SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarter Ended September 30, 1995
No. 0-15786
(Commission File Number)
COMMUNITY BANKS, INC.
(Exact Name of Registrant as Specified in its Charter)
PENNSYLVANIA 23-2251762
(State of Incorporation) (IRS Employer ID Number)
150 Market Street, Millersburg, PA 17061
(Address of Principal Executive Offices) (Zip Code)
(717) 692-4781
(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
Number of Shares Outstanding as of September 30, 1995.
CAPITAL STOCK-COMMON 2,029,367
(Title of Class) (Outstanding Shares)
COMMUNITY BANKS, INC. and SUBSIDIARIES
Index 10-Q
Part I
Financial Information.............................................1
Consolidated Balance Sheets.......................................2
Consolidated Statements of Income.................................3
Consolidated Statements of Cash Flows.............................4
Notes to Consolidated Financial Statements........................5-7
Management's Discussion and Analysis of Financial
Condition and Results of Operation.............................8-10
Part II
Other information and Signatures..................................11
PART I - FINANCIAL INFORMATION
COMMUNITY BANKS, INC. and SUBSIDIARIES
The following financial information sets forth the operations of
Community Banks, Inc. and Subsidiaries for the three month and nine
month periods ending September 30, 1995 and 1994.
In the opinion of management, the following Consolidated Balance
Sheets and related Consolidated Statements of Income and Cash Flows
reflect all adjustments (consisting of normal recurring accrual
adjustments) necessary to present fairly the financial position and
results of operations for such periods.
-1-
Community Banks, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars in thousands except per share data)
September 30, December 31,
1995 1994
ASSETS
Cash and due from banks................... $ 11,660 $ 12,152
Interest-bearing time deposits in other
banks.................................. 575 645
Investment securities, available for sale
(market value of $88,543 and $99,249
as of September 30, 1995, and December
31, 1994, respectively)................ 88,543 99,249
Loans..................................... 211,034 190,792
Less: Unearned income.................... (11,132) (8,522)
Allowance for loan losses.......... (2,206) (2,069)
Net loans.......................... 197,696 180,201
Premises and equipment, net............... 6,895 6,589
Goodwill.................................. 1,448 1,629
Other real estate owned................... 375 338
Loans held for sale....................... 2,342 35
Accrued interest receivable and other
assets................................. 5,575 6,283
Total assets........................... $315,109 $307,121
======== ========
LIABILITIES
Deposits:
Demand................................. $ 21,350 $ 24,343
Savings................................ 110,813 115,104
Time................................... 124,414 108,593
Time in denominations of $100,000 or
more.................................. 9,924 8,072
Total deposits......................... 266,501 256,112
Short-term borrowings..................... 3,926 11,709
Long-term debt............................ 7,000 7,000
Accrued interest payable and other
liabilities............................ 2,501 1,933
Subordinated capital notes................ --- 15
Total liabilities...................... 279,928 276,769
STOCKHOLDERS' EQUITY
Preferred stock, no par value; 500,000
shares authorized; no shares issued
and outstanding........................ --- ---
Common stock-$5.00 par value; 5,000,000
shares authorized; 2,032,018 and
2,027,918 shares issued in 1995 and
1994, respectively..................... 10,160 10,140
Surplus................................... 9,877 9,839
Retained earnings......................... 14,506 12,443
Net unrealized gain (loss) on investment
securities available for sale, net of tax 691 (2,017)
Less: Treasury stock of 2,651 shares at
cost................................... (53) (53)
Total stockholders' equity............. 35,181 30,352
Total liabilities and stockholders'
equity................................ $315,109 $307,121
======== ========
The accompanying notes are an integral part of the consolidated financial
statements.
-2-
<TABLE>
Community Banks, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(dollars in thousands except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans................. $ 4,749 $ 3,812 $ 13,606 $ 10,893
Interest and dividends on investment
securities:
Taxable............................... 1,033 1,160 3,248 3,357
Exempt from federal income tax........ 370 468 1,212 1,402
Other interest income...................... 23 14 55 58
Total interest income................. 6,175 5,454 18,121 15,710
Interest expense:
Interest on deposits:
Savings............................... 616 660 1,908 1,874
Time.................................. 1,730 1,232 4,713 3,744
Time in denominations of $100,000 or
more................................. 137 100 388 293
Interest on short-term borrowings and
long-term debt............................ 165 121 545 368
Interest on subordinated capital notes..... -- -- -- 1
Total interest expense................. 2,648 2,113 7,554 6,280
Net interest income................... 3,527 3,341 10,567 9,430
Provision for loan losses.................. 170 159 460 393
Net interest income after provision
for loan losses...................... 3,357 3,182 10,107 9,037
Other income:
Trust department income............... 59 46 157 136
Service charges on deposit accounts... 211 188 586 501
Other service charges, commissions
and fees............................. 49 61 168 184
Investment security gains ............ 63 59 137 380
Income on insurance premiums.......... 168 101 431 296
Gains on mortgage sales............... 60 31 126 182
Other income.......................... 63 51 132 126
Total other income............... 673 537 1,737 1,805
Other expenses:
Salaries and employee benefits........ 1,209 1,075 3,543 3,131
Net occupancy expense................. 375 315 1,045 985
Operating expense of insurance
subsidiary.......................... 43 75 247 217
Other operating expense............... 874 865 2,662 2,515
Total other expense.............. 2,501 2,330 7,497 6,848
Income before income taxes....... 1,529 1,389 4,347 3,994
Provision for income taxes................. 363 326 1,063 926
Net income....................... $ 1,166 $ 1,063 $ 3,284 $ 3,068
========== ========== ========== ==========
Average number of fully diluted shares
outstanding............................... 2,054,762 2,060,795 2,053,428 2,060,759
<FN> ========== ========= ========= =========
Earnings per share:
Primary................................. $ .57 $ .52 $ 1.62 $ 1.52
Fully diluted........................... $ .57 $ .52 $ 1.60 $ 1.49
Dividends paid per share................... $ .200 $ .167 $ .60 $ .500
</FN>
Earnings per share have been restated to reflect stock dividends.
The accompanying notes are an integral part of the consolidated financial
statements.
-3-
</TABLE>
Community Banks, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)
Nine Months Ended
September 30,
1995 1994
Operating Activities:
Net income...................................... $ 3,284 $ 3,068
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses.................... 460 393
Provision for depreciation and amortization.. 569 542
Amortization of goodwill..................... 181 181
Investment security gains.................... (137) (380)
Loans originated for sale.................... (8,784) (5,112)
Proceeds from sales of loans................. 6,603 9,144
Gains on mortgage sales...................... (126) (182)
Decrease (increase) in other assets.......... (368) (6,421)
Increase in accrued interest payable
and other liabilities....................... 212 242
Net cash provided by operating activities.. (4,709) (7,669)
Investing Activities:
Net decrease (increase) in interest-bearing time
deposits in other banks........................ 70 (325)
Proceeds from sales of investment
securities..................................... 347 847
Proceeds from maturities of investment
securities..................................... 15,272 15,391
Purchases of investment securities.............. (673) (19,130)
Net increase in total loans..................... (17,955) (14,632)
Purchases of premises and equipment............. (875) (1,251)
Net cash used by investing activities...... 2,789 (9,956)
Financing Activities:
Net increase in total deposits.................. 10,389 16,774
Net increase (decrease) in short-term borrowings (7,783) 4,794
Net increase (decrease) in long-term debt....... --- (2,000)
Repayment of subordinated capital notes......... (15) (16)
Cash dividends.................................. (1,218) (1,013)
Proceeds from issuance of common stock.......... 55 129
Net cash provided by financing activities.. 1,428 18,668
Increase (decrease) in cash and cash
equivalents............................... (492) 1,043
Cash and cash equivalents at beginning of period... 12,152 9,626
Cash and cash equivalents at end of period......... $11,660 $10,669
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
-4-
Community Banks, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands)
1. Accounting Policies
The information contained in this report is unaudited and is
subject to future adjustments. However, in the opinion of management, the
information reflects all adjustments necessary for a fair statement of
results for the three month and nine month periods ended September 30, 1995
and 1994.
The accounting policies of Community Banks, Inc. and subsidiaries,
as applied in the consolidated interim financial statements presented herein,
are substantially the same as those followed on an annual basis as presented
on page 9 of the 1994 Annual Report to shareholders, except for the adoption
of Statements of Financial Accounting Standards No. 114 and 118 effective
January 1, 1995, which had no impact on the provision for loan losses or the
allowance for loan losses.
2. Investment Securities
The amortized cost and estimated market values of investment
securities at September 30, 1995 and December 31, 1994, were as follows:
1995
Estimated
Amortized Market
Cost Value
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $14,662 $14,643
Mortgage-backed U.S. government
agencies................................ 39,210 39,024
Obligations of states and political
subdivisions............................ 26,956 27,424
Corporate securities..................... 3,516 3,624
Equity securities........................ 3,151 3,828
Total.............................. $87,495 $88,543
======= =======
1994
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 18,807 $ 17,832
Mortgage-backed U.S. government
agencies................................ 43,926 41,900
Obligations of states and political
subdivisions............................ 33,185 32,733
Corporate securities..................... 3,518 3,499
Equity securities........................ 2,869 3,285
Total.............................. $102,305 $ 99,249
======== ========
-5-
3. Allowance for loan losses
Changes in the allowance for loan losses are as follows:
Nine months ended Year Ended
September 30, December 31,
1995 1994
Balance, January 1.................. $2,069 $1,837
Provision for loan losses........... 460 462
Loan charge-offs.................... (487) (577)
Recoveries.......................... 164 347
Balance, September 30, 1995 and
December 31, 1994.................. $2,206 $2,069
====== ======
NONPERFORMING LOANS (a) AND OTHER REAL ESTATE
September 30, December 31,
1995 1994
Loans past due 90 days or more
and still accruing interest:
Commercial, financial and
agricultural................... $ 67 $ 152
Mortgages....................... 392 114
Personal installment............ 206 59
Other........................... 7 1
672 326
Loans renegotiated with the borrowers NONE NONE
Loans on which accrual of interest
has been discontinued:
Commercial, financial and
agricultural.................... 401 327
Mortgages........................ 711 475
Other............................ 93 30
1,205 832
Other real estate................... 375 338
Total............................ $2,252 $1,496
====== ======
(a) The determination to discontinue the accrual of interest on
nonperforming loans is made on the individual case basis. Such factors as
the character and size of the loan, quality of the collateral and the
historical creditworthiness of the borrower and/or guarantors are considered
by management in assessing the collectibility of such amounts.
Impaired Loans
The Corporation adopted FAS 114 "Accounting by Creditors for Impairment
of a Loan", as amended by FAS 118, on January 1, 1995. Under the new
standard, a loan is considered impaired, based on current information and
events, if it is probable that the Corporation will be unable to collect the
scheduled payments of principal or interest when due according to the
contractual terms of the loan agreement. For purposes of applying FAS 114,
larger groups of smaller-balance loans such as residential mortgage and
installment loans are collectively evaluated for impairment. Management has
established a smaller-dollar-value threshold of $200,000 for all loans.
Loans exceeding this threshold are evaluated in accordance with FAS 114. An
insignificant delay or shortfall in the amount of payments, when considered
6
independent of other factors, would not cause a loan to be rendered
impaired. Insignificant delays or shortfalls may include, depending on
specific facts and circumstances, those that are associated with temporary
operational downturns or seasonal business delays.
Management performs periodic reviews of its loans to identify impaired
loans. The measurement of impaired loans is based on the present value of
expected future cash flows discounted at the historical effective interest
rate, except that all collateral-dependent loans are measured for impairment
based on the fair value of the collateral. The adoption of FAS 114 did not
result in an additional provision for credit losses at January 1, 1995.
Loans continue to be classified as impaired unless they are brought
fully current and the collection of scheduled interest and principal is
considered probable. When an impaired loan or portion of impaired loan is
determined to be uncollectible, the portion deemed uncollectible is charged
against the related valuation allowance and subsequent recoveries, if any,
are credited to the valuation allowance. The company does not accrue
interest on impaired loans. While a loan is considered impaired, cash
payments received are applied to principal or interest depending upon
management's assessment of the ultimate collectibility of principal and
interest.
At September 30, 1995, the Corporation recorded no investment in
impaired loans recognized in accordance with FAS 114 with no related FAS 114
valuation allowance. For the nine month period ended September 30, 1995, the
average balance of impaired loans was negligible. The application of FASB
114 has not had any effect on the comparability of the non-performing loan
table in footnote 3 between the periods presented. The company recognized no
interest on impaired loans on the cash basis.
4. Statement of Cash Flows
Cash and cash equivalents include cash and due from banks and
federal funds sold. The company made cash payments of $1,000,000 and
$870,000, and $7,441,000 and $6,409,000 for income taxes and interest,
respectively, for each of the nine month periods ended September 30, 1995
and 1994.
Excluded from the consolidated statements of cash flows for the
periods ended September 30, 1995 and 1994 was the effect of certain non-cash
activities. The company acquired real estate through foreclosure totalling
$225,000 and $165,000, respectively. The company also recorded an increase
(decrease) to deferred tax assets totalling $(1,396,000) and $480,000,
respectively, relating to the effects of changes in the net unrealized gain
(loss) on investment securities available for sale.
5. Merger
On July 5, 1995, the Company and the Citizens National Bank of
Ashland (Citizens) announced an agreement to merge the two companies. The
agreement, which requires the approval of certain regulatory agencies and
the stockholders of Citizens, provides that, upon consummation of the
merger, stockholders of Citizens will receive between 27.673 and 31.206
shares of the Company's common stock for each share issued and outstanding
Citizens common stock. The merger is expected to be accounted for as a
pooling of interests.
-7-
Community Banks, Inc. and Subsidiaries
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
Net interest income after provision for loan losses for the first
nine months of 1995 was $1,070,000 or 11.8% greater than net interest
income after provision for loan losses for the first nine months of
1994. Total interest income increased $2,411,000 or 15.3% during the
period while total interest expense increased $1,274,000 or 20.3%.
Average earning assets were approximately 5.2% greater during the first
nine months of 1995 than the first nine months of 1994. Average loan
balances increased 14.6% while average investment securities decreased
approximately 8.4% in 1995. Average interest-bearing liabilities
increased approximately 5.4%. Management chose to reduce CBI's
borrowings in 1995 and fund a significant portion of the increase in
loan balances with proceeds from maturities of investment securities.
The average yields realized on earning assets approximated 8.3% and 7.8%
during the first nine months of 1995 and 1994, respectively. The average
costs of interest-bearing liabilities approximated 4.0% and 3.5%,
respectively, for the same periods. Net interest margins on a tax
equivalent basis approximated 5.2% and 4.9% for the first nine months of
1995 and 1994, respectively. The provision for loan losses charged to
income increased 17.0% in 1995. Total loans past due 90 days and still
accruing interest, non-performing loans, and other real estate
approximated $2,252,000 and $1,496,000, respectively, as of September
30, 1995 and December 31, 1994. A portion of this increase has been
attributed to increased loan volume, and to personnel changes related to
the loan collection function which are being addressed by management.
Total other income for the first nine months of 1995 was $68,000 or
3.8% less than total other income for the first nine months of 1994.
Affecting this change were security gains of $137,000 and $380,000
recognized in 1995 and 1994, respectively. Income on insurance premiums
increased $135,000 or 45.6% while gains on mortgage sales were $56,000
less in 1995. Loans held for sale are comprised for the most part of
fixed-rate real estate and education loans extended specifically for
resale. While demand for these products has been lower in 1995 than
1994, a recent modest resurgence has occurred. Typically, the
relationship of the volume of loans sold to gains recognized during a
period is relatively constant and a larger volume results in increased
gains. Loans held for sale as of September 30, 1995 totalled $2,342,000.
The market value of these loans approximated book value at that time.
Total other expenses for the first nine months of 1995 increased 649,000
or 9.5%. Contributing factors were increases of $412,000 or 13.2% in
salaries and employee benefits, $60,000 in net occupancy expense, and
$147,000 in other operating expenses. Affecting these increases were two
new banking offices located in Hazleton and Rutherford, Pennsylvania.
The provision for income taxes increased $137,000 for the first
nine months of 1995 in comparison to the first nine months of 1994. The
effective tax rates approximated 24.5% and 23.2% for the respective
periods. A decline in the relationship of tax-free income to taxable
income contributed to the 1995 increase.
The previously described factors contributed to a net increase of
$216,000 or 7.0% in net income for the nine month period ended September
30, 1995.
-8-
Management's Discussion, Continued
The significant changes and related causes which occurred during
the three month period ending September 30, 1995 were generally
consistent with those described for the nine month period ending
September 30, 1995. Net interest income after provision for loan losses
for the third quarter of 1995 was $3,357,000 and essentiall unchanged
from the $3,361,000 realized in the second quarter of 1995. Net interest
income after provision for loan losses for the third quarter of 1995 was
$175,000 or 5.5% greater than the third quarter of 1994. Net interest
income margins on a tax equivalent basis approximated 5.1%, 5.2%, and
5.0%, respectively, for the quarters ended September 30, 1995, June 30,
1995, and September 30, 1994. Investment security gains and gains on
mortgage sales increased modestly in the third quarter of 1995 compared
to the second quarter of 1995 and the third quarter of 1994. Gains on
mortgage sales were $60,000, $48,000 and $31,000, respectively, for the
three month periods ending September 30, 1995, June 30, 1995, and
September 30, 1994. Investment security gains were $63,000, $38,000, and
$59,000 for the three month periods ending September 30, 1995, June 30,
1995, and September 30 1994, respectively.
Financial Condition
As of September 30, 1995 cash and due from banks was $492,000 or
4.1% less than it was at December 31, 1994. Affecting this decline was
management's continuing effort to better control non-earning assets. As
a result of increased loan demand, interest-bearing time deposits in
other banks and investment securities decreased $10,776,000 or 10.8%
during this same period. The approximate market value of debt securities
was $371,000 greater than amortized cost at September 30, 1995. The
approximate market value of debt securities was $3,472,000 less than
amortized cost at December 31, 1994. Securities to be held for
indefinite periods of time and not intended to be held to maturity or on
a long-term basis are classified as available for sale and carried at
market value. Securities held for indefinite periods of time include
securities that management intends to use as part of its asset/liability
management strategy and that may be sold in response to changes in
interest rates, resultant prepayment risk and other factors related to
interest rate and resultant prepayment risk changes. At September 30,
1995 and December 31, 1994, management classified investment securities
with amortized costs and market values of $87,495,000 and $88,543,000,
and $102,305,000 and $99,249,000, respectively, as available for sale.
Gross unrealized gains and losses relating to debt securities
approximated $1,280,000 and $909,000, respectively, at September 30,
1995. Net loans increased $17,495,000 or 9.7% from December 31, 1994 to
September 30, 1995. Variable rate real estate loans represented
approximately $11,000,000 or sixty percent of this increase while most
of the remaining increase occurred in consumer loans. The allowance for
loan losses approximated 1.10% and 1.14% of net loans at September 30,
1995 and December 31, 1994, respectively. Much of the increase in net
premises and equipment of $306,000 related to the new banking offices.
Goodwill continues to be amortized at an annualized rate of $240,000. As
previously noted, Community Banks, Inc. sells only fixed-rate real
estate and education loans specifically designated for resale on the
secondary market and at September 30, 1995 and December 31, 1994 these
loans totalled $2,342,000 and $35,000, respectively. Affecting the
decrease of $708,000 in accrued interest receivable and other assets was
a decline in deferred taxes. These factors contributed to an increase of
$7,988,000 or 2.6% in total assets from December 31, 1994 to September
30, 1995.
-9-
Management's Discussion, Continued
Total deposits increased $10,389,000 or 4.1% from December 31, 1994
to September 30, 1995. All of the increase can be attributed to
increases in time deposits. During the first nine months of 1995, the
Corporation experienced some movement of funds from savings to time
deposits. It is management's philosophy to generally maintain
competitive but not overly-aggressive interest rates relative to
interest-bearing liabilities. Management reduced short-term borrowings
in 1995 in an attempt to better balance rate sensitive assets and
liabilities. At September 30, 1995 long-term debt totalling $7,000,000
was comprised entirely of borrowings from the Federal Home Loan Bank of
Pittsburgh at a weighted average interest rate of 6.15%.
Based on a one year interval, rate sensitive assets to rate
sensitive liabilities approximated 96% as of September 30, 1995.
As of September 30, 1995 the Corporation had risk-based capital in
excess of the fully implemented regulatory requirements. Tier 1 plus
tier 2 capital exceeded 17% of risk-weighted assets as of September 30,
1995. Effective January 1, 1994, the Corporation adopted the provisions
of Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities", which requires the
Corporation to reflect securities available and held for sale at fair
value on the balance sheet. Upon adoption, the Corporation classified
all investment securities as available for sale and recorded the
increase to fair value of $2,246,000, net of applicable income taxes,
as a separate component of equity. The increase recorded to
stockholders' equity at September 30, 1995 was $691,000, net of
applicable income taxes. Management believes that this action is
necessary to provide for proper administration of the investment
portfolio and can be accommodated by the capitalization of the
Corporation.
Liquidity
Liquidity is the ratio of net liquid assets to net liabilities. The
primary functions of asset/liability management are the assurance of
adequate liquidity and maintenance of an appropriate balance between
interest-sensitive earning assets and interest-bearing liabilities.
Liquidity management refers to the ability to meet the cash flow
requirements of depositors and borrowers.
A continuous review of net liquid assets is conducted to assure
appropriate cash flow to meet needs and obligations in a timely manner.
There was an adequate relationship of liquid assets to short-term
liabilities at September 30, 1995.
Forward Outlook
Management is unaware of any regulatory recommendations which, if
implemented, would have a material effect on the liquidity, capital
resources, or operations of CBI. Strong loan demand is anticipated for
the remainder of 1995 and management will continue to carefully evaluate
this demand based on the creditworthiness of the borrower and the
relative strength of the economy in the Corporation's market.
The Corporation is anticipating the maintenance of a favorable net
interest margin throughout the remainder of 1995.
-10-
COMMUNITY BANKS, INC. and SUBSIDIARIES
PART II - OTHER INFORMATION AND SIGNATURES
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Registrant was not required to file any reports on Form 8-K
during the quarter for which this report is filed.
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.
COMMUNITY BANKS, INC.
(Registrant)
Date November 10, 1995 /S/ Thomas L. Miller
Thomas L. Miller
Chairman
(Chief Executive Officer)
Date November 10, 1995 /S/ Terry L. Burrows
Terry L. Burrows
Executive Vice-President
(Chief Financial Officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 11,660
<INT-BEARING-DEPOSITS> 575
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 2,342
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 87,495
<INVESTMENTS-MARKET> 88,543
<LOANS> 199,902
<ALLOWANCE> 2,206
<TOTAL-ASSETS> 315,109
<DEPOSITS> 266,501
<SHORT-TERM> 3,926
<LIABILITIES-OTHER> 2,501
<LONG-TERM> 7,000
<COMMON> 10,160
0
0
<OTHER-SE> 25,021
<TOTAL-LIABILITIES-AND-EQUITY> 315,109
<INTEREST-LOAN> 4,749
<INTEREST-INVEST> 1,403
<INTEREST-OTHER> 23
<INTEREST-TOTAL> 6,175
<INTEREST-DEPOSIT> 2,483
<INTEREST-EXPENSE> 2,648
<INTEREST-INCOME-NET> 3,527
<LOAN-LOSSES> 170
<SECURITIES-GAINS> 63
<EXPENSE-OTHER> 2,501
<INCOME-PRETAX> 1,529
<INCOME-PRE-EXTRAORDINARY> 1,166
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,166
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
<YIELD-ACTUAL> 6.26
<LOANS-NON> 1,205
<LOANS-PAST> 672
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,069
<CHARGE-OFFS> 460
<RECOVERIES> 164
<ALLOWANCE-CLOSE> 2,206
<ALLOWANCE-DOMESTIC> 2,206
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
