<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
--------------
TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------- -------------
Commission file number 0-10627
---------------------------------
NORTH COUNTY BANCORP
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 95-3669135
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
444 S. Escondido Blvd., P.O.Box 462990, Escondido, California 92025
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (760) 743-2200
--------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
As of May 7, 1998 the Registrant had 4,637,290 shares of no par value common
stock issued and outstanding.
<PAGE>
NORTH COUNTY BANCORP
Page
----
Part I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheet -
March 31, 1998 and December 31, 1997 2
Consolidated Statement of Income -
Three Months Ended March 31, 1998 and 1997 3
Consolidated Statement of Cash Flows -
Three months Ended March 31, 1998 and 1997 4
Notes to Consolidated Financial Statements 5
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 6
Part II OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 11
</TABLE>
1
<PAGE>
NORTH COUNTY BANCORP
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 24,414 $ 24,262
Federal funds sold 5,800 4,000
--------- ---------
30,214 28,262
Investment securities:
Available for sale 18,584 17,544
Held to maturity 11,036 12,135
Loans, net 218,900 207,723
Other real estate owned 1,126 986
Premises and equipment, net 8,808 8,582
Accrued interest receivable and other assets 5,404 5,502
--------- ---------
$ 294,072 $280,734
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 88,385 $ 89,852
Interest bearing 175,402 161,703
--------- ---------
263,787 251,555
Accrued expenses and other liabilities 2,654 2,377
Federal funds purchased and
U.S. Treasury demand note 1,000 1,194
Capital lease obligation 412 415
--------- ---------
Total liabilities 267,853 255,541
--------- ---------
Stockholders' equity:
Common stock, no par value,
Authorized, 10,000,000 shares;
Outstanding shares 4,637,290
in 1998 and 1997 16,058 16,058
Retained earnings 10,137 9,137
Unrealized gain (loss) on available for
sale securities, net of tax 24 (2)
--------- ---------
Total stockholders' equity 26,219 25,193
--------- ---------
$294,072 $280,734
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
NORTH COUNTY BANCORP
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
------- -------
<S> <C> <C>
Interest income:
Interest and fees on loans $5,358 $4,470
Investment securities 440 444
Federal funds sold 105 58
------- -------
Total interest income 5,903 4,972
------- -------
Interest expense:
Deposits 1,403 1,243
Federal funds purchased and
U.S. Treasury demand note 8 32
Notes payable, capital lease obligation and
convertible subordinated debentures 15 83
------- -------
Total interest expense 1,426 1,358
------- -------
Net interest income 4,477 3,614
Provision for loan and lease losses 590 335
------- -------
Net interest income after provision
for loan and lease losses 3,887 3,279
------- -------
Other income 1,987 1,445
Other expense 4,212 3,682
------- -------
Income before income taxes 1,662 1,042
Provision for income taxes 662 392
------- -------
Net income $1,000 $ 650
------- -------
------- -------
Basic earnings per share $ 0.22 $ 0.16
------- -------
------- -------
Diluted earnings per share $ 0.21 $ 0.14
------- -------
------- -------
Comprehensive income:
Net income $1,000 $ 650
Unrealized gains and losses, net of tax 24 (2)
------- -------
$1,024 $ 648
------- -------
------- -------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
NORTH COUNTY BANCORP
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
-------- ------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,000 $ 650
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of:
Office property and equipment 264 330
Deferred loan fees and costs, net (202) (52)
Investment premiums and discounts, net 45 26
Other 9 45
(Gain) on sale of other real estate owned (77) (132)
Provision for loan and lease losses 590 335
(Increase) decrease in interest receivable (130) 202
Increase in taxes payable 569 58
Decrease in accrued expenses (346) (368)
Increase in interest payable 96 161
Other, net 202 194
--------- ---------
Net cash provided by operating activities 2,020 1,449
--------- ---------
Cash flows from investing activities:
Proceeds from sales and maturities of investment securities 3,331 2,180
Purchase of investment securities (3,317) ---
Net increase in loans (11,705) (6,099)
Purchase of premises and equipment (489) (120)
Proceeds from sale of other real estate owned 77 137
--------- ---------
Net cash used in investing activities (12,103) (3,902)
--------- ---------
Cash flows from financing activities:
Cash payments on notes payable and capital lease obligations (3) (3)
Net increase in deposits 12,232 19,563
Net (decrease) increase in short term borrowings (194) 1,564
Net decrease in long term borrowings --- (33)
--------- ---------
Net cash provided by financing activities 12,035 21,091
--------- ---------
Net increase in cash and cash equivalents 1,952 18,638
Cash and cash equivalents at beginning of year 28,262 28,136
--------- ---------
Cash and cash equivalents at end of period $ 30,214 $ 46,774
--------- ---------
--------- ---------
Disclosures:
Total interest paid $ 1,330 $ 1,197
--------- ---------
--------- ---------
Total taxes paid $ --- $ 385
--------- ---------
--------- ---------
Foreclosed real estate loans $ 140 $ 581
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
NORTH COUNTY BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial information has been prepared in accordance with
the Securities and Exchange Commission rules and regulations for quarterly
reporting and therefore does not necessarily include all information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. This information
should be read in conjunction with the Company's Annual Report for the year
ended December 31, 1997.
Operating results for interim periods are not necessarily indicative of
operating results for an entire fiscal year. In the opinion of management,
the unaudited financial information for the three months ended March 31, 1998
and 1997, reflect all adjustments, consisting only of normal recurring
accruals and provisions, necessary for a fair presentation thereof.
NOTE 2 - EARNINGS PER SHARE
Earnings per share are based upon the weighted average number of common stock
and common stock equivalent shares outstanding adjusted retroactively for
stock dividends. The weighted average number of shares outstanding for basic
earnings per share was 4,637,290 and 4,208,679 for the three months ended
March 31, 1998 and 1997, respectively. The calculation of diluted earnings
per share for the three months ended March 31, 1998 and 1997, assumes the
issuance of 175,067 and 464,025 shares of common stock, respectively, upon
the conversion of the stock options and convertible subordinated debentures.
The weighted average number of shares outstanding for diluted earnings per
share was 4,812,357 and 4,672,704 for the three months ended March 31, 1998
and 1997, respectively.
5
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
North County Bancorp (the "Company") has one wholly owned subsidiary, North
County Bank (the "Bank"). North County Bank's operations are the only
significant operations of the Company. The accompanying financial
information should be read in conjunction with the Company's Annual Report on
Form 10-K for the year ended December 31, 1997.
Statements contained in this Report on Form 10Q that are not purely
historical are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, including statements regarding the Company's expectations,
intentions, beliefs or strategies regarding the future. All forward-looking
statements included in this document are based on information available to
the Company on the date thereof, and the Company assumes no obligation to
update any such forward-looking statements. It is important to note that the
Company's actual results could differ materially from those in such
forward-looking statements. Factors that could cause actual results to
differ materially from those in such forward-looking statements are included
in the discussions below.
FINANCIAL CONDITION
Total assets of the Company increased $13.4 million or 4.8% to $294.1 million
at March 31, 1998, from $280.7 million at December 31, 1997. This growth was
centered in gross loans which increased $11.2 million or 5.3% to $222.2
million from $211.0 million at the end of 1997. Within the loan
portfolio,commercial real estate loans increased $3.1 million to $46.0
million, other commercial loans increased $5.9 million to $117.6 million and
construction loans increased $4.5 million to $14.8 million at quarter end.
These increases were partially offset by a decrease in consumer loans of $2.0
million to $39.0 million. Title I loans, a component of consumer loans,
decreased $1.4 million from the end of 1997 to $9.0 million at March 31,
1998. The Company continues to experience poor demand for consumer financing
primarily due to increased competition from non-bank lenders as well as other
financial institutions in its market area. There was little change in the
loan portfolio mix of which commerical real estate and other commercial loans
comprised 20% and 53%, respectively, at the end of both periods. Consumer
loans declined slightly to 18% from 19% of gross loans and construction loans
increased to 7% from 5% at year end. Federal funds sold increased $2.0
million to $5.8 million at the end of the first quarter. Other real estate
owned increased $140,000 to $1.1 million during the first three months of
1998 from $1.0 million due to the addition of two properties which were
subsequently sold in April and May of this year. During the first quarter,
the Company was able to sell one additional property which had a carrying
value of $0.
Total deposits at March 31, 1998 increased $12.2 million or 4.9% from
December 31, 1997. The deposit growth consisted of interest bearing
accounts which increased $13.7 million or 8.5% partially offset by
noninterest-bearing demand deposits which decreased slightly $1.5 million or
1.6%. In the interest-bearing deposit categories, NOW accounts increased $6.4
million to $43.0 million, savings and money market accounts increased $1.7
million to $80.0 million, and time deposits increased $5.6 million to $52.4
million. Total stockholders' equity at March 31, 1998 was $26.2 million
compared to $25.2 million at December 31, 1997, an increase of $1.0 million
or 4.1% due to first quarter earnings. The Company's Tier I risk based
capital, total risk based capital and Tier I leverage capital ratios were
10.75%, 12.00% and 9.12%, respectively, at March 31, 1998, compared to
10.88%, 12.14% and 8.76%, respectively, at December 31, 1997. The Bank's
Tier I risk based capital, total risk based capital and Tier I leverage
capital ratios were 10.72%, 11.97% and 9.10%, respectively, at March 31,
1998, compared to 10.85%, 12.10% and 8.73%, respectively, at December 31,
1997.
6
<PAGE>
RESULTS OF OPERATIONS
SUMMARY
Net income for the three months ended March 31, 1998 increased $350,000 or
53.8% to $1.0 million from $650,000 for the same 1997 period. This increase
is attributable to a number of factors, the largest of which was an increase
in net interest income of $863,000 or 23.9% to $4.5 million for the first
quarter of 1998 from $3.6 million for the same quarter last year. The
provision for loan and lease losses increased $255,000 or 76.1% to $590,000
from $335,000 primarily due to loan growth. Other income increased $542,000
and was offset by an increase of $530,000 in other expense. The provision
for income taxes increased $270,000 to $662,000 for the first three months of
1998 from $392,000 for the same prior year period due to an increase in
pre-tax earnings of $620,000 and a slightltly higher effective tax rate.
Return on average assets and average stockholders' equity increased during
the first quarter of 1998 to 1.41% and 15.46%, respectively, from 1.01% and
12.62%, respectively for the same 1997 period. Basic and diluted earnings
per share for the first three months of 1998 increased to $0.22 and $0.21,
respectively, from $0.16 and $0.14, respectively, for the same 1997 period.
The 1997 earnings per share calculations have been restated to reflect a 5%
stock dividend paid on January 30, 1998. (See RESULTS OF OPERATIONS --
PROVISION FOR LOAN AND LEASE LOSSES, RESULTS OF OPERATION -- NET INTEREST
INCOME, and RESULTS OF OPERATIONS -- OTHER INCOME AND EXPENSE.)
NET INTEREST INCOME
Net interest income for the three months ended March 31, 1998 compared to
1997 increased $863,000 or 23.9% primarily due to growth of 14.0% or $30.6
million in average interest earning assets. Interest income on earning assets
increased $931,000 or 18.7% to $5.9 million. The growth in interest income
was primarily due to an increase of $888,000 in interest and fees on loans.
Average loans increased $30.2 million to $212.4 million in the first quarter
of 1998 from $182.2 million for the same 1997 period. The average tax
equivalent yield on loans in the same time periods increased to 10.24%
compared to 9.97%. The tax equivalent yield on earning assets was 9.60% for
the first quarter of 1998 compared to 9.23% for the same quarter last year.
The net tax equivalent interest margin (net interest income as a percentage
of average interest-earning assets) was 7.29% and 6.72% for the three months
ended March 31, 1998 and 1997, respectively.
Interest expense increased $68,000 or 5.0% for the first three months of 1998
compared to the same period in 1997. The increase in interest expense
consisted of an increase of $160,000 in interest paid on deposits, partially
offset by a decrease of $92,000 in interest expense on other borrowings,
primarily long term borrowings. The average rate paid on interest-bearing
deposits increased during this time period to 3.40% at March 31, 1998
compared to 3.34% for the same 1997 period. The average rate paid on money
market and savings deposits increased to 3.38% from 3.27%. During the same
period the average rate paid on NOW and time deposits decreased slightly to
1.34% and 5.03%, respectively, from 1.43% and 5.06%, respectively. At March
31, 1997, the Company had $1.5 million outstanding in 9 1/4% convertible
subordinated debentures (the "Debentures") and $1.6 million outstanding under
two term notes. The Company, at its option, redeemed the Debentures for
common stock in October of 1997. The term notes were paid in full in May of
that same year. Consequently, average long term borrowings for the first
quarter of 1998 decreased to $413,000 from $3.5 million for the same prior
year period. The average rates paid on total interest-bearing liabilities
were 3.43% and 3.51% for the first three months of 1998 and 1997,
respectively.
OTHER INCOME AND OTHER EXPENSE
Other income and expense increased $542,000 and $530,000, respectively, for
the three months ended March 31, 1998. The increase in other income is
primarily due to an increase of $534,000 or 392.7% in gains on loan sales due
to an increase of $250,000 in gains on the sale of SBA loans and $284,000 in
gains on the sale of Title I and equity loans. The Company sold
7
<PAGE>
$1.9 million in SBA loans in the first quarter of 1998 and sold none during
the same quarter last year. Title I and equity loans sold totaled $10.8
million and $5.8 million during the first three months of 1998 and 1997,
respectively. Other expense consists primarily of salaries and employee
benefits which increased $325,000 to $2.5 million, occupancy expense which
decreased $60,000 to $791,000, advertising and other public relations which
increased $64,000 to $166,000, telephone expense which increased $29,000 to
$114,000, and supplies which increased $14,000 to $88,000.
PROVISION FOR LOAN AND LEASE LOSSES
The provision for loan and lease losses for the three months ended March 31,
1998 was $590,000 compared to $335,000 for the comparable 1997 period. The
amount of the provision reflects management's judgement as to the adequacy of
the reserve for loan and lease losses and is generally determined by the
periodic review of the loan portfolio, the Bank's loan loss experience, and
current and expected economic conditions. The increase in the provision for
loan and lease losses reflects a provision of $340,000 during the first
quarter of 1998 compared to $150,000 in the first quarter of 1997 to
supplement the Company's Title I HUD reserve due to potential losses in the
Title I portfolio. Net charge offs increased to $530,000 for the first three
months of 1998 from $160,000 for the same prior year period. The annualized
ratio of net charge offs to total loans was 0.95%, 0.47% and 0.34% at March
31, 1998, December 31, 1997, and March 31, 1997, respectively. The loan and
lease loss reserve was 1.50%, 1.55% and 1.78% of total gross loans at March
31, 1998, December 31, 1997 and March 31, 1997, respectively.
Loans are charged against the reserve, when in management's opinion, they are
deemed uncollectible, although the Bank continues to aggressively pursue
collection. Although management believes that the reserve for loan and lease
losses is adequate to absorb losses as they arise, there can be no assurance
that the Company will not sustain losses in any given period which could be
substantial in relation to the size of the reserve.
NONPERFORMING ASSETS
The following table provides information with respect to the components of
the Company's nonperforming assets at March 31, 1998 and December 31, 1997
(in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ------------
<S> <C> <C>
Nonaccrual loans:
Commercial $2,620 $2,163
Installment and consumer 552 858
------ ------
Total nonperforming loans 3,172 3,021
------ ------
Other real estate owned 1,126 986
------ ------
Total nonperforming assets $4,298 $4,007
------ ------
------ ------
Nonperforming assets to total
gross loans plus other real
estate owned 1.92% 1.89%
------ ------
------ ------
</TABLE>
The Company considers a loan to be nonperforming when any one of the
following events occurs: (a) any installment of principal or interest is 90
days past due; (b) the full timely collection of interest or principal
becomes uncertain; (c) the loan is classified as "doubtful" by bank
examiners; or (d) a portion of its principal balance has been charged-off.
The Company's
8
<PAGE>
policy is to classify loans which are 90 days past due as nonaccrual loans
unless Management determines that the loan is adequately collateralized and
in the process of collection or other circumstances exist which would justify
the treatment of the loan as fully collectible.
Impaired loans were recorded at $2.0 million and $464,000 for commercial
loans and real estate mortgage loans, respectively, at March 31, 1998. The
recorded investments are stated net of reserves for loan losses of $149,000
and $11,000, respectively. Impaired loans at December 31, 1997 were recorded
at $1.5 million and $468,000 for commercial loans and real estate mortgage
loans, respectively, net of reserves for loan losses of $130,000 and $21,000,
respectively.
LIQUIDITY AND ASSET/LIABILITY MANAGEMENT
The liquidity of a banking institution reflects its ability to provide funds
to meet customer credit needs, to accommodate possible outflows in deposits,
to provide funds for day-to-day operations, and to take advantage of interest
rate market opportunities. Asset liquidity is provided by cash, certificates
of deposit with other financial institutions, Federal funds sold, investment
maturities and sales and loan maturities, repayments and sales. Liquid
assets (consisting of cash, Federal funds sold and investment securities)
comprised 20.4% and 20.6% of the Company's total assets at March 31, 1998 and
December 31, 1997, respectively. Liquidity management also includes the
management of unfunded commitments to make loans and undisbursed amounts
under lines of credit. At March 31, 1998, these commitments totaled $39.6
million in commercial loans, $1.5 million in letters of credit, $17.0 million
in real estate construction loans, and $10.6 million in consumer and
installment loans.
In addition to loan and investment sales and deposit growth, the Bank has
several secondary sources of liquidity. Many of the Bank's real estate
construction loans are originated pursuant to underwriting standards which
make them readily marketable to other financial institutions or investors in
the secondary market. In addition, in order to meet liquidity needs on a
temporary basis, the Bank has unsecured lines of credit in the amount of $8.0
million for the purchase of Federal funds with other financial institutions
and may borrow funds at a correspondent financial institution, the Federal
Home Loan Bank and the Federal Reserve discount window, subject to the Bank's
ability to supply collateral.
Asset/Liability Management involves minimizing the impact of interest rate
changes on the Company's earnings through the management of the amount,
composition and repricing periods of rate sensitive assets and rate sensitive
liabilities. Emphasis is placed on maintaining a rate sensitivity position
within the Company's policy guidelines to avoid wide swings in spreads and to
minimize risk due to changes in interest rates. At March 31, 1998
approximately 57% of the Company's interest earning assets have interest
rates which are tied to the Bank's base lending rate or mature in one year or
less. In order to match the rate sensitivity of its assets, the Company's
policy is to offer a large number of variable rate deposit products and limit
the level of large dollar time deposits with maturities of one year or
longer. In addition to managing its asset/liability position, the Company has
taken steps to mitigate the impact of changing interest rates by generating
non-interest income through service charges, offering products which are not
interest rate sensitive, such as escrow services and insurance products, and
through the servicing of mortgage loans.
9
<PAGE>
CAPITAL RESOURCES
Stockholders' equity increased 4.1% to $26.2 million at March 31, 1998 from
$25.2 million at December 31, 1997. Net income of $1.0 million and an
increase in net unrealized gains on available for sale securities of $26,000
contributed to the increase in equity.
The following table provides information with respect to the Company's and
the Bank's regulatory capital ratios and regulatory minimum requirements:
<TABLE>
<CAPTION>
March 31, December 31, Regulatory Minimum
1998 1997 Ratios
-------- ----------- ------------------
<S> <C> <C> <C>
NORTH COUNTY BANCORP
Risk-based capital
Tier 1 10.75% 10.88% 4.00%
Total 12.00% 12.14% 8.00%
Tier 1 leverage capital 9.12% 8.76% 4.00% - 5.00%
NORTH COUNTY BANK
Risk-based capital
Tier 1 10.72% 10.85% 4.00%
Total 11.97% 12.10% 8.00%
Tier 1 leverage capital 9.10% 8.73% 4.00% - 5.00%
</TABLE>
Management anticipates capital expenditures of approximately $1.5 million
primarily for upgrades to computer and data communications equipment,
computer software and improvements to current facilities during 1998.
10
<PAGE>
PART II - OTHER INFORMATION
All items of Part II other than Item 6 below are either inapplicable or would
be responded to in the negative.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) None
(b) No reports on Form 8-K have been filed during the period, and no
events have occurred which would require one to be filed.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTH COUNTY BANCORP
(Registrant)
/s/ MICHAEL J. GILLIGAN Date: May 8, 1998
- ----------------------------- -----------
Michael J. Gilligan
Vice President & Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT OF INCOME FOUND ON
PAGES 2 AND 3 OF THE COMPANY'S FORM 10-Q FOR MARCH 31, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 24,414
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 18,584
<INVESTMENTS-CARRYING> 11,036
<INVESTMENTS-MARKET> 11,091
<LOANS> 222,728
<ALLOWANCE> 3,328
<TOTAL-ASSETS> 294,072
<DEPOSITS> 263,787
<SHORT-TERM> 1,000
<LIABILITIES-OTHER> 2,654
<LONG-TERM> 412
0
0
<COMMON> 16,058
<OTHER-SE> 10,161
<TOTAL-LIABILITIES-AND-EQUITY> 294,072
<INTEREST-LOAN> 5,358
<INTEREST-INVEST> 440
<INTEREST-OTHER> 105
<INTEREST-TOTAL> 5,903
<INTEREST-DEPOSIT> 1,403
<INTEREST-EXPENSE> 1,426
<INTEREST-INCOME-NET> 4,477
<LOAN-LOSSES> 590
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 4,212
<INCOME-PRETAX> 1,662
<INCOME-PRE-EXTRAORDINARY> 1,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,000
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.21
<YIELD-ACTUAL> 7.29
<LOANS-NON> 3,172
<LOANS-PAST> 0
<LOANS-TROUBLED> 5,028
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,268
<CHARGE-OFFS> 559
<RECOVERIES> 29
<ALLOWANCE-CLOSE> 3,328
<ALLOWANCE-DOMESTIC> 3,328
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
