FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended March 31, 1997 Commission File Number
33-22807-B
PEMI BANCORP, INC.
------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------------------------------------
NEW HAMPSHIRE 02-0386832
------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
287 Highland Street
PLYMOUTH, NEW HAMPSHIRE 03264
-----------------------------
Address of principal executive offices
(603) 536-3339
--------------
(Registrant's telephone number, including area code)
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 twelve (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 ninety (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.
690,401 shares of common stock are outstanding as of May 1, 1997.
<PAGE>
INDEX
PEMI BANCORP, INC.
PART I. FINANCIAL INFORMATION PAGE
Item 1
Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 1997
and December 31, 1996 ...................................... 3
Consolidated Statements of Income for the Three
Months Ended March 31, 1997 and 1996 .......................... 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1997 and 1996 .......................... 5
Notes to Consolidated Financial Statements .................... 7
Item 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations .................................... 8
Item 3
Quantitative and Qualitative Disclosures About Market Risk .... N/A
PART II. OTHER INFORMATION
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
Other Information ............................................. 13
Item 6
Exhibits and Reports on Form 8-K .............................. 13
Signatures .................................................... 14
2
<PAGE>
PEMI BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
3/31/97 12/31/96
<S> <C> <C>
ASSETS
Cash & due from banks $ 4,474,000 $ 4,979,633
Securities held to maturity 11,603,547 11,975,136
(approximate market value of
$11,398,199 and $11,879,497, respectively)
Securities available-for-sale 17,389,409 18,456,658
(listed at fair value)
FRB/FHLB Stock 819,850 819,850
Federal Funds Sold 0 0
Net loans 87,848,725 87,095,923
Other real estate owned 109,193 54,193
Bank premises & equipment 4,099,150 3,979,403
Other assets 1,718,203 1,618,336
------------- -------------
Total Assets $ 128,062,077 $ 128,979,132
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 14,570,982 $ 16,116,453
Now, Money Market & Savings 42,961,656 43,540,576
Time Deposits 46,068,956 46,028,339
Total Deposits 103,601,594 105,685,368
Advances from Federal Home Loan Bank
of Boston 9,891,525 8,702,525
Other liabilities 2,168,105 2,377,330
------------- -------------
Total Liabilities 115,661,224 116,765,223
Stockholders' Equity
Common stock par value $1.00
2,000,000 shares authorized
751,901 issued and 690,401
shares outstanding 751,901 751,901
Additional paid in capital 2,384,329 2,384,329
Retained earnings 9,993,002 9,714,379
Treasury stock, at cost (61,500 shares) (615,000) (615,000)
Unrealized gain/(loss)
Securities available-for-sale,net (113,379) (21,700)
------------- -------------
Total Stockholders' Equity 12,400,853 12,213,909
------------- -------------
Total Liabilities & Stockholders' Equity $ 128,062,077 $ 128,979,132
============= =============
</TABLE>
The accompanying notes are an intergral part of these financial statements.
3
<PAGE>
PEMI BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1997 & March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
3/31/97 3/31/96
INTEREST AND DIVIDEND INCOME:
<S> <C> <C>
Interest and fees on loans $ 1,993,014 $ 1,978,345
Interest on deposits in other banks 195 21,426
Interest on federal funds sold 12,368 11,777
Interest and dividends on securities
U.S. Government & agency securities 48,014 39,143
State & municipal securities 65,648 65,297
Other securities 376,288 306,715
-------------- -------------
TOTAL INTEREST & DIVIDEND INCOME $ 2,495,527 $ 2,422,703
INTEREST EXPENSE:
Now & money market accounts 136,518 144,932
Savings deposits 101,111 88,121
Time deposits $100,000 and over 76,445 77,379
Other time deposits 571,495 551,033
Short-term borrowing 57,792 107,173
Long-term borrowing 79,101 7,490
-------------- -------------
TOTAL INTEREST EXPENSE 1,022,462 976,128
-------------- -------------
NET INTEREST INCOME $ 1,473,065 $ 1,446,575
Provisions for loan losses 30,000 36,000
-------------- -------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES $ 1,443,065 $ 1,410,575
NONINTEREST INCOME:
Service charges deposit accounts $ 116,400 $ 112,798
Other services charges & fees 46,751 35,746
Security gains (losses) 0 0
-------------- -------------
TOTAL NONINTEREST INCOME $ 163,151 $ 148,544
NONINTEREST EXPENSE:
Salaries and wages $ 478,263 $ 463,917
Pensions and other employee benefits 126,735 119,144
Occupancy expense 106,900 92,653
Furniture & equipment expense 111,483 124,928
Other operating expense 366,412 323,074
-------------- -------------
TOTAL NONINTEREST EXPENSE $ 1,189,793 $ 1,123,716
-------------- -------------
INCOME BEFORE INCOME TAXES $ 416,423 $ 435,403
-------------- -------------
Income taxes 137,800 141,500
-------------- -------------
NET INCOME $ 278,623 $ 293,903
============== =============
Earnings per share based upon
690,401 shares $ 0.40 $ 0.43
</TABLE>
The accompanying notes are an intergral part of these financial statements.
4
<PAGE>
PEMI BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1997 & March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
3/31/97 3/31/96
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 278,623 $ 293,903
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Amortization of core deposit intangible 4,375 0
Amortization, net of accretion of securities held-to-maturity 19,464 21,000
Amortization, net of accretion of securities available-for-sale 6,337 10,974
Depreciation on bank premises and equipment 100,967 82,942
Provision for possible loan losses 30,000 36,000
(Increase) decrease in deferred taxes (8,900) 17,550
Increases in taxes payable 109,834 75,895
Decrease (Increase) in interest receivable 67,671 (71,308)
Increase in interest payable 30,525 176,017
Increase in accrued expenses 23,748 47,282
(Increase) in prepaid expenses (64,170) (12,845)
(Decrease) in unearned income (12,949) (38,614)
Other real estate owned writedowns 5,000 0
------------ -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 590,525 $ 638,796
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities available-for-sale 911,550 180,933
Purchase of securities available-for-sale 0 (6,182,400)
Proceeds from maturities of securities held-to-maturity 352,125 350,068
Net (increase) in loans (865,716) (718,431)
Capital expenditures (220,714) (45,259)
Recoveries of previously charged-off loans 35,863 6,477
(Decrease) in other liabilities (28,132) (24,777)
(Increase) decrease in federal funds sold 0 3,300,000
Decrease (increase) in other assets (41,160) 975
------------ -------------
NET CASH USED IN INVESTING ACTIVITIES $ 143,816 $ (3,132,414)
</TABLE>
(Continued on next page)
5
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued from previous page)
<TABLE>
<CAPTION>
3/31/97 3/31/96
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) in demand, NOW, money market
and savings accounts $ (2,124,391) $ (3,268,721)
Net increase in certificates of deposit 40,617 1,891,372
Net increase in FHLB borrowings 1,189,000 2,200,000
Dividends paid (345,200) (255,448)
------------ -------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (1,239,974) $ 567,203
NET DECREASE IN CASH AND CASH
EQUIVALENTS (505,633) (1,926,415)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 4,979,633 4,918,670
------------ -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,474,000 $ 2,992,255
============ =============
SUPPLEMENTAL DISCLOSURES:
Loans transferred to other real estate owned $ 60,000 $ 195,000
Interest paid 1,022,462 976,128
Income taxes paid 137,800 141,500
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1997
1. Financial information furnished herein reflects all adjustments which are
of a normal and recurring nature and which, in the opinion of management,
are necessary for a fair presentation of the results of operations for
interim periods.
2. Results of operations for the three month period ended March 31, 1997 are
not necessarily indicative of the results to be expected for the entire
year.
3. Financial Statements for interim periods, by their very nature, require
estimations which necessarily result in greater imprecision than those
associated with annual financial statements.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
INTRODUCTION
The following discussion and related consolidated financial statements
include Pemi Bancorp, Inc. (the "Company") and its wholly-owned subsidiary, the
Pemigewasset National Bank (the "Bank").
FINANCIAL CONDITION
Through the first quarter of 1997, the Company's total net income
decreased from $293,903 to $278,623, as compared to the same period last year.
Fees and expenses associated with the data processing conversion as well as
discussions and actions leading to the definitive merger agreement were
responsible for the decrease in net income compared to the first quarter of
1996.
The Company's total assets decreased .7% to $128,062,077 at March 31,
1997 as compared to $128,979,132 at December 31, 1996. Cash and Cash Equivalents
decreased from $4,979,633 to $4,474,000 during the period, while Securities
Available-for-Sale decreased from $18,456,658 to $17,389,409. During this
period, net loans increased .9% or $752,802 to $87,848,725 at March 31, 1997 as
compared with $87,095,923 at December 31, 1996, reflecting a modest increase in
loan demand.
For the first three months of 1997, the Bank's Provisions to the
Allowance for Loan and Lease Losses (ALLL) amounted to $30,000 compared to
$36,000 for the first three months of 1996. On March 31, 1997 the ALLL balance
was $1,283,392 or 1.44% of total loans, as compared to $1,306,304 or 1.48% of
total loans as of December 31, 1996. The adequacy of the ALLL is based on an
evaluation by Management and the Board of Directors of current and anticipated
economic conditions, changes in the diversification, size and risk within the
loan portfolio, and other factors.
Nonperforming loans amounted to $1,426,881 as of March 31, 1997, as
compared to $617,925, as of December 31, 1996, reflecting a net increase of
certain nonperforming loans. The ratio of nonperforming loans to total loans
increased from .7% to 1.6% and the ratio of nonperforming assets to total assets
increased to 1.11% from .52%.
Most of the increase in nonperforming loans is attributable to four (4)
separate loan relationships. In two of these instances, the deaths of the
borrowers have resulted in a disruption to the scheduled repayment of the loans
and the loans are considered to be nonperforming. However, based upon the
appraised value of the collateral which secures such loans, management has
established specific reserves and does not expect the Bank to incur additional
material losses from these loans when the administration of the estates is
completed and the properties are sold and/or the loans are repaid. In two other
instances, borrowers have experienced personal tragedies which have effected
their business and resulted in their commencement of bankruptcy proceedings. In
8
<PAGE>
light of the pending bankruptcy proceedings, the loans are considered to be
nonperforming. However, based upon the appraised values of the collateral which
secures such loans and the terms of a purchase and sale agreement with a third
party which would substantially protect the Bank's interest with regard to the
largest of these two credit relationships, management has established specific
reserves and does not anticipate that the Bank will experience any further
material losses in the ultimate resolution of these loans. The largest of these
credit relationships, which amounted to approximately one-half of the total
increase in nonperforming loans, was fully performing through March 31, 1997.
However, in early April 1997, upon the commencement of the bankruptcy
proceeding, the Bank placed the loan on nonaccrual status retroactively through
the first calender quarter of 1997.
Management is concerned regarding the increase in nonperforming loans
and is working aggressively to obtain repayment of these credits. Management
remains optimistic regarding the Bank's ability to significantly reduce
nonperforming loans and does not consider these credits to reflect any economic
trend affecting the Bank's loan portfolio, market area or customer base
generally.
The Bank implemented SFAS No. 114, as amended by SFAS No. 118, as part
of the review and adoption of policies regarding the ALLL by the Board of
Directors on February 21, 1995. The effects of implementing SFAS Nos. 114 and
118, respectively, were not material, and require that impaired loans be
measured on a loan by loan basis by either the present value of expected future
cash flows discounted at the loan's effective interest rate, the loan's
observable market price, or the fair value of the collateral if the loan is
collateral dependent.
Total cash and cash equivalents decreased $505,633 and amounted to
$4,474,000 at March 31, 1997, compared to $4,979,633 at December 31, 1996.
Securities held-to-maturity decreased over the same period from $11,975,136 to
$11,603,547, or $371,589, due to the principal reduction of certain securities.
RESULTS OF OPERATIONS
The Company generated net income of $278,623 for the three month period
ended March 31, 1997 as compared with net income of $293,903 for March 31, 1996.
Taxes decreased from $141,500 for the three months ended March 31, 1996 to
$137,800 for the three months ended March 31, 1997.
Earnings were $.40 per share for for the first three months of 1997
compared to $.43 per share for the first three months of 1996.
For the three month period ended March 31, 1997, interest and fees on
loans amounted to $1,993,014, which represented an increase of .7% or $14,669
from the comparable period in 1996. This can be attributed to increased loan
balances compared to the previous year. Interest and dividends on securities for
the three month period ended March 31, 1997 amounted to $489,950 as compared
with $411,155 from the same period in 1996, which reflects an increase of
$78,795 or 19.2%. This increase is a result of the growth in investment
securities. Interest on federal funds sold for the three month period increased
9
<PAGE>
from $11,777 to $12,368, which represents an increase of 5%. This increase is
due to larger average federal funds sold balances.
Corresponding total interest expense for the three month period ended
March 31, 1997 was $1,022,462 compared to $976,128 for same period in fiscal
1996, or an increase of 4.7%, which can be attributed to an increase in deposit
balances.
Total noninterest income for the three month period ended March 31,
1997 increased $14,607 or 9.8% to $163,151 from $148,544 when compared to the
first three months of 1997. This increase is primarily attributable to increases
in service charges and fee income.
Total noninterest expense amounted to $1,189,793 for the first three
months of 1997 as compared with $1,123,716, reflecting an increase of $66,077
compared to the corresponding period in fiscal year 1996. This increase stems
primarily from higher personnel costs and increased operating expense.
LIQUIDITY
Banking institutions measure liquidity as the ability to meet
unexpected deposit withdrawals of a short-term nature and to meet increased loan
demand. It is Management's objective to ensure a continuous ability to meet cash
needs as they arise. As of March 31, 1997 the Bank's liquidity ratio stood at
12.8% as compared to 14.1% at December 31, 1996. With available FHLB Advances
included, these ratios become 31.2% and 32.8%, respectively. Management believes
the Bank's liquidity to be adequate to meet the needs of the Bank.
The Bank increased its Federal Home Loan Bank borrowings by $1,189,000,
from $8,702,525 at December 31, 1996 to $9,891,525 at March 31, 1997. The Bank's
securities available-for-sale decreased $1,067,249 from $18,456,658 at December
31, 1996 to $17,389,409 at March 31, 1997.
The Bank is authorized to borrow from the Federal Home Loan Bank
("FHLB"). FHLB advances have become the Bank's primary borrowing vehicle. The
Bank borrows from the FHLB for liquidity management, interest rate risk
management, to match the funding of loans or investments, for profit enhancement
opportunities and to reduce the Bank's marginal cost of funds.
INTEREST RATE SENSITIVITY ANALYSIS
The Bank manages Interest Rate Risk through use of an asset/liability
funding matrix report supported by a GAP report. The potential impact on
earnings due to changes in interest rates is also evaluated through the use of
an income simulation model.
The Bank's analysis of interest rate sensitivity format is divided into
four (4) components. The first component is to evaluate information concerning
various maturities of rate sensitive assets. The second component identifies
10
<PAGE>
rate sensitive liabilities. The third component identifies interval gaps and the
fourth component evaluates cumulative gap analysis.
Rate sensitive assets and rate sensitive liabilities are catagorized by
their repricing characteristics and evaluated.
The Bank evaluates the difference between Rate Sensitive Assets and
Rate Sensitive Liabilities at various intervals and attempts to match or control
the ratio of such assets within prudent ranges.
Finally, the Bank evaluates the cumulative GAP measurement of GAP
positions at various time intervals.
The GAPs at time intervals indicate the timing of the effect of
interest rate changes on income. The Cumulative GAP indicates the overall
magnitude and direction of rate risk exposure.
It may be less costly to adjust the GAP in a negative direction than in
a positive direction because capital losses may be generated if the maturity of
the investment portfolio is shortened to move the GAP in a positive direction.
However, the greater the Bank's ability to replace short-term liabilities with
long-term liabilities, the easier it is to adjust the GAP in a positive
direction.
Should the Interest Rate Risk Sensitivity Analysis indicate that the
Bank is asset sensitive (more rate sensitive assets than rate sensitive
liabilities), then rising rates will have a positive impact on earnings;
however, falling rates will negatively affect earnings.
Should the analysis indicate liability sensitivity, then rising rates
will tend to reduce earnings and falling rates will tend to have a positive
impact on earnings.
Modeling is used to forecast how net interest income, and therefore net
income, varies under alternative interest rate and business activity scenarios.
The Bank then compares the risk, or income volatility, associated with a variety
of different future rate scenarios.
As of March 31, 1997, the Bank has a positive GAP position which, in a
rising interest rate environment would have a slightly positive effect on the
Bank's earnings and, in a declining interest rate environment would have a
slightly negative effect on earnings. Management believes the current level of
interest rate risk to be prudent in this economic environment and continues to
monitor and manage the Bank's GAP position to avoid an inappropriate level of
interst rate risk.
11
<PAGE>
CAPITAL RESOURCES
The equity capital of the Company as of March 31, 1997 amounted to
$12,400,853 or 9.68% of total assets. At December 31, 1996, the equity capital
amounted to $12,213,909 or 9.47% of total assets.
The Bank and the Company are required to maintain capital levels
consistent with the capital requirements of the Office of the Comptroller of the
Currency and the Federal Reserve System. The Office of the Comptroller of the
Currency's capital guidelines require a ratio of Total Capital (consisting of
capital, surplus and the allowance for loan losses up to 1.25% of risk weighted
assets) to be equal to at least 8.00% of risk weighted assets. Additionally, the
Bank must maintain Tier 1 Capital (which under the regulations, consists of
common stockholders' equity, noncumulative perpetual preferred stock and related
surplus, and minority interests in the equity accounts of consolidated
subsidiaries) in amounts not less than 3.00% of adjusted total assets (or 100 to
200 basis points or more higher in cases of banks which do not receive the best
composite ratings). As of March 31, 1997, Total Capital amounted to 17.59% of
risk weighted assets, and Tier 1 Leverage Capital of the Bank amounted to
approximately 9.56% of adjusted average assets, substantially exceeding
applicable minimum regulatory requirements. The Bank and the Company are in
compliance with all applicable capital requirements.
EFFECTS OF INFLATION
Inflation affects the growth of total assets by increasing the level of
loan demand and creating the need to increase equity capital at higher than
normal rates in order to maintain an appropriate ratio of equity to assets.
Interest rates in particular are significantly affected by inflation. (See
"Interest Rate Sensitivity Analysis"). In addition to its effect on interest
rates, inflation directly affects the Company by increasing the Company's cost
of funds and operating expenses. Currently, low inflation has been beneficial in
holding down the Bank's cost of funds.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings- None
Item 2. Changes in Securities- None
Item 3. Defaults upon Senior Securities- None
Item 4. Submission of Matters to a Vote of Security Holders-None
Item 5. Other Information-None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT NUMBER
--------------
(27) Financial Data Schedule
(b) Form 8-K- Other Matters. On March 26, 1997 the Company filed an
8-K regarding the execution on March 14, 1997 of a definitive
Agreement and Plan of Merger by and among Pemi Bancorp, Inc.,
Pemigewasset National Bank, The Berlin City Bank and Northway
Financial, Inc.
13
<PAGE>
SIGNATURES
Pursuant to 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.
PEMI BANCORP, INC.
Date MAY 6, 1997 By /s/ Fletcher W. Adams
---------------------
Fletcher W. Adams
President and Treasurer
(Chief Executive Officer)
By /s/ Keith L. Philbrick
----------------------
Keith L. Philbrick
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000768868
<NAME> PEMI BANCORP, INC
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,474,000
<INT-BEARING-DEPOSITS> 89,030,612
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 17,389,409
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 11,603,547
<LOANS> 89,132,117
<ALLOWANCE> 1,283,392
<TOTAL-ASSETS> 128,062,077
<DEPOSITS> 103,601,594
<SHORT-TERM> 4,597,225
<LIABILITIES-OTHER> 2,168,105
<LONG-TERM> 5,294,300
0
0
<COMMON> 751,901
<OTHER-SE> 11,648,952
<TOTAL-LIABILITIES-AND-EQUITY> 128,062,077
<INTEREST-LOAN> 1,993,014
<INTEREST-INVEST> 489,950
<INTEREST-OTHER> 12,758
<INTEREST-TOTAL> 2,495,527
<INTEREST-DEPOSIT> 885,569
<INTEREST-EXPENSE> 1,022,462
<INTEREST-INCOME-NET> 1,473,065
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,189,793
<INCOME-PRETAX> 416,423
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 278,623
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 115,382
<LOANS-PAST> 311,499
<LOANS-TROUBLED> 310,222
<LOANS-PROBLEM> 3,895,222
<ALLOWANCE-OPEN> 1,306,304
<CHARGE-OFFS> 88,776
<RECOVERIES> 35,863
<ALLOWANCE-CLOSE> 1,283,392
<ALLOWANCE-DOMESTIC> 1,283,392
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
