<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, 1999. 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 June 30, 1999
COMMON STOCK, $1.00 PAR VALUE Shares 356,844
- ----------------------------- --------
Outstanding at June 30,
1999, (including 23,119
shares held as treasury
shares)
<PAGE>
THE REPUBLIC CORPORATION
Index to Quarterly Report on Form 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
December 31, 1998, and June 30, 1999. 1
Consolidated Statements of Income for the three
months and six months ended June 30, 1998 and 1999. 2
Consolidated Statements of Cash Flows for the
six months ended June 30, 1998 and 1999. 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis 5-10
Part II. Other Information 11
Signatures 12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REPUBLIC CORPORATION AND SUBSIDIARY
Balance Sheet
June 30 December 31
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks (demand) . . . . . . . . . . . . . . . . . . . . . $ 4,869,681 $ 3,682,131
Investment securities:
Held-to-maturity
Market value at 6-30-99 29,843,479
Market value at 12-31-98 27,985,306 . . . . . . . . . . 29,843,479 23,864,557
Available-for-sale
Market value at 6-30-99 24,000
Market value at 12-31-98 24,000 . . . . . . . . . . 24,000 24,000
------------ ------------
$ 34,737,160 $ 27,570,688
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,770,321 94,569,025
Plus: Uncollected earned interest. . . . . . . . . . . . . . . . . 751,373 847,969
Less: Allowance for losses . . . . . . . . . . . . . . . . . . . . (1,271,186) (1,233,000)
Net loans and other receivables. . . . . . . . . . . . . . . . . . 95,250,508 94,183,994
------------ ------------
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,650,000 5,650,000
Property, equipment and vehicles (net) . . . . . . . . . . . . . . . . . . 2,555,830 2,610,729
Other real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,998 47,658
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436,079 436,079
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347,971 776,201
------------ ------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . $144,997,546 $131,275,349
------------ ------------
Liabilities and Stockholders' Equity
Deposits (Domestic):
Demand (non-interest bearing) . . . . . . . . . . . . . . . . . . $ 18,251,069 $ 16,718,279
Savings, time and demand (Interest-bearing) . . . . . . . . . . . 112,695,369 100,632,666
------------ ------------
$130,946,438 $117,350,945
Accounts payable and accrued interest payable . . . . . . . . . . . . . . 1,082,827 958,528
Accrued taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . 269,968 641,266
------------ ------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . $132,299,233 $118,977,739
------------ ------------
Minority Interest in Consolidated Subsidiary. . . . . . . . . . . . . . . 273,854 264,371
------------ ------------
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,923,987 11,532,767
------------ ------------
Net Unrealized Gain (Loss) on Securities
Available-for-Sale (Net of Taxes) . . . . . . . . . . . . . . . . -0- -0-
Stockholders'equity. . . . . . . . . . . . . . . . . . . . 12,424,459 12,033,239
------------ ------------
Total liabilities and stockholders equity . . . . . . . . . . . . $144,997,546 $131,275,349
------------ ------------
</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
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 2,038,011 $ 1,909,769 $ 4,037,712 $ 3,684,687
Interest on funds sold and securities
purchased under agreement to resell 128,919 156,246 196,632 293,052
Interest and dividends on investments
Securities of U.S. Government and
government agencies 334,500 361,454 630,862 741,778
Obligations of states, political
subdivisions and other obligations
secured by the government -0- -0- -0- -0-
----------- ----------- ----------- -----------
Total interest on investments 463,419 517,700 827,494 1,034,830
----------- ----------- ----------- -----------
Total interest income 2,501,430 2,427,469 4,865,206 4,719,517
----------- ----------- ----------- -----------
Interest expense:
Interest on deposits 1,211,978 1,118,535 2,311,865 2,245,408
----------- ----------- ----------- -----------
Total Interest expense 1,211,978 1,118,535 2,311,865 2,245,408
----------- ----------- ----------- -----------
Net interest income 1,289,452 1,308,934 2,553,341 2,474,109
Provision for loan losses (57,979) (69,823) (107,734) (118,181)
----------- ----------- ----------- -----------
Net interest income after provision for
loan losses 1,231,473 1,239,111 2,445,607 2,355,928
----------- ----------- ----------- -----------
Other income:
Service charges on deposit accounts 54,198 50,845 105,006 99,965
Other service charges, commission and fees 67,710 63,083 141,613 119,905
Gain on sale of securities -0- -0- -0- -0-
Net income- other real estate 15,839 33,277 15,839 33,277
Other income 17,469 17,859 34,011 31,409
----------- ----------- ----------- -----------
Total other income 155,216 165,064 296,469 284,556
----------- ----------- ----------- -----------
Other expenses:
Salaries and wages 472,961 353,257 916,084 685,108
Employee benefits 116,492 87,656 220,499 160,370
Net occupancy expenses 77,556 73,573 140,924 133,037
Furniture and equipment expenses 21,427 18,402 65,520 53,133
Depreciation other than rental property 59,153 50,980 118,304 88,314
Net cost-other real estate -0- -0- -0- -0-
Computer service center 59,214 56,379 113,643 102,768
FDIC-insurance 3,419 10,023 10,566 13,424
Professional services 34,745 33,960 78,107 67,806
Advertising 36,905 29,847 62,342 43,234
Other operating expenses 188,809 156,795 374,385 316,809
----------- ----------- ----------- -----------
Total other expenses 1,070,681 870,872 2,100,374 1,664,102
----------- ----------- ----------- -----------
Income before income taxes 316,008 533,303 641,702 976,382
Less applicable income taxes (Current) 111,000 208,000 241,000 365.000
----------- ----------- ----------- -----------
Income before reduction for minority interest 205,008 325,303 400,702 611,382
Less minority interest income (loss) 4,784 7,665 9,483 14,179
----------- ----------- ----------- -----------
Net income $ 200,224 $ 317,638 $ 391,219 $ 597,203
----------- ----------- ----------- -----------
Earnings per share $ .60 $ .95 $ 1.17 $ 1.79
----------- ----------- ----------- -----------
</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
1999 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows and operating activities:
Net income (loss) ....................................................... $ 391,219 $ 597,203
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation .............................................. 157,739 122,037
Provision for loan losses ................................. 107,734 118,181
Amortization (accretion) of discounts and Premium ......... (630,142) (377,597)
Other real estate gains/net ............................... (15,839) (33,277)
Investment securities gains/net ........................... -0- -0-
Re-appraisal - other real estate .......................... -0- -0-
(Decrease) increase in interest payable ................... 97,299 317,808
(Increase) decrease in interest receivable ................ 96,596 (82,258)
(Increase) decrease in other assets ....................... 440,679 267,394
Increase (decrease) in other liabilities .................. (361,815) (749,279)
------------ ------------
Total adjustments .......................................................... (107,749) (416,991)
------------ ------------
Net cash provided by (used in) operating activities ........................ 283,470 180,212
------------ ------------
Cash flows from investing activities
Proceeds from sales of investment securities ............................ -0- -0-
Proceeds from maturities of investment securities ....................... 50,000,000 32,000,000
Purchase of investment securities ....................................... (55,348,780) (29,608,507)
Loans made to customers net cash activity ............................... (1,239,102) (6,831,695)
Capital expenditure ..................................................... (102,841) (620,208)
Proceeds from sale of other real estate ................................. 11,759 13,949
------------ ------------
Net cash provided by (used in) investing activities ........................ (6,678,964) (5,046,461)
------------ ------------
Cash flows from financing activities
Net increase (descrease) in demand deposits, NOW
account, savings accounts and certificates of deposit ................... 13,595,493 3,519,482
Purchase of treasury stock ................................................. -0- -0-
------------ ------------
Net cash provided by (used in) financing ................................... 13,595,493 3,519,482
------------ ------------
Net increase (descrease) in cash and cash equivalents ...................... 7,199,999 (1,346,767)
------------ ------------
Cash and cash equivalents at beginning of year:
Cash and due from banks ................................................. 3,682,131 3,467,302
Federal funds sold ...................................................... 5,650,000 11,150,000
------------ ------------
Cash and cash equivalents at beginning of year ............................. 9,332,131 14,617,302
------------ ------------
Cash and cash equivalents at June 30, 1999
Cash and due from banks ................................................. 4,882,130 4,670,535
Federal funds sold ...................................................... 11,650,000 8,600,000
------------ ------------
Cash and cash equivalents at June 30, 1999 ................................. $ 16,532,130 $ 13,270,535
------------ ------------
------------ ------------
Supplemental disclosures of cash flow information:
Cash paid for interest .................................................. 2,214,566 1,927,599
Cash paid for income tax ................................................ 172,168 374,414
</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, 1999
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, 1998. 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 more than doubled from year-end, 1998 levels due to
defaults and subsequent foreclosures on two, larger commercial credits. It is
management's belief that, failing action to cure the default by the
borrowers, the commercial properties that serve as collateral will be sold
for amounts sufficient to cover the outstanding balances. The restructured
loan total at period-end represents one troubled commercial credit which has
received a below-market interest rate.
TABLE 1 PROBLEM ASSETS
<TABLE>
<CAPTION>
(dollars in thousands) June 30 December 31
------- --------------------------
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Nonaccrual loans $ 723 $ 351 $ 809 $ 759
Past-due loans (over 90 days) -0- -0- -0- -0-
Restructured loans 264 741 2,465 2,148
------ ------ ------ ------
Total problem loans $ 987 $1,065 $3,274 $2,907
Foreclosed assets
Real estate 20 48 9 300
In-substance foreclosures -0- -0- -0- -0-
Other 25 28 5 34
------ ------ ------ ------
Total Problem Assets $1,032 $1,141 $3,288 $3,241
Total problem loans as
a percentage of total loans 1.0% 1.1% 4.1% 4.1%
Total problem assets as a
percentage of total loans
and foreclosed assets 1.1% 1.2% 4.1% 4.5%
</TABLE>
TABLE 2 LOAN CONCENTRATIONS
<TABLE>
<CAPTION>
(dollars in thousands) June 30 December 31
------- --------------------
1999 1998 1997
<S> <C> <C> <C>
Commercial $ 7,145 $ 7,371 $ 5,762
Agricultural 4,069 4,156 3,459
Real Estate-Construction 5,412 6,423 1,960
Real Estate-Mortgage 68,757 66,652 59,562
Installment loans to Individuals 10,387 9,967 8,865
------- ------- -------
Totals $95,770 $94,569 $79,608
</TABLE>
5
<PAGE>
SOURCES AND USES OF FUNDS
Deposit growth for the first half of 1999 was $13,595,493 and exceeded
that which occurred in the first half of 1998 by $10,076,011. This growth, a
result of higher deposit offering rates, was largely deployed into
cash-equivalents, with $6,000,000 going into Fed Funds Sold and $5,978,922
going into short term investments during the first half of 1999. Loan growth
for the current period was far smaller than the year-ago period, $1,239,102
vs $6,831,695, and is a result of lower current loan demand. (Please see
Statement of Cash Flows, P-3 and Balance Sheet, P-1)
LIQUIDITY
Liquidity increased significantly over the first half of 1999, with
period-end holdings of cash and due from banks, short term securities and Fed
Funds Sold representing 35% of period-end liabilities, compared with 28% at
year-end, 1998 (Please see Balance Sheet, P-1)
INTEREST RATE SENSITIVITY MANAGEMENT
The recent increase in the percentage of earning assets held in the form
of short term securities or as Fed Funds Sold increases the bank's ability to
reprice to higher interest rates, especially in comparison with higher
leveraged loan accounts which can arguably only tolerate a slight increase in
interest rates, if any. The overall picture, however, is still one in which
bank earnings decline if rates increase significantly and rise if they do the
inverse. (Please see Table 3, P-7)
6
<PAGE>
INTEREST RATE SENSITIVITY MANAGEMENT
Table 3 - REPRICING SCHEDULE
6-30-99
<TABLE>
<CAPTION>
(dollars in thousands) 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 * 14,584 50,019 30,118 304
Federal Funds Sold 11,650 -0- -0- -0-
Taxable Securities ** 30,000 -0- -0- -0-
Municipal Bonds -0- -0- -0- -0-
TOTAL 56,234 50,019 30,118 304
RATE SENSITIVE LIABILITIES
(Liabilities that can be
repriced within X days)
Time Certificates of Deposit 27,129 30,521 4,229 -0-
NOW Accounts 2,337 -0- -0- -0-
Super NOW Accounts 25,120 -0- -0- -0-
Savings Accounts 9,447 -0- -0- -0-
MMDA Accounts 13,982 -0- -0- -0-
TOTAL 78,015 30,521 4,229 -0-
Interest Rate Sensitivity Gap (21,781) 19,498 25,889 304
Cumulative Interest Rate
Sensitivity Gap (21,781) (2,283) 23,606 23,910
</TABLE>
* Does not include $723,000 in nonaccruing loans or overdrawn demand deposits
of $22,000
** Does not include $24,000 in Federal Reserve Bank stock
7
<PAGE>
INVESTMENT SECURITIES
TABLE 4
<TABLE>
<CAPTION>
CARRYING UNREALIZED UNREALIZED MARKET
(dollars in thousands) VALUE GAINS LOSSES VALUE
<S> <C> <C> <C> <C>
JUNE 30, 1999
(1) Held-to-Maturity:
U.S. Treasury Securities -- -- -- --
Other 29,843,479 -- -- 29,843,479
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
----------- -------- -------- -----------
29,867,479 -- -- 29,867,479
----------- -------- -------- -----------
DECEMBER 31, 1998
(1) Held-to-Maturity:
U.S. Treasury Securities -- -- -- --
Other 23,864,557 4,493 -- 23,869,050
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
----------- -------- -------- -----------
23,888,557 4,493 -- 23,893,050
----------- -------- -------- -----------
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
----------- -------- -------- -----------
</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:
Since the predominant first half asset growth consisted of low risk, cash
equivalents, both risk-based capital ratios increased. The Tier 1 leverage
ratio declined, however, due to a robust asset growth rate which outstripped
retained earnings growth. (Please see Table 5, P-9)
Table 5 - CAPITAL
<TABLE>
<CAPTION>
* JUNE 30 DECEMBER
1999 1998
<S> <C> <C>
Tier 1 risk-based capital
(minimum is 4%) 14.49% 14.16%
Tier 1 + Tier 2 risk based capital
(minimum is 8%) 15.75% 15.41%
Tier 1 leverage (minimum is 3%) 8.42% 8.80%
*ESTIMATE
</TABLE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
While total interest income ran consistently above the year-ago figures
throughout the first half, total interest expense diverged and grew at an
increasing rate as the period progressed. This was due to the market rate
increases which occurred during the second quarter and the disproportionately
greater impact of same on the bank's liability sources. (Please see Statement
of Income, P-2)
OTHER INCOME AND EXPENSE
Loan loss provisions continue at a high level, primarily as a result of
charge-off activity and not, as in prior periods, as a result of loan growth.
Non interest income was comparable to prior periods and reflected deposit
growth through higher service charge income.
Increases in wages and employee benefits represented approximately two
thirds of the total increase in first half, non-interest expense. The
increase was significant and was reflective of increased staffing of new
facilities and pay hikes which have yet to be offset by revenue growth.
(Please see Statement of Income, P-2)
9
<PAGE>
YEAR 2000 READINESS
The Bank has made substantial progress in implementing its Y2K
preparedness plan. The plan consists of the following five phases:
AWARENESS PHASE - The creation of a basic strategy for project
management.
ASSESSMENT PHASE - The identification of mission critical
systems and equipment as well as customer and provider
relationships that may be vulnerable to the year 2000 problem.
RENOVATION PHASE - The upgrading or replacement of systems and
equipment known to be deficient.
VALIDATION PHASE - The comprehensive testing of all systems and
equipment to ensure that they survive each of as many as 13
suspect dates.
IMPLEMENTATION PHASE - The correction of any deficiencies
uncovered in the validation phase along with the continued
assessment and testing of systems and equipment.
The awareness and assessment phases were completed during the first
quarter of 1998. The renovation phase was substantially completed by the end
of 1998 with the exception of credit reporting software at the bank's main
facility. Compliant credit reporting software was installed during the second
quarter of 1999. The validation phase is ongoing and on schedule and
substantially all testing has now been performed at least once. Of primary
importance during this phase is the proxy testing of all applications
currently provided by the bank's third party provider of computing services.
These services are highly critical to bank operations and any significant
interruptions in them could materially impact the bank's results. Finally,
the implementation phase is ongoing and will continue beyond the end of the
millennium.
Management is of the opinion that its readiness plan is more than
adequate to address the year 2000 threat and that all systems and hardware
will function as intended when the time comes, without any material adverse
effect on the company's business. Due to the uniqueness of the year 2000
issue and the direct impact it can have on bank operations, however, it is
not possible to escape risk and uncertainty, particularly that which is tied
to third party service providers. The bank has, as mentioned, an ongoing
process to monitor these critical third parties and has developed business
resumption and contingency plans that address failures from these sources.
Management is not aware of any material expenditures that could be necessary
in order to complete its year 2000 readiness plan or contingency plans.
10
<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.
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.
THE REPUBLIC CORPORATION
Date: July 15, 1999 /S/ J. Ed Eisemann, IV
--------------------------
Chairman of the Board
Date: July 15, 1999 /S/ Catherine G. Eisemann
--------------------------
Director
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGISTRANT'S
FORM 10-Q, DATED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,869,681
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 11,650,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 24,000
<INVESTMENTS-CARRYING> 29,843,479
<INVESTMENTS-MARKET> 29,843,479
<LOANS> 95,770,321
<ALLOWANCE> 1,271,186
<TOTAL-ASSETS> 144,997,546
<DEPOSITS> 130,946,438
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,352,795
<LONG-TERM> 0
0
0
<COMMON> 356,844
<OTHER-SE> 12,067,615
<TOTAL-LIABILITIES-AND-EQUITY> 144,997,546
<INTEREST-LOAN> 4,037,712
<INTEREST-INVEST> 630,862
<INTEREST-OTHER> 196,632
<INTEREST-TOTAL> 4,865,206
<INTEREST-DEPOSIT> 2,311,865
<INTEREST-EXPENSE> 2,311,865
<INTEREST-INCOME-NET> 2,553,341
<LOAN-LOSSES> 107,734
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,100,374
<INCOME-PRETAX> 641,702
<INCOME-PRE-EXTRAORDINARY> 641,702
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 391,219
<EPS-BASIC> 1.17
<EPS-DILUTED> 1.17
<YIELD-ACTUAL> .071
<LOANS-NON> 723,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 264,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,233,000
<CHARGE-OFFS> 83,706
<RECOVERIES> 14,518
<ALLOWANCE-CLOSE> 1,271,186
<ALLOWANCE-DOMESTIC> 88,356
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,182,830
</TABLE>
