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, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________________ to ____________________
Commission file number 0-22288
Fidelity Bancorp, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Pennsylvania 25-1705405
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization
1009 Perry Highway, Pittsburgh, Pennsylvania 15237
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(Address of principal executive offices) (Zip code)
412-367-3300
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(Issuer's telephone number)
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 1,549,846 shares, par value
$0.01, at June 30, 1997
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [ X ]
<PAGE>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Index
Part I - Financial Information
Item 1. Financial Statements
Statements of Financial Condition as of September 30, 1996
and June 30, 1997 (Unaudited)
Statements of Income (Unaudited) for the Three and Nine Month Periods
Ended June 30, 1996 and 1997
Statements of Cash Flows (Unaudited) for the Nine Months Ended
June 30, 1996 and 1997
Statement of Changes in Stockholders' Equity (Unaudited) for the Nine
Months Ended June 30, 1996 and 1997
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Financial Condition
Assets June 30, 1997 September 30, 1996
------------- -------------
(Unaudited)
<S> <C> <C>
Cash and amounts due from
depository institutions ............................. $ 4,856,404 $ 4,616,088
Interest-earning demand deposits with
other institutions ................................... 137,893 146,010
Investment securities held-to-maturity ................ 6,620,275 5,401,139
Investment securities available-for-sale .............. 42,144,424 50,928,774
Loans receivable, net ................................. 175,926,238 151,263,067
Mortgage-backed securities held-to-maturity ........... 32,480,651 31,274,934
Mortgage-backed securities available-for-sale ......... 87,800,553 62,463,269
Real estate owned, net ................................ 119,541 369,675
Federal Home Loan Bank stock - at cost ............... 4,185,000 2,826,300
Accrued interest receivable, net:
Loans ............................................. 910,663 850,006
Mortgage-backed securities ........................ 708,896 566,018
Investments ....................................... 840,748 726,573
Office premises and equipment, net .................... 3,204,031 3,365,941
Deferred tax asset .................................... 1,590,459 1,925,924
Goodwill and other intangible assets .................. -0- 44,015
Prepaid income taxes .................................. -0- 324,414
Prepaid expenses and sundry assets .................... 1,776,331 781,894
------------ ------------
Total Assets ............................ $363,302,107 $317,874,041
============ ============
Liabilities and Net Worth
Liabilities:
Savings deposits .................................. $238,636,037 $234,275,620
Federal Home Loan Bank advances ................... 83,700,000 56,650,000
Reverse repurchase agreements ..................... 1,463,809 493,133
Advance deposits by borrowers for
taxes and insurance ............................. 2,728,744 1,316,683
Accrued interest on savings and
other deposits .................................. 113,789 176,914
Accrued interest on guaranteed preferred beneficial
interest in subordinated debt .................. 134,163 -0-
Accrued income taxes payable ...................... 651,422 -0-
Other accrued expenses and sundry liabilities ..... 1,086,906 3,183,596
Guaranteed preferred beneficial interest in
subordinated debt (Note 8) ..................... 10,250,000 -0-
------------
Total Liabilities ......................... 338,764,870 296,095,946
------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Financial Condition
June 30, 1997 September 30, 1996
------------- -------------
(Unaudited)
<S> <C> <C>
Stockholders' equity (Notes 4 and 5):
Common stock, $0.01 par value per share;
10,000,000 shares authorized; 1,549,846
and 1,506,462 shares issued and outstanding,
respectively ............................... 15,498 13,732
Additional paid-in capital ................... 13,661,693 10,437,133
Retained earnings - substantially restricted . 11,159,442 12,522,830
Unrealized gain (loss) on securities
available-for-sale ......................... (299,396) (1,195,600)
------------- -------------
Total stockholders' equity ................... 24,537,237 21,778,095
------------- -------------
Total Liabilities and Stockholders' Equity ....... $ 363,302,107 $ 317,874,041
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Income (Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income:
Loans ......................................... $ 3,464,077 $ 2,992,309 $ 9,861,072 $ 8,320,947
Mortgage-backed securities .................... 1,725,860 1,561,996 4,892,652 4,617,686
Investment securities ......................... 774,524 862,130 2,489,160 2,449,645
Deposits with other institutions .............. 2,358 3,687 7,273 20,022
----------- ----------- ----------- -----------
Total interest income ..................... 5,966,819 5,420,122 17,250,157 15,408,300
----------- ----------- ----------- -----------
Interest Expense:
Savings deposits .............................. 2,381,117 2,442,092 7,054,068 7,682,382
Guaranteed preferred beneficial interest
in subordinated debt (Note 8) .......... 137,064 -- 137,064 --
Borrowed funds ............................... 913,797 534,780 2,587,374 1,056,679
----------- ----------- ----------- -----------
Total interest expense ................. 3,431,978 2,976,872 9,778,506 8,739,061
----------- ----------- ----------- -----------
Net interest income before provision for loan losses 2,534,841 2,443,250 7,471,651 6,669,239
Provision for loan losses .......................... 130,000 90,000 365,000 180,000
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 2,404,841 2,353,250 7,106,651 6,489,239
----------- ----------- ----------- -----------
Other income:
Service fee income ............................ 21,199 20,336 56,838 55,843
Gain (loss) on sale of investment and
mortgage-backed securities, net ........... 6,402 9,617 26,924 26,620
Gain on sale of loans ......................... 10,845 3,360 16,131 8,912
Other operating income ........................ 183,607 161,226 530,580 453,034
----------- ----------- ----------- -----------
Total other income ........................ 222,053 194,539 630,473 544,409
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Income (Unaudited)
(continued)
Three Months Ended Nine Months Ended
June 30, June 30,
--------------------------- ---------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating expenses:
Compensation and employee benefits ............ 924,137 813,916 2,687,124 2,403,590
Occupancy and employee benefits ............... 150,516 139,552 439,021 418,049
Depreciation and amortization ................. 119,452 110,190 354,950 332,221
Federal insurance premiums .................... 37,788 140,343 75,529 420,292
Loss on real estate owned, net ................ 3,820 66,689 36,366 88,142
Amortization of intangibles ................... -- 66,022 44,015 198,067
Other operating expenses ...................... 374,425 330,632 1,130,020 973,994
----------- ----------- ----------- -----------
Total operating expenses .................. 1,610,138 1,667,344 4,767,025 4,834,355
----------- ----------- ----------- -----------
Income before income tax provision ................. 1,016,756 880,445 2,970,099 2,199,293
Income tax provision ............................... 361,000 263,000 1,054,000 646,000
----------- ----------- ----------- -----------
Net income ......................................... $ 655,756 $ 617,445 $ 1,916,099 $ 1,553,293
=========== =========== =========== ===========
Primary earnings per common share .................. $ 0.41 $ 0.40 $ 1.21 $ 1.01
(Notes 3&4)
Dividends per common share (Note 4) ................ $ 0.09 $ 0.066 $ 0.254 $ .198
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Cash Flows (Unaudited)
Nine Months
Ended June 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Operating Activities:
Net income: ........................................................ $ 1,916,099 $ 1,553,293
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses ...................................... 365,000 180,000
Depreciation and amortization .................................. 354,950 332,221
Deferred loan fee amortization ................................. (122,567) (221,021)
Amortization of investment and mortgage-backed
discounts/premiums, net ....................................... 233,914 234,052
Amortization of intangibles .................................... 44,015 198,067
Net (gain) loss on sale of investment securities ............... (57,078) (10,344)
Net (gain) loss on sale of mortgage-backed securities .......... 30,154 (16,276)
Net (gain) loss on sale of loans .............................. (16,131) (8,912)
Origination of loans held-for-sale ............................. (552,300) (134,400)
Proceeds from sale of loans held-for-sale ...................... 559,587 143,312
(Increase) decrease in interest receivable ..................... (317,710) (473,473)
(Increase) decrease in deferred tax asset ...................... 335,465 (858,332)
Increase (decrease) in accrued income taxes .................... 975,836 (1)
Increase (decrease) in interest payable ........................ 71,038 (130,510)
SAIF assessment ................................................ (1,530,357) -0-
Other changes, net ............................................. (1,868,309) 2,465,552
------------ ------------
Net cash provided (used) by operating activities ................ 421,606 3,253,228
------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Cash Flows (Unaudited)
(continued)
Nine Months
Ended June 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
Investing Activities:
Proceeds from sales of investment securities available-for-sale .... 15,191,701 5,555,628
Proceeds from maturities and principal repayments of
investment securities available-for-sale ........................ 2,000,000 5,000,000
Purchases of investment securities available-for-sale .............. (8,011,432) (24,504,255)
Proceeds from sales of mortgage-backed securities available-for-sale 8,587,846 5,505,078
Proceeds from maturities and principal repayments of mortgage-
backed securities available-for-sale ............................ 5,680,380 5,200,000
Purchases of mortgage-backed securities available-for-sale ......... (38,894,762) (12,289,521)
Proceeds from maturities and principal repayments of investment
securities held-to-maturity ..................................... 1,407,719 1,483,769
Purchases of investment securities held-to-maturity ................ (2,625,000) -0-
Proceeds from principal repayments of mortgage-backed
securities held to maturity ..................................... 3,762,971 5,121,233
Purchases of mortgage-backed securities held-to-maturity ........... (5,052,500) (33,165)
Principal repayments on first mortgage loans ....................... 11,964,110 11,159,662
Principal repayments on other loans ................................ 15,345,122 12,573,125
First mortgage loans originated and disbursed ...................... (25,866,520) (26,014,505)
Other loans originated ............................................. (27,458,872) (23,535,958)
Proceeds from sale of other loans .................................. 318,999 521,127
Additions to office premises and equipment ......................... (529,162) (185,339)
------------ ------------
Net cash provided (used) by investing activities ...................... (44,179,400) (34,443,121)
------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Cash Flows (Unaudited)
(continued)
Nine Months Ended June 30,
-----------------------------------
1997 1996
-------------- ---------------
<S> <C> <C>
Financing Activities:
Net increase (decrease) in savings deposits ..................... 4,360,417 (4,056,495)
Increase in advance payments by borrowers for taxes and insurance 1,412,061 1,495,332
Increase (decrease) in reverse repurchase agreements ............ 970,676 (4,205,716)
FHLB advance repayments ......................................... (1,165,525,000) (881,975,000)
FHLB advances ................................................... 1,192,575,000 924,975,000
Cash dividends paid ............................................. (376,038) (300,090)
Stock options exercised ......................................... 266,023 42,611
Proceeds from sale of stock ..................................... 56,854 40,397
Proceeds from guaranteed preferred beneficial interest in
subordinated debt ............................................. 10,250,000 -0-
-------------- ---------------
Net cash provided (used) by financing activities ................ 43,989,993 36,016,039
-------------- ---------------
Increase (decrease) in cash and cash equivalents ................ 232,199 4,826,146
Cash and cash equivalents at beginning of period ................ 4,762,098 5,043,480
--------------- ---------------
Cash and cash equivalents at end of period ...................... $ 4,994,297 $ 9,869,626
=============== ===============
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest on deposits and other borrowings ..................... $ 9,537,427 $ 8,825,394
Income taxes .................................................. $ 77,953 $ 650,000
--------------- ---------------
Transfer of investment and mortgage-backed securities from
investment to available-for-sale ............................. $ -0- $ 61,864,252
--------------- ---------------
Transfer of loan to REO ......................................... $ 119,541 $ -0-
--------------- ---------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statement of Changes in Stockholders' Equity
Additional Unrealised Gain/
Common Paid-in Retained (Loss) on Securities
Stock Capital Earnings Available-for-Sale Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at September 30, 1995 ........... $ 12,357 $ 8,138,525 $ 13,788,652 $ 192,792 $ 22,132,326
Net income .......................... 1,553,293 1,553,293
Cash dividends paid ................. (297,682) (297,682)
10% Stock Dividend on Common Stock .. 1,242 2,172,118 (2,173,360) 0
Cash paid on stock dividend in lieu
of fractional shares .......... (2,408) (2,408)
Effect of change in accounting
for certain debt and equity
securities at date of adoption,
net of deferred taxes ......... (539,414) (539,414)
Net change in unrealized gain
(loss) on securities available-
for-sale, net of taxes ........ (1,385,336) (1,385,336)
Sale of stock ...................... 24 40,373 40,397
Stock options exercised ............ 72 42,539 $ 42,611
------------ ------------ ------------ ------------ ------------
Balance at June 30, 1996 ................ $ 13,695 $ 10,393,555 $ 12,868,495 $ (1,731,958) $ 21,543,787
============ ============ ============ ============ ============
Balance at September 30, 1996 ........... $ 13,732 $ 10,437,133 $ 12,522,830 $ (1,195,600) $ 21,778,095
Net income ......................... 1,916,099 1,916,099
Cash dividends paid ................ (374,789) (374,789)
10% Stock Dividend on Common Stock . 1,403 2,902,046 (2,903,449)
Cash paid on stock dividend in lieu
of fractional shares .......... (1,249) (1,249)
Net change in unrealized gain
(loss) on securities available-
for-sale, net of taxes ........ 896,204 896,204
Sale of stock ...................... 27 56,827 56,854
Stock options exercised ............ 336 265,687 266,023
------------ ------------ ------------ ------------ ------------
Balance at June 30, 1997 ................ $ 15,498 $ 13,661,693 $ 11,159,442 $ (299,396) $ 24,537,237
============ ============ ============ ============ ============
</TABLE>
<PAGE>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Notes to Financial Statements
(Unaudited)
September 30, 1996 and June 30, 1997
(1) Consolidation
The audited and unaudited consolidated financial statements contained herein for
Fidelity Bancorp, Inc. (the "Company") include the accounts of Fidelity Bancorp,
Inc. and its wholly-owned subsidiaries, Fidelity Bank, PaSB (the "Bank") and FB
Capital Trust (the "Trust"). All significant inter-company balances and
transactions have been eliminated.
(2) Basis of Presentation
The accompanying consolidated financial statements were prepared in accordance
with instructions to Form 10-QSB, and therefore, do not include information or
footnotes necessary for a complete presentation of financial position, results
of operations and cash flows in conformity with generally accepted accounting
principles. However, all normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of the financial statements,
have been included. These financial statements should be read in conjunction
with the audited financial statements and the accompanying notes thereto
included in the Company's Annual Report for the period ended September 30, 1996.
The results for the three and nine month periods ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 1997.
(3) Earnings Per Share
Earnings per share for the three and nine months ended June 30, 1996 and 1997
are calculated by dividing net income by the weighted average number of common
shares outstanding. Outstanding shares also include common stock equivalents
which consist of certain outstanding stock options. The average number of shares
outstanding (including common stock equivalents) for the three month periods
ended June 30, 1996 and 1997 were 1,539,044 and 1,616,540, respectively. The
average number of shares outstanding (including common stock equivalents) for
the nine month periods ended June 30, 1996 and 1997 were 1,533,164 and
1,584,700, respectively. The average number of shares for the periods have been
restated to reflect the 10% stock dividends discussed in Note 4.
In February 1997, the Financial Accounting Standards Board ("FASB") issued FAS
No. 128, "Earnings per Share". FAS No. 128 provides revised reporting standards
for earnings per share and is effective for financial statement periods ending
after December 15, 1997, with earlier application not permitted. FAS No. 128
eliminates primary and fully diluted earnings per share disclosures and adds new
disclosures of basic and diluted earnings per share. Had the Company applied FAS
No. 128 to the accompanying consolidated financial statements, basic earnings
per share would have been $.37 and $.42 for the three months ended June 30, 1996
and 1997, respectively, and $.94 and $1.25 for the nine months ended June 30,
1996 and 1997, respectively. Diluted earnings per share would have been $.36 and
$.41 for the three months ended June 30, 1996 and 1997, respectively, and $.92
and $1.20 for the nine months ended June 30, 1996 and 1997, respectively.
(4) Per share amounts have been restated to give retroactive effect to the 10%
common stock dividends declared by the Company's Board of Directors and paid on
May 31, 1996 and May 28, 1997.
<PAGE>
(5) Securities The Company accounts for investments in debt and equity
securities in accordance with FAS No. 115, which requires that investments be
classified as either: (1) Securities Held-to- Maturity - reported at amortized
cost, (2) Trading Securities - reported at fair value, or (3) Securities
Available-for-Sale - reported at fair value. Unrealized gains and losses for
trading securities are reported in earnings while unrealized gains and losses
for securities available-for-sale are reported as a separate component of
equity. Unrealized losses of $299,000, net of tax, on investments classified as
available-for-sale is recorded as a separate component of equity at June 30,
1997.
(6) Loans Receivable
Loans receivable are comprised of the following (dollar amounts in
thousands):
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
--------- ---------
<S> <C> <C>
First mortgage loans:
Conventional:
1-4 family dwellings ....... $ 94,795 $ 80,186
Multi-family dwellings ..... 4,507 4,435
Commercial .......................... 19,766 19,112
Construction ........................ 6,209 7,645
--------- ---------
125,277 111,378
--------- ---------
Less:
Loans in process .................... (4,998) (4,109)
Unearned discounts and fees ......... (840) (960)
--------- ---------
119,439 106,309
--------- ---------
Installment loans:
Home equity ......................... 35,835 30,070
Mobile home loans ................... 109 169
Consumer loans ...................... 2,517 2,479
Other ............................... 3,022 3,064
--------- ---------
41,483 35,782
--------- ---------
Commercial business loans .................... 16,804 10,702
--------- ---------
Less: Allowance for possible loan losses ..... (1,800) (1,530)
--------- ---------
Loans receivable, net ............... $ 175,926 $ 151,263
========= =========
</TABLE>
<PAGE>
(7) Changes in the allowance for loan losses for the nine months ended June 30,
1997 and 1996 are as follows (dollar amounts in thousands):
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Balance at beginning of the fiscal year ........ $ 1,530 $ 1,429
Provision for loan losses ...................... 365 180
Charge-offs .................................... (117) (216)
Recoveries ..................................... 22 78
------- -------
Balance at June 30, ............................ $ 1,800 $ 1,471
======= =======
</TABLE>
The provision for loan losses charged to expense is based upon past loan loss
experience and an evaluation of potential losses in the current loan portfolio,
including the evaluation of impaired loans under FAS Nos. 114 and 118. A loan is
considered to be impaired when, based upon current information and events, it is
probable that the Bank will be unable to collect all amounts due according to
the contractual terms of the loan. An insignificant shortfall in payments does
not necessarily result in a loan being identified as impaired. For this purpose,
delays less than 90 days are considered to be insignificant.
Impairment losses are included in the provision for loan losses. FAS Nos. 114
and 118 do not apply to large groups of smaller balance, homogeneous loans that
are collectively evaluated for impairment, except for those loans restructured
under a troubled debt restructuring. Loans collectively evaluated for impairment
include consumer loans and residential real estate loans, and are not included
in the following data.
At June 30, 1997, the recorded investment in loans that are considered to be
impaired under FAS Nos. 114 was $753,000. Included in this amount is $753,000 of
impaired loans for which the related allowance for credit losses is $66,000, and
no impaired loans that as a result of write-downs do not have an allowance for
credit losses. The average recorded investment in impaired loans during the nine
months ended June 30, 1997, was approximately $715,000. For the nine months
ended June 30, 1997, the Company recognized no interest income on those impaired
loans, using the cash basis of income recognition.
(8) On May 13, 1997, the Trust, a statutory business trust created under
Delaware law that is a subsidiary of the Company, issued $10.25 million, 9.75%
Preferred Securities ("Preferred Securities") with a stated value and
liquidation preference of $10 per share. The Trust's obligations under the
Preferred Securities issued are fully and unconditionally guaranteed by the
Company. The proceeds from the sale of the Preferred Securities of the Trust, as
well as proceeds from the issuance of common securities to the Company, were
utilized by the Trust to invest in $10.57 million of 9.75% Junior Subordinated
Debentures (the "Debentures") of the Company. The Debentures are unsecured and
rank subordinate and junior in right of payment to all indebtedness, liabilities
and obligations of the Company. The Debentures represent the sole assets of the
Trust. Interest on the Preferred Securities is cumulative and payable quarterly
in arrears. The Company has the right to optionally redeem the Debentures prior
to the maturity date of July 15, 2027, on or after July 15, 2002, at 100% of the
<PAGE>
stated liquidation amount, plus accrued and unpaid distributions, if any, to the
redemption date. Under the occurrence of certain events, specifically, a Tax
Event, Investment Company Event or Capital Treatment Event as more fully defined
in the FB Capital Trust Prospectus dated May 8, 1997, the Company may redeem in
whole, but not in part, the Debentures prior to July 15, 2002. Proceeds from any
redemption of the Debentures would cause a mandatory redemption of the Preferred
Securities and the common securities having an aggregate liquidation amount
equal to the principal amount of the Debentures redeemed.
On July 17, 1997, on behalf of the Trust, the Company requested relief from the
Office of Chief Counsel of the Division of Corporation Finance of the Securities
and Exchange Commission, exempting the Trust from the reporting requirements of
the Securities Exchange Act of 1934. The Trust is a wholly-owned subsidiary of
the Company, has no independent operations and issued securities that contained
a full and unconditional guarantee of its parent, the Company.
FIDELITY BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Comparison of Financial Condition at September 30, 1996 and June 30, 1997
Total assets of the Bank increased $45.4 million or 14.3% to $363.3 million at
June 30, 1997 from $317.9 million at September 30, 1996. Significant changes in
individual categories were increases in loans receivable of $24.7 million and
mortgage-backed securities available-for-sale of $25.3 million, and decreases in
investment securities available-for-sale of $8.8 million.
Total liabilities of the Bank increased by $42.7 million or 14.4% to $338.8
million at June 30, 1997 from $296.1 million at September 30, 1996. The increase
reflects a $4.4 million increase in savings deposits, a $27.0 million increase
in Federal Home Loan Bank advances outstanding as well as the issuance of $10.25
million of Preferred Securities.
Stockholders' equity increased $2.8 million or 12.7% to $24.5 million at June
30, 1997, compared to September 30, 1996. The net increase reflects net income
for the nine month period ended June 30, 1997 of $1.9 million, proceeds from
stock options exercised of $266,000, and proceeds from the Dividend Reinvestment
Plan of $57,000, as well as a decrease in unrealized holding losses on
securities available-for-sale of $896,000 and common stock cash dividends paid
of $376,000.
<PAGE>
Non-Performing Assets
The following table sets forth information regarding non-accrual loans and real
estate owned by the Bank at the dates indicated. The Bank did not have any
accruing loans which were 90 days or more overdue or any loans which were
classified as troubled debt restructuring during the periods presented.
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
---------- ----------
<S> <C> <C>
Non-accrual residential real
estate loans (one-to-four-family) ............ $ 172,000 $ 567,000
Non-accrual construction, multi-family
residential and commercial real estate loans . 753,000 134,000
Non-accrual installment and
commercial business loans .................... 56,000 457,000
---------- ----------
Total non-performing loans ..................... $ 981,000 $1,158,000
========== ==========
Total non-performing loans as
a percent of net loans receivable ............ .56% .77%
========== ==========
Total real estate owned,
net of related reserves ...................... $ 120,000 $ 370,000
========== ==========
Total non-performing loans and real estate
owned as a percent of total assets ........... .30% .48%
========== ==========
</TABLE>
Included in non-performing loans at June 30, 1997 are 4 single-family
residential real estate loans totaling $172,000, one commercial real estate loan
in the amount of $753,000, and 18 installment and credit card loans totaling
$56,000. Of the 4 non-performing single-family residential real estate loans,
the largest amounted to $76,000. The commercial real estate loan is on an office
building located in Pittsburgh that is currently for sale. The 18 installment
and credit card loans total $56,000 and consist of various secured and unsecured
consumer loans.
At June 30, 1997, the Bank had an allowance for possible loan losses of $1.8
million or 1.02% of net loans receivable, as compared to an allowance of $1.5
million or 1.01% of net loans receivable at September 30, 1996. The allowance
for possible loan losses equaled 183.4% of non-performing loans at June 30,
1997.
Management has evaluated these non-performing loans and the overall allowance
for possible loan losses and is satisfied that the allowance for possible losses
on loans at June 30, 1997 is adequate. In that regard, consideration was given
to the increase in the level of the allowance from September 30, 1996 to June
30, 1997, as well as the coverage of non-performing loans the allowance provides
at June 30, 1997.
<PAGE>
Real estate owned at June 30, 1997 consists of one single-family residential
property located in Pittsburgh, Pennsylvania totaling $120,000. The property is
currently under an agreement of sale and management believes that the carrying
value of the property at June 30, 1997 approximates the net realizable value of
the property. However, while management uses the best information available to
make such determinations, future adjustments may become necessary.
Comparison of Results of Operations
for the Three and Nine Months Ended June 30, 1997 and 1996
Net Income
Net income for the three months ended June 30, 1997 was $656,000 compared to
$617,000 for the same period in 1996, an increase of $38,000 or 6.2%. The
increase reflects an increase in net interest income of $92,000 or 3.8%, an
increase in other income of $28,000 or 14.1% and a decrease in operating
expenses of $57,000 or 3.4%. Partially offsetting these factors was an increase
in the provision for loan losses of $40,000 or 44.4% and an increase in the
provision for income taxes of $98,000 or 37.3%.
Net income for the nine months ended June 30, 1997 was $1.9 million compared to
$1.6 million for the same period in 1996, an increase of $363,000 or 23.4%. The
increase reflects an increase in net interest income of $802,000 or 12.0%, an
increase in other income of $86,000 or 15.8% and a decrease in operating
expenses of $67,000 or 1.4%. Partially offsetting these factors were an increase
in provision for possible loan losses of $185,000 or 102.8% and an increase in
the provision for income taxes of $408,000 or 63.2%.
Interest Rate Spread
The Bank's interest rate spread, the difference between yields on
interest-earning assets and the cost of funds, decreased to 2.94% in the three
months ended June 30, 1997 from 3.29% in the same period in 1996. The following
table shows the average yields earned on the Bank's interest-earning assets and
the average rates paid on its interest-bearing liabilities for the periods
indicated, the resulting interest rate spreads, and the net yields on
interest-earning assets.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended June 30,
1997 1996
---- ----
<S> <C> <C>
Average yield on:
Mortgage loans .................................. 8.05% 8.68%
Mortgage-backed securities ...................... 6.27 6.40
Installment loans ............................... 8.50 7.99
Commercial business loans ....................... 9.20 9.57
Interest-earning deposits with other
institutions, investment securities,
and FHLB stock (1) ............................ 6.94 6.70
---- ----
Total interest-earning assets ................... 7.39 7.48
---- ----
Average rates paid on:
Savings deposits ................................ 4.06 4.06
Borrowed funds .................................. 5.68 4.88
---- ----
Total interest-bearing liabilities .............. 4.45 4.19
---- ----
Average interest rate spread ....................... 2.94% 3.29%
==== ====
Net yield on interest-earning assets ............... 3.21% 3.47%
==== ====
(1) Interest income on tax free investments has been adjusted for federal income
tax purposes using a rate of 34%.
</TABLE>
<PAGE>
The Bank's interest rate spread decreased to 3.07% in the nine months ended June
30, 1997 from 3.11% in the same period in fiscal 1996. The following table shows
the average yields earned on the Bank's interest-earning assets and the average
rates paid on its interest-bearing liabilities for the periods indicated, the
resulting interest rate spreads, and the net yields on interest-earning assets.
<TABLE>
<CAPTION>
Nine Months Ended June 30,
1997 1996
---- ----
<S> <C> <C>
Average yield on:
Mortgage loans .................................. 8.03% 8.36%
Mortgage-backed securities ...................... 6.28 6.27
Installment loans ............................... 8.29 8.31
Commercial business loans ....................... 9.72 9.81
Interest-earning deposits with other
institutions, investment securities,
and FHLB stock (1) ............................ 7.02 6.99
---- ----
Total interest-earning assets ................... 7.39 7.40
---- ----
Average rates paid on:
Savings deposits ................................ 4.03 4.23
Borrowed funds .................................. 5.28 4.77
Total interest-bearing liabilities .............. 4.31 4.29
---- ----
Average interest rate spread ....................... 3.07% 3.11%
==== ====
Net yield on interest-earning assets ............... 3.27% 3.29%
==== ====
(1) Interest income on tax free investments has been adjusted for federal income
tax purposes using a rate of 34%.
</TABLE>
Interest Income
Interest on loans increased $472,000 or 15.8% to $3.5 million for the three
months ended June 30, 1997, compared to the same period in 1996. The increase is
attributable to an increase in the average loan balance outstanding during the
1997 period, partially offset by a decrease in the yield earned on these assets
in the 1997 period as compared to the same period in 1996.
Interest on loans increased $1.5 million or 18.5% to $9.9 million for the nine
months ended June 30, 1997, compared to the same period in 1996. The increase is
attributable to an increase in the average loan balance outstanding during the
1997 period, partially offset by a decrease in the yield earned on these assets
in the fiscal 1997 period as compared to the same period in fiscal 1996.
<PAGE>
Interest on mortgage-backed securities increased $164,000 or 10.5% to $1.7
million and $275,000 or 5.9% to $4.9 million for the three and nine month
periods ended June 30, 1997, respectively, as compared to the same periods in
1996. The increase for both the three and nine month periods primarily reflects
an increase in the average balance of mortgage-backed securities held in the
1997 periods. Partially offsetting this for the three month period ended June
30, 1997, as compared to the same period in the prior year was a decrease in the
yield earned on the portfolio. Yields were essentially the same for the nine
month periods in fiscal 1997 and 1996.
Interest on interest-earning deposits with other institutions and investment
securities decreased $89,000 or 10.3% to $777,000 for the three month period
ended June 30, 1997, as compared to the same period in 1996. The decrease
reflects a decrease in the average balance of such securities and deposits,
partially offset by an increase in the yield earned on these investments. For
the nine month period ended June 30, 1997, interest on interest-earning deposits
with other institutions and investment securities increased $27,000 or 1.1% to
$2.5 million, as compared to the same period in the prior year. The increase
primarily reflects an increase in the yield earned on these investments. The
average balance of the investments was not significantly different between the
periods.
Interest Expense
Interest on savings deposits decreased $61,000 or 2.5% to $2.4 million and
$628,000 or 8.2% to $7.1 million for the three and nine month periods ended June
30, 1997, respectively, as compared to the same periods in fiscal 1996. The
decrease for the three month period in fiscal 1997 as compared to fiscal 1996
primarily reflects a decrease in the average balance of deposits. The decrease
for the nine month period in fiscal 1997, as compared to fiscal 1996, reflects
both a decrease in the average balance of deposits, as well as a decrease in the
average cost of deposits.
Interest on borrowed funds increased $379,000 or 70.9% to $914,000 and $1.5
million or 144.9% to $2.6 million for the three and nine month periods ended
June 30, 1997, respectively, as compared to the same periods in fiscal 1996. The
increases for both the three and nine month periods in fiscal 1997 as compared
to fiscal 1996 primarily reflect an increase in the average balance of funds
borrowed during the 1997 periods, as well as an increase in the average cost of
borrowing during the 1997 periods. The Bank continued to rely on wholesale
funding sources throughout fiscal 1997 to fund growth. These funding sources are
primarily Federal Home Loan Bank of Pittsburgh advances.
Interest on guaranteed preferred beneficial interest in subordinated debt was
$137,000 for both the three and nine month periods ended June 30, 1997. As
discussed more fully in Note 8, the Preferred Securities were issued in May
1997. In view of this transaction, the Company may incur an increase in interest
expense in future periods.
Net Interest Income Before Provision for Loan Losses
The Bank's net interest income before provision for loan losses increased
$92,000 or 3.8% to $2.5 million for the three months ended June 30, 1997, as
compared to the same period in 1996. The increase is primarily attributable to
an increase in the ratio of interest-earning assets to interest-bearing
liabilities in the 1997 period, partially offset by a decreased spread. Net
<PAGE>
interest income before provision for loan losses increased $802,000 or 12.0% to
$7.5 million for the nine months ended June 30, 1997, as compared to the same
period in fiscal 1996. The increase reflects an increase in the ratio of
interest-earning assets to interest-bearing liabilities in the fiscal 1997
period, partially offset by a small decrease in the spread earned.
Provision for Loan Losses
The provision for loan losses increased $40,000 or 44.4% to $130,000 and
$185,000 or 102.8% to $365,000 for the three and nine month periods ended June
30, 1997, respectively, as compared to the same periods in fiscal 1996. The
provision for both years reflects management's evaluation of the loan portfolio,
current economic conditions, and other factors as described below. The allowance
for possible loan losses has increased from $1.5 million at June 30, 1996 to
$1.8 million at June 30, 1997.
A monthly review is conducted by management to determine that the allowance for
possible loan losses is adequate to absorb estimated loan losses. In determining
the level of allowances for possible loan losses, consideration is given to
general economic conditions, the diversification and size of the loan portfolio,
historical loss experience, identified credit problems, delinquency levels and
the adequacy of collateral. Although management believes that the current
allowance for loan losses is adequate, future additions to the reserve may be
necessary due to changes in economic conditions. In addition, various regulatory
agencies review the adequacy of the allowance for loan losses as part of their
examination process and may require additions to the allowance based on their
judgment.
Other Income
Total non-interest or other income increased $28,000 or 14.1% to $222,000 and
$86,000 or 15.8% to $630,000 for the three and nine month periods ended June 30,
1997, respectively, as compared to the same periods in fiscal 1996.
Service fee income, which includes late charges on loans, fees for loans
serviced for others and other miscellaneous loan fees, increased $1,000 or 4.2%
to $21,000 and $1,000 or 1.8% to $57,000 for the three and nine month periods
ended June 30, 1997, respectively, as compared to the same periods in fiscal
1996. For both periods, the increase primarily represents increased fees related
to commercial loans and lines of credit, partially offset by reduced late
charges on loans.
Gain on the sale of investment and mortgage-backed securities decreased $3,000
or 33.4% for the three month period ended June 30, 1997, as compared to the same
period in 1996. For the nine month periods ended June 30, 1997 and 1996, gains
of $27,000 were recorded. All sales were made from the available-for-sale
portfolio in the periods and were done to reflect current economic conditions
and asset/liability management strategies, as well as changing market
conditions.
Gain on sale of loans increased $7,000 or 222.7% and $7,000 or 81.0% to $11,000
and $16,000 for the three and nine month periods ended June 39, 1997,
respectively, as compared to the same periods in the prior fiscal year. The Bank
sells education loans to the Student Loan Marketing Association ("SLMA"). Such
sales generally result in some gain or loss being realized and are being done to
reduce the Bank's position in these loans, which are generally lower yielding
<PAGE>
and subject to extensive and costly government regulation. The Bank does not
intend to originate additional student loans for its portfolio, except those
that will be serviced by SLMA. Results generally reflect the timing of such
sales. The volume of loans sold was slightly lower in the fiscal 1997 periods.
Other operating income includes miscellaneous sources of income which consist
primarily of various fees related to checking accounts, fees from the sale of
cashiers checks and money orders, and safe deposit box rental income. Other
operating income increased $22,000 or 13.4% to $184,000 and $78,000 or 17.1% to
$531,000 for the three and nine month periods ended June 30, 1997, as compared
to the same periods in fiscal 1996. The increase for both the three and nine
month periods is primarily due to increases in checking account service charges
and fees related to a debit card product the Bank introduced in fiscal 1996.
Other Expenses
Total operating expenses decreased $57,000 or 3.4% to $1.6 million and $67,000
or 1.4% to $4.8 million for the three and nine month periods ended June 30,
1997, respectively, as compared to the same period in fiscal 1996.
Compensation, payroll taxes and fringe benefits, the largest component of
operating expenses, increased $110,000 or 13.5% to $924,000 and $284,000 or
11.8% to $2.7 million for the three and nine month periods ended June 30, 1997,
respectively, compared to the same periods in fiscal 1996. Factors contributing
to the increase for both periods were normal salary increases, higher bonuses
awarded in fiscal 1997, expenses related to recruiting new employees, and an
increase in the number of employees on the payroll, particularly related to
lending operations. In addition, an increase in retirement and health care
expenses was experienced.
Office occupancy and equipment expense increased $11,000 or 7.9% and $21,000 or
5.0% to $151,000 and $439,000 for the three and nine month periods ended June
30, 1997 and 1996, respectively, compared to the same periods in fiscal 1996.
For both the three and nine month periods in fiscal 1997, as compared to the
same period in the prior year, the main factor causing the increase was
increased equipment maintenance expenditures.
Depreciation and amortization increased $9,000 or 8.4% to $119,000 and $23,000
or 6.8% to $355,000 for the three and nine month periods ended June 30, 1997,
respectively, compared to the same periods in fiscal 1996. The results reflect
the purchase of new equipment, primarily for back room operations and to upgrade
existing systems, as well as depreciation on renovations completed at the
Zelionople and Bloomfield branches of the Bank.
Federal insurance premiums decreased $103,000 or 73.1% to $38,000 and $345,000
or 82.0% to $76,000 for the three and nine month periods ended June 30, 1997,
respectively, compared to the same periods in fiscal 1996. On September 30,
1996, the President signed into law the Deposit Insurance Funds Act of 1996 (the
ACT). Among other things, the Act imposed a one time special assessment on
deposits insured by the Savings Association Insurance Fund ("SAIF") designed to
fully capitalize the SAIF to the level required by law. This special assessment
was approximately $1.5 million for the Bank and was recorded as an expense in
the year ended September 30, 1996, and was paid in November 1996. As a result of
the payments by SAIF insured institutions, the FDIC subsequently determined that
the SAIF was fully capitalized and that, for the quarter ended December 31,
1996, no deposit insurance premiums would be due from many institutions,
including the Bank. For the periods beginning January 1, 1997, deposit insurance
for well-capitalized SAIF insured institutions, including the Bank, were
<PAGE>
assessed at a rate of approximately $.0648 per hundred dollars of deposits. This
compares to a rate of $.23 per hundred that was in effect prior to the
recapitalization of SAIF.
Net loss on real estate owned was $4,000 for the three months ended June 30,
1997, as compared to a net loss of $67,000 in the comparable period in fiscal
1996. Net loss on real estate owned was $36,000 and $88,000 for the nine month
periods ended June 30, 1997 and 1996, respectively. Results for the periods
reflect the sale of property held as real estate owned. The higher fiscal 1996
losses primarily reflect the higher amounts expended to maintain and put into
salable condition a single-family home that was sold in fiscal 1996. Similar
expenditures have not been required in fiscal 1997.
Amortization of intangibles was zero for the three month period ended June 30,
1997, and $66,000 for the comparable period in fiscal 1996. Amortization of
intangibles was $44,000 and $198,000 for the nine month periods ended June 30,
1997 and 1996, respectively. The intangibles generated by the three branch
acquisitions that occurred in November 1991 were being amortized on a
straight-line basis over five years. These intangibles were fully amortized in
November 1996.
Other operating expenses, which consists of check processing costs, consulting
fees, legal and audit fees, advertising, bank charges, and other administrative
expenses, increased $44,000 or 13.3% to $374,000 and $156,000 or 16.0% to $1.1
million for the three and nine month periods ended June 30, 1997, respectively,
as compared to the same periods in fiscal 1996. Significant variations between
both the three and nine month periods in fiscal 1997, as compared to fiscal
1996, include increases in automatic teller machine network fees, stationary and
supplies, advertising and consulting fees, and Federal Reserve Bank service
charges related to the Bank's implementation of check imaging.
Income Taxes
Income taxes increased $98,000 or 37.3% to $361,000 and $408,000 or 63.2% to
$1.1 million for the three and nine month periods ended June 30, 1997,
respectively, compared to the same periods in fiscal 1997. The increase in taxes
for both the three and nine month periods results from an increase in taxable
income, as well as an increase in the effective tax rate to 35.5% for both the
three and nine month periods ended June 30, 1997, respectively, as compared to
29.9% and 29.4% for the comparable periods in the prior year. The increased
effective tax rate primarily results from the Bank's increased pre-tax income as
well as the sale of tax-free investments and the reinvestment of those proceeds
into taxable instruments.
Capital Requirements
The Federal Reserve Board measures capital adequacy for bank holding companies
on the basis of a risk-based capital framework and a leverage ratio. The
guidelines include the concept of Tier 1 capital and total capital. Tier 1
capital is essentially common equity, excluding net unrealized gain (loss) on
securities available-for-sale and goodwill, plus certain types of preferred
stock, including the Preferred Securities issued by the Trust in 1997. The
Preferred Securities may comprise up to 25% of the Company's Tier 1 capital.
Total capital includes Tier 1 capital and other forms of capital such as the
allowance for loan losses, subject to limitations, and subordinated debt. The
guidelines establish a minimum standard risk-based target ratio of 8%, of which
at least 4% must be in the form of Tier 1 capital. At June 30, 1997, the Company
had Tier 1 capital as a percentage of risk-weighted assets of 17.94% and total
risk-based capital as a percentage of risk-weighted assets of 18.91%.
<PAGE>
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These guidelines currently provide for a
minimum ratio of Tier 1 capital as a percentage of total average assets (the
"Leverage Ratio") of 3% for bank holding companies that meet certain criteria,
including that they maintain the highest regulatory rating. All other bank
holding companies are required to maintain a Leverage Ratio of at least 100 to
200 basis points above the minimum. At June 30, 1997, the Company had a Leverage
Ratio of 9.81%.
The FDIC has issued regulations that require insured institutions, such as the
Bank, to maintain minimum levels of capital. In general, current regulations
require a leverage ratio of Tier 1 capital to average total assets of not less
than 3% for the most highly rated institutions and an additional 1% to 2% for
all other institutions. At June 30, 1997, the Bank complied with the minimum
leverage ratio having Tier 1 capital of 9.17% of average total assets, as
defined.
The Bank is also required to maintain a ratio of qualifying total capital to
risk-weighted assets and off-balance sheet items of a minimum of 8%. At June 30,
1997, the Bank's total capital to risk-weighted assets ratio calculated under
the FDIC capital requirement was 18.30%.
A reconciliation of Stockholders' Equity for the Bank to Regulatory Capital is
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stockholder's equity at June 30, 1997 (1) ................. $31,258,379
Unrealized securities losses .............................. 272,880
-----------
Tier 1 Capital at June 30, 1997 ........................... 31,531,259
Plus: Qualifying loan loss allowance ...................... 1,800,192
-----------
Total capital at June 30, 1997 ............................ $33,331,451
===========
(1) Represents equity capital of the Bank as reported to the FDIC and the
Pennsylvania Department of Banking on Form 032.
</TABLE>
Liquidity
The Bank's primary sources of funds have historically consisted of deposits,
amortization and prepayments of outstanding loans, borrowings from the FHLB of
Pittsburgh and other sources, including sales of securities and, to a limited
extent, loans. At June 30, 1997, the total of approved loan commitments amounted
to $3.4 million. In addition, the Bank had $5.0 million of undisbursed loan
funds at that date. The amount of savings certificates which mature during the
next twelve months totals approximately $82.9 million, a substantial portion of
which management believes, on the basis of prior experience, will remain in the
Bank.
<PAGE>
Part II - Other Information
Item. 1 Legal Proceedings
The Bank is not involved in any pending legal proceedings other
than non-material legal proceedings undertaken in the ordinary
course of business.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
Not Applicable
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
4.1 Form of Junior Subordinated Debenture*
4.2 Form of Junior Subordinated Debenture Certificate
(included in Exhibit 4.1)*
4.3 Form of Trust Agreement*
4.4 Form of Amended and Restated Trust Agreement*
4.5 Form of Preferred Security (included in Exhibit 4.4)*
4.6 Form of Guarantee*
27 Financial Data Schedule (electronic data filing only)
*Incorporated by reference to the registrant's Registration
Statement on Form S-1, file number 333-24509 and 333-24509-1
<PAGE>
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.
FIDELITY SAVINGS BANK
Date: August 1, 1997 By: /s/ William L. Windisch
-----------------------
William L. Windisch
President and
Chief Executive Officer
Date: August 1, 1997 By: /s/ Richard G. Spencer
----------------------
Richard G. Spencer
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,856,404
<INT-BEARING-DEPOSITS> 137,893
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 129,944,977
<INVESTMENTS-CARRYING> 39,100,926
<INVESTMENTS-MARKET> 38,838,247
<LOANS> 177,726,430
<ALLOWANCE> 1,800,192
<TOTAL-ASSETS> 363,302,107
<DEPOSITS> 238,636,037
<SHORT-TERM> 65,163,809
<LIABILITIES-OTHER> 4,715,024
<LONG-TERM> 30,250,000
0
0
<COMMON> 15,498
<OTHER-SE> 24,521,739
<TOTAL-LIABILITIES-AND-EQUITY> 363,302,107
<INTEREST-LOAN> 9,861,072
<INTEREST-INVEST> 7,381,812
<INTEREST-OTHER> 7,273
<INTEREST-TOTAL> 17,250,157
<INTEREST-DEPOSIT> 7,054,068
<INTEREST-EXPENSE> 9,778,506
<INTEREST-INCOME-NET> 7,471,651
<LOAN-LOSSES> 365,000
<SECURITIES-GAINS> 26,924
<EXPENSE-OTHER> 4,767,025
<INCOME-PRETAX> 2,970,099
<INCOME-PRE-EXTRAORDINARY> 2,970,099
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,970,099
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.20
<YIELD-ACTUAL> 3.21
<LOANS-NON> 1,100,917
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,530,257
<CHARGE-OFFS> 117,020
<RECOVERIES> 21,955
<ALLOWANCE-CLOSE> 1,800,192
<ALLOWANCE-DOMESTIC> 1,800,912
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
