<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998 Commission File Number 0-16187
-------------- -------
GRANDBANC, INC.
--------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Maryland 52-1332050
- ------------------------------- ----------------------------------
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1800 Rockville Pike, Rockville, Maryland 20852
----------------------------------------------
(Address of principal executive offices)
(301) 770-1300
--------------
(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
----- -----
At April 30, 1998, there were 4,049,655 shares of Common Stock, par
value $.10 per share outstanding.
Transitional Small Business Disclosure Format
YES NO X
----- -----
<PAGE>
TABLE OF CONTENTS
-----------------
PART I - FINANCIAL INFORMATION PAGE
- ------------------------------ ----
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets......................................1
Consolidated Statements of Income (Loss).........................2
Consolidated Statements of Changes in Stockholders' Equity.......3
Consolidated Statements of Changes in Cash Flows ................4
Notes to Consolidated Financial Statements.....................5-9
Item 2 - Management's Discussion and Analysis
Financial Condition .........................................10-12
Results of Operations........................................12-13
PART II - OTHER INFORMATION
- ---------------------------
Items 1 -5...............................................................14
Item 6 - Exhibits and Reports on Form 8-K................................14
SIGNATURES...............................................................15
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GRANDBANC, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Cash and due from banks $2,784 $2,460
Federal funds sold 6,682 2,837
-------------------------------------
Total cash and cash equivalents 9,466 5,297
Securities available-for-sale 5,975 3,395
Securities held-to-maturity 7,352 10,970
Loans, net of unearned discount and loan fees 73,598 77,446
Less: Allowance for loan losses -1,324 -1,702
-------------------------------------
Loans, net 72,274 75,744
Bank premises and equipment, net 1,911 1,971
Accrued income receivable 558 603
Prepaid expenses and other assets 1,255 1,061
Deferred income taxes 2,039 2,057
Intangible assets 1,298 1,338
Other real estate owned 1,048 1,435
-------------------------------------
Total Assets $103,176 $103,871
=====================================
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Demand $10,669 $9,933
Interest checking 8,996 8,559
Savings 15,656 16,120
Time 55,931 54,086
-------------------------------------
Total Deposits 91,252 88,698
Securities sold under agreement to repurchase
and other borrowed funds 3,869 7,198
Other liabilities 431 490
-------------------------------------
Total Liabilities 95,552 96,386
=====================================
Shareholders' Equity
Preferred stock 0 0
Common stock 404 404
Surplus 10,962 10,928
Retained earnings -3,722 -3,747
Accumulated comprehensive income:
Unrealized holding loss on securities available-for-sale -20 -100
-------------------------------------
Total Shareholders' Equity 7,624 7,485
-------------------------------------
Total Liabilities and Shareholders' Equity $103,176 $103,871
=====================================
Book Value per Share $1.88 $1.85
=====================================
Actual Shares Outstanding 4,050 4,041
=====================================
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE>
GRANDBANC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest Income
Interest and fees on loans $1,810 $1,720
Interest on federal funds sold and repurchase agreements 69 26
Interest on securities 192 286
--------------- ---------------
Total Interest Income 2,071 2,032
Interest Expense
Interest on deposits 938 940
Interest on securities sold under agreements to repurchase and other borrowed funds 92 77
--------------- ---------------
Total Interest Expense 1,030 1,017
--------------- ---------------
Net Interest Income 1,041 1,015
Provision for Loan Losses 10 0
--------------- ---------------
Net Interest Income After Provision for Loan Losses 1,031 1,015
Other Income
Service charges 79 82
Other 49 40
--------------- ---------------
Total Other Income 128 122
Other Expenses
Salaries and employee benefits 462 487
Occupancy 192 170
Equipment 60 48
Other operating expenses 403 288
--------------- ---------------
Total Other Expenses 1,117 993
--------------- ---------------
Income Before Applicable Income Taxes 42 144
Income Taxes 18 0
--------------- ---------------
Net Income $24 $144
Other Comprehensive Income, net of tax
Net unrealized gain on investments available for sale, net of taxes $80 $7
--------------- ---------------
Comprehensive Income $104 $151
--------------- ---------------
Basic Net Income Per Common Share $0.01 $0.04
=============== ===============
Diluted Net Income Per Common Share $0.01 $0.03
=============== ===============
Weighted Average Shares Outstanding 4,047 4,041
=============== ===============
Adjusted Weighted Average Shares Outstanding 4,169 4,163
=================================
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
GRANDBANC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Common Unrealized
Stock Gain (Loss)
Shares Common Retained on
Outstanding Stock Surplus Earnings Securities Total
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 3,926 $ 393 $ 10,405 $ (4,597) $ (180) $ 6,021
Net Income 144 144
Common stock issuance 115 11 524 535
Change in unrealized holding
gain (loss) on securities
available-for-sale 7 7
-------------------------------------------------------------------------------------------------
Balance, March 31, 1997 4,041 $ 404 $ 10,929 $ (4,453) $ (173) $ 6,707
========== ========== ========== ========== ========== ==========
Balance, December 31, 1997 4,041 $ 404 $ 10,928 $ (3,747) $ (100) $ 7,485
Net Income 24 24
Common stock issuance 9 1 34 35
Change in unrealized holding
gain (loss) on securities
available-for-sale 80 80
-------------------------------------------------------------------------------------------------
Balance, March 31, 1997 4,050 $ 405 $ 10,962 $ (3,723) $ (20) $ 7,624
========== ========== ========== ========== ========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
GRANDBANC, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited) Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
--------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $24 $144
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Depreciation 60 56
Net amortization of securities 17 3
Amortization of intangibles 40 22
Provision for loan losses 10 0
Other real estate owned - write downs 10 0
(Benefit) provision for deferred income taxes 18 0
Change in assets and liabilities:
Increase in accrued income receivable,
other assets and other real estate -238 -753
Increase (decrease) in other liabilities 63 208
--------------------------------
Net cash (used in) provided by operating activities 4 -320
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in federal funds sold -3,845 -3,551
Proceeds from maturities/principal payments of available-for-sale securities 536 1,000
Proceeds from maturities of held-to-maturity securities 3,641 1,094
Purchase of available-for-sale securities -3,065 -177
Purchase of held-to-maturity securities 0 -1,600
Net (increase) decrease in loans 3,563 -404
Purchase of loans -111 0
Purchase of property and equipment 0 -129
Proceeds from sale of foreclosed real estate and other assets 376 0
--------------------------------
Net cash used in investing activities 1,095 -3,767
--------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 2,554 3,385
Net increase (decrease) in short-term borrowings -2,029 0
Net increase (decrease) in borrowed funds -1,300 0
Net proceeds from sale of common stock 0 500
--------------------------------
Net cash provided by financing activities -775 3,885
--------------------------------
Net decrease in cash and cash equivalents 324 -202
Cash and cash equivalents at beginning of period 2,460 2,455
--------------------------------
Cash and cash equivalents at end of period $2,784 $2,253
=============== ===============
Interest paid $995 $826
================================
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
GrandBanc, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 1998
Note 1 - Organization
GrandBanc, Inc. (the "Corporation"), is a Maryland bank holding company. The
Corporation's operations primarily consist of managing the operations of
GrandBank, its wholly owned subsidiary. GrandBank (the "Bank") is a community
oriented commercial bank. It provides a full range of banking services to
small-to-medium sized businesses, professionals, and individuals in its primary
market that encompasses the metropolitan Washington D.C. area including suburban
Maryland and northern Virginia. The Bank, in addition to its headquarters in
Rockville, has branch offices in Bethesda and Germantown, Maryland and
Alexandria, Virginia. The Corporation's other wholly owned subsidiary, Facility
Holdings, Inc., a Virginia corporation, was established in the first quarter of
1998 and owns the real property of the Corporation located in Alexandria,
Virginia. The Corporation and Bank are subject to the regulations of certain
Federal and State agencies and undergoes periodic examinations by those
regulatory agencies.
Note 2 - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month ended March 31, 1998 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997.
Note 3 - Recently Adopted Accounting Standards
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income,
which establishes standards for reporting and displaying comprehensive income
and its components (revenues, expenses, gains and losses) in financial
statements. In addition, SFAS No. 130 requires the Company to classify items of
other comprehensive income by their nature in a separate financial statement or
as a component of the statement of operations or the statement of shareholders'
equity and display the accumulated balance of other comprehensive income
separately in the shareholders' equity section of the statement of financial
condition. The Corporation adopted SFAS No. 130 on January 1, 1998 as required.
5
<PAGE>
Note 4
Securities
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
Securities Available-for-Sale Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury $0 $0 $0 $0
U.S. Government Agencies and Corporations 4,515 9 -7 4,517
Mortgage-Backed Securities 1,006 0 -5 1,001
Other Securities 399 58 0 457
--------------------------------------------------------------------------------
Total $5,920 $67 -$12 $5,975
================================================================================
Securities Held-to-Maturity
U.S. Government Agencies and Corporations $5,165 $23 -$11 $5,177
Mortgage-Backed Securities 2,187 45 0 2,232
--------------------------------------------------------------------------------
Total $7,352 $68 -$11 $7,409
================================================================================
<CAPTION>
December 31, 1997
- --------------------------------------------------------------------------------------------------------------------------------
Securities Available-for-Sale Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury $0 $0 $0 $0
U.S. Government Agencies and Corporations 3,005 7 -8 3,004
Mortgage-Backed Securities 0 0 0 0
Other Securities 391 0 0 391
--------------------------------------------------------------------------------
Total $3,396 $7 -$8 $3,395
================================================================================
Securities Held-to-Maturity
U.S. Government Agencies and Corporations $8,642 $27 -$14 $8,655
Mortgage-Backed Securities 2,328 50 0 2,378
--------------------------------------------------------------------------------
Total $10,970 $77 -$14 $11,033
================================================================================
</TABLE>
6
<PAGE>
Note 5
Loans
(Dollars in thousands)
March 31, December 31,
1998 1997
- ----------------------------------------------------------------------
Commercial $20,635 $21,684
Real Estate-Construction 361 434
Real Estate-Mortgage 44,820 47,149
Consumer 4,285 4,501
Credit Card Receivable 3,623 3,810
-----------------------------
Gross loans 73,724 77,578
-----------------------------
Less: Deferred loan fees and
unearned discount -126 -132
-----------------------------
Loans,net of unearned discount and
deferred loan fees 73,598 77,446
-----------------------------
Allowance for loan losses -1,324 -1,702
-----------------------------
Loans, net 72,274 75,744
=============================
<PAGE>
Note 6
Allowance for Loan Losses
(Dollars in thousands)
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
--------------------------------------
Balance at beginning of period $1,702 $1,016
Provision charged to expense 10 0
Charge-offs:
Commercial and other 105 232
Consumer 0 10
Real Estate-Mortgage 285 0
Real Estate-Construction 6 0
--------------------------------------
Total Charge-offs 396 242
Recoveries:
Commercial and other 7 13
Consumer 0 7
Real Estate-Mortgage 0 0
Real Estate-Construction 1 0
--------------------------------------
Total Recoveries 8 20
Net Charge-Offs (Recoveries) 388 222
--------------------------------------
Balance at end of period $1,324 $794
======================================
Average Total Loans(1) $75,608 $73,994
Total Loans at Period End (1) $73,598 $73,884
Ratio of net charge-offs (recoveries)
to average total loans 0.51% 0.30%
Ratio of allowance for
loan losses to total
loans at period end 1.80% 1.07%
(1) Total Loans are reported net of unearned income
8
<PAGE>
Note 7
Earnings Per Share
(Dollars in thousands, except per share data)
Three Months Ended March 31, 1998 March 31, 1997
- -------------------------------------------------------------------------------
Basic earnings per share:
Net income $24 $144
Stock and stock equivalents (average shares):
Common shares outstanding 4,047 4,041
Stock options 0 0
-----------------------------
Total stock and stock equivalents 4,047 4,041
-----------------------------
Basic net income per common share $0.01 $0.04
=============================
Diluted earnings per share:
Net income $24 $144
Stock and stock equivalents (average shares):
Common shares outstanding 4,047 4,041
Stock options 122 122
-----------------------------
Total stock and stock equivalents 4,169 4,163
-----------------------------
Diluted net income per common share $0.01 $0.03
=============================
9
<PAGE>
Item 2 - Management's Discussion and Analysis
This Management's Discussion and Analysis contains forward-looking statements,
including statements of goals, intentions and expectations, regarding or based
upon general economic conditions, interest rates, developments in national and
local markets, and other matters, and which, by their nature, are subject to
significant uncertainties so that actual future results may differ from those
stated.
FINANCIAL CONDITION
The Corporation's total assets at March 31, 1998 of $103.2 million reflected a
decrease of $695 thousand or .67% from December 31, 1997.
The Corporation's Stockholders' Equity of $7.6 million at March 31, 1998
reflected an increase of $139 thousand or 1.9% from December 31, 1997. The
increase is attributable primarily to earnings from operations of $24 thousand
and a decrease in unrealized holding loss on investment securities of $80
thousand.
Total loans of the Bank March 31, 1998 of $74 million reflected a decrease of
$3.8 million from December 31, 1997. The decrease is primarily due to
prepayments and maturities of loans. In the second and third quarters of 1998,
management will direct business development and lending activities toward the
small business market in the region in order to develop new loan relationships
and further expand the Bank's existing customer relationships.
Total deposits of the Bank at March 31, 1998 of $91 million reflected an
increase of $2.6 million or .29% from December 1997. During the three months
ended March 31, 1998, non-interest bearing deposits increased $736 thousand or
7.4% while interest bearing deposits increased $1.8 million or 2.3%. At March
31, 1998, non-interest bearing deposits are approximately 11.7 of total
deposits.
The Bank's loan to deposit ratio was 81% at March 31, 1998 compared to 87% at
December 31, 1997.
Investment Activity. The Corporation invests in various types of liquid assets,
- -------------------
including United States Treasury obligations, securities of federal government
agencies and government sponsored entities, certain certificates of deposit,
federal funds and other qualifying liquid investments. During the first quarter
of 1998, securities totaling $2 million matured or were called and securities
totaling $1.8 million were acquired.
Allowance for Loan Losses. The allowance for loan losses at March 31, 1998 was
- -------------------------
$1.3 million or 1.8% of total loans outstanding, compared to $1.7 million or
2.2% at December 31, 1997. Charge offs during the three months ended March 31,
1998 totaled $396 thousand consisting primarily of two real estate loans to one
borrower.
At March 31, 1998, the allowance for loan losses was 67% of non-performing
loans compared to 61% at December 31, 1997. In management's opinion the
allowance for loan losses as of March 31, 1998 was adequate to cover potential
losses that can be anticipated at this time based on current risks and knowledge
of the portfolio.
10
<PAGE>
Non-performing Loans and Assets. The Bank's non-performing assets totaling $3
- -------------------------------
million consist of non-accrual loans and foreclosed real estate. The percentage
of non-performing assets to total assets decreased to 2.93% at March 31, 1998
from 4.06% at December 31, 1997.
Non-performing loans totaled $2 million at March 31, 1998 compared to $2.8
million at December 31, 1997. Non-performing loans at March 31, 1998 consist of
non-accrual loans totaling $2 million.
At March 31, 1998, foreclosed real estate was $1 million compared to $1.4
million at December 31, 1997. The decrease of $387 thousand is primarily the
result of sales of foreclosed property in the first quarter of 1998. Generally,
the Bank evaluates the fair value of each property owned annually. These
evaluations may be appraisals or other market studies. At March 31, 1998,
management believes the carrying amounts for foreclosed real estate approximate
fair value.
Loans past due 90 days or more and still accruing interest totaled $109 thousand
at March 31, 1998. This amount consists entirely of credit card balances.
Short-term debt. The Corporation's short-term debt of $1.9 million at March 31,
- ---------------
1998 reflects a decrease of $50 thousand compared to December 31, 1997 due to
principal payments. Short-term borrowings of the Bank at March 31, 1998
decreased to $1.7 million from $3.7 million at December 31, 1998. Current
short-term borrowings represent securities sold under agreement to repurchase.
This product was developed to meet the overnight investment needs of the Bank's
commercial customers. Under the repurchase agreement program, available customer
balances are invested overnight in an uninsured account in the Bank. Available
balances are determined by the investable balances of the Bank's sweep account
commercial customers.
Long-term debt. Long-term debt of the Corporation at March 31, 1998 of $200
- --------------
thousand reflected a decrease of $1.3 million compared to December 31, 1997. In
the first quarter of 1998, the Corporation retired $1.3 million of a $1.5
million note to an unaffiliated bank, by transferring the real property owned by
the Corporation located in Alexandria, Virginia to its newly formed subsidiary,
Facility Holdings, Inc.. GrandBank holds a note by Facility Holdings, Inc. and
pays rent to Facility Holdings, Inc. for leased space in the building on the
property. The same unaffiliated bank continues to hold a note from the
Corporation in the amount of $200,000. Interest is payable monthly to GrandBank
and the unaffiliated bank. Principal is due to both banks October 1, 1999.
Liquidity. The Bank's liquidity position, those assets invested in cash, federal
- ---------
funds, and obligations of the U.S. Government, its agencies and sponsored
entities classified as available for sale, totaling $15.4 million, reflected an
increase of $6.7 million or 78% from December 31, 1997. The increase consists
primarily of an increase in federal funds of $3.8 million. The increase also
includes an increase of investment securities available for sale of $2.5
million. The increase in cash available for short-term investing is primarily
due to prepayments and maturities of loans. Funds available through the Bank's
sources of short-term borrowing, asset maturities, and available-for-sale
securities are considered adequate to meet current
11
<PAGE>
needs. However, the Bank continues to evaluate the asset and liability mix to
ensure that adequate liquidity is maintained.
Stockholders' Equity. Stockholders' equity of $7.6 million at March 31, 1998
- --------------------
increased $139 thousand from December 31, 1997. The increase results primarily
from earnings of $24 thousand for the period and a decrease of $80 thousand in
net unrealized holding loss in the March 31, 1998 compared to December 31, 1997.
Capital Adequacy and Regulatory Requirements. At March 31, 1998, the Bank's
- --------------------------------------------
ratio of Tier I capital to total average assets equaled 7.25%, which exceeded
the minimum leverage capital ratio of 4% by 3.25%. The Tier I capital to risk
weighted assets ratio was 8.88% which exceeded the minimum required ratio of 4%
by 4.88%. The Bank's total capital to risk-weighted assets ratio at March 31,
1998 was 10.13% which exceeded the minimum required ratio of 8% by 2.13%.
RESULTS OF OPERATIONS
For the three months ended March 31, 1998, the Corporation had net income of $24
thousand compared to net income from the corresponding period in 1997 of $144
thousand, a decrease of $120 thousand.
Earnings per share were $0.01 for the three months ended March 31, 1998,
compared to $0.04 for the same period in 1997.
Net Interest Income. Net interest income is the difference between interest
- -------------------
income on earning assets and interest expense on interest bearing deposits and
borrowings. Net interest income for the three month period ended March 31, 1998
of $1 million reflected an increase of $26 thousand or 2.6% compared to the
corresponding period in 1997. Interest income for the three month period ended
March 31, 1998 was $2.1 million, an increase of $39 thousand or 1.9% from the
same period in 1997. Interest expense of $1 million for the period ended March
31, 1998 reflected an increase of $13 thousand or 1.3%.
The average yield on interest earning assets for the three month period ended
March 31, 1998, was 8.92% compared to 8.62% for the three months ended March 31,
1997. The average cost of funds for the three months ended March 31, 1998, was
4.22% compared to 4.12% for the same period in 1997. Additionally, the net
interest margin was 4.80% for the period ended March 31, 1998 compared to 4.63%
for the corresponding period in 1997.
Provision for Loan Losses. There was a provision for loan losses in the amount
- -------------------------
of $10 thousand in the three month period ended March 31, 1998.
Noninterest Income. Non-interest income for the three months ended March 31,
- ------------------
1998, was $128 thousand compared to $122 thousand for the three months ended
March 31, 1997, an increase of $6 thousand or 4.92%.
Noninterest Expense. Noninterest expense for the three months ended March 31,
- -------------------
1998 of $1.2 million reflected an increase of $124 thousand or 12.5% compared to
the corresponding period of 1997. Salaries and benefits increased by $25
thousand or 5.1%. Occupancy and equipment increased by $34 thousand or 15.6%.
Data processing services increased by $43 thousand or 53.8% compared to the
12
<PAGE>
corresponding period in 1997. This increase is primarily due to data processing
systems enhancements begun in the second quarter of 1997 in order to expand
products and services offered by the Bank and to improve the efficiency of
operations. Other expenses increased by $62 thousand or 36.7% compared to the
same period in 1997. The increase in Other Expense is primarily due to expenses
incurred which are associated with the Bank's credit card program begun in the
third quarter of 1997.
Applicable Income Tax. The income tax expense of $18 thousand reflects the
- ---------------------
amount of the deferred tax asset realized in the first quarter of 1998.
13
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings N/A
Item 2 - Changes in Securities N/A
Item 3 - Defaults Upon Senior Securities N/A
Item 4 - Submission of Matters to a Vote of Security Holders
Item 5 - Other Information N/A
Item 6 - Exhibits and Reports on Form 8-K
A. Exhibits
(11) "Computation of Earnings per Common Share" is presented as
Note 6 on Page 6.
(27) Financial Data Schedule: Filed herewith.
B. Reports on Form 8-K
None
14
<PAGE>
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
GRANDBANC, INC.
(Registrant)
Date: May 13, 1998
---------------------------------------
Steven K. Colliatie
President & CEO
Date: May 13, 1998
---------------------------------------
Domingo Rodriguez
Executive Vice President and CFO
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000719488
<NAME> GRANDBANC, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,784
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,682
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,975
<INVESTMENTS-CARRYING> 7,352
<INVESTMENTS-MARKET> 0<F1>
<LOANS> 73,598
<ALLOWANCE> 1,324
<TOTAL-ASSETS> 103,176
<DEPOSITS> 91,252
<SHORT-TERM> 3,669
<LIABILITIES-OTHER> 431
<LONG-TERM> 200
0
0
<COMMON> 404
<OTHER-SE> 7,220
<TOTAL-LIABILITIES-AND-EQUITY> 103,176
<INTEREST-LOAN> 1,810
<INTEREST-INVEST> 192
<INTEREST-OTHER> 69
<INTEREST-TOTAL> 2,071
<INTEREST-DEPOSIT> 938
<INTEREST-EXPENSE> 1,030
<INTEREST-INCOME-NET> 1,041
<LOAN-LOSSES> 10
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,117
<INCOME-PRETAX> 42
<INCOME-PRE-EXTRAORDINARY> 42
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
<YIELD-ACTUAL> 4.80
<LOANS-NON> 1,974
<LOANS-PAST> 109
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,702
<CHARGE-OFFS> 420
<RECOVERIES> 8
<ALLOWANCE-CLOSE> 1,324
<ALLOWANCE-DOMESTIC> 1,324
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>NOT BROKEN OUT IN KSB.
</FN>
</TABLE>
