FIRST M & F CORPORATION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarter ended June 30, 1998 Commission File Number 0-9424
FIRST M & F CORPORATION
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Mississippi 64-0636653
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
Registrant's telephone number: (601) 289-5121
No Change
--------------------------------------------------------
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 shorter period that the registrant was required
to file such report), 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 registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 13, 1998
----- ----------------------------
Common stock ($5.00 par value) 3,394,656 shares
Page 1 of 18
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
FORM 10-Q
CONTENTS
Page
PART I: FINANCIAL INFORMATION 3
Item 1 - Financial Statements (unaudited):
Condensed Consolidated Statements of Condition 4
Condensed Consolidated Statements of Income 5
Condensed Consolidated Statements of Comprehensive
Income 6
Condensed Consolidated Statements of Stockholders'
Equity 7
Condensed Consolidated Statements of Cash Flows 8
Notes to Condensed Consolidated Financial Statements 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-15
PART II: OTHER INFORMATION
Item 1 - Legal Proceedings 16
Item 2 - Changes in Securities 16
Item 3 - Defaults upon Senior Securities 16
Item 4 - Submission of Matters to a Vote of Security
Holders 16
Item 5 - Other Information 16
Item 6 - Exhibits and Reports on Form 8-K 16
Exhibit 11 - Computation of Earnings Per Share 17
SIGNATURE 18
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<PAGE>
PART I: FINANCIAL INFORMATION
Item 1 - Financial Statements
-3-
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Condition
(Unaudited)
June 30, December 31,
Assets 1998 1997 (1)
----------- -----------
Cash and due from banks$ 22,792,398 $ 24,719,193
Interest bearing bank balances 9,741,093 10,801,934
Federal funds sold 19,500,000 2,000,000
Securities available for sale 138,915,165 109,002,998
Investment securities, market value of
$55,797,000 in 1998 and $59,696,000 in 1997 54,946,293 58,785,352
Loans 372,478,977 360,192,125
Reserve for possible loan losses (5,436,168) (5,170,000)
------------ ------------
Net loans 367,042,809 355,022,125
Bank premises and equipment 10,341,762 9,326,709
Accrued interest receivable 5,814,625 5,492,942
Other real estate 733,755 842,786
Intangible assets 2,434,392 2,519,053
Other assets 12,649,250 2,387,422
------------ ------------
$ 644,911,542 $580,900,514
=========== ===========
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Non-interest bearing$ 65,252,689 $60,577,750
Interest bearing 516,240,216 449,205,012
------------ ------------
Total deposits 581,492,905 509,782,762
------------ ------------
Borrowings 2,559,330 12,860,760
Accrued interest payable 2,584,359 2,563,911
Other liabilities 1,766,688 1,487,359
------------ ------------
Total liabilities 588,403,282 526,694,792
------------ ------------
Stockholders' equity:
Common stock, $5.00 par value, 15,000,000 shares
authorized, 3,394,656 issued and outstanding 16,973,280 16,973,280
Additional paid-in capital 10,698,388 10,698,388
Retained earnings 28,289,293 26,013,973
Net unrealized gain on securities available for
sale, net of income taxes 547,299 520,081
------------ ------------
Net stockholders' equity 56,508,260 54,205,722
------------ ------------
$ 644,911,542$ 580,900,514
=========== ===========
The accompanying notes are an integral part of these financial statements.
(1) Derived from audited financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 8,785,728 $ 8,378,678 $ 17,453,923 $ 16,594,456
Interest bearing bank
balances 119,656 40,484 260,704 91,070
Taxable investments 2,002,558 1,840,654 3,871,329 3,403,233
Tax exempt investments 656,785 521,745 1,243,609 1,018,924
Federal funds sold 188,660 148,418 460,064 336,163
---------- ---------- ---------- ----------
Total interest income 11,753,387 10,929,979 23,289,628 21,443,846
---------- ---------- ---------- ----------
Interest expense:
Deposits 5,703,773 5,029,762 11,077,169 9,828,563
Securities sold under agreements
to repurchase - 3,465 - 3,465
Other borrowings 37,299 62,331 220,682 147,641
---------- ---------- ---------- ----------
Total interest expense 5,741,072 5,095,558 11,297,851 9,979,669
---------- ---------- ---------- ----------
Net interest income 6,012,315 5,834,421 11,991,777 11,464,177
Provision for possible loan losses 478,874 397,502 938,346 791,288
---------- ---------- ---------- ----------
Net interest income after
provision for possible
loan losses 5,533,441 5,436,919 11,053,431 10,672,889
---------- ---------- ---------- ----------
Other operating income:
Service charges on deposits 873,856 841,004 1,727,304 1,659,346
Credit insurance income 93,832 98,011 198,492 190,115
Gains (losses) on AFS investments (1,086) 7,007 (7,713) 6,712
Other income 267,721 167,783 484,224 363,986
---------- ---------- ---------- ----------
Total other operating
income 1,234,323 1,113,805 2,402,307 2,220,159
---------- ---------- ---------- ----------
Other operating expenses:
Salaries and employee benefits 2,229,399 2,079,564 4,441,483 4,091,727
Net occupancy expense 271,801 230,500 510,394 474,534
Equipment and data processing
expenses 481,657 442,382 908,871 888,626
Other expenses 1,203,160 1,048,847 2,335,014 2,043,607
---------- ---------- ---------- ----------
Total other operating
expenses 4,186,017 3,801,293 8,195,762 7,498,494
---------- ---------- ---------- ----------
Income before income
taxes 2,581,747 2,749,431 5,259,976 5,394,554
Income taxes 584,111 793,534 1,355,222 1,544,064
---------- ---------- ---------- ----------
Net income $ 1,997,636 $ 1,955,897 $ 3,904,754 $ 3,850,490
========== ========== ========== ==========
Earnings per share:
Basic $ 0.59 $ 0.58 $ 1.15 $ 1.13
==== ==== ==== ====
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
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<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended June 30, Six Month Ended June 30,
--------------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
Net income $ 1,997,636 $ 1,955,953 $ 3,904,754 $ 3,850,490
--------- --------- --------- ---------
Other comprehensive income:
Unrealized holding gains
(losses) on securities,
net (6,196) 371,904 22,382 (170,609)
Plus (minus) reclassification
adjustments for losses
(gains) included in net
income 681 (4,393) 4,836 (4,208)
--------- --------- --------- ---------
Other comprehensive
income (5,515) 367,511 27,218 (174,817)
--------- --------- --------- ---------
Total comprehensive
income $ 1,992,121 $ 2,323,464 $ 3,931,972 $ 3,675,673
========= ========= ========= =========
-6-
<PAGE>
<TABLE>
<CAPTION>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)
Additional
Common Paid-In Retained Treasury Unrealized
Stock Capital Earnings Stock Gain (Loss) Total
<S> <C> <C> <C> <C> <C> <C>
January 1,
1997 $ 16,973,280 $ 10,698,388 $ 21,087,077 $ - $ 329,835 $ 49,088,580
Net income - - 3,850,490 - - 3,850,490
Cash
dividends
paid ($.42
per share) - - (1,425,755) - - (1,425,755)
Net change in
unrealized
gain - - - - (174,817) (174,817)
---------- ---------- ---------- ----- ------- -----------
June 30,
1997 $ 16,973,280 $ 10,698,388 $ 23,511,812 $ - $ 155,018 $ 51,338,498
========== ========== ========== ===== ======= ==========
January 1,
1998 $ 16,973,280 $ 10,698,388 $ 26,013,973 $ - $ 520,081 $ 54,205,722
Net income - - 3,904,754 - - 3,904,754
Cash
dividends
paid ($.48
per share) - - (1,629,434) - - (1,629,434)
Net change in
unrealized
gain - - - - 27,218 27,218
---------- ---------- ---------- ----- ------- -----------
June 30,
1998 $ 16,973,280 $ 10,698,388 $ 28,289,293 $ - $ 547,299 $ 56,508,260
========== ========== ========== ===== ======= ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
-7-
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
1998 1997
Cash flows from operating activities:
Net income $ 3,904,754 $ 3,850,490
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 610,192 606,147
Provision for possible loan losses 938,346 791,288
Increase in interest receivable (321,683) (515,953)
Increase in interest payable 20,448 362,288
Other, net 1,126,530 995,414
---------- ----------
Net cash provided by operating activities 6,278,587 6,089,674
---------- ----------
Cash flows from investing activities:
Net (increase) decrease in:
Interest bearing bank balances 1,060,841 (965,187)
Federal funds sold (17,500,000) (2,550,000)
Investment securities-purchases (8,375,283) (5,239,698)
Investment securities-maturities and calls 12,214,342 4,395,319
Securities available for sale-purchases (52,000,808) (34,255,604)
Securities available for sale-maturities
and calls 21,115,859 12,200,107
Loans (12,959,030) (929,713)
Bank premises and equipment (1,540,582) (750,446)
Investment in bank owned life insurance (10,000,000) -
---------- ----------
Net cash used in investing activities (67,984,661) (28,095,222)
---------- ----------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits 71,710,143 36,684,527
Other borrowings (10,301,430) (3,082,755)
Cash dividends (1,629,434) (1,425,755)
---------- ----------
Net cash provided by financing activities 59,779,279 32,176,017
---------- ----------
Net increase (decrease) in cash and
due from banks (1,926,795) 10,170,469
Cash and due from banks at January 1 24,719,193 20,213,398
---------- ----------
Cash and due from banks at June 30 $ 22,792,398 $ 30,383,867
========== ==========
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
FIRST M & F CORPORATION AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1: Basis of Presentation
- ------------------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The condensed
consolidated financial statements of First M & F Corporation include the
financial statements of Merchants & Farmers Bank, a wholly owned
subsidiary, and its wholly owned subsidiaries, First M & F Insurance Co., M
& F Financial Services, Inc. and M & F Bank Securities Corporation. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1997.
Note 2: Statements of Cash Flows
- ---------------------------------
During the six months ended June 30, 1998 and 1997, the Company had the
following payments:
1998 1997
Income taxes $ 1,579,000 $ 1,400,000
Interest on deposit liabilities 11,066,000 9,461,000
Interest on other borrowings 214,000 154,000
========== =========
Note 3: Comprehensive Income
- -----------------------------
On January 1, 1998, First M&F Corp adopted SFAS No. 130, "Reporting
Comprehensive Income" which establishes standards for the reporting and
display of comprehensive income and its components, net income and other
comprehensive income, in a full set of financial statements. Other
comprehensive income consists of revenues, expenses, gains and losses that
are excluded from earnings under current accounting standards.
Note 4: Bank Owned Life Insurance
- ----------------------------------
In March, 1998, Merchants and Farmers Bank invested $10,000,000 in corporate
owned life insurance policies covering approximately 160 employees. The
policies are designed to generate earnings through increases in cash
surrender value, thus covering costs of current and potential employee
benefit plans. The cash surrender value of the policies at June 30, 1998
was $10,159,726.
-9-
<PAGE>
FIRST M & F CORPORATION
Item 2: Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
The following provides a narrative discussion and analyses of significant
changes in the Company's results of operations and financial condition. This
discussion should be read in conjunction with the interim consolidated financial
statements and supplemental financial data presented elsewhere in this report.
Certain of the information included in this discussion contains forward looking
financial data and information that is based upon management's belief as well as
certain assumptions made by, and information currently available to management.
Specifically, this discussion includes statements with respect to the adequacy
of the reserve for possible loan losses; the effect of legal proceedings against
the Company's financial condition, results of operations and liquidity; year
2000 compliance issues; and market risk disclosures. Should one or more of these
risks materialize or the assumptions prove to be significantly different, actual
results may vary from those estimated, anticipated, projected or expected.
Financial Summary
- -----------------
For the six month period ended June 30, 1998, the Company's net income increased
to $3,904,754 as compared to $3,840,490 for the same period of 1997. Basic and
diluted earnings per share was $1.15 for 1998 and $1.13 for 1997. Quarterly
earnings for the two periods reflect $.59 per share for the quarter ending June
30, 1998 and $.58 per share for the same quarter of 1997. Net income for 1998
reflects several factors which have contributed to the Company's overall
flatness in earnings. These include a lack of anticipated loan growth during the
period; higher than anticipated interest bearing deposit growth; increased
operating expenses associated with new branch locations; and added personnel
costs at both the administrative and operating levels.
Total assets at June 30, 1998, increased 11.9% over year end 1997 to $644.9
million, while stockholders' equity increased 4.25% over year end 1997 and
equaled $56.5 million. The return on average assets for the period ended June
30, 1998, was 1.28% as compared to the same period of 1997 of 1.42%; the return
on average equity in 1998 was 14.13% as contrasted to 15.51% for 1997. Both of
these declines reflect a percentage growth in total assets during the quarter
that exceeded the percentage growth in net income.
-10-
<PAGE>
FIRST M & F CORPORATION
Asset/Liability Management/Liquidity
- ------------------------------------
Responsibility for managing the Company's program for controlling and monitoring
interest rate risk and for maintaining income stability, given the Company's
exposure to changes in interest rates, is vested in the asset/liability
committee. Appropriate policy and guidelines, approved by the board of
directors, govern these actions. Monitoring is primarily accomplished through
weekly reviews and analysis of asset/liability market conditions. These include
rate shocked scenarios of up and down 100, 200 and 300 basis points; yield curve
scenarios; and prepayment risk scenarios. Additionally, static gap analysis is
used to highlight short-term repricing volumes. Management believes, at June 30,
1998, there is adequate flexibility to alter the rate structure as necessary to
minimize the exposure to changes in interest rates, should they occur.
The asset/liability committee further establishes guidelines, approved by
appropriate board action, by which the current liquidity position of the Company
is monitored to ensure adequate funding capacity. Accessibility to local,
regional and other funding sources is also maintained in order to actively
manage both the asset and liability sides of the balance sheet. These funding
requirements and the Company's ability to maintain liquidity is also enhanced by
the Company's consistent earning capacity and adequate capital.
Net Interest Income
- -------------------
Net interest income (NII) is income produced by interest earning assets reduced
by the interest expense associated with the funding of those assets. Changes in
the mix of these interest earning assets and interest bearing liabilities and
their yields and rates contribute to the levels of NII realized and have a
significant impact on earnings.
During the period ended June 30, 1998, the level of NII increased $527,600 or
4.60% over the comparable period of 1997. NII for 1997 increased $941,248 or
8.94% over 1996's period. Average earning assets for the period ended June 30,
1998, was $575.6 million as contrasted to $506.6 for 1997's period, reflecting a
$69.0 million or 13.6% increase.
For the 1998 period, this increase in average earning assets compared to same
period of 1997 was driven by a $12.2 million or 3.4% increase in loans and a
$26.1 million or 16% increase in the investment portfolio. Average interest
bearing liabilities increased $61.8 million or 14.4%. As a result, there was
only a slight improvement in NII, 1998's quarter versus 1997's quarter, as the
cost of funding the increase in funding sources almost equaled the earnings of
the higher volume of interest earning assets.
-11-
<PAGE>
FIRST M & F CORPORATION
Provision for Loan Losses
- -------------------------
During the six month period ending June 30, 1998, the Company's provision for
loan losses was $938,346 contrasted to $791,288 for the same period of 1997.
This provision reflects management's assessment of the adequacy of the reserve
for possible loan losses to absorb potential losses in the loan portfolio.
Factors considered involve an assessment of growth and composition of the
portfolio; historical credit loss experience; current and anticipated economic
conditions; and changes in the borrower's financial condition. Net charge offs
for the first six months of 1998 were $672,178 as compared to $396,211 for the
same period in 1997.
Non Interest Income
- -------------------
One of the Company's key long-term strategies is to continue to boost its growth
in non interest income. For the six month period ending June 30, 1998, non
interest income was $2,402,307 as compared to $2,220,159 for 1997. Service
charges on deposits and credit insurance income reflected an approximate $76,000
or 4.1% increase for 1998. Other income reflects an approximate $120,300 or
33.1% increase primarily in the area of fee income on non-deposit products.
Management continues to emphasize the non interest income area through increased
focus and budget/incentive processes.
Non Interest Expense
- --------------------
Another strategy of the Company is to contain non interest expenses within an
overall growth discipline. At June 30, 1998, the Company's efficiency ratio, an
indicator of control of non interest expenses, was 57% and compared favorably
with peer groups. Improvements continue to be made in the overall monitoring and
control of expense through the budgeting and review process.
Salaries and benefits comprise the largest portion of non interest expense and
increased 8.5% when compared to the same period of 1997. Additional staffing has
been required in several locations as a result of volume and increased demand.
Other expense reflects an increase of approximately $291,000 in 1998 compared to
1997. Other expense for 1997 increased $53,000 over 1996. Both are considered
normal increases given the overall growth of the Company.
Income Taxes
- ------------
For the six months ended June 30, 1998, the Company's effective tax rate was
25.7% as compared to 28.8% for the same period of 1997. This decrease in
effective rate is the result of the increase in the level of tax-exempt
investment income and other tax advantaged strategies.
-12-
<PAGE>
FIRST M & F CORPORATION
Assets/Liabilities
- ------------------
Loans, net of unearned discount, increased to $372.0 million at June 30, 1998,
as compared to $360.2 million at the end of 1997. This approximate $12.3
million, or 3.4% increase in loans since December 31, 1997, generally reflects a
lack of consumer and commercial loan volumes. The commercial real estate lending
sector has remained fairly strong, showing 4.7% growth in the first six months
of 1998.
The current level of the reserve for possible loan losses approximates 1.46% of
total loans outstanding. The Company's nonperforming loans past due 90 days or
more remain well controlled and continue to compare favorably to peer levels.
The adequacy of the reserve is reviewed quarterly using criteria and guidance
provided by the appropriate regulatory agencies and is presented to the Board of
Directors for subsequent review and approval. Management will continue to take a
prudent approach in the evaluation of the reserve for loan losses.
The securities portfolio is utilized to provide quality investment alternatives
for available funds and a stable source of interest income. At June 30, 1998,
the total securities portfolio was approximately $194 million, up from the
December 31, 1997 level by approximately $26 million. Yield for the portfolio
was at 5.75% for the six months ended June 30, 1998 and is comparable to peer
groups. There were no sales of held to maturity securities during the period.
Deposits originating from the various communities served by the Company provide
the primary source of its funds. Total deposits increased approximately $72
million or 14.1% during the six month period ended June 30, 1998, ahead of
growth plans for the year.
Other borrowings of $2,559,330 represent advances from the Federal Home Loan
Bank of Dallas and are primarily funding sources tied to specific loans.
Approximately $10 million of advances were repaid prior to quarter-end March 31,
1998.
-13-
<PAGE>
FIRST M & F CORPORATION
Equity
- ------
The Company's regulatory capital ratios at June 30, 1998, as shown below are in
excess of the minimum requirements and qualify the institution as "well
capitalized" under the definition of such.
($ in Thousands)
Tier 1 capital $ 53,527
Tier 2 capital element 4,988
------
Total qualifying capital $ 58,515
======
Risk weighted assets $ 399,038
=======
Total qualifying capital/risk weighted assets 14.66%
======
Leverage ratio 8.51%
=====
The dividend payout ratio for the six months ended June 30, 1998 was 41.7% of
net income reflecting total dividends of $.48 per share. Book value per share at
June 30, 1998 was $16.64 compared to a $43.00 per share market price.
-14-
<PAGE>
FIRST M & F CORPORATION
Year 2000 Compliance
- --------------------
The Company has established a task-force to review all computer based systems
and applications to ensure proper functioning in the year 2000. The plan has
been approved by the Board of Directors, and management believes that
implementation will not materially effect operations in the future. Management
does not expect costs of achieving year 2000 compliance to have a material
adverse effect on the Company's consolidated financial statements.
-15-
<PAGE>
FIRST M & F CORPORATION
PART II: OTHER INFORMATION
--------------------------
Item 1 - Legal Proceedings
- --------------------------
No new legal proceedings occurred in the second quarter of 1998.
Item 2 - Changes in Securities
- ------------------------------
None
Item 3 - Defaults Upon Senior Securities
- ----------------------------------------
None
Item 4 - Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The annual stockholders' meeting was held on April 8, 1998. The only matter of
business was the election of directors as outlined in the Company's proxy
statement.
Item 5 - Other Information
- --------------------------
None
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
Exhibit 11 - Statement of computation of earnings per share
-16-
<PAGE>
FIRST M & F CORPORATION
Exhibit 11 - Computation of Earnings Per Share
- ----------------------------------------------
Three Months Ended June 30,
1998 1997
Net income $ 1,997,636 $ 1,955,897
========= =========
Weighted average shares outstanding $ 3,394,656 $ 3,394,656
========= =========
Earnings per share:
Basic $ .59 $ .58
=== ===
Six Months Ended June 30,
1998 1997
Net income $ 3,904,754 $ 3,840,490
========= =========
Weighted average shares outstanding $ 3,394,656 $ 3,394,656
========= =========
Earnings per share:
Basic $ 1.15 $ 1.13
==== ====
-17-
<PAGE>
FIRST M & F CORPORATION
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.
FIRST M & F CORPORATION
(Registrant)
DATE: August 13, 1998 /s/ Hugh S. Potts, Jr.
Chairman and Chief Executive Officer
DATE: August 13, 1998 /s/ Robert C. Thompson, III
Executive Vice President and
Treasurer
-18-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 22,792
<INT-BEARING-DEPOSITS> 9,741
<FED-FUNDS-SOLD> 19,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 138,915
<INVESTMENTS-CARRYING> 54,946
<INVESTMENTS-MARKET> 55,797
<LOANS> 372,479
<ALLOWANCE> 5,436
<TOTAL-ASSETS> 644,912
<DEPOSITS> 581,493
<SHORT-TERM> 2,559
<LIABILITIES-OTHER> 4,351
<LONG-TERM> 0
0
0
<COMMON> 16,973
<OTHER-SE> 38,988
<TOTAL-LIABILITIES-AND-EQUITY> 644,912
<INTEREST-LOAN> 17,454
<INTEREST-INVEST> 5,115
<INTEREST-OTHER> 721
<INTEREST-TOTAL> 23,290
<INTEREST-DEPOSIT> 11,077
<INTEREST-EXPENSE> 11,298
<INTEREST-INCOME-NET> 11,992
<LOAN-LOSSES> 938
<SECURITIES-GAINS> (8)
<EXPENSE-OTHER> 8,196
<INCOME-PRETAX> 5,260
<INCOME-PRE-EXTRAORDINARY> 5,260
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,905
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.15
<YIELD-ACTUAL> 4.50
<LOANS-NON> 524
<LOANS-PAST> 1,595
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 3,540
<ALLOWANCE-OPEN> 5,170
<CHARGE-OFFS> 846
<RECOVERIES> 174
<ALLOWANCE-CLOSE> 5,436
<ALLOWANCE-DOMESTIC> 5,436
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 207
</TABLE>
