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 June 30, 1997
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 June 30, 1997.
CAPITAL STOCK-COMMON 3,013,052
(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 six
month periods ending June 30, 1997 and 1996.
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)
June 30, December 31,
1997 1996
ASSETS
Cash and due from banks................... $ 20,002 $ 16,547
Interest-bearing time deposits in other
banks.................................. 1,528 1,397
Investment securities, available for sale
(market value)......................... 156,649 145,446
Loans..................................... 266,178 261,976
Less: Unearned income.................... (11,640) (11,965)
Allowance for loan losses.......... (2,887) (2,798)
Net loans.......................... 251,651 247,213
Premises and equipment, net............... 8,216 7,848
Goodwill.................................. 1,027 1,147
Other real estate owned................... 526 351
Loans held for sale....................... 1,744 4,622
Accrued interest receivable and other
assets................................. 7,776 7,947
Total assets........................... $449,119 $432,518
======== ========
LIABILITIES
Deposits:
Demand................................. $ 29,010 $ 27,345
Savings................................ 158,817 150,369
Time................................... 151,182 152,615
Time in denominations of $100,000 or
more.................................. 13,386 12,927
Total deposits......................... 352,395 343,256
Short-term borrowings..................... 8,995 13,217
Long-term debt............................ 35,000 25,000
Accrued interest payable and other
liabilities............................ 3,528 3,306
Total liabilities...................... 399,918 384,779
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; 3,056,920 and
2,888,088 shares issued in 1997 and
1996, respectively..................... 15,285 14,440
Surplus................................... 17,880 13,716
Retained earnings......................... 16,954 19,743
Net unrealized gain (loss) on investment
securities available for sale, net of tax 198 261
Less: Treasury stock of 43,868 and 19,927
shares, respectively, at cost.......... (1,116) (421)
Total stockholders' equity............. 49,201 47,739
Total liabilities and stockholders'
equity................................ $449,119 $432,518
======== ========
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 Six Months Ended
June 30, June 30,
<S> 1997 1996 1997 1996
Interest income: <C> <C> <C> <C>
Interest and fees on loans................. $5,798 $5,456 $11,586 $10,985
Interest and dividends on investment
securities:
Taxable............................... 2,037 1,475 3,958 2,834
Exempt from federal income tax........ 409 391 793 833
Fed funds interest......................... 13 108 28 189
Other interest income...................... 18 17 37 29
Total interest income................. 8,275 7,447 16,402 14,870
Interest expense:
Interest on deposits:
Savings............................... 834 810 1,629 1,570
Time.................................. 2,016 2,014 4,034 4,067
Time in denominations of $100,000 or
more................................. 179 165 358 320
Interest on short-term borrowings and
long-term debt............................ 227 112 469 226
Fed funds purchased and repo interest...... 238 --- 439 ---
Total interest expense................ 3,494 3,101 6,929 6,183
Net interest income................... 4,781 4,346 9,473 8,687
Provision for loan losses.................. 140 183 380 385
Net interest income after provision
for loan losses...................... 4,641 4,163 9,093 8,302
Other income:
Trust department income............... 73 65 144 132
Service charges on deposit accounts... 241 246 482 466
Other service charges, commissions
and fees............................. 44 66 100 111
Investment security gains ............ 123 130 419 277
Income on insurance premiums.......... 142 164 286 297
Gains on mortgage sales............... 62 70 102 70
Other income.......................... 70 48 179 80
Total other income............... 755 789 1,712 1,433
Other expenses:
Salaries and employee benefits........ 1,592 1,547 3,133 3,054
Net occupancy expense................. 496 448 1,008 919
Operating expense of insurance
subsidiary.......................... 91 100 221 187
Other operating expense............... 1,058 957 2,009 1,932
Total other expense.............. 3,237 3,052 6,371 6,092
Income before income taxes....... 2,159 1,900 4,434 3,643
Provision for income taxes................. 621 460 1,272 857
Net income....................... $1,538 $1,440 $ 3,162 $ 2,786
====== ====== ======= =======
Average number of fully diluted shares
outstanding............................... 3,077,337 2,895,418 3,078,382 2,895,004
========= ========= ========= =========
Earnings per share:
Primary................................. $ .51 $ .48 $ 1.05 $ .92
Fully diluted........................... $ .50 $ .48 $ 1.03 $ .91
Dividends paid per share................... $ .21 $ .19 $ .41 $ .36
Per share data has been adjusted 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)
Six Months Ended
June 30,
1997 1996
Operating Activities:
Net income...................................... $ 3,162 $ 2,786
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses.................... 380 385
Provision for depreciation and amortization.. 514 457
Amortization of goodwill..................... 120 120
Investment security gains.................... (419) (277)
Loans originated for sale.................... (1,991) (3,800)
Proceeds from sales of loans................. 4,971 3,875
Gains on mortgage sales...................... (102) (70)
Decrease (increase) in other assets.......... (104) (1,304)
Increase (decrease) in accrued interest
payable and other liabilities............... 254 117
Net cash provided by operating activities.. 6,785 2,289
Investing Activities:
Net decrease (increase) in interest-bearing time
deposits in other banks........................ (131) (965)
Proceeds from sales of investment
securities..................................... 11,530 653
Proceeds from maturities of investment
securities..................................... 11,693 16,647
Purchases of investment securities.............. (34,102) (21,940)
Net decrease (increase) in total loans.......... (4,718) (6,275)
Purchases of premises and equipment............. (882) (609)
Net cash used by investing activities...... (16,610) (12,489)
Financing Activities:
Net increase in total deposits.................. 9,139 16,060
Net increase (decrease) in short-term borrowings (4,222) (256)
Proceeds from issuance of long-term debt........ 10,000 ---
Cash dividends.................................. (1,262) (1,113)
Proceeds from issuance of common stock.......... 320 53
Purchases of treasury stock..................... (695) (161)
Net cash provided by financing activities.. 13,280 14,583
Increase (decrease) in cash and cash
equivalents............................... 3,455 4,383
Cash and cash equivalents at beginning of period... 16,547 17,085
Cash and cash equivalents at end of period......... $20,002 $21,468
======= =======
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 six month periods ended June 30, 1997 and
1996.
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 1996 Annual Report to shareholders.
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("SFAS 128"). SFAS 128 established standards for computing and presenting
earnings per share and applies to entities with publicly held common stock or
potential common stock. SFAS 128 simplifies the standards for cumputing
earnings per share previously found in APB Opinion No. 15, "Earnings Per
Share," by replacing the presentation of primary earnings per share with a
presentation of basic earnings per share. It also requires dual presentation
of basic and diluted earnings per share on the face of the income statement
for all entities with complex capital structures.
SFAS 128 is effective for financial statements issued for periods
ending after December 15, 1997, including interim periods. Earlier
application is not permitted; however, restatement of all prior-period
earnings per share data is required upon adoption. The impact of adoption of
SFAS 128 on the Corporation's earnings per share data is immaterial.
Community Banks, Inc. currently reports primary earnings per share and
diluted earnings per share on its Consolidated Statements of Income.
-5-
2. Investment Securities
The amortized cost and estimated market values of investment
securities at June 30, 1997 and December 31, 1996, were as follows:
1997
Estimated
Amortized Market
Cost Value
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 38,836 $ 38,956
Mortgage-backed U.S. government
agencies................................ 80,348 78,972
Obligations of states and political
subdivisions............................ 32,001 32,291
Corporate securities..................... 1,015 1,029
Equity securities........................ 4,149 5,401
Total.............................. $156,349 $156,649
======== ========
1996
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 40,267 $ 40,432
Mortgage-backed U.S. government
agencies................................ 69,837 68,528
Obligations of states and political
subdivisions............................ 30,496 30,958
Corporate securities..................... 1,101 1,123
Equity securities........................ 3,349 4,405
Total.............................. $145,050 $145,446
======== ========
-6-
3. Allowance for loan losses
Changes in the allowance for loan losses are as follows:
Six months ended Year Ended
June 30, December 31,
1997 1996
Balance, January 1.................. $2,798 $2,574
Provision for loan losses........... 380 1,042
Loan charge-offs.................... (441) (1,296)
Recoveries.......................... 150 478
Balance, June 30, 1997 and
December 31, 1996 ................. $2,887 $2,798
====== ======
NONPERFORMING LOANS (a) AND OTHER REAL ESTATE
June 30, December 31,
1997 1996
Loans past due 90 days or more
and still accruing interest:
Commercial, financial and
agricultural................... $ 72 $ 20
Mortgages....................... 510 547
Personal installment............ 268 189
Other........................... 9 11
859 767
Loans renegotiated with the borrowers NONE NONE
Loans on which accrual of interest
has been discontinued:
Commercial, financial and
agricultural.................... 818 723
Mortgages........................ 2,027 1,904
Other............................ 258 283
3,103 2,910
Other real estate................... 526 351
Total............................ $4,488 $4,028
====== ======
(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 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
-7-
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.
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 June 30, 1997 the Corporation recorded no investment in impaired
loans recognized in accordance with FAS 114 and no related FAS 114 valuation
allowance. For the six month period ended June 30, 1997, 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 $740,000 and
$1,025,000 and $6,931,000 and $6,358,000 for income taxes and interest,
respectively, for each of the six month periods ended June 30, 1997 and
1996.
Excluded from the consolidated statements of cash flows for the
periods ended June 30, 1997 and 1996 was the effect of certain non-cash
activities. The company acquired real estate through foreclosure totalling
$275,000 and $246,000, respectively. The company also recorded a decrease in
deferred tax liabilities of $32,000 in 1997. A decrease in deferred tax
liabilities of $833,000 was recognized in 1996. These variations related to
the effects of changes in the net unrealized gain (loss) on investment
securities available for sale.
-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
six months of 1997 was $791,000 or 9.5% greater than net interest income
after provision for loan losses for the first six months of 1996. Total
interest income increased $1,532,000 or 10.3% during the period while
total interest expense increased $746,000 or 12.1%. Average earning
assets were approximately 11.6% greater during the first six months of
1997 than the first six months of 1996. Average loan balances increased
6.5% and average investment securities increased approximately 25.7% in
1997. Average interest-bearing liabilities increased approximately
12.0%. The average yields realized on earning assets approximated 8.4%
and 8.2% during the first six months of 1997 and 1996, respectively. The
average costs of interest-bearing liabilities approximated 4.0% and 3.9%
for the same periods. Net interest margins on a tax equivalent basis
approximated 4.9% and 5.0% for the first six months of 1997 and 1996,
respectively. The provision for loan losses charged to income decreased
1.3% in 1997. Total loans past due 90 days and still accruing interest,
non-performing loans, and other real estate approximated $4,488,000 and
$4,028,000, respectively, as of June 30, 1997 and December 31, 1996.
Total other income for the first six months of 1997 was $279,000 or
19.5% more than total other income for the first six months of 1996.
Affecting this change were security gains of $419,000 and $277,000
recognized in 1997 and 1996, respectively. Gains recognized on mortgage
sales totalled $102,000 in 1997 while $70,000 were recognized in 1996.
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 1997 than 1996. Loans held for sale as
of June 30, 1997 totalled $1,744,000. The market value of these loans
approximated book value at that time. Other income in 1997 was also
affected by tax refunds. Total other expenses for the first six months
of 1997 increased $279,000 or 4.6%. Contributing factors were increases
of $79,000 or 2.6% in salaries and employee benefits and $89,000 in net
occupancy expense.
The provision for income taxes increased $415,000 for the first six
months of 1997 in comparison to the first six months of 1996. Affecting
this increase was a decline in tax-free income in 1997. The effective
tax rates approximated 28.7% and 23.5% for the respective periods.
The previously described factors contributed to a net increase of
$376,000 or 13.5% in net income for the six month period ended June 30,
1997.
The significant changes and related causes which occurred during
the three month period ending June 30, 1997 were generally consistent
with those described for the six month period ending June 30, 1997.
Investment security gains decreased while gains on mortgage sales
increased in the second quarter of 1997. Gains on mortgage sales were
$62,000 and $70,000, respectively, for the three month periods ending
June 30, 1997 and 1996. Investment security gains were $123,000 and
$130,000 for the three month periods ending June 30, 1997 and 1996,
respectively.
-9-
Management's Discussion, Continued
Financial Condition
As of June 30, 1997 cash and due from banks was $3,455,000 or 20.9%
greater than it was at December 31, 1996. This apparent increase was
affected by a one day aberration for the average of cash and due from
banks approximated $14,500,000 for June of 1997. Interest-bearing time
deposits in other banks and investment securities increased $11,334,000
or 7.7% during this same period. Contributing to this change was an
increase of $10,444,000 in mortgage-backed U.S. agency securities. The
approximate market value of debt securities was $952,000 less than
amortized cost at June 30, 1997. The approximate market value of debt
securities was $660,000 less than amortized cost at December 31, 1996.
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 June 30, 1997 and December 31, 1996, management classified
investment securities with amortized costs and market values of
$156,349,000 and $156,649,000, and $145,050,000 and $145,446,000,
respectively, as available for sale. Gross unrealized gains and losses
relating to debt securities approximated $916,000 and $1,868,000,
respectively, at June 30, 1997. Net loans increased $4,438,000 or 1.8%
from December 31, 1996 to June 30, 1997. Affecting this change were an
increase in real estate loans and a decrease in consumer loans.
Commercial loans increased $2,184,000 or 5.0% during the period. The
allowance for loan losses approximated 1.13% and 1.12% of net loans at
June 30, 1997 and December 31, 1996. Much of the increase in net
premises and equipment of $386,000 related to 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 June 30, 1997 and December 31, 1996 these loans
totalled $1,744,000 and $4,622,000, respectively. Affecting the decrease
of $171,000 in accrued interest receivable and other assets was a
decrease in accrued interest. These factors contributed to an increase
of $16,601,000 or 3.8% in total assets from December 31, 1996 to June
30, 1997.
Total deposits increased $9,139,000 or 2.7% from December 31, 1996
to June 30, 1997. All of the increase can be attributed to increases in
demand and savings deposits. It is management's philosophy to generally
maintain competitive but not overly-aggressive interest rates relative
to interest-bearing liabilities. Management decreased short-term
borrowings and increased long-term debt in 1997 in an attempt to better
balance rate sensitive assets and liabilities. At June 30, 1997
long-term debt totalling $35,000,000 was comprised of borrowings from
the Federal Home Loan Bank of Pittsburgh of $15,000,000 and repurchase
agreements totalling $20,000,000 at a weighted average interest rate of
5.89%.
Based on a one year interval, rate sensitive assets to rate
sensitive liabilities approximated 92% as of June 30, 1997.
-10-
Management's Discussion, Continued
As of June 30, 1997 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 June 30, 1997 was $198,000, 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 June 30, 1997.
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 1997 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 1997.
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. As of June 30, 1997, the Corporation had purchased 37,945
shares pursuant to this repurchase plan.
The Corporation declared a 5 percent stock dividend payable April
8, 1997, to shareholders of record on March 24, 1997.
-11-
COMMUNITY BANKS, INC. and SUBSIDIARIES
PART II - OTHER INFORMATION AND SIGNATURES
Item 4. Submission of Matters to Vote of Security Holders
The annual meeting of shareholders of Community Banks, Inc. was held
May 6, 1997 for the purpose of considering and voting upon the following
matters:
1. To elect five (5) Directors: Ray N. Leidich, Thomas W. Long,
Donald L. Miller, and Samuel E. Cooper to serve until the 2001 Annual
Meeting of Shareholders. In addition, Susan K. Nenstiel was elected to
serve until 1999. Each director received affirmative votes representing at
least 75.36% of the shares outstanding.
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 June 30, 1997.
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 August 6, 1997 /S/ Thomas L. Miller
Thomas L. Miller
Chairman
(Chief Executive Officer)
Date August 6, 1997 /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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 20,002
<INT-BEARING-DEPOSITS> 1,528
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 1,744
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 156,349
<INVESTMENTS-MARKET> 156,649
<LOANS> 254,538
<ALLOWANCE> 2,887
<TOTAL-ASSETS> 449,119
<DEPOSITS> 352,395
<SHORT-TERM> 8,995
<LIABILITIES-OTHER> 3,528
<LONG-TERM> 35,000
<COMMON> 15,285
0
0
<OTHER-SE> 33,916
<TOTAL-LIABILITIES-AND-EQUITY> 449,119
<INTEREST-LOAN> 5,798
<INTEREST-INVEST> 2,446
<INTEREST-OTHER> 31
<INTEREST-TOTAL> 8,275
<INTEREST-DEPOSIT> 3,029
<INTEREST-EXPENSE> 3,494
<INTEREST-INCOME-NET> 4,781
<LOAN-LOSSES> 140
<SECURITIES-GAINS> 123
<EXPENSE-OTHER> 3,237
<INCOME-PRETAX> 2,159
<INCOME-PRE-EXTRAORDINARY> 1,538
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,538
<EPS-PRIMARY> .51
<EPS-DILUTED> .50
<YIELD-ACTUAL> 4.81
<LOANS-NON> 3,103
<LOANS-PAST> 859
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,798
<CHARGE-OFFS> 441
<RECOVERIES> 150
<ALLOWANCE-CLOSE> 2,887
<ALLOWANCE-DOMESTIC> 2,887
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
