SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarter ended September 30, 1998
Commission file number 0-10972
First Farmers and Merchants Corporation
(Exact name of registrant as specified in its charter)
Tennessee 62-1148660
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
816 South Garden Street
Columbia, Tennessee 38402 - 1148
(Address of principal executive offices) (Zip Code)
(931) 388-3145
(Registrant's telephone number, including area code)
(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 Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such 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 of the issuer's common
stock, as of September 30, 1998. 2,800,000 shares
This filing contains 12 pages.
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
The following unaudited consolidated financial statements of the
registrant and its subsidiary for the nine months ended September 30,
1998, are as follows:
Consolidated balance sheets - September 30, 1998, and December 31, 1997.
Consolidated statements of income - For the three months and nine
months ended September 30, 1998, and September 30, 1997.
Consolidated statements of cash flows - For the nine months ended
September 30, 1998, and September 30, 1997.
<PAGE>
<TABLE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 and DECEMBER 31, 1997
<CAPTION>
ASSETS 1998 1997
<S> <C> <C>
Cash and due from banks $ 21,784,819 $ 29,873,333
Federal funds sold 10,400,000 12,800,000
Securities
Available for sale (amortized cost
$78,892,257 and $48,921,020 respectively) 79,933,700 49,521,330
Held to maturity (fair value $116,657,336
and $98,371,056 respectively) 112,966,304 96,265,967
Total securities 192,900,004 145,787,297
Loans, net of unearned income 320,615,189 331,360,183
Allowance for possible loan losses (3,890,422) (2,943,000)
Net loans 316,724,767 328,417,183
Bank premises and equipment, at cost less
allowance for depreciation 6,583,994 6,413,365
Other assets 15,337,847 14,030,992
TOTAL ASSETS $ 563,731,431 $ 537,322,171
LIABILITIES
Deposits
Noninterest-bearing $ 70,666,658 $ 80,204,767
Interest-bearing (including certificates
of deposit over $100,000:
1998 - $39,072,438;
1997 - $39,327,957) 421,993,228 390,077,040
Total deposits 492,659,886 470,281,807
Dividends payable 0 784,000
Accounts payable and accrued liabilities 5,958,708 6,113,040
TOTAL LIABILITIES 498,618,594 477,178,847
STOCKHOLDERS' EQUITY
Common stock - $10 par value, authorized
8,000,000 shares; 2,800,000 shares issued
and outstanding 28,000,000 14,000,000
Retained earnings 36,467,142 45,783,137
Net unrealized loss on available-for-sale
securities, net of tax 645,695 360,187
TOTAL STOCKHOLDERS' EQUITY 65,112,837 60,143,324
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 563,731,431 $ 537,322,171
UNAUDITED (A)
<FN>
<F1>
(A) The Consolidated Balance Sheet at December 31, 1997, has been taken from
the audited financial statements at that date.
</FN>
</TABLE>
<PAGE>
<TABLE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 7,344,991 $ 7,385,895 $ 22,013,663 $ 21,348,749
Interest on investment securities
Taxable interest 1,948,902 1,649,959 5,235,871 5,259,530
Exempt from federal income tax 650,742 617,155 1,911,877 1,850,731
Dividends 45,707 49,347 253,742 214,751
2,645,351 2,316,461 7,401,490 7,325,012
Other interest income 282,786 72,499 572,409 168,856
TOTAL INTEREST INCOME 10,273,128 9,774,855 29,987,562 28,842,617
INTEREST EXPENSE
Interest on deposits 4,509,270 4,348,349 13,134,535 12,873,417
Interest on other short term borrowings 7,879 13,366 23,003 77,208
TOTAL INTEREST EXPENSE 4,517,149 4,361,715 13,157,538 12,950,625
NET INTEREST INCOME 5,755,979 5,413,140 16,830,024 15,891,992
PROVISION FOR POSSIBLE LOAN LOSSES 675,000 550,000 2,195,000 1,290,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,080,979 4,863,140 14,635,024 14,601,992
NONINTEREST INCOME
Trust department income 373,894 372,711 1,145,103 1,093,218
Service fees on deposits accounts 934,208 948,604 2,724,739 2,792,060
Other service fees 248,061 225,312 773,689 590,132
Other operating income 92,214 76,233 310,391 310,545
Investment securities gains (losses) 0 0 351,055 (1,137)
TOTAL NONINTEREST INCOME 1,648,377 1,622,860 5,304,977 4,784,818
NONINTEREST EXPENSES
Salaries and employee benefits 1,958,027 1,799,405 5,806,604 5,433,454
Net occupancy expense 322,450 344,343 973,808 958,588
Furniture and equipment expense 333,978 373,658 1,054,028 1,155,716
Other operating expenses 1,420,646 1,493,614 4,205,397 4,426,048
TOTAL NONINTEREST EXPENSES 4,035,101 4,011,020 12,039,837 11,973,806
INCOME BEFORE PROVISION FOR
INCOME TAXES 2,694,255 2,474,980 7,900,164 7,413,004
PROVISION FOR INCOME TAXES 828,873 917,613 2,348,162 2,269,478
NET INCOME $ 1,865,382 $ 1,557,367 $ 5,552,002 $ 5,143,526
EARNINGS PER COMMON SHARE
(2,800,000 outstanding shares) $ 0.67 $ 0.56 $ 1.98 $ 1.84
</TABLE>
<PAGE>
<TABLE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 and 1997
(Unaudited)
<CAPTION>
1998 1997
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 5,552,002 $ 5,143,526
Adjustments to reconcile net income to
net cash provided by operating activities
Excess (deficiency) of provision for possible
loan losses over net charge offs 947,422 21,329
Provision for depreciation and amortization of
premises and equipment 465,222 488,871
Provision for depreciation of leased equipment 375,480 625,800
Amortization of deposit base intangibles 56,214 146,438
Amortization of investment security premiums,
net of accretion of discounts 404,974 372,251
Increase in cash surrender value of life
insurance contracts (89,230) (108,348)
Deferred income taxes (450,255) 244,284
(Increase) decrease in
Interest receivable (724,770) (467,532)
Other assets (629,913) (467,321)
Increase (decrease) in
Interest payable (134,206) 236,915
Other liabilities (20,526) 997,126
TOTAL ADJUSTMENTS 200,412 2,089,813
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,752,414 7,233,339
INVESTING ACTIVITIES
Proceeds from maturities, calls, and sales of
available-for-sale securities 11,007,459 8,174,197
Proceeds from maturities and calls of
held-to-maturity securities 7,922,000 25,498,811
Purchases of investment securities
Available-for-sale (41,265,914) (4,157,187)
Held-to-maturity (24,740,095) (8,520,875)
Net (increase) decrease in loans 10,744,994 (24,532,480)
Purchases of premises and equipment (635,851) (143,450)
Purchase of single premium life insurance
contracts 0 (385,000)
NET CASH USED BY INVESTING ACTIVITIES (36,967,407) (4,065,984)
FINANCING ACTIVITIES
Net increase in noninterest-bearing and
interest-bearing deposits 22,378,079 5,579,051
Net increase (decrease) in short term borrowings 400 (4,920,428)
Cash dividends (1,652,000) (1,456,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,726,479 (797,377)
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (10,488,514) 2,369,978
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 42,673,333 27,916,507
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32,184,819 $ 30,286,485
</TABLE>
<PAGE>
The unaudited consolidated financial statements have been prepared on a
consistent basis and in accordance with the instructions to Form 10-Q and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. These adjustments were of a normal,
recurring nature and consistent with generally accepted accounting principles.
For further information, refer to the consolidated financial statements
and footnotes included in the Corporation's annual report on Form 10-K for
the year ended December 31, 1997.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
Material Changes in Financial Condition
Material Changes in Financial Condition
Average earning assets increased 5.2% in the first nine months
of 1998 compared to a 4.7% increase in the first nine months of
1997. As a financial institution, the Bank's primary earning
asset is loans. At September 30, 1998, average net loans had
grown 2.9% and represented 64% of average earning assets.
Average net loans began a period of growth in the first quarter
of 1996 showing a 4.6% growth that continued throughout last
year and the first quarter of this year, slowing some in the
second and third quarters. While the strengthening of its
presence in the four county area in middle Tennessee that it
serves is a bank strategic goal, limiting loan growth to the
highest quality loans is the thrust of the action plan to
achieve this goal. Even though loans are not growing and loan
investment totals in some cases are lower than prior year
investments, management believes asset quality is improving.
Loan management is realigning loan pricing and developing new
products to meet customer and potential customer needs to
encourage quality loan growth. Average investment securities
and fed funds made up the remaining 36% of average earning
assets at September 30, 1998, increasing 9.7% in the first nine
months of 1998. Average total assets were $548.9 million at the
end of the first nine months of 1998 compared to $527 million at
the end of the first nine months of 1997. Period-end assets
were $563.7 million compared to $537.3 million at December 31,
1997.
The Bank maintains a formal asset and liability management
process to control interest rate risk and assist management in
maintaining reasonable stability in the gross interest margin as
a result of changes in the level of interest rates and/or the
spread relationships among interest rates. The Bank uses an
earnings simulation model to evaluate the impact of different
interest rate scenarios on the gross margin. Each month, the
Asset/Liability Committee monitors the relationship of rate
sensitive earning assets to rate sensitive interest bearing
liabilities (interest rate sensitivity) which is the principal
factor in determining the effect that fluctuating interest rates
will have on future net interest income. Rate sensitive earning
assets and interest bearing liabilities are those which can be
repriced to current market rates within a defined time period.
Projected possible changes in net interest income for the next
twelve months were well within policy guidelines. The following
sections analyze the average balance sheet and the major
components of the period-end balance sheet.
SECURITIES
Available-for-sale securities are an integral part of the
asset/liability management process. As such, they represent an
important source of liquidity available to fund loans and
accommodate asset reallocation strategies dictated by changes in
bank operating and tax plans, shifting yield spread
relationships, and changes in configuration of the yield curve.
At September 30, 1998, the Corporation's investment securities
portfolio had $79.9 million available-for-sale securities and
$112.9 million held-to-maturity securities. This compares to
$49.5 available-for-sale securities and $96.3 million
held-to-maturity securities at December 31, 1997.
LOANS
The loan portfolio is the largest component of earning assets and
consequently provides the highest amount of revenues. The loan portfolio
also contains, as a result of credit quality, the highest
<PAGE>
exposure to risk. When analyzing potential loans,
management assesses both interest rate objectives and credit
quality objectives in determining whether to make a given loan
and the appropriate pricing for that loan. The Bank maintains a
diversified portfolio in order to spread its risk and reduce its
exposure to economic downturns which may occur in different
segments of the economy or in particular industries. The
average loan portfolio increased $9.1 million or 2.9% in the
first nine months of 1998 compared to a $19.8 million or 6.8%
increase in the first nine months of 1997. This growth reflects
the consistent, although slower loan demand in the service area.
Ending balances at September 30, 1998, are down $8.6 million
compared to quarter end balances a year ago and $11.7 million
compared to year end. Loans secured by real estate showed
strong growth posting over 7.9% growth, personal loans declined
1.8%, and commercial loans posted an 8.5% decline for the first
nine months of 1998. An asset/liability strategic decision to
keep higher quality bank customer loans secured by residential
real estate in the portfolio rather than sell them in the
secondary market contributed to the increase in this type of
loans.
The Corporation's subsidiary loan review function reviews lines
of credit over $50,000. After this review during the first nine
months of 1998, loans totaling $2.7 million, .9% of the
portfolio, were classified as other assets especially mentioned
at September 30, 1998, which is down from the $3.1 million and
the $4.2 million so classified at June 30, 1998, and December
31, 1997, respectively. Loans totaling $9.0 million, 2.8% of
the portfolio, were classified as substandard at September 30,
1998, compared to $10.4 million and $5.6 million so classified
at June 30, 1998, and December 31, 1997. Loans totaling $2.0
million, .6% of the portfolio, were classified as doubtful at
September 30, 1998, compared to $.9 million and $.9 million at
June 30, 1998, and December 31, 1997. Any loans classified for
regulatory purposes as loss, doubtful, substandard, or special
mention do not represent or result from trends or uncertainties
which management reasonably expects will materially affect
operating results, liquidity, or capital resources. Neither do
such loans represent material credits about which management is
aware of any information which causes management to have serious
doubts as to the ability of such borrowers to comply with the
loan repayment terms. Management is not aware of any known
trends, events or uncertainties that will have or that are
reasonably likely to have a material effect on the corporation's
liquidity, capital resources or operations. Loans having
recorded investments of $5.3 million, 1.6% of the total
portfolio, were identified as impaired at the end of the first
nine months of 1998 compared to $5.6 million and $2.9 million at
June 30, 1998, and December 31, 1997 respectively.
DEPOSITS
The Corporation's subsidiary bank does not have any foreign
offices and all deposits are serviced in its sixteen domestic
offices, the newest of which opened during the first week of
1997. The bank's average deposits grew during the first nine
months of 1998 reflecting a 3.6% growth compared to a 4.4%
growth in the first nine months of 1997. Short and medium term
rates remained competitive compared to longer term rates
contributing to a 4.1% growth in average interest-bearing
transaction accounts and almost no growth in certificates of
deposits less than $100,000 during the first nine months of
1998. Savings deposits with limited transactions increased 8.1%
during the first nine months of 1998. Savings deposits have
been strong historically providing a core, low cost, source of
funding. Certificates of deposit over $100,000 increased 12.9%
in the first nine months of 1998.
<PAGE>
CAPITAL
Average shareholders' equity remained strong totaling $62.8
million at September 30, 1998, an 8.6% increase from 1997 year
end. The Corporation and the Bank are subject to federal
regulatory risk-adjusted capital adequacy standards. Failure to
meet capital adequacy requirements can initiate certain
mandatory, and possibly additional discretionary, actions by
regulators that could have a direct material effect on the
consolidated financial statements of the Corporation and its
subsidiary, the Bank. The regulations require the Bank to meet
specific capital adequacy guidelines that involve quantitative
measures of assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices. The
capital classification is also subject to qualitative judgments
by the regulators about components, risk weightings, and other
factors.
Quantitative measures established by regulation to ensure
capital adequacy require the Corporation and the Bank to
maintain minimum amounts and ratios of Total Capital and Tier I
Capital to risk-weighted assets and of average Tier I Capital to
average assets. Equity capital (net of certain adjustments for
intangible assets and investments in non-consolidated
subsidiaries and certain classes of preferred stock) are
considered Tier 1 ("core") capital. Tier 2 ("total") capital
consists of core capital plus subordinated debt, some types of
preferred stock, and varying amounts of the Allowance for
Possible Loan Losses. The minimum standard for a "well
capitalized" bank is a risk-based core capital ratio of 6%, a
risk-based total capital ratio of 10%, and a core capital to
average total assets ratio of 5%. As of September 30, 1998, the
Bank's total risk-based and core capital ratios were 20.2% and
21.4% respectively. The comparable ratios were 18.6% and 19.5%
at year end, 1997. As of September 30, 1998, the Corporation's
total risk-based and core capital ratios were 20.1% and 21.4%
respectively. The comparable ratios were 18.7% and 19.7% at
year end, 1997. At September 30, 1998, the Bank and the
Corporation had a ratio of average core capital to average total
assets of 11.2% and 11.3%, respectively, compared to 10.6% and
10.7% at December 31, 1997. Management believes, as of
September 30, 1998, that the Corporation and the Bank meet all
capital adequacy requirements to which they are subject. The
Bank's calculated risk-adjusted capital ratios exceeded the
minimum standard for a "well capitalized" bank. Most of the
capital needs of the Bank have historically been financed
through internal growth.
Material Changes in Results of Operations
Total interest income was 4.0% higher in the first nine months
of 1998 than the first nine months of 1997 . Interest and fees
earned on loans increased 3.1% despite an average volume 4.1%
behind the average budgeted volume and a ten basis point
shortfall in average yield compared to budget. Interest earned
on investment securities and other investments increased 6.4%
during the first nine months of 1998 due almost entirely to the
increased volume that was a result of the slowing loan growth.
Total interest expense increased 1.6% in the first nine months
of 1998 compared to the first nine months of 1997. Average
deposit volume is 1.1% over budgeted deposit volume and average
deposit cost is three basis points under budgeted cost. This
results in total deposit cost just slightly over budget $35.6
thousand, less than .5%. The total cost of interest-bearing deposits
remained steady all last year and this year has declined some under
monthly monitoring by the Asset/Liability Committee. As a policy,
budgeted financial goals are monitored on a monthly basis by the
<PAGE>
Asset/Liability Committee where the actual dollar change in net
interest income given different interest rate movements is reviewed.
A negative dollar change in net interest income for a twelve month period
of less than 3% of net interest income given a three hundred basis point
shift in interest rates is considered an acceptable rate risk
position. At September 30, 1998, the possible negative change
in net interest income less than 1%. The net interest margin,
on a tax equivalent basis, at September 30, 1998 and 1997 was
4.6% at the end of each period.
Net interest income on a fully taxable equivalent basis is
influenced primarily by changes in: (1) the volume and mix of
earning assets and sources of funding; (2) market rates of
interest, and (3) income tax rates. The impact of some of these
factors can be controlled by management policies and actions.
External factors also can have a significant impact on changes
in net interest income from one period to another. Some
examples of such factors are: (1) the strength of credit demands
by customers; (2) Federal Reserve Board monetary policy, and (3)
fiscal and debt management policies of the federal government,
including changes in tax laws.
The analysis and review of asset quality by the Corporation's
subsidiary loan review function and credit administrator also
includes a formal review that is prepared quarterly to assess
the risk in the loan portfolio and to determine the adequacy of
the allowance for loans losses. This review led to the adoption
of a more conservative methodology for determining the adequacy
of the allowance for loan losses. Additions to the allowance
during the first nine months of 1998 were significantly higher
than during the first nine months of 1997 as a result of
adopting this new methodology. It is management's assertion
that the allowance was adequate at September 30, 1998.
There were no write downs of other real estate associated with
declines in real estate values subsequent to foreclosure and
disposition of the properties at less than their carrying value
during the first three quarters of 1998. The carrying value of
Other Real Estate is included in other assets on the face of the
balance sheet and represents real estate acquired through
foreclosure and is stated at the lower of cost or fair value
minus cost to sell. An allowance for other real estate owned is
not maintained. Any decreases or losses associated with the
properties have been charged to current income. Management
evaluates properties included in this category on a regular
basis. Actual foreclosures were included in the carrying value
for Other Real Estate at September 30, 1998, and totaled $420
thousand which compares to $497 thousand at September 30, 1997.
Noninterest income increased 10.9% during the first nine months
of 1998 led by the increase in service fees from new and
acquired customers. Use of the Bank's check card generates fee
income from the clearing agent for the electronic transaction
even though no service fee is charged to Bank customers for its
use. Income from fiduciary services provided in the Bank's
Trust Department remained strong. A nonrecurring gain on the
disposal of common stock is included in the total of noninterest
income and accounts for 6.6% of total noninterest income and
contributes to the increase for the period.
Noninterest expenses, excluding the provision for possible loan
losses, held steady compared to the first nine months of 1997
increasing only .6%. Salary and benefit levels showed the
largest increase while furniture and equipment expenses
registered the largest decline due to the completion of a large
technology lease.
<PAGE>
Net income is 7.9% higher for the first nine months of 1998
compared to the first nine months of 1997. The increase in
interest income was large enough to more than offset the
increase in interest expense. The remaining increase in
interest income coupled with the increase in noninterest income
was sufficient to cover the increase in noninterest expense,
the increase in additions to the allowance for loan and lease
losses, and the small increase in taxes.
OTHER
A Year 2000 Compliance Task Force has been established for over
a year and is evaluating the mission critical software and
hardware that must be compatible for continued satisfactory data
processing. Representations have been obtained, or are in the
process of being obtained, from software and hardware vendors,
confirming their Year 2000 compatibility. Successful testing of
most mission critical software and hardware was completed
recently in compliance with Board policy and requirements of the
Federal Financial Interagency Examination Council. Management
believes that information systems are well on their way to being
Year 2000 compliant.
On October 26, 1998, the Corporation entered into an agreement
and plan of merger with the Farmers & Merchants Bank of White
Bluff, Dickson County, Tennessee, a $21 million Tennessee
banking corporation. The Comptroller of the Currency and the
Tennessee state banking regulators have not granted official
certification and authorization for the proposed merger at this
time.
<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.
FIRST FARMERS AND MERCHANTS CORPORATION
(Registrant)
Date November 12, 1998 /s/ Waymon L. Hickman
Waymon L. Hickman,
Chairman of the Board
(Chief Executive Officer)
Date November 12, 1998 /s/ Patricia N. McClanahan
Patricia N. McClanahan,
Treasurer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,779,885
<INT-BEARING-DEPOSITS> 4,934
<FED-FUNDS-SOLD> 10,400,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 79,933,700
<INVESTMENTS-CARRYING> 112,966,304
<INVESTMENTS-MARKET> 116,657,336
<LOANS> 320,615,189
<ALLOWANCE> (3,890,422)
<TOTAL-ASSETS> 563,731,431
<DEPOSITS> 492,659,886
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,958,708
<LONG-TERM> 0
0
0
<COMMON> 28,000,000
<OTHER-SE> 37,112,837
<TOTAL-LIABILITIES-AND-EQUITY> 563,731,431
<INTEREST-LOAN> 22,013,663
<INTEREST-INVEST> 7,401,490
<INTEREST-OTHER> 572,409
<INTEREST-TOTAL> 29,987,562
<INTEREST-DEPOSIT> 13,134,535
<INTEREST-EXPENSE> 13,157,538
<INTEREST-INCOME-NET> 16,830,024
<LOAN-LOSSES> 2,195,000
<SECURITIES-GAINS> 351,055
<EXPENSE-OTHER> 12,039,837
<INCOME-PRETAX> 7,900,164
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,552,002
<EPS-PRIMARY> 1.98
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.64
<LOANS-NON> 5,272,693
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,943,000
<CHARGE-OFFS> 1,394,775
<RECOVERIES> 147,197
<ALLOWANCE-CLOSE> 3,890,422
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
