SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
--------------------------
| | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ___________ to________________
Commission file number 0-10971
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ABIGAIL ADAMS NATIONAL BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 52-1508198
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(State or other jurisdiction of (I.R.S. Employer ID No.)
Incorporation or organization)
1627 K Street, N.W. Washington, D.C. 20006
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(Address of principal executive offices)
202-466-4090
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Issuer's telephone number including area code
N / A
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Former name, address, and fiscal year, if changes since last report
Indicate by check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 .
State the number of shares outstanding of each of the issuer's classes of
common equity as of May 9, 1997:
1,651,226 shares of Common Stock, Par Value $0.01/share
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE>
PART I.
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Item 1 - Financial Statements
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1
<PAGE>
ABIGAIL ADAMS NATIONAL BANCORP, INC. AND SUBSIDIARY
Consolidated Balance Sheets
March 31, 1997 and 1996 and December 31, 1996
<TABLE>
<CAPTION>
March 31, March 31, Dec 31,
1997 1996 1996
----------- ----------- ----------
Assets (Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash and due from banks $ 6,292,403 $ 4,478,105 $ 9,785,132
Short-term investments:
Federal funds sold 7,875,000 10,850,000 4,100,000
Interest-bearing deposits in other banks 1,479,000 486,715 1,479,000
---------- ------------ ---------
Total short-term investments 9,354,000 11,336,715 5,579,000
Securities available for sale 10,069,844 4,997,870 11,205,282
Investment securities (market value of $10,510,704, $7,626,518
and $11,679,607 at March 31,1997, March 31, 1996 and
December 31, 1996, respectively) 10,522,526 7,563,546 11,640,813
Loans (net of deferred fees and unearned discounts) 78,632,100 60,214,781 73,013,413
Less: Allowance for loan losses (1,094,952) (1,261,672) (1,048,487)
----------- ----------- -----------
Loans, net 77,537,148 58,953,109 71,964,926
----------- ----------- ----------
Bank premises and equipment, net 865,669 287,175 840,051
Other assets 1,377,446 1,272,692 1,147,100
------------- ------------ ------------
Total assets $ 116,019,036 $ 88,889,212 $ 112,162,304
============== ============= =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Demand deposits $ 27,926,140 $ 20,571,738 $ 23,678,374
NOW accounts 7,345,828 6,877,672 8,039,994
Money market accounts 20,160,965 22,159,158 29,533,210
Savings accounts 1,594,957 1,296,342 1,379,554
Certificates of deposit of $100,000 or greater 21,414,578 11,673,224 15,657,818
Certificates of deposit less than $100,000 19,102,010 16,233,468 16,865,790
------------- ----------- -----------
Total deposits 97,544,478 78,811,602 95,154,740
------------- ------------ -----------
Short-term borrowings 2,904,217 2,233,030 1,916,689
Long-term borrowings/debt 1,121,742 167,625 1,138,815
Other liabilities 1,219,238 887,670 811,863
-------------- -------------- -------------
Total liabilities 102,789,675 82,099,927 99,022,107
------------ ------------ -----------
Stockholders' equity:
Common stock, par value $0.01 per share, authorized 5,000,000 shares; issued
1,655,906 at March 31, 1997, 859,212 at March 31, 1996 and
1,654,712 shares at December 31, 1996; outstanding 1,651,226 shares at March
31, 1997, 854,532 shares at March 31, 1996 and 1,650,032
shares at December 31, 1996 16,559 8,592 16,547
Surplus 12,182,300 6,147,421 12,172,435
Retained earnings 1,277,587 698,652 1,191,706
------------- ------------- ------------
13,476,446 6,854,665 13,380,688
Less: Employee Stock Ownership Plan shares, 20,278 shares at cost (177,433) -- (177,791)
Less: Treasury stock, 4,680 shares at cost (28,710) (28,710) (28,710)
Less: Unrealized loss on securities, net of taxes (40,942) (36,670) (33,990)
-------------- ------------ -------------
Total stockholders' equity 13,229,361 6,789,285 13,140,197
------------ ----------- -----------
Total liabilities and stockholders' equity $ 116,019,036 $ 88,889,212 $ 112,162,304
============== ============= =============
</TABLE>
2
<PAGE>
ABIGAIL ADAMS NATIONAL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
(Unaudited)
1997 1996
------ ------
Interest income
<S> <C> <C>
Interest and fees on loans $1,697,427 $ 1,508,727
Interest on securities available for sale:
U.S. Treasury -- 26,562
Obligations of U.S. government agencies and corporations 152,881 47,311
--------- ---------
Total interest on securities available for sale 152,881 73,873
Interest and dividends on investment securities:
U.S. Treasury 15,070 7,489
Obligations of U.S. government agencies and corporations 144,188 85,593
Mortgage-backed securities 4,797 8,128
Obligations of states and municipalities 3,991 --
Other securities 12,078 7,036
--------- ---------
Total interest and dividends on investment securities 180,124 108,246
Interest on short-term investments:
Federal funds sold 51,961 109,238
Deposits with other banks 20,059 6,866
----------- -----------
Total interest on short-term investments 72,020 116,104
----------- ---------
Total interest income 2,102,452 1,806,950
----------- ----------
Interest expense
Interest on deposits:
NOW accounts 44,215 46,064
Money market accounts 250,664 217,388
Savings accounts 9,628 8,686
Certificates of deposit:
$100,000 or greater 233,693 171,469
Less than $100,000 214,634 238,675
--------- --------
Total interest on deposits 752,834 682,282
Federal funds purchased and
repurchase agreements 33,791 28,447
Interest on long-term borrowings/debt 20,001 2,794
--------- ---------
Total interest expense 806,626 713,523
--------- --------
Net interest income 1,295,826 1,093,427
Other income
Service charges on deposit accounts 291,077 172,269
Other income 11,593 12,150
----------- ---------
Total other income 302,670 184,419
---------- --------
Other expense
Salaries and employee benefits 538,284 431,691
Occupancy and equipment expense 228,622 171,724
Professional fees 64,633 42,617
Data processing fees 97,389 86,879
Other operating expense 271,281 168,423
------------ --------
Total other expense 1,200,209 901,334
----------- --------
Income (loss) before taxes 398,287 376,512
Applicable income tax expense 149,316 138,479
----------- ---------
Net income $ 248,971 $ 238,033
=========== =========
Net income per common share $ .15 $ .28
=========== =========
Weighted average number of shares used to compute EPS 1,630,165 860,940
========= =======
</TABLE>
3
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ABIGAIL ADAMS NATIONAL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
For the Three Months Ended March 31, 1997and 1996
(Unaudited)
<TABLE>
<CAPTION>
Employee
Additional Retained Stock Unrealized
Common Paid-in Earnings Treasury Ownership Loss on
Stock Capital (Deficit) Stock Plan Securities Total
----- ------- --------- ----- ---- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1,1996 $ 8,592 $ 6,147,421 $ 531,830 $(28,710) $ --- $ (40,267) $ 6,618,866
Net income --- --- 238,033 --- --- --- 238,033
Dividends declared --- --- (71,211) --- --- --- (71,211)
Unrealized gain on securities,
net of taxes --- --- --- --- --- 3,597 3,597
--------- ----------- ---------- -------- --------- --------- ---------
Balance at March 31, 1996 $ 8,592 $ 6,147,421 $ 698,652 $(28,710) $ --- $ (36,670) $ 6,789,285
=========== ============ =========== ========= ========= ========== ===========
Balance at January 1,1997 $ 16,547 $12,172,435 $1,191,706 $(28,710) $ (177,791) $ (33,990) $13,140,197
Net income --- --- 248,971 --- --- --- 248,971
Dividends declared --- --- (163,090) --- --- --- (163,090)
Dividends on allocated shares
of the Employee Stock
Ownership Plan --- 110 --- --- 358 --- 468
Issuance of common stock under
the Employee Incentive Stock
Option Plan 12 9,755 --- --- --- --- 9,767
Unrealized loss on securities,
net of taxes --- --- --- --- --- (6,952) (6,952)
---------- ---------- --------- --------- -------- -------- --------
Balance at March 31, 1997 $ 16,559 $12,182,300 $1,277,587 $(28,710) $ (177,433) $ (40,942) $13,229,361
=========== =========== ========== ========== ========== =========== ==========
</TABLE>
4
<PAGE>
ABIGAIL ADAMS NATIONAL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1997and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
--------- -------
Operating Activities
<S> <C> <C>
Net income $ 248,971 $ 238,033
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 68,169 28,237
Accretion of loan discounts and fees (23,429) (9,083)
Amortization and accretion of discounts and
premiums on securities (58,989) (1,553)
Provision for deferred income taxes (110,755) (94,576)
Increase in other assets (119,590) (119,930)
Increase in other liabilities 412,021 268,750
------------ ----------
Net cash provided by operating activities 416,398 309,878
------------ ------------
Investing Activities
Proceeds from repayment and maturity
of investment securities 1,150,000 1,650,000
Proceeds from maturity of securities
available for sale 2,675,000 2,000,000
Proceeds from repayment of mortgage-
backed securities 23,997 22,094
Purchase of investment securities (48,000) (1,024,775)
Purchase of securities available for sale (1,500,000) (1,500,000)
Principal collected on loans 4,537,194 1,375,823
Loans originated (8,831,355) (1,507,667)
Net decrease (increase) in short-term loans 101,178 (155,889)
Net decrease (increase) in lines of credit (1,355,811) 3,662,138
Purchase of bank premises and equipment (93,787) (37,895)
------------ --------------
Net cash provided (used) by investing activities (3,341,584) 4,483,829
---------- ------------
Financing Activities
Net increase in transaction and savings deposits (5,603,242) (2,591,348)
Proceeds from issuance of time deposits 17,273,769 3,463,596
Payments for maturing time deposits (9,280,789) (5,123,841)
Net increase in short-term borrowings 987,528 447,627
Payments on long-term debt (17,073) (18,625)
Proceeds from issuance of common stock 9,767 ---
Cash dividends paid to common stockholders (162,503) (71,211)
------------- -----------
Net cash provided (used) by financing activities 3,207,457 (3,893,802)
------------ -----------
Increase in cash and cash equivalents 282,271 899,905
Cash and cash equivalents at beginning of year 13,885,132 14,428,200
----------- ----------
Cash and cash equivalents at end of year $ 14,167,403 $15,328,105
============= ===========
Supplementary disclosures:
Interest paid on deposits and borrowings $ 783,903 $ 731,883
=============== ==============
Income taxes paid $ 0 $ 95,500
=============== ==============
</TABLE>
5
<PAGE>
Abigail Adams National Bancorp, Inc.
Notes to Consolidated Financial Statements
March 31, 1997 and 1996
(Unaudited)
1. General
The unaudited information at and for the three months ended March 31, 1997
and l996 furnished herein reflects all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim periods
presented. All adjustments are of a normal and recurring nature. All financial
information presented gives retroactive effect to (i) an increase in the number
of shares of authorized Common Stock from 800,000 to 5,000,000 and a reduction
of par value to $0.01 per share as of July 8, 1996, and (ii) the issuance by the
Company on July 9, 1996 of a three-for-one stock split in the form of a stock
dividend of two shares of Common Stock for each share of Common Stock issued and
outstanding.
2. Contingent Liabilities
In the normal course of business, there are various outstanding
commitments and contingent liabilities such as commitments to extend credit and
standby letters of credit that are not reflected in the accompanying
consolidated financial statements. No material losses are anticipated as a
result of these transactions on either a completed or uncompleted basis.
Under the terms of an employment agreement with the President and Chief
Executive Officer of the Company and the Bank, the Company is obligated to make
payments to her under certain conditions, totaling approximately $389,000, in
the event her employment is terminated. In addition, upon termination, certain
unvested stock options granted to the President and Chief Executive Officer
shall become immediately vested. Such unvested options are estimated to have an
aggregate value of approximately $289,000 at March 31, 1997.
Under the terms of severance agreements with seven key management
officials of the Bank, the Bank is obligated to make payments totaling $639,000
under certain conditions in the event of a change in control of the Company or
the Bank.
The Company maintains directors' and officers' liability insurance in the
amount of $5,000,000, subject to certain exclusions. In addition, according to
the by-laws, the Company is obligated to indemnify any director or officer for
any losses incurred in the performance of their duties as director to the full
extent authorized or permitted by Delaware general corporation law.
3. Shareholder Rights Plan
On April 12, 1994, the Board of Directors of the Company adopted a Rights
Agreement ("Rights Agreement"), which was amended April 20, 1995. Pursuant to
the Rights Agreement, the Board of Directors of the Company declared a dividend
of one share purchase right for each share of the Company's common stock
outstanding on April 25, 1994 ("Right"). Among other things, each Right entitles
the holder to purchase one share of the Company's common stock at an exercise
price of $20.11.
6
<PAGE>
Subject to certain exceptions, the Rights will be exercisable if a person
or group of persons acquires 25% or more of the Company's common stock
("Acquiring Person"), or announces a tender offer, the consummation of which
would result in ownership by a person or group of persons of 25% or more of the
common stock, or if the Board determines that a person or group of persons
holding 15% or more of the Company's common stock is an Adverse Person, as
defined in the Rights Agreement.
Upon the occurrence of one of the triggering events, all holders of
Rights, except the Acquiring Person or Adverse Person, would be entitled to
purchase the Company's common stock at 50% of the market price. If the Company
is acquired in a merger or business combination, each holder of a Right would be
entitled to purchase common stock of the Acquiring Person at a similar discount.
The Board of Directors may redeem the Rights for $0.01 per share or amend
the Plan at any time before a person becomes an Acquiring Person. The Rights
expire on December 31, 2003.
4. Employee Benefits
The Company has adopted a Nonqualified Stock Option Plan for certain
officers and key employees and has reserved 90,000 shares of common stock for
options to be granted under the plan. No options have been granted to date.
On January 23, 1996, the Company adopted a nonqualified Directors Stock
Option Plan (the "Directors Plan") and a qualified Employee Incentive Stock
Option Plan covering key employees (the "Employee Plan"), which were approved by
the shareholders on October 15, 1996. Shares subject to options under these
plans may be authorized but unissued shares or treasury shares. Options under
the Directors Plan are granted at a price not less than 85% of the fair market
value of the Company's common stock on the date of grant. The options vest
beginning in 1996 at an annual rate of 20% at the end of each year and become
fully vested in the event of a Change in Control, as defined in the Directors
Plan, or in the event that the Director leaves the Board. Options under the
Employee Plan are granted at a price of 100% of the fair market value of the
Company's common stock on the date of grant and are immediately exercisable.
Options under both plans expire not later than ten years after the date of
grant. Options for a total of 16,416 shares of common stock available for grant
under the above Plans were granted in 1996 at a price of $6.74 for directors and
$7.93 for employees. As of March 31, 1997, 1,194 options have been exercised
under these plans.
On November 19, 1996, the Company adopted a nonqualified Directors Stock
Option Plan (the "1996 Directors Plan") and a qualified Employee Incentive Stock
Option Plan covering key employees (the "1996 Employee Plan"). Shares subject to
options under these plans may be authorized but unissued shares or treasury
shares. Options under the 1996 Directors Plan are granted at a price not less
than 85% of the fair market value of the Company's common stock on the date of
grant. Options under the 1996 Employee Plan are granted at a price of 100% of
the fair market value of the Company's common stock on the date of grant. The
options granted
7
<PAGE>
under both the 1996 Directors Plan and the 1996 Employee Plan vest beginning in
1997 at an annual rate of 33.3% to 100% at the end of each year and become fully
vested in the event of a Change in Control, as defined in the 1996 Directors
Plan and the 1996 Employee Plan. Options under both plans expire not later than
ten years after the date of grant. Options for a total of 22,113 shares of
common stock are available for grant under the above Plans. Options totaling
20,608 were granted in 1996 at a price of $9.13 for directors and $10.74 for
employees. Options totaling 1,505 were granted to employees in 1997 at prices
ranging from $11.71 to $11.83. As of March 31, 1997, no options have been
exercised under these plans.
On March 29, 1996, the Company granted the President and Chief Executive
Officer a nonqualified stock option to purchase 75,000 shares at a price equal
to 85% of the fair market value of the Company's common stock on the date of
grant ($6.74). The option vests beginning in 1996 at an annual rate of 20% at
the end of each year and becomes fully vested in the event of a Change in
Control as defined in the Agreement, or in the event that she leaves the Company
or the Bank.
Compensation expense is recognized on the Directors Plan, the 1996
Directors Plan and the options granted to the President and Chief Executive
Officer in an amount equal to the difference between the quoted market price of
the stock at the date of grant and the amount the employee/director is required
to pay, ratably over the five year vesting periods.
On April 16, 1996, the Company and the Bank adopted an employee stock
ownership plan ("ESOP") with 401(k) provisions, replacing the Bank's former
401(k) Plan, which covered all full-time employees 21 years of age or older who
have completed one year of service. Participants may elect to contribute to the
ESOP a portion of their salary, which may not be less than 1% nor more than 15%,
of their annual salary (up to $9,500 for 1997). In addition, the Bank may make a
discretionary matching contribution equal to one-half of the percentage amount
of the salary reduction elected by each participant (up to a maximum of 3%),
which percentage will be determined each year by the Bank, and an additional
discretionary contribution determined each year by the Bank. Employee
contributions and the employer's matching contributions immediately vest. The
initial employer's discretionary contribution was immediately vested. All future
employer's discretionary contributions are vested as follows: 33 and 1/3% for
one year of service; 66 and 2/3% for two years of service; 100% for three years
of service, however, an employee's vested percentage will not be less than their
vested percentage under the former 401(k) Plan.
5. Net Income Per Share
Net income per common share is calculated by dividing net income by the
weighted average number of common shares and common share equivalents
outstanding during the period, 1,630,165 and 860,940 for the three months ended
March 31, 1997 and 1996, respectively. Stock options are included as common
share equivalents in the first quarter of 1996 but are not included in the first
quarter of 1997 as the dilution is immaterial.
8
<PAGE>
6. Change in Accounting Principles
(a) Accounting for Stock Based Compensation
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" (SFAS No. 123). SFAS No. 123 allows companies either to continue
to account for stock-based employee compensation plans under existing accounting
standards or to adopt a fair-value-based method of accounting as defined in the
new standard. The Company follows the existing accounting standards for these
plans, but provides annual pro-forma disclosure of net income and earnings per
share as if the expense provisions of SFAS No. 123 had been adopted.
(b) Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS No. 128).
SFAS No. 128 specifies the computation, presentation and disclosure requirements
for earning per share for entities with publicly held common stock or potential
common stock. The objective of SFAS No. 128 is to simplify the computation of
earnings per share and to make the U.S. standard for computing earnings per
share more compatible with the standards of other countries. SFAS No. 128 is
effective for financial statements for both interim and annual periods ending
after December 15, 1997. The adoption of SFAS No. 128 is not expected to have a
material impact on the Company.
(c) Disclosure of Information about Capital Structure
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 129, "Disclosure of Information about
Capital Structure" (SFAS No. 129). SFAS No. 129 continues the existing
requirements for companies to disclose the pertinent rights and privileges of
all securities other than ordinary common stock, but expands the number of
companies subject to portions of its requirements. SFAS No. 129 is effective for
financial statements for periods ending after December 15, 1997. The adoption of
SFAS No. 129 is not expected to have a material impact on the Company.
9
<PAGE>
PART I. FINANCIAL INFORMATION (Continued)
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
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Overview
Total assets of Abigail Adams National Bancorp, Inc. and subsidiary (the
"Company") were $116,019,000 at March 31, 1997 as compared to $112,162,000 at
December 31, 1996. Total assets at March 31, 1997 increased by $3,857,000 from
December 31, 1996 predominantly due to increases in short-term investments of
$3,775,000. Total deposits increased by $2,389,000 during the same period to
$97,544,000 at March 31, 1997 due primarily to normal fluctuations in the money
market balances, partially offset by growth in demand deposits and certificates
of deposit.
The Company reported net income for the first three months of 1997 of
$249,000, or $0.15 per share, for an annualized return on average assets of .95%
and an annualized return on average equity of 7.63%. This compares with return
on assets of 1.09% and return on equity of 14.23% for the first three months of
1996. Net income for the first three months of 1997 reflects a 5% increase over
the $238,000 net income, or $0.28 per share, recorded for the first three months
of 1996. Increases in net interest income and other income, partially offset by
increases in operating expenses associated with the opening of a new branch in
the fourth quarter of 1996, accounted for the growth in net income. Net income
per share declined during this period as a result of the issuance of 795,500
shares of common stock in the public stock offering completed in the third
quarter of 1996.
Analysis of Net Interest Income
Net interest income, the most significant component of the Company's
earnings, increased by $203,000, or 19%, to $1,296,000 for the first three
months of 1997 as compared to $1,093,000 for the comparable 1996 period. Average
earning assets for the first three months of 1997 of $ 99,890,000 increased by
$17,727,000, or 22%, over the comparable 1996 period. The increase in net
interest income resulted from increased earning assets, an increase in the
average loan to deposit ratio of 82% for the first three months of 1997 from 78%
for the comparable prior year period and a 7% increase in average demand deposit
accounts during the same period. The net interest spread for the first three
months of 1997 of 3.80% and a net interest margin of 5.26% for the same period,
reflected decrease of 15 basis points and 9 basis points, respectively, from the
prior year.
Other Income
Total other income increased by approximately $119,000, or 65%, to
$303,000 for the first three months of 1997, primarily due to increased income
recognized on ATM transactions resulting from the implementation in September
1996 of the $1.00 surcharge on noncustomer ATM transactions.
10
<PAGE>
Other Expense
Salaries and benefits of $538,000 for the first three months of 1997
increased by $106,000, or 25%, over the first three months of 1996, due
primarily to an increase in the number of employees attributable to the new
branch, normal merit increases, and associated increases in employee benefits.
Net occupancy expense of $229,000 for the first three months of 1997 reflects a
increase of $57,000, or 33%, from one year earlier due both to the opening of
the new branch during 1996 and additional depreciation expense of a local area
network installed in the later part of the second quarter of 1996. Professional
fees of $65,000 for the first three months of 1997 increased by $22,000 from one
year earlier due primarily to consulting expenses incurred in connection with
augmenting the Company's compliance infrastructure. Data processing expense of
$97,000 for the first three months of 1997 increased by $10,000, or 11%, over
the prior year due to the opening of the new branch as well as increased
activity levels and item charges. Other operating expense of $271,000 for the
first three months of 1997 reflects an increase of $103,000, or 61%, over the
prior year due primarily to increases in advertising, public relations, printing
and regulatory fees, as well as increases in administrative and overhead
expenses associated with opening the new branch.
Income Tax Expense
Income tax expense of $149,000 for the first three months of 1997 reflects
an increase of $11,000 over the $138,000 tax expense recorded one year earlier
due to an increases in pretax income. The Company's effective tax rate remained
at approximately 37% for the first three months of both 1997 and 1996.
Analysis of Loans
The loan portfolio at March 31, 1997 of $78,632,000 increased by
$5,619,000, or 8%, as compared to the December 31, 1996 balance of $73,013,000
primarily as a result of increased lending activity in the first three months of
1997 associated with the arrival of the Company's new Chief Lending Officer in
January 1997. New loans of $8,831,000, exclusive of short-term loans and lines
of credit, were originated in the first three months of 1997. Loan principal
payments of $4,537,000 offset only a portion of this increase. The loan to
deposit ratio at March 31, 1997 was 81% as compared to 77% at December 31, 1996.
On average, the loan to deposit ratio for the first three months of 1997 was 82%
as compared to 78% during the comparable period of the prior year.
Loan concentrations at March 31, 1997 and December 31, 1996 are summarized
as follows:
Loan Concentrations
At March 31, 1997 and December 31, 1996
March 31, December 31,
1997 1996
----- ----
Service industry 41% 38%
Real estate development/finance 27 30
Wholesale/retail 22 22
Other 10 10
---- ----
Total 100% 100%
==== ====
11
<PAGE>
Analysis of Investments
Securities available for sale totaling $2,675,000 matured during the
first three months of 1997 as compared to purchases of $1,500,000 during the
same period. These securities transactions coupled with scheduled amortization
and accretion for the first three months accounted for the $1,135,000 decrease
in the available for sale portfolio to $10,070,000 at March 31, 1997 as compared
to $11,205,000 at December 31, 1996. Long-term investment maturities of
$1,150,000 partially offset by purchases totaling $48,000 and normal pay downs
on mortgage-backed and other amortizing securities, account for the $1,118,000
decrease in long-term investments to $10,523,000 at March 31, 1997 from
$11,641,000 at December 31, 1996. Proceeds from maturing securities net of
reinvestments were used to fund new loans.
Short-term investments increased by $3,775,000 to $9,354,000 at March
31, 1997 due to normal fluctuations in the Company's liquidity.
Noninterest-Earning Assets
Cash and due from banks of $6,292,000 at March 31, 1997 decreased by
$3,493,000 from the December 31, 1996 balance of $9,785,000. The majority of
this decrease is attributable to a large deposit from one of the Company's large
commercial customers received on December 31, 1996 which was not available for
investment with other financial institutions until January 1, 1997.
Deposits
Total deposits of $97,544,000 at March 31, 1997 increased by $2,389,000, or
3%, from the December 31, 1996 balance of $95,155,000. Demand deposits of
$27,926,000 at March 31, 1997 reflect a $4,248,000, or 18%, increase from the
$23,678,000 balance at December 31, 1996 due principally to normal fluctuations
in the balances of commercial customers as well as an increase in the Company's
official checks outstanding. Normal fluctuations in the deposits of nonprofit
accounts make up the majority of the $694,000 decrease in NOW accounts to
$7,346,000 at March 31, 1997 as compared to $8,040,000 at December 31, 1996.
Money market accounts of $20,161,000 at March 31, 1997 decreased by $9,372,000
from the $29,533,000 balance reported at December 31, 1996 due primarily to
normal fluctuations in the balances of some of the Company's large corporate
customers. Certificates of deposit at March 31, 1997 of $40,517,000 increased by
$7,993,000 from the $32,524,000 balance at December 31, 1996, with certificates
of deposit $100,000 and over increasing by $5,757,000 and certificates of
deposit under $100,000 increasing by $2,236,000. The increase in certificates of
deposit over $100,000 is primarily due to increases in both brokered deposits
and collateralized government deposits, while the increase in certificates of
deposit under $100,000 is primarily due to the issuance of brokered deposits in
the first quarter of 1997.
Average noninterest-bearing demand deposits for the first three months of
1997 of $23,008,000 increased by $1,462,000, or 7%, from the comparable 1996
period, while average interest-bearing deposits increased by $8,928,000 during
the same period to $65,155,000. Average NOW accounts for the first three months
of 1997 of $7,424,000 decreased by $228,000. Average money market deposits for
the first three months of 1997 of $22,756,000 increased by
12
<PAGE>
$3,935,000 over the prior year's average balance. Average certificates of
deposit $100,000 and over increased by $5,663,000 to $17,771,000 for the first
three months of 1997 as compared to the first three months of 1996 due
principally to increases in collateralized government deposits. Average
certificates of deposit under $100,000 for the first three months of 1997 of
$15,730,000 decreased by $602,000 over the comparable period of the prior year
primarily due to the maturity of brokered deposits. Average noninterest-bearing
deposits to average total deposits during the first three months of 1997
represent 26% as compared to 28% one year earlier.
Asset Quality
Loan Portfolio and Adequacy of Allowance for Loan Losses
As a result of improvement in the quality of the loan portfolio over
the last few years as well as relatively low levels of net charge-offs from mid
1994 through mid 1996, the Company did not record a provision for loan losses.
Nonetheless, the unallocated portion of the Company's allowance for loan losses
continued to increase. In the last half of 1996, the Company reversed $275,000
of loan loss provision. Throughout this process, the Company continues to
recognize the risk characteristics of the loan portfolio, including specific
reserves for problem credits and general reserves for the overall loan
portfolio, and deems the allowance for loan losses of $1,095,000 at March 31,
1997 to be adequate. The allowance for loan losses as a percentage of
outstanding loans at March 31, 1997 was 1.39%, down from the 1.44% reported at
December 31, 1996. Both the total dollar amount of the allowance for loan
losses, as well as the portion of the allowance for loan losses which is not
allocated to any particular component of the loan portfolio at March 31, 1997
have increased from December 31, 1996. The unallocated portion of the allowance
for loan losses has increased by 19% to $139,000 from the December 31, 1996
level of $117,000 resulting primarily from recoveries recorded in the first
three months of 1997.
Allocation of Allowance for Loan Losses
At March 31, 1997 and December 31, 1996
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------------------------ -----------------------
Reserve % of loans Reserve % of loans
Amount to total loans Amount to total loans
<S> <C> <C> <C> <C>
Commercial $ 431 48.5 % $ 438 53.8%
Real estate - commercial mortgage 403 39.3 360 33.9
Real estate - residential mortgage 19 3.3 19 3.6
Real estate - construction 37 6.3 31 5.7
Installment 66 2.6 83 3.0
Unallocated 139 -- 117 --
------- ------- ------- ----
Total $ 1,095 100.00% $ 1,048 100.00%
======= ======= ======= =======
</TABLE>
13
<PAGE>
Transactions in the allowance for loan losses for the three months
ended March 31, 1997 and 1996 are summarized as follows:
Transactions in the Allowance for Loans Losses for the
Three Months Ended March 31, 1997 and 1996
(In thousands)
1997 1996
-------- ------
Balance at January 1 $1,048 $1,274
Recoveries:
Commercial 53 20
Installment 6 13
---- ----
Total recoveries 59 33
Loans charged off:
Installment (12) (45)
------- --------
Total charge-offs (12) (45)
------- --------
Net recoveries (charge-offs) 47 (12)
------- --------
Balance at March 31 $ 1,095 $ 1,262
======= =======
Ratio of net recoveries (charge-offs)
to average loans (1) 0.26% (.08)%
====== =======
(1) Ratio of net charge-offs to average loans is computed on an annualized
basis for the three months ended March 31, 1997 and 1996.
Nonperforming Assets
Nonaccrual loans at March 31, 1997 of $875,000 are down by $88,000 from the
$963,000 reported at December 31, 1996. Nonaccrual loans at March 31, 1997
include loans guaranteed by the U.S. Small Business Administration ("SBA")
totaling $659,000. Banking regulations require that the full balance of these
loans be placed on nonaccrual status, despite the SBA guarantee on an average of
100% of the total. Restructured loans at March 31, 1997 of $572,000 remain
virtually unchanged from the $573,000 reported at December 31, 1996. Loans past
due 90 days or more decreased to $144,000 at March 31, 1997 from $153,000 at
December 31, 1996 due principally to paydowns on loans.
14
<PAGE>
Analysis of Nonperforming Assets
At March 31, 1997 and December 31, 1996
(In thousands)
March 31, December 31,
1997 1996
------ -----
Nonaccrual loans:
Commercial $875 $863
Real estate - commercial mortgage -- 100
-------- ------
Total nonaccrual loans (1) 875 963
------ ------
Past due loans:
Real estate - commercial mortgage 137 142
Installment - individuals 7 11
------ ------
Total past due loans 144 153
----- ------
Restructured loans:
Commercial 572 573
----- -----
Total restructured loans 572 573
------ -----
Total nonperforming assets $ 1,591 $ 1,689
======= =======
Total nonperforming assets exclusive of
SBA guaranteed balances $ 931 $ 1,094
======== =======
Ratio of nonperforming assets
to gross loans plus foreclosed properties (2) 2.02% 2.31%
Ratio of nonperforming assets to total
assets (2) 1.37% 1.51%
Percentage of allowance for loan losses to
nonperforming assets (2) 65.83% 62.05%
- ----------------------------
(1) Nonaccrual loans include $659,000 and $607,000 in loans guaranteed by
the SBA at March 31, 1997 and December 31, 1996, respectively. The
outstanding balance of these loans are insured for 100%, or $659,000
and 97.9%, or $594,000, respectively.
(2) Ratios include SBA guaranteed loan balances.
Potential Problem Loans
At March 31, 1997 and December 31, 1996, respectively, loans totaling
$796,000 and $781,000 were classified as potential problem loans which are not
reported in the table entitled "Analysis of Nonperforming Assets." The loans are
subject to management attention as a result of financial difficulties of the
borrowers and their classification is reviewed on a quarterly basis. All of the
potential problem loans at March 31, 1997 are partially to fully secured. At
December 31, 1996, 91% of potential problem loans were partially to fully
secured, with $66,000 of the remaining 9%, or $73,000, guaranteed by the SBA.
The $15,000 increase in potential problem loans from December 31, 1996 to March
31, 1997 is primarily attributable to the addition in 1997 of one potential
problem loan which had previously been reported as nonaccrual, net of the
transfer of one loan to nonaccrual status.
15
<PAGE>
Impaired Loans
At March 31, 1997 and December 31, 1996, respectively, loans totaling
$1,884,000 and $1,955,000 were classified as impaired loans, all of which are
reported above as nonaccrual, restructured or potential problem loans.
Interest Sensitivity
Through the Bank's Asset/Liability Investment Committee, sensitivity of
net interest income to fluctuations in interest rates is considered through
analysis of the interest sensitivity positions of major asset and liability
categories. As a result of inherent limitations in this type of analysis, the
Company does not necessarily attempt to maintain a matched position for each
time frame. To augment this analysis, the Company also prepares an analysis of
the effect on net interest income of 1%, 2% and 3% interest rate movements in
either direction. Based on the Company's interest sensitivity position and the
analyses performed on the effect of interest rate movements at March 31, 1997
net interest income will not be materially impacted by either a rising or
declining interest rate environment.
Liquidity and Capital Resources
Liquidity
Principal sources of liquidity are cash and unpledged assets that can
be readily converted into cash, including investment securities maturing within
one year, the available for sale security portfolio and short-term loans. In
addition to $15,646,000 in cash and short-term investments at March 31, 1997,
the Company has a securities portfolio which can be pledged to raise additional
deposits and borrowings, if necessary. At March 31, 1997, the Company had
$2,170,000 in unpledged securities which were available for such use. As a
percentage of total assets, the amount of these cash equivalent assets at March
31, 1997 and December 31, 1996 was 15% and 20%, respectively. Normal
fluctuations in the deposit levels of some of the Company's large corporate
customers resulted in corresponding fluctuations in the Company's liquidity
position (short-term investments). The Bank's liquidity needs are mitigated by
the sizeable base of relatively stable funds which includes demand deposits, NOW
and money market accounts, savings deposits and nonbrokered certificates of
deposit under $100,000 (excluding financial institutions and custodial funds
raised under deposit acquisition programs) representing 74% of average total
deposits for the three months ended March 31, 1997 and 79% of average total
deposits for the year ended December 31, 1996. In addition, the Bank has
unsecured lines of credit from correspondent financial institutions which can
provide up to an additional $3,000,000 in liquidity as well as access to other
collateralized borrowing programs. Through its membership in the Federal Home
Loan Bank of Atlanta (the "FHLB"), which serves as a reserve or central bank for
member institutions within its region, the Bank is eligible to borrow up to
approximately $1,501,000 in funds from the FHLB collateralized by loans secured
by first liens on one to four family, multifamily and commercial mortgages as
well as investment securities. At March 31, 1997, $1,122,000 in borrowings from
the FHLB were outstanding. As of April 16, 1997, an $1,193,000 in loans were
pledged to the FHLB, thus increasing the borrowing limit by $671,000. The Bank
is eligible to increase the maximum amount to be borrowed by $7,499,000 with the
purchase of up to $1,648,000 in additional stock in
16
<PAGE>
the FHLB. The Company has adequate resources to meet its liquidity needs.
Increases in deposit levels comprise the majority of the Company's net
cash inflows from financing activities for the first three months of 1997. Loan
originations, net of repayments and maturities of securities, during the first
three months of 1997 constitute the majority of the Company's cash outflows from
investing activities.
Stockholders' Equity
In the third quarter of 1996, the Company completed a stock offering
issuing 795,500 shares at a price of $8.75 per share, resulting in net proceeds
to the Company of $6,019,000 after underwriting discounts, commissions and
expenses. Of these proceeds, $219,000 was used to fund a loan to The Adams
National Bank Employee Stock Ownership Plan with 401(k) Provisions ("ESOP") to
purchase stock in that public offering. Immediately prior to the stock offering,
the Company increased the number of shares of authorized Common Stock from
800,000 to 5,000,000, reduced the par value to $0.01 per share and issued a
three-for-one stock split in the form of a stock dividend of two shares of
Common Stock for each share of Common Stock issued and outstanding. As of July
12, 1996, the effective date of the offering, the Company's Common Stock was
approved for listing on the Nasdaq National Market.
Stockholders' equity at March 31, 1997 of $13,229,000 increased by
$89,000 from December 31, 1996. Common stock issued through the exercise of
options granted under the Employee Incentive Stock Option Plan coupled with
dividends paid on allocated shares of the Employee Stock Ownership Plan with
401(k) Provisions accounted for a portion of this increase. Net income of
$249,000 for the first three months of 1997 was partially offset by both a
$7,000 increase in unrealized losses on securities, net of taxes and dividends
declared during the quarter of $163,000. Average stockholders' equity as a
percentage of average total assets for 1997 was 12.47% as compared to 7.67% for
the comparable prior year period.
Under the risk based capital guidelines issued by the Federal Reserve
Board and the Comptroller of the Currency, total capital consists of core
capital (Tier 1) and supplementary capital (Tier 2). For the Company and the
Bank, Tier 1 capital consists of stockholders' equity, excluding unrealized
gains and losses on securities, and Tier 2 capital consists of long-term debt
and a portion of the allowance for loan losses. Assets include items both on and
off the balance sheet, with each item being assigned a "risk-weight" for the
determination of the ratio of capital to risk-adjusted assets. These guidelines
require a minimum of 8% total capital to risk-adjusted assets, with at least 4%
being in Tier 1 capital. At March 31, 1997, the Company's total risk-based
capital ratio and Tier 1 capital ratio of 16.42% and 15.17%, respectively, met
the regulatory definition of "well- capitalized." Under regulatory guidelines,
an institution is generally considered "well-capitalized" if it has a total
risk-based capital ratio of 10% or greater, a Tier 1 capital ratio of 6% or
greater and a leverage ratio of 5% or greater (discussed below). The March 31,
1997 ratios are based on total capital of $14,363,000, Tier 1 capital of
$13,270,000 and risk adjusted assets of $87,449,000. At March 31, 1997, the
Bank's total risk-based capital ratio and Tier 1 capital ratio of 10.45% and
17
<PAGE>
9.20%, respectively, also met the definition of "well-capitalized." The March
31, 1997 ratios for the Bank are based on total capital of $8,883,000, Tier 1
capital of $7,820,000 and risk-adjusted assets of $85,037,000.
The Federal Reserve Board and the Comptroller of the Currency have also
adopted a minimum leverage ratio of Tier 1 capital to total assets which is
intended to supplement the risk- based capital guidelines. The minimum Tier 1
leverage ratio is 3% for the most highly rated institutions which meet certain
standards. For other banks and bank holding companies, the guidelines provide
that the Tier 1 leverage ratio should be at least 1% to 2% higher. At March 31,
1997, the Company's and the Bank's Tier 1 leverage ratios based on annual
average assets of $106,146,000 and $103,957,000 were 12.50% and 7.52%,
respectively, meeting the regulatory definition of "well-capitalized."
18
<PAGE>
PART II.
- --------------------------------------------------------------------------------
Item 6 - Exhibits and Reports on Form 8-K
- --------------------------------------------------------------------------------
(a) Exhibits
Exhibit No. Description of Exhibit
- ----------- ----------------------
13 Abigail Adams National Bancorp, Inc. Financial Summary for March
31, 1997
27 Financial Data Schedule
(b) No reports on From 8-K were filed during the quarter ended March 31, 1997.
19
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
ABIGAIL ADAMS NATIONAL BANCORP, INC.
------------------------------------
Registrant
Date: May 14, 1997 /s/ Barbara Davis Blum
-------------- -----------------------
Barbara Davis Blum
Chairwoman of the Board,
President and Director
(Principal Executive Officer)
Date: May 14, 1997 /s/ Kimberly J. Levine
-------------- -----------------------
Kimberly J. Levine
Senior Vice President & Chief Financial Officer
(Principal Financial and
Accounting Officer)
20
[The following quarterly financial report was printed in a 11 x 8 1/2 landscape
presentation. While five (5) pages are presented here, the actual report
produced was a one page 3-fold format.]
April 30, 1997
Dear Shareholder:
We are pleased to inform you that for
the seventh consecutive quarter, the Board of
Directors has declared a dividend. Your first
quarter dividend remains $.10 per share, up
from $.083 per share during 1996.
Abigail Adams National Bancorp, Inc.
reported net income of $249,000 for the first
quarter of 1997, up from $238,000 for the
first quarter of 1996. Total assets and total
loans have also increased over the prior
year, both growing over 30% to $116,000,000
and $78,600,000, respectively. As always, we
continue to maintain our well- capitalized
status (the top capital rating).
We remain strongly committed to
expanding our branching network. Our new full
service branch at 1604 17th Street, Dupont
Circle East, in the District of Columbia is
living up to expectations in its contribution
to our total banking network. We have already
opened an ATM at the corner of 7th and H
Streets in Chinatown, the site of our newest
full service branch which is scheduled to
open this fall. The completion of the branch
coincides with the opening of the new MCI
Arena across the street. Other branches are
in the planning stages.
We take satisfaction in these
accomplishments as well as in our twenty
years of outstanding service to our community
of customers. Over the years, we have
faithfully served the needs of our small
business, commercial real estate and
non-profit customers, offering a high level
of personalized service without the
bureaucracy of a large bank environment. We
appreciate our customers' business and value
each as important.
If you are not already banking at the
Adams National Bank, please support the
growth of your stock by doing so. We believe
you will find it a most satisfactory
experience.
Sincerely,
/s/ Barbara Davis Blum
----------------------
Barbara Davis Blum
Chairwoman, President &CEO
[Page: Outside back right page or folded inside right page]
<PAGE>
The
Adams
National Bank
1627 K Street, NW
Washington, DC 20006
(202) 466-4090
www.adamsbank.com.
Branch Locations Board of Directors
Main Office Barbara Davis Blum
1627 K Street, NW Chairwoman, President and
Washington, DC 20006 Chief Executive Officer
(202) 466-4090 The Adams National Bank
Dupont Circle East Shireen L. Dodson
1604 17th Street NW Assistant Director
Washington, DC 20009 Center for African American
(202) 466-4090 History and Culture
Smithsonian Institution
Georgetown
2905 M Street, NW Susan Hager
Washington, DC 20007 Chairwoman and
(202) 466-4090 Chief Executive Officer
Hager Sharp, Inc.
Union Station
50 Massachusetts Ave, NE Jeanne D. Hubbard
Washington, DC 20002 Executive Vice President
(202) 466-4090 First Sentry Bank (W. Va.)
MCI Center/CHinatown Clarence L. James, Jr., Esquire
(Opening Fall, 1997) Executive Director
802 Seventh Street, NW Executive Leadership Council
Washington, DC 20001
Steve Protulis
Executive Director
National Council of
Senior Citizens
Marshall T. Reynolds
Chairman & President
Champion Industries, Inc.
Robert L. Shell, Jr.
Chief Executive Officer
Guyan International
Dana B. Stebbins, Esquire
Partner
Wilkes, Artis, Hedrick & Lane
Susan J. Williams
President
Bracy Williams & Company
FDIC
Equal Housing Lender
[Union logo 'bug' here]
[Page: Outside back middle page.]
<PAGE>
VISION LEADERSHIP STRATEGY
[Mural Artwork appears here in the background]
20
Abigail Adams National Bancorp, Inc.
years
In The National Capital Region
First Quarter Report
March 31, 1997
[Page: Outside back left page or the left folded front cover]
<PAGE>
Balance Sheet Abigail Adams National Bancorp, Inc.
- --------------------------------------------------------
($ IN THOUSANDS)
(UNAUDITED)
March 31,
1997 1996
- ------------------------------------------------------------
Assets:
Cash and due from banks $ 6,293 $ 4,478
Short-term investments 9,354 11,337
Securities (market value of
$20,580 and $12,624 in 1997
and 1996, respectively) 20,592 12,561
Loans 78,632 60,215
Less: Allowance for loan losses (1,095) (1,262)
------ ------
Loans, net 77,537 58,953
Other assets 2,243 1,560
----- -----
Total assets $ 116,019 $ 88,889
========= =========
Liabilities and
Stockholders' Equity:
Deposits $ 97,545 $ 78,812
Short-term borrowings 2,904 2,233
Long-term debt 1,122 168
Other liabilities 1,219 887
----- ---
Total liabilities 102,790 82,100
Stockholders' equity 13,229 6,789
------ -----
Total liabilities and
stockholders' equity $ 116,019 $ 88,889
========= =========
Selected Data Abigail Adams National Bancorp, Inc.
- -------------------------------------------------------------
March 31, 1997 and 1996
(UNAUDITED)
1997 1996
- -------------------------------------------------------------
Allowance for loan losses as a
percentage of loans 1.39% 2.10%
Average equity to average assets 12.47% 7.67%
Return on average assets .95% 1.09%
Net interest margin 5.26% 5.35%
[Page: Inside left page.]
<PAGE>
Statement of Income Abigail Adams National Bancorp, Inc.
- --------------------------------------------------------------
($ IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Years ended:
March 31,
1997 1996
- --------------------------------------------------------------
Interest income:
Interest and fees on loas $ 1,697 $ 1,509
Interest on securities 333 182
Interest on short-term investments 72 116
------- ------
Total interest income 2,102 1,807
Interest expense:
Interest on deposits 753 682
Interest on short-term borrowings 33 29
Interest on long-term debt 20 3
------- ------
Total interest expense 806 714
------- ------
Net interest income 1,296 1,093
Other income:
Service charges on deposits 291 173
Other income 11 12
------ -----
Total other income 302 185
Other expense:
Salaries and employee benefits 538 432
Net occupancy expense 229 172
Professional fees 65 42
Data processing expense 97 87
Other operating expense 271 168
------- -----
Total other expense 1,200 901
------- ------
Income before taxes 398 377
Income tax expense 149 139
------ -----
Net income $ 249 $ 238
======= ========
Net income per share $ .15 $ .28
======= =======
Weighted average number of shares
used to compute EPS 1,630,165 860,940
[Page: Inside middle page] [Page: Inside right page]
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000356809
<NAME> ABIGAIL ADAMS NATIONAL BANCORP, INC.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,292,403
<INT-BEARING-DEPOSITS> 1,479,000
<FED-FUNDS-SOLD> 7,875,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,069,844
<INVESTMENTS-CARRYING> 10,522,526
<INVESTMENTS-MARKET> 10,510,704
<LOANS> 78,632,100
<ALLOWANCE> (1,094,952)
<TOTAL-ASSETS> 116,019,036
<DEPOSITS> 97,544,478
<SHORT-TERM> 2,904,217
<LIABILITIES-OTHER> 1,219,238
<LONG-TERM> 1,121,742
0
0
<COMMON> 16,559
<OTHER-SE> 13,212,802
<TOTAL-LIABILITIES-AND-EQUITY>116,019,036
<INTEREST-LOAN> 1,697,427
<INTEREST-INVEST> 333,005
<INTEREST-OTHER> 72,020
<INTEREST-TOTAL> 2,102,452
<INTEREST-DEPOSIT> 752,834
<INTEREST-EXPENSE> 806,626
<INTEREST-INCOME-NET> 1,295,826
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,200,209
<INCOME-PRETAX> 398,287
<INCOME-PRE-EXTRAORDINARY> 398,287
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 248,971
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.53
<LOANS-NON> 875,211
<LOANS-PAST> 144,266
<LOANS-TROUBLED> 572,077
<LOANS-PROBLEM> 796,082
<ALLOWANCE-OPEN> (1,048,487)
<CHARGE-OFFS> 12,049
<RECOVERIES> (58,513)
<ALLOWANCE-CLOSE> (1,094,952)
<ALLOWANCE-DOMESTIC> (1,094,952)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 138,552
</TABLE>
