UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10- QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1998
--------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _________
Commission file number 0-12510
----------------------------------
MARATHON BANCORP
- ------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3770539
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification
No.)
11150 West Olympic Boulevard, Los Angeles, CA 90064
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 996-9100
-----------------
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 ____
-----
As of May 11, 1998, there were 3,817,819 shares of no par Common Stock
issued and outstanding.
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Financial Condition
Marathon Bancorp and Subsidiary
March 31, December 31,
ASSETS 1998 1997
------------ --------------
<S> <C> <C>
Cash and Due From Banks . . . . . . . . . . . . . . . . . . . . . . . $ 4,170,000 $ 7,327,000
Federal Funds Sold. . . . . . . . . . . . . . . . . . . . . . . . . . 6,300,000 8,700,000
Interest-Bearing Deposits with Financial Institutions . . . . . . . . 0 0
Investment Securities
Securities Available for Sale. . . . . . . . . . . . . . . . . . . 2,747,000 5,249,000
Securities Held to Maturity. . . . . . . . . . . . . . . . . . . . 9,977,000 9,147,000
------------ --------------
TOTAL INVESTMENT SECURITIES. . . . . . . . . . . . . . . . . . 12,724,000 14,396,000
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,254,000 46,775,000
Less Allowance for Credit Losses . . . . . . . . . . . . . . . . . (739,000) (747,000)
------------ --------------
NET LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 43,515,000 46,028,000
Premises and Equipment. . . . . . . . . . . . . . . . . . . . . . . . 399,000 416,000
Other Real Estate Owned . . . . . . . . . . . . . . . . . . . . . . . 1,161,000 1,248,000
Accrued Interest and Other Assets . . . . . . . . . . . . . . . . . . 2,000,000 954,000
------------ --------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . $70,269,000 $ 79,069,000
============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-Bearing. . . . . . . . . . . . . . . . . . . . . . . . 23,291,000 31,932,000
Interest-Bearing . . . . . . . . . . . . . . . . . . . . . . . . . 38,031,000 38,513,000
------------ --------------
TOTAL DEPOSITS. . . . . . . . . . . . . . . . . . . . . . . . 61,322,000 70,445,000
Accrued Interest and Other Liabilities. . . . . . . . . . . . . . . . 734,000 423,000
------------ --------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . 62,056,000 70,868,000
Shareholders' Equity
Preferred Shares - No Par Value, 1,000,000 Shares Authorized,
No Shares Issued and Outstanding. . . . . . . . . . . . . . . . 0 0
Common Shares - No Par Value, 9,000,000 Shares Authorized,
Issued and Outstanding: 3,811,819 in 1998 and 1,589,596 in 1997 13,607,000 13,607,000
Net Unrealized Gain on Securities Available for Sale . . . . . . . 4,000 3,000
Accumulated Deficit. . . . . . . . . . . . . . . . . . . . . . . . (5,398,000) (5,409,000)
------------ --------------
TOTAL SHAREHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . 8,213,000 8,201,000
------------ --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . $70,269,000 $ 79,069,000
============ ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Income
Marathon Bancorp and Subsidiary
March 31,
1998 1997
---------- ---------------
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans . . . . . . . . . . $ 916,000 $ 876,000
Interest on Investment Securities - Taxable. . 169,000 109,000
Other Interest Income. . . . . . . . . . . . . 116,000 65,000
---------- ---------------
TOTAL INTEREST INCOME. . . . . . . . . . . . 1,201,000 1,050,000
INTEREST EXPENSE
Interest on Demand Deposits. . . . . . . . . . 12,000 14,000
Interest on Money Market and Savings . . . . . 150,000 153,000
Interest on Time Deposits. . . . . . . . . . . 149,000 89,000
Other Interest Expense . . . . . . . . . . . . 1,000 -
---------- ---------------
TOTAL INTEREST EXPENSE . . . . . . . . . . . 312,000 256,000
---------- ---------------
NET INTEREST INCOME. . . . . . . . . . . . . . . . 889,000 794,000
Provision for Credit Losses. . . . . . . . . . . . - 150,000
---------- ---------------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES . . . . . . . . . . 889,000 644,000
---------- ---------------
NONINTEREST INCOME
Service Charges and Fees on Deposits . . . . . 61,000 60,000
Gain on Sale of Other Real Estate Owned. . . . - -
Other Noninterest Income . . . . . . . . . . . 39,000 8,000
---------- ---------------
'TOTAL NONINTEREST INCOME. . . . . . . . . . 100,000 68,000
---------- ---------------
NONINTEREST EXPENSE
Salaries and Employee Benefits . . . . . . . . 392,000 372,000
Occupancy Expenses . . . . . . . . . . . . . . 159,000 156,000
Furniture and Equipment. . . . . . . . . . . . 23,000 37,000
Professional Services. . . . . . . . . . . . . 50,000 94,000
Business Promotion . . . . . . . . . . . . . . 16,000 7,000
Stationery and Supplies. . . . . . . . . . . . 29,000 28,000
Data Processing Services . . . . . . . . . . . 115,000 115,000
Messenger and Courier Services . . . . . . . . 22,000 37,000
Insurance and Assessments. . . . . . . . . . . 81,000 96,000
Litigation . . . . . . . . . . . . . . . . . . - 25,000
Customer Checks. . . . . . . . . . . . . . . . 11,000 13,000
Provision for OREO Losses. . . . . . . . . . . - -
Net Operating Cost of Other Real Estate Owned. 12,000 2,000
Other Expenses . . . . . . . . . . . . . . . . 68,000 20,000
---------- ---------------
TOTAL NONINTEREST EXPENSE. . . . . . . . . . 978,000 1,002,000
---------- ---------------
INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . 11,000 ( 290,000)
Income Taxes. . . . . . . . . . . . . . . . . . - -
---------- ---------------
NET INCOME (LOSS). . . . . . . . . . . . . . . . . $ 11,000 $ ( 290,000)
========== ===============
Per Share Data :
Net Income (Loss) - Basic . . . . . . . . . . $ - $( 0.23)
Net Income (Loss) - Diluted . . . . . . . . . $ - $( 0.23)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Marathon Bancorp and Subsidiary
Three Months Ended March 31,
------------------------------
1998 1997
------------------------------ -------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss). . . . . . . . . . . . . . . . . . . . . . . $ 11,000 $ ( 290,000)
Adjustments to Reconcile Net Gain (Loss) to Net Cash Provided
by Operating Activities:
Depreciation and Amortization. . . . . . . . . . . . . . 36,000 33,000
Provision for Credit Losses. . . . . . . . . . . . . . . - 150,000
Provision for OREO Losses. . . . . . . . . . . . . . . . - -
Loss (Gain) on Sale of Other Real Estate Owned . . . . . 34,000 ( 3,000)
Net Amortization of Premiums and Discounts
on Investment Securities. . . . . . . . . . . . . . . 7,000 7,000
Net Change in Deferred Loan Origination Fees . . . . . . 4,000 7,000
Net Change in Accrued Interest, Other Assets
and Other Liabilities. . . . . . . . . . . . . . . . ( 733,000) 156,000
------------------------------ -------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES. . . . . ( 641,000) 60,000
INVESTING ACTIVITIES
Net Decrease (Increase) in Interest-Bearing Deposits with
Financial Institutions. . . . . . . . . . . . . . . . . . . - 100,000
Purchases of Available for Sale Securities. . . . . . . . . . ( 998,000) ( 997,000)
Purchases of Held to Maturity Securities . . . . . . . . . . . ( 4,535,000) -
Proceeds from Maturities of Available for Sale Securities. . . 3,500,000 4,000
Proceeds from Maturities of Held to Maturity Securities. . . . 3,697,000 6,000
Net Decrease in Loans. . . . . . . . . . . . . . . . . . . . . 1,527,000 1,540,000
Proceeds from Sale of Other Real Estate Owned. . . . . . . . . 1,035,000 248,000
Purchases of Furniture, Fixtures and Equipment . . . . . . . . ( 19,000) ( 17,000)
------------------------------ -------------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES . . . . 4,207,000 884,000
FINANCING ACTIVITIES
Net Change in Demand Deposits, Money Market and Savings. . . . ( 10,631,000) 12,572,000
Net Change in Time Deposits. . . . . . . . . . . . . . . . . . 1,508,000 689,000
Proceeds from Issuance of Common shares. . . . . . . . . . . . - 767,000
------------------------------ -------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES . . . . ( 9,123,000) 14,028,000
------------------------------ -------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . . . . . . ( 5,557,000) 14,972,000
Cash and Cash Equivalents at Beginning of Year . . . . . . . . 16,027,000 7,289,000
------------------------------ -------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR. . . . . . . . . . . . . $ 10,470,000 $ 22,261,000
============================== ===================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest Paid. . . . . . . . . . . . . . . . . . . . . . . . . $ 278,000 $ 294,000
Income Taxes Paid (Refunded) . . . . . . . . . . . . . . . . . $ - $ -
Loans Made to Facilitate the Sale of Other Real Estate Owned . $ 600,000 $ -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Equity
Marathon Bancorp and Subsidiary
Net
Unrealized
Appreciation
(Depreciation)
on Available
Common shares Accumulated For Sale
--------------
Shares Amount Deficit Securities Total
-------------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE - JANUARY 1, 1998 . 3,811,819 $ 13,607,000 $(5,409,000) $ 3,000 $8,201,000
Net Income. . . . . . . . . - - 11,000 - 11,000
Issuance of Common Shares . - - - - -
Net Changes in Unrealized
Appreciation on Available
for Sale Securities . . . - - - 1,000 1,000
-------------- ------------ ------------ ----------- ----------
BALANCE - MARCH 31, 1998. . 3,811,819 $ 13,607,000 $(5,398,000) $ 4,000 $8,213,000
============== ============ ============ =========== ==========
</TABLE>
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION AND MANAGEMENT REPRESENTATIONS
The unaudited consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not include
all footnotes normally required for complete financial disclosure. While the
Company believes that the disclosures presented are sufficient to make the
information not misleading, reference may be made to the consolidated financial
statements and notes thereto included in the Company's 1997 Annual Report on
Form 10-KSB.
The accompanying consolidated statements of financial condition and the
related consolidated statements of operations and cash flows reflect, in the
opinion of management, all material adjustments necessary for fair presentation
of the Company's financial position as of March 31, 1998 and December 31, 1997,
results of operations and changes in cash flows for the three-month period ended
March 31, 1998 and 1997. The results of operations for the three-month period
ended March 31, 1998 are not necessarily indicative of what the results of
operations will be for the full year ending December 31, 1998.
(2) INCOME OR LOSS PER SHARE
Income or loss per share is computed using the weighted average number of
common shares outstanding during the period. Loss per share calculations
exclude common share equivalents (stock options) since their effect would be to
increase the income per share and reduce the loss per share. Accordingly, the
weighted average number of shares used to compute the net income or loss per
share were 3,811,819 and 1,275,273 respectively for the three-month period ended
March 31, 1998.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion is intended to provide additional information
about Marathon Bancorp (the Company), its financial condition and results of
operations, which is not otherwise apparent from the consolidated financial
statements. Since Marathon National Bank (the Bank) represents a substantial
portion of the Company's activities and investments, the following relates
primarily to the financial condition and operations of the Bank. It should be
read in conjunction with the Company's 1997 Annual Report on Form 10-KSB.
FINANCIAL HIGHLIGHTS OVERVIEW
Marathon Bancorp recorded a profit for the third consecutive quarter of
$11,000 for the period ending March 31, 1998, compared to a loss of $290,000 for
the same period of 1997.
Per share earnings were less than one cent for 1998 compared to a $0.23 per
share loss in the first quarter of 1997.
At March 31, 1998 total assets were $70,269,000, total loans of $44,254,000
and total deposits of $61,322,000. This compares to total assets of
$79,069,000, total loans of $46,775,000 and total Deposits of $70,445,000 at
December 31, 1997.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income (the difference between interest income and interest
expense) increased by $95,000, or 12% over the amount reported for the first
quarter of 1997. This is the most significant component of the Company's
earnings and this increase was critical in being able to report a profit in
comparison to the prior year's first quarter loss.
Interest income rose $151,000, or 14.4% over last year with all interest
income categories showing improvement. Interest and fees on loans increased by
$40,000, or 4.6% on a slightly
smaller loan portfolio. Interest earned increased as a result of a reduction in
non-performing loans since the same period a year ago. At March 31, 1997
nonaccrual loans totaled $2,074,000 compared to $695,000 at March 31, 1998.
Interest on investment securities increased $60,000, or 55.1% over the prior
year. This is due to an increase in the average investment portfolio
outstandings of 54.6%. Other interest income, which includes interest on
federal funds sold and interest on deposits with other financial institutions
also increased from $65,000 in the first quarter of 1997 to $116,000 for the
first quarter of 1998. This was attributable to an increase in federal funds
sold.
Interest expense increased by $56,000, or 21.9% over the same period last
year. This was due to an increase in interest paid on time deposits caused by
an increase in the average outstandings of $5,353,000. Average time deposits
over $100,000 increased $3,103,000 and average time deposits under $100,000
increased $2,250,000.
Noninterest Income
Increasing the noninterest income has been one of the Company's primary
objectives. The first quarter of 1998 showed an increase of $32,000, or 47%
over the first quarter of 1997.
Increasing noninterest revenue was accomplished by increasing selected
service charges on deposit accounts, non-deposit products and noninterest
related loan fees.
Noninterest Expense
Noninterest expense decreased from $1,002,000 for the first quarter of 1997
to $978,000 for the first quarter of 1998 a 2.5% decrease. The main
contributors to lower expenses were professional services, courier services,
insurance and litigation expenses. The Company's improved financial condition
led to decreases in legal expenditures, FDIC insurance and directors and
officers insurance expense. The Company's change of auditors decreased the fees
for audit and tax services and the litigation that the Company was involved in
was settled in 1997 and there has been no need to fund litigation expense in
1998.
The Company is very cognizant of its expenses and will continue to decrease
costs wherever possible. The Company's improving financial condition should
help to further lower costs for legal, insurance and OREO costs.
Provision for Credit Losses:
Based upon management's assessment of the overall quality of the loan
portfolio, and of external economic conditions the Bank felt that the current
level in the reserve for credit losses was adequate an therefore made no
provision to the credit loss reserve. During the first quarter, the Bank
recorded charge-offs of $26,000 while collecting recoveries on loans charged off
of $18,000.
The Bank's internally classified loans decreased from $2,983,000 at
December 31, 1997 to $1,969,000 at March 31, 1998. Nonaccrual loans decreased
from $965,000 at December 31, 1997 to $695,000 at March 31, 1998 and the level
of OREO decreased from $1,248,000 at year-end to $1,161,000 at March 31st.
Based upon these factors and management's assessment of the overall quality
of the loan portfolio, its internal migration analysis and economic conditions
they felt the current level of the reserve for credit losses was adequate
without the need for further provisions.
ASSETS AND LIABILITIES
Assets decreased from year-end 1997 due to several of the Bank's large
depositors increasing their balances the last two weeks of the year and then
decreasing these balances back to their normal levels during January 1998.
These deposit fluctuations are normal for the Bank during the first quarter of
the year. The Company decreased its cash and federal funds sold positions to
fund the outflow of deposits.
Loans decreased by $2,521,000. The major reasons for the decrease were the
payoff of a real estate loan in the amount of $2,000,000 and the transfer of two
loans totaling $752,000 to OREO. Securities in the held-to-maturity portfolio
were increased with callable agency securities while short-term investments in
available-for-sale securities matured and were used for liquidity.
Two foreclosed properties totaling $981,000 were transferred into OREO
during the first quarter of the year. The Company also sold two properties
totaling $1,068,000 during the first quarter and completed the sale of an
additional property in April of this year. The properties were sold at a loss
of $34,000, which is reflected in other expenses on the income statement.
During the first quarter deposits declined by $9,123,000 from year-end
totals, but were only down $1,559,000 from the totals of September 30, 1997.
The decline was in noninterest bearing deposits and mostly due to year-end
buildup in several large accounts that flowed out during the quarter.
LIQUIDITY AND CAPITAL
Asset/Liability Management
The Company's Asset/Liability Committee is responsible for managing the
risks associated with changing interest rates and their impact on earnings, as
well as, the liquidity needs of the Company.
Management monitors its liquidity position continuously in relation to
trends in loans and deposits, and relates the data to short and long term
expectations. In order to serve customers effectively, funds must be available
to meet their credit needs as well as their withdrawals of deposited funds.
Assets that are normally considered liquid are federal funds sold, available for
sale investment securities, cash and due from banks, and securities purchased
under agreements to resell. The ratio of liquid assets to deposits was 24% as
of March 31, 1998 and the loan to deposit ratio was 72%.
Interest rate risk management focuses on the maturity and repricing of
interest earning assets in relationship to the interest bearing liabilities that
fund them. Net interest income can be vulnerable to fluctuations arising from a
change in the general level of interest rates to the extent that the average
yield on earning assets responds differently to such a change than does the
average cost of funds.
The Company measures interest rate sensitivity by distributing the
maturities and repricing periods of assets and supporting funding liabilities
into interest sensitivity periods, summarizing interest rate risk in terms of
the resulting interest sensitivity gaps. A positive gap indicates that more
interest sensitive assets than interest sensitive liabilities will be repriced
during a specified period, while a negative gap indicates the opposite
condition.
It is the Bank's policy to maintain an adequate balance of rate sensitive
assets to rate sensitive liabilities. Due to the fact that the Bank has a large
portfolio of noninterest bearing demand deposits the Company has historically
been asset sensitive with a positive gap. Currently the Company is still asset
sensitive which means the Company will have increased income in a rising rate
environment and decreased income in a falling rate scenario.
Capital
The Bank is required to meet certain minimum risk-based capital guidelines
and leverage ratios promulgated by the bank regulatory authorities. The risk
based capital standards establish capital requirements that are more sensitive
to risk differences between various assets, consider off balance sheet
activities in assessing capital adequacy, and minimize the disincentives to
holding liquid, low risk assets. The leverage ratio consists of tangible Tier 1
capital divided by average total assets.
The Company's capital position is strong. The adequately capitalized
risk-based capital ratio required by the federal regulators is 8.0 percent and
the well capitalized ratio is 10.0 percent. At March 31, 1998 the Company and
the Bank had a risk based capital ratio of 17.3 percent, and a Tier 1 capital
leverage ratio of 11.4 percent.
On December 16, 1996, the Company entered into a memorandum of
understanding with the Federal Reserve Bank (FRB) under which the Company
agreed, among other things, to refrain from paying cash dividends except with
the prior approval of the FRB, submit annual statements of planned sources and
uses of cash, and submit annual progress reports. The Bank has met all of the
terms of the formal agreement.
YEAR 2000
The Company is well aware of the issues relating to the century date change
and the impact on computer systems and business operations. The Company started
its analysis of the problem in June 1997 when it sent letters to its vendors
that supplied computer services to the Company on the status of their Year 2000
plans. All the mission critical vendors were well on their way with plans to
make their products Year 2000 compliant. The Company then went on to develop
its own Year 2000 plan. The Company's Year 2000 Plan (the Plan) was submitted to
the Board of Directors for review in January 1998 and approved in February 1998.
The Plan includes the steps necessary for the Company to become year 2000
as well as the steps to be taken to check that the major borrowers and fund
providers of the Company are also working to become compliant. The Company's
main computer processing is supplied by the Fiserv CBS Service Bureau, who has
notified the Company that its software has been modified to be year 2000
compliant and that it is currently under testing. The software will be fully
operational by the fourth quarter of 1998.
The Company will begin testing its equipment and programs for full
compliance in the third quarter of 1998 and would expect that all mission
critical applications and equipment will be compliant by the end of the year.
The costs to the Company will be both capital costs for the purchase of new
equipment and the expense for the maintenance and testing of computer software.
These costs have not been fully determined, but should not have a major impact
on future earnings.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On April 1, 1998, proxy materials for 1998 Annual Meeting of Shareholders
were mailed to all shareholders of record as of March 20, 1998. The meeting
took place on May 11, 1998. Shareholders were asked to vote on the matters shown
below. Of the total 3,811,819 shares outstanding and entitled to vote,
2,849,054 shares were represented either in person or by properly executed
proxies. The results of the voting on the matters are shown below:
Matter 1. Election of Directors. To elect seven (7) persons to the board
of directors to serve until the 1999 annual meeting of Shareholders and until
their successors are elected and have been qualified.
For Withhold Authority for
Robert J. Abernethy 2,803,728 45,326
Craig C. Collette 2,820,225 28,829
Frank Jobe, M.D. 2,790,925 58,129
C. Thomas Mallos 2,803,728 45,326
Robert Oltman 2,813,790 35,264
Ann Pappas 2,803,915 45,139
Nick Patsaouras 2,803,423 45,631
Matter 2. Approval of Stock Option Plan. To approve the Marathon Bancorp
1998 Stock Option Plan.
For Against Abstain
2,633,072 145,262 67,971
Matter 3. Other Business. There was none.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARATHON BANCORP
Date: May 12, 1998 Craig D. Collette
-------------------
Craig D. Collette
President and Chief Executive
Officer
Howard J. Stanke
------------------
Howard J. Stanke
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 4,170
<INT-BEARING-DEPOSITS> 38,031
<FED-FUNDS-SOLD> 6,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,977
<INVESTMENTS-CARRYING> 12,720
<INVESTMENTS-MARKET> 12,659
<LOANS> 44,254
<ALLOWANCE> 739
<TOTAL-ASSETS> 70,269
<DEPOSITS> 61,322
<SHORT-TERM> 0
<LIABILITIES-OTHER> 734
<LONG-TERM> 0
0
0
<COMMON> 8,213
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 70,269
<INTEREST-LOAN> 916
<INTEREST-INVEST> 169
<INTEREST-OTHER> 116
<INTEREST-TOTAL> 1,201
<INTEREST-DEPOSIT> 311
<INTEREST-EXPENSE> 1
<INTEREST-INCOME-NET> 889
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 978
<INCOME-PRETAX> 11
<INCOME-PRE-EXTRAORDINARY> 11
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
<YIELD-ACTUAL> 7.59
<LOANS-NON> 695
<LOANS-PAST> 1
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 747
<CHARGE-OFFS> 26
<RECOVERIES> 18
<ALLOWANCE-CLOSE> 739
<ALLOWANCE-DOMESTIC> 739
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 739
</TABLE>
