FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1995 Commission File Number 0-10275
EVERGREEN BANCORP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-3114735
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
237 GLEN STREET, GLENS FALLS, NEW YORK 12801
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(Address of principal executive offices)
Registrant's telephone number, including area code: (518) 792-1151
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Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securi-
ties Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), 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 Issuer's classes of
common stock, as of the latest practicable date:
Class of Common Stock Number of Shares Outstanding
as of June 30, 1995
------------------- -------------------
$3.33 1/3 Par Value 4,704,894
EVERGREEN BANCORP, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I FINANCIAL INFORMATION
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Item 1 Financial Statements (unaudited):
Consolidated Statements of Income for the Three
Months Ended June 30, 1995, and 1994 1-2
Consolidated Statements of Income for the Six
Months Ended June 30, 1995, and 1994 3-4
Consolidated Statements of Financial Condition
as of June 30, 1995, and December 31, 1994 5-6
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1995 and 1994 7-8
Notes to Consolidated Interim 9-12
Financial Statements
Report of Independent Auditors 13-14
Item 2 Management's Discussion and Analysis 15-28
PART II OTHER INFORMATION
-------
Item 1 Legal Proceedings - None
Item 2 Changes in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Security Holders -
Annual Meeting of Shareholders
See Attached Item 4 - Matters
Item 5 Other Information - None
Item 6 (a) Exhibits - Not Applicable
(b) Reports on Form 8-K - None
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders was held on April 20,
1995, to consider the following matters:
1. Shareholders of the Company were asked to consider the Company's
nominees for director and to elect directors, each to serve for a
term of three years. The Company's nominees for the class of
director whose terms were all elected by a plurality of the votes
presented, and there was no solicitation in opposition to the manage-
ment's nominees.
2. The adoption and approval of the 1995 Stock Incentive Plan:
Votes For Votes Against Votes Withheld
2,888,490 475,973 43,054
3. The adoption and approval of the 1995 Directors' Stock Option
Plan:
Votes For Votes Against Votes Withheld
2,593,038 469,550 44,929
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED June 30,
1995 1994
(UNAUDITED)
Interest Income:
Interest and Fees on Loans $13,313 $11,675
Interest on U.S. Government & Agency Obligations 2,414 2,512
Interest on State & Municipal Obligations 475 495
Interest on Other Bonds, Notes, & Debentures 150 179
Interest on Federal Funds Sold & Bank Deposits 551 38
------- -------
Total Interest Income 16,903 14,899
------- -------
Interest Expense:
Interest on Deposits:
Regular Savings, NOW and Money Market
Deposit Accounts 2,379 2,874
Other Time 4,238 2,259
Interest on Short-Term Borrowings 205 100
Interest on Long-Term Debt 181 141
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Total Interest Expense 7,003 5,374
------- -------
Net Interest Income 9,900 9,525
Provision for Loan Losses 540 520
------- -------
Net Interest Income After Provision for
Loan Losses 9,360 9,005
------- -------
Other Income:
Trust Department Income 563 580
Service Charges on Deposit Accounts 714 718
Credit Card Merchant Discount - 258
Net Loss on Security Transactions (187) -
Other 369 231
------- -------
Total Other Income 1,459 1,787
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- 1 -
CONSOLIDATED STATEMENTS OF INCOME
CONTINUED
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED June 30,
1995 1994
(UNAUDITED)
Other Expense:
Salaries and Employee Benefits 3,975 3,682
Net Occupancy Expense 491 511
Equipment Expense 447 465
FDIC Insurance 468 507
Professional Services 478 605
Data Processing 537 402
Supplies and Printing 265 203
Advertising 126 279
Postage 134 154
Credit Card Interchange Fees - 185
Other 1,152 1,308
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Total Other Expense 8,073 8,301
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Income Before Taxes 2,746 2,491
Applicable Income Taxes 915 782
------- -------
Net Income $ 1,831 $ 1,709
======= =======
Earnings Per Common Share:
Average Shares Outstanding 4,718,000 4,720,000
Net Income per Share $ .39 $ .36
======= ======
See accompanying notes to consolidated interim financial statements.
- 2 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
SIX MONTHS
ENDED June 30,
1995 1994
(UNAUDITED)
Interest Income:
Interest and Fees on Loans $26,208 $23,152
Interest on U.S. Government & Agency Obligations 4,899 4,778
Interest on State & Municipal Obligations 979 1,007
Interest on Other Bonds, Notes, & Debentures 291 355
Interest on Federal Funds Sold & Bank Deposits 600 67
------- -------
Total Interest Income 32,977 29,359
------- -------
Interest Expense:
Interest on Deposits:
Regular Savings, NOW and Money Market
Deposit Accounts 4,736 5,680
Other Time 7,814 4,484
Interest on Short-Term Borrowings 306 143
Interest on Long-Term Debt 354 254
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Total Interest Expense 13,210 10,561
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Net Interest Income 19,767 18,798
Provision for Loan Losses 1,080 1,131
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Net Interest Income After Provision for Loan Losses 18,687 17,667
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Other Income:
Trust Department Income 1,236 1,388
Service Charges on Deposit Accounts 1,359 1,401
Credit Card Merchant Discount - 450
Net (Loss) Gain on Security Transactions (187) 19
Other 729 682
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Total Other Income 3,137 3,940
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- 3 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONTINUED
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
SIX MONTHS
ENDED June 30,
1995 1994
(UNAUDITED)
Other Expenses:
Salaries and Employee Benefits 7,699 7,071
Net Occupancy Expense 985 1,067
Equipment Expense 912 962
FDIC Insurance 936 1,013
Professional Services 823 1,331
Data Processing 1,023 907
Supplies and Printing 586 377
Advertising 330 562
Postage 262 293
Credit Card Interchange Fees 6 345
Other 2,470 2,664
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Total Other Expenses 16,032 16,592
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Income Before Taxes 5,792 5,015
Applicable Income Taxes 1,929 1,630
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Net Income $ 3,863 $ 3,385
======= =======
Earnings Per Common Share:
Average Shares Outstanding 4,733,000 4,718,000
Net Income per share $ .82 $ .72
======== =======
See accompanying notes to consolidated interim financial statements.
- 4 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
6/30/95 12/31/94
(UNAUDITED)
Assets:
Cash and Cash Equivalents:
Cash and Due From Banks $ 35,263 $ 32,592
Federal Funds Sold 6,000 2,000
-------- --------
Total Cash and Cash Equivalents 41,263 34,592
-------- --------
Securities:
Securities Available For Sale (Amortized
cost of $159,540 and $167,508 at 6/30/95
and 12/31/94 respectively) 158,563 161,079
Securities Held to Maturity (fair value
of $33,386 and $36,328 at 6/30/95
and 12/31/94 respectively) 32,144 35,803
-------- --------
Total Securities 190,707 196,882
-------- --------
Loans (Note 3):
Commercial 243,816 257,152
Mortgage 240,623 232,373
Installment 104,728 98,545
Other 363 452
-------- --------
Total Loans 589,530 588,522
Less:
Allowance for Loan Losses (17,805) (18,752)
Unearned Income on Loans ( 9,047) (11,193)
-------- --------
Loans, net 562,678 558,577
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Bank Premises and Equipment net of Depreciation 13,799 13,946
Other Real Estate Owned 7,525 10,319
Other Assets 16,611 19,302
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Total Assets $832,583 $833,618
======== ========
- 5 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
CONTINUED
(DOLLARS IN THOUSANDS)
6/30/95 12/31/94
(UNAUDITED)
Liabilities:
Deposits:
Demand $ 91,846 $ 98,628
Regular Savings, Now Accounts and Money
Market Deposit Accounts 343,663 372,381
Certificates of Deposit over $100,000 44,381 61,485
Other Time 240,873 203,327
-------- --------
Total Deposits 720,763 735,821
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Federal Funds Purchased and Other Short
Term Borrowings 12,857 4,418
Accrued Taxes and Other Liabilities 9,446 9,309
Long-Term Debt 10,264 10,469
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Total Liabilities 753,330 760,017
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Stockholders' Equity
Common Stock $3.33 1/3 Par Value: Authorized
20,000,000 Shares Issued 4,769,253 at June 30,
1995 and 4,765,253 at December 31, 1994 15,897 15,884
Surplus 6,190 6,141
Undivided Profits 59,726 56,811
Excess Cost Over Fair Value on Securities
Available For Sale Net of Deferred Tax (586) (3,857)
Treasury Stock (64,359 shares at June 30,1995
and 19,359 shares at December 31, 1994) (1,007) (258)
Common Stock Subscribed by ESOP (967) (1,120)
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Total Stockholders' Equity 79,253 73,601
-------- --------
Total Liabilities and Stockholders' Equity $832,583 $833,618
======== ========
See accompanying notes to consolidated interim financial statements.
- 6 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
THE SIX MONTHS ENDED JUNE 30, 1995 1994
(Unaudited)
-----------------
Cash Flows from Operating Activities:
Net Income. . . . . . . . . . . . . . . . . . $ 3,863 $ 3,385
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Net Change in Unearned Loan Fees. . . . . . 21 49
Net Change in Other Assets and Other Liabilities 133 326
Loss on Sale of Loans, Securities,
and Other Real Estate. . . . . . . . . . . 187 3
Decrease (Increase) in Deferred Tax Benefit 514 (166)
Loss on Write-Down of Other Real Estate. . 102 43
Loss on Disposition of Assets . . . . . . . . - 13
Depreciation . . . . . . . . . . . . . . . 731 826
Provision for Loan Losses. . . . . . . . . 1,080 1,131
Amortization of Premiums & Accretion of
Discounts on Securities, Net. . . . 21 609
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Net Cash Provided By Operating Activities. 6,652 6,219
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Cash Flows From Investing Activities:
Proceeds From:
Sales of Securities Available for Sale. . . 7,997 15,259
Maturities of Securities Available for Sale 23,130 21,101
Maturities of Securities Held to Maturity . 9,144 1,675
Purchases of Securities Available for Sale. . (23,352) (28,692)
Purchases of Securities Held to Maturity. . . (5,500) (4,900)
Proceeds From Sales of Loans. . . . . . . . . 4,382 4,909
Change in Credit Card and
Check Overdraft Receivables . . . . . . . . 269 136
Proceeds From Sales of Other Real Estate. . . 4,322 1,156
Net Increase in Loans . . . . . . . . . . . . (11,483) (17,101)
Capital Expenditures. . . . . . . . . . . . . (584) (170)
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Net Cash Provided (Used) By
Investing Activities . . . . . . . . . 8,325 (6,627)
------ -------
Cash Flows From Financing Activities:
Net Decrease in Deposits. . . . . . . . . . . (15,058) (13,920)
Net Increase in Short-Term Borrowings . . . . 8,439 15,349
Payments on Long Term Debt. . . . . . . . . . (52) (32)
Proceeds From Issuance of Long-Term Debt. . . - 2,200
Proceeds From Issuance of Common Stock. . . . 62 206
- 7 -
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONTINUED
(DOLLARS IN THOUSANDS)
THE SIX MONTHS ENDED JUNE 30, 1995 1994
(Unaudited)
-----------------
Payments for Purchase of Treasury Stock . . . (749) -
Dividends Paid. . . . . . . . . . . . . . . . (948) -
-------- -------
Net Cash (Used)/Provided By
Financing Activities. . . . . . . . . . (8,306) 3,803
-------- -------
Net Increase in Cash and Cash Equivalents . . 6,671 3,395
Cash and Cash Equivalents at Beginning of Year 34,592 31,963
---------- --------
Cash and Cash Equivalents at End of Quarter . $ 41,263 $ 35,358
======== ========
Supplemental Disclosure of Cash Flows:
Interest Paid. . . . . . . . . . . . . . . . $ 12,788 $ 10,572
Taxes Paid. . . . . . . . . . . . . . . . . . 2,508 2,037
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Certain properties which were foreclosed upon were transferred from
loans to other real estate in the amount of $1,630,000 and $6,637,000
during the six months ended June 30, 1995 and 1994, respectively.
The Company borrowed $1,600,000 which was used to subscribe for
common stock of the Company in 1990. Payments were made on the ESOP
loan in the amount of $153,000 and $144,000 during the six months
ended June 30, 1995 and 1994 respectively.
As a result of the adoption of Statement of Financial Accounting
Standard No. 115, securities available for sale are recorded at fair
value. The unrealized loss on these securities was $977,000 at June
30, 1995. The adjustment to stockholders' equity for the unrealized
loss was $586,000, net of deferred income tax benefit of $391,000
which is included as an increase to the deferred tax asset. The
unrealized loss on these securities was $6,429,000 at December 31,
1994. The adjustment to stockholders' equity for the unrealized loss
was $3,857,000, net of deferred income tax benefit of $2,572,000
which is included as an increase to the deferred tax asset.
At June 30, 1994 these securities had an unrealized loss of
$3,399,000. The adjustment to stockholders equity net of deferred
income tax benefit of $1,361,000, was $2,038,000.
See accompanying notes to consolidated interim financial statements.
- 8 -
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. Financial Statement Presentation
--------------------------------
The accompanying consolidated financial statements consist of
Evergreen Bancorp, Inc. ("the Company") and the financial statements
of its wholly owned subsidiary, Evergreen Bank, N.A. The unau-
dited consolidated interim financial statements have been prepared
according to the rules of the Securities and Exchange Commission
appicable to Form 10-Q. In the opinion of the Company, the
accompanying unaudited consolidated interim financial statements
contain all adjustments necessary to present fairly the financial
position as of June 30, 1995, the results of operations for the three
and six months ended June 30, 1995 and 1994 and cash flows for the
six months ended June 30, 1995 and 1994. All adjustments are of a
normal recurring nature. 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 rules and regulations applicable to interim
financial statements.
The accompanying interim consolidated financial statements should be
read in conjunction with the Evergreen Bancorp, Inc. consolidated
year-end financial statements, including notes thereto, which are
included in the Evergreen Bancorp, Inc. 1994 Annual Report and Form
10-K.
2. Earnings Per Share
------------------
Primary earnings per share is calculated as net income divided by
average shares outstanding. Average shares outstanding for June 30,
1995, and 1994, takes into consideration a reduction to issued shares
by Treasury Stock held weighted by the number of days in the quarter
such stock is held.
3. Loans
-----
Loans are stated at the principal amount outstanding, net of unearned
discount and deferred fees. Interest on loans is computed by methods
which result in level rates of return on principal amounts outstand-
ing. Net deferred fees are amortized as yield adjustments using
methods that provide for a constant level-yield on the loan.
- 9 -
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
Commercial loans which are 90 days past due are placed on a non-
accrual status unless they are well secured and in the process of
collection or, regardless of the past due status of the loan, when
management determines that the complete recovery of principal and
interest is in doubt. Consumer loans are generally charged off after
they become 120 days past due. Mortgage loans are generally not
placed on a non-accrual basis unless the value of the real estate has
deteriorated to the point that a potential loss of prinicpal or
interest exists. Amortization of related deferred fees is suspended
when a loan is placed on a non-accrual status.
On May 31,1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairement of a Loan", (SFAS No. 114). SFAS No. 114,
was amended by Statement of Financial Accounting Standards No. 118,"
Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosure", (SFAS No. 118). These Statements prescribe recogni-
tion criteria for loan impairement and measurement methods for cer-
tain impaired loans and loans whose terms are modified in troubled
debt restructurings. As of January 1, 1995, the Company has adopted
the provisions of SFAS No. 114 and SFAS No. 118 and has provided the
required disclosures.
The allowance for loan losses is utilized to absorb losses in the
loan portfolio. Provisions for loan losses are charged to operating
expense and added to the allowance for loan losses. Losses are
charged to the allowance and recoveries are credited to it. As a
result of the adoption of SFAS No. 114, the allowance for loan losses
related to loans that are identified for evaluation in accordance
with SFAS No. 114 is based on discounted cash flows using the loan's
initial effective interest rate or the fair value of the collateral
for certain collateral dependent loans. The allowance is maintained
at a level deemed appropriate by management to adequately provide
for known and inherent risks in the present portfolio. This evalua-
tion is inherently subjective as it requires material estimates in-
cluding the amounts and timing of future cash flows expected to be
received on impaired loans that may be susceptible to significant
change. While management uses available information to recognize
losses on loans, future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various regu-
latory agencies, as part of their examination process, periodically
- 10 -
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
review the Company's allowance for loan losses. Such agencies may
require the Company to recognize additions to the allowance based on
their judgments of information available to them at the time of
examination.
Loans at June 30, 1995 are as follows:
June 30, 1995
-------------
Commercial $ 243,816,000
Real estate mortgage 240,623,000
Installment 104,728,000
Other 363,000
-------------
589,530,000
less:
Allowance for loan losses ( 17,805,000)
Unearned income ( 9,047,000)
-------------
Net Loans $ 562,678,000
=============
Changes in the allowance for loan losses for the six months ended
June 30, 1995, is as follows:
Balance at December 31, 1994 $ 18,752,000
Provisions for loan losses 1,080,000
Recoveries during the period 592,000
Losses charged to the allowance (2,619,000)
-------------
Balance at June 30,1995 $ 17,805,000
=============
At June 30, 1995, the recorded investment in loans that are consid-
ered to be impaired under SFAS No. 114 was $12,901,000. Included in
this amount is $4,998,000 of impaired loans for which the related
allowance for credit losses is $1,701,000 and $7,903,000 of impaired
loans that as a result of write downs do not have an allowance for
- 11 -
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
credit losses. The average recorded investment in impaired loans
during the six months ended June 30, 1995 was approximately
$14,022,000. For the six months ended June 30, 1995 the Company
recognized interest income on those impaired loans of $30,000 which
is recognized using the cash basis method of income recognition.
The following table presents information concerning non-performing
loans at June 30, 1995:
Non accrual $ 12,901,000
Past due 90+ days 1,757,000
Restructured 1,298,000
-------------
Total $ 15,956,000
=============
4. Payment of Dividends
--------------------
The Company is a legal entity separate and distinct from its bank
and other subsidiaries. The principal source of cash flow of the
Registrant, including cash flow to pay dividends to its stockholders,
is dividends from Evergreen Bank. The subsidiary bank is required to
meet various legal requirements prior to the payment of dividends to
the Company. Without the payment of dividends from Evergreen Bank
the Company would not be able to pay dividends to its stockholders.
- 12 -
Independent Auditors' Review Report
The Board of Directors and Stockholders
Evergreen Bancorp, Inc.:
We have reviewed the consolidated statement of financial condition of
Evergreen Bancorp, Inc. and subsidiaries as of June 30, 1995 and the
related consolidated statements of income for the three-month and
six-month periods ended June 30, 1995 and 1994, and the consolidated
statements of cash flows for the six-month periods ended June 30,
1995 and 1994. These consolidated financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying ana-
lytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantial-
ly less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the consolidated financial statements referred
to above for them to be in conformity with generally accepted ac-
counting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated statement of financial condition
of Evergreen Bancorp, Inc. and subsidiaries as of December 31, 1994,
and the related consolidated statements of income, changes in stock-
holders' equity, and cash flows for the year then ended (not present-
ed herein); and in our report dated January 26, 1995, we expressed an
unqualified opinion on those consolidated financial statement. In
our opinion, the information set forth in the accompanying consoli-
dated statement of financial condition as of December 31, 1994, is
fairly presented, in all material respects, in relation to the con-
solidated statement of financial condition from which it has been
derived.
- 13 -
Independent Auditors' Review Report
The Board of Directors and Stockholders
Evergreen Bancorp, Inc.:
Page 2
As discussed in note 3 to the consolidated statements, effective
January 1,1995, the Company adopted the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting Stan-
dards No. 114, "Accounting by Creditors for Impairment of a Loan,"
and Statement of Financial Accounting Standards No. 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and
Disclosure" which prescribed recognition criteria for loan impair-
ment and measurement methods for certain impaired loans and loans
whose terms are modified in a trouble debt restructuring subsequent
to the adoption of these statements.
/s/ KPMG PEAT MARWICK, LLP
--------------------------
KPMG PEAT MARWICK, LLP
Albany, New York
August 4, 1995
- 14 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL REVIEW
----------------
The principal source of earnings for the Company is its single
banking subsidiary, Evergreen Bank, N.A., the surviving bank from
the 1994 merger of the Company's three banking subsidiaries. All
discus sion herein refers to the banking activities of the Com-
pany's banking subsidiary unless otherwise noted.
SUMMARY OF RESULTS OF OPERATIONS
--------------------------------
Net income for the three months ended June 30, 1995, was
$1,831,000 as compared to $1,709,000 in the same quarter last year.
This represents an increase of $122,000. For the six months ended
June 30, 1995 net income was $3,863,000 compared to $3,385,000 in
1994. Net income per share for the quarter ended June 30, 1995, was
$.39, compared to $.36 for the June 30, 1994 quarter.
In 1995 the annualized return on average assets for the six
months was .93%, compared to .82% for the first six months last year.
The annualized return on average stockholders' equity, including the
effect of FASB 115 "Accounting for Certain Investments in Debt and
Equity Securities", for the first six months of 1995 was 10.1%, com-
pared to 9.4% for the same period in 1994. The increase in the
returns on average assets and stockholders' equity are due primarily
to the increased level of net income.
NET INTEREST INCOME
-------------------
Net interest income for the three months ended June 30, 1995 was
$9,900,000, compared to $9,525,000 for the same period of 1994. This
represents an increase of $375,000 or 3.9%. The first six months of
1995 reflects net interest income of $19,767,000 an increase of 5.2%
as compared to $18,798,000 for the same period last year. The in-
crease in net interest income in 1995's second quarter is attributed
primarily to an increase in net interest margin and a higher level of
average earning assets. The trend in net interest margin is expected
to reverse somewhat for the remainder of 1995 because of a 0.25%
decrease in the federal funds rate and the shift to more costly time
deposits.
- 15 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
On a taxable equivalent basis, net interest income was
$10,198,000 for the quarter ended June 30, 1995 as compared to
$9,825,000 for the quarter ended June 30, 1994. This represents an
increase of $373,000 or 3.8%. For the six months of 1995 taxable
equivalent net interest income increased 5.1% to $20,379,000 from the
level reported for the six months ended June 30, 1994. The increase
in net interest income on a taxable equivalent basis resulted primar-
ily from an increase in net interest margin. The favorable rate trend
was created by the yield on earning assets increasing more than the
rate on interest bearing liabilities. Additionally, during the first
six months of 1995 the volume of average earning assets increased
$5.2 million or .7% in comparison to the same period in 1994. This
increase resulted primarily from a higher level of federal funds
sold, which increased $15.5 million, offset somewhat by the de-
crease in average investment securities of $10.3 million. In 1995,
average loans decreased $435,000 or less than .1% from 1994
average balances of $580.4 million.
The increases in average earning assets were funded by decreases
in non-earning assets of $1.8 million or 2.7% and increases in aver-
age stockholders equity, which increased $7.1 million or 9.9%.
Average interest bearing liabilities increased $2.6 million or less
than 1.0% of their 1994 average balance of $660.3 million. While
interest bearing liabilities in total showed only a modest increase,
significant balance changes occured within this category. The aver-
age volume of time deposits, increased 35.6% to $296.0 million as
rates increased 118 basis points. The average volume of Savings, NOW
and Money Market Deposit decreased $77.4 million to $346.8 million,
as average interest rates on these deposits increased only 5 basis
points from the six months ended June 30, 1994. These deposit shifts
are largely attributed to depositors placing funds in longer maturity
deposits, in an effort to increase the effective income yield on
their funds.
The 22 basis point increase in net interest margin resulted from
net increases in non-interest bearing funding sources and a 9 basis
point increase in the net interest rate spread from 1994 to 1995.
This trend could reverse if earning assets were funded with a more
costly funding source.
- 16 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
PROVISION FOR LOAN LOSSES
-------------------------
Management records the provision for loan losses in amounts
sufficient to cover current estimates of the credit risks inherent in
the loan portfolio. Amounts thus charged are reflected in the provi-
sion for loan losses, an element of expenses appearing on the Com-
pany's consolidated statement of income. Factors which influence
management's judgement in determining the adequacy of the allowance
for loan losses and the related loss provision include an analysis
of: existing credits, the growth and composition of the loan portfo-
lio, the loss potential of loans classified by internal reviewers and
supervisory authorities, prevailing regional and national economic
conditions, past due and non-accrual loans and historical loss ex-
perience.
Additionally the collateral value supporting the loan affects
the reserve associated with the loan and the required provision
expense. Collateralization and loan-to-value policies vary by type
of loan and type of collateral. Commercial real estate loans gener-
ally have ratios of 65% or less, whereas required residential real
estate loan-to-value ratios may range from 70% on refinances to 95%
on FHA guaranteed loans. Home equity loans require a 70% loan-to-
value ratio and consumer loan-to-value ratios range from 70% on older
used automobiles to 90% on shorter term mobile home loans secured by
bank deposits. The commercial construction loan collateralization
policy requires a loan-to-value ratio of 65% with a 35% equity in-
vestment by the borrower. Commercial new equipment loans may be
advanced at an 80 - 90% loan-to-value ratio.
The provision for loan losses for the quarter ended June 30,
1995 was $540,000, compared to $520,000 for the quarter ended June
30, 1994. For the six months ended June 30, 1995 the provision
totaled $1,080,000 compared to $1,131,000 a year earlier.
The allowance for loan losses at June 30, 1995, decreased
$947,000 since December 31, 1994, as net chargeoffs of $2,027,000
exceeded the six month 1995 provision of $1,080,000. As a percent of
total loans, net of unearned income, the allowance was 3.1% at June
30, 1995. The allowance represents 112.0% of the non-performing
loans at year end compared to 96.5% at year end 1994.
- 17 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
The relatively modest provision in 1995 and 1994 in relation to
the net charge-offs in the periods is attributable to the significant
provision taken in the second quarter of 1993. Since then provision
levels have been at a more modest level due to charge-off amounts
approximating expected levels, weaker loan demand and continued
reductions in non-performing loans.
The following table presents information concerning non-
performing loans and other real estate.
6/30/95 12/31/94
------- --------
(Dollars In Thousands)
Non-Accrual $ 12,901 $ 14,139
Past Due 90 Days 1,757 2,630
Restructured 1,298 2,656
-------- --------
Total Non-Performing
Loans $ 15,956 $ 19,425
======== ========
Other Real Estate $ 7,525 $ 10,319
======== ========
The majority of the Company's non-performing loans consist of
commercial and commercial real estate loans. There is no distinct
concentration as to type of borrower within these classifications.
Although the Company expects net loan charge-offs will exceed
peer levels in 1995, they are not expected to reach the level seen
during 1993.
Additionally, the allowance level in relationship to the level
of problem loans allows the Company to continue its program of
aggres sive management of problem loans and to explore avenues
for additional reductions, including bulk sales and assets auctions.
- 18 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
OTHER INCOME AND EXPENSE
------------------------
Other income for the six months ended June 30, 1995, was
$3,137,000, $803,000 less than the $3,940,000 recorded in the same
period last year, $450,000 of this decrease is the result of the
Company's decision to sell its merchant credit card portfolio in
1994. Additionally, the Company recorded security losses of $187,000
in 1995 versus gains of $19,000 in 1994. The largest source of
other income continues to be service charges. Other income for the
second quarter of 1995 was $1,459,000 down 18.4% from $1,787,000 in
the second quarter of 1994.
Other expense for the three months ended June 30, 1995 was
$8,073,000, compared to $8,301,000 for the same quarter last year, a
decrease of $228,000 or 2.7%. This reduction resulted primarily from
a $185,000 decrease in credit card interchange fees due to the 1994
sale of the merchant credit card portfolio. Salaries and benefits
continue to represent the largest portion of other expense and they
increased $293,000, or 8.0%, on a quarterly basis and $628,000, or
8.9%, on a year to date basis. The increase is principally due to
increased merit salary levels and specialized staffing increases.
FDIC insurance was $468,000 for the quarter ended June 30, 1995,
compared to $507,000 for the same quarter last year. This decrease is
primarily a result of decreased insurance rates on deposits. Profes-
sional services were $478,000 for the quarter ended June 30, 1995 as
compared to $605,000 for the same period a year ago. This represents
a decrease of $127,000 or 21.0%. For the remainder of 1995, manage-
ment anticipates certain reductions in the level of its FDIC in-
surance expense because of recently announced rate decreases. The
rate decreases if enacted without challenge, become effective as of
July 1, 1995.
INCOME TAX EXPENSE
------------------
Income tax for the three months ended June 30, 1995, was
$915,000 as compared to $782,000 for the three months ended June 30,
1995. For the six months ended June 30, 1995 income tax was
$1,929,000 compared to $1,630,000 in 1994. The increased expense is
a result of higher levels of income derived from taxable sources, as
well as a reduction in deferred tax benefit, in 1995 as compared to
1994. The effective income tax rates for the six months ended June
30, 1995 and 1994 were 33.3% and 32.5%, respectively.
- 19 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
CAPITAL AND LIQUIDITY
---------------------
At June 30, 1995, stockholders' equity was $79,253,000 as com-
pared to $73,601,000 at December 31, 1994, an increase of 7.7%. The
increase in stockholders' equity is greater than the amount of 1995
earnings, net of dividends and treasury stock purchases, due to a
reduction in the market deficit over cost on available for sale
securities component of the equity section required by FASB
115.
The following table sets forth the Company's risk based capital
ratios as of June 30, 1995 and the regulatory guidelines for well
capitalized institutions.
Evergreen Well Capitalized
Risk-Based Bancorp, Inc. Regulatory
Ratios June 30, 1995 Guidelines
---------- ------------- ----------------
Leverage Ratio 9.6 % 5.0 %
Tier 1 14.0 % 6.0 %
Total Capital 15.2 % 10.0 %
Average federal funds sold for the six months ended June 30,
1995 was $19,555,000 as compared to $4,031,000 for the six months
ended June 30, 1994. Net cash provided by operating activities was
$6,652,000 for the six months ended June 30, 1995 as compared to net
cash provided of $6,219,000 for the six months ended June 30, 1994.
Largely due to decreases in securities and sales of other real es-
tate, net cash provided by investing activities was $8,325,000 for
the six months ended June 30, 1995 as compared to net cash used of
$6,627,000 for the same period last year. Net cash used by financ-
ing activities was $8,306,000 for the six months of 1995 as compared
to cash provided of $3,803,000 by financing activities for the six
months of 1994. The decrease in cash provided by financing activi-
ties resulted primarily from a $6,910,000 net decrease in cashflows
from short term borrowings. The level of cash and cash equivalents
was $41,263,000 at June 30, 1995 as compared to $35,358,000 at June
30, 1994.
- 20 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
On March 16, 1995 the Company indicated its intent to repurchase
up to 5 percent of its then outstanding shares. The purchase author-
ization, to a maximum of 237,000 shares, is an amount not to exceed
$4,750,000. The funding for this program is not anticipated to
materially affect the liquidity or capital position of the Company or
the bank. Through June 30, 1995 the Company has purchased 45,000
shares or slightly less than 1 percent of outstandings, at the cost
of $749,000.
Evergreen Bank, N.A. is the principal source of funds to the
Company and, if it cannot pay dividends to the Company, the Company
will be unable to pay dividends to its stockholders.
Adoption of New Accounting Pronouncements
-----------------------------------------
On May 31, 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan", (SFAS No. 114). SFAS No. 114,
was amended by Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recogni-
tion and Disclosure", (SFAS No. 118). These Statements prescribe
recognition criteria for loan impairment and measurement methods for
certain impaired loans, and loans whose terms are modified in
troubled debt restructurings subsequent to the adoption of SFAS No.
114 . As of January 1, 1995, the Company has adopted the provisions
of SFAS No. 114 and SFAS No. 118 and has provided the required dis-
closures. The accompanying financial statements reflect the effect
of these new pronouncements. Details of the effect of these new
statements are included in the footnotes to the accompanying finan-
cial statements.
Rate Volume Analysis
----------------------
For the purposes of the following analysis, Securities Available
forSale are stated at average amortized cost and Stockholders' Equity
is unadjusted for the effects of SFAS No. 115.
* Non-accrual loans are included in the following analysis and the
average balance of these loans is deemed immaterial.
- 21 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
* Portions of income earned on certain Commercial Loans, US Govern-
ment Obligations and Obligations of State and Political Subdivisions
are exempt from Federal and/or State taxation. Appropriate adjust-
ments have been made to reflect the equivalent amount of taxable
income that would have been necessary to genertae an equal amount of
after tax income. The taxable equivalent adjustment is based on a
marginal Federal income tax rate of 34.0% in 1995 and 1994 along with
a marginal State income tax rate of 10.125% for 1995 and 10.35% for
1994.
The following table sets forth the dollar amounts of interest income
(on a taxable equivalent basis) and interest expense and changes
therein resulting from changes in volume and changes in rate. The
change in interest due to both rate and volume has been allocated to
change due to volume and change due to rate based on the percentage
relationship of such variances to each other.
- 22 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the three months ended
30-JUN-95 VS 30-JUN-94
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans
Taxable $ (1) $ 1,621 $ 1,620
Tax-Exempt (54) 72 18
Investment Securities
Taxable (353) 204 (149)
Tax-Exempt 42 (42) -
Federal Funds Sold 440 69 509
Interest-Bearing Deposits 4 - 4
----- ------ ------
Changes in Total Interest
Income 78 1,924 2,002
----- ------ -----
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs (606) 111 (495)
Time Deposits 1,079 900 1,979
Short-Term Borrowings 10 95 105
Long Term Debt 17 23 40
Changes in Total Interest
Expense 500 1,129 1,629
----- ------ -----
Changes in Net Interest
Income $ (422) $ 795 $ 373
====== ====== ======
- 23 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the quarter ended
30-JUN-95 VS 30-JUN-94
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans and Leases
Taxable $ 48 $ 2,959 $ 3,007
Tax-Exempt (69) 132 63
Investment Securities
Taxable (391) 404 13
Tax-Exempt 108 (83) 25
Federal Funds Sold 430 93 523
Interest-Bearing Deposits 10 - 10
------ ------ -----
Changes in Total Interest
Income 136 3,505 3,641
------ ------ -----
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs (1,055) 111 (944)
Time Deposits 1,848 1,482 3,330
Short-Term Borrowings 30 133 163
Long Term Debt 27 73 100
------ ------ -----
Changes in Total Interest
Expense 850 1,799 2,649
------ ------ -----
Changes in Net Interest
Income $ (714) $1,706 $ 992
====== ====== ======
- 24 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Three Months Ended June 30, 1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $563,663 $13,021 9.27%
Tax Exempt 17,330 416 9.63%
Securities
Taxable 163,168 2,691 6.62%
Tax Exempt 23,075 522 9.07%
Federal Funds Sold 35,988 546 6.09%
Interest Bearing Deposits
with Banks 446 5 4.50%
-------- -------
Total Earning Assets 803,670 17,201 8.58%
-------
Allowance for Loan
Losses (18,108)
Cash and Due from Banks 27,678
Other Non-Earning Assets 38,669
--------
Total Assets $851,909
=======
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $340,054 2,379 2.81%
Time Deposits 308,911 4,238 5.50%
Short-Term Borrowings 11,318 205 7.27%
Long Term Debt 11,921 181 6.09%
-------- -------
Total Interest
Bearing Liabilities 672,204 7,003 4.02%
------- -----
Demand Deposits 89,813
Other Liabilities 10,222
Stockholders' Equity 79,670
Total Liabilities and --------
Stockholders' Equity $851,909
========
Net Interest Income (Tax
Equivalent Basis) 10,198
Tax Equivalent Adjustment (298)
-------
Net Interest Income $ 9,900
=======
Net Interest Rate Spread 4.40%
=====
Net Interest Margin 5.09%
=====
- 25 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Three Months Ended June 30, 1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $563,710 $11,401 8.11%
Tax Exempt 19,834 398 8.05%
Securities
Taxable 185,193 2,840 6.15%
Tax Exempt 21,286 522 9.84%
Federal Funds Sold 4,878 37 3.04%
Interest Bearing Deposits
with Banks 50 1 3.04%
-------- -------
Total Earning Assets 794,951 15,199 7.67%
------- -----
Allowance for Loan
Losses (19,360)
Cash and Due from Banks 31,787
Other Non-Earning Assets 34,658
--------
Total Assets $842,036
========
Liabilities and
Stockholders' Equity
Regular Savings, NOW
and MMDAs $427,281 2,874 2.70%
Time Deposits 220,100 2,259 4.12%
Short-Term Borrowings 10,373 100 3.87%
Long Term Debt 10,730 141 5.27%
-------- -------
Total Interest
Bearing Liabilities 668,484 5,374 3.22%
-----
Demand Deposits 92,008
Other Liabilities 8,884
Stockholders' Equity 72,660
--------
Total Liabilities and
Stockholders' Equity $842,036
========
Net Interest Income (Tax
Equivalent Basis) 9,825
Tax Equivalent Adjustment (300)
-------
Net Interest Income $ 9,525
=======
Net Interest Rate Spread 4.45%
=====
Net Interest Margin 4.96%
=====
- 26 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Six Months Ended June 30, 1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $562,483 $25,629 9.19%
Tax Exempt 17,481 828 9.55%
Securities
Taxable 169,746 5,454 6.48%
Tax Exempt 23,760 1,078 9.15%
Federal Funds Sold 19,555 589 6.08%
Interest Bearing Deposits
with Banks 456 11 4.94%
-------- -------
Total Earning Assets 793,481 33,589 8.54%
-------
Allowance for Loan
Losses (18,574)
Cash and Due from Banks 27,596
Other Non-Earning Assets 39,455
--------
Total Assets $841,958
=======
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $346,846 4,736 2.75%
Time Deposits 295,979 7,814 5.32%
Short-Term Borrowings 9,063 306 6.80%
Long Term Debt 11,115 354 6.41%
-------- -------
Total Interest
Bearing Liabilities 663,003 13,210 4.02%
------- -----
Demand Deposits 89,735
Other Liabilities 10,098
Stockholders' Equity 79,122
Total Liabilities and --------
Stockholders' Equity $841,958
========
Net Interest Income (Tax
Equivalent Basis) 20,379
Tax Equivalent Adjustment (612)
-------
Net Interest Income $19,767
=======
Net Interest Rate Spread 4.52%
=====
Net Interest Margin 5.18%
=====
- 27 -
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Average Balances Six Months Ended June 30, 1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $561,289 $22,622 8.13%
Tax Exempt 19,110 765 8.07%
Securities
Taxable 182,384 5,441 6.02%
Tax Exempt 21,456 1,053 9.90%
Federal Funds Sold 4,031 66 3.30%
Interest Bearing Deposits
with Banks 50 1 3.96%
-------- -------
Total Earning Assets 788,320 29,948 7.66%
------- -----
Allowance for Loan
Losses (19,174)
Cash and Due from Banks 31,015
Other Non-Earning Assets 34,263
--------
Total Assets $834,424
========
Liabilities and
Stockholders' Equity
Regular Savings, NOW
and MMDAs $424,242 5,680 2.70%
Time Deposits 218,302 4,484 4.14%
Short-Term Borrowings 7,660 143 3.76%
Long Term Debt 10,111 254 5.07%
-------- -------
Total Interest
Bearing Liabilities 660,315 10,561 3.23%
-----
Demand Deposits 93,687
Other Liabilities 8,420
Stockholders' Equity 72,002
--------
Total Liabilities and
Stockholders' Equity $834,424
========
Net Interest Income (Tax
Equivalent Basis) 19,387
Tax Equivalent Adjustment (589)
-------
Net Interest Income $18,798
=======
Net Interest Rate Spread 4.43%
=====
Net Interest Margin 4.96%
=====
- 28 -
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 duly authorized.
EVERGREEN BANCORP, INC.
August 11, 1995 /s/ George W. Dougan
--------------- --------------------
Date George W. Dougan
President & Chief Executive Officer
(Principal Executive Officer)
August 11, 1995 /s/ Frederick M. Fink
--------------- ---------------------
Date Frederick M. Fink, EVP &
Chief Financial Officer
- 29 -
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<ARTICLE> 9
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 35,263
<INT-BEARING-DEPOSITS> 628,917
<FED-FUNDS-SOLD> 6,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 158,563
<INVESTMENTS-CARRYING> 190,707
<INVESTMENTS-MARKET> 191,949
<LOANS> 580,483
<ALLOWANCE> 17,805
<TOTAL-ASSETS> 832,583
<DEPOSITS> 720,763
<SHORT-TERM> 12,857
<LIABILITIES-OTHER> 9,446
<LONG-TERM> 10,264
<COMMON> 15,897
0
0
<OTHER-SE> 63,356
<TOTAL-LIABILITIES-AND-EQUITY> 832,583
<INTEREST-LOAN> 26,208
<INTEREST-INVEST> 6,169
<INTEREST-OTHER> 600
<INTEREST-TOTAL> 32,977
<INTEREST-DEPOSIT> 12,550
<INTEREST-EXPENSE> 13,210
<INTEREST-INCOME-NET> 19,767
<LOAN-LOSSES> 1,080
<SECURITIES-GAINS> (187)
<EXPENSE-OTHER> 16,032
<INCOME-PRETAX> 5,792
<INCOME-PRE-EXTRAORDINARY> 5,792
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,863
<EPS-PRIMARY> .82
<EPS-DILUTED> .82
<YIELD-ACTUAL> 518
<LOANS-NON> 12,901
<LOANS-PAST> 1,757
<LOANS-TROUBLED> 1,298
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 18,752
<CHARGE-OFFS> 2,619
<RECOVERIES> 592
<ALLOWANCE-CLOSE> 17,805
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 17,805
</TABLE>
