<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934.
For Quarter ended March 31, 1998 Commission File Number
-------------- 0-15261
-------
Bryn Mawr Bank Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2434506
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
801 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
-------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 525-1700
---------------
Not Applicable
------------------------------------------------------------------
Former name, former address and fiscal year, if changed since last report.
Indicate by check 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
----- -----
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1998
-------------------------- 2,161,869
Common Stock, par value $1
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED March 31, 1998
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Income for the three months ended
March 31, 1998 and 1997.........................................Page 1
Consolidated Balance Sheets as of March 31, 1998, December 31, 1997
and March 31, 1997..............................................Page 2
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997.........................................Page 3
Consolidated Statements of Comprehensive Income for the three months
ended March 31, 1998 and 1997...................................Page 4
Notes to Consolidated Financial Statements...........................Page 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................Page 10
PART II - OTHER INFORMATION..............................................Page 20
<PAGE>
PART I. FINANCIAL INFORMATION
FINANCIAL STATEMENTS
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Item 1.
(In Thousands)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997*
---------- ----------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans............................... $ 5,662 $ 5,367
Interest on federal funds sold........................... 220 231
Interest on interest bearing deposits with banks......... 30 2
Interest on dividends on investment securities:
U.S. Treasury securities............................... 189 219
U.S. Government Agency securities...................... 339 204
Obligations of states and political subdivisions....... 51 83
Dividend income........................................ 19 19
---------- ----------
Total interest and dividend income......................... 6,510 6,125
Interest expense on deposits............................... 1,528 1,682
---------- ----------
Net interest income........................................ 4,982 4,443
Loan loss provision........................................ 25 50
---------- ----------
Net interest income after loan loss provision.............. 4,957 4,393
---------- ----------
OTHER INCOME:
Fees for Trust services.................................. 2,178 1,913
Service charges on deposits.............................. 267 270
Other service charges, commissions and fees.............. 418 312
Net gain on sale of loans................................ 127 67
Net gain on sale of other real estate owned.............. 86 1
Other operating income................................... 239 128
---------- ----------
Total other income......................................... 3,315 2,691
---------- ----------
OTHER EXPENSES:
Salaries and wages....................................... 2,896 2,425
Employee benefits........................................ 550 478
Occupancy and bank premises.............................. 321 348
Furniture, fixtures, and equipment....................... 400 375
Other operating expenses................................. 1,489 1,280
---------- ----------
Total other expenses....................................... 5,656 4,906
---------- ----------
Income before income taxes................................. 2,616 2,178
Applicable income taxes.................................... 870 720
---------- ----------
Net income................................................. $ 1,746 $ 1,458
========== ==========
Earnings per common share.................................. $0.80 $0.66
Earnings per common share-assuming dilution................ $0.76 $0.63
Cash dividends declared.................................... $0.23 $0.18
Weighted-average shares outstanding........................ 2,177,579 2,177,579
Dilutive potential common shares........................... 110,938 110,938
---------- ----------
Adjusted weighted-average shares........................... 2,288,571 2,288,517
</TABLE>
The accompanying noted are an integral part of the consolidated financial
statements.
*-Reclassified for comparative purposes
Page 1
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER MARCH 31,
1998 31, 1997
(UNAUDITED) 1997 (UNAUDITED)
----------- -------- -----------
<S> <C> <C> <C>
ASSETS
Cash and due from banks..................... $ 18,843 $ 34,464 $ 20,701
Interest bearing deposits with banks........ 171 2,118 166
Federal funds sold.......................... 10,600 16,600 14,300
Investment securities available for sale, at
market (amortized cost of $41,300, $40,573
and $39,704 as of March 31, 1998, December
31, 1997 and March 31, 1997,
respectively).............................. 41,376 40,666 39,491
Loans:
Consumer.................................. 75,042 76,963 81,597
Commercial................................ 83,867 75,474 70,410
Real Estate............................... 113,470 116,121 109,267
-------- -------- --------
Total loans............................. 272,379 268,558 261,274
Less: Allowance for loan losses........... (4,054) (4,074) (4,240)
-------- -------- --------
Net loans............................... 268,325 264,484 257,034
-------- -------- --------
Premises and equipment, net................. 11,695 11,790 11,221
Accrued interest receivable................. 2,134 2,039 2,268
Other real estate owned..................... 25 25 1,515
Other assets................................ 2,165 2,024 2,365
-------- -------- --------
Total assets............................ $355,334 $374,210 $349,061
======== ======== ========
LIABILITIES
Deposits:
Demand, noninterest-bearing............... $ 82,252 $101,188 $ 70,316
Savings................................... 167,807 165,739 158,498
Time...................................... 60,430 61,879 77,038
-------- -------- --------
Total deposits.......................... 310,489 328,806 305,852
Other liabilities........................... 5,296 6,055 6,407
-------- -------- --------
Total liabilities....................... 315,785 334,861 312,259
SHAREHOLDERS' EQUITY
Common stock, par value $1; authorized
5,000,000 shares; issued 2,522,139,
2,519,379 and 2,508,485 shares as of March
31, 1998, December 31, 1997 and March 31,
1997, respectively and outstanding
2,166,369, 2,185,609 and 2,205,665 shares
as of March 31, 1998, December 31, 1997 and
March 31, 1997, respectively............... 2,522 2,519 2,508
Paid-in capital in excess of par value...... 4,636 4,589 4,513
Unrealized investment appreciation
(depreciation) net of deferred income
taxes...................................... 50 62 (141)
Retained earnings........................... 36,191 34,946 31,461
-------- -------- --------
43,399 42,116 38,341
Less: Common stock in treasury at cost--
355,770, 333,770 and 302,820 shares as of
March 31, 1998, December 31, 1997 and March
31, 1997, respectively..................... (3,850) (2,767) (1,539)
-------- -------- --------
Total shareholders' equity................ 39,549 39,349 36,802
-------- -------- --------
Total liabilities and shareholders'
equity................................... $355,334 $374,210 $349,601
======== ======== ========
</TABLE>
The accompanying notes are an integral part of consolidated financial
statements.
Page 2
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income................................................. $ 1,746 $ 1,458
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for loan losses................................ 25 50
Provision for depreciation and amortization.............. 358 319
Gain on sale of other real estate owned.................. (86) (1)
Loans originated for resale.............................. (36,303) (7,761)
Proceeds from loans sold................................. 35,558 8,209
Gain on sale of loans.................................... (127) (67)
Provision for deferred income taxes...................... 49 45
Increase in interest receivable.......................... (95) (104)
Increase (decrease) in interest payable.................. 181 (356)
Other.................................................... (1,077) (28)
---------- ----------
Net cash provised by operating activities............... 229 1,764
---------- ----------
INVESTING ACTIVITIES:
Purchases of investment securities......................... (4,743) (12,984)
Proceeds from calls of fixed income securities............. 4,000 8,027
Loan repayments, net of loan originations.................. 4,077 6,804
Loans purchased (dealer loans)............................. (7,071) (9,024)
Purchases of premises and equipment........................ (203) (205)
---------- ----------
Net cash (used) by investing activities................. 3,940 (7,382)
---------- ----------
FINANCING ACTIVITIES:
Net decrease in demand and savings deposits................ (16,868) (15,491)
Net increase (decrease) in time deposits................... (1,449) 18,160
Dividends paid............................................. (501) (396)
Proceeds from issuance of common stock..................... 50 72
Purchase of treasury stock................................. (1,083) 0
Repayment of mortgage debt................................. (6) (14)
---------- ----------
Net cash (used) provided by financing activities......... (19,857) 2,331
---------- ----------
Decrease in cash and cash equivalents...................... (23,568) (3,287)
Cash and cash equivalents at beginning of period........... 53,182 38,454
---------- ----------
Cash and cash equivalents at end of period................. 29,614 35,167
========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid........................................ 548 51
Interest paid............................................ 1,347 2,038
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
The accompanying noted are an integral part of the consolidated financial
statements.
Page 3
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
Unaudited
Three Months Ended
March 31
1998 1997
--------------------
Net Income............................................ $ 1,746 $ 1,458
Other comprehensive income:
Unrealized holding gains (losses) on
available-for-sale securities.............. (17) (212)
Deferred income tax (benefit) expense on
unrealized holding gains on
available-for-sale securities.............. 5 72
----- -----
Comprehensive net income.............................. $ 1,734 $ 1,318
===== =====
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4
<PAGE>
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(UNAUDITED)
1. Unaudited Interim Results:
The consolidated balance sheets of Bryn Mawr Bank Corporation (the
"Corporation") as of March 31, 1998 and 1997, the consolidated statements of
cash flows for the three month periods ended March 31, 1998 and 1997 and the
related consolidated statements of income for the three month periods ended
March 31, 1998 and 1997 are unaudited.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of certain assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of related revenue and expense during the
reporting period. Actual results could differ from those estimates. Management
believes that all adjustments, accruals and elimination entries necessary for
the fair presentation of the consolidated financial position and results of
operations for the interim periods presented have been made. All such
adjustments were of a normal recurring nature. The year-end balance sheet data
was derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles. The financial
statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained in the Corporation's 1997 Annual Report
incorporated in the 1997 Form 10-K (Exhibit #13).
2. Earnings Per Common Share:
Reference is made to Note #10, Stock Option Plan (the "Plan"), in the Notes
to Consolidated Financial Statements in the Corporation's 1997 Annual Report
incorporated in the 1997 Form 10-K (Exhibit #13). Shares under option under the
Plan had a dilutive impact on net income per share for the three month periods
ended March 31, 1998 and 1997.
3. Disclosure of Accounting Policy:
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, interest bearing deposits with banks and federal funds sold.
4. Adoption of Financial Accounting Standards:
In January 1997, the Corporation adopted Statement of Financial Accounting
Standard No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities", ("SFAS No. 125"). SFAS No. 125, which was
adopted prospectively, provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishments of liabilities based on
the concept of control. The adoption of SFAS No. 125 did not have a material
impact on the financial position or results of operation of the Corporation.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128, "Earning per Share", ("SFAS No. 128").
SFAS No. 128 specifies the computation, presentation and
Page 5
<PAGE>
disclosure requirements for earnings per share for entities with publicly held
common stock or potential common stock. SFAS No. 128 requires the presentation
of both basic earnings per share and, when not antidilutive, diluted earnings
per share. Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period.
Dilutive earnings per share is computed in a manner similar to basic earnings
per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the dilutive common
shares had been issued.
SFAS No. 128 supersedes Accounting Principals Board Opinion No. 15-Earnings
Per Share and is effective for financial statements for both interim and annual
periods ending after December 15, 1997, which essentially means that it is
effective for 1998. All prior periods have been restated.
In June 1997, Statement of Financial Accounting Standard No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130") was issued. SFAS No. 130
establishes standards for reporting and displaying comprehensive income and its
components in financial statements. Comprehensive income includes net income and
several other items that current accounting standards require to be recognized
outside of net income, such as unrealized holding gains and losses on available-
for-sale investment securities in accordance with Statement of Financial
Accounting Standard No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. The Corporation adopted SFAS No. 130 on January 1, 1998. When
first applying SFAS No. 130, financial statements for earlier periods that are
provided for comparative purposes are required to be reclassified to reflect
application of the provisions of SFAS No. 130. SFAS No. 130 must be adopted at
the beginning of an enterprises fiscal year.
In June 1997, Statement of Financial Accounting Standard No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS No.
131") was issued. SFAS 131 replaces Statement of Financial Accounting Standard
No. 14, "Financial Reporting for Segments of a Business Enterprise". SFAS No.
131 requires public business enterprises to report certain information about
their operating segments in a complete set of financial statements to
shareholders. Such financial information is required to be reported on the basis
that it is used internally by the enterprise's chief operating decision maker in
making decisions related to resource allocation and segment performance. SFAS
No. 131 is effective for financial statements for periods beginning after
December 15, 1997. The Corporation adopted SFAS No. 131 on January 1, 1998.
Comparative year information is required to be restated in accordance with SFAS
No. 131, if practicable. In 1998, the first year of implementation, SFAS No. 131
is not required to be applied to interim period financial statements and the
Corporation has not done so.
5. Loans:
Interest income on loans performing satisfactorily is recognized on the
accrual method of accounting. Nonperforming loans are loans on which scheduled
principal and/or interest is past due 90 days or more or loans less than 90 days
past due which are deemed to be problem loans by management. All nonperforming
loans, except consumer loans, are placed on nonaccrual status, and any
outstanding interest receivable at the time the loan is deemed nonperforming is
deducted from interest income. The charge-off policy for all loans, including
nonperforming and impaired loans, considers such factors as the type and size of
the loan, the quality of the collateral, and historical creditworthiness of the
borrower in management's assessment of the collectability of such loans.
Page 6
<PAGE>
As a part of its internal loan review process, management, when considering
making a loan an impaired loan, considers a number of factors, such as a
borrower's financial strength, the value of related collateral and the ability
to continue to meet the original contractual terms of a loan. Major risk
classifications, used to aggregate loans include both credit and the risk of
failure to repay a loan and concentration risk. A loan is not considered
impaired if there is merely an insignificant delay or shortfall in the amounts
of payments. An insignificant delay or shortfall is a temporary delay in the
payment process of a loan. However, under these circumstances, the
Corporation's subsidiary The Bryn Mawr Trust Company (the "Bank") expects to
collect all amounts due, including interest accrued at the contractual interest
rate for the period of the delay.
When a borrower is deemed to be unable to meet the original terms of a
loan, the loan is considered impaired. While all impaired loans are not
necessarily considered non-performing loans, if a loan is delinquent for 90 days
or more, it is considered both a nonperforming and impaired loan. All of the
Corporation's impaired loans, which amounted to $3,361,000, $3,524,000 and
$1,486,000 at March 31, 1998, December 31, 1997 and March 31, 1997,
respectively, were put on a nonaccrual status and any outstanding accrued
interest receivable on such loans at the time they were put on nonaccrual
status, was reversed from income.
Impaired loans are required to be measured based upon the present value of
expected future cash flows, discounted at the loan's initial effective interest
rate or at the loan's market price or fair value of the collateral, if the loan
is collateral dependent. As of March 31, 1998 and December 31, 1997, no
impaired loans were measured using the present value of expected future cash
flows because all impaired loans were collateral dependent at these respective
dates. As of March 31, 1997, impaired loans measured using the present value of
future cash flows amounted to $159,000. Impaired loans measured by the value of
the loan's collateral amounted to $3,361,000, $3,524,000, and $1,327,000,
respectively.
If the loan valuation is less than the recorded value of the loan, an
impairment reserve must be established for the difference. The impairment
reserve is established by either an allocation of the reserve for loan losses or
by a provision for loan losses, depending on the adequacy of the reserve for
loan losses. All impairment reserves established in either 1998 or 1997 were
allocated from the existing reserve for loan losses. As of March 31, 1998,
December 31, 1997 and March 31, 1997, there were $2,203,000, $791,000 and
$916,000, respectively of impaired loans for which there is a related allowance
for loan losses. The total related allowance for loan loss at March 31, 1998,
December 31, 1997 and March 31, 1997 was $300,000, $226,000 and $187,000,
respectively. Impaired loans for which no loan loss allowance was allocated
amounted to $1,158,000, $2,733,000 and $570,000 at March 31, 1998, December 31,
1997 and March 31, 1997, respectively. Average impaired loans during the first
three months of 1998 and 1997, respectively, amounted to $3,218,000 and
$1,588,000, compared to $2,927,000 for the twelve months ended December 31,
1997.
When a loan is classified as impaired, it is put on a nonaccrual status and
any income subsequently collected is credited to the outstanding principal
balance. Therefore, no interest income was reported on outstanding loans while
considered impaired during either quarter ended March 31, 1998 or 1997. Loans
may be removed from impaired status and returned to accrual status when all
principal and interest amounts contractually due are reasonably assured of
repayment within an acceptable period of time and there is a sustained period of
repayment performance by the borrower, with a minimum repayment of at least six
months, in accordance with the contractual terms of interest and
Page 7
<PAGE>
principal. Subsequent income recognition would be recorded under the existing
terms of the loan. Based on the above criteria, during the first quarter of
1997, $409,000 in loan balances were removed from impaired status and returned
to accrual status. During 1998, no loans considered impaired were removed from
the impaired loan status.
Smaller balance, homogeneous loans, exclusively consumer loans, when
included in nonperforming loans, for practical consideration, are not put on a
nonaccrual status nor is the current accrued interest receivable reversed from
income.
Page 8
<PAGE>
6. Allowance for Possible Loan Losses:
The summary of changes in the allowance is as follows:
three months ended year ended
March 31, December 31,
1998 1997 1997
-------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Balance, Beginning of period $4,074 $4,182 $4,182
-------------------------------
Charge-offs:
Consumer (27) (43) (237)
Commercial and industrial 0 0 (196)
Real estate (26) (5) (0)
-------------------------------
Total charge-offs (53) (48) (433)
-------------------------------
Recoveries:
Consumer 3 7 23
Commercial and industrial 0 45 102
Real estate 5 4 0
-------------------------------
Total recoveries 8 56 125
-------------------------------
Net (charge-offs) / recoveries (45) 8 (308)
Provision for loan losses 25 50 200
-------------------------------
Balance, End of period $4,054 $4,240 $4,074
===============================
</TABLE>
Page 9
<PAGE>
ITEM 2.
BRYN MAWR BANK CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is a discussion of the consolidated results of operations of Bryn
Mawr Bank Corporation and its subsidiaries (the "Corporation") for the three
months ended March 31, 1998 and 1997, as well as the financial condition of the
Corporation as of March 31, 1998, December 31, 1997 and March 31, 1997. The
Bryn Mawr Trust Company (the "Bank") and Tax Counsellors of Bryn Mawr, Inc.
("TCBM") are wholly-owned subsidiaries of the Corporation. During the first
quarter of 1998, the Bank formed a wholly-owned subsidiary, Insurance
Counsellors of Bryn Mawr, Inc. ("ICBM") to sell insurance products to its
customers.
RESULTS OF OPERATIONS
- ---------------------
The Corporation reported net income of $1,746,000 for the three months
ended March 31, 1998, a 20% increase over $1,458,000 reported for the same
period in 1997. During 1998, the Bank reported net gains on the sale of other
real estate owned ("OREO") of $86,000 and a recovery of $144,000 in disputed
legal fees from a prior loan settlement (the "Non-recurring Items"). Exclusive
of these Non-recurring Items, which added $152,000 to net income on an after tax
basis in 1998, the Corporation's earnings grew by 9% over 1997 earnings.
Earnings per common share amounted to $0.80, a 21% increase over $0.66 reported
for the first quarter of 1997. Earnings per common share, assuming dilution
were $0.76 and $0.63, respectively.
Exclusive of the after tax effect of the Nonrecurring-Items, the increase
in earnings, for the first three months of 1998 over the same period in 1997 may
be attributed to a number of factors, including an increase in net interest
income, up 12% over the first three months of 1997, a decrease in the provision
for loan losses, down 50% and an increase of 20% in other income, primarily due
to a 34% increase in other service charges, commissions and fees and a 14%
increase in fees for trust services. Other expenses, exclusive of the
Nonrecurring Items, rose 18% for the first three months of 1998 compared to the
same period in 1997.
Higher average outstanding loan balances for the first three months of 1998
grew 3% from average daily outstanding loan balances for the first three months
of 1997. Average outstanding investment security balances grew by 12%. The
increases in both average loan balances and average investment balances were
partially funded by an 18% increase in average daily outstanding deposit
balances. The majority of the growth in average daily outstanding deposits
occurred in transaction based accounts. Average daily outstanding balances of
non-interest bearing demand deposit accounts and NOW accounts were up 10% and
9%, respectively. Due primarily to a 12% decrease in average outstanding CDs
during the first quarter of 1998, compared to the same quarter of 1997, the
average cost of funds for the respective periods decreased 20 basis points, from
2.2% in 1997 to 2.0% in 1998. The result was an increase in the Bank's
annualized net interest margin, to 5.97% for the first three months of 1998
compared to 5.65% for the same period in 1997.
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The prime rate remained unchanged at 8.5% from March 1997 to March 1998.
Since, in the short term, 30 days or less, the Bank is asset rate sensitive, a
rising prime rate usually will cause a related increase in interest income.
While the Bank's prime rate did not change during the most recent twelve month
period, a 3% increase in higher average outstanding loan balances was primarily
responsible for a 10 basis point increase in the yield on earning assets for the
first three months of 1998, to 7.9% compared to 7.8% for the same period in
1997. While interest rate movements and their effect on future revenue streams
cannot be predicted, management believes that there are presently no known
trends, events or uncertainties that will have or are reasonably likely to have
a material effect on the Corporation's liquidity, capital resources or results
of operations in the future.
NET INTEREST INCOME
- -------------------
For the three months ended March 31, 1998, net interest income rose 12% to
$4,982,000 from $4,443,000 in 1997. Total interest income grew 6% for the first
three months of 1998, to $6,510,000 from $6,125,000 for the first three months
of 1997. Interest expense decreased 9% for the three months ended March 31,
1998, to $1,528,000 compared to $1,682,000 for the first three months of 1997.
The yield on earning assets for the first three months of 1998 was 7.9% compared
to 7.8% for the first three months of 1997 while the effective rate paid on
interest bearing deposits for the first three months of 1998 and 1997 was 2.7%
and 2.9%, respectively.
Interest and fees on loans increased 5% from $5,367,000 for the first three
months of 1997 to $5,662,000 for the first three months of 1998. A level loan
portfolio yield, at 8.3% for the first three months of 1998 and 1997, combined
with a 3% increase in average outstanding loan balances from $257,823,000 for
the first three months of 1997 to $265,601,000 for the same period in 1998, are
the primary reasons for this increase in loan related interest and fee income.
Interest income on investments increased $73,000 or 14%, from $525,000 for
the first three months of 1997 to $598,000 for the first three months of 1998.
Interest from U.S. Treasury obligations decreased 14% from $219,000 for the
first three months of 1997 to $189,000 for the first three months of 1998. The
primary reason for this decrease was a $1,760,000 or 12% decrease in the average
balance of U.S. Treasury securities, from $14,898,000 during the first three
months of 1997 to $13,138,000 for the comparable period in 1998. The decrease
in U.S. Treasury obligations was a result of investment maturities as opposed to
sales. Interest income on U.S. Government Agency securities increased 66% from
$204,000 for the three months ended March 31, 1997 to $339,000 at March 31,
1998. A 64% increase in the average balance of U.S. Government Agency
securities, from $13,493,000 for the three months ended March 31, 1997 to
$22,083,000 for the same period in 1998, is primarily responsible for the
related 66% increase in interest income. Interest income on obligations of
states and political subdivisions decreased by 39%, from $83,000 for the three
months ended March 31, 1997 to $51,000 for the same period in 1998. A decrease
of $2,402,000 or 35% in average outstanding balances of obligations of state and
political subdivisions, from $6,817,000 in average outstanding balances for the
first three months of 1997 down to $4,415,000 for the same period in 1998 is the
primary reason for this decrease. The overall yield on investment securities
increased from 5.8% for
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the first three months of 1997 to 5.9% for the first three months of 1998, due
primarily to the maturity of lower yielding investments in the Bank's investment
portfolio.
Interest expense on deposits decreased 9% or $154,000, to $1,528,000 for
the three months ended March 31, 1998 compared to $1,682,000 for the same period
in 1997. The average cost of interest bearing deposits decreased 20 basis
points, from 2.9% at March 31, 1997 to 2.7% for the three months ended March 31,
1998. The average interest bearing deposit balances decreased 1% to
$228,842,000 at March 31, 1998 compared to $231,086,000 for the same period in
1997. The average deposit mix changed for the first three months of 1998
compared to the same period in 1997. Average non-transaction savings accounts
increased 3%, while average Market Rate Accounts decreased 3%. The Bank's
average transaction based NOW account and non-interest bearing demand deposit
account balances increased 9% and 10% respectively. During the first quarter of
1995, the Bank offered a new one and two year Premier CD, at highly competitive
rates of interest. The one year Premier CDs matured during the first quarter of
1996 and were not renewed. The two year Premier CDs matured during the first
quarter of 1997 and a CD promotion, offering a 50 basis point premium over the
then current market rate of interest for a nine month CD was offered. These CD
balances matured during the fourth quarter of 1997. A similar promotion was not
offered at that time. As a result of this run off of Premier CD funds in the
final quarter of 1997, the average daily outstanding balances of time deposits
decreased 12% for the first three months of 1998, compared to 1997. The
annualized cost of CDs decreased 30 basis points, from 5.3% for the first three
months of 1997 to 5.0% for the same period in 1998. With the exception of the
average cost of Market Rate Accounts increasing 10 basis points, the average
cost of both savings and NOW account balances each decreased 10 basis points for
the first quarter of 1998 from the first quarter of 1997. The result was a 20
basis point decrease in the average cost of interest bearing deposits, from 2.9%
in 1997 to 2.7% for the first quarter of 1998. The average cost of deposits,
including non-interest bearing demand deposits decreased from 2.2% for 1997, to
2.0% for the first quarter of 1998.
For the first three months of 1998, the net interest margin increased to
5.97% from 5.65% for same period in 1997. The net interest margin is computed
exclusive of related loan fee income.
LOAN LOSS PROVISION
- -------------------
The loan loss provision represents management's determination of the amount
necessary to be charged against the current year's income in order to maintain
an adequate loan loss reserve. The Bank maintains an Officer Loan Review
Committee (the "Committee") and retains the services of an independent loan
review consultant (the "Consultant"). The Consultant performs an independent
review of the Bank's loan portfolio and the loan loss reserve. The Committee
meets monthly to review the adequacy of the loan loss reserve as well as all
nonaccrual loans, any potential problem loans and loans criticized by either the
Bank's regulators or the Consultant.
Based on ratings assigned by the Committee on the quality of the loans
which are reviewed, a specific reserve may be computed for each loan. In
addition to the specific reserve amounts, the balance of loans not reviewed by
Page 12
<PAGE>
the Committee has a reserve computed based on the average of the prior five
years write-offs plus the annualized write-offs for the current year. Including
annualized write-offs for the current year takes into consideration current
trends in both volumes and write-offs, to be included in the computation.
Finally, an amount equal to .5% of all outstanding loans is included in the loan
loss reserve calculation to address possible unforeseen loan loss reserve
requirements. The sum of the specific reserves, the reserve calculated based on
average write-offs and the reserve calculated based on the entire portfolio for
possible unforeseen loan losses is compared to the Bank's current loan loss
reserve balance. Any additions deemed necessary to the loan loss reserve are
then made on a timely basis.
Based on the results of the aforementioned reviews, the low level of loan
delinquencies, .74% of total loans at March 31, 1998 and the size of the loan
loss reserve, 1.49% of total loans at March 31, 1998, the loan loss provision
was reduced to $25,000 for the three months ended March 31, 1998, compared to
$50,000 for the same period in 1997. The loan loss reserve amounted to 1.62% of
outstanding loans at March 31, 1997. Nonperforming loans have decreased 10% to
$1,047,000 as of March 31, 1998, down from $1,169,000 as of December 31, 1997
and increased 24% from $846,000 in nonperforming loans as of March 31, 1997.
The loan loss reserve amounted to 387% of nonperforming loans as of March 31,
1998 compared to 501% as of March 31, 1997. Based on the results of both the
internal and external loan review processes and the current level of
nonperforming loans, management believes the loan loss reserve to be adequate as
of March 31, 1998.
OTHER INCOME
- ------------
Total other income of $3,315,000 for the three months ended March 31, 1998
increased 23% over $2,691,000 reported for the same period in 1997. Included in
these amounts was an $85,000 increase in net gains on the sale of OREO.
Exclusive of these gains, total other income increased by 20% over 1997 levels.
Fees for trust services rose 14% from $1,913,000 for the first three months
of 1997 to $2,178,000 for the same period in 1998, due primarily to both the
acquisition of new Trust accounts and an increase in the market value of Trust
assets under management, up by 45%, to $1,812,937,000 at March 31, 1998 from
$1,254,336,000 as of March 31, 1997.
Due primarily to favorable residential mortgage interest rates,
encouraging borrowers to refinance existing higher rate mortgage loans, for the
three month period ended March 31, 1997, the Bank originated and sold
$35,431,000 of residential mortgage loans in the secondary mortgage market, a
336% increase over $8,125,000 of residential mortgage loans originated and sold
during the first three months of 1997. Deferred loan fees earned as income
resulting from the sale of residential mortgage loans in the secondary mortgage
market amounted to $111,000 or 31 basis points earned on the sale of $35,431,000
of residential mortgage loans in the secondary mortgage market, compared to
$26,000 or 32 basis points earned on the sale of $8,125,000 of residential
mortgage loans in the secondary mortgage market during the first quarter of
1997. Related gains on the same respective sales of residential mortgage loans
in the secondary mortgage market amounted to $169,000 or 48 basis points for the
first quarter of 1998 compared to $59,000 or 73 basis points for the same period
in 1997. The result was a decline in the total
Page 13
<PAGE>
basis points earned on the sale of loans in the secondary mortgage market, from
105 basis points earned on the sale of $8,125,000 in residential mortgages loans
for the first quarter of 1997 to 79 basis points on the sale of $35,431,000 in
residential mortgage loans for the first quarter of 1998.
Income from other service charges, commissions and fees amounted to
$418,000 for the first quarter of 1998, a 34% increase from $312,000 reported
for the first quarter of 1997. Fee income, such as documentation preparation
fees, associated with the increase in residential mortgage loan sale activity
was primarily responsible for this increase in fee income.
Other operating income increased 87% to $239,000 for the first three months
of 1998, compared to $128,000 for the same period in 1997. Fee income of
$90,000, earned by TCBM was the primary reason for this $111,000 increase in
other operating income. TCBM was not in operation during the first quarter of
1997.
OTHER EXPENSES
- --------------
Total other expense increased 15% for the first three months of 1998 to
$5,656,000 from $4,906,000 for the first three months of 1997. Salaries and
wages grew $471,000 or 19%, from $2,425,000 for the three months ended March 31,
1997 to $2,896,000 for the same period in 1998. Of this increase, $314,000
relates to regular salary expense, representing a 15% increase in regular, part
time and overtime salaries during the first quarter of 1998, compared to 1997.
Included in 1998's regular salary expense were salaries for TCBM and ICBM of
$117,000. Both companies were not in operation during the first quarter of
1997. The Bank's regular salary expense increased 10% in the first quarter of
1998, compared to the same quarter in 1997. Staffing additions, occurring
during the previous twelve month period were primarily responsible for this
increase. Incentive salaries were up $157,000 or 41%, from $382,000 for the
three months ended March 31, 1997 to $539,000 for the same period in 1998.
Incentive salaries are primarily related to the profitability of both the Bank
and its related business segments.
Employee benefits expenses increased $72,000 or 15% from $478,000 for the
first three months of 1997 to $550,000 for the same period in 1998. The largest
increase in employee benefits expense occurred in the Bank's social security
expense, up $43,000 over 1997's similar expense. This was primarily due to an
increase in the social security expense related to an increase in the Bank's
incentive bonus, paid in January 1998, compared to a similar bonus paid in 1997.
Fringe benefits costs for TCBM and ICBM amounted to $13,000 for the first
quarter of 1998. There were no such expenses for the first quarter of 1997.
Occupancy expense decreased $27,000 or 8%, from $348,000 for the first
three months of 1997 to $321,000 for the first three months of 1998. The
primary reason for this decrease was a reduction of $46,000 in occupancy costs
for the Corporation, because of a payoff, in May of 1997, of a mortgage loan
secured by a lien on the offices used by the Bank's Investment Management and
Trust Division.
Furniture, fixtures and equipment expense increased $25,000 or 7% from
$375,000 for the first quarter of 1997 to $400,000 for the same period in
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<PAGE>
1998. Increased depreciation expense was the primary reason for this increase.
Other operating expenses increased $209,000 or 16% over the first three
months of 1997, from $1,280,000 for the first three months of 1997 to $1,489,000
for the first three months of 1998. The largest increase in other operating
expense occurred in advertising expense, up $147,000 for the first three months
of 1998, compared to the same period in 1997. Partially offsetting this increase
was a $139,000 decrease in the Bank's legal expense, primarily the result of a
recovery of $144,000 in disputed legal fees from a prior loan settlement during
the first quarter of 1998. TCBM and ICBM had combined other operating expenses
of $24,000. No such expenses were incurred during the first quarter of 1997.
Appraisal fees, directly related to the level of residential mortgage loans
origination and sale activity, increased $28,000.
APPLICABLE INCOME TAXES
- -----------------------
The Corporation's effective tax rate for the first three months of 1998 and
1997 was 33%.
FINANCIAL CONDITION
- -------------------
Total assets decreased 5% from $374,210,000 at December 31, 1997 to
$355,334,000 as of March 31, 1998. Total assets grew 2% from $349,061,000 as of
March 31, 1997.
Outstanding earning assets decreased 1% to $324,526,000 as of March 31,
1998 from $327,942,000 as of December 31, 1997. The Bank's loan portfolio
increased 1%, to $272,379,000 at March 31, 1998 from $268,558,000 as of December
31, 1997. Outstanding loans increased by 4%, from $261,274,000 as of March 31,
1997. Outstanding consumer loans of $75,042,000 at March 31, 1998 decreased 2%
and 8%, respectively, from consumer loan outstanding balances of $76,963,000 as
of December 31, 1997 and $81,597,000 as of March 31, 1997. Competition from
automobile manufacturers for automobile loans and borrowers' ability to
refinance existing fixed rate home equity loans with lower rate residential
mortgage loans were the primary reasons for the decrease in consumer loan
balances from both December 31, 1997 and March 31, 1997. Outstanding commercial
loans at March 31, 1998 were $83,867,000, an 11% increase from outstanding
commercial loan balances of $75,474,000 at December 31, 1997 and 19% ahead of
$70,410,000 at March 31, 1997. Outstanding real estate loans were $113,470,000
at March 31, 1998, a 2% decrease from $116,121,000 in outstanding real estate
loans at December 31, 1997 and a 4% increase over $109,267,000 in outstanding
real estate loans as of March 31, 1997. The primary reason for the decrease in
outstanding real estate loans from December 31, 1997 to March 31, 1998 was an
increase in the sale of residential mortgage loans in the secondary mortgage
market during the first quarter of 1998.
The Bank's investment portfolio, having a market value of $41,376,000 at
March 31, 1998, increased 2% from a market value of $40,666,000 at December 31,
1997 and 5% from $39,491,000 as of March 31, 1997.
The Corporation has chosen to include all of its investment securities in
the available for sale category. Investments in this category are reported
Page 15
<PAGE>
at the current market value with net unrealized gains or losses, net of the
deferred tax effect, being added or deducted from the Corporation's total equity
on the balance sheet. As of March 31, 1998, the investment portfolio had an
unrealized gain of $76,000, compared to an unrealized gain of $93,000 as of
December 31, 1997. The unrealized investment appreciation, net of deferred
income taxes, increased the Corporation's shareholders' equity on the balance
sheet by $50,000 as of March 31, 1998.
Federal funds sold amounted to $10,600,000 as of March 31, 1998, a 36% and
26% decrease from $16,600,000 as of December 31, 1997 and $14,300,000 as of
March 31, 1997, respectively. The decrease in outstanding federal funds sold
from December 31, 1997 was primarily due to both an increase in outstanding
loans and a decrease in deposits during the first quarter of 1998. Management
continues to monitor the liquidity requirements of the Bank and believes that it
has the ability to increase its liquidity position through growth of new CDs,
borrowing from the Federal Home Loan Bank of Pittsburgh (the "FHLB") and the
sale of investments, classified as available for sale.
Nonperforming assets amounted to $1,072,000 at March 31, 1998, a 10%
decrease from $1,194,000 at December 31, 1997 and a 55% decrease from
nonperforming assets of $2,361,000 at March 31, 1997. Nonperforming loans
decreased 10% to $1,047,000 at March 31, 1998 compared to nonperforming loans of
$1,169,000 at December 31, 1997 and increased 24% from $846,000 as of March 31,
1997. OREO balances of $25,000 remained unchanged from December 31, 1997 and
decreased 98% from $1,515,000 as of March 31, 1997. The decrease in OREO
balances from March 1997 was due to the sale of the last large OREO property
owned by the Bank, during the fourth quarter of 1997. One OREO property remains
on the Bank's books as of March 31, 1998.
As of March 31, 1998 and 1997, there were no significant loans classified
for regulatory purposes as loss, doubtful, substandard or special mention that
either (i) represent or result from trends or uncertainties which management
reasonably expects will impact future operating results, liquidity, or capital
resources, or (ii) represent material credits about which management is aware of
any information, causing management to have serious doubts as to the borrower's
ability to comply with the loan repayment terms.
Total deposits decreased 6% to $310,489,000 as of March 31, 1998 from
$328,806,000 as of December 31, 1997. A more meaningful measurement of deposit
change is the change in average outstanding deposit balances. Total average
outstanding deposit balances increased 2% to $311,273,000 for the three month
period ended March 31, 1998 from $306,541,000 for the same period in 1997.
Although the amount of average total deposits remained relatively stable, the
mix of deposits shifted. Average savings balances remained relatively level at
$40,530,000 for the first three months of 1998, compared to $39,499,000 for the
same period in 1997. Market Rate Account balances decreased 5% or $3,301,000
from $46,312,000 in average daily outstanding balances for the three months
ended March 31, 1997 to $44,111,000 for the same period in 1998. The Bank's
transaction based NOW Account and non-interest bearing demand deposit accounts
both grew over the first quarter 1997 average balances. Average outstanding NOW
account balances grew 10% or $7,732,000, from $74,665,000 for the first three
months of 1997 to $82,397,000 for the same period in 1998. Non-interest bearing
demand deposit average outstanding balances grew 9% or $6,976,000 from
$75,455,000 for the three months ended
Page 16
<PAGE>
March 31, 1997 to $82,431,000 for the same period in 1998. The two year Premier
CDs, offered during the first quarter of 1995 matured during the first quarter
of 1997. During the first quarter of 1995, the Bank offered a new one and two
year Premier CD, at highly competitive rates of interest. The one year Premier
CDs matured during the first quarter of 1996 and were not renewed. The two year
Premier CDs matured during the first quarter of 1997 and a CD promotion,
offering a 50 basis point premium over the then current market rate of interest
for a nine month CD was offered. These CD balances matured during the fourth
quarter of 1997. A similar promotion was not offered at that time. As a result
of this run off of Premier CD funds in the final quarter of 1997, the average
daily outstanding balances of time deposits decreased 12% for the first three
months of 1998 compared to 1997. The net result was a decrease in the average
outstanding CD balances, by $8,776,000 from $70,579,000 in average outstanding
balances for the first three months of 1997 to $65,281,000 for the same period
in 1998.
LIQUIDITY, INTEREST RATE SENSITIVITY
- ------------------------------------
The Bank's liquidity is maintained by managing its core deposits,
purchasing federal funds, selling loans in the secondary market, and borrowing
from the FHLB. The Bank's liquid assets include cash and cash equivalents as
well as certain unpledged investment securities. Bank management has developed
a revised liquidity measure, incorporating its ability to borrow from the FHLB
to meet liquidity needs and goals. Periodically, the Asset / Liability
Committee of the Bank reviews the Bank's liquidity needs and reports its
findings to the Risk Management Committee of the Bank's Board of Directors.
In the short term, 30 days or less, the Bank is asset rate sensitive after
adjusting the interest rate sensitivity of savings deposits based on
management's experience and assumptions regarding the impact of product pricing,
interest rate spread relationships and customer behavior. Asset rate
sensitivity will result in a greater portion of assets compared to deposits
repricing with changes in interest rates within specified time periods. The
opposite effect results from being liability rate sensitive. Asset rate
sensitivity in the short term, in an increasing rate environment should produce
an increase in net interest income. The Bank uses simulation models to help
measure its interest rate risk and to help manage its interest rate sensitivity.
The simulation models consider not only the impact of changes in interest rates
on forecasted net interest income, but also such factors as yield curve
relationships, possible loan prepayments, and deposit withdrawals. As of March
31, 1998, based on the results from the simulation models, the amount of the
Bank's interest rate risk was within the acceptable range as established by the
Policy.
CAPITAL RESOURCES
- -----------------
Total consolidated shareholders equity of the Corporation was $39,549,000,
or 11.1% of total assets, as of March 31, 1998, compared to total shareholders
equity of $39,349,000, or 10.5% of total assets, as of December 31, 1997. As of
March 31, 1997, shareholders' equity was $36,802,000, or
Page 17
<PAGE>
10.5% of total assets. The Corporation's risk weighted Tier I capital ratio was
13.68% as of March 31, 1998 compared to 13.62% and 13.16% at December 31, 1997
and March 31, 1997, respectively. The respective Tier II ratios were 14.93%,
14.87% and 14.41%, respectively. During the first quarter of 1998, the
Corporation declared its regular dividend of $0.23 per share, a 28% increase
over $0.18 per share declared during the first quarter of 1997.
In March 1997, the Corporation implemented a stock repurchase program with a
goal of repurchasing up to 5% of the then outstanding stock of the Corporation.
This one-year program was renewed in March of 1998 for an additional year. As
of March 31, 1998, the Corporation repurchased 52,950 shares of its stock at a
cost of $2,311,000.
YEAR 2000
- ---------
The Corporation began its process of assuring that all computer systems and
applications are Year 2000 compliant in November 1996. The process involves
either modifying or replacing certain hardware and software as well as
communicating with external service providers to ensure they are also taking the
appropriate action to remedy their Year 2000 issues. Management expects to have
substantially all essential systems, hardware and software reviewed and
upgraded, if necessary for compliance, by year-end 1998. Management believes
that its level of preparedness is appropriate.
The Corporation estimates cumulative costs of the process to approximate
$250,000, which includes the cost of replacing or modifying hardware and
software. Purchased hardware and software will be capitalized and depreciated
in accordance with Corporation policy. Other costs related to the project will
be expensed as incurred.
The Bank is also assessing the impact, if any, the century date change may have
on its credit risk and loan underwriting. In connection with potential credit
risk related to the Year 2000 issue, the Bank is contacting its large commercial
loan customers regarding their level of preparedness for Year 2000.
The costs of the project and expected completion dates are based on management's
best estimates.
Page 18
<PAGE>
PART II. OTHER INFORMATION
--------------------------
MARCH 31, 1998
ITEM 1. LEGAL PROCEEDINGS
- --------
NONE
ITEM 2. CHANGES IN SECURITIES
- --------
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- --------
NONE
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
- --------
NONE
ITEM 5. OTHER INFORMATION
- --------
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- --------
NONE
Page 19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Bryn Mawr Bank Corporation
Date: May 1, 1998 By:/s/ Robert L. Stevens
------------------ ------------------------
Robert L. Stevens
Chairman,
President & Chief Executive Officer
Date: May 1, 1998 By:/s/ Joseph W. Rebl
------------------- ------------------
Joseph W. Rebl
Treasurer and
Assistant Secretary
Form 10-Q
Page 20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 18,843
<INT-BEARING-DEPOSITS> 171
<FED-FUNDS-SOLD> 10,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,376
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 272,379
<ALLOWANCE> 4,054
<TOTAL-ASSETS> 355,334
<DEPOSITS> 310,489
<SHORT-TERM> 0
<LIABILITIES-OTHER> 5,296
<LONG-TERM> 0
0
0
<COMMON> 7,522
<OTHER-SE> 37,027
<TOTAL-LIABILITIES-AND-EQUITY> 355,334
<INTEREST-LOAN> 5,662
<INTEREST-INVEST> 598
<INTEREST-OTHER> 250
<INTEREST-TOTAL> 6,510
<INTEREST-DEPOSIT> 1,528
<INTEREST-EXPENSE> 1,528
<INTEREST-INCOME-NET> 4,982
<LOAN-LOSSES> 25
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,656
<INCOME-PRETAX> 2,616
<INCOME-PRE-EXTRAORDINARY> 2,616
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,616
<EPS-PRIMARY> .80
<EPS-DILUTED> .76
<YIELD-ACTUAL> 5.97
<LOANS-NON> 1,047
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,074
<CHARGE-OFFS> 53
<RECOVERIES> 8
<ALLOWANCE-CLOSE> 4,054
<ALLOWANCE-DOMESTIC> 2,078
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,976
</TABLE>
