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, 1996
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 Sections 12, 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, 1996.
CAPITAL STOCK-COMMON 2,866,267
(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........................5-8
Management's Discussion and Analysis of Financial
Condition and Results of Operation.............................9-11
Part II
Other information and Signatures..................................12
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, 1996 and 1995.
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,
1996 1995
ASSETS
Cash and due from banks................... $ 18,388 $ 14,870
Interest-bearing time deposits in other
banks.................................. 790 434
Investment securities, available for sale
(market value)......................... 128,634 117,426
Federal funds sold........................ --- 2,215
Loans..................................... 259,258 243,308
Less: Unearned income.................... (12,082) (11,671)
Allowance for loan losses.......... (2,622) (2,574)
Net loans.......................... 244,554 229,063
Premises and equipment, net............... 7,827 7,657
Goodwill.................................. 1,208 1,388
Other real estate owned................... 417 302
Loans held for sale....................... 2,448 2,206
Accrued interest receivable and other
assets................................. 7,173 6,261
Total assets........................... $411,439 $381,822
======== ========
LIABILITIES
Deposits:
Demand................................. $ 26,842 $ 28,337
Savings................................ 153,738 133,004
Time................................... 148,316 150,908
Time in denominations of $100,000 or
more.................................. 12,248 11,848
Total deposits......................... 341,144 324,097
Short-term borrowings..................... 12,989 1,016
Long-term debt............................ 7,000 7,000
Accrued interest payable and other
liabilities............................ 3,168 3,709
Total liabilities...................... 364,301 335,822
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; 2,882,194 and
2,611,409 shares issued in 1996 and
1995, respectively..................... 14,411 13,057
Surplus................................... 7,160 8,381
Retained earnings......................... 25,511 22,951
Net unrealized gain on investment
securities available for sale, net of tax 380 1,664
Less: Treasury stock of 15,927 and 3,907
shares, respectively, at cost.......... (324) (53)
Total stockholders' equity............. 47,138 46,000
Total liabilities and stockholders'
equity................................ $411,439 $381,822
======== ========
All periods reflect the combined data of Community Banks, Inc. and the
Citizens' National Bank of Ashland.
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,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans................. $ 5,719 $ 5,352 $ 16,704 $ 15,336
Interest and dividends on investment
securities:
Taxable............................... 1,676 1,376 4,510 4,253
Exempt from federal income tax........ 382 494 1,215 1,595
Other interest income...................... 21 69 239 172
Total interest income................. 7,798 7,291 22,668 21,356
Interest expense:
Interest on deposits:
Savings............................... 826 753 2,396 2,315
Time.................................. 1,995 2,058 6,062 5,627
Time in denominations of $100,000 or
more................................. 163 152 483 430
Interest on short-term borrowings and
long-term debt............................ 238 165 464 545
Total interest expense................ 3,222 3,128 9,405 8,917
Net interest income................... 4,576 4,163 13,263 12,439
Provision for loan losses.................. 245 170 630 460
Net interest income after provision
for loan losses...................... 4,331 3,993 12,633 11,979
Other income:
Trust department income............... 65 59 197 157
Service charges on deposit accounts... 249 230 715 643
Other service charges, commissions
and fees............................. 56 61 167 211
Investment security gains ............ 4 63 281 139
Income on insurance premiums.......... 189 168 486 431
Gains on mortgage sales............... 47 60 117 126
Other income.......................... 38 75 118 164
Total other income............... 648 716 2,081 1,871
Other expenses:
Salaries and employee benefits........ 1,541 1,438 4,595 4,194
Net occupancy expense................. 448 418 1,367 1,174
Operating expense of insurance
subsidiary.......................... 63 43 250 247
Other operating expense............... 920 1,104 2,852 3,214
Total other expense.............. 2,972 3,003 9,064 8,829
Income before income taxes....... 2,007 1,706 5,650 5,021
Provision for income taxes................. 546 385 1,403 1,179
Net income....................... $ 1,461 $ 1,321 $ 4,247 $ 3,842
========== ========== ========= =========
Average number of fully diluted shares
outstanding............................... 2,911,458 2,896,127 2,913,262 2,894,660
========== ========= ========= =========
Earnings per share:
Primary................................. $ .51 $ .46 $ 1.48 $ 1.34
Fully diluted........................... $ .50 $ .46 $ 1.46 $ 1.33
Dividends paid per share................... $ .20 $ .17 $ .58 $ .52
Per share data has been adjusted to reflect a 10 percent stock dividend
payable May 30, 1996.
All periods reflect the combined data of Community Banks, Inc. and the
Citizens' National Bank of Ashland.
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
1996 1995
Operating Activities:
Net income...................................... $ 4,247 $ 3,842
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses.................... 630 460
Provision for depreciation and amortization.. 700 651
Amortization of goodwill..................... 180 181
Investment security gains.................... (281) (139)
Loans originated for sale.................... (6,034) (6,603)
Proceeds from sales of loans................. 5,909 4,422
Gains on mortgage sales...................... (117) (126)
Increase in other assets..................... (912) (89)
Increase in accrued interest payable
and other liabilities....................... 119 503
Net cash provided by operating activities.. 4,441 3,102
Investing Activities:
Net decrease (increase) in interest-bearing time
deposits in other banks........................ (356) 70
Proceeds from sales of investment
securities..................................... 1,092 347
Proceeds from maturities of investment
securities..................................... 20,109 15,391
Purchases of investment securities.............. (34,072) (1,077)
Net increase in total loans..................... (16,236) (17,893)
Purchases of premises and equipment............. (870) (949)
Net cash used by investing activities...... (30,333) (4,111)
Financing Activities:
Net increase in total deposits.................. 17,047 10,736
Net increase (decrease) in short-term borrowings 11,973 (7,783)
Net increase in long-term debt.................. --- ---
Repayment of subordinated capital notes......... --- (15)
Cash dividends.................................. (1,686) (1,488)
Proceeds from issuance of common stock.......... 132 55
Purchases of treasury stock..................... (271) ---
Net cash provided by financing activities.. 27,195 1,505
Increase in cash and cash
equivalents............................... 1,303 496
Cash and cash equivalents at beginning of period... 17,085 15,105
Cash and cash equivalents at end of period......... $18,388 $15,601
======= =======
All periods reflect the combined data of Community Banks, Inc. and the
Citizens' National Bank of Ashland.
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, 1996
and 1995.
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 1995 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, 1996 and December 31, 1995, were as follows:
1996
Estimated
Amortized Market
Cost Value
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 40,181 $ 40,120
Mortgage-backed U.S. government
agencies................................ 51,071 50,492
Obligations of states and political
subdivisions............................ 30,172 30,542
Corporate securities..................... 3,310 3,329
Equity securities........................ 3,323 4,151
Total.............................. $128,057 $128,634
======== ========
1995
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 27,719 $ 28,031
Mortgage-backed U.S. government
agencies................................ 45,888 46,153
Obligations of states and political
subdivisions............................ 34,067 34,941
Corporate securities..................... 3,990 4,123
Equity securities........................ 3,241 4,178
Total.............................. $114,905 $117,426
======== ========
-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,
1996 1995
Balance, January 1.................. $2,574 $2,347
Provision for loan losses........... 630 728
Loan charge-offs.................... (929) (825)
Recoveries.......................... 347 324
Balance, September 30, 1996 and
December 31, 1995.................. $2,622 $2,574
====== ======
NONPERFORMING LOANS (a) AND OTHER REAL ESTATE
September 30, December 31,
1996 1995
Loans past due 90 days or more
and still accruing interest:
Commercial, financial and
agricultural................... $ 65 $ 120
Mortgages....................... 606 558
Personal installment............ 165 236
Other........................... 22 ---
858 914
Loans renegotiated with the borrowers NONE NONE
Loans on which accrual of interest
has been discontinued:
Commercial, financial and
agricultural.................... 282 415
Mortgages........................ 1,139 1,245
Other............................ 264 99
1,685 1,759
Other real estate................... 417 302
Total............................ $2,960 $2,975
====== ======
(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 $250,000 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 an 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, 1996, the Corporation recorded no investment in
impaired loans recognized in accordance with FAS 114 and no related FAS 114
valuation allowance. For the nine month period ended September 30, 1996, the
average balance of impaired loans was negligible. The application of FAS 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 $1,479,000 and
$1,087,000, and $9,114,000 and $8,378,000 for income taxes and interest,
respectively, for each of the nine month periods ended September 30, 1996
and 1995.
Excluded from the consolidated statements of cash flows for the
periods ended September 30, 1996 and 1995 was the effect of certain non-cash
activities. The company acquired real estate through foreclosure totalling
$650,000 and $563,000, respectively. The company also recorded a decrease in
deferred tax liabilities of $660,000 in 1996, and a decrease of $1,039,000
in deferred tax assets in 1995. In addition, an increase in deferred tax
liabilities of $235,000 was recognized in 1995. These variations related to
the effects of changes in the net unrealized gain (loss) on investment
securities available for sale.
5. Merger
On January 12, 1996, Community Banks, Inc., (Community) completed
its merger of Citizens National Bank of Ashland (Citizens). Citizens has
three banking offices which are located in Ashland, Gordon, and Lavelle,
Pennsylvania. Community issued 578,081 shares of common stock for all of the
outstanding common stock of Citizens. This transaction was accounted for as
-7-
a pooling of interests and combined unaudited financial information is as
follows:
Nine Months Ended September 30, 1995
(dollars in thousands except per share data)
Community Citizens' Combined
Interest income $18,121 $3,235 $21,356
Interest expense 7,554 1,363 8,917
Net interest income 10,567 1,872 12,439
Loan loss provision 460 --- 460
Other income 1,737 134 1,871
Other expense 7,497 1,332 8,829
Income before taxes 4,347 674 5,021
Taxes 1,063 116 1,179
Net income $ 3,284 $ 558 $ 3,842
===============================================
Earnings per common share:
Net income $ 1.45 $0.88 $ 1.33
-8-
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 1996 was $654,000 or 5.5% greater than net interest
income after provision for loan losses for the first nine months of
1995. Total interest income increased $1,312,000 or 6.1% during the
period while total interest expense increased $488,000 or 5.5%. Average
earning assets were approximately 5.2% greater during the first nine
months of 1996 than the first nine months of 1995. Average loan balances
increased 9.8% while average investment securities decreased
approximately 3.0% in 1996. Average interest-bearing liabilities
increased approximately 6.0%. The average yields realized on earning
assets approximated 8.2% during the first nine months of 1996 and 1995.
The average costs of interest-bearing liabilities approximated 3.9% and
for the same periods. Net interest margins on a tax equivalent basis
approximated 5.1% for the first nine months of 1996 and 1995. The
provision for loan losses charged to income increased 37.0% in 1996.
Total loans past due 90 days and still accruing interest, non-performing
loans, and other real estate approximated $2,960,000 and $2,975,000,
respectively, as of September 30, 1996 and December 31, 1995.
Total other income for the first nine months of 1996 was $210,000
or 11.2% more than total other income for the first nine months of 1995.
Affecting this change were security gains of $281,000 and $139,000
recognized in 1996 and 1995, respectively. Gains recognized on mortgage
sales totalled $117,000 and $126,000, respectively in 1996 and 1995.
Loans held for sale are comprised for the most part of fixed-rate real
estate and education loans extended specifically for resale. Demand for
these products has been lower in 1996 than 1995. Loans held for sale as
of September 30, 1996 totalled $2,448,000. The market value of these
loans approximated book value at that time. Total other expenses for the
first nine months of 1996 increased $235,000 or 2.7%. Contributing
factors were increases of $401,000 or 9.6% in salaries and employee
benefits and $193,000 in net occupancy expense. Affecting these
increases were three new banking offices located in Hazleton,
Rutherford, and Valley View, Pennsylvania.
The provision for income taxes increased $224,000 for the first
nine months of 1996 in comparison to the first nine months of 1995.
Affecting this increase was a decline in tax-free income in 1996. The
effective tax rates approximated 24.8% and 23.5% for the respective
periods.
The previously described factors contributed to a net increase of
$405,000 or 10.5% in net income for the nine month period ended
September 30, 1996.
The significant changes and related causes which occurred during
the three month period ending September 30, 1996 were generally
consistent with those described for the nine month period ending
September 30, 1996. Gains on mortgage sales were $47,000 and $60,000,
respectively, for the three month periods ending September 30, 1996 and
1995 while investment security gains were $4,000 and $63,000
respectively.
-9-
Management's Discussion, Continued
Financial Condition
As of September 30, 1996 cash and due from banks was $3,518,000 or
23.7% greater than it was at December 31, 1995. Affecting this increase
were the previously noted new banking offices. Interest-bearing time
deposits in other banks, investment securities, and federal funds sold
increased $9,349,000 or 7.8% during this same period. The approximate
market value of debt securities was $251,000 less than amortized cost at
September 30, 1996. The approximate market value of debt securities was
$1,584,000 more than amortized cost at December 31, 1995. 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, 1996 and December 31, 1995, management classified
investment securities with amortized costs and market values of
$128,057,000 and $128,634,000, and $114,905,000 and $117,426,000,
respectively, as available for sale. Gross unrealized gains and losses
relating to debt securities approximated $861,000 and $1,112,000,
respectively, at September 30, 1996. Net loans increased $15,491,000 or
6.8% from December 31, 1995 to September 30, 1996. While Real estate
loans and consumer loans increased approximately $13,295,000 and
$2,451,000, respectively, during the period, most other types of loans
experienced modest increases or declines. The allowance for loan losses
approximated 1.06% and 1.11% of net loans at September 30, 1996 and
December 31, 1995. Much of the increase in net premises and equipment of
$170,000 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, 1996 and December 31, 1995 these loans totalled $2,448,000
and $2,206,000, respectively. Affecting the increase of $912,000 in
accrued interest receivable and other assets was an increase in accrued
interest. These factors contributed to an increase of $29,617,000 or
7.8% in total assets from December 31, 1995 to September 30, 1996.
Total deposits increased $17,047,000 or 5.3% from December 31, 1995
to September 30, 1996. All of the increase can be attributed to
increases in savings deposits. It is management's philosophy to
generally maintain competitive but not overly-aggressive interest rates
relative to interest-bearing liabilities. Management increased
short-term borrowings in 1996 in an attempt to better balance rate
sensitive assets and liabilities and enhance earnings. At September 30,
1996 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%. Affecting the decline in accrued
interest payable and other liabilities was a reduction in deferred tax
liabilities of $660,000.
Based on a one year interval, rate sensitive assets to rate
sensitive liabilities approximated 85% as of September 30, 1996.
-10-
Management's Discussion, Continued
As of September 30, 1996 the Corporation had risk-based capital in
excess of the fully implemented regulatory requirements, and tier 1 plus
tier 2 capital approximated 18% of risk-weighted assets. 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, 1996 was $380,000, 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, 1996.
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. Increased loan demand is anticipated
for the remainder of 1996 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 1996.
Other Events
On April 22, 1996, the Corporation announced plans to repurchase up
to 130,500 shares or 5% of its outstanding common stock. The repurchases
will be made from time to time in open market transactions. The
repurchased shares will become Treasury shares and will be used for
general corporate purposes, including grants under its Employee Stock
Option Plans.
The Corporation declared a 10% stock dividend payable May 30, 1996,
to shareholders of record on May 15, 1996.
-11-
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 ending September 30, 1996.
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 8, 1996 /S/ Thomas L. Miller
Thomas L. Miller
Chairman
(Chief Executive Officer)
Date November 8, 1996 /S/ Terry L. Burrows
Terry L. Burrows
Executive Vice-President
(Chief Financial Officer)
-12-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 18,388
<INT-BEARING-DEPOSITS> 790
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 2,448
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 128,057
<INVESTMENTS-MARKET> 128,634
<LOANS> 247,176
<ALLOWANCE> 2,622
<TOTAL-ASSETS> 411,439
<DEPOSITS> 341,144
<SHORT-TERM> 12,989
<LIABILITIES-OTHER> 3,168
<LONG-TERM> 7,000
<COMMON> 14,411
0
0
<OTHER-SE> 32,727
<TOTAL-LIABILITIES-AND-EQUITY> 411,439
<INTEREST-LOAN> 5,719
<INTEREST-INVEST> 2,058
<INTEREST-OTHER> 21
<INTEREST-TOTAL> 7,798
<INTEREST-DEPOSIT> 2,984
<INTEREST-EXPENSE> 3,222
<INTEREST-INCOME-NET> 4,576
<LOAN-LOSSES> 245
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 2,972
<INCOME-PRETAX> 2,007
<INCOME-PRE-EXTRAORDINARY> 1,461
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,461
<EPS-PRIMARY> .51
<EPS-DILUTED> .51
<YIELD-ACTUAL> 4.82
<LOANS-NON> 1,685
<LOANS-PAST> 858
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,574
<CHARGE-OFFS> 929
<RECOVERIES> 343
<ALLOWANCE-CLOSE> 2,622
<ALLOWANCE-DOMESTIC> 2,622
<ALLOWANCE-FOREIGN> 0
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