FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number 01-14346
CORNERSTONE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 02-0368172
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
15 EAST BROADWAY, DERRY, NEW HAMPSHIRE 03038
Address of principal executive offices and zip code
(603) 432-9517
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of latest practicable date. May 1, 1995 - 2,109,872 shares
CORNERSTONE FINANCIAL CORPORATION
INDEX
Page Number
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Condition
March 31, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Income
three months ended March 31, 1995 and 4
March 31, 1994
Condensed Consolidated Statements of Cash Flows
three months ended March 31, 1995 and
March 31, 1994 5
Notes to Condensed Consolidated Financial
Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9-12
Part II. Other Information 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Exhibits and Reports on Form 8-K 13
Item 6. Other Information 14
Exhibit 11 - Computation of Primary and Fully
Diluted Earnings Per Share 15
Signatures 16
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CORNERSTONE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
(Dollars in Thousands)
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 6,965 $ 7,176
Interest-bearing deposits in other banks 2,051 1,051
Federal funds sold 1,000 3,890
Investment securities held to maturity
(market value of $21,731 in 1995 and
$22,655 in 1994 Note 2) 22,272 23,666
Investment securities available for sale (Note 2) 40,766 39,765
Net loans (Note 3) 54,955 53,540
Premises and equipment, net 5,865 5,940
Other real estate owned (Note 4) 1,501 1,532
Other assets 5,817 6,331
Total assets $141,192 $142,891
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits (Note 5) $122,156 $123,299
Short-term borrowings 3,500 5,000
Other borrowings 3,508 3,508
Other liabilities 2,087 2,163
Total liabilities 131,251 133,970
STOCKHOLDERS' EQUITY:
Common stock, no par; authorized,
8,000,000 shares; issued, 2,253,519
and 2,253,519, outstanding 2,107,017
and 2,107,017 1,408 1,408
Capital surplus 15,449 15,449
Retained deficit (4,631) (4,980)
12,226 11,877
Treasury stock, at cost, 146,502 shares
in 1995 and 1994 (1,381) (1,381)
Net unrealized gain (loss) on securities
available for sale (Note 2) (904) (1,575)
Total stockholders' equity $ 9,941 $ 8,921
Total liabilities and stockholders' equity $141,192 $142,891
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
CORNERSTONE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31
1995 1994
(Dollars in Thousands)
<S> <C> <C>
Interest income:
Interest on loans $ 1,275 $ 1,183
Interest on investment securities 919 842
Interest on federal funds sold 37 16
Total interest income 2,231 2,041
Interest expense:
Interest on deposits 671 633
Other interest 124 63
Total interest expense 795 696
Net interest income 1,436 1,345
Provision for loan losses 0 (15)
Net interest income after provision
for loan losses 1,436 1,330
Gain on security transactions, net 0 22
Other operating income 664 560
Loss on other real estate (2) (112)
Other operating expenses (1,530) (1,467)
Income before income taxes 568 333
Income tax provision 219 -
Net income $ 349 $ 333
Earnings per share:
Net income $ .16 $ .15
Cash Dividends declared per share - -
Weighted average shares outstanding 2,177,000 2,162,000
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
CORNERSTONE FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995 March 31, 1994
(Dollars in Thousands)
<S> <C> <C>
Cash flow from operating activities:
Net income $ 349 $ 333
Adjustments to reconcile net income to net
cash provided by operating activities-
Gain on security transactions, net - (22)
Depreciation and amortization 80 110
Provision for loan losses - 15
Other real estate owned valuation adjustments - 73
Gain on sale of loans - (40)
Amortization of premiums on investment securities, net 39 60
Increase in interest payable 91 52
Increase (decrease) in interest receivable 193 (143)
Deferred compensation expense 44 42
Gain on sale of other assets (184) -
Other, net (1) (66)
Net cash provided by operating activities 611 414
Cash flow from investing activities:
Proceeds from sales of securities
available for sale - 7,630
Proceeds from maturities of securities
available for sale 0 2,976
Purchases of securities available for sale - (12,281)
Purchases of securities held to maturity - (7,054)
Proceeds from maturities, redemptions or principal
payments on securities held to maturity 1,367 417
Net loan principal advances (1,690) (3,283)
Proceeds from sale of loans 254 3,667
Purchase of premises and equipment - (14)
Net cash used by investing activities (69) (7,942)
Cash flow from financing activities:
Proceeds from exercise of stock options - 5
Decrease in short term borrowings (1,500) (460)
Net increase (decrease) in deposits (1,143) 628
Net cash used by financing activities (2,643) 173
Net increase (decrease) cash & cash equivalents (2,101) (7,355)
Cash and cash equivalents, beginning of year 12,117 14,788
Cash and cash equivalents, end of quarter $10,016 $ 7,433
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
CORNERSTONE FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Interim Financial Data
Interim financial data is unaudited. In the opinion of management, the
accompanying condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the results for the interim periods. Certain amounts in
prior periods have been reclassified to conform to the current presentation.
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan" which was subsequently amended by SFAS No. 118
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures" in October 1994. The Company adopted these statements effective
January 1, 1995. SFAS 114 modifies the accounting for impaired loans, defined
as those loans where, based on current information and events, it is probable
that a creditor will be unable to collect all amounts due, both interest and
principal, according to the contractual terms of the loan agreement.
Spefifically, SFAS 114 requires that the allowance for loan losses related to
impared loans be determined based on the present value of the expected future
cash flows discounted at the loan's effective rate, or, as a practical
expedient, the loans' observable market price or the fair value of the loan's
underlying collateral if the loan is collateral dependent. In addition, SFAS
No. 114 modified the accounting for in-substance foreclosures (ISF). A
collateralized loan is considered an ISF and reclassified to Other Real Estate
Owned when the Company has received physical possession of the collateral
regardless of whether formal foreclosure proceedings have taken place. The
adoption of these statements did not have a material impact on the Company's
financial position or results of operations. Instead, it resulted only in a
reallocation of the existing allowance for loan losses.
SFAS No. 114, as amended by SFAS No. 118, permits a creditor to use existing
methods for recognizing interest income on impaired loans. Generally,
interest income received on an impaired loan either continues to be applied by
the Company against principal or is realized as interest income, according the
management's judgment as to the collectibility of principal.
NOTE 2. Investment Securities
A summary of the amortized cost and market value of the securities available
for sale portfolio at March 31, 1995 and December 31, 1994 is as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
March 31, 1995 Cost Gains Losses Value
(In thousands)
<S> <C> <C> <C> <C>
U.S.Govt. & Fed. Agency Obl. $42,300 $ 14 $(1,609) $40,705
Mortgage backed securities 62 0 (1) 61
Total Securities Available for sale $42,362 $ 14 $(1,610) $40,766
<CAPTION>
December 31, 1994
(In thousands)
<S> <C> <C> <C> <C>
U.S.Govt. & Fed. Agency Obl. $42,311 $ 0 $(2,611) $39,700
Mortgage backed securities 66 0 (1) 65
Total Securities Available for sale $42,377 $ 0 $(2,612) $39,765
</TABLE>
A summary of the amortized cost and market value of securities held to
maturity at March 31, 1995 and December 31, 1994 is as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
March 31, 1995 Cost Gains Losses Value
(In thousands)
<S> <C> <C> <C> <C>
U.S. Govt. & Fed. Agency Obl. $ 7,860 $ 6 $ (79) $ 7,787
Collateralized Mtg. Obgl. 1,439 0 (57) 1,382
Mortgage-backed securities 5,079 0 (229) 4,850
Corporate bonds 7,177 0 (182) 6,995
Total debt securities 21,555 6 (547) 21,014
Federal Home Loan Bank stock 717 0 0 717
Total securities held to maturity $22,272 $ 6 $ (547) $21,731
<CAPTION>
December 31, 1994
(In thousands)
<S> <C> <C> <C> <C>
U.S.Govt. & Fed. Agency Obl. $ 7,863 $ 0 $ (193) $ 7,670
Collateralized Mtg. Obgl. 1,604 0 (86) 1,518
Mortgage-backed securities 5,200 0 (409) 4,791
Corporate bonds 7,697 0 (323) 7,374
Total debt securities 22,364 0 (1,011) 21,353
Federal Home Loan Bank stock 1,302 0 0 1,302
Total securities held to maturity $23,666 $ 0 $(1,011) $22,655
</TABLE>
NOTE 3. Net Loans and Allowance for Loan Losses
Net loans at March 31, 1995 and December 31, 1994 were as follows:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
(Dollars in Thousands)
(Unaudited)
<S> <C> <C>
Real estate mortgage loans $10,012 $10,082
Commercial and other loans 42,095 40,786
Consumer loans 4,876 4,686
Total loans 56,983 55,554
Less:
Allowance for loan losses (2,028) (2,014)
Net loans $54,955 $53,540
</TABLE>
Activity related to the allowance for loan losses for the three months ended
March 31, 1995 and 1994 was as follows:
<TABLE>
<CAPTION>
Allowance for Loan Losses at: 1995 1994
(Dollars in Thousands)
(Unaudited) (Unaudited)
<S> <C> <C>
Balance, January 1 $2,014 $2,118
Provision for loan losses 0 15
Recoveries of loans previously charged off 22 17
Loans charged off (8) (166)
Balance, March 31 $2,028 $2,084
</TABLE>
At March 31, 1995, the recorded investment in loans that are considered
impaired under SFAS No. 114 was $5,020,000. Included in this amount is
$2,890,000 of impaired loans for which the related SFAS No. 114 allowance for
loan losses is $841,000 and $2,130,000 of impaired loans that do not have a
related SFAS No. 114 allowance for loan losses. During the period ended March
31, 1995, the Company recognized $80,000 of interest on the average impaired
loan balance of $5,080,000.
At March 31, 1994, the Company had $2,156,000 in restructured loans. For the
first quarter of 1994 the aggregate amount of interest income recorded on
these restructured loans was $38,000 and the amount of income that would have
been recorded had the restructured loans been current in their original terms
was approximately $46,000.
Note 4. Other Real Estate
Other real estate owned is net of a valuation allowance of $253,000 at March
31, 1995. An analysis of the allowance for the valuation reserve for the
quarter ended March 31, 1995 is as follows:
<TABLE>
<CAPTION>
(Dollars in Thousands)
(Unaudited)
<S> <C>
Balance, January 1, 1995 $253
Additions to valuation reserves 0
Balance, March 31, 1995 $253
</TABLE>
NOTE 5. Deposits
Deposits at March 31, 1995 and December 31, 1994 were as follows:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
(Dollars in Thousands)
(Unaudited)
<S> <C> <C>
Demand $ 12,941 $ 13,511
NOW, money market 41,891 43,404
Passbook savings 35,915 35,219
Certificates of Deposit of $100,000 or more 2,414 2,615
Other time 28,995 28,550
Total $122,156 $123,299
</TABLE>
Item #2 -- Management Discussion and Analysis of Financial Condition
and Results of Operation.
On March 23, 1995, Cornerstone entered into a merger agreement pursuant to
which Cornerstone Financial Corporation will become a subsidiary of BayBanks,
Inc. a Massachusetts bank holding company, and Cornerstone shareholders will
receive $8.80 per share in cash. The merger is subject to regulatory approval
and approval by Cornerstone's shareholders.
The following table summarizes key financial operating data for the periods
indicated.
<TABLE>
<CAPTION>
Three months ended
March 31,
1995 1994
(Dollars in Thousands)
(Unaudited)
<S> <C> <C>
Net interest income $ 1,436 $ 1,345
Provision for loan losses 0 (15)
Loss on other real estate (2) (112)
Gain on securities transactions, net 0 22
Other operating income 664 560
Other operating expenses (1,520) (1,467)
Provision for income taxes (219) 0
Net income $ 349 $ 333
</TABLE>
The Company had net income of $349,000 for the first quarter ended March 31,
1995, compared to net income of $333,000 for the first quarter 1994.
Total interest income for the first quarter ended March 31, 1995 increased by
$190,000, or 9.3%, when compared to the first quarter of 1994. The increase
was primarily due to an increase in loan interest income of $92,000, or 7.8%,
that was primarily attributable to increased loan balances outstanding, on
average, in 1995 compared to 1994 and higher interest rates earned on these
loan balances.
Investment interest income increased by $77,000, or 9.1%, due to higher
interest rates earned, and increased average investment balances outstanding.
Total interest expense for the first quarter ended March 31, 1995 increased by
$99,000, or 14.2% from the corresponding quarter in 1994. The increase was
primarily attributable to higher rates paid on interest bearing deposits as
well as increased average balances of interest bearing liabilities.
Net interest income during the first quarter of 1995 increased by $91,000, or
6.8%, from the first quarter of 1994 due to the factors discussed previously.
For the first quarter of 1995 the provision for loan losses was $0 as compared
to a provision for $15,000 in the first quarter of 1994. Management continues
to monitor and review its loan portfolio and the adequacy of loan loss
reserves, and in the first quarter of 1995 the loan charge-offs of $8,000 were
offset by recoveries of loans of $22,000 to show a net increase in the reserve
for loan losses of $14,000 from year end 1994.
The following table summarizes the changes in the allowance for loan losses
for the periods indicated:
<TABLE>
<CAPTION>
Three months ended
March 31,
1995 1994
(Dollars in thousands)
(Unaudited)
<S> <C> <C>
Balance at beginning of period $2,014 $2,118
Provision for loan losses 0 15
Recoveries of loans previously charged off 22 17
Loans charged off (8) (66)
Balance at end of period $2,028 $2,084
Allowance as a percent of period end loans 3.56% 3.80%
Allowance as a percent of nonaccrual loans 200.00% 367.55%
</TABLE>
The allowance for loan losses of $2,028,000, or 200% of nonaccrual loans and
3.6% of outstanding loans at March 31, 1995 was at a level considered
necessary by management to reflect the level of risk in the loan portfolio.
The following table summarizes nonperforming assets at the dates indicated.
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
(Dollars in thousands)
(Unaudited)
<S> <C> <C>
Loans accounted for on a nonaccrual basis:
Real estate $ 0 $ 0
Commercial, financial, and other 1,014 1,088
Consumer loans to individuals 0 1
Total nonaccrual loans 1,014 1,089
Other real estate 1,501 1,532
Total nonperforming assets $2,515 $2,621
</TABLE>
The effect of nonperforming assets caused interest income to be reduced by
$35,000 for the quarter ended March 31, 1995 as compared to $51,000 for the
comparable period ending March 31, 1994, from that which would have been
recorded had such loans remained current in accordance with their original
terms.
Losses on other real estate owned were $2,000 and $112,000, respectively, for
the respective three months ended March 31, 1995 and March 31, 1994. The
losses on other real estate of $19,000 were offset by income on other real
estate of $17,000 for the 1995 period.
Net gains on sales of investment securities were $0 and $22,000, respectively,
for the first quarters of 1995 and 1994. In the first quarter of 1994 total
gains were $55,000 while total losses were $33,000. At March 31, 1995 the
Company's available for sale investment portfolio had an unrealized loss of
$1,596,000 ($904,000, net of tax) and the held to maturity investment
portfolio had an unrealized loss of $541,000.
Other operating income increased by $104,000, or 18.6% in the first quarter of
1995 versus the first quarter of 1994. The primary reason for the increase
was a gain from the sale of the assets in an employee trust of $184,000 offset
by reduced deposit fees of $40,000 and reduced gains on loan sales of $40,000.
Other operating expenses increased by $63,000, or 4.3% in the first quarter
1995 versus the first quarter 1994. The primary reason for the increase was
increased salaries and benefits of $18,000, increased office supplies and
printing expenses of $63,000 offset in part by decreases of several other
expenses totaling $18,000.
The Company recorded a tax provision during the first quarter of 1995 of
$219,000 while the first quarter of 1994 resulted in no tax provision
primarily due to realization of deferred tax assets.
As a result of the factors discussed above, the Company reported net income of
$349,000 for the three month period ended March 31, 1995 as compared to net
income of $333,000 for the corresponding period in 1994.
EARNINGS PER SHARE
Net income per share was $.16 and $.15 for the respective three months ended
March 31, 1995 and 1994.
FINANCIAL CONDITION AND CAPITAL RESERVES
Total assets at March 31, 1995 decreased by $1,699,000, or 1.2% from December
1994. The total investment portfolio decreased by $393,000, or 0.6% while net
loans increased by $1,415,000, or 2.6% at March 31, 1995 as compared to year
end 1994.
Stockholders' equity at March 31, 1995 was $9,941,000, an increase of
$1,020,000 from December 31, 1994. The increase was a result of the decrease
in the unrealized loss on securities available for sale of $671,000 (net of
tax) and by net income of $349,000.
The Company and its banking subsidiary, Cornerstone Bank, are each required by
regulation to maintain certain minimum capital ratios. The following table
summarizes the Company's and the Bank's capital ratios and amounts at March
31, 1995.
<TABLE>
<CAPTION>
Capital Ratios Capital Amounts (in 000's)
----------------------------- -----------------------------
Risk Based Leverage Risk Based Leverage
----------------- --------- ----------------- ---------
Tier I Tier 2 Tier 1 Tier 1 Tier 2 Tier 1
<S> <C> <C> <C> <C> <C> <C>
The Company
Balance 15.36% 16.63% 7.50% $10,694 $11,582 $10,694
Requirement 4.00% 8.00% 4.00% 2,786 5,571 5,704
The Bank
Balance 19.24% 20.52% 9.45% 13,383 14,270 13,383
Requirement 4.00% 8.00% 4.00% 2,782 5,564 5,665
</TABLE>
The above capital ratios table does not include the net unrealized loss on
securities available for sale of $904,000.
LIQUIDITY
The primary source of liquidity consists of debt securities, federal funds
sold and short term investments. At March 31, 1995, approximately
$30,871,000, or 49.0%, of the investment portfolio matures or reprices in two
years or less. In addition, amortizing installment and mortgage loans, along
with short term or direct reduction commercial loans, provide additional
sources of funds for liquidity purposes.
Furthermore, management has designated $40,766,000 of investment securities as
available for sale. These investments are accordingly carried at market
value. At March 31, 1995, market value was below the cost of these
investments by $1,596,000.
Part II - Other Information
Item 1. - Legal proceedings - Not applicable
Item 2. - Changes in securities - Not applicable
Item 3. - Defaults upon senior securities - Not applicable
Item 4. - Submission of matters to vote of security holders: - Not applicable
Item 5. - Other information - Not applicable
Item 6. - Exhibits and reports on form 8-K
(a) Exhibit 27 - Financial data schedule (submitted only in electronic
format to the Securities and Exchange Commission)
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1995.
CORNERSTONE FINANCIAL CORPORATION
AVERAGE BALANCE, INTEREST INCOME AND EXPENSE AND EFFECTIVE RATES
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------------------------------
1995 1994
---------------------------------- -----------------------------------
Interest Avg. Interest Avg
Average Income/ Yield/ Average Income/ Yield/
Balance(1) Expense(2) Rate(2) Balance(1) Expense(2) Rate(2)
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Taxable investment securities $ 66,388 $ 919 5.5% $ 61,938 $ 842 5.4%
Loans(2)(3) 56,485 1,279 9.1% 55,585 1,188 8.5%
Federal funds sold 2,492 37 5.9% 2,355 16 2.7%
Total $125,365 $ 2,235 7.1% $119,878 $ 2,046 6.8%
Interest paying liabilities:
Savings deposits $ 35,619 $ 183 2.1% $ 34,514 $ 168 1.9%
NOW and money market deposits 41,338 170 1.6% 41,541 137 1.3%
Time deposits 31,090 318 4.1% 34,131 328 3.8%
Other borrowed funds 7,625 124 6.5% 3,641 63 6.9%
Total $115,672 $ 795 2.7% $113,827 $ 696 2.4%
Net interest income $ 1,440 $ 1,350
Net interest margin 4.4% 4.4%
Net yield on earning assets 4.6% 4.5%
<FN>
<F1> Based on daily averages
<F2> On a fully taxable equivalent basis
(34% tax rate in 1995 and 1994)
<F3> Average balance includes non-accrual loans.
</FN>
</TABLE>
CORNERSTONE FINANCIAL CORPORATION
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
<S> <C> <C>
Primary earnings per share:
Net income $ 349 $ 333
Common and common equivalent shares:
Weighted average number of common shares
outstanding 2,107 2,105
Add: Shares arising from assumed exercise of
stock options (as determined under the
Treasury Stock Method) 70 57
Weighted average of common and equivalent
shares outstanding 2,177 2,162
Primary earnings per share:
Net income $ .16 $ .15
Fully diluted earnings per share:
Net income $ 390 $ 374
Common shares-assuming full dilution:
Weighted average of common shares outstanding 2,107 2,105
Add: Shares arising from assumed exercise of
stock options (as determined under the
Treasury Stock Method) and conversion to
stock of convertible subordinated
debentures 307 288
Weighted average of common and equivalent
shares 2,414 2,393
Fully diluted earnings per share:
Net income $ .16 $ .16
</TABLE>
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.
CORNERSTONE FINANCIAL CORPORATION
(Registrant)
DATE: May 11, 1995 /s/ JOHN M. TERRAVECCHIA
John M. Terravecchia
Chairman, President and
Chief Executive Officer
DATE: May 11, 1995 /s/ ROBERT E. BENOIT
Robert E. Benoit
Vice President/Treasurer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
10-Q FOR QUARTER ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 6,965,000
<INT-BEARING-DEPOSITS> 2,051,000
<FED-FUNDS-SOLD> 1,000,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 40,766,000
<INVESTMENTS-CARRYING> 22,272,000
<INVESTMENTS-MARKET> 21,731,000
<LOANS> 56,983,000
<ALLOWANCE> 2,028,000
<TOTAL-ASSETS> 141,192,000
<DEPOSITS> 122,156,000
<SHORT-TERM> 3,500,000
<LIABILITIES-OTHER> 2,087,000
<LONG-TERM> 3,508,000
<COMMON> 1,408,000
0
0
<OTHER-SE> 8,533,000
<TOTAL-LIABILITIES-AND-EQUITY> 141,192,000
<INTEREST-LOAN> 1,275,000
<INTEREST-INVEST> 919,000
<INTEREST-OTHER> 37,000
<INTEREST-TOTAL> 2,231,000
<INTEREST-DEPOSIT> 671,000
<INTEREST-EXPENSE> 795,000
<INTEREST-INCOME-NET> 1,436,000
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,530,000
<INCOME-PRETAX> 568,000
<INCOME-PRE-EXTRAORDINARY> 349,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 349,000
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
<YIELD-ACTUAL> 4.60
<LOANS-NON> 1,014,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 2,468,000
<LOANS-PROBLEM> 7,194,000
<ALLOWANCE-OPEN> 2,014,000
<CHARGE-OFFS> 8,000
<RECOVERIES> 22,000
<ALLOWANCE-CLOSE> 2,028,000
<ALLOWANCE-DOMESTIC> 2,028,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
