021
Professional services . . . . . . . . . . . . . . . . . . . . . . . . 33,846 31,148
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,387 12,553
Other operating expenses. . . . . . . . . . . . . . . . . . . . . . . 160,014 158,016
---------- ----------
Total other expenses . . . . . . . . . . . . . . . . . . . . . . 793,230 709,424
---------- ----------
Income before income taxes . . . . . . . . . . . . . . . . . . . 443,079 421,780
Less applicable income taxes (Current). . . . . . . . . . . . . . . . 157,000 184,000
---------- ----------
Income before reduction for minority interest. . . . . . . . . . 286,079 237,780
Less minority interest income (loss). . . . . . . . . . . . . . . . . 6,514 5,417
---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $279,565 $ 232,363
---------- ----------
Earnings per share . . . . . . . . . . . . . . . . . . . . . . . $.84 $.70
---------- ----------
</TABLE>
The accompanying note is an integral part of these financial statements.
(2)
REPUBLIC CORPORATION AND SUBSIDIARY
Statement of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
March 31 March 31
1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows and operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 279,565 $ 232,363
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . 50,586 46,188
Provision for loan losses . . . . . . . . . . . . . . . . . . . 48,358 100,914
Amortization (accretion) of discounts and
Premium. . . . . . . . . . . . . . . . . . . . . . . . . . (198,616) 2,388
Other real estate gains/net . . . . . . . . . . . . . . . . . . -0- (20,606)
Investment securities gains/net . . . . . . . . . . . . . . . . -0- -0-
Loss on sale of subsidiary stock. . . . . . . . . . . . . . . . -0- -0-
Re-appraisal - other real estate. . . . . . . . . . . . . . . . -0- 12,500
(Decrease) increase in interest payable . . . . . . . . . . . . 417,568 106,278
(Increase) decrease in interest receivable . . . . . . . . . . 38,841 23,563
(Increase) decrease in other assets . . . . . . . . . . . . . . 885,647 682,932
Increase (decrease) in other liabilities. . . . . . . . . . . . (976,445) (360,297)
------------- ------------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265,939 593,860
------------- ------------
Net cash provided by (used in) operating activities. . . . . . . . . . . . . . 545,504 826,223
------------- ------------
Cash flows from investing activities
Proceeds from sale of subsidiary stock. . . . . . . . . . . . . . . . . . -0- -0-
Proceeds from sales of investment securities. . . . . . . . . . . . . . . -0- -0-
Proceeds from maturities of investment securities . . . . . . . . . . . . 16,000,000 -0-
Purchase of investment securities . . . . . . . . . . . . . . . . . . . . (15,789,200) -0-
Loans made to customers net cash activity . . . . . . . . . . . . . . . . (2,566,036) (1,200,052)
Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . (372,640) (23,523)
Proceeds from sale of other real estate . . . . . . . . . . . . . . . . . -0- 23,007
------------- ------------
Net cash provided by (used in) investing activities. . . . . . . . . . . . . . (2,727,876) (1,200,568)
------------- ------------
Cash flows from financing activities
Net increase (decrease) in demand deposits, NOW
account, savings accounts and certificates of deposit . . . . . . . . . . 363,943 3,518,191
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . -0- -0-
------------- ------------
Net cash provided by (used in) financing . . . . . . . . . . . . . . . . . . . 363,943 3,518,191
------------- ------------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . (1,818,429) 3,143,846
------------- ------------
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 March 31
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . 3,923,873 2,792,426
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,875,000 30,750,000
------------- ------------
Cash and cash equivalents at March 31. . . . . . . . . . . . . . . . . . . . . $ 12,798,873 $ 33,542,426
------------- ------------
------------- ------------
Supplemental disclosures of cash flow information:
Cash paid for interest. . . . . . . . . . . . . . . . . . . . . . . . . . 709,305 911,180
Cash paid for income tax. . . . . . . . . . . . . . . . . . . . . . . . . -0- -0-
</TABLE>
The accompanying note is an integral part of these financial statements.
(3)
<PAGE>
REPUBLIC CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
March 31, 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
- -------------
Total loans placed on nonaccrual declined from year end levels in the
two previous periods as a result of foreclosures and one upgrade on an
agricultural account. Restructured loan totals remain high due to continued
below market interest rates on selected agricultural credits recently
impacted by severe winter weather.
<TABLE>
<CAPTION>
Table 1 PROBLEM ASSETS
-----------------------
(dollars in thousand) March 31 December 31
-------- -----------------------
1998 1997 1996 1995
<S> <C> <C> <C> <C>
Nonaccrual loans $ 593 $ 809 $ 759 $ 183
Past-due loans (over 90 days) -0- -0- -0- -0-
Restructured loans 2,469 2,465 2,148 593
------- ------ ------ -----
Total problem loans $ 3,062 $3,274 $2,907 $ 776
Foreclosed assets
Real estate 133 9 300 -0-
In-substance foreclosures -0- -0- -0- -0-
Other 12 5 34 -0-
------- ------ ------ -----
Total Problem Assets $ 3,207 $3,288 $3,241 $ 776
Total problem loans as
a percentage of total loans 3.7% 4.1% 4.1% 1.2%
Total problem assets as a
percentage of total loans
and foreclosed assets 3.9% 4.1% 4.5% 1.2%
<CAPTION>
Table 2 LOAN CONCENTRATIONS
----------------------------
(dollars in thousands)
March 31 December 31
-------- ----------------
1998 1997 1996
<S> <C> <C> <C>
Commercial $ 5,953 $ 5,762 $ 5,716
Agricultural 3,734 3,459 3,787
Real Estate-Construction 2,425 1,960 3,087
Real Estate-Mortgage 61,226 59,562 50,228
Installment loans to Individuals 8,674 8,865 8,775
-------- ------- -------
Totals $82,012 $79,608 $71,593
</TABLE>
(5)
<PAGE>
SOURCES AND USES OF FUNDS
- -------------------------
Deposit growth for the first quarter of 1998 was $363,943, substantially
lower than the $3,518,191 growth in the same period last year. Loan growth,
however, was more than twice the level experienced last year and was largely
funded by a decrease in cash equivalents. (Please see Statement of Cash Flows,
P-3).
LIQUIDITY
- ---------
The brisk loan growth experienced in the current period, coupled with the
absence of significant deposit growth, has caused a decline in the percentage of
liabilities held in liquid assets. Cash and due from banks, federal funds sold
and short term securities represented 35.9% of total liabilities on March 31,
1998, compared with 37.4% at the end of the year ago period. (Please see
Balance Sheet, P-1).
INTEREST RATE SENSITIVITY MANAGEMENT
- ------------------------------------
Near term bank earnings are most at risk in a scenario of significantly
higher interest rates. The excess accumulation of interest bearing liabilities
which reprice in three months or less will cause inerest cost to outstrip any
revenue increase in a rising rate environment. The inverse would occur in an
environment of declining rates. (Please see Table 3, P-7).
(6)
<PAGE>
INTEREST RATE SENSITIVITY MANAGEMENT
------------------------------------
<TABLE>
<CAPTION>
Table 3 - REPRICING SCHEDULE
3-31-98
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 * 13,909 31,312 35,883 308
Federal Funds Sold 8,875 -0- -0- -0-
Taxable Securities ** 16,000 12,000 -0- -0-
Municipal Bonds -0- -0- -0- -0-
TOTAL 38,784 43,312 35,883 308
RATE SENSITIVE LIABILITIES
(Liabilities that can be
repriced within X days)
Time Certificates of Deposit 23,011 27,789 4,468 -0-
NOW Accounts 1,674 -0- -0- -0-
Super NOW Accounts 18,534 -0- -0- -0-
Savings Accounts 9,372 -0- -0- -0-
MMDA Accounts 9,979 -0- -0- -0-
TOTAL 62,570 27,789 4,468 -0-
Interest Rate Sensitivity Gap (23,786) 15,523 31,415 308
Cumulative Interest Rate
Sensitivity Gap (23,786) (8,263) 23,152 23,460
</TABLE>
* Does not include $593,000 in nonaccruing loans or overdrawn demand
deposits of $7,000
** Does not include $24,000 in Federal Reserve Bank stock
(7)
<PAGE>
INVESTMENT SECURITIES
- ---------------------
<TABLE>
<CAPTION>
Table 4
-------
CARRYING UNREALIZED UNREALIZED MARKET
VALUE GAINS LOSSES VALUE
---------- ---------- ---------- -----------
March 31, 1998
- --------------
<S> <C> <C> <C> <C>
(1) Held-to-Maturity:
U.S. Treasury Securities 12,022,950 3,300 -- 12,026,250
Other 15,953,156 -- -- 15,953,155
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
---------- ---------- ---------- -----------
28,000,106 3,300 -- 28,003,405
---------- ---------- ---------- -----------
December 31, 1997
- -----------------
(1) Held-to-Maturity:
U.S. Treasury Securities 12,036,450 -- 2,700 12,033,750
Other 15,951,840 -- 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 lease
quarterly.
(8)
<PAGE>
CAPITALIZATION:
- ---------------
Retained earnings growth in the absence of total asset growth, in spite
of a significant migration from low risk investments into higher risk loan
categories, has caused continued growth in risk based and leverage capital
ratios. (Please see Table 5, P-9 and Balance Sheet, P-1).
<TABLE>
<CAPTION>
Table 5 - CAPITAL
-----------------
*March 31 December
--------- --------
1998 1997
<S> <C> <C>
Tier 1 risk-based capital
(minimum is 4%) 15.65% 15.34%
Tier 1 + Tier 2 risk based capital
(minimum is 8%) 16.90% 16.60%
Tier 1 leverage (minimum is 3%) 8.88% 8.66%
</TABLE>
*ESTIMATE
RESULTS OF OPERATIONS
NET INTEREST INCOME
- -------------------
Net interest income was higher in the current period due to loan growth
and the conversion of low yielding, short term invested funds into higher
yielding loan balances. This has occurred in spite of higher total deposit
costs and lower offering rates on home mortgage loans in the current period.
(Please see Statement of Income, P-2).
OTHER INCOME AND EXPENSE
- ------------------------
The provision for loan losses is lower in the current period due to
lower charge-off activity and lower risk in the loan portfolio.
Non interest income was comparable to the prior period if gains on real
estate are eliminated.
Non interest expenses were significantly higher in the current period due
to growth factors such as increases in staffing and facilities renovation and
expansion. (Please see Statement of Income, P-2).
(9)
<PAGE>
PART II
OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C>
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)
</TABLE>
<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: May 5, 1998 /S/ J. Ed Eisemann, IV
-------------------------
Chairman of the Board
Date: May 5, 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 MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,923,873
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,875,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 24,000
<INVESTMENTS-CARRYING> 27,976,106
<INVESTMENTS-MARKET> 27,979,405
<LOANS> 82,012,081
<ALLOWANCE> 1,080,080
<TOTAL-ASSETS> 125,274,413
<DEPOSITS> 112,321,336
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,335,403
<LONG-TERM> 0
0
0
<COMMON> 356,844
<OTHER-SE> 11,011,404
<TOTAL-LIABILITIES-AND-EQUITY> 125,274,413
<INTEREST-LOAN> 1,774,918
<INTEREST-INVEST> 380,324
<INTEREST-OTHER> 136,806
<INTEREST-TOTAL> 2,292,048
<INTEREST-DEPOSIT> 1,126,873
<INTEREST-EXPENSE> 1,126,873
<INTEREST-INCOME-NET> 1,165,175
<LOAN-LOSSES> 48,358
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 793,230
<INCOME-PRETAX> 443,079
<INCOME-PRE-EXTRAORDINARY> 443,079
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 279,565
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
<YIELD-ACTUAL> .077
<LOANS-NON> 593,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 2,469,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,070,000
<CHARGE-OFFS> 48,000
<RECOVERIES> 8,000
<ALLOWANCE-CLOSE> 1,080,000
<ALLOWANCE-DOMESTIC> 186,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 894,000
</TABLE>
