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 September 30, 1996
( ) 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: 0-18533
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
___New York __16-1168175
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 North Main Street Box 129 Castile NY 14427
(Address of principal executive offices) (Zip Code)
(716) 493-2576
Registrant's telephone number, including area code)
____________________________________________________________
(Former name, address, fiscal year, if changed)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(b) 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.
Y Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of October 31, 1996
Common Stock, $1.00 per share 917,070 shares
Transitional Small Business Disclosure Format (Check One):
Yes__ No X
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
INDEX
Page
PART I Financial Information
Item 1. Financial Statements
Consolidated Statement of Condition
September 30, 1996(Unaudited) and
December 31, 1995(Unaudited) 3
Consolidated Statement of Income (Unaudited)
Three Months and Nine Months Ended September 30, 1996
and 1995, respectively 4
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended September 30,1996 and 1995,
respectively 5
Notes to Consolidated Financial Information 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II Other Information
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit 11
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
Assets
<S> <C> <C>
Cash and due from banks $10,719,291 $7,752,080
Fed funds sold 575,000 2,050,000
Investment securities:
Available for sale, 36,820,578 38,200,900
Held to maturity 38,323,867 44,406,441
Loans 138,679,767 133,479,088
Less-Allowance for possible loan losses (1,788,189) (1,716,300)
Net Loans $136,891,578 $131,762,788
Accrued interest receivable 1,960,345 1,949,266
Premises and equipment, net 5,144,410 4,998,697
Other assets 2,384,412 2,373,972
Total Assets $232,819,481 $233,494,144
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $24,709,454 $26,443,148
Interest bearing 176,777,511 177,370,635
Total deposits $201,486,965 $203,813,783
Securities sold under agreements to 1,887,537 1,767,984
purchase
Accrued interest payable 721,562 747,351
Accrued taxes and other liabilities 740,407 832,126
Advances from Federal Home Loan Bank 3,208,085 3,507,020
Total Liabilities $208,044,556 $210,668,264
Shareholders' equity:
Common stock, par value $1.00 per share
1,500,000 shares authorized, 917,070
and 899,970
shares issued $917,070 $899,970
Capital surplus 10,544,224 10,206,024
Retained earnings 13,520,223 11,778,164
Unrealized gain on securities 46,503 307,400
Employee stock ownership plan loan (253,095) (365,678)
payable
Total shareholders' equity $24,774,925 $22,825,880
Total Liabilities and Shareholders' $232,819,481 $233,494,144
Equity
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $3,329,094 $3,261,112 $9,755,614 $9,525,136
Interest on investment securities
Taxable 853,566 943,196 2,717,859 2,652,267
Tax-Exempt 276,152 266,655 836,712 797,286
Interest on federal funds sold 40,458 110,251 192,300 306,438
Total interest income $4,499,270 $4,581,214 $13,502,485 $13,281,127
Interest on deposits 1,800,212 1,975,617 5,612,381 5,576,596
Net interest income $2,699,058 $2,605,597 $7,890,104 $7,704,531
Provision for possible loan 83,426 55,439 180,675 193,946
losses
Net interest income after
provision for possible loan
losses $2,615,632 $2,550,158 $7,709,429 $7,510,585
Other operating income:
Service charges on deposit
accounts $230,765 $229,182 $678,331 $662,687
Other charges and fees 26,002 19,627 69,645 65,357
Other operating income 61,686 48,839 109,474 93,633
Gains on sales of loans and
securities available for sale 14,077 6,902 27,298 16,461
Total other operating income $332,530 $304,550 $884,748 $838,138
Other operating expenses:
Salaries and employee benefits $970,590 $956,606 $2,826,432 $2,767,894
Occupancy expense 111,542 104,750 381,591 315,336
Printing and supplies 43,171 66,630 174,255 227,657
Equipment expense 142,771 118,599 464,457 385,150
FDIC assessment 136,737 117,914 180,227 318,229
Other non-detailed expenses 403,973 379,228 1,353,119 1,293,089
Total other operating expense$1,808,784 $1,743,727 $5,380,081 $5,307,355
Income before income taxes 1,139,378 1,110,981 3,214,096 3,041,368
Provision for income taxes 351,000 347,500 1,035,000 990,150
Net income $788,378 $763,481 $2,179,096 $2,051,218
Net income per common and common
equivelent share $ 0.80 $ .81 $2.21 $2.24
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Interest received $13,622,150 $12,911,357
Service charges, fees and other inc. received 857,450 821,677
Interest paid (5,586,315) (5,920,016)
Cash paid to suppliers and employees (4,560,442) (2,881,447)
Income taxes paid (977,000) (875,000)
Net cash provided by operating activities 3,355,843 4,056,571
Cash flows from investing activities:
Proceeds from sale of investments-AFS $4,519,219 $0
Proceeds from maturities of invest securities 11,865,280 9,248,312
Purchases of investment securities-HTM (5,829,206) (19,309,902)
Purchases of investment securities-AFS (3,471,113) (986,250)
Net (increase) in loans (6,666,844) (9,730,617)
Proceeds from sale of loans 1,118,657 2,181,059
Expenditures for capital assets (550,010) (642,321)
Net cash provided by (used in) investing 985,983 (19,239,719)
activities
Cash flows from financing activities:
Net increase in demand deposits, NOW
accounts and money market accounts 4,238,721 6,062,044
Net (decrease) increase in time deposits (6,827,217) 15,217,582
Proceeds from current FHLB borrowings 0 540,511
Repayment FHLB borrowings (298,935) (262,472)
Exercise of warrants 294,650 0
Exercise of stock options 60,650 0
Increase in repos 119,553 324,488
Dividends paid (437,037) (295,927)
Net cash (used in)provided by financing (2,849,615) 21,586,226
activities
Net increase in cash and cash equivalents 1,492,211 6,403,078
Cash and cash equivalents, beginning of year 9,802,080 11,864,350
Cash and cash equivalents, end of quarter $11,294,291 $18,267,428
<PAGE>
Reconciliation of net income to
net cash provided by operating activities:
Net income $2,179,096 $2,051,218
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation 536,026 462,969
Provision for possible loan losses 180,675 193,946
(Gain) on sale of investments (12,924) 0
(Gain) on sale of loans (14,374) (16,461)
(Increase) in interest receivable (11,079) (544,324)
Amortization of bond premium 197,285 230,173
Accretion of bond discount (66,541) (55,619)
(Decrease) increase in other assets (355,563) 583,008
(Decrease) increase in interest payable (25,789) 343,420
Increase in accrued taxes
and other liabilities 749,031 808,541
Net cash provided by operating activities $3,355,843 $4,056,571
</TABLE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
September 30, 1996
Note 1 Basis of Presentation
The unaudited interim financial information includes the accounts of
Letchworth Independent Bancshares Corporation and its subsidiary, The
Bank of Castile. The financial information has been prepared in
accordance with the Summary of Significant Accounting Policies as
outlined in the Company's Form 10-KSB for the year ended December 31,
1995 and, in the opinion of management contains all adjustments
necessary to present fairly the Company's financial position as of
September 30, 1996 and December 31, 1995, the results of its
operations for the three month and nine month periods ended September
30, 1996 and 1995, respectively, and its cash flows for the nine month
periods ended September 30, 1996 and 1995, respectively.
The accounting policies of the Company conform with generally accepted
accounting principles and prevailing practices within the banking
industry. The preparation of financial information in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial information and the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period presentation.
Note 2 Loans
Loans consist of the following:
September 30, December-31
1996 1995
(unaudited)
Agricultural loans $25,768,551 $25,168,552
Commercial and industrial loans 26,250,251 23,317,057
Real estate loans:
Secured by 1 to 4 family
residential properties 45,255,125 41,120,730
Other 31,673,334 33,917,880
$76,928,459 $75,038,610
Consumer loans 9,732,506 9,954,869
$138,679,768 $133,479,088
<PAGE>
Letchworth Independent Bancshares
Notes, Continued
An analysis of changes in
allowance for possible loan losses
is as follows:
September 30, September 30,
1996 1995
(unaudited) (unaudited)
Balance, beginning of year $1,716,300 $1,526,877
Provision, expense 180,675 193,945
Charge-offs 133,051 155,164
Recoveries 24,265 60,105
Balance, end of period $1,788,189 $1,625,763
The following table summarized the Company's non-performing loans at
the dates indicated.
September 30,
1996 1995 1994
Non-accruing loans $503,644 $190,257 $217,287
Accruing loans past due 90 days or more 216,883 162,074 385,458
Renegotiated loans 0 0 0
The average balance of impaired loans during the first nine months of
1996 was approximately $291,238. At September 30, 1996, the balance
of impaired loans and related reserve against that balance was
$361,151 and $137,464, respectively. Interest income recognized on
impaired loans and interest income recognized on a cash basis was not
significant.
Note 3 Investment Securities
The book and approximate market
value of investment securities
at September 30, 1996:
<TABLE>
September 30, 1996 December 31, 1995
Amortized Market Amortized Market
Cost Value Cost Value
(unaudited) (unaudited) (unaudited) (unaudited)
Available for Sale
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S.Government
corporations and agencies $28,897,597 $29,076,681 $31,907,710 $32,380,800
State and political subdivision
obligations $501,490 $506,610 $1,054,794 $1,070,000
Mortgage-Backed Securities $6,459,058 $6,422,387 $4,086,984 $4,113,800
Federal Home Loan Bank stock $814,900 $814,900 $636,300 $636,300
$36,673,045 $36,820,578 $37,685,788 $38,200,900
<PAGE>
Letchworth Independent Bancshares
Notes, Continued
Held to Maturity
U.S. Treasury securities and
obligations of U.S.Government
corporations and agencies $12,300,722 $12,457,093 $15,992,787 $16,483,900
State and political subdivision
obligations $20,326,483 $20,825,307 $21,674,732 $22,396,100
Mortgage-Backed Securities $5,696,662 $5,674,064 $6,738,922 $6,742,500
$38,323,867 $38,956,464 $44,406,441 $45,622,500
</TABLE>
Note 4 Earnings Per Share
Earnings per share are based on the weighted average number of common,
and when applicable, common equivalent shares outstanding during the
period.
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1996
Financial Condition
Total assets of Letchworth Independent Bancshares
Corporation (the "Company") were $232.8 million as of
September 30, 1996, a decrease of $.7 million, or .29%,
below total assets at December 31, 1995. Deposits, the
Company's primary source of funds, decreased $2.3 million,
or 1.14%, to $201.5 million at September 30, 1996. The
primary reason for the decrease in deposits was the
Company's conscious effort to be less aggressive in bidding
for municipal certificates of deposit.
Total loans outstanding as of September 30, 1996 increased
by $5.2 million, or 3.90%, over total loans at December 31,
1995. The total loans outstanding figure of $138.7 million
is net of loans sold. As of September 30, 1996, residential
real estate loans increased by $4.1 million or 10.05%;
agricultural loans increased $.6 million or 2.38%;
commercial and industrial loans increased $ 2.9 million or
12.58%; consumer loans decreased $.2 million or 2.23%; and
other real estate loans decreased $2.2 million or 6.62%.
Consumer loans have continued to decrease slowly over the
past several years as a result of increased competition from
non-bank organizations and the Company's focus on different
loan products.
The Company's shareholders' equity increased to $24.8
million, an increase of 8.54% or $ 1.9 million from December
31, 1995. As of September 30, 1996, 15,600 warrants or 7.8%
of the original 200,000 warrants outstanding have been
exercised at $23 per share
The Risk-based capital ratios are a very good indicator of
the Company's financial soundness. As of September 30,
1996, the Company had a Tier 1 capital ratio of 17.10%, a
total capital ratio of 18.35%, and a Tier 1 leverage ratio
of 10.46%. Each of these ratios compares favorably with the
regulatory minimum requirements of 4.00%, 8.00%, and 4.00%,
respectively.
"Potential problem loans" consist of loans which are
generally secured and not currently considered
nonperforming, but where information about possible credit
problems has caused management to have doubts as to the
ability of such borrowers to comply with present repayment
terms. As of September 30, 1996, the Company considers
$2,548,473 to be "potentially problem loans", as described
above. Historically, however, only a very small portion of
those loans have resulted in actual losses for the Company.
Loans, including impaired loans, are placed on non-accrual
status in accordance with policies established by
management. A loan is considered impaired when it is
probable that the bank will be unable to collect all amounts
due according the the contractual terms of the loan
agreement. Loans are generally transferred to non-accrual
status when principal or interest payments become ninety
days past due. Any accrued but uncollected interest
previously recorded on such loans is reversed in the current
period and interest income is subsequently recognized only
when actually collected. Loans are returned to accrual
status when management determines that the circumstances
have improved to the extent that both principal and interest
are deemed collectible and there has been a sustained period
of repayment performance. The Company may continue to
accrue interest on loans past due ninety days or more which
are well secured and in the process of collection.
Liquidity measures the ability of the Company to meet its
maturing obligations and existing commitments, to withstand
fluctuations in deposit levels, to fund its operations, and
to provide for customer credit needs. At September 30,
1996, the Company sold $.6 million in federal funds. These
funds are available on one day notice to meet upcoming
obligations. However, due to the low return available on
federal funds, the Company has attempted to minimize the
level of federal funds while maintaining adequate daily
liquidity. Pursuing this aggressive cash policy may cause
the Company to experience a negative excess cash position at
certain times. Specifically, during the nine months ended
September 30, 1996, overnite lines of credit were utilized
for twenty-two days in order to access additional liquidity.
As additional sources of liquidity, the Company may also
sell loans on the secondary market or participate large
commercial loans with other financial institutions.
Results of Operations - Three Months Ended September 30,
1996 Compared to Three Months Ended September 30, 1995
Net income of $788,378 for the three months ended September
30, 1996 represents an increase of $24,897, or 3.26%, over
the $763,481 earned during the same period ended September
30, 1995. Net income per common share and common share
equivalent was $.80 for the three months ended September 30,
1996 compared to $.81 for the same period in 1995. This
decrease was primarily due to changes in the dilutive effect
of outstanding options and warrants on the earnings per
share calculation.
Net interest income was $2.7 million for the three months
ended September 30, 1996, up 3.59% from the $2.6 million
earned during the three months ended September 30, 1995.
Lower interest rates on interest earning assets was more
than offset by increased volume over the second quarter of
1995. Interest expense on deposits decreased by $175,405.
The provision for possible loan losses, the charge to
earnings for potential credit losses associated with lending
activities, was $83,426 for the three months ended September
30, 1996, up 50.48% from the $55,439 provision recorded
during the three months ended September 30, 1995. Net charge-
offs were $45,344 in the third quarter of 1996, as compared
to $16,058 for the same period last year.
Other operating expense for the three month period ended
September 30, 1996 was $1,808,784, an increase of 3.73% over
the $1,743,727 recorded for the same period in the prior
year. Increases in this category occurred in the following
areas: occupancy expense increased by $6,792 or 6.48%;
equipment expense increased by $24,172 or 20.38%; salaries
and employee benefits increased by $13,984 or 1.46%; and
FDIC assessment increased by $18,823 or 15.96%. In addition,
printing and supplies expense decreased by $23,459.
Results of Operations - Nine Months Ended September 30, 1996
Compared to Nine Months Ended September 30, 1995
Net income of $2,179,096 for the nine months ended September
30, 1996 represents an increase of $127,877, or 6.23%, over
the $2,051,219 earned during the same period ended September
30, 1995. Net income per common share and common share
equivalent was $2.21 for the nine months ended September 30,
1996 compared to $2.24 for the same period in 1995. This
decrease was primarily due to changes in the dilutive effect
of outstanding options and warrants on the earnings per
share calculation.
Net interest income increased to $7.9 million for the nine
months ended September 30, 1996, up 2.41% from the $7.7
million earned during the nine months ended September 30,
1995. Lower interest rates on interest earning assets was
more than offset by increased volume for the third quarter
of 1996, when compared to the third quarter of 1995.
Interest expense on deposits remained virtually unchanged
for the nine months ended September 30, 1996 as compared to
the nine months ended September 30, 1995.
The provision for possible loan losses, the charge to
earnings for potential credit losses associated with lending
activities, was $180,675 for the nine months ended September
30, 1996, down 6.84% from the $193,946 provision recorded
during the nine months ended September 30, 1995. Net charge
offs were $108,786 in the nine months ended September 30,
1996, as compared to $95,059 for the same period last year.
Management conducts a periodic evaluation which assigns risk
weights for individual loans and different classes of loan
groups in determining the adequacy of the reserve.
Regulatory examination, historical gross loan losses, an
assessment of prevailing and anticipated economic conditions
and other relevant factors are used in this analysis.
Management of the Company believes this analysis indicates
that the level of the loan loss reserve is adequate to
absorb any potential losses within the loan portfolio. The
allowance for possible loan losses of the Company at
September 30, 1996 was $1,788,189 or 1.29% of total loans
and is up 4.19% or $71,889 from the allowance at December
31, 1995.
Other operating expense for the nine month period ended
September 30, 1996 was $5,380,081, an increase of 1.37% over
the $5,307,355 recorded for the same period in the prior
year. Increases in this category occurred in the following
areas: salaries and employee benefits expense increased by
$58,538 or 2.11%; occupancy expense increased by $66,255 or
21.01%; equipment expense increased by $79,307 or 20.59%.
All salary increases throughout the organization took effect
on January 1st of this year. This represents a change in
practice from previous years, when such increases took place
throughout the year. The increase in occupancy expense
results mainly from the major addition to the operations
center building. In addition, printing and supplies expense
decreased by $53,402 in the first nine months of 1996,
compared to the first nine months of 1995, while the FDIC
assessment dropped by $138,002 during the same period. The
Bank recognized $120,000 in expense during the third quarter
for a one-time assessment on all SAIF-insured deposits.
This charge, which is payable in the fourth quarter of 1996,
received final congressional approval in September of this
year. The Company acquired SAIF funds from its 1992
purchase of certain deposits from Anchor Savings Bank, and
virtually all of the 1996 assessment is attributed to those
deposits.
Other Events of Significance:
Letchworth Independent Bancshares Corporation has
implemented a major core software system upgrade during the
second quarter of 1996. This enhancement is expected to
generate increased operating efficiency. The Company
installed a new check imaging system in September of this
year. This equipment is expected to greatly improve
customer service. Additionally, it will help to reduce
costs by reducing statement preparation time, lowering
postage costs, and by streamlining research time. Per the
Company's 1996 Strategic Plan, various non-bank
opportunities, including financial, trust and insurance
related businesses, are being considered.
<PAGE>
OTHER INFORMATION
ITEM 6. Exhibits and Reports on From 8-K
(a) Index to Exhibits
3(a) Certificate of Incorporation of Registrant filed by the New
York Department of State on July 17, 1981, incorporated by reference
to the Registrant's Registration Statement on Form S-18 (Reg. No. 33-
31149-NY), filed with the commission on September 2, 1989 and wherein
such Exhibit is designed Exhibit 3(a).
3(b) Certificate of Amendment of Certificate of Incorporation of
Registrant filed by the New York Department of State on July 26, 1989,
incorporated by reference to the Registrant's Registration Statement
on Form S-18 (Reg. No. 33-31149-NY), filed with the Commission on
September 2, 1989, and wherein such Exhibit is designated Exhibit
3(b).
3(c) Certificate of Amendment to Certificate of Incorporation of
Registrant filed by the New York Department of State on May 2, 1990,
incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1990 and filed with the Commission
on August 9, 1990, and wherein such Exhibit is designed Exhibit (4)b.
3(d) Bylaws of Registrant, as amended by the stockholders of the
Registrant at a special meeting of stockholders on July 11, 1989,
incorporated by reference to the Registrant's Registration Statement
on From S-18 (Reg. No. 33-31149-NY), filed with the Commission on
September 2, 1989 and wherein such Exhibit is designated Exhibit 3(c).
4(a) Form of Common Stock Certificate of Registrant, incorporated by
reference to the Registrant's Amendment No. 1 to Form s-18
Registration Statement (Reg. No. 33-31149-NY), filed with the
Commission on October 31, 1989, and wherein such Exhibit is designated
Exhibit 4.
4(b) Letchworth Independent Bancshares Corporation Stock Option Plan
of 1990 and form of Stock Option Agreement, incorporated by reference
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1990 and filed with the Commission on August 9, 1990,
and wherein such Exhibit is designated Exhibit 4.
4(c) Form of Warrant of Registrant, and Warrant Agreement, dated as
of September 27, 1993, by and between Registrant and Mellon Securities
Trust Company, incorporated by reference to the registrants annual
report on Form 10KSB for the year ended 12/31/94, filed with the
Commission on March 31, 1995, and therein such Exhibit is designated
Exhibit 4(c).
11 Computation of Earnings Per Share for the quarter ended June
30, 1996 is presented on Exhibit 11 of this Report on Form 10-QSB.
(b). The Registrant did not file any current reports on Form 8-K
during the quarter ended September 30, 1996.
<PAGE>
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.
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
Date_11/7/96 /s/ James W. Fulmer
James W. Fulmer
President & Chief Executive Officer
Date_11/7/96 /s/ Steven C. Lockwood
Steven C. Lockwood
Treasurer & Chief Financial Officer
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
COMPUTATION OF EARNINGS PER SHARE
September 30, 1996
Exhibit 11:
Nine Months Ended
September 30, 1996
Net income $2,179,096
Add: Adjustment due to assumed interest
savings on debt reduction 1,698
Adjusted Net Income $2,180,794
Weighted average number of shares
outstanding 912,520
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 87,171
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (13,140)
Adjusted common and common equivalent shares 986,551
Net Income per common and common equivalent
share $ 2.21
Three Months Ended
September 30, 1996
Net income $788,378
Add: Adjustment due to assumed interest
savings on debt reduction 0
Adjusted Net Income $788,378
Weighted average number of shares
outstanding 917,070
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 82,244
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (11,390)
Adjusted common and common equivalent shares 987,924
Net Income per common and common equivalent
share $ .80
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 10719
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 575
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 36821
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0
0
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</TABLE>
