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, 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 September 30, 1997.
CAPITAL STOCK-COMMON 3,016,247
(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, 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)
September 30, December 31,
1997 1996
ASSETS
Cash and due from banks................... $ 13,578 $ 16,547
Interest-bearing time deposits in other
banks.................................. 1,302 1,397
Investment securities, available for sale
(market value)......................... 172,055 145,446
Loans..................................... 267,032 261,976
Less: Unearned income.................... (11,892) (11,965)
Allowance for loan losses.......... (2,913) (2,798)
Net loans.......................... 252,227 247,213
Premises and equipment, net............... 8,386 7,848
Goodwill.................................. 967 1,147
Other real estate owned................... 463 351
Loans held for sale....................... 3,332 4,622
Accrued interest receivable and other
assets................................. 7,236 7,947
Total assets........................... $459,546 $432,518
======== ========
LIABILITIES
Deposits:
Demand................................. $ 24,938 $ 27,345
Savings................................ 158,809 150,369
Time................................... 152,125 152,615
Time in denominations of $100,000 or
more.................................. 14,730 12,927
Total deposits......................... 350,602 343,256
Short-term borrowings..................... 3,766 13,217
Long-term debt............................ 50,000 25,000
Accrued interest payable and other
liabilities............................ 4,039 3,306
Total liabilities...................... 408,407 384,779
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; 3,060,115 and
2,888,088 shares issued in 1997 and
1996, respectively..................... 15,301 14,440
Surplus................................... 17,939 13,716
Retained earnings......................... 17,864 19,743
Net unrealized gain (loss) on investment
securities available for sale, net of tax 1,151 261
Less: Treasury stock of 43,868 and 19,927
shares, respectively, at cost.......... (1,116) (421)
Total stockholders' equity............. 51,139 47,739
Total liabilities and stockholders'
equity................................ $459,546 $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 Nine Months Ended
September 30, September 30,
<S> 1997 1996 1997 1996
Interest income: <C> <C> <C> <C>
Interest and fees on loans................. $5,922 $5,719 $17,508 $16,704
Interest and dividends on investment
securities:
Taxable............................... 2,350 1,676 6,308 4,510
Exempt from federal income tax........ 407 382 1,200 1,215
Fed funds interest......................... 57 5 85 194
Other interest income...................... 18 16 55 45
Total interest income................. 8,754 7,798 25,156 22,668
Interest expense:
Interest on deposits:
Savings............................... 815 826 2,444 2,396
Time.................................. 2,042 1,995 6,076 6,062
Time in denominations of $100,000 or
more................................. 186 163 544 483
Interest on short-term borrowings and
long-term debt............................ 407 96 876 322
Fed funds purchased and repo interest...... 334 142 773 142
Total interest expense................ 3,784 3,222 10,713 9,405
Net interest income................... 4,970 4,576 14,443 13,263
Provision for loan losses.................. 140 245 520 630
Net interest income after provision
for loan losses...................... 4,830 4,331 13,923 12,633
Other income:
Trust department income............... 107 65 251 197
Service charges on deposit accounts... 271 249 753 715
Other service charges, commissions
and fees............................. 51 56 151 167
Investment security gains ............ -- 4 419 281
Income on insurance premiums.......... 150 189 436 486
Gains on mortgage sales............... 31 47 133 117
Other income.......................... 57 38 236 118
Total other income............... 667 648 2,379 2,081
Other expenses:
Salaries and employee benefits........ 1,648 1,541 4,781 4,595
Net occupancy expense................. 501 448 1,509 1,367
Operating expense of insurance
subsidiary.......................... 104 63 325 250
Other operating expense............... 1,020 920 3,029 2,852
Total other expense.............. 3,273 2,972 9,644 9,064
Income before income taxes....... 2,224 2,007 6,658 5,650
Provision for income taxes................. 630 546 1,902 1,403
Net income....................... $1,594 $1,461 $ 4,756 $ 4,247
====== ====== ======= =======
Average number of fully diluted shares
outstanding............................... 3,082,332 3,057,031 3,078,629 3,058,925
========= ========= ========= =========
Earnings per share:
Primary................................. $ .53 $ .49 $ 1.58 $ 1.41
Fully diluted........................... $ .52 $ .48 $ 1.54 $ 1.39
Dividends paid per share................... $ .21 $ .19 $ .62 $ .55
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)
Nine Months Ended
September 30,
1997 1996
Operating Activities:
Net income...................................... $ 4,756 $ 4,247
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses.................... 520 630
Provision for depreciation and amortization.. 796 700
Amortization of goodwill..................... 180 180
Investment security gains.................... (419) (281)
Loans originated for sale.................... (4,896) (6,034)
Proceeds from sales of loans................. 6,319 5,909
Gains on mortgage sales...................... (133) (117)
Decrease (increase) in other assets.......... 877 (912)
Increase in accrued interest payable and
other liabilities........................... 274 119
Net cash provided by operating activities.. 8,274 4,441
Investing Activities:
Net decrease (increase) in interest-bearing time
deposits in other banks........................ 95 (356)
Proceeds from sales of investment
securities..................................... 11,530 1,092
Proceeds from maturities of investment
securities..................................... 18,413 20,109
Purchases of investment securities.............. (54,784) (34,072)
Net increase in total loans..................... (5,812) (16,236)
Purchases of premises and equipment............. (1,334) (870)
Net cash used by investing activities...... (31,892) (30,333)
Financing Activities:
Net increase in total deposits.................. 7,346 17,047
Net decrease (increase) in short-term borrowings (9,451) 11,973
Proceeds from issuance of long-term debt........ 25,000 ---
Cash dividends.................................. (1,895) (1,686)
Proceeds from issuance of common stock.......... 344 132
Purchases of treasury stock..................... (695) (271)
Net cash provided by financing activities.. 20,649 27,195
Increase (decrease) in cash and cash
equivalents............................... (2,969) 1,303
Cash and cash equivalents at beginning of period... 16,547 17,085
Cash and cash equivalents at end of period......... $13,578 $18,388
======= =======
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, 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 computing
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 September 30, 1997 and December 31, 1996, were as follows:
1997
Estimated
Amortized Fair
Cost Value
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 46,206 $ 46,402
Mortgage-backed U.S. government
agencies................................ 87,613 86,740
Obligations of states and political
subdivisions............................ 31,091 31,636
Corporate securities..................... 1,015 1,036
Equity securities........................ 4,385 6,241
Total.............................. $170,310 $172,055
======== ========
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-
<TABLE>
3. Allowance for loan losses
Changes in the allowance for loan losses are as follows:
<CAPTION>
Nine months ended Year Ended Nine Months ended
September 30, December 31, September 30,
<S> 1997 1996 1996
<C> <C> <C>
Balance, January 1.................. $2,798 $2,574 $2,574
Provision for loan losses........... 520 1,042 630
Loan charge-offs.................... (649) (1,296) (929)
Recoveries.......................... 244 478 347
Balance, September 30, 1997, December
31, 1996, and September 30, 1996... $2,913 $2,798 $2,622
====== ====== ======
NONPERFORMING LOANS (a) AND OTHER REAL ESTATE
September 30, December 31, September 30,
1997 1996 1996
Loans past due 90 days or more
and still accruing interest:
Commercial, financial and
agricultural................... -- $ 20 $ 65
Mortgages....................... $588 547 606
Personal installment............ 388 189 165
Other........................... 16 11 22
992 767 858
Loans on which accrual of interest
has been discontinued:
Commercial, financial and
agricultural.................... 781 723 282
Mortgages........................ 1,637 1,904 1,139
Other............................ 192 283 264
2,610 2,910 1,685
Other real estate................... 463 351 417
Total............................ $4,065 $4,028 $2,960
====== ====== ======
(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
At September 30, 1997 and December 31, 1996 the Corporation recorded no investment in
impaired loans or related valuation allowance as required by Statement of Financial Account
Standard (SFAS) No. 114, "Accounting by Creditors for Impairment of a Loan", as amended by
SFAS No. 118. For the three month periods and nine month periods ended September 30,1997 and
1996 the average balance of impaired loans was negligible. In addition, the Corporation
recognized no interest on impaired loans on the cash basis for the three month periods and
the nine month periods ended September 30, 1997 and 1996.
-7-
</TABLE>
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 $1,240,000 and
$1,479,000 and $10,677,000 and $9,114,000 for income taxes and interest,
respectively, for each of the nine month periods ended September 30, 1997
and 1996.
Excluded from the consolidated statements of cash flows for the
periods ended September 30, 1997 and 1996 was the effect of certain non-cash
activities. The company acquired real estate through foreclosure totalling
$278,000 and $650,000, respectively. The company also recorded an increase
in deferred tax liabilities of $459,000 in 1997. A decrease in deferred tax
liabilities of $660,000 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
nine months of 1997 was $1,290,000 or 10.2% greater than 1996. Total
interest income for the first nine months increased $2,488,000 or 11.0%
while total interest expense increased $1,308,000 or 13.9% over the
comparable period of 1996. The amount of net interest income and total
interest income are dependent upon many factors including the volume of
earning assets and interest bearing liabilities, the level of and
changes in interest rates and levels of non-performing assets. The cost
of interest bearing liabilities changes with the amount of funds
necessary to support earning assets, the rates paid to attract and
maintain deposits, rates paid on borrowed funds and the level of
non-interest bearing demand deposits and equity capital. The increases
in net interest income and total interest income were impacted by
average earning assets increasing approximately $42,335,000 or 11.5%
while average interest bearing liabilities increased only $39,286,000 or
12.3% for the first nine months of 1997 over the comparable period of
1996. Impacting the increase in average earning assets were increases in
average loan balances of 5.5% and average investment securities balances
of 23.8% in 1997. The average yields realized on earning assets for the
first nine months approximated 8.2% in 1997 and 1996. The average costs
of interest-bearing liabilities approximated 4.0% and 3.9%. Net interest
margins, on a tax equivalent basis for the first nine months
approximated 4.9% and 5.1% in 1997 and 1996, respectively. The provision
for loan losses charged to income decreased 17.5% in 1997. Total loans
past due 90 days and still accruing interest, non-performing loans, and
other real estate approximated $4,065,000 and $4,028,000, respectively,
as of September 30, 1997 and December 31, 1996.
Total other income for the first nine months of 1997 was $298,000
or 14.3% more than total other income for the first nine months of 1996.
Affecting this change were security gains of $419,000 and $281,000
recognized in 1997 and 1996, respectively. Gains recognized on mortgage
sales totalled $133,000 and $117,000 in 1997 and 1996, respectively.
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 September 30, 1997 totalled $3,332,000. 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 nine
months of 1997 increased $580,000 or 6.4%. Contributing factors were
increases of $186,000 or 4.0% in salaries and employee benefits and
$142,000 in net occupancy expense.
The provision for income taxes increased $499,000 for the first
nine months of 1997 in comparison to the first nine months of 1996.
Affecting this increase was a decline in the relative amount of tax-free
income in 1997. The effective tax rates approximated 28.6% and 24.8% for
the respective periods.
The previously described factors contributed to a net increase of
$509,000 or 12.0% in net income for the nine month period ended
September 30, 1997.
The significant changes and related causes which occurred during
the three month period ending September 30, 1997 were generally
consistent with those described for the nine month period ending
September 30, 1997. Investment security gains and gains on mortgage
sales decreased in the third quarter of 1997. Gains on mortgage sales
were $31,000 and $47,000, respectively, for the three month periods
ending September 30, 1997 and 1996.
-9-
Management's Discussion, Continued
Financial Condition
As of September 30, 1997 cash and due from banks was $2,969,000 or
17.9% less than it was at December 31, 1996. This apparent decrease was
affected by a one day aberration for the average of cash and due from
banks approximated $15,930,000 for September of 1997. Interest-bearing
time deposits in other banks and investment securities increased
$26,514,000 or 18.1% during this same period. Contributing to this
change was an increase of $18,212,000 in mortgage-backed U.S. agency
securities. The approximate market value of debt securities was $111,000
less than amortized cost at September 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 September 30, 1997 and December 31, 1996,
management classified investment securities with amortized costs and
market values of $170,310,000 and $172,055,000, and $145,050,000 and
$145,446,000, respectively, as available for sale. Gross unrealized
gains and losses relating to debt securities approximated $1,325,000 and
$1,436,000, respectively, at September 30, 1997. Net loans increased
$5,014,000 or 2.0% from December 31, 1996 to September 30, 1997.
Affecting this change were an increase in real estate loans of
$10,633,000 and a decrease in consumer loans of $4,349,000. Commercial
loans decreased $1,340,000 during the period. The allowance for loan
losses approximated 1.14% and 1.12% of net loans at September 30, 1997
and December 31, 1996. Much of the increase in net premises and
equipment of $538,000 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
September 30, 1997 and December 31, 1996 these loans totalled $3,332,000
and $4,622,000, respectively. Affecting the decrease of $711,000 in
accrued interest receivable and other assets was a decrease in accrued
interest. These factors contributed to an increase of $27,028,000 or
6.2% in total assets from December 31, 1996 to September 30, 1997.
Total deposits increased $7,346,000 or 2.1% from December 31, 1996
to September 30, 1997. All of the increase can be attributed to
increases in savings deposits and time deposits greater than $100,000.
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 September 30, 1997 long-term debt totalling
$50,000,000 was comprised of borrowings from the Federal Home Loan Bank
of Pittsburgh of $30,000,000 and repurchase agreements totalling
$20,000,000 at a weighted average interest rate of 5.80%.
Based on a one year interval, rate sensitive assets to rate
sensitive liabilities approximated 89% as of September 30, 1997.
-10-
Management's Discussion, Continued
As of September 30, 1997 the Corporation had risk-based capital in
excess of the fully implemented regulatory requirements, and tier 1 plus
tier 2 capital approximated 17% of risk-weighted assets.
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, 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 October 28, 1997 Community Banks, Inc. (Community) signed a
definitive agreement to acquire The Peoples State Bank (Peoples).
Community will acquire Peoples and its subsidiaries for approximately
1,324,000 shares of its common stock based on an exchange ratio of .889
shares of Community common stock for each share of Peoples common stock.
The acquisition requires shareholder and regulatory approval prior to
consummation and is not expected to close until the first quarter of
1998. The acquisition will be accounted for under the
pooling-of-interests method of accounting, accordingly upon consummation
the financial statements of Community will be restated to include the
consolidated accounts of Peoples. A summary of unaudited financial
information for Peoples follow:
(dollars in thousands)
Quarter ended Nine months ended
September 30 September 30
1997 1996 1997 1996
Net interest income.......... $2,229 $1,732 $6,208 $4,893
Provision for loan losses.... 200 150 500 450
Other income................. 326 83 720 355
Other expenses............... 1,405 1,148 4,017 3,444
Income before taxes.......... 950 517 2,411 1,354
Taxes........................ 301 177 769 440
Net income................... $ 649 $ 340 $1,642 $ 914
====== ====== ====== ======
September 30, 1997 December 31, 1996
Loans, net................ $169,466 $155,468
Total assets.............. 244,787 219,055
Deposits.................. 194,994 179,346
Shareholders' equity...... 20,175 16,340
-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, 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 November 11, 1997 /S/ Thomas L. Miller
Thomas L. Miller
Chairman
(Chief Executive Officer)
Date November 11, 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 13,578
<INT-BEARING-DEPOSITS> 1,302
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 3,332
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 170,310
<INVESTMENTS-MARKET> 172,055
<LOANS> 255,140
<ALLOWANCE> 2,913
<TOTAL-ASSETS> 459,546
<DEPOSITS> 350,602
<SHORT-TERM> 3,766
<LIABILITIES-OTHER> 4,039
<LONG-TERM> 50,000
<COMMON> 15,301
0
0
<OTHER-SE> 35,838
<TOTAL-LIABILITIES-AND-EQUITY> 459,546
<INTEREST-LOAN> 5,922
<INTEREST-INVEST> 2,757
<INTEREST-OTHER> 75
<INTEREST-TOTAL> 8,754
<INTEREST-DEPOSIT> 3,043
<INTEREST-EXPENSE> 3,784
<INTEREST-INCOME-NET> 4,970
<LOAN-LOSSES> 140
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,273
<INCOME-PRETAX> 2,224
<INCOME-PRE-EXTRAORDINARY> 1,594
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,594
<EPS-PRIMARY> .53
<EPS-DILUTED> .52
<YIELD-ACTUAL> 4.62
<LOANS-NON> 2,610
<LOANS-PAST> 992
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,798
<CHARGE-OFFS> 649
<RECOVERIES> 244
<ALLOWANCE-CLOSE> 2,913
<ALLOWANCE-DOMESTIC> 2,913
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
