UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission file number 0-15366
CORTLAND FIRST FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
New York 16-1276885
(State or other jurisdiction of (IRS Employer I.D. #)
incorporation or organization)
65 Main Street, Cortland, New York 13045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (607) 756-2831
Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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
The number of shares outstanding of the registrant's common stock on June 30,
1998: Common Stock, $1.6667 Par Value -- 1,969,776 shares.
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CORTLAND FIRST FINANCIAL CORPORATION
Condensed Consolidated Balance Sheets
(000's Omitted)
June 30, 1998 December 31, 1997
(Unaudited) (Note)
ASSETS
Cash and Due From Banks $ 12,771 $ 10,139
Federal Funds Sold 11,300 1,100
Total Cash and Cash Equivalents 24,071 11,239
Investment Securities
Held to Maturity 2,408 2,435
Available for Sale 85,869 85,821
Total Investment Securities
(Fair Value 88,316 & 88,301, 88,277 88,256
respectively)
Loans (Net of Unearned Discount of
(2,663 & 3,072) 114,995 113,173
Allowance for Possible Loan Losses (1,268) (1,240)
Net Loans 113,727 111,933
Bank Premises,Furniture,and Equip. 3,345 3,516
Other Real Estate 275 275
Other Assets 3,871 4,150
TOTAL ASSETS $233,566 $219,369
LIABILITIES
Non-Interest Bearing Deposits $ 27,639 24,509
Interest Bearing Deposits 178,317 167,701
Total Deposits 205,956 192,210
Accrued Int,Taxes,& Other Liabilities 1,199 1,271
Accrued Post-Retirement Benefits 928 882
TOTAL LIABILITIES 208,083 194,363
SHAREHOLDERS' EQUITY
Common Stock (par value $1.6667)
2,016,000 shares issued;
1,969,776 shares outstanding 3,360 3,360
Surplus 3,360 3,360
Undivided Profits 19,383 18,812
Accumulated other comprehensive income 446 540
Treasury Stock,at cost;46,224 shares (1,066) (1,066)
TOTAL SHAREHOLDERS' EQUITY 25,483 25,006
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
$233,566 $219,369
The accompanying notes are an integral part of the financial statements.
CORTLAND FIRST FINANCIAL CORPORATION
Condensed Consolidated Statements of Income
(000's Omitted)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Interest Income:
Interest & fees on loans $2,630 $2,578 $5,148 $5,119
Interest on investment securities 1,220 1,412 2,497 2,687
Interest on Federal Funds sold 100 78 191 182
TOTAL INTEREST INCOME $3,950 $4,068 $7,836 $7,988
Interest Expense:
Interest on deposits 1,621 1,675 3,235 3,259
NET INTEREST INCOME $2,329 $2,393 $4,601 $4,729
Provision for loan losses 50 105 125 180
INTEREST INCOME AFTER PROV
FOR LOSSES $2,279 $2,288 $4,476 $4,549
Other Income 431 369 870 764
TOTAL OPERATING INCOME $2,710 $2,657 $5,346 $5,313
Non-interest expenses 1,974 1,802 3,857 3,573
INCOME BEFORE INC TAXES $ 736 $ 855 $1,489 $1,740
Income Taxes 180 238 366 464
NET INCOME $ 556 $ 617 $1,123 $1,276
Net Income per Common Share $.28 $.31 $.57 $.63
Weighted average shares
outstanding 1,969,776 2,016,000 1,969,776 2,016,000
The accompanying notes are an integral part of the financial statements.<PAGE>
CORTLAND FIRST FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income
(000's Omitted)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Net Income $ 556 $ 617 $1,123 $1,276
Other Comprehensive Income
net of taxes: Unrealized net
gain (loss) on securities (95) 378 (94) (171)
Comprehensive Income $ 461 $ 995 $1,029 $1,105
The accompanying notes are an integral part of the financial statements.<PAGE>
CORTLAND FIRST FINANCIAL CORPORATION
Consolidated Statements of Changes in Stockholders' Equity
(000's Omitted)
(Unaudited)
Accumulated
Other
Six Months Ended Common Undivided Comprehensive Treasury
June 30, 1998 and 1997 Stock Surplus Profits Income Stock Total
Balance at December 31, $3,360 $3,360 $18,283 $ 375 - $25,378
1996
Net Income 1,276 1,276
Cash Dividend Declared (564) (564)
Net Unrealized Gains on
Securities (171) (171)
Balance at June 30, 1997 $3,360 $3,360 $18,995 $ 204 - $25,919
Balance at December 31, $3,360 $3,360 $18,812 $ 540 $(1,066) $25,006
1997
Net Income 1,123 1,123
Cash Dividend Declared (552) (552)
Net Unrealized Gains on
Securities (94) (94)
Balance at June 30, 1998 $3,360 $3,360 $19,383 $ 446 $(1,066) $25,483
The accompanying notes are an integral part of the financial statements.
<PAGE>
CORTLAND FIRST FINANCIAL CORPORATION
Consolidated Statements of Cash Flow
(000's OMITTED)
(Unaudited)
Six Months Ended June 30,
1998 1997
OPERATING ACTIVITIES
Net Income $ 1,123 $ 1,267
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 125 180
Provision for depreciation 218 222
Provision (Benefit) for deferred income taxe 64 (64)
Amortization of investment security premiums net 114 153
Decrease in interest receivable (69) (107)
Decrease (Increase) in other assets 347 (159)
Decrease in interest payable (1) (8)
(Decrease) Increase in other liabilities (24) 187
Loss on disposal of fixed assets - 3
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,897 1,683
INVESTING ACTIVITIES
Proceeds from maturities of investment 14,813 10,570
securities
Purchase of investment securities (15,106) (20,652)
Net (increase) decrease in loans (1,919) 429
Purchase of premises and equipment, net (47) (449)
NET CASH USED BY INVESTING ACTIVITIES (2,259) (10,102)
FINANCING ACTIVITIES
Net increase in demand deposits,NOW & savings 14,409 4,143
Net (decrease) increase of certificates of (663) 1,451
deposits
Cash dividends (552) (564)
NET CASH PROVIDED BY FINANCING ACTIVITIES 13,194 5,030
INCREASE (DECREASE) IN CASH AND CASH 12,832 (3,389)
EQUIVALENTS
Cash and cash equivalents at beginning of 11,239 15,400
year
CASH AND CASH EQUIVALENTS AT END OF $24,071 $12,011
PERIOD
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and short term $ 3,236 $ 3,267
borrowings
Income taxes 325 514
Non Cash Investing Activities:
Change in net unrealized losses on investment
securities (158) (285)
The accompanying notes are an integral part of the financial statements.<PAGE>
CORTLAND FIRST FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. The foregoing financial statements are unaudited; however, in the opinion
of Management, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the financial statements have been
included. A summary of the Corporation's significant accounting policies
is set forth in Note 1 to the Consolidated Financial Statements in the
Corporation's Annual Report to Shareholders on Form 10-K, for the year
ended December 31, 1997. The balance sheet at December 31, 1997, has been
derived from the audited financial statements at that date.
B. On July 13, 1998 the Company announced that they had agreed to merge with
Oneida Valley Bancshares, Inc. to create an independent bank holding
company named Alliance Financial Corporation to serve the community banking
market of Central New York State. The Bank and Oneida Valley National Bank
will also merge, taking the name Alliance Bank, N.A. The merger is
expected to close in the fourth quarter of 1998, subject to the approval of
the shareholders of both companies, as well as regulatory approvals. The
combined market will cover the Central New York region and will allow the
new company to offer its customers enhanced products and services through
its 16 branches located in Cortland, Broome, Madison, Onondaga, and Oneida
Counties.
C. Effective January 1, 1998, the Bank adopted Statement of Financial
Accounting Standard (SFAS) No. 130, "Reporting Comprehensive Income." This
pronouncement requires the Bank to report the effects of unrealized
investment holding gains or losses on comprehensive income.
D. In June of 1998, the Financial Accounting Standards Account Board (FASB)
issued FAS No. 133. This statement requires an entity to recognize all
derivatives as either assets or liabilities in the balance sheet and
measure those instruments at fair value. This statement is effective for
all fiscal quarters of fiscal year beginning after June 30, 1999. Since
the Company does not have any derivative instruments or hedges, management
believes there will be no effect on the Company.
E. Investment Securities
June 30, 1998
(000's Omitted)
Available for Sale Held to Maturity
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $32,669 $ 999
Obligations of State & Political
subdivisions 29,810 1,409
Other debt securities 3,961 0
Mortgage backed securities 19,429 0
TOTAL INVESTMENT SECURITIES $85,869 $ 2,408
December 31, 1997
(000's Omitted)
Available for Sale Held to Maturity
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $35,750 $ 999
Obligations of State & Political
subdivisions 28,274 1,436
Other debt securities 865 0
Mortgage backed securities 20,932 0
TOTAL INVESTMENT SECURITIES $85,821 $ 2,435
F. Allowance for Possible Loan Loss
June 30, 1998 June 30, 1997
(000's Omitted)
Balance at January 1 $ 1,240 $ 1,271
Provision for the period 125 180
Recoveries on loans 37 43
Sub Total 1,402 1,494
Less loans charged off (134) (272)
Balance at June 30, $ 1,268 $ 1,222
The appropriateness of the allowance for loan losses is determined
by quarterly detailed review of the loan portfolio.
<PAGE>
PART 1.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Amount in thousands of dollars unless otherwise indicated)
The purpose of this discussion is to provide the reader with information
designed to understand the financial statements of Cortland First Financial
Corporation included herewith and to provide information as to material
events or changes which affected the financial condition or results of
operation since the last reporting period. Cortland First Financial Corporation
(the "Company") is a bank holding company, with First National Bank of Cortland
(the "Bank") being its sole subsidiary. The financial condition and operating
results of the Company are largely dependent on the Bank,its primary investment.
The Bank is an independent community bank with offices in Cortland, southern
Onondaga, and northern Broome counties.
The primary regulator of the Company is the Federal Reserve Bank, while its
subsidiary, the Bank, is regulated by the Office of the Comptroller of the
Currency.
Effective January 1,1998,the Bank implemented Statement of Financial Accounting
Standard (SFAS) No. 130 Reporting Comprehensive Income. For the Bank,
comprehensive income is determined by adding unrealized investment holdings,
gains or losses during the period to net income.
On July 13, 1998 the Company announced that they had agreed to merge with Oneida
Valley Bancshares, Inc. to create an independent bank holding company named
Alliance Financial Corporation to serve the community banking market of Central
New York State. The Bank and Oneida Valley National Bank will also merge,taking
the name Alliance Bank, N.A. The merger is expected to close in the fourth
quarter of 1998, subject to the approval of the shareholders of both companies,
as well as regulatory approvals. The combined market will cover the Central New
York region and will allow the new company to offer its customers enhanced
products and services through its 16 branches located in Cortland, Broome,
Madison, Onondaga, and Oneida Counties.
Comparison of the Results of Operations
Net income was $556,000 or $.28 per share for the second quarter of 1998,
compared with $617,000 or $.31 per share for the same period in 1997. Net
interest income decreased by $64,000 when compared to the second quarter of
1997,and was partially offset by a decrease in the provision for loan losses of
$55,000 when compared to the same quarter a year ago. Other operating income
increased by $62,000 but was offset by an increase in other operating expenses
of $172,000 compared to the second quarter of 1997.
Net interest income is affected by the difference between the yield earned on
interest earning assets and rates paid on interest bearing deposits and
borrowings. The relative amounts of interest earning assets, interest bearing
deposits, and borrowings also impact net interest income levels.
Net interest income was $2.3 million for the three months ended June 30, 1998
compared with $2.4 million for the same period in 1997. For the first six months
of 1997, net interest income was $4.6 million compared to $4.7 million in the
first half of 1997. The decrease is due to lower than anticipated yields being
earned on commercial loans and investments and decreases in outstanding consumer
loans as a result of weak loan demand.
The average costs of interest bearing liabilities for the first six months of
1998 were 3.77% and were comparable to the first half of 1997 of 3.78%.
The net interest margin for the first half of 1998 was 4.78%, down slightly from
4.86% for the same period in 1997.
OTHER OPERATING INCOME and EXPENSES
Total other operating income was $431,000 in the second quarter of 1998, an
increase of $62,000 or 16.8% from the second quarter of 1997. Other operating
income for the first half of 1998 was $870,000 up $106,000 or 13.9% from the
same period in the prior year.The increase is due primarily to increased service
fees collected on demand and savings accounts which increased by $107,000 and
increased ATM fees of $36,000. This was partially offset by loss of credit card
interest income due to the sale of the credit card portfolio. Other operating
expenses were $2 million for the three months ended June 30, 1998 compared to
$1.8 million for the same period in 1997. This is an increase of $172,000 or
9.5%. For the first half of 1998 other operating expenses were $3.9 million
compared to $3.6 million for the same period a year ago. Salary and benefits
increased by $185,000 for the first half of 1998 when compared to 1997. This is
due primarily to staffing changes and normal merit increases to our employees
along with higher than expected insurance claims on the Bank's self insured
medical program. Also contributing to the increase are higher than expected
expenses for the Bank's post-retirement program which increased by $19,000
compared to the same period a year ago. Loan origination and collection expense
increased by $41,000 for the first half of 1998 compared to the same period in
1997. The increase is due primarily to increased mortgage originations and
higher than expected collection costs on delinquent loans. Expenses related to
the holding company increased by $26,000 for the first half of 1998 compared to
1997 due primarily to merger consulting costs.
Changes in Financial Condition from December 31, 1997 to June 30, 1998
Consolidated assets of the Company were $233.6 million at June 30, 1998, a $14.2
million or 6.5% increase from December 31, 1997.
Net loans receivable were $113.7 million at June 30, 1998, an increase of $1.8
million from December 31, 1997. Loan demand remains weak due primarily to
economic conditions within the Bank's geographic area. Mortgage loan and
commercial loans outstanding increased by $2.7 million and $2.6 million,
respectively since December 31,1997. This was partially offset by a decrease in
consumer loans of $2.6 million. The Bank will be implementing a new indirect
lending program sometime late in the third quarter of 1998 through which it will
receive consumer loan applications from Bank-approved automobile dealers on
behalf of their customers to finance their purchases. The loans will be subject
to the Bank's normal consumer loan underwriting standards.
The reserve for loan losses was $1,268,000 at June 30, 1998. Loan loss
provisions of $125,000 in the first half of 1998 were offset by net charge-offs
totaling $97,000.This compares to loan loss provisions of $180,000 for the same
period of 1997 being offset by net charge-offs of $229,000 for the first half of
1997. The lower provision in 1998 is a result of the Bank's improved
underwriting standards resulting in a lower loss experience factor. In
management's opinion, the allowance for loan losses is adequate as of June 30,
1998. Nonperforming assets (nonaccrual loans and real estate owned) totaled
$523,000 or .20% of total gross loans at June 30, 1998. This is down from
$581,000 or .24% of total gross loans as of year end 1997.
Total deposit liabilities were $206 million at June 30, 1998, an increase of
$13.8 million or $7.18% from December 31, 1997 which totaled $192.2 million.
The increase is due primarily to a $10.2 million increase in NOW accounts as a
result of increased deposits by municipalities and Noninterest bearing demand
deposits have grown by $3.3 million in the first half of 1998.
Capital adequacy remained strong at the end of the second quarter. Stockholder's
equity at June 30, 1998 was $25.5 million, or $12.94 per share, compared to $25
million, or $12.40 per share at December 31, 1997. The Company's capital
leverage ratio was 11.20% which compares favorably with 11.38% for the year
ended December 31, 1997. Tier 1 and Total Risk-based capital ratios were 21.63%
and 22.72%, respectively. All of the Bank's capital ratios are well above
regulatory minimums to qualify as "well capitalized".
LIQUIDITY
Liquidity describes the ability of the Bank to meet financial obligations that
arise out of the ordinary course of business. Liquidity is primarily needed to
meet the borrowing and deposit withdrawal requirements of the Bank's customers
and to fund current and planned expenditures. The Bank derives liquidity from
increased customer deposits, the maturity distribution of the investment
portfolio, loan repayments, and income from earning assets. The Bank also
maintains a line of credit with the Federal Home Loan Bank which provides
additional liquidity. Additionally, the Bank's securities classified as
available-for-sale, which totaled $85.9 million, were available for the
management of liquidity and interest rate risk. At June 30, 1998, the ratio of
net liquid assets to net deposits amounted to 30.47% indicating a high level of
liquidity. Management is not aware of any trends, demands, commitments, or
uncertainties that are reasonably likely to result in material changes in
liquidity.
RISK ASSESSMENT
Risk is the potential that unexpected and unanticipated events may have an
adverse impact on the Bank's capital or earnings. The Office of the Comptroller
of the Currency has defined several categories of risk for supervisory purposes.
The Asset and Liability Committee of the Bank is responsible for assessing these
risks. Management of the composition and maturity configurations of the earning
assets and funding sources contributes to maintaining an appropriate balance
between the maturity and repricing characteristics of assets and liabilities
that is consistent with liquidity, growth, and capital adequacy goals. A
forward looking assessment regarding the impact of interest rate movement may
have on net interest income is performed on a monthly basis. Based on current
analysis, the Bank believes that it is well positioned with minimal impact on
income when subjected to a 200 basis point (2.00%) shock, the equivalent of an
immediate increase or decrease of 2% in all interest rates on both assets and
liabilities. Management believes its exposure in each of the risk categories is
low.
YEAR 2000
The Bank has continued to make progress on its Year 2000 compliance program.
The costs to implement the program have not been material to date.
<PAGE>
INTEREST MARGIN REPORT
(000's Omitted)
1/98 - 6/98 1/97 - 6/97
EARNINGS ASSET YIELDS: FTE INC BALANCE YIELD FTE INC BALANCE YIELD
GOVT & AGY SEC $1,124 $36,042 6.26 $1,483 $47,189 6.31
TAX EXEMPT SEC 991 28,324 7.00 896 25,301 7.08
MORTG BACKED SEC 602 19,768 6.14 509 14,931 6.88
OTHER SECURITIES 160 4,713 6.79 90 2,988 6.06
TOTAL SECURITIES $2,877 $88,847 6.50 $2,978 $90,409 6.62
FED FUNDS SOLD $ 191 $ 6,915 5.46 $ 183 $ 6,836 5.29
COMMERCIAL LOANS $1,143 $23,824 9.67 $1,151 $23,276 9.97
OVERDRAFTS 0 103 0.00 0 92 0.00
CONSTRUCTION LOANS 39 874 9.19 9 220 8.52
MORTGAGE LOANS 2,391 56,119 8.59 2,323 54,634 8.57
INSTALLMENT LOANS 930 19,378 9.67 1,064 22,237 9.65
CONSUMER LOANS 459 9,009 10.27 477 9,412 10.23
TAX FREE LOANS 190 4,259 8.91 141 2,638 10.67
TOTAL LOANS $5,152 $113,566 9.15 $5,165 $112,509 9.26
TOTAL EARNING ASSETS $8,220 $209,328 7.90 $8,326 $209,754 7.99
TOTAL INTEREST INCOME
COST/FUNDS RATES: EXP BALANCE RATE EXP BALANCE RATE
NOW & SAVINGS $ 896 $77,417 2.34 $ 946 $76,662 2.49
MONEY MARKET DEP 889 37,809 4.74 844 38,339 4.44
MONEY MARKET CDS 148 6,359 4.68 152 6,585 4.65
CDS OVER $100M 261 11,120 4.73 341 14,487 4.75
OTHER CDS 1,028 39,333 5.27 961 36,840 5.26
TIME DEPOSITS 13 1,015 2.64 14 1,048 2.74
TOTAL CDS & TIME $1,450 $57,827 5.06 $1,468 $58,960 5.02
S-T BORROWINGS 0 0 0.00 $ 1 $ 25 5.72
TOTAL INT BEARING LIAB $3,235 $173,053 3.77 $3,259 $173,986 3.78
TOTAL INTEREST EXPENSE
NET INTEREST SPREAD 4.13 4.21
NET INTEREST MARGIN $4,985 $209,328 4.78 $5,067 $209,754 4.86
INTEREST MARGIN REPORT(CONT)
(000's Omitted)
INTEREST INCOME
CHANGE DUE TO:
TOTAL TOTAL
EARNINGS ASSET YIELDS: VOLUME RATE CHANGE
GOVT & AGY SEC (376) (22) (398)
TAX EXEMPT SEC 64 (2) 62
MORTG BACKED SEC 146 (15) 131
OTHER SECURITIES 55 15 70
TOTAL SECURITIES (111) (24) (135)
FED FUNDS SOLD 2 6 8
COMMERCIAL LOANS 27 (35) (8)
OVERDRAFTS 0 0 0
CONSTRUCTION LOANS 30 1 31
MORTGAGE LOANS 63 6 69
INSTALLMENT LOANS (137) 2 (135)
CONSUMER LOANS (21) 2 (19)
TAX FREE LOANS 51 (15) 36
TOTAL LOANS 13 (39) (26)
TOTAL EARNING ASSETS
TOTAL INTEREST INCOME (96) (57) (153)
INTEREST EXPENSE
COST/FUNDS RATES: CHANGE DUE TO:
NOW & SAVINGS 16 (49) (33)
MONEY MARKET DEP (12) 38 26
MONEY MARKET CDS (5) 1 (4)
CDS OVER $100M (79) (1) (80)
OTHER CDS 36 4 40
TIME DEPOSITS 0 0 0
TOTAL CDS & TIME 19 17 36
S-T BORROWINGS 0 0 0
TOTAL INT BEARING LIAB
TOTAL INTEREST EXPENSE (25) 0 (25)
NET INTEREST SPREAD
NET INTEREST MARGIN (71) (57) (128)
PART 2.
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
a) Exhibits required by Item 601 of Regulation S-K:
(21) Subsidiaries of the registrant
- First National Bank of Cortland, State of New York
(27) Financial Data Schedule
b) Reports on Form 8-K
No Form 8-K was filed during the second quarter of 1998.
<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.
CORTLAND FIRST FINANCIAL CORPORATION
DATE August 13, 1998 /s/ David R. Alvord
David R. Alvord, President & CEO
DATE August 13, 1998 /s/ Bob Derksen
Bob Derksen, Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 12,771
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 11,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 85,869
<INVESTMENTS-CARRYING> 2,408
<INVESTMENTS-MARKET> 2,447
<LOANS> 114,995
<ALLOWANCE> 1,268
<TOTAL-ASSETS> 233,566
<DEPOSITS> 205,956
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,127
<LONG-TERM> 0
0
0
<COMMON> 6,720
<OTHER-SE> 18,763
<TOTAL-LIABILITIES-AND-EQUITY> 233,566
<INTEREST-LOAN> 5,148
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<INTEREST-OTHER> 191
<INTEREST-TOTAL> 7,836
<INTEREST-DEPOSIT> 3,235
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 4,601
<LOAN-LOSSES> 125
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,857
<INCOME-PRETAX> 1,489
<INCOME-PRE-EXTRAORDINARY> 1,489
<EXTRAORDINARY> 0
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<NET-INCOME> 1,123
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
<YIELD-ACTUAL> 4.3
<LOANS-NON> 239
<LOANS-PAST> 89
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,918
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