<PAGE> 1
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 quarterly period ended June 30, 1998
Commission file number 0-25422
PAB BANKSHARES, INC.
(Exact name of Registrant
as specified in its charter)
Georgia 58-1473302
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3102 North Oak Street Extension
Valdosta, Georgia 31602
(Address of principal executive offices)
(912) 241-2775
(Registrant's telephone number)
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
------- -------
The number of shares outstanding of the Issuer's class of common stock at
June 30, 1998 was 7,372,635 shares of common stock.
Transitional Small Business Disclosure Format (Check one): Yes No X
----- -----
<PAGE> 2
PAB BANKSHARES, INC.
FORM 10-Q
TABLE OF CONTENTS
-----------------
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS - JUNE 30, 1998
(UNAUDITED) AND DECEMBER 31, 1997 . . . . . . . . . . . 3
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - THREE MONTH
AND SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 . . . 4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) -
THREE MONTH AND SIX MONTH PERIODS ENDED JUNE 30, 1998 AND
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED) - SIX MONTH PERIODS ENDED JUNE 30,
1998 AND 1997 . . . . . . . . . . . . . . . . . . . . . 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -
SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1997 . . . . . 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . 17
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . 18
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS . . . . . . . . . . . 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . . 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . 18
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . 19
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
<PAGE> 3
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Cash and Cash Equivalents:
Cash and due from banks $ 17,700,429 22,239,560
Interest-bearing deposits in other banks 2,464,448 3,247,147
Federal funds sold and securities purchased under
agreement to resell 22,785,945 14,568,204
------------ ------------
Total Cash and Cash Equivalents 42,950,822 40,054,911
Time Deposits 398,000 3,398,000
Investment Securities available-for-sale, at fair value 69,444,921 72,299,716
Investment in Unconsolidated Subsidiary 77,299 66,749
Loans, Net of Allowance for Loan Losses ($3,722,778 - 1998; $3,536,806 - 1997)
and Unearned Interest 289,530,180 268,493,383
Bank Premises and Equipment 9,856,489 9,392,509
Property Acquired in Settlement of Loans and Other Real Estate Owned:
Land and building of former banking offices 342,317 315,277
Land and building held for lease 594,589 -0-
Property acquired in settlement of loans 519,673 419,036
Accrued Interest Receivable 4,597,903 4,421,661
Cash Value of Life Insurance 2,836,480 2,783,838
Goodwill and other intangible assets 2,892,119 3,070,426
Other Assets 1,103,377 871,668
------------ ------------
Total Assets $425,144,169 405,587,174
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits:
Demand $ 49,030,328 60,218,277
NOW 79,704,329 68,994,844
Savings 23,128,873 22,139,241
Time, $100,000 and over 45,977,043 52,166,532
Other time 135,819,088 127,457,360
------------ ------------
333,659,661 330,976,254
Federal funds purchased and securities sold under agreement to repurchase 3,145,376 -0-
Advances from Federal Home Loan Bank 40,081,196 29,168,166
Note payable 2,047,500 2,184,000
Other borrowed funds 1,773,171 1,004,854
Accrued Interest Payable 1,015,585 985,074
Advance Payments by Borrowers for Taxes and Insurance 93,118 180,322
Dividends Payable 389,481 268,466
Other Liabilities 1,350,974 1,507,497
------------ ------------
Total Liabilities 383,556,062 366,274,633
------------ ------------
Stockholders' Equity:
Common stock, no par value, 15,000,000 shares authorized,
7,372,635 shares (1997 - 7,527,487) issued and 7,372,635
shares (1997 - 7,363,175) outstanding 1,217,065 1,263,745
Preferred stock, no par value, 1,500,000 shares authorized,
no shares issued or outstanding -0- -0-
Additional paid in capital 19,736,038 20,543,122
Retained earnings 20,534,799 18,383,396
Accumulated other comprehensive income 100,205 105,467
------------ ------------
41,588,107 40,295,730
Treasury stock, at cost (1997 - 164,312 shares) -0- (983,189)
------------ ------------
41,588,107 39,312,541
------------ ------------
Total Liabilities and Stockholders' Equity $425,144,169 405,587,174
============ ============
</TABLE>
<PAGE> 4
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $6,972,908 6,255,712 13,680,421 12,170,395
Interest on investment securities:
Taxable 1,095,319 1,142,788 2,172,301 2,360,047
Tax exempt 44,051 33,546 88,625 64,718
Interest on federal funds sold 381,732 81,432 750,644 175,459
Interest on deposits in banks 42,407 47,193 111,521 93,455
----------- ----------- ----------- -----------
Total 8,536,417 7,560,671 16,803,512 14,864,074
----------- ----------- ----------- -----------
Interest Expense:
Interest on deposits 3,462,801 3,156,993 6,839,684 6,262,027
Interest on federal funds purchased 718 10,491 5,084 24,990
Interest on notes and mortgages 37,516 63,703 78,280 125,530
Interest on other borrowed funds 57,620 5,082 65,487 8,389
Interest on advances from Federal Home Loan Bank 590,155 280,536 1,077,082 530,643
----------- ----------- ----------- -----------
Total 4,148,810 3,516,805 8,065,617 6,951,579
----------- ----------- ----------- -----------
Net Interest Income 4,387,607 4,043,866 8,737,895 7,912,495
Provision for Loan Losses 156,850 133,000 434,283 266,000
----------- ----------- ----------- -----------
Net Interest Income After Provision for Loan Losses 4,230,757 3,910,866 8,303,612 7,646,495
----------- ----------- ----------- -----------
Other Income:
Service charges on deposit accounts 661,668 631,423 1,285,184 1,148,365
Insurance commissions 53,749 27,753 89,927 55,885
Equity in earnings of unconsolidated subsidiary 148,845 109,129 210,550 160,142
Fees on loans originated for sale 79,114 1,079 143,154 1,559
Gain (Loss) on sale of loans 1,989 15,662 1,989 18,302
Gain (Loss) on sale of assets -0- (1,854) 102,131 (1,854)
Gain (Loss) on sale of real estate owned 1,481 -0- (7,525) 869
Other income 204,412 176,122 531,104 386,464
Securities gains (losses) 4,531 (22,758) 28,988 (23,065)
----------- ----------- ----------- -----------
Total 1,155,789 936,556 2,385,502 1,746,667
----------- ----------- ----------- -----------
Other Expenses:
Compensation 1,328,147 1,167,636 2,586,702 2,337,931
Other personnel expenses 314,882 280,552 636,322 550,353
Occupancy expense of bank premises 151,008 151,395 302,183 301,379
Furniture and equipment expense 283,545 261,464 520,568 469,280
Federal deposit insurance 24,569 11,996 30,293 22,514
Postage and courier services 76,111 81,571 158,993 153,280
Supplies 121,629 104,085 215,557 201,984
Amortization 89,165 89,165 178,332 178,332
Other operating expenses 793,922 551,797 1,466,204 1,070,189
----------- ----------- ----------- -----------
Total 3,182,978 2,699,661 6,095,154 5,285,242
----------- ----------- ----------- -----------
Income Before Income Taxes 2,203,568 2,147,761 4,593,960 4,107,920
Income Taxes 776,860 734,339 1,557,804 1,399,335
----------- ----------- ----------- -----------
Net Income $1,426,708 1,413,422 3,036,156 2,708,585
=========== =========== =========== ===========
Earnings Per Share:
Basic $ .19 .19 .41 .37
=========== =========== =========== ===========
Diluted .19 .19 .41 .36
=========== =========== =========== ===========
Weighted Average Shares:
Basic 7,372,901 7,359,925 7,370,894 7,350,489
=========== =========== =========== ===========
Diluted 7,449,278 7,445,804 7,474,102 7,421,591
=========== =========== =========== ===========
</TABLE>
<PAGE> 5
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income $1,426,708 1,413,422 3,036,156 2,708,585
----------- ----------- ----------- -----------
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period 28,380 34,060 12,786 (156,501)
Less: reclassification adjustment for (gains)
losses included in net income (2,821) 14,169 (18,048) 14,360
----------- ----------- ----------- -----------
Other comprehensive income 25,559 48,229 (5,262) (142,141)
----------- ----------- ----------- -----------
Comprehensive Income $1,452,267 1,461,651 3,030,894 2,566,444
=========== =========== =========== ===========
</TABLE>
<PAGE> 6
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
-----------------------------------------------
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE
COMMON PREFERRED PAID IN RETAINED INCOME TREASURY
STOCK STOCK CAPITAL EARNINGS (LOSS) STOCK TOTAL
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31,
1996, as previously
reported $ 1,263,745 -0- 15,609,717 11,246,210 21,388 1,074,547 27,066,513
Adjustment for pooling
of interest:
Issuance of
1,711,249 shares
to shareholders of
Investors Financial
Corp. -0- -0- 4,608,542 3,041,056 (100,484) -0- 7,549,114
----------- ----------- ----------- ----------- ----------- ----------- ----------
Balances, December 31,
1996, as restated 1,263,745 -0- 20,218,259 14,287,266 (79,096) 1,074,547 34,615,627
Issuance of 26,150 shares
at $10.33 average
through dividend
reinvestment plan -0- -0- 270,062 -0- -0- -0- 270,062
Issuance of 4,810 shares at
$10.55 through common
stock purchase plan -0- -0- 50,732 -0- -0- -0- 50,732
Issuance of 15,268 shares
at $6.25 to Directors
in lieu of fees -0- -0- 4,069 -0- -0- (91,358) 95,427
Net Income -0- -0- -0- 2,708,585 -0- -0- 2,708,585
Dividends -0- -0- -0- (465,618) -0- -0- (465,618)
Dividends-pooled company -0- -0- -0- (112,800) -0- -0- (112,800)
Other comprehensive income
(loss) -0- -0- -0- -0- (142,141) -0- (142,141)
----------- ----------- ----------- ----------- ----------- ----------- ----------
Balances,
June 30, 1997
(Unaudited) $1,263,745 -0- 20,543,122 16,417,433 (221,237) 983,189 37,019,874
=========== =========== =========== =========== =========== =========== ==========
Balances, December 31,
1997, as previously
restated $1,263,745 -0- 15,934,580 14,401,920 114,785 983,189 30,731,841
Adjustment for pooling
of interest:
Issuance of
1,711,249 shares
to shareholders of
Investors Financial
Corp. -0- -0- 4,608,542 3,981,476 (9,318) -0- 8,580,700
----------- ----------- ----------- ----------- ----------- ----------- ----------
Balances, December 31,
1997, as restated 1,263,745 -0- 20,543,122 18,383,396 105,467 983,189 39,312,541
Issuance of 1,650 shares
at $11.93 average through
dividend reinvestment plan -0- -0- 19,685 -0- -0- -0- 19,685
Issuance of 7,808 shares
at $10.40 to directors
in lieu of fees -0- -0- 81,240 -0- -0- -0- 81,240
Net Income -0- -0- -0- 3,036,156 -0- -0- 3,036,156
Dividends -0- -0- -0- (818,953) -0- -0- (818,953)
Dividends-pooled
company -0- -0- -0- (65,800) -0- -0- (65,800)
Additional stock
issued by
pooled company -0- -0- 28,500 -0- -0- -0- 28,500
Cancellation of
treasury stock (46,680) -0- (936,509) -0- -0- (983,189) -0-
Other comprehensive income
(loss) -0- -0- -0- -0- (5,262) -0- (5,262)
----------- ----------- ----------- ----------- ----------- ----------- ----------
Balances,
June 30, 1998
(Unaudited) $1,217,065 -0- 19,736,038 20,534,799 100,205 -0- 41,588,107
=========== =========== =========== =========== =========== =========== ==========
</TABLE>
<PAGE> 7
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(UNAUDITED)
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------
1998 1997
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 3,036,156 2,708,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 406,443 402,389
Deferred income taxes (20,896) (15,968)
Provision for loan losses 434,283 266,000
Amortization of goodwill and other intangible assets 178,332 178,332
Amortization (accretion) of securities (75,038) (84,934)
(Gain) loss on sale of loans (1,989) (18,302)
Securities (gains) losses (28,988) 23,065
(Gain) loss on sale of assets (102,131) 1,854
(Gain) Loss on sale of real estate owned 7,525 (869)
Minority interests 357 337
Equity in earnings of unconsolidated subsidiary (210,550) (160,142)
Dividend received from unconsolidated subsidiary 200,000 160,000
Increase in cash value of life insurance (52,642) (44,157)
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable (176,242) (236,182)
Increase (decrease) in accrued interest payable 30,511 (61,811)
(Increase) decrease in other assets (271,478) (389,979)
Increase (decrease) in income taxes payable -0- (6,453)
Increase (decrease) in other liabilities (75,640) (177,088)
----------- -----------
Net cash provided (used) by operating activities 3,278,013 2,544,677
----------- -----------
Cash Flows From Investing Activities:
Capital expenditures (1,492,050) (780,416)
Proceeds from sale of assets 167,414 -0-
Principal payments on mortgage-backed securities 5,068,676 1,436,175
Purchase of available-for-sale securities (17,462,756) (8,975,780)
Proceeds from maturities of available-for-sale securities 14,357,993 7,062,199
Proceeds from sales of available-for-sale securities 985,000 5,452,294
(Increase) decrease in interest-bearing deposits in banks 3,000,000 298,000
(Increase) decrease in loans (21,577,251) (22,269,567)
----------- -----------
Net cash provided (used) by investing activities (16,952,974 (17,777,095)
----------- -----------
Cash Flows From Financing Activities:
Proceeds of additional stock issue 28,500 50,732
Increase (decrease) in time deposits 2,172,238 1,565,468
Increase (decrease) in other deposits 511,168 (6,152,634)
Advances from Federal Home Loan Bank 16,900,000 7,250,000
Payments on long-term indebtedness (6,123,470) (3,269,166)
Increase (Decrease) in other borrowed funds 768,317 -0-
Dividends paid (744,053) (278,364)
Increase in federal funds purchased and securities sold under
agreement to repurchase 3,145,376 3,240,000
Increase in advance payments by borrowers for taxes and insurance (87,204) 73,955
----------- -----------
Net cash provided (used) by financing activities 16,570,872 2,479,991
----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents 2,895,911 (12,752,427)
Cash and Cash Equivalents at Beginning of Period 40,054,911 32,841,055
----------- -----------
Cash and Cash Equivalents at End of Period $42,950,822 20,088,628
=========== ===========
Supplemental Disclosures of Cash Flow Information
- -------------------------------------------------
Cash Paid During The Period For:
Interest $ 8,035,106 7,013,391
=========== ===========
Income taxes $ 1,683,886 1,485,747
=========== ===========
Schedule of Non-Cash Investing and Financing Activities
- -------------------------------------------------------
Total increase (decrease) in unrealized losses on securities available-for-sale $ 9,908 229,081
=========== ===========
Stock issued to directors in payment of fees and stock issued through dividend
reinvestment plan $ 100,925 365,489
=========== ===========
</TABLE>
<PAGE> 8
PAB BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q.
Accordingly, they 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 (consisting of
normal and recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six months ended June 30, 1998
are not necessarily indicative of the results that may be expected for the
year ending December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1997.
Earnings per share information for the period ended June 30, 1997 has been
restated to reflect a two-for-one stock split on March 10, 1998 for
shareholders of record February 17, 1998.
Prior period financial information has been restated for a business
combination with Investors Financial Corporation (Investors) (and its
subsidiary, Bainbridge National Bank), which was consummated on June 19, 1998
and accounted for as a pooling of interests in conformity with generally
accepted accounting principles.
Note 2 - Business Combination
-----------------------------
On June 19, 1998, PAB Bankshares, Inc. (PAB) issued 1,711,249 shares of
common stock in exchange for all of the outstanding stock, warrants and
options of Investors (Bainbridge, Georgia). This transaction, accounted for
as a pooling of interests, added $79.5 million in assets.
As explained in Note 1, PAB restated prior period financial information for
the Investors transaction. The following table presents net interest income,
net income and earnings per share as reported by PAB and Investors and on a
combined basis for the six months ended June 30, 1997 (amounts in thousands,
except per share information):
<TABLE>
<CAPTION>
<S> <C>
Net Interest Income:
PAB $ 6,289
Investors 1,623
----------
Combined $ 7,912
=========
Net Income:
PAB $ 2,158
Investors 551
----------
Combined $ 2,709
=========
<PAGE> 9
Basic Earnings Per Share:
PAB $ .38
Investors 1.17
Combined .37
Diluted Earnings Per Share:
PAB $ .38
Investors 1.06
Combined .36
</TABLE>
<PAGE> 10
MANAGEMENTS'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
---------------------
On June 19, 1998, the Company completed its merger of Investors Financial
Corporation (and its subsidiary, Bainbridge National Bank). The transaction
has been accounted for as a pooling of interests; therefore, all prior period
financial information has been restated to reflect the merger. Current
period financial information reflects the merger as if it had occurred on
January 1, 1998.
Results of Operations
---------------------
The Company, including the operations of its subsidiaries, reported
consolidated net income of $3,036,156 for the six months ended June 30, 1998
compared to $2,708,585 for the six months ended June 30, 1997. Net interest
income after provision for loan losses was $8,303,612 and $7,646,495 for the
six months ended June 30, 1998 and 1997, respectively. The provision for
loan losses was $434,283 and $266,000 for the six months ended June 30, 1998
and 1997, respectively. Noninterest income totalled $2,385,502 and
$1,746,667 for the six months ended June 30, 1998 and 1997, respectively, and
noninterest expenses totalled $6,095,154 and $5,285,242 for the six months
ended June 30, 1998 and 1997, respectively. Net income for the quarter ended
June 30, 1998 was $1,426,708 compared to $1,413,422 for the quarter ended
June 30, 1997.
Comprehensive income was $3,030,894 and $2,566,444 for the six months ended
June 30, 1998 and 1997, respectively. Other comprehensive income consisted
of unrealized gains and losses on available-for-sale securities.
The following table summarizes the results of operations of the Company for
the three month and six month periods ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Interest income $ 8,536 7,561 16,803 14,864
Interest expense (4,149) (3,517) (8,066) (6,952)
-------- -------- -------- --------
Net interest income 4,387 4,044 8,737 7,912
Provision for loan losses (157) (133) (434) (266)
Noninterest income 1,156 937 2,386 1,747
Noninterest expense (3,183) (2,700) (6,095) (5,285)
-------- -------- -------- --------
Income before taxes 2,203 2,148 4,594 4,108
Income taxes (776) (734) (1,558) (1,399)
-------- -------- -------- --------
Net income 1,427 1,414 3,036 2,709
Other comprehensive income,
net of tax 25 48 (5) (142)
-------- -------- -------- --------
Comprehensive income $ 1,452 1,462 3,031 2,567
======== ======== ======== ========
</TABLE>
Interest Income
---------------
Total interest income increased approximately $1,939,000 for the six months
ended June 30, 1998 compared to the six months ended June 30, 1997. This
increase is attributed to the factors explained in the following paragraph.
<PAGE> 11
This increase was the combined effect of an increase in the average loan
portfolio balance from approximately $252.9 million for the six months ended
June 30, 1997 to approximately $282.6 million for the six months ended June
30, 1998 and an increase in the average rate earned on the loan portfolio
from 9.63% for the six months ended June 30, 1997 to 9.68% for the six months
ended June 30, 1998. The effect of these changes increased the interest
income earned on the loan portfolio from approximately $12,170,000 for the
six months ended June 30, 1997 to approximately $13,680,000 for the six
months ended June 30, 1998, an increase of $1,510,000. Interest income on
the loan portfolio increased from approximately $6,256,000 for the quarter
ended June 30, 1997 to approximately $6,973,000 for the quarter ended June
30, 1998, an increase of $717,000.
Interest earned on taxable investment securities decreased from approximately
$2,360,000 for the six months ended June 30, 1997 to approximately $2,172,000
for the six months ended June 30, 1998, a decrease of $188,000. This
decrease was the net effect of a decrease in the average taxable investment
portfolio balance from approximately $74.3 million for the six months ended
June 30, 1997 to approximately $67.4 million for the six months ended June
30, 1998 and an increase in the rate earned on the taxable investment
portfolio from 6.35% for the six months ended June 30, 1997 to 6.45% for the
six months ended June 30, 1998. Interest income on the taxable investment
portfolio decreased from approximately $1,143,000 for the quarter ended June
30, 1997 to approximately $1,095,000 for the quarter ended June 30, 1998, a
decrease of $48,000.
Interest earned on non-taxable investment securities increased from
approximately $65,000 for the six months ended June 30, 1997 to approximately
$89,000 for the six months ended June 30, 1998, an increase of $24,000. This
increase was the combined effect of an increase in the average non-taxable
investment portfolio from approximately $2.5 million for the six months ended
June 30, 1997 to approximately $3.3 million for the six months ended June 30,
1998 and an increase in the rate earned on the non-taxable investment
portfolio from 5.08% for the six months ended June 30, 1997 to 5.30% for the
six months ended June 30, 1998. Interest income on the non-taxable
investment securities portfolio increased from approximately $34,000 for the
quarter ended June 30, 1997 to approximately $44,000 for the quarter ended
June 30, 1998, an increase of $10,000.
As of June 30, 1998, the amortized cost of taxable and non-taxable
investments consisted of U.S. Treasury securities (12.5%), securities of U.S.
Government Agencies and Corporations (76.0%), obligations of States, Counties
and Municipalities (5.4%) and equity securities (6.1%). The securities are
predominantly at fixed rates. There are no interest rates which change
inversely to changes in interest rates.
Interest earned on interest-bearing deposits in banks increased from
approximately $93,000 for the six months ended June 30, 1997 to approximately
$112,000 for the six months ended June 30, 1998, an increase of $19,000.
This increase was the net effect of an increase in the average interest-
bearing deposits balance from approximately $3.7 million for the six months
ended June 30, 1997 to approximately $4.8 million for the six months ended
June 30, 1998 and a decrease in the rate earned on the interest-bearing
deposits from 5.02% for the six months ended June 30, 1997 to 4.69% for the
six months ended June 30, 1998. Interest income on the interest-bearing
deposits decreased from approximately $47,000 for the quarter ended June 30,
1997 to approximately $42,000 for the quarter ended June 30, 1998, a decrease
of $5,000.
<PAGE> 12
Interest earned on federal funds sold and securities purchased under
agreement to resell increased from approximately $175,000 for the six months
ended June 30, 1997 to approximately $751,000 for the six months ended June
30, 1998, an increase of $576,000. This increase was the combined effect of
an increase in the average federal funds sold balance from approximately $5.8
million for the six months ended June 30, 1997 to approximately $18.7 million
for the six months ended June 30, 1998 and an increase in the average rate
earned from 6.08% for the six months ended June 30, 1997 to 8.04% for the six
months ended June 30, 1998. Interest income on federal funds sold and
securities purchased under agreement to resell increased from approximately
$81,000 for the quarter ended June 30, 1997 to approximately $382,000 for the
quarter ended June 30, 1998, an increase of $301,000.
Interest Expense
----------------
Total interest expense increased approximately $1,114,000 for the six months
ended June 30, 1998 compared to the six months ended June 30, 1997. This
increase is attributed to the factors explained in the following paragraph.
This increase was the combined effect of an increase in the average balance
of interest-bearing deposits from approximately $264.1 million for the six
months ended June 30, 1997 to approximately $277.7 million for the six months
ended June 30, 1998 and an increase in the average rate paid on interest-
bearing deposits from 4.74% for the six months ended June 30, 1997 to 4.93%
for the six months ended June 30, 1998. The effect of these changes
increased the interest expense on interest-bearing deposits from
approximately $6,262,000 for the six months ended June 30, 1997 to
approximately $6,840,000 for the six months ended June 30, 1998, an increase
of $578,000. Interest expense on interest-bearing deposits increased from
approximately $3,157,000 for the quarter ended June 30, 1997 to approximately
$3,463,000 for the quarter ended June 30, 1998, an increase of $306,000. The
increase in interest-bearing deposits came primarily from the local
communities served by the Banks.
Interest expense on advances from the Federal Home Loan Bank increased from
approximately $531,000 for the six months ended June 30, 1997 to
approximately $1,077,000 for the six months ended June 30, 1998, an increase
of $546,000. This increase was the combined effect of an increase in the
average balance of advances from approximately $17.4 million for the six
months ended June 30, 1997 to approximately $34.6 million for the six months
ended June 30, 1998 and an increase in the average rate paid from 6.11% for
the six months ended June 30, 1997 to 6.22% for the six months ended June 30,
1998. Interest expense on Federal Home Loan Bank advances increased from
approximately $281,000 for the quarter ended June 30, 1997 to approximately
$590,000 for the quarter ended June 30, 1998, an increase of $309,000.
All other interest expense consisting of interest on notes and mortgages
payable, federal funds purchased and securities sold under agreements to
repurchase and sweep agreements decreased from approximately $159,000 for the
six months ended June 30, 1997 to approximately $149,000 for the six months
ended June 30, 1998, a decrease of $10,000. This decrease was the combined
effect of a decrease in the average balance of such indebtedness from
approximately $5.2 million for the six months ended June 30, 1997 to
approximately $5.1 million for the six months ended June 30, 1998 and a
decrease in the average rate paid from approximately 6.08% for the six months
ended June 30, 1997 to approximately 5.86% for the six months ended June 30,
1998. All other interest expense increased from approximately $79,000 for
the quarter ended June 30, 1997 to approximately $95,000 for the quarter
ended June 30, 1998, an increase of $16,000. The interest rate reduction was
attributed to the repayment prior to maturity of a note payable to a
correspondent bank which carried a rate of prime less .50% subject to a
ceiling of 9.50% until July 1, 1999.
<PAGE> 13
Noninterest Income
------------------
The following table presents the principal components of noninterest income
for the three month and six month periods ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service charges on deposit
accounts $ 662 631 1,285 1,148
Insurance commissions 54 28 90 56
Fees on loans originated for
sale 79 1 143 2
Gain (Loss) on sale of loans 2 16 2 18
Gain (Loss) on sale of assets -0- (2) 102 (2)
Securities gains (losses) 5 (23) 29 (23)
Equity in earnings of
unconsolidated subsidiary 149 109 211 160
Gain (Loss) on sale of other
real estate 1 -0- (8) 1
Other income 204 177 532 387
-------- -------- -------- --------
Total Noninterest Income $ 1,156 937 2,386 1,747
======== ======== ======== ========
</TABLE>
Noninterest income for the six months ended June 30, 1998 as compared to the
six months ended June 30, 1997 increased approximately $639,000.
Service charges on deposit accounts for the six months ended June 30, 1998 as
compared to the six months ended June 30, 1997, increased approximately
$137,000. This increase was related primarily to an increase in the number
of transaction deposit accounts with NSF charges. Equity in earnings of
unconsolidated subsidiary, which represents the Company's 50% interest in the
earnings of Empire Financial Services, Inc., an unconsolidated subsidiary
which is owned by First Community Bank of Southwest Georgia (a subsidiary of
the Company), increased $51,000. Gain on sale of assets represented a gain
on the sale of mortgage servicing rights. Fees on mortgage loans originated
for sale increased $141,000 due to an increase in loan origination activity
undertaken by the Company. All other income increased approximately $206,000
for the six months ended June 30, 1998.
<PAGE> 14
Noninterest Expenses
--------------------
The following table presents the principal components of noninterest expenses
for the three month and six month periods ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Compensation $ 1,328 1,168 2,587 2,338
Other personnel expenses 315 281 636 550
Occupancy expense of bank
premises 151 151 302 301
Furniture and equipment
expense 284 261 521 469
Federal deposit insurance 25 12 30 23
Postage and courier services 76 82 159 153
Supplies 122 104 216 202
Amortization 89 89 178 178
Other operating expenses 793 552 1,466 1,071
-------- -------- -------- --------
Total Noninterest Expenses $ 3,183 2,700 6,095 5,285
======== ======== ======== ========
</TABLE>
Noninterest expenses for the six months ended June 30, 1998 as compared to
the six months ended June 30, 1997, increased approximately $810,000 or
15.3%. Compensation and other personnel expenses increased approximately
$35,000 for the six months ended June 30, 1998 as compared to the six months
ended June 30, 1997. This increase reflects increases in the number of
employees, in wage levels and in the cost of employee benefits. All other
expenses increased approximately $475,000 or 19.8% for the six months ended
June 30, 1998 compared to the six months ended June 30, 1997. This increase
was primarily the result of a larger volume of business and professional fees
associated with the merger activities of the Company.
Provision for Loan Losses
-------------------------
The provision for loan losses for the six months ended June 30, 1998 was
$434,000 compared to $266,000 for the six months ended June 30, 1997. The
balance of the allowance for loan losses was approximately $3,723,000 (1.3%
of outstanding loans) at June 30, 1998 and approximately $3,292,000 (1.2% of
outstanding loans) at June 30, 1997. Actual loan charge-offs net of
recoveries were approximately $248,000 for the six months ended June 30, 1998
and approximately $138,000 for the six months ended June 30, 1997. Non-
accrual loans were approximately $766,000 at June 30, 1998 as compared to
$472,000 at December 31, 1997. Loans ninety days or more past due and still
accruing amounted to approximately $307,000 at June 30, 1998 and $178,000 at
December 31, 1997. In determining an adequate level of loan loss reserves,
such loans were included in such consideration. The amount of the provision
for loan losses is a result of the amount of loans charged off, the amount of
loans recovered and management's conclusion concerning the level of the
allowance for loan losses. The level of the allowance for loan losses is
based upon a number of factors including the Banks' past loan loss
experience, management's evaluation of the collectibility of loans including
specific impaired loans, the general state of the economy and other relevant
factors.
Income Taxes
------------
The effective tax rate for the six months ended June 30, 1998 was 33.9%
compared to 34.1% for the six months ended June 30, 1997.
<PAGE> 15
Financial Condition
-------------------
The Company, including its subsidiaries, reported consolidated total assets
of approximately $425.1 million at June 30, 1998 and approximately $405.6
million at December 31, 1997, representing an increase of approximately $19.6
million.
During the six months ended June 30, 1998, deposits increased $2.7 million,
cash and due from banks decreased $4.5 million, federal funds purchased and
securities sold under agreement to repurchase increased $3.1 million,
investments decreased $2,9 million, advances from the Federal Home Loan Bank
increased $10.9 million, other borrowed funds increased $.7 million,
operations generated $3.5 million and interest bearing deposits decreased
$3.8 million which provided $32.1 million of funds which were used to fund
increases in loans of $21.6 million, decrease long-term debt $.1 million,
increase federal funds sold and securities purchased under agreement to
resell $8.2 million, pay dividends of $.7 million and fund capital
expenditures of $1.5 million.
A number of factors contribute to the charges in loans and deposits as
discussed under "Results of Operations" and "Financial Condition". Such
factors include the growth in the customer base due to business development
efforts of the management team, the pricing of loans and deposits and the
favorable economic conditions experienced in the markets served by the
subsidiary banks. The changes in interest rates as previously discussed are
reflective of interest rates in general, market conditions and competition.
Changes in short-term funds including cash and due from banks, federal funds
sold and securities purchased under agreement to resell, interest-bearing
deposits and investment securities are reflective of the liquidity position
of the company.
The investment securities portfolio of the Company, including its
subsidiaries, reflected unrealized gains for the available-for-sale category
of approximately $168,000 ($100,000 net of income tax effect). All
securities were held in the available-for-sale category as of June 30, 1998.
Pursuant to Financial Accounting Standards Board Statement No. 115 and as
amended by Statement No. 130, a valuation allowance has been provided for the
available-for-sale category and is reflected as a separate component of
shareholders' equity as other comprehensive income.
The Company and its subsidiary banks are required to maintain minimum amounts
of capital to total "risk weighted" assets, as defined by the banking
regulators. On a consolidated basis, at June 30, 1998, a comparison of the
minimum required and actual capital ratios are as follows:
<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED
UNDER
PROMPT
FOR CAPITAL CORRECTIVE
ADEQUACY ACTION
ACTUAL PURPOSES PROVISIONS
---------------- ---------------- ----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
-------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
As of June 30, 1998
Total Capital
(to Risk Weighted
Assets) $42,323 13.61% 24,878 8.0% 31,097 10.0%
Tier 1 Capital
(to Risk Weighted
Assets) 38,600 12.41% 12,442 4.0% 18,662 6.0%
Tier 1 Capital
(to Average Assets) 38,600 9.26% 16,674 4.0% 20,842 5.0%
</TABLE>
Each entity was in full compliance with its respective regulatory capital
requirements.
<PAGE> 16
Liquidity and Capital Resources
-------------------------------
Liquidity management involves the matching of the cash flow requirements of
customers, for the withdrawal of funds or the funding of additional loans,
and the ability of the Banks to meet those requirements. Management monitors
and maintains appropriate levels of assets and liabilities so that maturities
of assets are such that adequate funds are provided to meet estimated
customer withdrawals and loan requests.
The Banks' liquidity position depends primarily upon the liquidity of its
assets relative to its need to respond to short-term demand for funds caused
by withdrawals from deposit accounts and loan funding commitments. Primary
sources of liquidity are scheduled payments on its loans and interest on the
Banks' investments. The Banks may also utilize their cash and due from
banks, short-term deposits with financial institutions, federal funds sold
and investment securities to meet liquidity requirements. At June 30, 1998,
the Company's cash and due from banks were approximately $15.8 million in
excess of its reserve requirements of approximately $1.9 million, its short-
term deposits with financial institutions were approximately $2.9 million and
its federal funds sold and securities purchased under agreement to resell
were approximately $22.8 million. All of the above can be converted to cash
on short notice. The sale of investments which had a market value of
approximately $69.4 million at June 30, 1998 can also be used to meet
liquidity requirements, to the extent the investments are not pledged to
secure public funds on deposit as required by law. Securities with a market
value of approximately $23.6 million were pledged as of June 30, 1998.
The Banks' funding needs are based primarily on the volume of lending. The
primary funding source is from new deposits. The Banks seek to attract new
deposits by paying rates of interest on deposit accounts which are
competitive in their respective primary service areas. The Banks' generally
do not pay brokers' commissions in connection with the obtaining of deposits
or have deposits outside the primary service area. The Banks do not pay
premiums to attract deposits. The Banks continue to expect that new deposits
will serve as their primary funding source.
The Banks also have the ability, on short-term basis, to borrow and purchase
federal funds from other financial institutions. The Banks are members of
the Federal Home Loan Bank of Atlanta and as such have the ability to secure
advances therefrom, although the cost of such advances exceed lower cost
alternatives such as deposits from the local communities. The Banks had
advances outstanding from the Federal Home Loan Bank of Atlanta of $40.1
million at June 30, 1998, at fixed and variable rates ranging from 5.20% to
7.24%.
Through the Company's dividend reinvestment and common stock purchase plans,
an additional 1,650 shares at an average of $11.93 per share was issued
during the six months ended June 30, 1998.
Year 2000 Issue
---------------
Based on a preliminary study, the Company expects to spend approximately
$200,000 to $250,000 from 1998 through 1999 to modify its computer
information systems enabling proper processing of transactions relating to
the year 2000 and beyond. The Company continues to evaluate appropriate
courses of corrective action, including replacement of certain systems whose
associated costs would be recorded as assets and amortized. Accordingly, the
Company does not expect the amounts required to be expensed over the next two
years to have a material effect on its financial position or results of
operations. The amount expensed through June 30, 1998 was immaterial.
<PAGE> 17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's financial performance is impacted by, among other factors,
interest rate risk and credit risk. The Company utilizes no derivatives to
mitigate its credit risk, relying instead on strict underwriting standards,
loan review and an adequate loan loss reserve.
The Company has reviewed its market risk information disclosed in its 1997
Annual Report to Stockholders in relation to market risk information for the
six months ended June 30, 1998 and has determined that there has been no
material changes in its market risk disclosures from those presented in its
1997 Annual Report.
<PAGE> 18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) At the annual meeting of shareholders held on April 27,
1998, the following directors were elected to hold office
for three year terms:
<TABLE>
<CAPTION>
NAME FOR AGAINST ABSTAIN
------------------ --------- ------- -------
<S> <C> <C> <C> <C>
James L. Dewar, Jr. 4,261,532 0 768
D. Ramsay Simmons, Jr. 4,261,668 0 632
F. Ferrell Scruggs, Sr. 4,261,532 0 768
</TABLE>
The following directors will continue in office: James L.
Dewar, Sr., R. Bradford Burnette, Walter W. Carroll, II,
William S. Cowart, Thompson Kurrie, Jr., Joe P. Singletary
and C. Larry Wilkinson.
(b) A special meeting of shareholders was held on June 19,
1998 to vote on a proposal to issue shares of PAB common
stock in connection with the agreement and plan of merger,
dated as of December 31, 1997 and amended on April 27,
1998, by and among Investors Financial Corporation,
Bainbridge National Bank and PAB Bankshares, Inc.,
pursuant to which, among other matters, (a) Investors
Financial Corporation would merge with and into PAB
Bankshares, Inc. and (b) the shares of Investors Financial
Corporation common stock, warrants and options would be
converted into the right to receive shares of PAB
Bankshares, Inc. common stock, as described in the Joint
Proxy Statement/Prospectus dated May 13, 1998. Votes were
cast as follows:
For - 4,048,030
Against - 13,205
Abstain - 26,966
ITEM 5. OTHER INFORMATION.
The Company has announced its plan for a merger of Eagle
Bancorp, Inc. (Eagle) (Parent Company of Eagle Bank and Trust
in Statesboro) into the Company. The anticipated effective
date is prior to December 31, 1998. The transaction is to be
consummated by issuance of 873,875 shares of Company common
stock for 873,875 shares of Eagle common stock representing
all of the outstanding stock of Eagle. It is anticipated that
the merger will qualify as a "pooling of interest" for
financial reporting purposes. Regulatory and stockholder
approvals will be required.
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit No.
-----------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K.
During the quarterly period ended June 30, 1998, the Company
filed a current report on Form 8-K dated May 21, 1998. Such
current report, which was filed under Item 5 of Form 8-K,
reported that on April 29, 1998, PAB Bankshares, Inc.
announced that it had entered into a letter of intent
regarding the proposed acquisition of Eagle Bancorp, Inc.
The Form 8-K also included a press release dated April 29,
1998 concerning the proposed acquisition.
Additionally, the Company filed a current report on Form 8-
K dated July 2, 1998. Such current report, was filed under
Item 2 and 7 of Form 8-K and reported the consummation on
June 19, 1998 of a merger of Investors Financial
Corporation and Bainbridge National Bank with PAB
Bankshares, Inc. by the issuance of 1,711,249 shares of
common stock of PAB Bankshares, Inc. in exchange for all of
the common stock, warrants and options of Investors
Financial Corporation. Item 7 of the Form 8-K reported
that the financial statements of Investors Financial
Corporation and the pro forma financial information
concerning Investors Financial Corporation and PAB
Bankshares, Inc. would be filed no later that September 1,
1998.
<PAGE> 20
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.
PAB BANKSHARES, INC.
By:/s/ R. Bradford Burnette
---------------------------------
R. Bradford Burnette
(President and
Chief Executive Officer)
By:/s/ C. Larry Wilkinson
----------------------------------
C. Larry Wilkinson
(Executive Vice President and Chief
Financial Officer)
Date:August 14, 1998
<PAGE> 21
PAB BANKSHARES, INC.
FORM 10-Q
INDEX OF EXHIBITS
-----------------
The following exhibits are filed as part of the report.
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
11 Statement re computation of
per share earnings 22
27 Financial data schedule 23
[MULTIPLIER] 1
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
PAB BANKSHARES, INC.
--------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1998 1997
---------- ----------
<S> <C> <C>
Basic Earnings Per Share:
-------------------------
Average shares outstanding 7,370,894 7,350,489
========== ==========
Diluted Earnings Per Share:
---------------------------
Average shares outstanding 7,370,894 7,350,489
---------- ----------
Average options outstanding:
With exercise price of $12.50 144,000 144,000
With exercise price of $20.125 131,500 131,500
With exercise price of $24.125 46,500 -0-
With exercise price of $21.625 3,000 -0-
---------- ----------
Proceeds from assumed exercise of options
outstanding $5,633,126 4,446,438
Average market price per share during the period $ 25.40 21.75
---------- ----------
Assumed shares repurchased 221,792 204,398
---------- ----------
Common stock equivalents of options outstanding 103,208 71,102
---------- ----------
Average shares outstanding 7,474,102 7,421,591
========== ==========
Earnings Per Share:
-------------------
Net Income $3,036,156 2,708,585
========== ==========
Basic Earnings Per Share $ .41 .37
========== ==========
Diluted Earnings Per Share $ .41 .36
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 17,700,429
<INT-BEARING-DEPOSITS> 2,862,448
<FED-FUNDS-SOLD> 22,785,945
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 69,444,921
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 293,252,958
<ALLOWANCE> 3,722,778
<TOTAL-ASSETS> 425,144,169
<DEPOSITS> 333,659,661
<SHORT-TERM> 4,918,547
<LIABILITIES-OTHER> 2,849,158
<LONG-TERM> 42,128,696
<COMMON> 1,217,065
0
0
<OTHER-SE> 40,371,042
<TOTAL-LIABILITIES-AND-EQUITY> 425,144,169
<INTEREST-LOAN> 13,680,421
<INTEREST-INVEST> 2,260,926
<INTEREST-OTHER> 862,165
<INTEREST-TOTAL> 16,803,512
<INTEREST-DEPOSIT> 6,839,684
<INTEREST-EXPENSE> 8,065,617
<INTEREST-INCOME-NET> 8,737,895
<LOAN-LOSSES> 434,283
<SECURITIES-GAINS> 28,988
<EXPENSE-OTHER> 6,095,154
<INCOME-PRETAX> 4,593,960
<INCOME-PRE-EXTRAORDINARY> 3,036,156
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,036,156
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
