<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, 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 March 31, 1999.
Common Stock, $1.00 par value Shares 356,844
- ----------------------------- Outstanding at March 31,
1999, (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>
Part I. Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets
December 31, 1998, and March 31, 1999. 1
Consolidated Statements of Income for the three months
Ended March 31, 1998 and 1999. 2
Consolidated Statements of Cash Flows for the
three months Ended March 31, 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>
REPUBLIC CORPORATION AND SUBSIDIARY
Balance Sheet
<TABLE>
<CAPTION>
March 31 December 31
1999 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks (demand) . . . . . . . . . . . . . . . . . $ 4,160,091 $ 3,682,131
Investment securities:
Held-to-maturity
Market value at 3-31-99 25,861,423
Market value at 12-31-98 23,869,050 . . . . . . . . . 25,861,423 23,864,557
Available-for-sale
Market value at 3-31-99 24,000
Market value at 12-31-98 24,000 . . . . . . . . . 24,000 24,000
------------- --------------
$ 30,045,514 $ 27,570,688
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,950,213 94,569,025
Plus: Uncollected earned interest . . . . . . . . . . . . . . 733,427 847,969
Less: Allowance for losses . . . . . . . . . . . . . . . . . . (1,268,000) (1,233,000)
Net loans and other receivables. . . . . . . . . . . . . . . . 94,415,640 94,183,994
------------- --------------
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . 6,650,000 5 ,650,000
Property, equipment and vehicles (net). . . . . . . . . . . . . . . 2,560,701 2,610,729
Other real estate . . . . . . . . . . . . . . . . . . . . . . . . . 47,658 47,658
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436,079 436,079
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 179,138 776,201
------------- --------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . $134,334,730 $ 131,275,349
------------- --------------
------------- --------------
Liabilities and Stockholders' Equity
Deposits (Domestic):
Demand (non-interest bearing). . . . . . . . . . . . . . . . $ 16,680,604 $ 16,718,279
Savings, time and demand (Interest-bearing). . . . . . . . . 103,955,353 100,632,666
------------- --------------
$ 120,635,957 $ 117,350,945
Accounts payable and accrued interest payable . . . . . . . . . . 1,062,576 985,528
Accrued taxes payable . . . . . . . . . . . . . . . . . . . . . . 142,892 641,266
------------- --------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . $121,841,425 $118,977,739
------------- --------------
Minority Interest in Consolidated Subsidiary . . . . . . . . . . 269,071 264,371
------------- --------------
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 3-31-99 and
23,119 at 12-31-98). . . . . . . . . . . . . . . . . . . . . (91,303) (91,303)
------------- --------------
Total contributed capital . . . . . . . . . . . . . . . 500,472 500,472
------------- --------------
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 11,723,762 11,532,767
------------- --------------
Net Unrealized Gain (Loss) on Securities
Available-for-Sale (Net of Taxes). . . . . . . . . . . . . . -0- -0-
Stockholders'equity . . . . . . . . . . . . . . . . . . 12,224,234 12,033,239
------------- --------------
Total liabilities and stockholders equity . . . . . . . . . $134,334,730 $131,275,349
------------- --------------
------------- --------------
</TABLE>
The accompanying note is an integral part of these financial statements.
(1)
<PAGE>
<TABLE>
<CAPTION>
REPUBLIC CORPORATION AND SUBSIDIARY
Statement of Income
Three Months Ended
------------------------------
March 31 March 31
1999 1998
<S> <C> <C>
Interest Income:
Interest and fees on loans $2,009,199 $1,774,918
Interest on funds sold and securities
purchased under agreement to resell 67,713 136,806
Interest and dividends on investments
Securities of U.S. Government and
government agencies 296,362 380,324
Obligations of states, political
subdivisions and other obligations
secured by the government -0- -0-
----------- -----------
Total interest on investments 364,075 517,130
----------- -----------
Total interest income $2,373,274 $2,292,048
----------- -----------
Interest expense:
Interest on deposits 1,099,887 1,126,873
----------- -----------
Total Interest expense 1,099,887 1,126,873
----------- -----------
Net interest income 1,273,387 1,165,175
Provision for loan losses 49,755 48,358
----------- -----------
Net interest income after provision for
loan losses 1,223,632 1,116,817
----------- -----------
Other income:
Service charges on deposit accounts 50,807 49,120
Other service charges, commission and fees 64,406 56,822
Gain on sale of securities -0- -0-
Net income- other real estate -0- -0-
Other income 16,542 13,550
----------- -----------
Total other income 131,755 119,492
----------- -----------
Other expenses:
Salaries and wages 443,122 331,851
Employee benefits 104,007 72,714
Net occupancy expenses 63,368 59,464
Furniture and equipment expenses 44,094 34,731
Depreciation other than rental property 59,152 37,433
Net cost-other real estate -0- -0-
Computer service center 54,429 46,389
FDIC-insurance 7,148 3,401
Professional services 43,361 33,846
Advertising 25,437 13,387
Other operating expenses 185,575 160,014
----------- -----------
Total other expenses 1,029,693 793,230
----------- -----------
Income before income taxes 325,694 443,079
Less applicable income taxes (Current) 130,000 157,000
----------- -----------
Income before reduction for minority interest 195,694 286,079
Less minority interest income (loss) 4,699 6,514
----------- -----------
Net income $ 190,995 $ 279,565
----------- -----------
Earnings per share $ .57 $ .84
----------- -----------
</TABLE>
The accompanying note is an integral part of these financial statements.
(2)
<PAGE>
<TABLE>
<CAPTION>
REPUBLIC CORPORATION AND SUBSIDIARY
Statement of Cash Flows
Three Months Ended
March 31 March 31
1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows and operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 190,995 $ 279,565
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 78,869 50,586
Provision for loan losses. . . . . . . . . . . . . . . . . . 49,756 48,358
Amortization (accretion) of discounts and
Premium . . . . . . . . . . . . . . . . . . . . . . . . (296,362) (198,616)
Other real estate gains/net . . . . . . . . . . . . . . . . -0- -0-
Investment securities gains/net . . . . . . . . . . . . . . -0- -0-
Re-appraisal - other real estate . . . . . . . . . . . . . . -0- -0-
(Decrease) increase in interest payable . . . . . . . . . . 77,048 417,568
(Increase) decrease in interest receivable . . . . . . . . . 114,542 38,841
(Increase) decrease in other assets. . . . . . . . . . . . . 597,063 885,647
Increase (decrease) in other liabilities . . . . . . . . . . (493,674) (976,445)
----------- ----------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,242 265,939
----------- ----------
Net cash provided by (used in) operating activities . . . . . . . . . . . . 318,237 545,504
----------- ----------
Cash flows from investing activities
Proceeds from sales of investment securities . . . . . . . . . . . . . -0- -0-
Proceeds from maturities of investment securities . . . . . . . . . . 24,000,000 16,000.000
Purchase of investment securities . . . . . . . . . . . . . . . . . . (25,700,505) (15,789,200)
Loans made to customers net cash activity. . . . . . . . . . . . . . . (395,943) (2,566,036)
Capital expenditure. . . . . . . . . . . . . . . . . . . . . . . . . . (28,842) (372,640)
Proceeds from sale of other real estate. . . . . . . . . . . . . . . . -0- -0-
----------- ----------
Net cash provided by (used in) investing activities . . . . . . . . . . . . (2,125,290) (2,727,876)
----------- ----------
Cash flows from financing activities
Net increase (decrease) in demand deposits, NOW
account, savings accounts and certificates of deposit. . . . . . . . . 3,285,012 363,943
Purchase of treasury stock. . . . . . . . . . . . . . . . . . . . . . . . . -0- -0-
----------- ----------
Net cash provided by (used in) financing . . . . . . . . . . . . . . . . . . 3,285,012 363,943
----------- ----------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . 1,477,960 (1,818,429)
----------- ----------
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 March 31
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . 4,160,091 3,923,873
Federal funds sold. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,650,000 8,875,000
----------- -----------
Cash and cash equivalents at March 31 . . . . . . . . . . . . . . . $10,810,091 $12,798,873
----------- -----------
----------- -----------
Supplemental disclosures of cash flow information:
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . 1,022,839 709,305
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, 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
Loans placed on nonaccrual doubled from the level that existed at year-end
1998, a result of larger commercial real estate credits which were beyond 30
days past due at period end and close to foreclosure activity by the bank.
These accounts will either ultimately cure and return to accruing status or be
sold by the bank following foreclosure. The restructured loan total fell
abruptly during the quarter due to the renewal of a larger agricultural loan
grouping at prevailing interest rates.
<TABLE>
<CAPTION>
TABLE 1 PROBLEM ASSETS
March 31 December 31
-------- ----------------------------------
(dollars in thousand) 1999 1998 1997 1996
<S> <C> <C> <C> <C>
Nonaccrual loans $ 702 $ 351 $ 809 $ 759
Past-due loans (over 90 days) -0- -0- -0- -0-
Restructured loans 45 741 2,465 2,148
-------- -------- ------ ------
Total problem loans $ 747 $ 1,065 $3,274 $2,907
Foreclosed assets
Real estate 48 48 9 300
In-substance foreclosures -0- -0- -0- -0-
Other 24 28 5 34
-------- -------- ------ ------
Total Problem Assets $ 819 $ 1,141 $3,288 $3,241
Total problem loans as
a percentage of total loans .8% 1.1% 4.1% 4.1%
Total problem assets as a
percentage of total loans
and foreclosed assets .9% 1.2% 4.1% 4.5%
</TABLE>
<TABLE>
<CAPTION>
TABLE 2 LOAN CONCENTRATIONS
March 31 December 31
--------- ------------------------
(dollars in thousands) 1999 1998 1997
<S> <C> <C> <C>
Commercial $ 7,560 $ 7,371 $ 5,762
Agricultural 3,845 4,156 3,459
Real Estate-Construction 6,516 6,423 1,960
Real Estate-Mortgage 66,860 66,652 59,562
Installment Loans to Individuals 10,169 9,967 8,865
-------- ------- -------
Totals $ 94,950 $94,569 $79,608
</TABLE>
(5)
<PAGE>
SOURCES AND USES OF FUNDS
Unlike all periods in the recent past, the bank grew its deposits
significantly more than it grew outstanding loans in the first quarter. Deposit
growth of $3,285,012 far outstripped loan growth of $381,188. (Please see
Balance Sheet, P-1 and Statement of Cash Flows, P-3).
LIQUIDITY
Period end holdings of cash and due from banks, short term securities and
federal funds sold totaled approximately 30% of period end liabilities. This
compared to a level of approximately 28% at year-end, 1998. ( Please see
Balance Sheet, P-1).
INTEREST RATE SENSITIVITY MANAGEMENT
Near term bank earnings are most at risk in an environment of significantly
increasing, short term market interest rates. The excess accumulation of
interest bearing liabilities which reprice in three months or less will cause
interest costs to increase much more rapidly than revenue. The inverse will
likely occur in an environment of declining rates. (Please see Table 3, P-7).
(6)
<PAGE>
INTEREST RATE SENSITIVITY MANAGEMENT
Table 3 -- REPRICING SCHEDULE
3-31-99
<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 * 11,007 47,316 35,508 409
Federal Funds Sold 6,650 -0- -0- -0-
Taxable Securities ** 26,000 -0- -0- -0-
Municipal Bonds -0- -0- -0- -0-
TOTAL 43,657 47,316 35,508 409
RATE SENSITIVE LIABILITIES
(Liabilities that can be
repriced within X days)
Time Certificates of Deposit 24,400 29,872 2,768 -0-
NOW Accounts 2,372 -0- -0- -0-
Super NOW Accounts 22,356 -0- -0- -0-
Savings Accounts 9,049 -0- -0- -0-
MMDA Accounts 13,138 -0- -0- -0-
TOTAL 71,315 29,872 2,768 -0-
Interest Rate Sensitivity Gap (27,658) 17,444 32,740 409
Cumulative Interest Rate
Sensitivity Gap (27,658) (10,214) 22,526 22,935
</TABLE>
* Does not include $702,000 in nonaccruing loans or overdrawn demand deposits
of $8,000
** 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>
MARCH 31, 1999
(1) Held-to-Maturity:
U.S. Treasury Securities -- -- -- --
Other 25,861,423 -- -- 25,861,423
(2) Available-for-Sale Securities
Carried at Fair Value:
U.S. Treasury Securities -- -- -- --
Other 24,000 -- -- 24,000
---------- ---------- ---------- ----------
25,885,423 -- -- 25,885,423
---------- ---------- ---------- ----------
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 lease
quarterly.
(8)
<PAGE>
CAPITALIZATION:
Both risk-based capital ratios rose in the first quarter of 1999 as a
result of modest loan growth and much higher growth in investment assets. This
tended to lower total risk-based assets and thereby raise the associated capital
ratios. Retained earnings growth provided the slight increase in the leverage
ratio. (Please see Table 5, P-9).
TABLE 5 - CAPITAL
<TABLE>
<CAPTION>
*March 31 December
--------- --------
1999 1998
<S> <C> <C>
Tier 1 risk-based capital
(minimum is 4%) 14.62% 14.16%
Tier 1 + Tier 2 risk based capital
(minimum is 8%) 15.87% 15.41%
Tier 1 leverage (minimum is 3%) 8.94% 8.80%
</TABLE>
*ESTIMATE
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income grew approximately $108,000 compared with the year-ago
period, a result of loan growth and the conversion at renewal of time deposit
yields to lower levels. Net interest income represented 4% of interest bearing
assets at March 31, 1999, compared with 3.92% at March 31, 1998. (Please see
Balance Sheet, P-1 and Statement of Income, P-2).
OTHER INCOME AND EXPENSE
The loan loss provision for the first quarter of 1999 was similiar to that
of the year-ago period and is reflective of continued, elevated installment loan
charge offs.
Non-interest income grew slightly as a result of growth in deposit accounts
and the resulting impact of same on service charge totals.
Non-interest expenses grew significantly over the prior year period and
were only partially offset by gains in net interest income and non-interest
income. This growth in expenses occurred in all categories and is directly tied
to growth in facilities, staffing and operating levels. This growth has been
instituted recently and is therefore not yet profitable to the bank. (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.
The replacement of credit reporting software is expected by the end of the
second quarter of 1999. The validation phase is ongoing and on schedule and it
is anticipated that substantially all testing will have been performed at least
once by the end of the second quarter of 1999. 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 interruption 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: April 27, 1999 /S/ J. Ed Eisemann, IV
-----------------------
Chairman of the Board
Date: April 27, 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 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-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 4,160,091
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,650,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 24,000
<INVESTMENTS-CARRYING> 25,861,423
<INVESTMENTS-MARKET> 25,861,423
<LOANS> 94,950,213
<ALLOWANCE> 1,268,000
<TOTAL-ASSETS> 134,334,730
<DEPOSITS> 120,635,957
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,205,468
<LONG-TERM> 0
0
0
<COMMON> 356,844
<OTHER-SE> 11,867,390
<TOTAL-LIABILITIES-AND-EQUITY> 134,334,730
<INTEREST-LOAN> 2,009,199
<INTEREST-INVEST> 296,362
<INTEREST-OTHER> 67,713
<INTEREST-TOTAL> 2,373,274
<INTEREST-DEPOSIT> 1,099,887
<INTEREST-EXPENSE> 1,099,887
<INTEREST-INCOME-NET> 1,273,387
<LOAN-LOSSES> 49,755
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,029,693
<INCOME-PRETAX> 325,694
<INCOME-PRE-EXTRAORDINARY> 325,694
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 190,995
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
<YIELD-ACTUAL> .074
<LOANS-NON> 702,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 45,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,233,000
<CHARGE-OFFS> 21,235
<RECOVERIES> 6,479
<ALLOWANCE-CLOSE> 1,268,000
<ALLOWANCE-DOMESTIC> 79,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,189,000
</TABLE>
