<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C., 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the quarterly period ended: September 30, 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: 0-11671
POCAHONTAS BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
West Virginia 55-0628089
------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
500 Federal Street, Bluefield, WV 24701
--------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (304) 325-8181
--------------
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
---- ----
The number of shares outstanding of the registrant's $1.25 par value common
stock, as of November 11, 1998, was 2,000,000 shares.
1
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION
Financial Statements
<S> <C>
Consolidated Statements of Financial Condition.............. 3
Consolidated Statements of Income........................... 4
Consolidated Statements of Cash Flows....................... 5
Consolidated Statements of Changes in Stockholders' Equity.. 6
Notes to Consolidated Financial Statements....................... 6 - 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 9 - 10
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8-K................................. 10
SIGNATURES....................................................... 10
</TABLE>
The total number of pages of the Form 10-Q Quarterly Report is ten (10) pages.
2
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data) September 30, December 31,
1998 1997
ASSETS (Unaudited) (Audited)
----------------- -----------------
<S> <C> <C>
Cash and due from banks $ 10,108 $ 8,883
Interest-bearing balances with banks 4,211 2,013
Securities available for sale: (cost approximated $43,819 at
September 30, 1998, and $36,024 at December 31, 1997) 44,458 36,177
Securities held to maturity: (market value approximated $13,087 at
September 30, 1998 and $17,516 at December 31, 1997) 12,934 17,334
Federal funds sold 6,000 3,400
Loans 199,939 197,094
Less allowance for loan losses 2,533 2,370
------------- -------------
Net loans 197,406 194,724
Premises and equipment 9,327 8,660
Real estate owned other than bank premises 680 993
Other assets 3,970 4,213
Goodwill and other intangible assets 1,721 350
------------- -------------
TOTAL ASSETS $ 290,815 $ 276,747
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 32,149 $ 27,923
Interest-bearing 216,385 204,414
------------- -------------
Total deposits 248,534 232,337
Federal funds purchased and securities sold under
agreements to repurchase 11,162 12,838
Demand notes to U. S. Treasury and other
liabilities for borrowed money 1,300 4,200
Other liabilities 1,494 783
------------- -------------
TOTAL LIABILITIES 262,490 250,158
------------- -------------
STOCKHOLDERS' EQUITY
Common stock - par value per share $1.25
Shares authorized: 10,000,000
Shares issued and outstanding: 2,000,000 2,500 2,500
Paid-in capital 785 785
Retained earnings 24,632 23,223
Accumulated other comprehensive income 408 81
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 28,325 26,589
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 290,815 $ 276,747
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(Dollars in thousands, except per share data)
INTEREST INCOME 1998 1997 1998 1997
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest and fees on loans $ 4,814 $ 4,406 $ 14,082 $ 12,876
Interest on balances with banks 76 24 138 65
Interest and dividends from securities available
for sale:
Taxable 665 567 1,890 1,601
Interest and dividends from securities held
to maturity:
Taxable 90 298 328 1,109
Tax-exempt 93 102 252 307
Interest on federal funds sold 115 56 285 160
------------ ------------- ------------- -------------
TOTAL INTEREST INCOME 5,853 5,453 16,975 16,118
INTEREST EXPENSE
Interest on time certificates of $100,000 or 335 269 936 831
more
Interest on other deposits 2,084 1,915 5,975 5,738
Interest on federal funds purchased and
securities
sold under agreements to repurchase 167 138 455 390
Interest on demand notes to U. S. Treasury
and other liabilities for borrowed money 21 20 60 59
------------ ------------- ------------- -------------
TOTAL INTEREST EXPENSE 2,607 2,342 7,426 7,018
------------ ------------- ------------- -------------
Net interest income 3,246 3,111 9,549 9,100
Provision for loan losses 124 204 445 583
------------ ------------- ------------- -------------
Net interest income after provision for loan losses 3,122 2,907 9,104 8,517
NONINTEREST INCOME
Income from fiduciary activities 230 284 740 744
Other operating income 419 371 1,193 1,095
Gains (losses) on sale of securities (14) (59)
------------ ------------- ------------- -------------
TOTAL NONINTEREST INCOME 649 655 1,919 1,780
NONINTEREST EXPENSE
Salaries, wages, and other employee benefits 1,181 1,097 3,501 3,303
Premises and equipment expense 372 341 1,001 940
Other noninterest expense 928 875 2,747 2,641
------------ ------------- ------------- -------------
TOTAL NONINTEREST EXPENSE 2,481 2,313 7,249 6,884
------------ ------------- ------------- -------------
Income before income taxes 1,290 1,249 3,774 3,413
Provision for income taxes 470 432 1,365 1,192
------------ ------------- ------------- -------------
NET INCOME $ 820 $ 817 $ 2,409 $ 2,221
============ ============= ============= =============
NET INCOME PER COMMON SHARE:
Basic $ 0.41 $ 0.41 $ 1.20 $ 1.11
Diluted $ 0.41 $ 0.41 $ 1.20 $ 1.11
AVERAGE SHARES OUTSTANDING:
Basic 2,000,000 2,000,000 2,000,000 2,000,000
Diluted 2,001,794 2,000,000 2,000,598 2,000,000
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Nine Months Ended
September 30,
--------------
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES 1998 1997
------------------ -------------
<S> <C> <C>
Net income $ 2,409 $ 2,221
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 445 583
Depreciation and amortization 560 465
Securities losses 14 59
Net investment amortization and accretion 102 196
Net decrease in interest receivable and other assets 301 639
Net increase in interest payable and other liabilities 531 480
------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,362 4,643
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in federal funds sold (2,600) 5,750
Purchases of securities held to maturity (2,580) (500)
Purchases of securities available for sale (16,428) (13,057)
Proceeds from maturities and calls of securities held to
maturity 6,940 15,858
Proceeds from maturities and calls of securities available for
sale 7,315 --
Proceeds from sales of securities available for sale 883 1,751
Net decrease (increase) in loans 394 (9,395)
Net cash received from branch acquisition 8,510 --
Acquisition of fixed assets (729) (963)
------------- -------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 1,705 (556)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand and savings deposits 3,880 (4,728)
Net decrease in time deposits (948) (5,808)
Net increase (decrease) in short-term borrowings (4,576) 3,717
Cash dividends paid (1,000) (900)
------------- -------------
NET CASH USED BY FINANCING ACTIVITIES (2,644) (7,719)
------------- -------------
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS 3,423 (3,632)
CASH AND DUE FROM BANKS AT JANUARY 1, 10,896 14,403
------------- -------------
CASH AND DUE FROM BANKS AT SEPTEMBER 30, $ 14,319 $ 10,771
============= =============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 7,001 $ 6,702
Income taxes $ 1,420 $ 924
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
(Unaudited) Nine Months Ended
September 30,
-------------
(Dollars in thousands)
1998 1997
------------- -------------
<S> <C> <C>
BALANCE, JANUARY 1, $ 26,589 $ 24,629
Net income 2,409 2,221
Cash dividends declared - $0.50 per share in 1998
and $0.45 per share in 1997 1,000 900
Other comprehensive income 327 219
------------- -------------
BALANCE, SEPTEMBER 30, $ 28,325 $ 26,169
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Rule 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 considered necessary
for a fair presentation have been included. All such adjustments were of a
normal recurring nature. Certain reclassifications have been made to the prior
period's financial statements to place them on a comparable basis with the
current period's financial statements. Operating results are for the nine-month
period ended September 30, 1998, and are not necessarily indicative of the
results that may be expected for the year ending December 31, 1998. For further
information refer to the financial statements and footnotes thereto included as
Exhibit 13 to Corporation's annual report on Form 10-K for the year ended
December 31, 1997.
NOTE B - COMPREHENSIVE INCOME
On January 1, 1998, the Corporation adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income. As required by SFAS No. 130,
prior year information has been modified to conform with the new presentation.
Comprehensive income includes net income and all other changes to the
Corporation's equity, with the exception of transactions with shareholders
("other comprehensive income"). The Corporation's only component of other
comprehensive income is the change in unrealized gains and losses on available
for sale securities.
The Corporation's total comprehensive income for the nine-month periods ended
September 30, 1998 and 1997 was $2,736,000 and $2,440,000, respectively.
Information concerning the Corporation's other comprehensive income for the
nine-month periods ended September 30, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Unrealized gains on available for sale securities $ 473 $ 237
Income tax liability relating to
unrealized gains on available for sale securities (160) (77)
Reclassification adjustment for losses recognized in net income 14 59
----- -----
Other comprehensive income (loss) $ 327 $ 219
===== =====
</TABLE>
6
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
September 30, 1998
NOTE B - EARNINGS PER SHARE
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards ("SFAS") No. 128, "Accounting for Earnings Per Share".
This standard requires dual presentation of basic and diluted earnings per share
on the face of the statements of operations and requires a reconciliation of the
numerators and denominators of the basic and diluted earnings per share
calculations. The Corporation adopted SFAS No. 128 retroactive to January 1,
1995. For the periods ending prior to July 1, 1998, there were no adjustments
to either the numerator or denominator for the purpose of calculating diluted
earnings per share as the Corporation had no common stock equivalents. The
following tables reconcile the numerator and denominator of the basic and
diluted computations for income from continuing operations:
<TABLE>
<CAPTION>
For the three months ended September 30, 1998
-----------------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
--------------- ---------------- ------------
<S> <C> <C> <C>
Basic EPS
Income available to
common shareholders $ 819,292 2,000,000 $0.41
============
Effect of dilutive securities-
Stock options 0 1,794
-------------- ---------------
Diluted EPS
Income available to common
shareholders and assumed conversions $ 819,292 2,001,794 $0.41
============== =============== ============
<CAPTION>
For the nine months ended September 30, 1998
-----------------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
-------------- --------------- ------------
<S> <C> <C> <C>
Basic EPS
Income available to
common shareholders $2,408,831 2,000,000 $1.20
============
Effect of dilutive securities-
Stock options 0 598
-------------- ---------------
Diluted EPS
Income available to common
shareholders and assumed conversions $2,408,831 2,000,598 $1.20
============== =============== ============
</TABLE>
NOTE C - COMPENSATION PLANS
During 1998, the Corporation adopted the 1998 Officer Stock Option Plan (the
"Officer Plan") which provides for the issuance of options to purchase shares of
the Corporation's common stock to officers of the Corporation and its
subsidiaries. The options have an original term of ten years with an exercise
price equal to the market price of the common stock on the date of grant, as
defined by the plan. The options vest 20% per year after their date of grant.
During the three months ended September 30, 1998, 58,470 options were granted
under the Officer Plan at an exercise price of $20.25 per share. The weighted
average life of the outstanding options is 84 months. At September 30, 1998,
options for 111,530 shares of common stock were reserved for future issuance for
the Officer Plan. As of September 30, 1998, no options had been exercised under
the Officer Plan.
7
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
September 30, 1998
NOTE C - COMPENSATION PLANS (Continued)
During 1998, the Corporation adopted the 1998 Director Stock Option Plan (the
"Director Plan") which provides for the issuance of options to purchase shares
of the Corporation's common stock to directors of the Corporation and its
subsidiaries. The options have an original term of ten years with an exercise
price equal to the market price of the common stock on the date of grant, as
defined by the plan. The options are fully vested upon their date of grant.
During the three months ended September 30, 1998, 20,000 options were granted
under the Director Plan at an exercise price of $20.25 per share. The weighted
average life of the outstanding options is 72 months. At September 30, 1998,
options for 10,000 shares of common stock were reserved for future issuance for
the Director Plan. As of September 30, 1998, no options had been exercised
under the Director Plan.
The Corporation accounts for the Officer Plan and the Director Plan under the
provision of SFAS No. 123, "Accounting for Stock Based Compensation". As
permitted by SFAS No. 123, the Corporation has chosen to apply APB Opinion No.
25, "Accounting for Stock Issued to Employees" and related interpretations in
accounting for its plans. Accordingly, no compensation cost had been recognized
for options granted under the plans. Had compensation cost for the
Corporation's plans been determined based on the fair value at the grant dates
for awards under the plans consistent with the method of SFAS No. 123, the
Corporation's net income and net income per share would have been decreased to
the pro forma amounts indicated below. The Corporation did not award any option
grants prior to July 1, 1998, therefore, there are no pro forma amounts for
prior periods.
<TABLE>
<CAPTION>
1998 1998
3 Months Ended 9 Months Ended
---------------------- ------------------------
As Reported Pro Forma As Reported Pro Forma
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net income $819,292 $792,825 $2,408,830 $2,382,363
======== ======== ========== ==========
Net income per share $ 0.41 $ 0.40 $ 1.20 $ 1.19
======== ======== ========== ==========
</TABLE>
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for the 1998 grants; 8% dividend yield; expected volatility of
3.31%; risk-free interest rate of 5.46%; and expected life of six years for
directors and seven years for officers.
NOTE D - REGULATORY CAPITAL REQUIREMENTS
Regulators of the Corporation and its subsidiaries have implemented risk-based
capital guidelines which require the maintenance of certain minimum capital as a
percent of assets and certain off-balance sheet items adjusted for predefined
credit risk factors. The regulatory minimums as defined by regulation for Tier
1 and combined Tier 1 and Tier 2 capital ratios were 4.0% and 8.0% respectively.
Tier 1 capital includes tangible common shareholders' equity reduced by goodwill
and certain other intangibles. Tier 2 capital includes portions of the
allowance for loan losses, not to exceed Tier 1 capital. In addition to the
risk-based guidelines, a minimum leverage ratio (Tier 1 capital as a percentage
of average total consolidated assets) of 4% is required. The following table
contains the capital ratios for the Corporation and each subsidiary as of
September 30, 1998 and 1997.
<TABLE>
<CAPTION>
1998 1997
---- ----
Combined Capital Combined Capital
Entity Tier 1 (Tier 1 and Tier 2) Leverage Tier 1 (Tier 1 and Tier 2) Leverage
------- ------------------- --------- ------- ------------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Consolidated.............. 12.78% 14.02% 8.84% 13.11% 14.30% 9.31%
First Century Bank, N.A... 12.39% 13.62% 8.48% 12.87% 14.06% 9.15%
First Century Bank........ 13.18% 14.43% 9.60% 12.45% 13.65% 8.61%
</TABLE>
8
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
During the third quarter of 1998 net income remained essentially unchanged from
the $817,000 earned during the third three-month period of 1997, at $820,000
earned during the same period in 1998. There was an improvement in the interest
margin of $135,000, or 4.3%, and the provision for loan losses decreased
$80,000, or 39.2%. However, these improvements were offset by an increase in
noninterest expenses of $168,000 or 7.3%. These changes can primarily be
attributed to the acquisition of the Bluefield, Virginia branch of First
American FSB, which was completed during the second quarter of 1998. Earnings
per share for the third quarter of 1998 and 1997 were $0.41. When compared to
the second quarter of 1998, net income decreased $44,000, from $864,000 for the
quarter ended June 30, 1998, to $820,000 for the quarter ended September 30,
1998. This was attributable to increases in the interest margin of $33,000, and
a reduction the provision for loan losses of $9,000 being offset by an increase
in noninterest expenses of $16,000 and a reduction in noninterest income of
$90,000 when compared with the second quarter of 1998. The reduction in
noninterest income was a result of lower fees from fiduciary activities of
$100,00 when compared with the second quarter of 1998. Earnings per share
decreased $0.02 per share from $0.43 per share for the quarter ended June 30,
1998, to $0.41 per share for the quarter ended September 30, 1998.
The performance during the third quarter enhanced the earnings for the nine-
month period ended September 30, 1998. Net income was $2,409,000 for the first
nine months of 1998 which was an increase of $188,000, or 8.5%, over the 1997
level of $2,221,000. Increases in the interest margin of $449,000, or 4.9%, and
noninterest income of $139,000, or 7.8%, contributed to the improved earnings.
Noninterest expenses increased $365,000, or 5.3%, to $7,249,000 for the nine
months ended September 30, 1998, from $6,884,000 for the same period in 1997,
reflecting increases in personnel expenses and other operating costs. The
Corporation's performance through September 30, 1998 reflects an annualized
return on average assets of 1.11% and a return on average equity of 11.70%.
Earnings per share for the nine-month period ended September 30, 1998 were $1.20
compared to $1.11 per share for 1997. For a further discussion of earnings per
share, refer to Note B Earnings Per Share, of the Notes to Consolidated
Financial Statements, presented elsewhere in this report.
Total assets increased approximately $14.1 million from December 31, 1997 to
September 30, 1998. This growth was primarily the result of the completion of
an acquisition of the Bluefield, Virginia branch of First American FSB, Roanoke,
Virginia, during the second quarter of 1998. Total assets at September 30, 1998
were $290.8 million as compared to $276.7 million at December 31, 1997. The
loan portfolio increased to $199.9 million or an increase of $2.8 million or
1.4%. The investment portfolio increased approximately $3.9 million or 7.3%
during the first nine months of 1998. As previously discussed, total deposits
increased approximately $16.2 million during the first three quarters of 1998,
with approximately $12.0 million of this increase occurring in the interest-
bearing category.
The Year 2000 (Y2K) problem continues to be a major focus of the financial
services industry. The Corporation has been working diligently on this problem
for many months. A member of senior management is directing this effort.
Internal reviews of all software and hardware have now been completed. Internal
test and contingency plans have been developed for all mission critical
applications and actual testing on these systems should be completed by December
31, 1998. Additionally, the Corporation's subsidiary banks are undergoing
quarterly reviews by their primary regulators. Management is very focused on
its efforts to provide for minimal disruptions to its operations as a result of
this problem. The total cost associated with the corporation's plan to be Year
2000 compliant, a significant portion of which is consulting fees of $2,000 per
month, is not expected to be material to the Corporation's financial position.
The failure to correct a material Y2K problem could result in an interruption
in, or a failure of, normal business activities. However, management believes
the more significant risk to the Corporation is in the efforts of its loan
customers to become Y2K compliant. Failure to do so could result in a
customer's inability to repay its contractual loan obligations, the
Corporation's largest asset. The Corporation is continuing its undertaking to
inform and assist key customers in their Y2K compliance efforts. An educational
program including brochures and seminars for customers has been implemented. By
helping its customers understand the significance of Year 2000, management
believes it will further reduce the Corporation's exposure to loss.
9
<PAGE>
POCAHONTAS BANKSHARES CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
As was previously reported, on July 31, 1998, the Corporation's board of
directors unanimously approved an agreement in principle to acquire First
National Bankshares Corporation, the parent company of First National Bank,
which has offices in Ronceverte, Lewisburg and Charleston, West Virginia. The
board of directors of First National also unanimously approved this agreement.
The transaction was subject to, among other conditions, the negotiation and
execution of a definitive and legally binding merger agreement. Effective
September 11, 1998, negotiations were terminated due to the parties' inability
to come to a fundamental agreement over various aspects of the proposal.
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K.
(a.) Exhibit 27 - Financial Data Schedule
(b.) On September 15, 1998, the Corporation filed a current report on
Form 8-K announcing the termination of negotiations for a legally
binding merger agreement to acquire First National Bankshares
Corporation, Ronceverte, West Virginia.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
(Registrant) Pocahontas Bankshares Corporation
---------------------------------
By: /s/ J. Ronald Hypes
----------------------------------
J. Ronald Hypes, Treasurer
(Principal Accounting and Financial Officer)
Date: November 11, 1998
---------------------------
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 10,108
<INT-BEARING-DEPOSITS> 4,211
<FED-FUNDS-SOLD> 6,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 44,458
<INVESTMENTS-CARRYING> 12,934
<INVESTMENTS-MARKET> 13,087
<LOANS> 199,939
<ALLOWANCE> 2,533
<TOTAL-ASSETS> 290,815
<DEPOSITS> 248,534
<SHORT-TERM> 12,462
<LIABILITIES-OTHER> 1,494
<LONG-TERM> 0
0
0
<COMMON> 2,500
<OTHER-SE> 25,825
<TOTAL-LIABILITIES-AND-EQUITY> 290,815
<INTEREST-LOAN> 14,082
<INTEREST-INVEST> 2,470
<INTEREST-OTHER> 423
<INTEREST-TOTAL> 16,975
<INTEREST-DEPOSIT> 6,911
<INTEREST-EXPENSE> 7,426
<INTEREST-INCOME-NET> 9,549
<LOAN-LOSSES> 445
<SECURITIES-GAINS> (14)
<EXPENSE-OTHER> 7,249
<INCOME-PRETAX> 3,774
<INCOME-PRE-EXTRAORDINARY> 2,409
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,409
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.20
<YIELD-ACTUAL> 0.00
<LOANS-NON> 1,754
<LOANS-PAST> 77
<LOANS-TROUBLED> 637
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,370
<CHARGE-OFFS> 337
<RECOVERIES> 55
<ALLOWANCE-CLOSE> 2,533
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
