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, 1999
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 (I.R.S. Employer
organization) 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, 1999.
2,920,000 shares
This filing contains 13 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, 1999, are as follows:
Consolidated balance sheets - September 30, 1999, and December 31, 1998.
Consolidated statements of income - For the three
months and nine months ended September 30, 1999 and September 30, 1998.
Consolidated statements of cash flows - For the nine months ended
September 30, 1999 and September 30, 1998.
<PAGE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
(Dollars in Thousands) 1999 1998
<S> <C> <C>
ASSETS Cash and due from banks $ 29,157 $ 21,155
Federal funds sold 5,600 12,000
Securities
Available for sale (amortized
cost $112,926 and $83,395
respectively) 111,639 84,347
Held to maturity (fair value
$112,913 and $118,010
respectively) 113,949 114,648
Total securities 225,588 198,995
Loans, net of deferred fees 328,508 320,184
Allowance for possible
loan losses (4,758) (3,852)
Net loans 323,750 316,332
Bank premises and equipment, at
cost less allowance for
depreciation 8,231 7,240
Other assets 18,947 14,689
TOTAL ASSETS $ 611,273 $ 570,411
LIABILITIES Deposits
Noninterest-bearing $ 76,887 $ 83,165
Interest-bearing (including
certificates of deposit
over $100,000: 1999 -
$50,334; 1998 - $42,611) 455,784 417,366
Total deposits 532,671 500,531
Dividends payable - 896
Other short term liabilities 602 602
Accounts payable and accrued
liabilities 5,990 5,232
TOTAL LIABILITIES 539,263 507,261
STOCKHOLDERS' Common stock - $10 par value,
EQUITY 8,000,000 shares authorized;
issued and outstanding -
2,920,000 in 1999;
2,800,000 in 1998 29,200 28,000
Additional paid-in capital 4,320 -
Retained earnings 39,288 34,560
Accumulated other comprehensive
income (798) 590
TOTAL STOCKHOLDERS' EQUITY 72,010 63,150
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 611,273 $ 570,411
</TABLE>
<PAGE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
(Dollars In Thousands Except Per Share Data) Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
INTEREST INCOME Interest and fees on loans $ 7,044 $ 7,345 $ 20,893 $ 22,013
Income on investment securities
Taxable interest 2,496 1,949 6,910 5,236
Exempt from federal income tax 708 651 2,155 1,912
Dividends 54 45 216 253
3,258 2,645 9,281 7,401
Other interest income 121 283 410 573
TOTAL INTEREST INCOME 10,423 10,273 30,584 29,987
INTEREST EXPENSE Interest on deposits 4,560 4,509 13,114 13,134
Interest on other short term
borrowings 8 8 23 23
TOTAL INTEREST EXPENSE 4,568 4,517 13,137 13,157
NET INTEREST INCOME 5,855 5,756 17,447 16,830
PROVISION FOR POSSIBLE LOAN LOSSES 200 675 1,475 2,195
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,655 5,081 15,972 14,635
NONINTEREST INCOME Trust department income 398 374 1,249 1,145
Service fees on deposit accounts 1,069 934 3,065 2,725
Other service fees, commissions,
and fees 163 248 647 774
Other operating income 123 92 462 310
Securities gains - - 130 351
TOTAL NONINTEREST INCOME 1,753 1,648 5,553 5,305
NONINTEREST EXPENSES Salaries and employee benefits 2,197 1,958 6,444 5,807
Net occupancy expense 379 322 1,141 973
Furniture and equipment expense 318 334 937 1,054
Other operating expenses 1,582 1,421 4,916 4,206
TOTAL NONINTEREST EXPENSES 4,476 4,035 13,438 12,040
INCOME BEFORE PROVISION FOR
INCOME TAXES 2,932 2,694 8,087 7,900
PROVISION FOR INCOME TAXES 911 829 2,366 2,348
NET INCOME $ 2,021 $ 1,865 $ 5,721 $ 5,552
EARNINGS PER SHARE Common stock
2,920,000 shares outstanding 1999
2,800,000 shares outstanding 1998 $ 0.69 $ 0.67 $ 1.96 $ 1.98
</TABLE>
FIRST FARMERS AND MERCHANTS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Dollars In Thousands)
Nine Months Ended September 30, 1999 1998
<S> <C> <C> <C>
OPERATING Net income
ACTIVITIES Adjustments to reconcile net income to net
cash provided $ 5,721 $ 5,552
by operating activities
Excess (deficiency) of provision for
possible loan losses over net charge offs 688 947
Provision for depreciation and
amortization of premises and equipment 867 465
Provision for depreciation of leased
equipment 225 375
Amortization of intangibles 158 56
Amortization of investment security
premiums, net of accretion of discounts 682 405
Increase in cash surrender value of life
insurance contracts (134) (89)
Deferred income taxes (367) (450)
(Increase) decrease in
Interest receivable (644) (725)
Other assets (52) (630)
Increase (decrease) in
Interest payable 261 (134)
Other liabilities 371 (21)
Total Adjustments 2,055 200
Net cash provided by operating
activities 7,776 5,752
INVESTING Proceeds from maturities, calls, and
ACTIVITIES sales of available-for-sale securities 19,957 11,007
Proceeds from maturities and calls of
held-to-maturity securities 15,465 7,922
Purchases of investment securities
Available-for-sale (36,969) (41,266)
Held-to-maturity (14,942) (24,740)
Net (increase) decrease in loans (3,108) 10,745
Purchases of premises and equipment (1,016) (636)
Purchase of single premium life insurance
contracts (920) -
Acquisition of other assets 2,789 -
Net cash used by investing activities (18,744) (36,967)
FINANCING Net increase (decrease) in
ACTIVITIES noninterest-bearing and interest-bearing
deposits 14,458 22,378
Net increase (decrease) in short term
borrowings - 0
Cash dividends (1,888) (1,652)
Net cash provided by financing
activities 12,570 20,726
Increase (decrease) in cash and
cash equivalents 1,602 (10,489)
Cash and cash equivalents at
beginning of period 33,155 42,673
Cash and cash equivalents at end of
period $ 34,757 $ 32,185
</TABLE>
NONCASH Noncash Investing and Financing Activities
ACTIVITIES An agreement and plan to merge the Farmers and Merchants
Bank of White Bluff, Dickson, County, Tennessee with and
into the Bank was completed February 5, 1999. The merger
was a noncash transaction in which 120,000 shares of
Corporation common stock were issued to complete the
acquisition of the assets and the assumption of certain
liabilities indicated in the following schedule.
<TABLE>
<S> <C> <C> <C>
Securities $ 13,025 Deposits $ 17,682
Loans 4,998 Other liabilities 125
Other assets 1,045
</TABLE>
<PAGE>
<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, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
Material Changes in Financial Condition
An agreement and plan to merge the Farmers and Merchants
Bank of White Bluff, Dickson County, Tennessee, with and into
the Bank was completed February 5, 1999. The purchase of the
$23 million dollar bank for 120,000 shares of Corporation common
stock must be considered in the discussion that follows where
the impact in each area will be indicated. Average earning
assets increased 7.5% in the first nine months of 1999 compared
to a 5.2% increase in the first nine months of 1998. Over half
of this increase resulted from the acquisition. As a financial
institution, the Bank's primary earning asset is loans. At
September 30, 1999, average net loans had decreased 1.3% and
represented 58.1% of average earning assets. The loans acquired
in Dickson County represent less than two percent of average
loans. Average net loans began a period of growth in the first
quarter of 1996 showing a 4.6% growth that continued throughout
last year. Management believes this growth is indicative of the
strengthening of its presence in the five county area in middle
Tennessee that it serves. This loan growth has slowed down,
even decreasing slightly, as increased competition and
reaffirmation of strong credit standards in our new markets has
softened loan demand. Average investments represented 41.9% of
average earning assets at September 30, 1999, an increase of
22.5% in the first nine months of 1999. Average total assets
were $593 million at the end of the first nine months of 1999
compared to $549 million at the end of the first nine months of
1998. Period-end assets were $611 million compared to $570
million at December 31, 1998.
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.
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, 1999, the Corporation's investment securities
portfolio had $111.6 million available-for-sale securities and
$113.9 million held-to-maturity securities. Of the $13.0
million securities acquired in the Dickson County transaction,
$7.8 million were recorded as available-for-sale and $5.1
million were recorded as held-to-maturity. There were $84.3
million available-for-sale securities and $114.6 million
held-to-maturity securities at December 31, 1998.
<PAGE>
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 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 decreased $4.2 million or 1.3% in the
first nine months of 1999 compared to a $9.1 million or 2.9%
increase in the first nine months of 1998. Commercial loans
decreased 17.8%, personal loans decreased 7.1%, but loans
secured by real estate posted a 4.5% growth for the first nine
months of 1999. An asset/liability strategic decision to keep
higher quality mortgage loans 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 $75,000. After this review during the
first nine months of 1999, loans totaling $.8 million, .25% of
the portfolio, were classified as other assets especially
mentioned at September 30, 1999, which is about the same as
loans so classified at June 30, 1999, down from the $1.8
million so classified at March 31, 1999 and $2.7 million at
December 31, 1998. Loans totaling $15.0 million, 4.6% of the
portfolio, were classified as substandard at September 30, 1999,
which is a decrease compared to $16.2 million at June 30, 1999,
and $15.6 million at March 31, 1999, but an increase compared to
$8.3 million so classified at December 31, 1998. Loans totaling
$1.9 million, .6% of the portfolio, were classified as doubtful
at September 30, 1999, which is an improvement compared to $2.1
million so classified at June 30, 1999, $2.6 million at March
31, 1999, and $2.1 million at December 31, 1998. 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 $2.5 million,
.8% of the total portfolio, were identified as impaired at the
end of the first nine months of 1999 which is a positive trend
compared to $5.3 million at September 30, 1998, and $3.9 million
at December 31, 1998.
The Bank is a party to financial instruments with
off-balance-sheet risk in the normal course of business to meet
the financing needs of its customers. These financial
instruments include commitments to extend credit and standby
letters of credit. Those instruments involve, to varying
degrees, elements of credit risk in excess of the amount
recognized in the balance sheet. The contract or notional
amounts of those instruments reflect the extent of involvement
the Bank has in those particular financial instruments. The
total outstanding loan commitments and stand-by letters of
credit in the normal course of business at September 30, 1999,
were $39.3 million and $2.2 million respectively. Loan
commitments are agreements to lend to a customer as long as there
is not a violation of any condition established in the contract.
Standby letters of credit are conditional commitments issued by the
Bank to guarantee the performance of a customer to a third party. Those
<PAGE>
guarantees are primarily issued to support public and private
borrowing arrangements, including commercial paper, bond
financing, and similar transactions. The credit risk involved
in issuing letters of credit is essentially the same as that
involved in making a loan.
The loan portfolio is well diversified with loans
generally secured by tangible personal property, real property,
or stock. The loans are expected to be repaid from cash flow or
proceeds from the sale of selected assets of the borrowers.
Collateral requirements for the loan portfolio are based on
credit evaluation of the customer. It is management's opinion
that there is not a concentration of credit risk in the
portfolio.
DEPOSITS
The Corporation's subsidiary bank does not have any foreign
offices and all deposits are serviced in its seventeen domestic
offices. The bank's average deposits grew during the first nine
months of 1999 reflecting a 7.1% growth compared to a 3.6%
growth in the first nine months of 1998. Deposits totaling over
$17.6 million were assumed in the Dickson County acquisition and
represent 3.4% of average deposits accounting for over 62% of
the deposit growth in the first nine months. Short and medium
term rates were less competitive compared to longer term rates.
This was a contributing factor to the 2.6% growth in average
interest-bearing checking accounts, the 7.2% growth in
certificates of deposits under $100 thousand, and the 8.2%
growth in certificates of deposit over $100 thousand in the
first nine months of 1999. A special promotion for certificate
of deposits celebrating the Bank's ninetieth anniversary also
contributed to this growth. Savings deposits with limited
transactions increased 14.9% during the first nine months of
1999. Savings deposits have been strong historically providing
a core, low cost, source of funding.
CAPITAL
During 1998, the Corporation amended its corporate charter
to increase the number of authorized shares of its common stock
from 4,000,000 to 8,000,000 shares and on April 21, 1998, the
Corporation's stockholders approved a two-for-one split effected
in the form of a 100% stock dividend to stockholders of record
on April 21, 1998. In accordance with State corporate legal
requirements, the transaction was recorded by a transfer from
retained earnings to common stock in the amount of $14,000,000
($10 for each additional share issued). All per share and share
data in the accompanying consolidated financial statements and
footnotes have been restated to give retroactive effect to the
transaction. Average shareholders' equity in the first nine
months of 1999 remained strong totaling $69.4 million at
September 30, 1999, a 10.1% increase from 1998 year end. The
issuance of stock to complete the Dickson County merger accounts
for 80% of this growth. 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.
<PAGE>
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. As of September 30, 1999, the Bank's
total risk-based and core capital ratios were 21.9% and 20.7%
respectively. The comparable ratios were 20.7% and 19.5% at
year end, 1998. As of September 30, 1999, the Corporation's
total risk-based and core capital ratios were 22.1% and 20.9%
respectively. The comparable ratios were 20.9% and 19.7% at
year end, 1998. As of September 30, 1999, the Bank and the
Corporation had a ratio of average core capital to average total
assets of 12.7% and 12.8% respectively, compared to 11.1% and
11.2% at December 31, 1998. Management believes, as of
September 30, 1999, 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. The approval of the
Comptroller of the Currency is required before the Bank's
dividends in a given year may exceed the total of its net profit
(as defined) for the year combined with retained net profits of
the preceding two years. As of September 30, 1999, additional
dividends of approximately $13 million could have been declared
by the Bank to the Corporation without regulatory agency
approval.
YEAR 2000 COMPLIANCE TASK FORCE
A Year 2000 Compliance Task Force was established to
evaluate the mission critical software and hardware that must be
compatible for continued satisfactory data processing;
representations have been obtained, and satisfactorily tested,
from our software and hardware vendors, confirming their Year
2000 compatibility. Testing of systems' compatibility was 90%
complete for all areas and 100% complete for core application
processing, by December 31, 1998. The committee completed all
testing and software changes by September 30, 1999. Significant
expenses relating to this issue have been limited because the
Bank uses an outside core processor. However, the task force
developed a budget and continually reviews expenses as they
emerge, reporting to the Board of Directors quarterly.
Expenses did not have a material impact on the financial
statements of the Corporation. The Bank has developed
contingency plans for the most critical operational areas and
comprehensive contingency/business continuation plans. No
material effect on operations is anticipated in preparing for
potential risks. Management believes that all information
systems will be Year 2000 compliant.
Material Changes in Results of Operations
Total interest income was 2% higher in the first nine months of
1999 than the first nine months of 1998. Interest and fees
earned on loans decreased 5.1% due to the decrease in the volume
of average loans. Interest earned on investment securities and
other investments increased 21.5% compared to the first nine
months of 1998 due to the increased volume of securities. Investment
<PAGE>
securities acquired in the acquisition in Dickson County are
about 5.0% of total investment securities and contribute to this
increase.
Total interest expense in the first nine months of 1999
compared to the first nine months of 1998 declined .2%. The
total cost of interest-bearing deposits has remained steady all
last year and this year under monthly monitoring by the
Asset/Liability Committee. As a policy, budgeted financial
goals are monitored on a monthly basis by the 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. The net interest margin, on a tax
equivalent basis, at September 30, 1999, 1998, and December, 31,
1998 was 4.46%, 4.64%, and 4.64% respectively.
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 supported management's assertion that the allowance was
adequate at September 30, 1999. Additions to the allowance
during the first nine months of 1999 were lower than the first
nine months of 1998 due almost entirely to a consumer loan
underwriting problem that was being corrected in 1998. Net
charge offs of $787 thousand for the first nine months of 1999
were down from prior periods as well. The ratio of net charge
offs to net average loans outstanding was .33% as of September
30, 1999.
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 nine months of 1999. 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, 1999, December 31, 1998,
and September 30, 1998, and totaled $789 thousand, $544
thousand, and $420 thousand respectively.
Noninterest income increased 4.7% during the first nine
months of 1999 compared to the first nine months of 1998.
Income from fiduciary services provided in the Bank's Trust
Department remained strong, increasing 9.1%.
<PAGE>
Noninterest expenses, excluding the provision for possible
loan losses, were 11.6% more in the first nine months of 1999
than in the first nine months of 1998. Extra expenses related
to the Dickson County acquisition, including the salaries of
additional employees, contributed to this increase.
Net income was 3.1% higher for the first nine months of 1999
compared to the first nine months of 1998. The increase in
interest income combined with the steady interest cost
contributed to enough of an increase in net interest income
that, combined with a modest increase in noninterest income,
lower additions to the allowance for possible loan losses, and
tax savings, offset the increase in noninterest expense.
<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, 1999 /s/ Waymon L. Hickman
Waymon L. Hickman,
Chairman of the Board
(Chief Executive Officer)
Date November 12, 1999 /s/ Patricia N. McClanahan
Patricia N. McClanahan,
Treasurer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 29,128
<INT-BEARING-DEPOSITS> 29
<FED-FUNDS-SOLD> 5,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 111,639
<INVESTMENTS-CARRYING> 113,949
<INVESTMENTS-MARKET> 112,913
<LOANS> 328,508
<ALLOWANCE> (4,758)
<TOTAL-ASSETS> 611,273
<DEPOSITS> 532,671
<SHORT-TERM> 0
<LIABILITIES-OTHER> 6,592
<LONG-TERM> 0
0
0
<COMMON> 29,200
<OTHER-SE> 42,810
<TOTAL-LIABILITIES-AND-EQUITY> 611,273
<INTEREST-LOAN> 20,893
<INTEREST-INVEST> 9,281
<INTEREST-OTHER> 410
<INTEREST-TOTAL> 30,584
<INTEREST-DEPOSIT> 13,114
<INTEREST-EXPENSE> 13,137
<INTEREST-INCOME-NET> 17,447
<LOAN-LOSSES> 1,475
<SECURITIES-GAINS> 130
<EXPENSE-OTHER> 13,438
<INCOME-PRETAX> 8,087
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,721
<EPS-BASIC> 1.96
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.46
<LOANS-NON> 2,542
<LOANS-PAST> 41
<LOANS-TROUBLED> 44
<LOANS-PROBLEM> 17,752
<ALLOWANCE-OPEN> 3,852
<CHARGE-OFFS> 940
<RECOVERIES> 153
<ALLOWANCE-CLOSE> 4,758
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
