Page 1 of 17
Form 10-QSB
U. S. Securities and Exchange Commission
Washington, DC 20549
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the 9-month period ended September 30, 1998.
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from ______________ to ______________
Commission File No. 000-18445
Benchmark Bankshares, Inc.
(Name of Small Business Issuer in its Charter)
Virginia 54-1460991
(State or Other Jurisdiction of (I.R.S. Employer ID No.)
Incorporation or Organization)
100 South Broad Street
Kenbridge, Virginia 23944
(Address of Principal Executive Offices)
Issuer's Telephone Number: (804)676-8444
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.
(1) Yes [X] No [ ] (2) Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest applicable date:
2,997,465.366
<PAGE>
Page 2 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Index
September 30, 1998
Part I Financial Information
Item 1 Consolidated Balance Sheet
Consolidated Statement of Income
Condensed Consolidated Statement of Cash Flows
Notes to Consolidated 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 Report on Form 8K
<PAGE>
Page 3 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Consolidated Balance Sheet
(Unaudited) (Audited)
September 30, December 31,
1998 1997
---- ----
Assets
Cash and due from banks $ 4,781,921 $ 4,595,094
Securities
Federal Agency obligations 9,387,297 9,007,268
State and municipal obligations 10,058,136 8,915,548
Other securities 137,000 137,000
Federal funds sold 19,346,000 5,353,000
Loans 131,199,153 127,110,962
Less
Unearned interest income (266,868) (297,097)
Allowance for loan losses (1,522,115) (1,391,424)
--------------- -------------
Net Loans 129,410,170 125,422,441
Premises and equipment - net 3,159,386 2,997,866
Accrued interest receivable 1,490,906 1,236,384
Deferred income taxes 284,760 266,401
Other real estate 550,704 533,234
Other assets 671,911 270,659
--------------- -------------
Total Assets $ 179,278,191 $158,734,895
=============== =============
<PAGE>
Page 4 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Consolidated Balance Sheet
(Unaudited) (Audited)
September 30, December 31,
1998 1997
---- ----
Liabilities and Stockholders' Equity
Deposits
Demand (noninterest-bearing) $ 17,238,593 $ 13,859,115
NOW accounts 18,360,695 15,707,189
Money market accounts 6,844,373 6,564,365
Savings 9,441,392 8,320,696
Time, $100,000 and over 16,053,682 12,370,092
Other time 91,247,785 83,920,648
--------------- -------------
Total Deposits 159,186,520 140,742,105
Accrued interest payable 779,702 708,315
Accrued income tax payable 27,892 49,867
Dividends payable - 440,824
Other liabilities 292,293 141,512
--------------- -------------
Total Liabilities 160,286,407 142,082,623
Stockholders' Equity
Common stock, par value $.21 per share,
authorized 4,000,000 shares; issued and
outstanding 2,997,465.366 shares as of
9-30-98; and authorized 4,000,000 shares,
issued and outstanding 2,942,811.048
shares as of 12-31-97 629,468 617,990
Capital surplus 4,307,183 3,667,557
Retained earnings 13,789,169 12,189,180
Accumulated other comprehensive income,
net of tax 265,964 177,545
--------------- -------------
Total Stockholders' Equity 18,991,784 16,652,272
--------------- -------------
Total Liabilities and
Stockholders' Equity $ 179,278,191 $158,734,895
=============== =============
Note: The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date.
See notes to consolidated financial statements.
<PAGE>
Page 5 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Consolidated Statement of Income
(Unaudited)
Nine Months Ended September 30,
1998 1997
---- ----
Interest Income
Interest and fees on loans $ 9,316,058 $ 9,133,353
Interest on U. S. Government obligations 508,487 394,087
Interest on State and municipal obligations 352,293 374,676
Interest on Federal funds sold 452,205 275,663
Interest on other securities 2,610 2,610
------------ ------------
Total Interest Income 10,631,653 10,180,389
Interest Expense
Interest on deposits 5,147,596 4,853,985
------------ ------------
Net Interest Income 5,484,057 5,326,404
Provision for Loan Losses 228,924 293,979
------------ ------------
Net Interest Income after
Provision 5,255,133 5,032,425
Noninterest Income
Service charges, commissions, and fees on
deposits 316,556 300,107
Other operating income 155,960 143,495
(Losses) on sale of securities (595) (1,468)
------------ ------------
Total Noninterest Income 471,921 442,134
Noninterest Expense
Salaries and wages 1,482,925 1,436,714
Employee benefits 335,104 291,060
Occupancy expense 151,099 157,965
Furniture and equipment expense 112,383 108,712
Other operating expense 699,672 695,916
------------ ------------
Total Noninterest Expense 2,781,183 2,690,367
------------ ------------
Net Income before Taxes 2,945,871 2,784,192
Income Taxes 897,230 859,059
------------ ------------
Net Income 2,048,641 1,925,133
Other Comprehensive Income, Net of Tax
Unrealized holding gains arising during
period 265,964 -
------------ ------------
Comprehensive Income $ 2,314,605 $ 1,925,133
============ ============
Net Income per Share $ 0.69 $ 0.66 (1)
============ ============
(1) Adjusted for a 2 for 1 stock split on October 2, 1997.
See notes to consolidated financial statements.
<PAGE>
Page 6 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Consolidated Statement of Income
(Unaudited)
Three Months Ended September 30,
1998 1997
---- ----
Interest Income
Interest and fees on loans $3,136,756 $3,123,813
Interest on U. S. Government obligations 171,314 131,812
Interest on State and municipal obligations 120,484 116,635
Interest on Federal funds sold 212,113 106,642
----------- -----------
Total Interest Income 3,640,667 3,478,902
Interest Expense
Interest on deposits 1,790,543 1,646,941
----------- -----------
Net Interest Income 1,850,124 1,831,961
Provision for Loan Losses 80,974 147,784
----------- -----------
Net Interest Income after
Provision 1,769,150 1,684,177
Noninterest Income
Service charges, commissions, and fees on
deposits 107,218 107,213
Other operating income 88,479 57,592
(Losses) on sale of securities (159) (234)
----------- -----------
Total Noninterest Income 195,538 164,571
Noninterest Expense
Salaries and wages 489,307 488,486
Employee benefits 113,725 112,634
Occupancy expense 51,152 54,359
Furniture and equipment expense 38,364 36,079
Other operating expense 252,115 254,777
----------- -----------
Total Noninterest Expense 944,663 946,335
----------- -----------
Net Income before Taxes 1,020,025 902,413
Income Taxes 287,844 279,223
----------- -----------
Net Income 732,181 623,190
Other Comprehensive Income, Net of Tax
Unrealized holding gains arising during
period 103,635 -
----------- -----------
Comprehensive Income $ 835,816 $ 623,190
=========== ===========
Net Income per Share $ 0.25 $ 0.22 (1)
=========== ===========
(1) Adjusted for a 2 for 1 stock split on October 2, 1997.
See notes to consolidated financial statements.
<PAGE>
Page 7 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended September 30,
1998 1997
---- ----
Cash Flows from Operating Activities $ 1,370,299 $ 1,789,246
Cash Flows from Financing Activities
Net increase in demand deposits and interest-
bearing transaction accounts 6,032,984 2,892,251
Net increase in savings and money market
deposits 1,400,704 601,366
Net increase in certificates of deposit 11,010,727 3,245,634
Net sale of stock 651,104 369,155
Dividends paid (440,824) (394,226)
------------ ------------
Net Cash Provided by Financing
Activities 18,654,695 6,714,180
Cash Flows from Investing Activities
Purchase of securities (10,961,068) (661,787)
Sale of securities 114,430 823,870
Maturity of securities 9,457,989 1,669,779
Net increase in loans (4,118,420) (6,559,840)
Purchases of premises and equipment (320,628) (70,331)
Other real estate (17,470) -
------------ ------------
Net Cash Used by Investing
Activities (5,845,167) (4,798,309)
------------ ------------
Increase in Cash and Cash Equivalents 14,179,827 3,705,117
Beginning Cash and Cash Equivalents 9,948,094 8,482,901
------------ ------------
Ending Cash and Cash Equivalents $24,127,921 $12,188,018
============ ============
Supplemental Data
Interest paid $ 5,076,209 $ 4,830,217
Taxes paid 966,927 821,031
See notes to consolidated financial statements.
<PAGE>
Page 8 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended September 30,
1998 1997
---- ----
Cash Flows from Operating Activities $ 425,341 $ 744,851
Cash Flows from Financing Activities
Net increase in demand deposits
and interest-bearing transaction
accounts 710,959 851,471
Net increase (decrease) in savings and money
market deposits 5,331 (248,993)
Net increase in certificates of deposit 4,902,414 938,246
Sale of stock 210,779 369,155
Dividends paid - (394,226)
----------- -----------
Net Cash Provided by Financing
Activities 5,829,483 1,515,653
Cash Flows from Investing Activities
Purchase of securities (3,776,983) (499,927)
Sales of securities 23,062 -
Maturity of securities 4,457,989 253,876
Net increase in loans (2,251,641) (2,268,272)
Purchases of premises and equipment (55,831) (16,003)
Other real estate (17,470) -
----------- -----------
Net Cash Used by Investing
Activities (1,620,874) (2,530,326)
----------- -----------
Increase (Decrease) in Cash and Cash
Equivalents 4,633,950 (269,822)
Beginning Cash and Cash Equivalents 19,493,971 12,457,840
Ending Cash and Cash Equivalents $24,127,921 $12,188,018
============ ============
Supplemental Data
Interest paid $ 1,741,547 $ 1,626,017
Taxes paid 305,000 237,011
See notes to consolidated financial statements.
<PAGE>
Page 9 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
Notes to Consolidated Financial Statements
September 30, 1998
1. Basis of Presentation
The accompanying consolidated financial statements and related
notes of Benchmark Bankshares, Inc. and its subsidiary, Benchmark
Community Bank, were prepared by management, which has the primary
responsibility for the integrity of the financial information. The
statements have been prepared in conformity with generally accepted
accounting principles appropriate in the circumstances and include
amounts that are based on management's best estimates and judgments.
In meeting its responsibilities for the accuracy of its
financial statements, management relies on the Company's internal
accounting controls. The system provides reasonable assurances that
assets are safeguarded and transactions are recorded to permit the
preparation of appropriate financial information.
The interim period financial information included herein is
unaudited; however, such information reflects all adjustments
(consisting solely of normal recurring adjustments), which are, in the
opinion of management, necessary to a fair presentation of financial
position, results of operation, and changes in financial position for
the interim periods herein reported.
2. Significant Accounting Policies and Practices
The accounting policies and practices of Benchmark Bankshares,
Inc. conform to generally accepted accounting principles and general
practice within the banking industry. Certain of the more significant
policies and practices follow:
(a) The consolidated financial statements of Benchmark Bankshares,
Inc. and its wholly owned subsidiary, Benchmark Community
Bank, include the accounts of both companies. All material
inter-company balances and transactions have been eliminated
in consolidation.
(b) Investment Securities. Pursuant to guidelines established in
FAS 115, the Company has elected to classify a portion of its
current portfolio as securities available-for-sale. This
category refers to investments that are not actively traded
but are not anticipated by management to be held-to-maturity.
Typically, these types of investments will be utilized by
management to meet short-term asset/liability management
needs. The remainder of the portfolio is classified as
held-to-maturity. This category refers to investments that are
anticipated by management to be held until they mature.
For purposes of financial statement reporting, securities
classified as available-for-sale are to be reported at fair
market value (net of any tax effect) as of the date of the
statements; however, unrealized holding gains or losses are to
be excluded from earnings and reported as a net amount in a
separate component of stockholders' equity until realized.
Securities classified as held-to-maturity are recorded at
cost. The resulting book value ignores the impact of current
market trends.
<PAGE>
Page 10 of 17
(c) Loans. Interest on loans is computed by methods which
generally result in level rates of return on principal amounts
outstanding (simple interest). Unearned interest on certain
installment loans is recognized as income using the rule of
78's method, which materially approximates the effective
interest method. Loan fees and related costs are recognized as
income and expense in the year the fees are charged and costs
incurred.
(d) Allowance for Loan Losses. The allowance for loan losses is
increased by provisions charged to expense and decreased by
loan losses net of recoveries. The provision for loan losses
is based on the Bank's loan loss experience and management's
detailed review of the loan portfolio which considers economic
conditions, prior loan loss experience, and other factors
affecting the collectivity of loans. Accrual of interest is
discontinued on loans past due 90 days or more when collateral
is inadequate to cover principal and interest or immediately
if management believes, after considering economic and
business conditions and collection efforts, that the
borrower's financial condition is such that collection is
doubtful.
(e) Premises and Equipment. Premises and equipment are stated at
cost less accumulated depreciation. Depreciation is computed
generally by the straight line basis over the estimated useful
lives of the assets. Additions to premises and equipment and
major betterments and replacements are added to the accounts
at cost. Maintenance and repairs and minor replacements are
expensed as incurred. Gains and losses on dispositions are
reflected in current earnings.
(f) Depreciation. For financial reporting, property and equipment
are depreciated using the straight line method; for income tax
reporting, depreciation is computed using statutory
accelerated methods. Leasehold improvements are amortized on
the straight line method over the estimated useful lives of
the improvements. Income taxes in the accompanying financial
statements reflect the depreciation method used for financial
reporting and, accordingly, include a provision for the
deferred income tax effect of depreciation which will be
recognized in different periods for income tax reporting.
(g) Earnings Per Share
Earnings per share were computed by using the average
shares outstanding for each period presented. The 1998 average
shares have been adjusted to reflect the sale of 22,105.344
shares of the Company's common stock through the dividend
reinvestment plan and 32,550 shares exercised from the
employee stock option plan during the first nine months of
1998. The 1997 average shares have been adjusted to reflect
the sale of 17,818.008 shares through the dividend
reinvestment program. The average shares of outstanding stock
for the first nine months of 1998 and 1997 were 2,957,702.001
shares and 2,922,177.770 shares, respectively.
As of September 30, 1998, the Company had outstanding
granted options to purchase 110,950 shares of Benchmark
Bankshares, Inc. stock to employees and directors under two
separate incentive stock plans. Based on current trading
values of the stock, the stock options are not considered
materially dilutive; therefore, the Company's earnings per
share are reported as a simple capital structure.
<PAGE>
Page 11 of 17
(h) Cash and Cash Equivalents
The term cash as used in the Condensed Consolidated Statement
of Cash Flows refers to all cash and cash equivalent
investments. For purposes of the statement, Federal funds
sold, which have a one day maturity, are classified as cash
equivalents.
(i) The table below reflects the components of the Net Deferred Tax
Asset account as of September 30, 1998:
Deferred Tax Assets
Resulting from
Loan loss reserves $465,099
Deferred Tax Liabilities
Resulting from
Depreciation (43,327)
Unrealized securities gains (137,012)
---------
Net Deferred Tax Asset $284,760
=========
(j) Year 2000 Compliance
The Company has developed a plan which, when
implemented, will result in compliance, by June 30, 1999,
with all Year 2000 issues related to its operation. In the
last quarter, the Federal Reserve Bank reviewed the Bank's
existing plan and implementation thereof and reported that
the Bank had followed the regulator's guidelines and timetable
as prescribed.
While in-house operational areas are being addressed
currently, the Bank is also dependent on outside vendors
and utilities over which it has little control. In these
areas, the Bank is pressing for written guarantees for future
compliance. If these outside vendors do not provide the proper
level of assurances, the Bank will seek additional vendors or
take alternative action. The alternative programs are in the
early stages of development. Currently, there are no
meaningful cost projections for the alternative procedures.
<PAGE>
Page 12 of 17
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following is management's discussion and analysis of
certain significant factors which have affected the Company's financial
position and operating results during the periods included in the
accompanying condensed financial statements.
Nine Months Ending September 30: 1998 Versus 1997
Earnings Summary
Net income of $2,048,641 for the first nine months of 1998
increased $123,508 or 6.42% as compared to net income of $1,925,133
earned during the first nine months of 1997. Earnings per share of $.69
as of September 30, 1998 increased $.03 over the September 30, 1997
level of $.66. The annualized return on average assets of 1.62%
decreased 1.82% while the annualized return on average equity of 15.45%
decreased 7.49% when comparing first nine months 1998 results with
those of first nine months 1997.
The increase in earnings reflects a continued growth in loans
and deposits. The decline in the return on assets reflects a quicker
rate of growth in deposits over loans resulting in a heavier emphasis
on lower earning investments. The decrease in the rate of return on
equity indicates growth in equity through stock purchases and income
retention.
Interest Income and Interest Expense
Total interest income of $10,631,653 for the first nine months
of 1998 increased $451,264 or 4.43% over interest income of $10,180,389
recorded during the first nine months of 1997. The major area of
increase was from investments which increased $268,559.
Total interest expense in the first nine months of 1998
increased to a level of $5,484,057. This amounted to an increase of
$630,072 or 12.98% over the level reached during the first nine months
of 1997. This increase in interest expense resulted from deposit
growth.
Provision for Loan Losses
While the Company's loan loss experience ratio remains low,
management continues to set aside increasing provisions to the loan
loss reserve. During the first nine months of 1998, the Bank increased
the loan loss reserve by $130,691 to a level of $1,522,115 or 1.16% of
the outstanding loan balance.
At year end 1997, the reserve level amounted to $1,349,480 or
1.06% of the outstanding loan balance net of unearned interest.
Non-Accrual Loans
Non-accrual loans consist of loans accounted for on a
non-accrual basis. These loans are maintained on a non-accrual status
because of deterioration in the financial condition of the borrower or
payment in full of principal or interest is not expected or principal
or interest has been in default for a period of 90 days or more unless
the asset is both well secured and in the process of collection.
As of September 30, 1998, the Bank had $787,580 or .60% of the
loan portfolio classified as non-accrual loans.
<PAGE>
Page 13 of 17
Noninterest Income and Noninterest Expense
Noninterest income of $471,921 increased $29,787 or 6.74% for
the first nine months of 1998 as compared to the level of $442,134
reached during the first nine months of 1997. The increase primarily
resulted from an increase in fees collected on deposit accounts.
Noninterest expense of $699,672 increased $3,756 or .54% for
the first nine months of 1998 as compared to the level of $2,690,367
reached during the first nine months of 1997 as increases in salaries
due to staffing the new office were almost totally offset by a decrease
in other operating expenses.
Off Balance Sheet Instruments/Credit Concentrations
The Company is a party to financial instruments with off
balance sheet risk in the normal course of business to meet the
financing needs of its customers. Unless noted otherwise, the Company
does not require collateral or other security to support these
financial instruments. Standby letters of credit are conditional
commitments issued by the Company to guarantee the performance of a
customer to a third party. Those guarantees are primarily issued to
facilitate the transaction of business between these parties where the
exact financial amount of the transaction is unknown, but a limit can
be projected. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to
customers. There is a fee charged for this service.
As of September 30, 1998, the Bank had $2,195,102 outstanding
letters of credit. These instruments are based on the financial
strength of the customer and the existing relationship between the
Company and the customer. The maturities of these instruments are as
follows:
1999 $ 411,313
2000 1,000
2001 1,177,971
2002 604,818
Liquidity
As of the end of the first nine months of 1998, $57,043,001 or
43.48% of gross loans will mature or are subject to repricing within
one year. These loans are funded in part by $16,053,682 in certificates
of deposit of $100,000 or more of which $8,383,384 mature in one year
or less.
Currently, the Bank has a maturity average ratio for the next
twelve months of 55.81% when comparing assets and deposits.
At year end 1997, $49,997,185 or 39.39% of gross loans were
scheduled to mature or were subject to repricing within one year and
$13,277,452 in certificates of deposit were scheduled to mature during
1998.
Capital Adequacy
Total stockholder equity was $18,991,784 or 10.59% of total
assets as of September 30, 1998. This compared to $16,652,272 or 10.49%
of total assets as of December 31, 1997.
<PAGE>
Page 14 of 17
Primary capital (stockholders' equity plus loan loss reserves)
of $20,513,899 represents 11.44% of total assets as of September 30,
1998 as compared to $18,043,696 or 11.37% of total assets as of
December 31, 1997.
The increase in the equity position resulted from the sale of
additional stock through the Dividend Reinvestment Program and Stock
Option Plans as well as an increase in earnings in the first nine
months of 1998 versus the first nine months of 1997.
<PAGE>
Page 15 of 17
Three Months Ending September 30: 1998 Versus 1997
The same operating policies and philosophies discussed in the
nine month discussion were prevalent throughout the third quarter and
the operating results were predictably similar.
Earnings Summary
Net income of $732,181 for the third quarter of 1998 increased
$108,991 or 17.49% as compared to the $623,190 earned during the third
quarter of 1997. Earnings per share of $.25 for the third quarter of
1998 increased $.03 or 13.64% when compared to the corresponding period
in 1997. The annualized return on average assets was 1.66% and the
return on average equity was 15.86% for the third quarter of 1998. This
compares to a return on average assets of 1.57% and a return on average
equity of 15.83% for the same period in 1997.
The increased earnings reflect an increase in net earning
assets for the comparison period.
Interest Income and Interest Expense
Total interest income of $3,640,667 for the third quarter of
1998 increased $161,765 or 4.65% from the total interest income of
$3,478,902 for the corresponding quarter in 1997. The increase resulted
from growth in the investment portfolio including short-term Federal
funds sold. Interest on total investments amounted to $503,911. This
represented an increase of $148,822 or 41.91% over the corresponding
period in 1997.
Interest expense for the third quarter of 1998 increased
$143,602 or 8.72% over the same period in 1997. The increase in
interest expense reflected the deposit growth within the Bank's trade
area.
Provisions for Loan Losses
During the third quarter, the demand for loans was strong and
the level of quality loans continued to increase. During the period,
the Bank provided an additional $80,974 to the reserve through its
provision for loan loss.
Loans and Deposits
During the third quarter of 1998, net loans grew $2,268,900 or
7.12% annualized. This growth resulted from the continued strong loan
demand experienced throughout the Company's trade area. The strong loan
demand also allowed the Bank to increase the quality of the loan
portfolio by increasing the loan acceptance criteria.
Deposits increased by $5,618,704 or 14.64% annualized for the
three month period ending September 30, 1998. Management feels that the
growth in deposits has resulted from an increase in the size of the
trade area as well as further penetration into existing market areas.
<PAGE>
Page 16 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
September 30, 1998
Part II Other Information
Item 1 Legal Proceedings
None
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
None
Item 5 Other Information
None
Item 6 Report on Form 8-K
No reports on Form 8-K have been filed during the
quarter ended September 30, 1998.
<PAGE>
Page 17 of 17
Form 10-QSB
Benchmark Bankshares, Inc.
September 30, 1998
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.
Benchmark Bankshares, Inc.
(Registrant)
Date: November 9, 1998 Ben L. Watson, III
------------------
President and CEO
Date: November 9, 1998 Janice C. Whitlow
-----------------
Cashier and Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> $
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 4,781,921
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 19,346,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 16,215,724
<INVESTMENTS-CARRYING> 3,366,709
<INVESTMENTS-MARKET> 3,388,883
<LOANS> 131,199,153
<ALLOWANCE> 1,522,115
<TOTAL-ASSETS> 179,278,191
<DEPOSITS> 159,186,520
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,099,887
<LONG-TERM> 0
0
0
<COMMON> 629,468
<OTHER-SE> 18,362,316
<TOTAL-LIABILITIES-AND-EQUITY> 179,278,191
<INTEREST-LOAN> 9,316,058
<INTEREST-INVEST> 1,315,595
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 10,631,653
<INTEREST-DEPOSIT> 5,147,596
<INTEREST-EXPENSE> 5,147,596
<INTEREST-INCOME-NET> 5,484,057
<LOAN-LOSSES> 228,924
<SECURITIES-GAINS> (595)
<EXPENSE-OTHER> 2,781,183
<INCOME-PRETAX> 2,048,641
<INCOME-PRE-EXTRAORDINARY> 2,048,641
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<EPS-PRIMARY> .69
<EPS-DILUTED> .69
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</TABLE>
