<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1997
[ ] Transition report under Section 13 or 15(d) of the
Exchange Act
For the transition period to
----------------------------
- ------------------------
Commission file number 0-15777
FIRST INDEPENDENCE CORPORATION
------------------------------
(Exact Name of Small Business Issuer in Its Charter)
Michigan 38-2583843
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
44 Michigan, Detroit, Michigan 48226
------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(313) 256-8400
--------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12 (b) of the Exchange Act:
NONE
Securities registered under Section 12 (g) of the Exchange Act:
Common stock, par value $1.00 per share
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
Common Stock, $1 Par Value-336,760 shares as of May 12, 1997
<PAGE> 2
FIRST INDEPENDENCE CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet March 31, 1997 3
Consolidated Statement of Income
Three Months and YTD Ended March 31, 1997 and 1996 4
Consolidated Statement of Cash Flows
Three Months ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8-12
Part II. OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
2
<PAGE> 3
PART I.
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31
1997
----
<S> <C>
ASSETS
Cash and due from banks $ 2,378,145
Federal funds sold 8,960,000
-----------
Total cash and cash equivalents 11,338,145
Securities available for sale 9,559,512
Securities held to maturity (fair value of $19,311,974) 19,527,300
-----------
Total securities 29,086,812
Loans
Commercial 10,987,895
Real estate mortgages 24,199,082
Consumer 7,562,848
-----------
42,749,825
Allowance for loan losses (837,756)
-----------
41,912,069
Premises and equipment, net 3,495,952
Accrued interest receivable and other assets 1,385,601
-----------
Total assets $87,218,579
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Noninterest-bearing $25,805,293
Interest-bearing 51,065,113
-----------
76,870,406
Securities sold under retail repurchase agreements 3,416,882
Accrued expenses and other liabilities 1,055,492
Long-term debt 900,000
-----------
Total liabilities 82,242,780
Shareholders' equity
Preferred stock 2,749,508
Common stock, $1 par value: 500,000 shares authorized;
336,760 shares issued and outstanding 336,760
Capital surplus 2,369,782
Accumulated deficit (368,054)
Unrealized gain (losses) on securities available
for sale (94,454)
Unrealized holding loss on securities transferred (17,743)
-----------
Total shareholders' equity 4,975,799
-----------
Total liabilities and shareholders' equity $87,218,579
===========
</TABLE>
3
<PAGE> 4
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
Quarter ended March 31, 1997 and 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Interest income
loans, including fees $1,068,622 $1,118,507
Taxable securities 428,402 451,887
Non-taxable securities 0 0
Federal funds sold 172,837 141,599
---------- ----------
Total interest income 1,669,861 1,711,993
Interest expense
Deposits 462,249 414,333
Other borrowed funds 71,698 97,463
---------- ----------
Total interest expense 533,947 511,796
---------- ----------
NET INTEREST INCOME 1,135,914 1,200,197
Provision for loan loss (874,572) 317,750
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSS 2,010,486 882,447
Noninterest income
Service charges on deposit accounts 200,404 197,610
Securities gains, net 0 116
Net gains on sales of residential real estate loans 64,628 147,624
Other 61,377 54,861
---------- ----------
Total noninterest income 326,409 400,211
Noninterest expenses
Salaries and employee benefits 668,755 662,112
Occupancy 111,056 128,663
Professional services 113,000 56,000
Insurance expense 29,472 23,989
Other noninterest expenses 537,711 419,625
---------- ----------
Total noninterest expenses 1,459,994 1,290,389
INCOME (LOSS) BEFORE FEDERAL INCOME TAXES 876,901 (7,731)
Federal income tax expense 0 0
---------- ----------
Net income (loss) 876,901 (7,731)
Preferred stock dividend requirements 8,550 8,550
---------- ----------
Income (loss) attributable to common stock $ 868,351 $ (16,281)
========== ==========
Income (loss) per common and common equivalent share $ 2.58 $ (0.05)
========== ==========
</TABLE>
4
<PAGE> 5
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
for the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 876,901 $ (7,731)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 117,126 122,700
Amortization of premiums and accretion of discounts 18,727 7,954
Provision for loan losses (874,572) 317,750
Securities gains, net - (116)
Changes in:
Accrued interest receivable and other assets 124,547 (61,402)
Accrued expenses and other liabilities 57,168 (58,572)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 319,897 320,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment securities available for sale - 1,000,938
Proceeds from maturities of investment securities available for sale 1,007,707 635,537
Proceeds from maturities of investment securities held to maturity 1,500,000 3,000,000
Purchases of investment securities available for sale - (5,049,217)
Purchases of investment securities held to maturity (2,471,213) (2,658,811)
Net change in loans 4,243,173 (457,362)
Purchases of premises and equipment (56,313) (149,706)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES 4,223,354 (3,678,621)
CASH FLOWS FROM FINANCING ACTIVITIES
changes in:
Deposits (6,659,288) 520,687
Securities sold under repurchase agreements (867,806) 1,300,993
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES (7,527,094) 1,821,680
----------- -----------
Net increase (decrease) in cash and cash equivalents (2,983,843) (1,536,358)
Cash and cash equivalents, beginning of year 14,321,988 17,059,650
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $11,338,145 $15,523,292
=========== ===========
</TABLE>
5
<PAGE> 6
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
1. The consolidated balance sheet as of March 31, 1997, the related
consolidated statements of income for the quarter and three months ended March
31, 1997 and 1996, and the statement of cash flows for the three month period
ended March 31, 1997 and 1996 are unaudited.
2. In the opinion of management, all normal recurring adjustments necessary for
a fair presentation of such financial statements have been included. Interim
results are not necessarily indicative of results for a full year.
3. The consolidated statements include the accounts of First Independence
Corporation (the "Corporation") and its wholly owned subsidiary, First
Independence National Bank of Detroit (the "Bank"). All significant
intercompany balances and transactions have been eliminated in consolidation.
4. Securities are classified as held to maturity and carried at amortized cost
when management has the positive intent and ability to hold them to maturity.
Securities are classified as available for sale when they might be sold before
maturity. Securities available for sale are carried at fair value, with
unrealized holding gains and losses reported seperately in shareholders'
equity.
Gains and losses on sales of securities are determined using amortized
cost of the specific security sold. Interest income includes amortization of
purchased premiums and discounts.
5. Loans are reported at the principal balance outstanding, net of deferred
loan fees and costs, and the allowance for loan losses. Interest income is
reported on the interest method and includes amortization of net deferred loan
fees and costs over the loan term.
6. The allowance for possible losses on loans is maintained at a level believed
adequate by management to absorb potential losses from specific assets
identified as having greater than a normal risk of loss as well as losses from
the remainder of the portfolio. Management's determination of the level of the
allowance is based upon an evaluation of the portfolio, past experience,
current economic conditions, size and composition of the portfolio, collateral
location and values, cash flow positions, industry concentrations,
delinquencies and other relevant factors.
Loan impairment is reported when full paymant under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of
similiar nature such as residential mortgage, consumer, and credit card loans,
and on an individual basis for other loans. If a loan is impaired, a portion
of the allowance is allocated so that the loan is reported, net, at the present
value of estimated future cash flows using the loan's existing rate or at the
fair value of the collateral if the loan is collateral dependant. When credit
analysis of a borrower's operating results and financial condition indicates
that the underlying cash flows of the borrower's business are not adequate to
meet its debt service requirements, including the Bank's loans to the borrower,
the loan is evaluated for impairment. Often this is associated when payments
are delayed, typically 90 days or more, or when the internal grading system
indicates a substandard or doubtful classification.
6
<PAGE> 7
The following table details information concerning nonperforming, non-accrual,
and other impaired loans as of March 31, 1997.
<TABLE>
<S> <C>
(in thousands)
Non-accrual Loans 1,275
Impaired loans 611
Loans past due 90
days or more 1,622
-----
Total 3,508
=====
</TABLE>
Interest that would have been accrued on the non-accrual loans at March 31,
1997, had they been on accrual status would have been approximately $28,000.
7. All significant intercompany balances and transactions have been
eliminated in consolidation.
8. In 1991, a former senior officer of the Bank filed a complaint in the
Circuit Court for the County of Wayne, Michigan, against the Bank, a
non-operating subsidiary of the Bank, and the Corporation and certain directors
and another former officer thereof alleging wrongful termination. In May 1993,
a jury verdict was entered against the Corporation, a non-operating subsidiary
of the Bank, certain directors and another former officer thereof, in the
amount of $320,000 by a Wayne County Circuit Court. A judgment was entered on
the verdict in October 1994. An accrual for the judgement was recorded in 1994
and is reflected in the consolidated financial statements and attorney fees and
other litigation costs have been expensed as they were incurred. The
Corporation appealed the judgement to the Michigan Court of Appeals and on
March 14, 1997, the judgement was reversed by the Court of Appeals holding that
there was no liability by the Corporation, the Bank's subsidiary, or any of the
individual defendants. The plaintiff has sought leave of the Michigan Supreme
Court to appeal the reversal by the Michigan Court of Appeals. Counsel for the
Corporation are of the opinion that the appeal is without merit.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
SUMMARY OF OPERATIONS
Net income for the first quarter of 1997 was $876,901, or $2.58 per share,
compared to a net loss of $7,731 or $.05 per share for the first quarter of
1996. The increase in net income for the first quarter of 1997, as compared
to 1996, resulted from a lower loan loss provision for the first quarter of
1997 as compared to the first quarter of 1996. The loan loss provision for the
first quarter in 1997 was a credit of $874,572 as compared to a charge of
$317,750, in 1996. The decrease in the first quarter 1997 provision as
compared to 1996 resulted from the February 21, 1997, insurance settlement of
$1,444,721 from its fidelity insurance underwriters in settlement of the Bank's
claims related to the fictitious "loans" made in late 1995 and January 1996.
As a result, the Bank recorded a recovery of $1,137,000 to the allowance for
loan losses for amounts previously charged off related to the fictitious
"loans". Subsequently, the allowance was reduced through a negative provision
in the first quarter of 1997 to a level considered adaquate, consistent with
management's evaluation of the allowance.
Net Interest Income
Net interest income in the first quarter of 1997 was $1,135,914, a decrease of
$64,283 from the first quarter 1996 net interest income of $1,200,197. The
decrease was attributable to lower yielding earning assets and higher rates on
deposits. As a result of lower yields on earning assets and higher rates paid
on deposits, net interest margin decreased 35 basis points from 5.63 percent in
the first quarter of 1996 to 5.28 percent in the first quarter of 1997.
Provision for Possible Credit Losses
The Provision for Possible Credit Losses in the first quarter in 1997 amounted
to a credit of $874,572, a decrease of $1,192,322 from the first quarter 1996
Provision for Possible Credit Losses of $317,750. The decrease resulted from
the February 21, 1997, insurance settlement of $1,444,721 described above. A
detailed analysis of the related Allowance for Possible Credit Losses,
charge-offs, recoveries, and ratios is presented on page 11.
Noninterest Income
Noninterest income for the first quarter of 1997 amounted to $326,409, a
decrease of $73,802, or 18.44 percent, from first quarter 1996 noninterest
income of $400,211. The decrease was primarily due to a decrease in gains on
sales of residential real estate loans of $83,000. This decrease was partially
offset by an increase in OREO gains of $14,708.
Noninterest Expenses
Noninterest expenses for the first quarter of 1997 amounted to $1,459,994, an
increase of $169,605, or 13.14 percent, from first quarter 1996 noninterest
expense of $1,290,389. The increase was primarily the result of increased
professional fee expense of $57,000, FDIC assessment of $30,000,writedown of
other assets $16,000, and an increase in single business tax of $40,000.
8
<PAGE> 9
BALANCE SHEET ANALYSIS
LIQUIDITY
Deposits at March 31, 1997 totaled $76,870,406 while federal funds sold were
$8,960,000 (11.7% of total deposits). Total securities available-for-sale at
March 31, 1997 were $9,559,512 (12.4% of total deposits). In addition,
$5,902,000 (7.7% of total deposits) of the Bank's $29 million of securities
will mature within one year. Thus, the bank has a liquidity position such that
management believes it is capable of funding loan demand or deposit
withdrawals.
INVESTMENTS
The Bank had $29,086,812 of investment securities at March 31, 1997, compared
to $29,175,658 of such securities at December 31, 1996. The following is a
summary of the maturities and weighted average yields from the investment
portfolio at March 31, 1997. Yields are not calculated on a tax equivalent
basis.
<TABLE>
<CAPTION>
After One After Five
Within But Within But Within After
(in thousands) One Year Five Years Ten Years Ten Years Total
-------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Available-for-sale
-------------------
Treasury and agency $1,000 $ 8,325 - $ 68 $ 9,393
State and Political - - - - -
Other - - - 167 167
------ ------- -------- -------- -------
Total $1,000 $ 8,325 - 235 $ 9,560
====== ======= ======== ======== =======
Weighted Ave Yield 6.00% 5.92% - 6.71% 5.95%
Held-to-maturity
-------------------
Treasury and agency $4,902 $14,625 - - 19,527
State and Political - - - - -
Other - - - - -
------ ------- -------- -------- -------
Total $4,902 $14,625 - - $19,527
====== ======= ======== ======== =======
Weighted Ave Yield 5.58% 6.02% - - 5.91%
</TABLE>
LOANS
The following table sets forth the composition of the Bank's loan portfolio at
March 31, 1997.
<TABLE>
<S> <C> <C>
Commercial $10,988 25.70%
Commercial Real Estate 8,792 20.57
Residential Real Estate 15,407 36.04
Consumer 7,563 17.69
------- ------
$42,750 100.00%
======= ======
</TABLE>
9
<PAGE> 10
At March 31, 1997, the Bank had $3,508,000 of loans that were nonperforming.
Nonperforming loans include non-accrual loans, loans with principal or interest
past due 90 days or more, and loans that have matured and are being extended or
rewritten after their stated maturity date.
Non-accrual loans are those nonperforming and/or impaired loans on which the
Bank does not accrue interest income. Loans are placed on non-accrual status
when principal or interest is in default for a period of 90 days or more unless
the loan is in the process of collection and is well secured so that delinquent
principal and interest would be expected to be satisfied from the collateral.
Nonperforming loans and non-accrual loans are all considered "impaired loans"
under SFAS 114, "Accounting by Creditors for Impairment of a Loan", and SFAS
118, "Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosure." At March 31, 1997, total nonperforming and impaired loans
amounted to 8.21% of the aggregate loans at March 31, 1997, compared to 7.12%
at the end of 1996.
The table included on page 11 details information concerning nonperforming,
non-accrual and impaired loans, by loan type, as of March 31, 1997. The amount
of interest income that would have been accrued on the loans on non-accrual
status at March 31, 1997, had those loans remained current, was approximately
$28,000.
At March 31, 1997, there were no significant loans other than those included in
the above table, for which information was known that caused management to have
serious doubts as to the ability of borrowers to comply with loan repayment
terms.
The allowance for loan losses totaled $837,756 at March 31, 1997, compared to
the 1996 year end balance of $765,561. The allowance for loan losses
represented 1.96% of loans compared with 1.66% at December 31, 1996. The
allowance for loan losses was 28.93% of the aggregate of non-accrual loans and
loans delinquent 90 days or more at March 31, 1997. At December 31, 1996, the
allowance was 36.1% of such loans. The total amount of the allowance for loan
losses is based on management's evaluation of the portfolio, past experience,
economic conditions, composition of the portfolio, collateral location and
values, cash flow positions of the borrowers, delinquencies and other factors
deemed relevant. The allowance for loan losses, in management's opinion, is
adequate taking all such considerations into account.
The loan review system and charge-off policy assist management in identifying
problem loans and credit deterioration earlier than in the past and continuing
implementation of the loan review system will improve this process further.
Loans charged off in the first quarter of 1997 aggregated $215,253. The charge
offs were part of the Bank's continuing effort to address problem loans in the
loan portfolio and improve the quality of the loan assets. On February 21,
1997, the Bank received $1,441,721 from its fidelity insurance underwriters in
settlement of the bank's claims related to the fictitious "loans" made by a
consumer loan officer with no lending authority. As a result, the Bank has
recorded a recovery of $1,139,797 for the amounts previously charged off, and
the remaining balance of the insurance proceeds were used to pay down the value
of the fictitious "loans" that were not charged off. Collection efforts in the
first quarter of 1997 resulted in recoveries of $22,223 on loans previously
charged off. Total recoveries, including the insurance proceeds, for the first
quarter of 1997 aggregated $1,162,020.
10
<PAGE> 11
The table below presents management's allocation of the allowance for loan
losses at March 31, 1997, and shows the percentage of the allowance allocated
to each category of loans.
<TABLE>
(in thousands) Allowance Percent*
--------- --------
<S> <C> <C>
Commercial 598 46%
Real estate mortgage 68 36
Consumer 171 18
--- ---
837 100%
=== ===
</TABLE>
*Represents percent of loans in each category as a percent of total loans
The following table summarizes activity in the allowance for loan losses during
the first quarter of 1997.
<TABLE>
<CAPTION>
Quarter Ended
March 1997
-------------
<S> <C>
Average loans outstanding
during the period $44,542,607
===========
Allowance for loan losses:
Beginning balance 765,561
Provision for credit losses (874,572)
Charge-Offs (215,253)
Recoveries 1,162,020
-----------
Balance at End-of-Period 837,756
===========
Charge-Offs by Category
Commercial (48,814)
Consumer (165,989)
Real-Estate Mortgages (450)
-----------
Total charge-offs (215,253)
===========
Recoveries by Category
Commercial 18,273
Consumer 1,141,020
Real-Estate Mortgages 2,727
-----------
Total recoveries 1,162,020
===========
Net Loans Charged Off 946,767
===========
Provision for loan losses as a percent of
average loans (1.96)%
Net loans charged off as a percent of
average loans (2.13)%
Total loans charged off as a percent of
average loans .48%
</TABLE>
11
<PAGE> 12
DEPOSITS
The following is a summary of the average balances and average rates paid on
deposits for the quarter ending March 31, 1997.
<TABLE>
<CAPTION>
Average Average
Balance Rate
---------- ----------
<S> <C> <C>
(in thousands)
Non-interest bearing demand deposits $28,820
U.S. Treasury, tax, and loan deposits * 175
Interest bearing demand deposits 5,471 2.08%
Savings deposits 14,996 2.42%
Time deposits
$100,000 or more ** 18,951 3.39%
Other time deposits 14,946 4.89%
-------
Total $83,359
=======
</TABLE>
- --------------------------------------------------------------------------------
* Represents non-retail deposits held overnight and remitted to the federal
government the following business day.
** Includes approximately $6,000,000 of a non-interest bearing time deposit
from the U.S. Treasury.
CAPITAL RESOURCES
At March 31, 1997, the ratio of equity capital to average assets of the Bank
was 6.67% and in compliance with the Comptroller of Currency requirement of
5.50%. The risk-based Tier 1 capital ratio at March 31, 1997 was 12.79% and
the Bank's total capital ratio on March 31, 1997, was 14.05%. These ratios
were higher when compared to the December 31, 1996 ratios, which were 6.67%,
10.40%, and 11.66%, respectively.
As a result of the first quarter net income of $838,456, the Bank is now
legally able to pay dividends to the Corporation, subject to prior approval of
the Comptroller of the Currency. The Bank is prohibited from paying any cash
dividends to the Corporation without prior written consent of the Comptroller
of the Currency until the Comptroller Agreement described in the 10-KSB is
terminated. The Bank has requested permission from the Comptroller of the
Currency to pay dividends to the Corporation so that the Corporation can pay
the Senior Note holders and Class A and Class B Preferred Stock holders
interest and dividends due to them.
The Corporation in June 1996, requested the holders of its Class A and Class B
Preferred Stock and of its $900,000 of Senior Notes for a waiver of defaults in
payment of interest on the Senior Notes and dividends on the Class A and Class
B Preferred Stock during 1996 as a result of the loan department losses. The
waiver would not forgive any dividends or interest due in 1996 but would allow
the Corporation to make the payment any time in 1997 without penalty. The
Series 1994-1 Preferred Stock is not entitled to receive dividends, but a 4%
dividend is required to be paid on the series 1994-1 Stock before any dividends
may be paid on the Common Stock.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings. The judgement for wrongful termination, entered
against the Corporation in October 1994, in the amount of
$320,000 was reversed in March 1997 by the Michigan Court of Appeals
holding that there was no liability by the Corporation, the Bank's
subsidiary, or any of the individual defendants. The plaintiff has
sought leave of the Michigan Supreme Court to appeal the reversal by
the Michigan Court of Appeals. The Corporation is awaiting final
disposition.
ITEM 2. Changes in Securities - none.
ITEM 3 Defaults upon senior securities.
Reference is made to the above in the section on Capital and Resources.
ITEM 4 Submission of matters to vote of security holders.
There were no matters submitted to a vote of the security holders
during the quarter ended March 31, 1997.
ITEM 5. Exhibits and reports on Form 8-K.
Exhibits:
(a)Exhibit 27-Financial Data Schedule
Reports on Form 8-K: None
13
<PAGE> 14
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934,
the registrant has duly caused this to report on Form 10-QSB to be signed on
behalf of the undersigned thereunto duly authorized.
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
Registrant
May 12,1997 /s/ Don Davis
------------------------
Don Davis
Chief Executive Officer
May 12, 1997 /s/ Rose Ann Lacy
------------------------
Rose Ann Lacy
Chief Financial Officer
Chief Accounting Officer
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,378,145
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,960,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 13,596,981
<INVESTMENTS-CARRYING> 15,509,978
<INVESTMENTS-MARKET> 15,320,000
<LOANS> 42,749,825
<ALLOWANCE> 837,756
<TOTAL-ASSETS> 87,218,579
<DEPOSITS> 76,870,406
<SHORT-TERM> 3,416,882
<LIABILITIES-OTHER> 1,055,492
<LONG-TERM> 900,000
0
2,749,508
<COMMON> 336,760
<OTHER-SE> 1,889,531
<TOTAL-LIABILITIES-AND-EQUITY> 87,218,579
<INTEREST-LOAN> 1,671,916
<INTEREST-INVEST> 428,402
<INTEREST-OTHER> 172,837
<INTEREST-TOTAL> 1,671,916
<INTEREST-DEPOSIT> 462,249
<INTEREST-EXPENSE> 574,447
<INTEREST-INCOME-NET> 1,972,041
<LOAN-LOSSES> (874,572)
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,459,994
<INCOME-PRETAX> 876,901
<INCOME-PRE-EXTRAORDINARY> 876,901
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 876,901
<EPS-PRIMARY> 2.58
<EPS-DILUTED> 2.58
<YIELD-ACTUAL> 0
<LOANS-NON> 1,275,000
<LOANS-PAST> 1,622,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 611,000
<ALLOWANCE-OPEN> 765,561
<CHARGE-OFFS> 215,253
<RECOVERIES> 1,162,020
<ALLOWANCE-CLOSE> 837,756
<ALLOWANCE-DOMESTIC> 837,756
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
