<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
-------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from > to >
Commission File Number: 0-15777
FIRST INDEPENDENCE CORPORATION
------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Michigan 38-2583843
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
44 Michigan, Detroit, Michigan 48226
------------------------------------
(Address of Principal Executive Offices)
(313) 256-8400
-------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 of 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer 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 practicable date:
336,760 shares of Common Stock ($1 par value) as of August 5, 1998.
Transitional Small Business Disclosure Format (check one): Yes ; No X .
--- ---
<PAGE> 2
FIRST INDEPENDENCE CORPORATION
INDEX
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION Page No.
--------
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheet -
June 30, 1998 (Unaudited)........................................................ 1
Condensed Consolidated Statements of Income - Three and
Six Months Ended June 30, 1998 (Unaudited) and
June 30, 1997 (Unaudited)........................................................ 2
Consolidated Statements of Comprehensive Income - Three
and Six Months Ended June 30, 1998 (Unaudited) and
June 30, 1997 (Unaudited)........................................................ 3
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1998 (Unaudited) and
June 30, 1997 (Unaudited)........................................................ 4
Notes to Condensed Consolidated Financial Statements (Unaudited)................... 5
Item 2. Management's Discussion and Analysis or Plan of Operation.......................... 6-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................................. 11
Item 2. Changes in Securities and Use of Proceeds.......................................... 11
Item 3. Defaults upon Senior Securities.................................................... 11
Item 4. Submission of Matters to a Vote of Security Holders................................ 11
Item 5. Other Information.................................................................. 11
Item 6. Exhibits and Reports on Form 8-K................................................... 11
SIGNATURES ................................................................................... 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30,
1998
----
(Unaudited)
<S> <C>
ASSETS
Cash and due from banks $ 2,726,635
Federal funds sold 12,218,000
--------------
Total cash and cash equivalents 14,944,635
Securities available for sale 32,768,242
Securities held to maturity (fair value of $13,698,964) 13,596,306
--------------
46,364,548
Total loans 41,065,329
Allowance for loan losses (1,069,831)
--------------
39,995,498
Premises and equipment - net 3,117,928
Accrued interest receivable and other assets 1,499,768
--------------
Total assets $ 105,922,377
==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing $ 34,770,037
Interest-bearing 53,415,085
--------------
88,185,122
Short-term borrowings 11,001,263
Accrued expenses and other liabilities 454,192
Long-term debt 900,000
--------------
Total liabilities 100,540,577
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 (100,104)
Unrealized gain on securities available for sale 26,269
Unrealized holding loss on securities transferred (415)
--------------
Total shareholders' equity 5,381,800
--------------
Total liabilities and shareholders' equity $ 105,922,377
==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1.
<PAGE> 4
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
------Three Months Ended------ ------Six Months Ended------
June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest income
Loans, including fees $ 994,569 $ 1,009,843 $ 1,966,698 $ 2,078,465
Federal funds sold 150,819 202,555 333,512 375,392
Securities 709,983 459,273 1,398,512 887,675
----------- ----------- ----------- -----------
1,855,371 1,671,671 3,698,722 3,341,532
Interest expense
Deposits 489,649 462,053 946,154 924,302
Other borrowed funds 160,698 68,267 327,668 139,965
----------- ----------- ----------- -----------
650,347 530,320 1,273,822 1,064,267
----------- ----------- ----------- -----------
NET INTEREST INCOME 1,205,024 1,141,351 2,424,900 2,277,265
Provision for loan losses 75,000 348,693 150,000 (525,879)
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,130,024 792,658 2,274,900 2,803,144
Noninterest income
Service charges on deposit accounts 181,229 206,061 346,475 406,465
Net gain on sales of residential real estate loans 3,618 57,094 22,408 121,722
Other noninterest income 55,179 27,788 153,495 89,165
----------- ----------- ----------- -----------
240,026 290,943 522,378 617,352
Noninterest expense
Salaries and employee benefits 586,173 635,492 1,174,952 1,304,247
Occupancy 304,911 333,856 617,461 667,586
Professional services 47,500 30,000 115,000 143,000
Other noninterest expense 226,763 364,411 444,738 708,920
----------- ----------- ----------- -----------
1,165,347 1,363,759 2,352,151 2,823,753
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE FEDERAL INCOME TAX 204,703 (280,158) 445,127 596,743
Federal income tax expense 0 0 0 0
----------- ----------- ----------- -----------
NET INCOME (LOSS) 204,703 (280,158) 445,127 596,743
Preferred stock dividend requirement 8,550 8,550 17,100 17,100
----------- ----------- ----------- -----------
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK $ 196,153 $ (288,708) $ 428,027 $ 579,643
=========== =========== =========== ===========
Basic and diluted earnings (loss) per common share $ 0.58 $ (0.86) $ 1.27 $ 1.72
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2.
<PAGE> 5
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---Three months ended--- ---Six months ended---
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 204,703 $ (280,158) $ 445,127 $ 596,743
Other comprehensive income, net of tax:
Change in unrealized gains (losses)
on securities 45,837 86,075 (29,030) 22,451
------------ ------------ ------------ ------------
Comprehensive income $ 250,540 $ (194,083) $ 416,097 $ 619,194
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3.
<PAGE> 6
FIRST INDEPENDENCE CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 445,127 $ 596,743
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation 248,478 237,300
Amortization of premiums and discounts on
securities, net 40,649 37,322
Provision (credit) for loan losses 150,000 (525,879)
Net change in:
Accrued interest receivable and other assets (332,354) 231,605
Accrued expenses and other liabilities (177,244) 43,856
------------ ------------
Net cash from operating activities 374,656 620,947
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in loans (439,609) 5,275,482
Securities available for sale:
Proceeds from maturities and principal paydowns 9,168,923 1,048,346
Purchases (17,093,125)
Securities held to maturity:
Proceeds from maturities 3,410,000 1,500,000
Purchases (6,507,107)
Premises and equipment expenditures, net (120,501) (142,632)
------------ ------------
Net cash from investing activities (5,074,312) 1,174,089
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 7,085,369 (873,122)
Net change in short-term borrowings (1,116,353) (121,539)
Dividends paid (17,105) (42,750)
------------ ------------
Net cash from financing activities 5,951,911 (1,037,411)
------------ ------------
Net change in cash and cash equivalents 1,252,255 757,625
Cash and cash equivalents at beginning of period 13,692,380 14,321,988
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,944,635 $ 15,079,613
============ ============
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest 1,264,537 1,050,843
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4.
<PAGE> 7
FIRST INDEPENDENCE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION:
The unaudited condensed consolidated financial statements include the
consolidated results of operations of First Independence Corporation ("the
Corporation") and its wholly-owned subsidiary, First Independence National
Bank of Detroit ("the Bank"). These consolidated financial statements have
been prepared in accordance with the Instructions for Form 10-QSB and Item
310(b) of Regulation S-B and do not include all disclosures required by
generally accepted accounting principles for a complete presentation of the
Corporation's financial condition and results of operations. In the opinion
of management, the information reflects all adjustments (consisting only of
normal recurring accruals) which are necessary in order to make the
financial statements not misleading and for a fair presentation of the
results that may be achieved of operations for such periods. The results
for the period ended June 30, 1998 should not be considered as indicative
of results that may be achieved for a full year. For further information,
refer to the consolidated financial statements and footnotes included in
the Corporation's Annual Report on Form 10-KSB for the year ended December
31, 1997.
2. EARNINGS (LOSS) PER COMMON SHARE:
Basic earnings (loss) per common share is based on net income (loss)
divided by the weighted average number of common shares outstanding during
the period. Diluted earnings (loss) per common share further assumes the
issue of any potentially dilutive common shares. The weighted average
number of common shares used in the calculation of both basic and diluted
earnings (loss) per common share was 336,760 shares for the three and six
months ended June 30, 1998 and 1997.
3. COMPREHENSIVE INCOME:
Under a new accounting standard, comprehensive income is now reported for
all periods, effective for both interim and year-end financial statements
for fiscal years beginning after December 31, 1997. Comprehensive income
includes both net income and other comprehensive income. Other
comprehensive income includes the change in net unrealized gains and losses
on securities. Interim financial statements need only disclose total
comprehensive income for each reported period.
5.
<PAGE> 8
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
SUMMARY OF OPERATIONS
Net income for the second quarter of 1998 was $196,000, or $0.58 per common
share, compared to a net loss of ($289,000) or ($0.86) per common share for the
second quarter of 1997. The increase in net income for the second quarter 1998,
as compared to 1997, was primarily the result of a decrease in the loan loss
provision and a decrease in noninterest expense.
Net income for the six months ended June 30, 1998 was $445,000, or $1.27 per
common share, compared to $597,000, or $1.72 per common share, for the six
months ended June 30, 1997. The decrease was primarily the result of an increase
in the provision for loan losses, offset by an increase in net interest income
and a decrease in noninterest expense.
Net Interest Income: Net interest income for the second quarter of 1998 was
$1,205,000, an increase of $64,000 from the second quarter of 1997 net interest
income of $1,141,000. Net interest income for the six months ended June 30, 1998
was $2,425,000, an increase of $148,000 when compared to the six months ended
June 30, 1997. The increase for both the second quarter and the first six months
of 1998 as compared to 1997 was attributable to average earning assets
increasing more than average interest-bearing liabilities. This increase was
offset by a reduction in net interest margin due to lower yielding earning
assets and higher rates on deposits.
Provision for Loan Losses: The provision for loan losses in the second quarter
of 1998 was $75,000, a decrease of $274,000 from the second quarter of 1997. The
decrease in the need for additional provisions for loan losses is a result of
management's continued efforts on improving the quality of the loan portfolio.
The provision for loan losses for the six months ended June 30, 1998 was
$150,000, an increase of $676,000 when compared to the $526,000 negative
provision for loan losses for the six months ended June 30, 1997. The increase
was the result of the February 21, 1997 insurance settlement of $1,441,721 from
the Bank's claims related to "fictitious loans" originated in late 1995 and
early 1996. The majority of this amount was recorded as a recovery to the
allowance for loan losses in the first quarter of 1997. Consequently, management
reduced the balance of the allowance for loan losses through a negative
provision for loan losses of $875,000 in the first quarter of 1997, to a level
considered adequate and consistent with management's evaluation of the adequacy
of the allowance for loan losses.
Noninterest Income: Noninterest income for the second quarter of 1998 amounted
to $240,000, a decrease of $51,000, or 18%, from the second quarter of 1997. The
decrease was primarily due to a decrease in gains on sales of residential real
estate loans of $53,000.
- --------------------------------------------------------------------------------
(Continued)
6.
<PAGE> 9
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
SUMMARY OF OPERATIONS (Continued)
Noninterest income for the six months ended June 30, 1998 was $522,000, a
decrease of $95,000 when compared to the six months ended June 30, 1997. The
decrease was the result of a decrease in service charges on deposits of $60,000
and a decrease in gains on sales of residential real estate loans of $120,000,
partially offset by an increase in other noninterest income of $64,000,
primarily from additional surcharge fees on ATM usage. The decrease in gains on
sales of residential real estate loans is primarily the result of less emphasis
placed by management on the origination and sale of residential real estate
loans.
Noninterest Expense: Noninterest expense for the second quarter of 1998 amounted
to $1,165,000, a decrease of $199,000, or 15%, from the second quarter of 1997
noninterest expense of $1,364,000. The decrease was primarily the result of a
decrease in salary and wages of $49,000, occupancy expense of $29,000 and other
noninterest expense of $138,000.
For the six months ended June 30, 1998, noninterest expense of $2,350,000 was
down $472,000 as compared to the six months ended June 30, 1997. The overall
decrease was the result the following: salaries and employee benefits decreased
$129,000, occupancy decreased $60,000, other asset writedowns decreased $79,000,
the FDIC assessment decreased $51,000, and insurance expense decreased $34,000.
Less emphasis by management on the origination and sale of residential real
estate loans is also reflected in the reduction of such noninterest expenses.
BALANCE SHEET ANALYSIS
Liquidity: Federal funds sold were $12,218,000, or 13.9% of total deposits of
$88,185,000 at June 30, 1998. Total securities available-for-sale at June 30,
1998 were $32,768,000, or 37% of total deposits. In addition, $11.4 million (13%
of total deposits) of the Bank's $46.4 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.
Securities: The Bank had $46,365,000 of securities at June 30, 1998, compared to
$41,920,000 at December 31, 1997. The increase in securities is the result of
management's strategy to invest the excess funds made available from an increase
in deposits into higher earning assets. Securities primarily consist of U.S.
Treasury and U.S. Government and federal agency securities.
- --------------------------------------------------------------------------------
(Continued)
7.
<PAGE> 10
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
Loans: The following table sets forth the composition of the Bank's loan
portfolio at June 30, 1998:
<TABLE>
<S> <C> <C>
Commercial $ 12,019,000 29.3%
Commercial real estate 9,298,000 22.6
Residential real estate 13,766,000 33.5
Consumer 5,982,000 14.6
---------------- -----
$ 41,065,000 100.0%
================ =====
</TABLE>
At June 30, 1998, the Bank had $1,761,000 of loans that were considered
nonperforming. Nonperforming loans include non-accrual loans, loans with
principal or interest past due 90 days or more, and other impaired loans.
Non-accrual loans are those 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. Impaired loans are those loans
which management does not expect to fully collect all principal and interest
under the original terms of the loan. At June 30, 1998, total nonperforming and
impaired loans amounted to 4.29% of aggregate loans at June 30, 1998, compared
to 10.17% at December 31, 1997.
The amount of interest income that would have been accrued on the loans on
non-accrual status at June 30, 1998, had those loans remained current, was
approximately $35,000.
At June 30, 1998, there were no significant loans other than those identified
above, for which information was known that would cause management to have
serious doubts as to the ability of borrowers to comply with loan repayment
terms.
The allowance for loan losses totaled $1,069,831 at June 30, 1998, compared to
December 31, 1997 of $936,090. The allowance for loan losses represented 2.61%
of total loans at June 30, 1998 compared with 2.30% at December 31, 1997. The
allowance for loan losses was 60.8% of nonperforming loans at June 30, 1998 as
compared to 22.6% of nonperforming loans at December 31, 1997. 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.
Loans charged off in the second quarter of 1998 aggregated $89,505. The charge
offs are part of the Bank's continuing effort to address problem loans in the
loan portfolio and improve the quality of the loan assets. The Bank's collection
efforts in the second quarter of 1998 resulted in recoveries of $73,246 on loans
previously charged off.
- --------------------------------------------------------------------------------
(Continued)
8.
<PAGE> 11
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
The table below presents management's allocation of the allowance for loan
losses by loan portfolio at June 30, 1998.
<TABLE>
<CAPTION>
(In thousands) Allowance Percent
--------- -------
<S> <C> <C>
Commercial/commercial real estate $ 605 57%
Real estate mortgage 20 2
Consumer 91 8
Unallocated 354 33
---------- -----
$ 1,070 100%
========== =====
</TABLE>
The following table summarizes activity in the allowance for loan losses during
the six months ended June 30, 1998.
<TABLE>
<CAPTION>
<S> <C>
Average loans outstanding during the period $ 41,120,000
================
Allowance for loan losses
Beginning balance $ 936,090
Provision for loan losses 150,000
Charge-offs (89,505)
Recoveries 73,246
----------------
Balance at end of period $ 1,069,831
================
Charge-offs by category
Commercial $ 2,321
Consumer 84,835
Real estate mortgages 2,349
----------------
Total charge-offs $ 89,505
================
Recoveries by category
Commercial $ 5,539
Consumer 62,611
Real estate mortgages 5,096
----------------
Total recoveries $ 73,246
================
Net loans charged off $ 16,261
Provision for loan losses as a percent of average loans 0.36%
Net loans charged off as a percent of average loans 0.04%
Total loans charged off as a percent of average loans 0.22%
</TABLE>
- --------------------------------------------------------------------------------
(Continued)
9.
<PAGE> 12
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
BALANCE SHEET ANALYSIS (continued)
Deposits: The following is a summary of the average balances and average rates
paid on deposits for the six months ending June 30, 1998.
<TABLE>
<CAPTION>
Average Average
(In thousands) Balance Rate
------- -------
<S> <C> <C>
Noninterest-bearing demand deposits $ 32,031
Interest-bearing demand deposits 9,518 2.12%
Savings deposits 14,800 2.32
Time deposits
$100,000 or more * 16,263 3.92
Other time deposits 14,718 4.83
----------
$ 87,330
==========
</TABLE>
* Includes approximately $4.7 million of noninterest-bearing time deposits
from the U.S. Treasury.
Capital Resources: The following table presents the components of Tier 1 Capital
and Total Capital as of June 30, 1998. Both Tier 1 and Total Capital exceed
regulatory minimum requirements of 4% and 8%, respectively. The Tier 1 Leverage
Ratio, also presented below, exceeds the regulatory minimum of 3%.
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---- ----
<S> <C> <C>
Capital Components:
Tier 1 Capital:
Common shareholders' equity $ 6,280,137 $ 5,881,141
Adjustments (25,852) (54,882)
-------------- --------------
$ 6,254,285 $ 5,826,259
============== ==============
Total Capital:
Common shareholders' equity $ 6,280,137 $ 5,881,141
Adjustments (25,852) (54,882)
Qualifying allowance for possible credit losses 1,070,000 936,090
-------------- --------------
$ 7,324,285 $ 6,762,349
============== ==============
Ratios (end of period):
Risk-Based Capital Ratios:
Tier 1 Capital Ratio 11.97% 11.95%
Total Capital Ratio 13.23% 13.20%
Tier 1 Leverage Ratio 5.92% 6.08%
</TABLE>
- --------------------------------------------------------------------------------
10.
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. The judgment 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 sought leave of the Michigan Supreme Court to appeal the
reversal by the Michigan Court of Appeals. On March 17, 1998, the
Michigan Supreme Court denied the appeal holding that the
questions presented should not be reviewed by the Court.
Item 2. Changes in Securities - none.
Item 3. Defaults upon Senior Securities - none.
Item 4. Submission of Matters to Vote of Security Holders.
There were no matters submitted to a vote of the security holders
during the six months ended June 30, 1998.
Item 5. Other Information - none.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits:
(a) Exhibit 27-Financial Data Schedule
Reports on Form 8-K: None
- --------------------------------------------------------------------------------
11.
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST INDEPENDENCE CORPORATION
Registrant
Date: 8/12/98 /s/ Don Davis
---------------------- ----------------------------------
Don Davis, Chief Executive Officer
Date: 8/12/98 /s/ Rose Ann Lacy
---------------------- ----------------------------------
Rose Ann Lacy, Chief Financial Officer
- --------------------------------------------------------------------------------
12.
<PAGE> 15
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,726,635
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 12,218,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 32,768,242
<INVESTMENTS-CARRYING> 13,596,306
<INVESTMENTS-MARKET> 13,698,964
<LOANS> 41,065,329
<ALLOWANCE> 1,069,831
<TOTAL-ASSETS> 105,922,377
<DEPOSITS> 88,185,122
<SHORT-TERM> 11,001,263
<LIABILITIES-OTHER> 454,192
<LONG-TERM> 900,000
0
2,749,508
<COMMON> 336,760
<OTHER-SE> 2,295,532
<TOTAL-LIABILITIES-AND-EQUITY> 105,922,377
<INTEREST-LOAN> 1,966,698
<INTEREST-INVEST> 1,398,512
<INTEREST-OTHER> 333,512
<INTEREST-TOTAL> 3,698,722
<INTEREST-DEPOSIT> 946,154
<INTEREST-EXPENSE> 1,273,822
<INTEREST-INCOME-NET> 2,424,900
<LOAN-LOSSES> 150,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,352,151
<INCOME-PRETAX> 445,127
<INCOME-PRE-EXTRAORDINARY> 445,127
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 445,127
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
<YIELD-ACTUAL> 0
<LOANS-NON> 721,052
<LOANS-PAST> 1,038,563
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,637
<ALLOWANCE-OPEN> 936,090
<CHARGE-OFFS> 89,505
<RECOVERIES> 73,246
<ALLOWANCE-CLOSE> 1,069,831
<ALLOWANCE-DOMESTIC> 715,479
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 354,352
</TABLE>
