U.S. Securities and Exchange Commission
WASHINGTON, D.C. 20549
FORM 10QSB/A
Amendment No. 1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] 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
------------ ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization
1009 Perry Highway, Pittsburgh, Pennsylvania 15237
---------------------------------------------------
(Address of principal executive offices) (Zip code)
412-367-3300
------------
(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 [ X ] 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: 1,968,002 shares, par value $0.01, at
April 30, 1998
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, 1997
and March 31, 1998 (Unaudited)
Statements of Income (Unaudited) for the Three and Six Month Periods
Ended March 31, 1997 and 1998
Statements of Cash Flows (Unaudited) for the Six Months Ended
March 31, 1997 and 1998
Statement of Changes in Stockholders' Equity (Unaudited) for the Six
Months Ended March 31, 1997 and 1998
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
(in thousands)
March 31, September 30,
1998 1997
-------- --------
(Unaudited)
Assets
<S> <C> <C>
Cash and amounts due from
depository institutions ........................... $ 4,054 $ 3,731
Interest-earning demand deposits with
other institutions ................................ 232 243
Investment securities held-to-maturity ............... 11,411 8,541
Investment securities available-for-sale ............. 46,605 44,573
Loans receivable, net (Notes 6 and 7) ............... 199,028 182,869
Mortgage-backed securities, held-to-maturity ......... 28,122 34,065
Mortgage-backed securities available-for-sale ........ 96,259 93,851
Real estate owned, net ............................... 21 --
Federal Home Loan Bank stock - at cost ............... 4,925 4,885
Accrued interest receivable, net:
Loans ............................................. 1,021 932
Mortgage-backed securities ........................ 747 759
Investments ....................................... 783 724
Office premises and equipment, net ................... 3,394 3,467
Deferred tax asset ................................... 1,032 852
Prepaid expenses and sundry assets ................... 5,285 1,472
-------- --------
Total Assets .................................. $402,919 $380,964
======== ========
Liabilities and Net worth
Liabilities:
Savings deposits .................................. $263,006 $244,192
Federal Home Loan Bank advances ................... 96,100 96,700
Reverse repurchase agreements ..................... 1,758 1,183
Advance deposits by borrowers for
taxes and insurance ............................ 2,112 1,097
Accrued interest on savings and
other deposits ................................. 53 159
Accrued interest on trust preferred securities .... 211 211
Accrued income taxes payable ...................... 520 204
Other accrued expenses and sundry liabilities ..... 1,356 1,087
Guaranteed preferred beneficial interest in
Company's debentures (Note 8) ................. 10,250 10,250
-------- --------
Total Liabilities ............................. 375,366 355,083
-------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Financial Condition (Cont'd)
(in thousands)
March 31, September 30,
1998 1997
-------- --------
(Unaudited)
<S> <C> <C>
Stockholders' equity (Notes 4 and 5):
Common Stock, $0.01 par value per share,
10,000,000 shares authorized; 1,966,015
and 1,943,469 shares issued and outstanding,
respectively ................................... 20 15
Additional paid-in capital ........................ 13,965 13,811
Retained earnings - substantially restricted ...... 12,869 11,822
Unrealized gain (loss) on securities
available-for-sale ............................. 699 233
-------- --------
Total Stockholders' Equity .................... 27,553 25,881
-------- --------
Total Liabilities and Stockholders' Equity .... $402,919 $380,964
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Income (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
--------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest income:
Loans .................................... $ 3,960 $ 3,211 $ 7,944 $ 6,397
Mortgage-backed securities ............... 1,952 1,612 4,037 3,167
Investment securities:
Taxable .............................. 636 609 1,311 1,200
Tax-exempt ........................... 278 246 528 514
Deposits with other institutions ......... 29 2 33 5
------- ------- ------- -------
Total interest income ................. 6,855 5,680 13,852 11,283
------- ------- ------- -------
Interest expense:
Savings deposits ......................... 2,724 2,310 5,395 4,673
Guaranteed preferred beneficial interest
in subordinated debt (Note 8) ......... 256 -- 512 --
Borrowed funds ........................... 1,321 884 2,706 1,673
------- ------- ------- -------
Total interest expense ................ 4,301 3,194 8,613 6,346
------- ------- ------- -------
Net interest income before provision
for loan losses .......................... 2,554 2,486 5,239 4,937
Provision for loan losses ................... 110 120 225 235
------- ------- ------- -------
Net interest income after provision
for loan losses .......................... 2,444 2,366 5,014 4,702
------- ------- ------- -------
Other income:
Service fee income ....................... 30 17 64 36
Gain (loss) on sale of investment
and mortgage-backed
securities, net ....................... (1) 22 8 20
Gain on sale of loans .................... 7 3 9 5
Other operating income ................... 271 182 444 347
------- ------- ------- -------
Total other income .................... 307 224 525 408
------- ------- ------- -------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Income (Unaudited) (Cont'd)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
--------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Operating expenses:
Compensation and employee benefits ....... 1,003 853 2,047 1,763
Occupancy and equipment expense .......... 161 144 299 289
Depreciation and amortization ............ 127 123 250 235
Federal insurance premiums ............... 38 38 76 38
Loss on real estate owned, net ........... 1 26 10 33
Amortization of intangibles .............. -- -- -- 44
Other operating expenses ................. 421 383 830 755
------- ------- ------- -------
Total operating expenses .............. 1,751 1,567 3,512 3,157
------- ------- ------- -------
Income before income tax provision .......... 1,000 1,023 2,027 1,953
Income tax provision ........................ 335 385 694 693
------- ------- ------- -------
Net income .................................. $ 665 $ 638 $ 1,333 $ 1,260
======= ======= ======= =======
Basic earnings per common share (Notes 3&4) . $ 0.34 $ 0.33 $ 0.68 $ 0.66
======= ======= ======= =======
Diluted earnings per common share (Notes 3&4) $ 0.33 $ 0.32 $ 0.65 $ 0.64
======= ======= ======= =======
Dividends per common share (Note 4) ......... $ .072 $ 0.066 $ .144 $ .124
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended March 31,
------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Operating Activities:
Net income ......................................................... $ 1,333 $ 1,260
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses ...................................... 225 235
Loss on real estate owned ...................................... 10 33
Depreciation and amortization .................................. 250 235
Deferred loan fee amortization ................................. (66) (97)
Amortization of investment and mortgage-backed securities
discounts/premiums, net ....................................... 205 159
Amortization of intangibles .................................... -- 44
Net (gain) loss on sale of investment securities ............... (6) (10)
Net (gain) loss on sale of mortgage-backed securities .......... (3) (10)
Net (gain) loss on sale of loans .............................. (9) (5)
Origination of loans held-for-sale ............................. (68) (320)
Proceeds from sale of loans held-for-sale ...................... 68 324
(Increase) decrease in interest receivable ..................... (136) 44
(Increase) decrease in deferred tax asset ...................... (180) (275)
Increase (decrease) in accrued income taxes .................... 316 662
Increase (decrease) in interest payable ........................ (107) (109)
SAIF assessment ................................................ -- (1,530)
Other changes, net ............................................. (946) (356)
-------- --------
Net cash provided (used) by operating activities ................ 886 284
Investing Activities:
Proceeds from sales of investment securities available-for-sale .... 8,001 7,774
Proceeds from maturities and principal repayments of
investment securities available-for-sale ........................ 2,005 2,000
Purchases of investment securities available-for-sale .............. (11,764) (4,251)
Proceeds from sales of mortgage-backed securities available-for-sale 14,042 4,158
Proceeds from maturities and principal repayments of mortgage-
backed securities available-for-sale ............................ 8,066 3,358
Purchases of mortgage-backed securities available-for-sale ......... (24,192) (19,684)
Proceeds from maturities and principal repayments of investment
securities held-to-maturity ..................................... 5,129 1,242
Purchases of investment securities held-to-maturity ................ (7,997) (1,000)
Purchases of mortgage-backed securities held-to-maturity ........... -- (2,008)
Proceeds from principal repayments of mortgage-backed
securities held-to-maturity ...................................... 5,845 2,808
Principal repayments on first mortgage loans ....................... 8,528 8,098
Principal repayments on other loans ................................ 14,168 8,879
First mortgage loans originated and disbursed ...................... (22,087) (10,405)
Other loans originated ............................................. (20,035) (11,676)
Proceeds from sale of other loans .................................. 269 197
Additions to office premises and equipment ......................... (195) (381)
Net purchases of FHLB Stock ........................................... (40) (529)
-------- --------
Net cash provided (used) by investing activities ...................... (20,257) (11,420)
-------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statements of Cash Flows (Unaudited) (Cont'd)
(in thousands)
Six Months Ended March 31,
1998 1997
-------- ---------
<S> <C> <C>
Financing Activities:
Net increase (decrease) in savings deposits ............................. 18,814 386
Increase in advance payments by borrowers for taxes and insurance........ 1,015 622
Increase (decrease) in reverse repurchase agreements .................... 575 138
FHLB advance repayments ................................................. (515,030) (840,800)
FHLB advances ........................................................... 514,430 850,575
Cash dividends paid ..................................................... (281) (236)
Stock options exercised ................................................. 114 202
Proceeds from sale of stock ............................................. 45 32
-------- ---------
Net cash provided (used) by financing activities ........................ 19,682 10,919
-------- --------
Increase (decrease) in cash and cash equivalents ........................ 311 (217)
Cash and cash equivalents at beginning of period ........................ 3,975 4,762
-------- ---------
Cash and cash equivalents at end of period .............................. $ 4,286 $ 4,545
======== ========
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest on deposits and other borrowings ............................. $ 8,575 $ 6,316
Income taxes .......................................................... $ 785 $ 28
--------- ---------
Transfer of investment and mortgage-backed securities from
investment to available-for-sale ...................................... $ 0 $ 0
--------- ----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Statement of Changes in Stockholders' Equity
(in thousands)
Additional Unrealized 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, 1996 ........... $ 14 $ 10,437 $ 12,523 $ (1,196) $21,778
Net income .......................... 1,260 1,260
Cash dividends paid at
$.08 per share ...................... (236) (236)
Net change in unrealized gain
(loss) on securities available-
for-sale, net of taxes ........ (213) (213)
Sale of stock ...................... 32 32
Stock options exercised ............ 202 202
----------- ----------- -------- -------- -------
Balance at March 31, 1997 ............... $ 14 $ 10,671 $ 13,547 $ (1,409) $ 22,823
----------- ----------- -------- -------- -------
Balance at September 30, 1997 ........... $ 16 $ 13,810 $ 11,822 $ 233 $ 25,881
Net income .......................... 1,332 1,332
Cash dividends paid at
$.09 per share ...................... (281) (281)
5/4 Stock Split ..................... 4 (4) 0
Cash paid on stock split in lieu of
fractional shares ............. (4) (4)
Net change in unrealized gain
(loss) on securities available-
for-sale, net of taxes ........ 466 466
Sale of stock ...................... 114 114
Stock options exercised ............ 45 45
----------- ----------- -------- -------- -------
Balance at March 31, 1998 ............... $ 20 $ 13,965 $ 12,869 $ 699 $27,553
----------- ----------- -------- -------- -------
</TABLE>
<PAGE>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
Notes to Financial Statements
(Unaudited)
September 30, 1997 and March 31, 1998
(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, 1997.
The results for the three and six month periods ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 1998.
(3) Earnings Per Share
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 ("EPS") and is effective for financial statement periods
ending after December 15, 1997. FAS No. 128 eliminates primary and fully diluted
EPS disclosures and adds new disclosures of basic and diluted EPS. Basic EPS
excludes dilution and is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the Company. The Company adopted FAS No. 128 as of December
31, 1997 and all prior period per share amounts have been restated.
<PAGE>
The following table sets forth the computation of basic and diluted earnings per
share (amounts in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
Numerator: 1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income ......................... $ 665 $ 638 $1,333 $1,260
------ ------ ------ ------
Numerator for basic and
diluted earnings per share ..... $ 665 $ 638 $1,333 $1,260
------ ------ ------ ------
Denominator:
Denominator for basic earnings
per share - weighted average
shares .......................... 1,959 1,912 1,953 1,903
Effect of dilutive securities:
Employee stock options .......... 86 61 86 61
------ ------ ------ ------
Denominator for diluted earnings
per share - weighted average
shares and assumed conversions .. 2,045 1,973 2,039 1,964
====== ====== ====== ======
Basic earnings per share ........... $ .34 $ .33 $ .68 $ .66
====== ====== ====== ======
Diluted earnings per share ......... $ .32 $ .32 $ .65 $ .64
====== ====== ====== ======
</TABLE>
(4) Per share amounts have been restated to give retroactive effect to the 10%
common stock dividend declared by the Company's Board of Directors and paid on
May 28, 1997, and the five for four stock split paid on March 31, 1998.
(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
gains of $699,000, net of tax, on investments classified as available-for-sale
are recorded as a separate component of equity at March 31, 1998.
<PAGE>
(6) Loans Receivable
Loans receivable are comprised of the following (dollar amounts in
thousands):
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
--------- ---------
<S> <C> <C>
First mortgage loans:
Conventional:
1-4 family dwellings .... $ 106,309 $ 97,698
Multi-family dwellings .. 4,123 4,165
Commercial ....................... 23,093 19,976
Construction ..................... 9,856 7,614
--------- ---------
143,381 129,453
--------- ---------
Less:
Loans in process ................. (6,365) (3,695)
Unearned discounts and fees ...... (1,003) (912)
--------- ---------
136,013 124,846
--------- ---------
Installment loans:
Home equity ...................... 39,552 37,271
Mobile home loans ................ 41 68
Consumer loans ................... 2,383 2,579
Other ............................ 4,056 3,163
--------- ---------
46,032 43,081
--------- ---------
Commercial loans:
Commercial business loans ........ 17,336 16,325
Lease loans ...................... 1,761 548
--------- ---------
19,097 16,873
--------- ---------
Less: Allowance for possible loan losses .. (2,114) (1,931)
--------- ---------
Loans receivable, net ............ $ 199,028 $ 182,869
========= =========
</TABLE>
<PAGE>
(7) Changes in the allowance for loan losses for the six months ended March 31,
1998 and 1997 are as follows (dollar amounts in thousands):
<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Balance at beginning of the fiscal year ........ $ 1,931 $ 1,530
Provision for loan losses ...................... 225 235
Charge-offs .................................... (46) (105)
Recoveries ..................................... 4 17
------- -------
Balance at March 31, ........................... $ 2,114 $ 1,677
======= =======
</TABLE>
The provision for loan losses charged to expense is based upon past loan and
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 March 31, 1998, there are no loans that are considered to be impaired under
FAS No. 114. The average recorded investment in impaired loans during the six
months ended March 31, 1998, was zero. For the six months ended March 31, 1998,
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
were utilized by the Trust to invest in $10.25 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 stated liquidation amount, plus accrued
and unpaid distributions, if any, to the redemption date. Under the occurrence
of certain events, 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.
<PAGE>
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. On January 29,
1998, the Company received notification from the Division exempting the Trust
from the reporting requirements.
(9) The Company has adopted a plan to address Year 2000 data processing issues.
The plan includes the assessment of all internal systems, programs and data
processing applications as well as those provided to the Company by third-party
vendors. In addition, a program to ascertain the readiness of key customer
systems has been undertaken. The Company is utilizing both internal and external
resources for this project. A significant portion of the Company's data
processing software is provided by third-party vendors from which the Company
has received confirmation that they expect to be compliant with Year 2000 issues
on a timely basis. The Company is coordinating with third-party vendors to
perform testing of all significant applications. This testing is expected to be
completed by December 31, 1998. The Company is also developing a contingency
plan that would be implemented should any applications or systems fail to be
Year 2000 compliant. However, based on representations from third-party vendors,
the Company believes all significant applications will be compliant. The Company
has not incurred significant expense to date and does not yet have an estimate
of the cost to address Year 2000 issues; however, the Company does not expect
the costs to be material to future operations.
<PAGE>
FIDELITY BANCORP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Comparison of Financial Condition at September 30, 1997 and March 31, 1998
Total assets of the Company increased $22.0 million or 5.8% to $402.9 million at
March 31, 1998 from $381.0 million at September 30, 1997. Significant changes in
individual categories were increases in loans receivable of $16.2 million,
investment securities held-to-maturity of $2.0 million, investment securities
available-for-sale of $2.6 million, mortgage-backed securities
available-for-sale of $2.4 million, and a decrease in mortgage-backed securities
held-to-maturity of $5.9 million.
Total liabilities of the Bank increased by $20.3 million or 5.7% to $375.4
million at March 31, 1998 from $355.1 million at September 30, 1997. The
increase primarily reflects an $18.8 million increase in savings deposits and a
$1.0 million increase in advance payments by borrowers for taxes and insurance.
Stockholders' equity increased $1.7 million or 6.5% to $27.6 million at March
31, 1998, compared to September 30, 1997. The increase reflects net income for
the six month period ended March 31, 1998 of $1.3 million, an increase in
unrealized holding gains on securities available-for-sale of $466,000, stock
options exercised of $45,000 and stock issued under the Dividend Reinvestment
Plan of $114,000. Partially offsetting these increases were common stock cash
dividends paid of $281,000.
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. (Dollar
amounts in thousands):
<TABLE>
<CAPTION>
March 31, September 30,
1998 1997
------ ------
<S> <C> <C>
Non-accrual residential real
estate loans (one-to-four-family) ................ $ 124 $ 94
Non-accrual construction, multi-family
residential and commercial real estate loans ..... 119 751
Non-accrual installment and
commercial business loans ........................ 57 271
------ ------
Total non-performing loans ......................... $ 300 $1,116
====== ======
Total non-performing loans as
a percent of net loans receivable ................ .15% .61%
====== ======
Total real estate owned,
net of related reserves .......................... $ 21 $ --
====== ======
Total non-performing loans and real estate
owned as a percent of total assets ............... .08% .29%
====== ======
</TABLE>
<PAGE>
Included in non-performing loans at March 31, 1998 are 5 single-family
residential real estate loans totaling $124,000, two commercial real estate
loans totaling $119,000, 23 installment loans totaling $46,000, and one
commercial business loan totaling $11,000. Of the 5 non-performing single-family
residential real estate loans, the largest amounted to $61,000. Of the two
commercial real estate loans, the largest is an $84,000 loan on a commercial
office building and the other is a $35,000 loan to a local community development
group.
The 23 installment loans total $46,000 and consist of various secured and
unsecured consumer loans and credit card loans. The largest loan is for $7,000.
The commercial business loan for $11,000 is represents a bankruptcy situation.
At March 31, 1998, the Bank had an allowance for possible loan losses of $2.1
million or 1.06% of net loans receivable, as compared to an allowance of $1.9
million or 1.06% of net loans receivable at September 30, 1997. The allowance
for possible loan losses equals 704% of non-performing loans at March 31, 1998.
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 March 31, 1998 is adequate. In that regard, consideration was given
to the increase in the level of the allowance from September 30, 1997 to March
31, 1998, as well as the coverage of non-performing loans the allowance provides
at March 31, 1998.
Real estate owned at March 31, 1998 consists of one single-family residential
property located in Pittsburgh, Pennsylvania totaling $21,000. The property is
currently for sale and management believes that the carrying value of the
property at March 31, 1998 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 Six Months Ended March 31, 1998 and 1997
Net Income
Net income for the three months ended March 31, 1998 was $665,000 compared to
$638,000 for the same period in 1997, an increase of $27,000 or 4.2%. The
increase reflects an increase in net interest income of $68,000 or 2.7%, an
increase in other income of $83,000 or 36.9%, a decrease in the provision for
loan losses of $10,000 or 8.3%, and a decrease in the provision for income taxes
of $50,000 or 13.1%. Partially offsetting these factors was an increase in other
operating expenses of $184,000 or 11.8%.
<PAGE>
Net income for the six months ended March 31, 1998 was $1.33 million compared to
$1.26 million for the same period in 1997, an increase of $72,000 or 5.7%. The
increase reflects an increase in net interest income of $303,000 or 6.1%, an
increase in other income of $117,000 or 28.5% and a decrease in the provision
for loan losses of $10,000 or 4.3%. Partially offsetting these factors was an
increase in other operating expenses of $356,000 or 11.3%.
Interest Rate Spread
The Bank's interest rate spread, the difference between yields on
interest-earning assets and the cost of funds, decreased to 2.56% in the three
months ended March 31, 1998 from 3.08% in the same period in 1997. 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>
Three Months Ended March 31,
1998 1997
---- -----
<S> <C> <C>
Average yield on:
Mortgage loans ....................................... 7.74% 8.04%
Mortgage-backed securities ........................... 6.38 6.32
Installment loans .................................... 8.21 8.11
Commercial business loans ............................ 9.62 10.17
Interest-earning deposits with other institutions,
investment securities, and FHLB stock (1) .......... 6.91 7.09
---- -----
Total interest-earning assets ........................ 7.32 7.40
---- -----
Average rates paid on:
Savings deposits ..................................... 4.26 4.02
Borrowed funds ....................................... 5.94 5.41
---- -----
Total interest-bearing liabilities ................... 4.76 4.32
---- -----
Average interest rate spread ............................ 2.56% 3.08%
==== =====
Net yield on interest-earning assets .................... 2.80% 3.32%
==== =====
</TABLE>
(1) Interest income on tax free investments has been adjusted for federal income
tax purposes using a rate of 34%.
<PAGE>
The Bank's interest rate spread decreased to 2.68% in the six months ended March
31, 1998 from 3.13% in the same period in fiscal 1997. 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>
Six Months Ended March 31,
1998 1997
----- -----
<S> <C> <C>
Average yield on:
Mortgage loans ........................................ 8.00% 8.06%
Mortgage-backed securities ............................ 6.44 6.31
Installment loans ..................................... 8.32 8.23
Commercial business loans ............................. 10.12 10.15
Interest-earning deposits with other institutions,
investment securities, and FHLB stock (1) ........... 6.95 7.08
----- -----
Total interest-earning assets ......................... 7.45 7.42
----- -----
Average rates paid on:
Savings deposits ...................................... 4.25 4.01
Borrowed funds ........................................ 5.99 5.31
----- -----
Total interest-bearing liabilities .................... 4.77 4.29
----- -----
Average interest rate spread ............................. 2.68% 3.13%
===== =====
Net yield on interest-earning assets ..................... 2.89% 3.33%
===== =====
</TABLE>
(1) Interest income on tax free investments has been adjusted for federal income
tax purposes using a rate of 34%.
Interest Income
Interest on loans increased $749,000 or 23.3% to $4.0 million for the three
months ended March 31, 1998, compared to the same period in 1997. 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 1998 period as compared to the same period in 1997. Interest on
loans increased $1.6 million or 24.4% to $8.0 for the six months ended March 31,
1998, compared to the same period in fiscal 1997. The increase is attributable
to an increase in the average loan balance outstanding during the 1998 period,
partially offset by a decrease in the yield earned on these assets in the fiscal
1998 period as compared to the same period in fiscal 1997. The increase in the
average balance of the loan portfolio in the fiscal 1998 periods reflects
management's continued strategy of emphasizing and increasing loans. The lower
yield earned on the portfolio reflects the lower long term interest rate
environment that has existed for much of fiscal 1998, as both new loans
originated are at lower rates and more existing borrowers refinance into lower
rate loans.
<PAGE>
Interest on mortgage-backed securities increased $340,000 or 21.1% to $2.0
million and $854,000 or 27.0% to $4.0 million for the three and six months ended
March 31, 1998, respectively, as compared to the same periods in 1997. The
increase for both the three and six month periods ended March 31, 1998, reflects
both an increase in the average balance of mortgage-backed securities owned in
the fiscal 1998 periods, as compared to fiscal 1997, and an increase in the
average yield earned on the portfolio.
Interest on interest-earning deposits with other institutions and investment
securities increased $86,000 or 10.0% to $943,000 for the three month period
ended March 31, 1998, as compared to the same period in 1997. The increase
reflects an increase in the average balance in the portfolio, partially offset
by a decrease in the yield earned on these investments. For the six month period
ended March 31, 1998, interest on interest-earning deposits with other
institutions and investment securities increased $151,000 or 8.8% to $1.9
million, as compared to the same period in the prior year. The increase reflects
an increase in the average balance of such securities and deposits, partially
offset by a decrease in the yield earned on these investments.
Interest Expense
Interest on savings deposits increased $415,000 or 17.9% to $2.7 million and
$722,000 or 15.5% to $5.4 million for the three and six month periods ended
March 31, 1998, respectively, as compared to the same periods in fiscal 1997.
The increase for both the three and six month periods in fiscal 1998 as compared
to fiscal 1997 reflects an increase in the average cost of deposits, as well as
an increase in the average balance of savings deposits for the fiscal 1997
periods. The increase in the average balance of savings deposits reflects
management's decision to more aggressively price and pursue retail deposits and
the potential additional customer relationships that could ensue. Additionally,
short term interest rates have remained relatively high in fiscal 1998, compared
to long term rates, thus deposit costs have increased.
Interest on borrowed funds increased $436,000 or 49.3% to $1.3 million and $1.0
million or 61.6% to $2.7 million for the three and six month periods ended March
31, 1998, respectively, as compared to the same periods in fiscal 1997. The
increases for both periods in fiscal 1998 as compared to fiscal 1997 reflect
both an increase in the average cost of borrowing during the 1998 periods, as
compared to 1997, as well as an increase in the Federal Home Loan Bank ("FHLB")
advances and reverse repurchase agreements outstanding during the fiscal 1998
periods. The Bank continues to rely on these wholesale funding sources in fiscal
1998 as an additional way to fund growth.
Interest on guaranteed preferred beneficial interest in subordinated debt was
$256,000 and $512,000 for the three and six month periods ended March 31, 1998.
As discussed more fully in Note 8, the Preferred Securities were issued in May
1997.
Net Interest Income Before Provision for Loan Losses
The Bank's net interest income before provision for loan losses increased
$68,000 or 2.7% to $2.6 million, and $303,000 or 6.1% to $5.2 million for the
three and six month periods ended March 31, 1998, respectively, as compared to
the same periods in fiscal 1997. The increase for both periods is attributable
to an increase in earning assets partially offset by a decrease in interest rate
spread.
<PAGE>
Provision for Loan Losses
The provision for loan losses decreased $10,000 or 8.3% to $110,000 and $10,000
or 4.3% to $225,000 for the three and six month periods ended March 31, 1998,
respectively, as compared to the same periods in fiscal 1997. 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 $1.7 million at March 31, 1997 to $2.1
million at March 31, 1998.
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 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 $83,000 or 36.9% to $307,000 and
$117,000 or 28.5% to $525,000 for the three and six month periods ended March
31, 1998, respectively, as compared to the same periods in fiscal 1997.
Service fee income, which includes late charges on loans and fees for loans
serviced for others, increased $13,000 or 79.0% to $30,000 for the three month
period ended March 31, 1998, as compared to the same period in the prior year.
The increase is primarily attributable to an increase in late charges on
mortgages, as well as the imposition of a late charge fee on credit cards.
Service fee income increased $28,000 or 78.6% to $64,000 for the six month
period ended March 31, 1998, as compared to the same period in fiscal 1997. The
increase is primarily attributable to an increase in late charges on all loans,
the imposition of a late charge on credit cards, and the collection of a fee
related to a program whereby customers could skip their regular loan payment
over the Christmas holidays.
Loss on the sale of investment and mortgage-backed securities was $1,000 for the
three month period ended March 31, 1998, as compared to a gain of $22,000 in the
same period in 1997. For the six month period ended March 31, 1998, a gain of
$8,000 was recorded, as compared to a gain of $20,000 for the same period in
fiscal 1997. 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 was $7,000 and $9,000 for the three and six month periods
ended March 31, 1998, respectively, as compared to gains of $3,000 and $5,000 in
the comparable periods in fiscal 1997. 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 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.
<PAGE>
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 $89,000 or 48.9% to $271,000 and increased $97,000 or
27.9% to $444,000 for the three and six month periods ended March 31, 1998, as
compared to the same periods in fiscal 1997. The increase for both the three and
six month periods is primarily due to increases in checking account service
charges, fees related to debit cards, increased fees on the sale of accident and
health insurance on loans, and profit on the sale of some used equipment.
Other Expenses
Total operating expenses increased $184,000 or 9.8% to $1.8 million and $356,000
or 11.3% to $3.5 million for the three and six month periods ended March 31,
1998, respectively, as compared to the same period in fiscal 1997.
Compensation, payroll taxes and fringe benefits, the largest component of
operating expenses, increased $150,000 or 17.6% to $1.0 million and $284,000 or
16.1% to $2.0 million for the three and six month periods ended March 31, 1998,
respectively, compared to the same periods in fiscal 1997. Factors contributing
to the increase were normal salary increases, higher bonuses awarded in fiscal
1998, an increase in the number of employees on the payroll, particularly
professionals employed in the lending area, and an increase in retirement and
health care expenses.
Office occupancy and equipment expense increased $17,000 or 12.0% to $161,000
and $11,000 or 3.8% to $299,000 for the three and six month periods ended March
31, 1998, respectively, compared to the same periods in fiscal 1997. In both the
three and six month periods, increases in rent expense on the Company's new loan
center were partially offset by decreased equipment maintenance costs.
Depreciation and amortization increased $4,000 or 3.0% to $127,000 and $14,000
or 6.1% to $250,000 for the three and six month periods ended March 31, 1998,
respectively, compared to the same periods in fiscal 1997. The results reflect
the purchase of new computer equipment, primarily for back room operations, as
well as an automatic teller machine for the Washington Road branch.
Federal insurance premiums were $38,000 in both the three month periods ended
March 31, 1998 and 1997. For the six months ended March 31, 1998, federal
deposit insurance premiums were $76,000, compared to $38,000 in the comparable
period in fiscal 1997. As a result of the Deposit Insurance Funds Act of 1996
and the resulting payment of a one-time special assessment in 1996, the Savings
Association Insurance Fund was fully capitalized to the level required by law.
The FDIC then determined that, for the quarter ended December 31, 1996, no
deposit insurance premiums would be due from many institutions, including the
Bank. Thus there was no deposit insurance expense for the three months ended
December 31, 1996. For subsequent periods, the amount of the premium is based on
the average amount of deposits outstanding and is currently approximately 6.22
basis points.
Net loss on real estate owned was $1,000 for the three months ended March 31,
1998, as compared to a net loss of $26,000 in the comparable period in fiscal
1997. Net loss on real estate owned was $10,000 and $33,000 for the six month
periods ended March 31, 1998 and 1997, respectively. Results for the periods
reflect the sale of property held as real estate owned. At March 31, 1998, the
Bank has one single family property valued at $21,000 classified as real estate
owned.
<PAGE>
Amortization of intangibles was zero for the three month periods ended March 31,
1998 and 1997. Amortization of intangibles was zero and $44,000 for the six
month periods ended March 31, 1998 and 1997, 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 $38,000 or 9.8% to $421,000 and $75,000 or 9.9% to $830,000
for the three and six month periods ended March 31, 1998, respectively, as
compared to the same periods in fiscal 1997. Significant variations between both
the three and six month periods in fiscal 1998, as compared to fiscal 1997,
include increases in advertising, stationary and supplies, consulting fees, and
costs related to the introduction of a new credit card program. Partially
offsetting these increases were decreases in automatic teller machine network
expenses and insurance premiums.
Income Taxes
Income taxes decreased $50,000 or 13.1% to $335,000 and increased $1,000 or .1%
to $694,000 for the three and six month periods ended March 31, 1998,
respectively, compared to the same periods in fiscal 1997. The decrease in taxes
for the three month period ended March 31, 1998, reflects decreased taxable
income in the 1998 period, as well as a decrease in the effective tax rate to
33.5%, as compared to 37.7% for the comparable period in the prior year. The
increase in taxes for the six month period ended March 31, 1998, reflects
increased taxable income in the 1998 period, substantially offset by a decrease
in the effective tax rate to 34.25%, as compared to 35.5% for the comparable
period in the prior year. The decreased effective tax rate primarily results
from the Bank's increased purchases of tax-free investments.
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 minimum
ratio of total risk-based capital to risk-weighted assets is 8%. At least half
of the total capital must be common stockholders' equity (not inclusive of net
unrealized gains and losses on available-for-sale securities) and perpetual
preferred stock, less goodwill and other nonqualifying intangible assets ("Tier
1 capital"). The remainder (i.e. , the "Tier 2 risk-based capital") may consist
of hybrid capital instruments, perpetual debt, term subordinated debt, other
preferred stock and a limited amount of the allowance for loan losses. At March
31, 1998, the Company had Tier 1 capital as a percentage of risk-weighted assets
of 16.9% and total risk-based capital as a percentage of risk-weighted assets of
18.5%.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These guidelines currently provide for a
minimum ratio or Tier 1 capital as a percentage of average total 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 March 31, 1998, the Company had a
Leverage Ratio of 9.0%.
<PAGE>
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 March 31, 1998, the Bank complied with the minimum
leverage ratio having Tier 1 capital of 6.32% 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 March
31, 1998, the Bank's total capital to risk-weighted assets ratio calculated
under the FDIC capital requirement was 12.9%.
A reconciliation of Stockholders' Equity to Regulatory Capital is as follows:
<TABLE>
<CAPTION>
<S> <C>
Stockholder's equity at March 31, 1998 (1) $25,149,804
Unrealized securities gains 516,474
-----------
Tier 1 Capital at March 31, 1998 24,633,330
Plus: Qualifying loan loss allowance 2,113,644
-----------
Total capital at March 31, 1998 $26,746,974
===========
</TABLE>
(1) Represents equity capital of the Bank as reported to the FDIC and the
Pennsylvania Department of Banking on Form 033.
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 March 31, 1998, the total of approved loan commitments
amounted to $4.5 million. In addition, the Bank had $6.4 million of undisbursed
loan funds at that date. The amount of savings certificates which mature during
the next twelve months totals approximately $113.1 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
A. The Annual Meeting of Stockholders was held on February 3, 1998.
B. The following item, in addition to the election of directors and
ratification of auditors, was submitted for approval to the
stockholders of Fidelity Bancorp, Inc. and was approved thereby
by the requisite vote required:
(1) To consider and act upon a proposal to adopt the Fidelity
Bancorp, Inc. 1997 Employee Stock Compensation Program.
The stockholders voted as follows for Proposal (1)
For: 1,042,068
Against: 100,536
Abstain: 29,514
Non-voted: 387,330
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
<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 BANK
Date: June 3, 1998 By: /s/ William L. Windisch
-----------------------
William L. Windisch
President and
Chief Executive Officer
Date: June 3, 1998 By: /s/ Richard G. Spencer
----------------------
Richard G. Spencer
Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,054
<INT-BEARING-DEPOSITS> 232
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 142,864
<INVESTMENTS-CARRYING> 39,533
<INVESTMENTS-MARKET> 39,586
<LOANS> 201,142
<ALLOWANCE> (2,114)
<TOTAL-ASSETS> 402,919
<DEPOSITS> 263,006
<SHORT-TERM> 67,958
<LIABILITIES-OTHER> 4,152
<LONG-TERM> 40,250
0
0
<COMMON> 20
<OTHER-SE> 27,533
<TOTAL-LIABILITIES-AND-EQUITY> 402,919
<INTEREST-LOAN> 7,944
<INTEREST-INVEST> 5,876
<INTEREST-OTHER> 33
<INTEREST-TOTAL> 13,852
<INTEREST-DEPOSIT> 5,395
<INTEREST-EXPENSE> 8,613
<INTEREST-INCOME-NET> 5,239
<LOAN-LOSSES> 225
<SECURITIES-GAINS> 8
<EXPENSE-OTHER> 3,512
<INCOME-PRETAX> 2,027
<INCOME-PRE-EXTRAORDINARY> 2,027
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 694
<EPS-PRIMARY> .68
<EPS-DILUTED> .65
<YIELD-ACTUAL> 7.33
<LOANS-NON> 300
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,931
<CHARGE-OFFS> (46)
<RECOVERIES> 4
<ALLOWANCE-CLOSE> 2,114
<ALLOWANCE-DOMESTIC> 2,114
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
