<PAGE> 1
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, 1995, 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 2-71332
-------------------------
TWENTIETH BANCORP, INC.
(Exact name of registrant as specified in its charter)
WEST VIRGINIA 55-0634729
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1900 THIRD AVENUE
HUNTINGTON, WEST VIRGINIA
(Address of principal executive offices)
25703-0527
(Zip code)
(304) 526-6200
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and
(2) has been subject to such filing requirements for the past 90
days.
Yes X No
The number of shares outstanding of each of the issuer's classes
of common stock was 1,800,000 shares of common stock, par value
$1.00, outstanding as of November 14, 1995.
<PAGE> 2
FINANCIAL STATEMENTS
TWENTIETH BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994 1994
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks $ 12,115,690 $ 12,087,479 $ 15,323,903
Federal Funds Sold and Securities
Purchased under Reverse Repurchase
Agreements 7,450,000 3,400,000 --
Investment Securities: (Note 2)
Held to Maturity 36,142,833 46,696,717 41,522,115
Available for Sale 55,546,417 40,732,071 40,593,569
----------- ----------- -----------
Total Investment Securities 91,689,250 87,428,788 82,115,684
Loans, net of unearned discount
(Note 3) 196,485,072 196,203,292 205,291,973
Less: Allowance for loan losses 2,000,000 1,725,000 1,825,000
----------- ----------- -----------
Loans - Net 194,485,072 194,478,292 203,471,460
----------- ----------- -----------
Bank Premises and Equipment - net 6,960,654 7,007,354 6,860,818
Earned Income Receivable 2,642,659 2,520,693 2,598,154
Other Real Estate Owned 24,000 57,500 260,751
Excess of cost over net assets
of acquisition, unamortized 946,685 1,054,067 1,027,221
Other Assets 519,074 818,685 1,012,955
----------- ----------- -----------
Total Assets $316,833,084 $308,852,858 $312,670,946
============ ============ ============
LIABILITIES
Deposits:
Demand 39,993,129 38,114,155 45,481,873
Demand-Interest Bearing 47,278,073 55,037,480 51,613,982
Savings 78,131,057 101,825,434 97,042,562
Time 97,122,620 69,592,392 74,181,796
Time Deposits $100,000 and over 15,035,467 9,872,771 10,743,542
----------- ----------- -----------
Total Deposits 277,560,346 274,442,232 279,063,755
Federal Funds Purchased and Securities
Sold under Repurchase Agreements
(Note 4) 4,065,000 3,740,000 3,225,000
Long Term Debt 134,318 151,036 148,988
Other Liabilities 2,480,886 1,211,080 923,634
----------- ----------- -----------
Total Liabilities 284,240,550 279,544,348 283,361,377
----------- ----------- -----------
<PAGE> 3
SHAREHOLDERS' EQUITY
Common Stock, $1.00 par value;
3,600,000 shares authorized,
1,800,000 issued, and outstanding* 1,800,000 1,500,000 1,500,000
Surplus 7,500,000 7,500,000 7,500,000
Retained Earnings 23,343,064 21,129,385 21,559,410
Net Unrealized Loss on
Investment Securities -
Available for Sale ( 50,530) (810,375) (1,249,841)
Treasury Stock, 200 shares at cost -- ( 10,500) --
----------- ----------- -----------
Total Shareholders' Equity 32,592,534 29,308,510 29,309,569
----------- ----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $316,833,084 $308,852,858 $312,670,946
============ ============ ============
</TABLE>
[CAPTION]
See accompanying notes to consolidated financial statements.
* Outstanding shares for periods prior to May 22, 1995
had Common Stock of $2.50 par value and 600,000 shares
issued and outstanding.
<PAGE> 4
TWENTIETH BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans $4,568,556 $4,004,874 $13,599,960 $10,976,449
Interest on Securities:
Taxable 1,232,241 1,234,417 3,477,969 3,735,075
Tax Exempt 59,209 108,121 208,001 381,982
Other Interest Income:
Federal Funds Sold
and Repurchase Agreements 225,765 70,293 446,129 184,202
--------- --------- ---------- ----------
TOTAL INTEREST INCOME 6,085,771 5,417,705 17,732,059 15,277,708
--------- --------- ---------- ----------
INTEREST EXPENSE
Interest on Demand Deposits 216,530 230,313 635,774 678,020
Interest on Savings 662,563 807,375 2,086,199 2,496,725
Interest on Time Certificates
of Deposit $100,000 or more 115,975 80,490 366,700 213,780
Interest on All Other
Time Deposits 1,368,939 668,641 3,463,524 1,830,288
--------- --------- --------- ---------
Total Interest on Deposits 2,364,007 1,786,819 6,552,197 5,218,813
--------- --------- --------- ---------
Interest on Federal Funds
Purchased and Securities Sold
under Repurchase Agreements 48,684 31,918 125,079 38,170
Interest on Long-term Debt 2,028 2,296 6,390 7,022
Other Interest Paid ( 2,698) -- 43,431 --
--------- --------- ---------- ----------
TOTAL INTEREST EXPENSE 2,412,021 1,821,033 6,727,097 5,264,005
--------- --------- ---------- ----------
Net Interest Income 3,673,750 3,596,672 11,004,962 10,013,703
Provision for Loan Losses 263,996 191,828 752,187 447,591
--------- --------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,409,754 3,404,844 10,252,775 9,566,112
<PAGE> 5
<S> <C> <C> <C> <C>
OTHER INCOME
Trust Department Fees 97,025 111,901 328,854 299,443
Service Charges on
Deposit Accounts 234,627 196,748 648,174 572,459
Securities Gains (Losses) -- -- -- (188,200)
Other Income 47,880 35,267 223,590 212,652
--------- --------- ---------- ----------
TOTAL OTHER INCOME 379,532 343,916 1,200,618 896,354
--------- --------- ---------- ----------
OTHER EXPENSE
Salaries and Employee Benefits 1,103,283 1,047,539 3,324,423 3,114,846
Occupancy and Equipment Expense 286,006 254,629 831,250 764,234
Other Operating Expense 983,801 1,145,354 2,988,855 3,108,504
--------- --------- ---------- ----------
TOTAL OTHER EXPENSE 2,373,090 2,447,522 7,144,528 6,987,584
--------- --------- ---------- ----------
Income Before Income Taxes 1,416,196 1,301,238 4,308,865 3,474,882
Applicable Income Taxes 512,678 464,715 1,685,211 1,231,208
--------- --------- ---------- ----------
NET INCOME $ 903,518 $ 836,523 2,623,654 2,243,674
========= ========= ========== ==========
Net Income Per Share .50 .47 1.46 1.25
==== ==== ==== ====
</TABLE>
<PAGE> 6
TWENTIETH BANCORP, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK Shares outstanding were 599,800 September 1994 and
1,800,000 September 1995.
Net
(In thousands) Retained Unrealized Treasury
Amount Surplus Earnings Gain (Loss) Stock Total
<S> <C> <C> <C> <C> <C) <C>
Balance, December
31, 1993 $1,500 $7,500 $19,305,431 -- -- $28,305,431
Net Income 2,243,674 2,243,674
Dividends paid (419,720) (419,720)
Net Unrealized Gains
(Losses) on Invest-
ment Securities -
Available for Sale
Net of taxes
of $417,465 (810,375) (810,375)
Treasury shares:
Acquired (109,850) (109,850)
Sold 99,350 99,350
----- ----- ---------- --------- -------- ----------
Balance, September
30, 1994 $1,500 $7,500 $21,129,385 $( 810,375) $(10,500)$29,308,510
===== ====== =========== =========== ======== ===========
Balance, December
31, 1994 $1,500 $7,500 $21,559,410 $(1,249,841) -- $29,309,569
Net Income 2,623,654 2,623,654
Dividends paid ( 540,000) ( 540,000)
Net Unrealized Gains
(Losses) on Invest-
ment Securities -
Available for Sale
Net of Taxes
of $617,829 1,199,311 1,199,311
Treasury shares:
Acquired (677,143) (677,143)
Sold 677,143 677,143
Stock Split/Dividend
(3-for-1) 300 ( 300,000) --
----- ----- ---------- ---------- -------- ----------
Balance, September
30, 1995 $1,800 $7,500 $23,343,064 $( 50,530) $ -- $32,592,534
====== ====== =========== =========== ======== ===========
</TABLE>
<PAGE> 7
TWENTIETH BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Interest received $18,077,867 $15,976,115
Fees, commissions and other income 1,191,086 1,107,455
Bad debt recoveries 198,411 142,688
Interest paid (5,605,507) (4,980,022)
Cash paid for operating expenses (6,536,002) (6,538,040)
Income tax paid (1,501,649) (1,261,896)
---------- ----------
Net cash provided by operating activities $ 5,824,206 $ 4,446,300
----------- -----------
Cash flows from investing activities:
Purchase of securities held to maturity (11,177,046) ( 9,381,556)
Proceeds from maturities and calls of
securities held to maturity 16,268,362 16,036,449
Purchase of securities available for sale (17,035,938) ( 7,092,503)
Proceeds from sales of securities
available for sale -- 4,866,679
Proceeds from maturities and early calls of
securities available for sale 3,830,379 5,636,261
Net decrease (increase) in loans 8,012,825 (14,934,121)
Capital expenditures ( 470,099) ( 546,498)
Proceeds from sale of other real estate 205,251 --
---------- ----------
Net cash provided by investing activities ( 366,266) ( 5,415,289)
---------- ----------
Cash flows from financing activities:
Net increase (decrease) in non interest
bearing demand deposits ( 5,486,817) 1,827,511
Net increase (decrease) interest bearing
demand deposits and savings (23,247,413) (11,988,637)
Net increase (decrease) in certificates of
deposit, individual retirement accounts,
and other time deposits 27,232,748 8,215,177
Net increase (decrease) in federal funds
purchased and securities sold under
repurchase agreements 840,000 1,095,000
Proceeds from borrowed funds -- 160,000
Repayment of borrowed funds ( 14,671) ( 8,965)
Payment of dividends ( 540,000) ( 419,720)
Purchase of treasury stock ( 677,143) ( 109,850)
Proceeds from sale of treasury stock 677,143 99,350
---------- ----------
Net cash provided by (used in)
financing activities ( 1,216,153) (1,130,134)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 4,241,787 (2,099,123)
Cash and cash equivalents at beginning of year 15,323,903 17,586,602
---------- ----------
Cash and cash equivalents at end of quarter $19,565,690 $15,487,479
=========== ===========
</TABLE>
<PAGE> 8
Consolidated Statements of Cash Flows (continued)
Reconciliation of net income to net cash provided by operating
activities:
<TABLE>
<S> <C> <C>
Net Income $ 2,623,654 $ 2,243,674
--------- ---------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 370,264 320,764
Amortization and accretions 461,316 847,523
Provision for bad debts 950,598 590,279
Provision for deferred income taxes 3,375 24,525
Gain on maturities of securities held to maturity -- ( 5,449)
Loss on sale of securities available for sale -- 193,649
Loss on sale of other real estate
and fixed assets-net 31,500 --
Decrease (increase) in other assets (140,185) 41,374
Decrease (increase) in accrued income ( 44,504) ( 45,678)
Increase (decrease) in accrued expenses 266,411 6,869
Increase (decrease) in income taxes payable 180,187 ( 55,213)
Increase (decrease) in reserve for interest 1,121,590 283,983
--------- --------
3,200,552 2,202,626
--------- ---------
$ 5,824,206 $ 4,446,300
=========== ===========
Supplemental Disclosures -
Unrealized losses on securities available
for sale:
Increase (decrease) in securities
available for sale $ 1,817,140 $(1,711,171)
Increase (decrease) in deferred tax benefit ( 617,829) ( 581,798)
Increase (decrease) in shareholders equity 1,199,311 (1,129,373)
<FN>
<F1>
Disclosure of accounting policy:
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks, food coupons and federal funds sold. Generally,
federal funds are purchased and sold for one-day periods.
</FN>
</TABLE>
<PAGE> 9
TWENTIETH BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for the interim
financial information and with the instructions to Form 10Q and rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information
and notes 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 nine months ended September 30, 1995 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1995. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's 1994 Annual
Report, Proxy and Form 10-K.
NOTE 2. INVESTMENT SECURITIES
On January 1, 1994, Twentieth Bancorp adopted SFAS 115, "Accounting for
Certain Investments in Debt and Equity Securities," which requires Investment
Securities to be classified as either Held to Maturity or Available for Sale.
SFAS 115 changed the accounting for investment securities available for sale
from the lower of cost or market to fair value.
SECURITIES - HELD TO MATURITY
September 30, 1995
The amortized cost (carrying values) and estimated market values of securities
held to maturity at September 30, 1995 and September 30, 1994, respectively
follow:
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
U. S. Treasury Securities 32,107,837 44,612 -- 32,152,449
Federal Agency Securities 999,401 -- 31 999,370
State and Political
Subdivision Securities 2,935,595 305,961 -- 3,241,556
Other Securities - Debt 100,000 -- -- 100,000
---------- ------- ------- ----------
Total $36,142,833 $350,573 $ 31 $36,493,375
=========== ======== ======== ===========
September 30, 1994
U. S. Treasury Securities 41,570,909 -- 225,459 41,345,450
States and Political
Subdivision Securities 5,025,808 352,560 -- 5,378,368
Other Securities - Debt 100,000 -- -- 100,000
---------- ------- ------- ----------
Total $46,696,717 $352,560 $225,459 $46,823,818
=========== ======== ======== ===========
<PAGE> 10
SECURITIES - AVAILABLE FOR SALE
September 30, 1995
The amortized cost and estimated market value (carrying values) of securities
available for sale at September 30, 1995 and September 30, 1994, respectively
follow:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
U. S. Treasury Securities 21,458,682 111,243 -- 21,569,925
Federal Agency Securities 34,094,983 -- 187,801 33,907,182
Other Securities - Equity 69,310 -- -- 69,310
---------- ------- ------- ----------
Total $55,622,975 $111,243 $187,801 $55,546,417
=========== ======== ======== ===========
September 30, 1994
U. S. Treasury Securities 14,362,514 -- 526,753 13,835,761
Federal Agency Securities 27,528,087 -- 701,087 26,827,000
Other Securities - Equity 69,310 -- -- 69,310
---------- ------- --------- ----------
Total $41,959,911 $ -- $1,227,840 $40,732,071
=========== ======= ========== ===========
NOTE 3. LOANS
Major classifications of loans are summarized as follows:
(In thousands) 1995 1994
Commercial $ 73,172 $ 71,692
Real Estate - Construction 1,180 --
Real Estate - Mortgage 42,993 48,011
Installment and Consumer 79,140 76,500
------- -------
Loans net of unearned discount 196,485 196,203
Allowance for loan losses 2,000 1,725
------- -------
Loans, net $194,485 $194,478
Unearned discount was $322. and $1,302 at September 30, 1995
and 1994, respectively; $1,871 at December 31, 1994.
<PAGE> 11
ALLOWANCE FOR LOAN LOSSES
Transactions in the consolidated allowance for loan losses for the three
months ended September 30, 1995 and 1994, respectively were:
(In thousands) 1995 1994
Balance at Beginning of Period $1,825 $1,650
Charge-offs (775) (515)
Recoveries 198 143
----- -----
Net Charge-offs (577) (372)
Provision for loan losses 752 447
----- -----
Net Increase 175 75
----- -----
Balance, September 30, $2,000 $1,725
====== ======
* The provision for credit losses is included in the allowance for
loan losses at September 30, 1995 and 1994, respectively.
IMPAIRED LOANS
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standard No. 114, "Accounting by Creditors for Impairment of a
Loan" (SFAS 114) in 1993. SFAS 114 was further amended by the FASB in 1994
through the issuance of Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures" (SFAS 118). Effective January 1, 1995, SFAS No. 114, as amended
by SFAS 118, required that an impaired loan be measured and reported on the
basis of the present value of expected cash flows discounted at the loan's
effective interest rate, or at the fair value of the loan's collateral if the
loan is deemed "collateral dependent". Impaired loans are specifically
reviewed loans for which it is probable that the creditor will be unable to
collect all amounts due according to the terms of the loan agreement. SFAS
118 allows a creditor to use existing methods for recognizing interest income
on an impaired loan. For Bancorp nonaccrual loans and impaired loans,
interest receipts are recognized as interest revenue or are applied to
principal when management believes the ultimate collectiblity of principal
is in doubt.
SFAS 114 does not apply to larger groups of homogeneous loans such as
consumer installment, bank card and real estate mortgage loans, which are
collectively evaluated for impairment. Impaired loans are therefore
primarily business loans, which include commercial loans and income property
and construction real estate loans. Small balance populations of business
loans, which are not specifically reviewed in accordance with Bancorp's
normal credit review procedures are also excluded from the application of
SFAS 114. Bancorp's impaired loans are nonaccrual loans, as generally
loans are placed in nonaccrual status on the earlier of the date that
principal or interest amounts are 90 days or more past due or the date that
collection of such amounts is judged uncertain based on an evaluation of the
net realizable value of the collateral and the financial strength of the
borrower.
<PAGE> 12
Impaired loans and the applicable valuation allowance at September 30, 1995
were:
(In Thousands)
Related
Loan Valuation
Balance Allowance
Impaired with specific
valuation allowance $1,389 $ 340
Impaired without specific
valuation allowance -- --
----- ---
Total Impaired Loans $1,389 $ 340
====== ======
Collateral dependent loans which were measured at the fair value of the
collateral constituted all of the impaired loans at September 30, 1995. The
average recored investment in impaired loans, the amount of interest income
recognized on a cash basis during the first nine months of 1995 were:
(In Thousands)
Nine Months Ended September 30, 1995
Average recorded investment in
impaired loans $ 619
Interest income recognized
during impairment 7
Interest income recognized on a cash
basis during impairment 7
At March 31 and June 30, 1995, impaired loans of $266,000 and $537,000
consisted of nonaccrual business loans balances of Bancorp. The balance of
impaired loans at January 1, 1995 also totaled $296,000. Because the
majority of loans deemed impaired during the first nine months were
collateral dependent, valuations of impaired loans did not vary materially
from the values previously assigned to this population of loans. The
initial adoption of the new accounting standard did not require an increase
to Bancorp's allowance for loan losses. The impact of adopting SFAS 114,
as amended by SFAS 118, was therefore immaterial to the financial condition
and operations of Bancorp as of an for the nine month period ended September
30, 1995. In accordance with SFAS 114, no retroactive application of its
provisions has been made to the consolidated financial statements for periods
prior to January 1, 1995.
<PAGE> 13
NONPERFORMING ASSETS
Nonperforming Assets at September 30 were:
(In Thousands)
1995 1994
Nonaccrual Loans $1,778 $ 484
Loans 90 Days Past Due
and still accruing 1,322 1,877
----- -----
Total Nonperforming Loans 3,100 2,361
Other Real Estate Owned 24 58
----- -----
Total Nonperforming Assets $3,124 $2,419
====== ======
Nonperforming Loans % Total Loans 1.58% 1.20%
Nonperforming Assets % Total
Loans and Other Real Estate Owned 1.59% 1.23%
NOTE 4. FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER
REPURCHASE AGREEMENTS
(In Thousands)
1995 1994
Federal Funds Purchased $2,415 $3,260
Securities Sold Under Repurchase Agreements 1,650 480
----- -----
Total Federal Funds Purchased and
Securities Sold Under Repurchase Agreements $4,065 $3,740
====== ======
<PAGE> 14
TWENTIETH BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
PERFORMANCE SUMMARY
Twentieth Bancorp, Inc. reported net income of $903,518 for the quarter
ended September 30, 1995, and increase of 8% over net income reported in the
third quarter of 1994. For the first nine months, earnings were $2,623,574
in 1995, an increase of 16.93% from the $2,243,674 reported in 1994. These
increases reflected the continued positive effects of improved net interest
margins and management of controllable expenses. Earnings per common share
were 50 cents a share for the third quarter of 1995, compared to 47 cents a
share a year earlier. For the first nine months of 1995, earnings per common
share were $1.46, compared to $1.25 per common share a year earlier. Some of
the increased earnings are attributed to the FDIC reducing the insurance
premiums banks are required to pay on deposits.
Third quarter comparisons of total assets and net income were positive.
Total interest income for the quarter increased $668,066 or 12.33%, and
interest expense increased $590,988 or 32.45% from the same period last year.
This reflects the increased cost of money as rates stabilize in 1995 as
compared to the rising interest trend in 1994.
Total assets increased $7,980,226 or 2.58% for the comparative quarterly
periods. Total deposits increased $3,118,114 or 1.14% for the comparative
quarterly periods. Growth in deposits is substantially attributed to the
nine month certificate introduced in April and May, 1995, at 6.50%. Since
that time the rate has been lowered to 5.10%, in line with our market
competitiveness on traditional deposit instruments. The Bank has utilized
"Sweep" deposits which have transferred, temporarily, $10 million in deposits
on a contractual basis to a secured third party. The decrease in the
amortized cost of investment securities held to maturity of $10,553,884 was
the result of securities maturing. New securities were purchased and
placed in the available for sale category and held in the Federal funds sold
until more attractive securities were available.
Combining the earnings increase with the reduction in the net unrealized loss
of $760,000 results in the shareholders' equity growth of $3,284,000 for year
to date comparisons. Resulting from the positive trends of the first three
quarters, the market price of Twentieth Bancorp, Inc. stock has increased
from $17.50 to $20.00 per share following the 3 for 1 stock split-up
in May, 1995.
Our Hamlin, WV branch application has been approved and we are working to
have it ready to open on December 1, 1995. This will be a full function
branch with an automated teller machine, but no drive in facility.
The positive trends of the first three quarters should be maintainable through
year end 1995.
PROFITABILITY MEASURE AND CAPITAL RESOURCES
Twentieth Bancorp's increased earnings in the third quarter of 1995 resulted
in improvements in the key profitability measures when compared to the same
period in 1994. Return on average assets was 1.12% in the first nine months of
1995, up from .98% for the same period in 1994. For the first nine months of
1995, return on average equity was 10.88%, compared to 10.33% reported a year
earlier.
<PAGE> 15
Equity to assets of 10.29% for the first nine months of 1995 increased 80 basis
points from 9.49% in the first nine months of 1994, reflected higher earnings.
Risk-based capital ratios are another measure of capital adequacy. At
September 30, 1995, the consolidated risk-adjusted capital ratios were 15.63%
for Tier 1 and 16.65% for total capital, well above the required minimums of
4.0% and 8.0%, respectively. The Tier 1 leverage ratio of 9.95% at September
30, 1995 also was significantly above the regulatory minimum of 3.0%.
Twentieth Bancorp's subsidiary bank was considered "well capitalized" as of
September 30, 1995, the highest category of capitalization defined by
regulatory authorities, allowing for the lowest level of FDIC insurance
premium payments of 4 cents per $100 of deposits, down from 23 cents per $100
rate that existed. A refund from FDIC is reflected in the third quarter
earnings.
FINANCIAL RATIOS
Nine months ended September 30, 1995 and 1994, respectively.
1995 1994
Return on Average Assets 1.12% .98%
Return on Average Equity 10.88% 10.33%
Dividend Payout Ratio .21 :1 .19 :1
Equity to Assets 10.29% 9.49%
Capital Adequacy Ratio 10.58% 9.69%
Primary Capital Ratio 10.85% 9.99%
Total Risk Based Capital Ratio 16.65% 15.73%
Tier 1 Risk Based Capital Ratio 15.63% 14.85%
Leverage Ratio 9.95% 9.50%
NET INTEREST INCOME AND INTEREST MARGIN
The schedule, Comparative Operation Data, shows that Twentieth Bancorp's net
income increased by $66,995 to $903,518 for the third quarter of 1995 as
compared to $836,523 earned during the same period in 1994. The net interest
margin for the nine months ended September 30, 1995, was 5.11%, an improvement
of 35 basis points from the net interest margin recorded a year earlier. The
net interest income margin for the third quarter dropped 8 basis points to
4.93% when compared to the third quarter of 1994. Yields paid on interest
bearing liabilities increased to 3.95% for the third quarter of 1995, compared
to 3.03% for the same period in 1994. Gross earning assets yield increased to
8.14% from 7.52% for the third quarter of 1995 over the comparable period for
1994. The improvement was due to increased volume of earning assets over
interest bearing deposits which offset the decline in the net interest margin
percentage during the third quarter of 1995 and 1994, respectively. Gross
earning assets yield increased to 8.20% for the nine months ended September
30, 1995, from 7.22% a year earlier. Yields paid on interest bearing
liabilities increased to 3.79% for the nine months ended September 30, 1995,
from 2.96% as compared to a year earlier. The net interest margin increase
if 35 basis points reflects the more rapid repricing of earning assets over
interest bearing liabilities.
<PAGE> 16
Total average loans increased $3,949,220 or 2.05% when compared to 1994 third
quarter average balances. The average installment loans increased $5,836,582
or 8.32% was primarily responsible. The yield on average loans increased 96
basis points to 9.24% from the third quarter of 1994 which yielded 8.28%.
Higher yields in all categories of loans were experienced. Funding for the
loan growth came in part from reductions in the average balance of securities
as they matured, which declined $4,101,285 for the third quarter of 1995 as
compared to the same period in 1994. Average federal funds sold increased
$9,092,934 or 145.94% for the third quarter of 1995 as compared to September
30, 1994.
Average total earning assets increased to a balance of $298,699,779 for the
third quarter of 1995 as compared to a balance of $289,758,910 for the same
period in 1994. Average total interest bearing liabilities increased to a
balance of $242,634,157 for the third quarter of 1995 as compared to
$239,868,835 for the same period in 1994. The shift from savings and interest
bearing demand deposits to time deposits was primarily due to higher yields
paid on certificates of deposits. Average time deposits for the third quarter
of 1995 increased $33,299,730 or 42.48% to $111,689,761 from $78,390,031 in
1994. Average savings deposits decreased $28,711,635 or 24.06% to $90,634,783
for the third quarter of 1995 from $119,346,418 in 1994. The average yield
paid on deposits, however, has lagged the increases in yield on variable rate
assets, such as prime-rate based loans.
RISK EXPOSURES AND CREDIT QUALITY
Twentieth Bancorp provides as an expense an amount which reflects
expected credit losses and is called the provision for loan losses, and is
based on management's evaluation of the loan portfolio. The allowance for
loan losses was $2 million at September 30, 1995, representing 1.02% of
period-end loans, 64% of period-end nonperforming assets and a 65% coverage
of nonperforming loans. Management considers the level of the allowance
adequate.
At September 30, 1995, nonperforming assets of $3.1 million were up 29% from
September 30, 1994. The ratio of nonperforming assets to loans and other
real estate at September 30, 1995 was 1.59%, up from 1.23% at September 30,
1994. Based on current portfolio trends, and barring an unexpected
deterioration in the economy, management does not expect the ratio of non-
performing assets to loans and other real estate to change significantly
during the remainder of 1995.
An increase in the allowance to 1% of total loans was the result of a request
by the regulators, after receiving their report from the November 1994
examination. Previously, the reserve was maintained at a .85% level. It is
anticipated that provisions for losses will continue to increase as a result
of aging loans, primarily consumer, which have net increased over $59 million
in the past three calendar years.
Other real estate owned decreased to $24 thousand as of September 30, 1995
from $58 thousand on September 30, 1994, and down from $261 thousand at year-
end 1994. The closing of the Alum Creek Branch in 1994 accounted for
$200 thousand placed in other real estate owned at the beginning of the year
which was sold during the current quarter.
<PAGE> 17
The increase in non-performing loans represent three long time well
collateralized commercial customers in dissimilar activities which have
experienced temporary cash flow problems but are current with their interest.
Additionally, one commercial loan of $300,000 is currently in a work out
situation. The effect of an aggressive three year campaign to increase
indirect consumer auto loans is being felt through increased repossessions.
NONINTEREST INCOME AND EXPENSE
Noninterest income totaled $379,532 in the third quarter of 1995, a $35,616
or 10.36% increase over the third quarter of 1994. Noninterest income totaled
$1,200,618 for the first nine months of 1995, a $304,264 or 33.94% increase
over a year earlier which contained $188,200 in securities losses. This
growth reflects increases in all noninterest income categories. Trust
Department income decreased $14,876 for the third quarter of 1995 over the
third quarter of 1994, but increased $19,411 or 9.82% for the nine months
ended over a year earlier. Service charges increased $37,879 or 19.25% in
the third quarter of 1995 in comparison to the third quarter of 1994. Fee
income was up $12,613 or 35.76% for the third quarter compared to the third
quarter of 1994. Fee income increased $10,938 or 5.14% for the nine months
ended September 30, 1995 over the same period a year earlier. This increase
resulted from fees received from a third party on the Sweep deposits.
Noninterest expense decreased $74,432 or 3.04% for the third quarter of 1995
when compared to the same period of 1994, totaling $2,373,090 for the three
month period ending September 30, 1995 versus $2,447,522 for the same period
in 1994. As a result of the FDIC reducing the insurance premiums banks are
required to pay on deposits, a refund of $168,196 was received in the third
quarter of 1995. Control of other expense accounts has contributed to the
reduction in this area. Dealer Commission decreased $304,763 for the nine
months ended in September 30, 1995 over 1994 a year earlier from $557,203 on
September 30, 1994 to $252,440 on September 30, 1995.
APPLICABLE INCOME TAXES
The applicable income tax for the nine months ended September 30, 1995
represents $1,681,836 in current and $3,375 in deferred taxes as compared to
$1,206,683 in current and $24,525 in deferred for the same period in 1994.
The effective tax rate on income before taxes increased 4.30% to 39.03% in
1995 from 34.73% in 1994. This increase is attributable primarily to the
decrease in tax exempt income on investment securities.
FINANCIAL CONDITION
Twentieth Bancorp's assets totaled $316,833,084 at September 30, 1995,
compared to $312,670,946 in assets at December 31, 1994, and $308,852,858
in assets at September 30, 1994. The increase from year to year is
primarily due to the increase in total deposits. Total deposits increased
$3,118,114 or 1.14% over September 30, 1994, however has decreased $1,503,409
or .54% since December 31, 1994. With the higher interest rate environment
and increased competition for deposits resulted in declines in some deposit
categories, including interest checking and regular savings deposits. The
shift in deposits was partially due to a new nine month certificate of deposit
being offered. Loans net of unearned income were up only marginally from
September 30, 1994. All loan categories decreased from year-end 1994
primarily because as rates fell more attractive interest rates were available
in the marketplace.
<PAGE> 18
With respect to the securities held to maturity portfolio, market value
exceeded book value $350,542 on September 30, 1995, consisting of $305,573
in unrealized gains and $31 in unrealized losses. The amortized cost of
securities available for sale exceeded the market value $76,558 on September
30, 1995, consisting of $111,243 in unrealized gains and $187,801 in unrealized
losses. The unrealized loss, net of tax effect, for the quarter ended
September 30, 1995 was $50,530. Unrealized losses for the comparison quarters
ending September 30, 1994 of $810,375 and $1,249,841 for December 31, 1994
illustrates the positive change in the bond market and how these securities
are affected. The unrealized gain or loss on securities available for sale,
which is recorded as a component of shareholders' equity, will continue to be
subject to change in future periods due to fluctuations in market value,
purchased, sales, maturities and calls of securities classified as available
for sale. However, it is managements opinion, after reviewing the portfolio
that unrealized losses are deemed temporary in nature.
Twentieth Bancorp purchased and sold 6,550 shares of common stock during the
third quarter of 1995 and has purchased and sold 17,277 shares of common
stock during the first nine months of 1995. Such purchases were from
shareholders wanting to sell shares and resold to new and existing share-
holders. At the Annual Meeting held on March 30, 1995, the Shareholders
voted to reduce the par value of all shares, to effect a 2 1/2 for 1 split,
and to capitalize, at a dollar per share, $300,000 to common stock from
retained earnings. On May 22, 1995 the stock split/dividend was effected.
This means that each shareholder has three times the number of shares
previously owned - although the total value of all of ones shares would remain
the same. The common stock was reduced ratably from $52.50 to $17.50 per
share. The authorized capital was increased from $1,500,000 to $3,600,000.
As a result of these transactions common stock carrying value was increased
from $1,500,000 to $1,800,000 issued and outstanding. The market price of
Twentieth Bancorp, Inc. stock has increased from $17.50 to $20.00 per share.
LIQUIDITY AND INTEREST SENSITIVITY
Bank liquidity is a measure of the ability to generate and maintain
sufficient cash flows to fund operations and to meet financial obligations to
depositors and borrowers promptly and in a cost effective manner. Liquidity
is provided through securities available for sale, federal funds sold, maturing
loans and securities, and the ability to generate new deposits or borrowings
as needed. Twentieth Bancorp's liquidity position is measured on a daily
basis, and monitored regularly by the Asset/Liability Management committee.
The objective is to optimize net interest income within the constraints of
prudent capital adequacy, liquidity needs, the interest rate and economic
outlook, market opportunities, and customer requirements. General strategies
to accomplish this objective include maintaining a strong balance sheet,
achieving solid core deposit growth, accepting manageable interest rate risk,
adhering to conservative financial management principles and practicing
prudent dividend policies.
As of September 30, 1995, the Bancorp's cash and cash equivalents totaled
$19,565,690 compared to $15,323,90 on December 31, 1994 and $15,487,479 on
September 30, 1994. Bancorp's securities portfolio includes $78,593,573
in unencumbered value that could have been converted to cash at September 30,
1995.
<PAGE> 19
SHAREHOLDERS' EQUITY
On September 30, 1995, total shareholders' equity was $32,592,534 compared to
$29,308,510 on September 30, 1994. This increase of $3,284,024 or 11.21% was
primarily due to an increase in profits retained. With the adoption of
SFAS 115 a reduction of shareholders' equity resulted with net unrealized
losses on investment securities of $50,530 and $810,375, respectively, which
represents the net unrealized loss (after tax effect) of the available
for sale securities for the quarters ended September 30, 1995 and 1994. On
September 30, 1995 and 1994 there were 0 and 200 shares held in treasury,
respectively.
<PAGE> 20
<TABLE>
TWENTIETH BANCORP, INC.
CONSOLIDATED AVERAGE BALANCE SHEET
AND INTEREST MARGIN ANALYSIS
Three Months Ended
<CAPTION>
September 30, 1995 September 30, 1994
Interest Average Interest Average
Average Income/ Yields/ Average Income/ Yields/
ASSETS Balances Expense Rates Balances Expense Rates
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans:
Commercial * $ 73,949,333 $1,779,902 9.55% $ 72,354,202 $1,557,774 8.54%
Real Estate 46,723,183 1,034,995 8.79 50,205,676 988,090 7.81
Installment and
Consumer 75,980,598 1,766,730 9.23 70,144,016 1,474,555 8.34
----------- --------- ----------- ---------
Total Loans 196,653,114 4,581,627 9.24 192,703,894 4,020,419 8.28
----------- --------- ----------- ---------
Securities:
Taxable 83,617,743 1,232,241 5.85 85,502,949 1,234,417 5.73
Tax Exempt * 3,105,281 89,711 11.46 5,321,360 163,819 12.21
----------- --------- ----------- ---------
Total
Securities 86,723,024 1,321,952 6.05 90,824,309 1,398,236 6.11
----------- --------- ----------- ---------
Federal Funds
Sold and
Securities
Purchased
under
Agreements
to Resell 15,323,641 225,765 5.85 6,230,707 70,294 4.48
----------- --------- ----------- ---------
Total Earning
Assets 298,699,779 6,129,344 8.14 289,758,910 5,488,949 7.52
----------- --------- ----------- ---------
Non-Earning
Assets:
Cash & Due
From Banks 10,806,739 9,660,658
Premises &
Equipment, net 6,897,357 7,010,126
Other Assets 4,375,710 3,983,508
Reserve for
Loan Losses (2,068,900) (1,696,831)
----------- -----------
Total
Non-earning
Assets 20,010,906 18,957,461
----------- -----------
TOTAL ASSETS 318,710,685 308,716,371
=========== ===========
<PAGE> 21
LIABILITIES &
SHAREHOLDERS'
EQUITY
Interest Bearing
Liabilities:
Savings 90,634,783 663,916 2.91% 119,346,418 809,548 2.69
Demand 36,245,047 216,976 2.38 39,108,239 233,099 2.36
Time 111,689,761 1,488,019 5.29 78,390,031 752,734 3.81
----------- --------- ----------- -------
Total Deposits 238,569,591 2,368,911 3.94 236,844,688 1,795,381 3.01
----------- --------- ----------- ---------
Purchased
Funds 3,928,357 48,786 4.93 2,871,141 32,076 4.43
Long-Term debt 136,209 2,032 5.92 153,006 2,307 5.98
Other Interest
Paid -- (2,708) -- --
----------- --------- ----------- ---------
Total Interest
Bearing* 242,634,157 2,417,021 3.95 239,868,835 1,829,764 3.03
Non-Interest
Bearing
Demand
Deposits 41,071,409 38,265,755
Accrued Expenses
& Other 2,533,395 1,457,027
----------- -----------
Total
Liabilities 286,238,961 279,591,617
Capital 32,471,724 29,124,754
------------ -----------
TOTAL LIABILITIES
AND CAPITAL 318,710,685 308,716,371
=========== ===========
NET INTEREST
INCOME/MARGIN 3,712,323 4.93% 3,659,185 5.01%
========= =========
<FN>
<F1>
* Computed on a Fully Tax-Equivalent Basis Assuming a Tax Rate of 34%
</FN>
</TABLE>
<PAGE> 22
Consolidated Average Balance Sheet and Interest Margin Analysis
(continued)
<TABLE>
Nine Months Ended September 30, 1995 and 1994
<CAPTION>
Interest Interest Average
Average Income/ Yields/ Average Income/ Yields/
ASSETS Balances Expense Rates Balances Expense Rates
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Loans:
Commercial * $ 75,176,996 $ 5,396,455 9.60% $72,238,567 $4,315,443 7.99%
Real Estate 47,267,597 3,029,200 8.57 51,054,836 2,908,935 7.62
Installment
and Consumer 76,812,631 5,213,363 9.07 63,212,965 3,801,009 8.04
----------- --------- ---------- ---------
Total Loans
Net of Unearned 199,257,224 13,639,018 9.15 186,506,368 11,025,387 7.90
----------- ---------- ----------- ----------
Securities:
Taxable 78,589,782 3,477,969 5.92 88,113,102 3,735,075 5.67
Tax Exempt * 3,517,526 315,153 11.98 6,196,069 578,761 12.49
----------- ---------- ----------- ----------
Total Securities 82,107,308 3,793,122 6.18 94,309,171 4,313,836 6.12
----------- ---------- ----------- ----------
Fed funds sold
and securities
Purchased under
agreements
to Resell 10,140,018 446,129 5.88 6,512,875 184,202 3.78
----------- ---------- ---------- ---------
Total Earning
Assets 291,504,550 17,878,269 8.20 287,328,414 15,523,425 7.22
----------- ---------- ----------- ----------
Non-Earning
Assets:
Cash and Due
From Banks 10,515,674 9,484,612
Premises &
Equipment, net 7,069,628 6,977,690
Other Assets 4,806,708 3,892,232
Reserve for Loan
Losses (2,003,245) (1,675,454)
----------- -----------
Total Non-earning
Assets 20,388,765 18,679,080
----------- -----------
TOTAL ASSETS 311,893,315 306,007,494
=========== ===========
<PAGE> 23
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest Bearing
Liabilities:
Savings 96,198,474 2,090,851 2.91% 124,232,039 2,506,537 2.70%
Demand 35,730,843 637,191 2.38 37,872,470 684,006 2.41
Time Deposits 102,288,505 3,838,765 5.02 74,773,654 2,054,240 3.67
----------- --------- ----------- ---------
Total Deposits 234,217,822 6,566,807 3.75 236,878,163 5,244,783 2.96
----------- --------- ----------- ---------
Purchased
Funds 3,281,990 125,358 5.11 1,628,370 38,360 3.15
Long Term Debt 142,311 6,404 6.02 153,854 7,057 6.13
Other Interest
Paid 43,528
----------- --------- ----------- ---------
Total Interest
Bearing * 237,642,123 6,742,097 3.79 238,660,387 5,290,200 2.96
Non-Interest
Bearing Demand
Deposits 40,320,487 36,828,027
Accrued Expenses
& Other 1,675,769 1,469,028
----------- -----------
Total
Liabilities 279,638,379 276,957,442
Capital 32,254,936 29,050,052
----------- -----------
TOTAL
LIABILITIES &
CAPITAL 311,893,315 306,007,494
=========== ===========
Net Interest
Income/Margin 11,136,172 5.11% 10,233,225 4.76%
========== ==========
<FN>
<F1>
* Computed on a Fully Tax-equivalent Basis Assuming a Tax Rate of 34%.
</FN>
</TABLE>
<PAGE> 24
<TABLE>
TWENTIETH BANCORP, INC.
COMPARATIVE OPERATING DATA
(Fully Taxable Equivalent Basis)
For Three Months Ended September 30, 1995 and 1994
<CAPTION>
Increase
Three Months Ended (Decrease)
1995 1994 Amount Percent
<S> <C> <C> <C> <C>
Interest Income $ 6,129,344 $ 5,488,949 $ 640,395 11.67%
Interest Expense 2,417,021 1,829,764 587,257 32.09
--------- --------- -------
Net Interest Income 3,712,323 3,659,185 53,138 1.45
Provision for Loan Losses 263,996 191,828 72,168 37.62
--------- --------- -------
Net Interest Income After
Provision for Loan Losses 3,448,327 3,467,357 (19,030) (0.55)
Other Income 379,532 343,916 35,616 10.36
Other Expenses 2,373,090 2,447,522 (74,432) (3.04)
--------- --------- -------
Income Before Income Tax 1,454,769 1,363,751 91,018 6.67
--------- --------- -------
Income Taxes:
Current and Deferred Taxes 512,678 464,715 47,963 10.32
Tax Equivalent Adjustment 38,573 62,513 (23,940) (38.30)
---------- ---------- -------
Net Income $ 903,518 $ 836,523 $66,995 8.01
========== ========== =======
Per Share Net Income .50 .47 0.03 6.38
==== ==== ====
For Nine Months Ended September 30, 1995 and 1994
Interest Income $17,878,269 $15,523,425 $2,354,844 15.17%
Interest Expense 6,742,097 5,290,200 1,451,897 27.45
---------- ---------- ---------
Net Interest Income 11,136,172 10,233,225 902,947 8.82
Provision for Loan Losses 752,187 447,591 304,596 68.05
---------- ---------- ---------
Net Income after
Provision for Loan Losses 10,383,985 9,785,634 598,351 6.11
Other Income 1,200,618 896,354 304,264 33.94
Other Expenses 7,144,528 6,987,584 156,944 2.25
---------- ---------- ---------
Income Before Income Tax 4,440,075 3,694,404 745,671 20.18
Income Taxes:
Current & Deferred Taxes 1,685,211 1,231,208 454,003 36.87
Tax Equivalent Adjustment 131,210 219,522 (88,312) (40.23)
---------- --------- ---------
Net Income $ 2,623,654 $ 2,243,674 $ 379,980 16.94
=========== =========== =========
Per Share
Net Income 1.46 1.25 0.21 16.80
==== ==== ====
</TABLE>
<PAGE> 25
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - not applicable
Item 2. Changes in Securities - not applicable
Item 3. Defaults upon Senior securities - not applicable
Item 4. Submission of matters to a vote of Security Holders -
not applicable
Item 5. Other Information - not applicable.
Item 6. Exhibits and reports for 8-K - not applicable.
<PAGE> 26
TWENTIETH BANCORP, INC.
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.
TWENTIETH BANCORP, INC.
Date: November 14, 1995 B. C. McGINNIS, III
B. C. McGINNIS, III
PRESIDENT
Date: November 14, 1995 THOMAS L. McGINNIS
THOMAS L. McGINNIS
VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 12,115,690
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 7,450,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55,546,417
<INVESTMENTS-CARRYING> 36,142,833
<INVESTMENTS-MARKET> 36,493,375
<LOANS> 196,485,072
<ALLOWANCE> 2,000,000
<TOTAL-ASSETS> 316,833,084
<DEPOSITS> 277,560,346
<SHORT-TERM> 4,065,000
<LIABILITIES-OTHER> 2,480,886
<LONG-TERM> 134,318
<COMMON> 1,800,000
0
0
<OTHER-SE> 30,792,534
<TOTAL-LIABILITIES-AND-EQUITY> 316,833,084
<INTEREST-LOAN> 13,599,960
<INTEREST-INVEST> 3,685,970
<INTEREST-OTHER> 446,129
<INTEREST-TOTAL> 17,732,059
<INTEREST-DEPOSIT> 6,552,197
<INTEREST-EXPENSE> 174,900
<INTEREST-INCOME-NET> 11,004,962
<LOAN-LOSSES> 752,187
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 7,144,528
<INCOME-PRETAX> 4,308,865
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,623,654
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
<YIELD-ACTUAL> 7.30
<LOANS-NON> 1,778,000
<LOANS-PAST> 1,322,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,825,000
<CHARGE-OFFS> 775,000
<RECOVERIES> 198,000
<ALLOWANCE-CLOSE> 2,000,000
<ALLOWANCE-DOMESTIC> 2,000,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
