<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark One
[ X ] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1995; or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ___________
to ___________.
Commission File Number: 0-15732
Central Bancorporation, Inc.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Texas 75-1653291
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 West Rosedale, Fort Worth, Texas 76104
--------------------------------------------------------------------------------
(Address of principal executive offices)
(817) 347-8102
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Change
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required 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 of common stock, $2.50 par value, outstanding at June
30, 1995 was 2,616,723 shares.
<PAGE>
CENTRAL BANCORPORATION, INC.
----------------------------
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
------------------------------ --------
<S> <C>
Item 1. Financial Statements
-------
Consolidated Balance Sheets at June 30, 1995 (unaudited)
and at December 31, 1994 (audited) 3
Consolidated Statements of Earnings for the Three Months and Six
Months Ended June 30, 1995 and 1994 (unaudited) 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1995 and 1994 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of
-------
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings 23
-------
Item 2. Change in Securities 23
-------
Item 3. Defaults Upon Senior Securities 23
-------
Item 4. Submission of Matters to a Vote of Security Holders 23
-------
Item 5. Other Information 23
-------
Item 6. Exhibits and Reports on Form 8-K 23
-------
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
----------------------------
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(formerly Texas Security Bancshares, Inc. and Subsidiaries)
Consolidated Balance Sheets
June 30, 1995 (Unaudited) and December 31, 1994
<TABLE>
<CAPTION>
Assets 1995 1994
------ ------------ -----------
<S> <C> <C>
Cash and due from banks $ 44,668,615 49,348,407
Interest-bearing deposits in other banks 494,651 267,925
Federal funds sold 14,700,000 25,100,000
------------ -----------
Total cash and cash equivalents 59,863,266 74,716,332
------------ -----------
Investment securities 501,956,317 504,687,973
Loans:
Loans, net of unearned discount 307,548,121 272,825,001
Less allowance for loan losses 4,217,625 3,871,653
------------ -----------
Net loans 303,330,496 268,953,348
------------ -----------
Premises and equipment, net 21,639,826 21,090,898
Accrued interest receivable 7,649,152 7,028,363
Other real estate owned, net 938,986 352,211
Excess of cost over net assets acquired,
net of applicable amortization 809,016 907,752
Federal income taxes receivable 264,764 523,524
Deferred income taxes 1,869,769 3,626,813
Other assets 2,613,560 2,980,357
------------ -----------
$900,935,152 884,867,571
============ ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Noninterest-bearing demand $144,418,568 140,459,818
Interest-bearing demand 291,925,333 252,959,937
Savings 66,847,668 67,145,836
Time, $100,000 and over 54,428,758 53,383,374
Other time 221,103,563 212,298,950
------------ -----------
Total deposits 778,723,890 726,247,915
------------ -----------
Short-term borrowings 45,879,732 89,598,888
Note payable 1,500,000 500,000
Dividends payable 261,672 261,672
Accrued interest payable 2,337,472 1,982,687
Other liabilities 9,755,465 10,950,102
------------ -----------
Total liabilities 838,458,231 829,541,264
------------ -----------
Stockholders' equity:
Common stock, $2.50 par value,
5,000,000 shares authorized and 2,616,723
shares issued 6,541,808 6,541,808
Additional paid-in capital 16,578,010 16,578,010
Retained earnings 39,843,900 36,104,018
Unrealized loss on securities
available-for-sale (486,797) (3,897,529)
------------- ------------
Total stockholders' equity 62,476,921 55,326,307
------------ -----------
$900,935,152 884,867,571
============ ===========
</TABLE>
3
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(formerly Texas Security Bancshares, Inc. and Subsidiaries)
Consolidated Statements of Earnings
Three Months and Six Months Ended June 30, 1995 and 1994 (Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1995 1994 1995 1994
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 6,735,294 5,107,803 12,938,914 10,078,447
Interest on investment securities:
Taxable securities 6,820,599 5,801,556 13,968,812 10,963,969
Tax-exempt securities 1,003,511 637,120 1,814,005 1,265,036
Interest on deposits in other banks 1,544 3,882 3,405 9,505
Interest on federal funds sold 399,019 90,623 682,679 229,741
------------ ----------- ----------- -----------
Total interest income 14,959,967 11,640,984 29,407,815 22,546,698
------------ ----------- ----------- -----------
Interest expense:
Interest on interest-bearing demand deposits 2,165,892 1,240,096 4,085,829 2,317,527
Interest on savings deposits 355,694 404,147 712,740 795,151
Interest on time deposits 3,564,926 2,224,555 6,720,640 4,370,165
Interest on short-term borrowings 1,050,981 467,535 2,281,187 646,087
Interest on note payable 30,750 - 49,146 -
------------ ----------- ----------- -----------
Total interest expense 7,168,243 4,336,333 13,849,542 8,128,930
------------ ----------- ----------- -----------
Net interest income 7,791,724 7,304,651 15,558,273 14,417,768
Provision for loan losses 225,000 - 450,000 -
------------ ----------- ----------- -----------
Net interest income after provision
for loan losses 7,566,724 7,304,651 15,108,273 14,417,768
------------ ----------- ----------- -----------
Noninterest income:
Service charges and fees 2,310,853 2,018,705 4,510,205 4,038,510
Gains on sales of investment securities 133,176 - 133,176 -
Other income 271,893 246,798 420,092 327,884
------------ ----------- ----------- -----------
Total noninterest income 2,715,922 2,265,503 5,063,473 4,366,394
------------ ----------- ----------- -----------
Noninterest expenses:
Salaries and employee benefits 4,070,495 3,856,427 8,042,326 7,551,279
Net occupancy expense 739,013 758,787 1,396,221 1,416,731
Equipment and data processing expense 826,585 701,295 1,587,804 1,353,264
Communication expense 338,308 320,045 677,461 660,635
Other real estate owned expense, net (4,913) (53,738) (51,661) (55,837)
Federal deposit insurance fees 398,100 374,409 796,200 748,818
Legal and professional 241,230 235,293 474,493 443,690
Stationery and supplies 242,224 224,702 459,340 432,097
Marketing expense 224,434 226,061 432,538 391,411
Other operating expense 425,991 384,326 836,798 814,734
------------ ----------- ----------- -----------
Total noninterest expenses 7,501,467 7,027,607 14,651,520 13,756,822
------------ ----------- ----------- -----------
Income before Federal income taxes 2,781,179 2,542,547 5,520,226 5,027,340
Provision for Federal income taxes 601,000 644,000 1,257,000 1,269,000
------------ ----------- ----------- -----------
Net income $ 2,180,179 1,898,547 4,263,226 3,758,340
============ =========== =========== ===========
Net income per share $ .83 .73 1.63 1.44
============ =========== =========== ===========
Weighted average number of shares outstanding 2,616,723 2,616,723 2,616,723 2,616,723
============ =========== =========== ===========
</TABLE>
4
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(formerly Texas Security Bancshares, Inc. and Subsidiaries)
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994 (Unaudited)
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,263,226 3,758,340
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses and losses
on other real estate owned 480,390 (15,528)
Depreciation 1,332,943 1,233,721
Amortization of intangibles 98,736 91,624
Premium amortization and discount accretion 305,720 1,258,429
Net gain on sales of other real estate owned (97,011) (50,108)
Net gain on sales of premises and equipment (1,948) (6,918)
Gains on sales of investment securities (133,176) -
Changes in operating assets and liabilities:
Increase in accrued interest receivable (620,789) (1,915)
Decrease (increase) in Federal income taxes receivable 258,760 (29,640)
Decrease in other assets 366,797 598,931
Increase in accrued interest payable 354,785 106,423
Decrease in other liabilities (1 ,194,637) (312,131)
------------ -----------
Net cash provided by
operating activities 5,413,796 6,631,228
------------ -----------
Cash flows from investing activities:
Cash and cash equivalents paid in acquisitions - (1,679,778)
Proceeds from sales of investment securities
available-for-sale 30,228,601 -
Proceeds from maturities and principal reductions
of investment securities held-to-maturity 22,058,156 27,374,878
Proceeds from maturities and principal reductions
of investment securities available-for-sale 8,855,318 72,710,686
Purchases of investment securities held-to-maturity (39,445,387) (77,521,399)
Purchases of investment securities available-for-sale (14,194,800) (77,023,306)
Net increase in loans (35,523,186) (17,997,580)
Proceeds from sales of premises and equipment 3,342 10,773
Purchases of premises and equipment (1,883,265) (3,273,696)
Proceeds from sales of other real estate owned 400,884 199,130
------------ -----------
Net cash used in
investing activities (29,500,337) (77,200,292)
------------ ------------
</TABLE>
(Continued)
5
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(formerly Texas Security Bancshares, Inc. and Subsidiaries)
Consolidated Statements of Cash Flows, Continued
<TABLE>
<CAPTION>
1995 1994
------------ ------------
Cash flows from financing activities:
<S> <C> <C>
Net increase in demand deposits
and savings accounts $ 42,625,978 11,462,978
Net increase in time deposits 9,849,997 3,891,721
Proceeds from note payable 1,000,000 -
Net increase (decrease) in other borrowings (43,719,156) 51,108,978
Dividends paid (523,344) (444,842)
------------ -----------
Net cash provided by
financing activities 9,233,475 66,018,835
------------ -----------
Net decrease in cash and cash equivalents (14,853,066) (4,550,229)
Cash and cash equivalents at beginning of period 74,716,332 64,182,656
------------ -----------
Cash and cash equivalents at end of period $ 59,863,266 59,632,427
============ ===========
Supplemental Cash Flow Information:
----------------------------------
Cash paid for interest $ 13,494,757 8,022,507
Cash paid for Federal income taxes $ 1,000,000 1,300,000
Loans transferred to other real estate owned $ 921,038 134,710
Proceeds from sales of other real estate owned
financed through loans $ - 83,399
</TABLE>
6
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(formerly Texas Security Bancshares, Inc. and Subsidiaries)
Notes to Consolidated Financial Statements (Unaudited)
(1) Principles of Reporting and Consolidation
-----------------------------------------
The accounting and reporting policies of Central Bancorporation, Inc. (the
Corporation), formerly known as Texas Security Bancshares, Inc., and
subsidiaries conform to generally accepted accounting principles and to general
practices in the banking industry. All subsidiaries are included in the
consolidated financial statements, and all significant intercompany accounts and
transactions are eliminated in consolidation.
The consolidated financial information reflects all adjustments, consisting
of only normal recurring accruals, which are, in the opinion of management,
necessary for a fair presentation of the results of the interim periods.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
Results of Operations
---------------------
ANALYSIS OF EARNINGS
Net income for the second quarter of 1995 was $2,180,179 or $0.83 per share
compared to $1,898,547 or $.73 per share for the second quarter of 1994. For the
six months ended June 30, 1995, net income was $4,263,226 or $1.63 per share,
compared with net income of $3,758,340 or $1.44 per share for the same period in
1994. Per share amounts are based on average shares outstanding of 2,616,723 for
the second quarter of both 1995 and 1994.
The following is a discussion of the significant changes in the results of
operations and financial condition for the periods indicated.
Net Interest Income
Net interest income on a taxable equivalent basis for the second quarter of
1995 increased $738,000 or 9.59%, compared to the same period in 1994. For the
six months ended June 30, 1995, net interest income on a taxable equivalent
basis increased $1,547,000 or 10.20% compared to the same period in 1994. The
increase in net interest income is primarily attributable to the higher level of
earning assets, as the Corporation's net interest spread and net interest margin
declined 40 basis points and 20 basis points, respectively, from the second
quarter of 1994. The increase in earning assets was the result of investing
funds provided by growth in deposits. Yields on earning assets and rates on
interest-bearing liabilities for the second quarter of 1995 increased from the
same period last year. The net interest spread on a taxable equivalent basis
decreased to 3.46% for the second quarter of 1995 from 3.86% for the comparable
period in 1994 and the net interest margin on taxable equivalent basis decreased
to 4.12% for the second quarter of 1995 from 4.32% for the same period in 1994.
8
<PAGE>
The following table summarizes the effects of changes in interest rates and
average volume of earning assets on net interest income for the quarters ended
June 30, 1995 and 1994.
ANALYSIS OF CHANGES IN NET INTEREST MARGIN
(Dollars in Thousands - Taxable Equivalent Basis)
<TABLE>
<CAPTION>
2nd Qtr 1995 vs. 2nd Qtr 1994
-----------------------------
Due to Due to Changes
Net Changes Changes in Rates/
Increase In Volume In Rates Volume
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Earning assets $ 3,571 $ 1,787 $ 1,553 $ 231
Interest-bearing
liabilities 2,833 639 1,912 282
------- -------- ------- -------
Net interest margin before
allocation of
rates/volume 738 1,148 (359) (51)
Allocation of
rates/volume - (74) 23 51
------- -------- ------- -------
Net interest margin $ 738 $ 1,074 $ (336) $ -
======= ======== ======= =======
YTD 1995 vs. YTD 1994
---------------------
Due to Due to Changes
Net Changes Changes in Rates/
Increase In Volume In Rates Volume
-------- --------- -------- ----------
<S> <C> <C> <C> <C>
Earning assets $ 7,268 $ 3,821 $ 2,961 $ 486
Interest-bearing
liabilities 5,721 1,386 3,703 632
-------- --------- -------- ---------
Net interest margin before
allocation of
rates/volume 1,547 2,435 (742) (146)
Allocation of
rates/volume - (210) 64 146
-------- --------- -------- ---------
Net interest margin $ 1,547 $ 2,225 $ (678) $ -
======== ========= ======== =========
</TABLE>
9
<PAGE>
Noninterest Income
Noninterest income increased $450,419 or 19.9% for the second quarter of
1995 from the same period last year. For the six months ended June 30,1995,
non-interest income increased $697,079 or 16.0%. Increased levels of
noninterest income are primarily attributable to increases in service charge
income resulting from the increased customer deposit base and increases in rates
charged for certain services. The following table summarizes the major
categories of noninterest income for the six months ended June 30, 1995 and 1994
(dollars in thousands).
<TABLE>
<CAPTION>
Six Months
Ended June 30, $ %
--------------
1995 1994 Change Change
------ ------ ------ ------
<S> <C> <C> <C> <C>
Service charges and fees $3,829 $3,448 $381 11.0%
Investment services income 208 272 (64) (23.5)
Trust fees 419 293 126 43.0
Mortgage services income 316 221 95 43.0
Gains on sales of investment securities 133 - 133 -
Other income 158 132 26 19.7
------ ------ ---- -----
Total noninterest income $5,063 $4,366 $697 16.0%
====== ====== ==== =====
</TABLE>
Noninterest Expenses
Noninterest expenses were $7,501,467 for the second quarter of 1995
compared to $7,027,607 for the second quarter of 1994, an increase of $473,860
or 6.7%. For the six months ended June 30,1995 and 1994, non-interest expenses
were $14,651,520 and $13,756,822, respectively, an increase of 6.5%. The
following table summarizes the major categories of noninterest expense for the
six months ended June 30, 1995 and 1994 (dollars in thousands).
<TABLE>
<CAPTION>
Six Months
Ended June 30, $ %
------------------
1995 1994 Change Change
-------- -------- ------ ------
<S> <C> <C> <C> <C>
Salaries and employee benefits $ 8,042 $ 7,551 $491 6.5%
Net occupancy expense 1,396 1,417 (21) (1.5)
Equipment and data processing expense 1,588 1,353 235 17.4
Communication expense 678 661 17 2.6
Other real estate owned expense (income), net (52) (56) 4 7.1
Federal deposit insurance fees 796 749 47 6.3
Legal and professional 475 444 31 7.0
Stationery and supplies 459 432 27 6.3
Marketing expense 433 391 42 10.7
Other operating expenses 837 815 22 2.7
------- ------- ---- ----
Total noninterest expenses $14,652 $13,757 $895 6.5%
======= ======= ==== ====
</TABLE>
Salaries and employee benefits for the six months ended June 30, 1995,
increased $491,047 or 6.5% over the same period in 1994 due to normal
compensation increases and expanded banking operations.
Equipment and data processing expense increased $234,540 or 17.4% compared
to the same period in 1994. The increase is primarily attributable to
depreciation expense on new equipment and new furniture for new and remodeled
banking centers.
Federal deposit insurance fees increased $47,382 or 6.3% over the same
period in 1994. The increase is attributable to the increase in average deposits
for the assessment period.
Marketing expense for the six months ended June 30, 1995, which includes
consulting fees with respect to various advertising campaigns and events,
including deposit and home loan promotions, increased $41,127 or 10.7% from the
same period in 1994.
10
<PAGE>
Provision for Federal Income Taxes
The Corporation files a consolidated tax return under the consolidation
provisions of the Internal Revenue Code. Generally, the consolidated tax
liability is settled between the Corporation and its subsidiaries as if each had
filed a separate return. Payments are made to the Corporation by its
subsidiaries with net tax liabilities on a separate return basis. Subsidiaries
with losses or excess tax credits on a separate return basis receive payment
for these benefits when they are usable in the consolidated return.
As of June 30, 1995 the Corporation has a deferred tax asset in the amount
of $1,869,769. This deferred tax asset is determined based on net deductible
temporary differences, primarily relating to the allowance for loan losses, the
allowance for losses on other real estate owned, and unrealized loss on
securities available-for-sale, approximating $6,000,000. Based on the
Corporation's historical ability to generate taxable income exclusive of
reversing timing differences, management of the Corporation believes it is more
likely than not that the entire deferred tax asset will be realized or settled,
and accordingly, no valuation allowance has been recorded as of June 30, 1995
and December 31, 1994.
Provision for Loan Losses, Allowance for Loan Losses and Credit Quality
The Texas economy, in general, continued a recovery which began in 1993.
Growth was experienced by small and medium size companies and, overall, in 1994,
Texas was second nationally behind only Florida in job creation. For May 1995,
the Dallas/Fort Worth area reported an unemployment rate of 4.5%, reflecting a
stable economy.
In 1995 and 1994, the real estate market, as a whole, has continued to
improve. The most encouraging news came from the areas of residential, retail
and industrial markets. The Dallas/Fort Worth area currently rates as one of the
top residential markets in the U.S. with sales of single-family homes remaining
strong. Through June 1995, new home sales have declined from 1994 levels, but
sales of pre-owned homes have improved from a year earlier. The apartment market
maintained over 90% occupancy in 1994, which resulted in higher rental rates and
new development. The retail market reported approximately 85% occupancy in 1994
with increasing rent levels. The industrial market has improved to above 90%
occupancy. The office market has finally started to improve in 1995.
With the improving economy, the Corporation has continued to achieve
moderate loan growth. Most of the growth came from small and medium size
companies and from new or refinanced real estate mortgages. The Corporation's
loan portfolio, although concentrated in real estate, does not have any industry
concentrations and is primarily extended to user occupied property.
Based upon current information and conditions, management believes the
known risks in the existing loan portfolio have been properly evaluated and the
allowance is at a satisfactory level. Subsequent evaluations, however, could
necessitate changes in the balance of the allowance.
11
<PAGE>
The following table presents the provision for loan losses, loans charged-
off, recoveries of loans previously charged-off, and amounts of the allowance
for loan losses, the loans outstanding and certain pertinent ratios for the
periods indicated (dollars in thousands).
<TABLE>
<CAPTION>
Three Months Six Months Year Ended
Ended June 30, Ended June 30, December 31,
------------------- -------------------- -------------
1995 1994 1995 1994 1994
--------- -------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 3,866 $ 4,151 $ 3,872 $ 4,072 $ 4,072
-------- -------- -------- -------- --------
Charge-offs:
Commercial and financial loans 13 570 106 652 913
Real estate loans 49 194 361 223 230
Installment loans 53 46 95 125 335
-------- -------- -------- -------- --------
Total 115 810 562 1,000 1,478
-------- -------- -------- -------- --------
Recoveries:
Commercial and financial loans 158 58 269 196 419
Real estate loans 43 64 117 171 241
Installment loans 41 42 72 66 118
-------- -------- -------- -------- --------
Total 242 164 458 433 778
-------- -------- -------- -------- --------
Net Charge-offs:
Commercial and financial loans (145) 512 (163) 456 494
Real estate loans 6 130 244 52 (11)
Installment loans 12 4 23 59 217
-------- -------- -------- -------- --------
Total (127) 646 104 567 700
-------- -------- -------- -------- --------
Provision charged to earnings 225 - 450 - 500
-------- -------- -------- -------- --------
Balance at end of period $ 4,218 $ 3,505 $ 4,218 $ 3,505 $ 3,872
======== ======== ======== ======== ========
Amount of outstanding loans at
end of period $307,548 $254,363 $307,548 $254,363 $272,825
======== ======== ======== ======== ========
Average amount of loans outstanding
Commercial and financial loans $104,032 $ 79,700 $ 99,694 $ 76,967 $ 82,714
Real estate loans 171,854 152,024 169,275 149,861 154,599
Installment loans 17,349 14,991 16,711 15,440 15,365
-------- -------- -------- -------- --------
Total $293,235 $246,715 $285,680 $242,268 $252,678
======== ======== ======== ======== ========
Ratios:
Annualized net charge-offs (recoveries) to
average loans:
Commercial and financial loans (0.33)% 1.19% 0.60%
Real estate loans 0.29 0.07 (0.01)
Installment loans 0.28 0.77 1.41
-------- -------- --------
Total 0.07% 0.47% 0.28%
======== ======== ========
Balance in allowance at end of
period to outstanding loans
at end of period 1.37% 1.38% 1.42%
======== ======== ========
</TABLE>
At June 30, 1995, the allowance for loan losses was $4.218 million, or
1.37% of period end loans, compared to $3.872 million and 1.42% at December 31,
1994 and $3.505 million or 1.38% at June 30, 1994.
12
<PAGE>
The following schedule presents the allowance for loan losses by loan
category at the dates indicated (dollars in thousands).
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Specific reserves by category:
Commercial and financial loans $ 465 $ 427
Real estate loans 821 1,180
Installment loans 131 103
Unallocated reserves 2,801 2,162
------ ------
Total allowance for loan losses $4,218 $3,872
====== ======
</TABLE>
Net recoveries for the quarter ended June 30, 1995 were $127,000 compared
to net charge-offs of $646,000 in the second quarter of 1994. For the six
months ended June 30, 1995, net charge-offs were $104,000 compared to $567,000
for the same period in 1994.
For the quarter ended June 30, 1995, a provision for loan losses of
$225,000 was charged to earnings. In the second quarter of 1994, no provision
for loan losses was necessary due to reduced levels of nonperforming loans.
Nonperforming assets (loans accounted for on a nonaccrual basis,
restructured loans and foreclosed real estate) at June 30, 1995 totaled $3.155
million, a 19.33% decrease from the $3.911 million reported at December 31,
1994 and an increase of $587,000 or 22.85% compared to June 30, 1994 totals.
The increase in nonperforming assets from June 30, 1994 to June 30, 1995 is
primarily attributable to increases in other real estate owned.
The following table summarizes the nonperforming assets and loans 90 days
or more past due that are still accruing interest (dollars in thousands).
<TABLE>
<CAPTION>
June 30, March 31, December 31, September 30, June 30,
1995 1995 1994 1994 1994
-------- --------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans $1,985 $2,986 $3,339 $2,941 $2,234
Other real estate
owned, net 939 89 352 224 315
Restructured loans 231 235 220 243 19
------ ------ ------ ------ ------
Total nonperforming
assets $3,155 $3,310 $3,911 $3,408 $2,568
====== ====== ====== ====== ======
Loans over 90 days
past due but not
on nonaccrual $ 112 $ - $ 48 $ 88 $ 89
====== ====== ====== ====== ======
</TABLE>
The Corporation's problem loan monitoring program examines on a monthly
basis the status and specific action plan for resolution or liquidation of all
major nonperforming assets.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 114 ("Statement No. 114"), "Accounting by Creditors for
Impairment of a Loan" and Statement of Financial Accounting Standards No. 118
("Statement No. 118"), "Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosures." Both statements are effective for fiscal
years beginning after December 15, 1994 and have been applied on a prospective
basis. Statement No. 114 requires that impaired loans within the scope of the
statement be measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate or at the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. Impairment shall be recognized by creating a valuation allowance
with a corresponding charge to the provision for loan losses. Statement No. 118
amends Statement No. 114 and allows the use of existing methods for recognizing
interest income on impaired loans. The effect of adopting these statements is
not considered material.
13
<PAGE>
BALANCE SHEET ANALYSIS
Loans
The following schedule presents the Corporation's loan balances at the
dates indicated according to loan type.
DISTRIBUTION OF LOANS
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
-------------- ------------------
<S> <C> <C>
Commercial and financial $115,340 $ 92,992
Real Estate:
Construction 7,381 3,355
Mortgage 167,635 162,130
Installment 19,523 16,395
Overdrafts 113 151
-------- --------
Total loans 309,992 275,023
Less unearned discount (2,444) (2,198)
-------- --------
Total loans, net
of unearned discount $307,548 $272,825
======== ========
</TABLE>
Net loans increased by $34.723 million or 12.7% from December 31, 1994. The
growth is primarily from commercial loans and from new and refinanced real
estate mortgages, and has resulted from an improved economy.
Deposits
The most important source of the Corporation's funds is the deposits of the
subsidiary bank. The types of deposits that were in the subsidiary bank on a
daily average basis are shown in the following table (dollars in thousands).
<TABLE>
<CAPTION>
Six Months Ended Twelve Months Ended
June 30, 1995 December 31, 1994
---------------- -------------------
<S> <C> <C>
Noninterest-bearing demand $134,307 $130,532
Interest-bearing demand 267,283 234,293
Savings 64,162 71,787
Time, $100,000 and over 53,597 49,063
Other time 218,784 208,079
-------- --------
Total deposits $738,133 $693,754
======== ========
</TABLE>
Total average deposits increased $44.379 million or 6.4% from the average
for the year ended December 31, 1994. Time deposits have increased due to
higher interest rates. Money market accounts, included in interest-bearing
demand deposits in the table above, continue to grow as the rates on these
products are competitive with those offered for similar investment alternatives.
14
<PAGE>
Investment Portfolio
Management of the investment portfolio remains very important as the loan
to deposit ratio remains below 40% and alternative investments are examined to
protect the Corporation's net interest margin. Significant investments have
been made in mortgage-backed securities that provide attractive yields, minimal
credit risk and a balance to the asset and liability management strategy. The
principal mortgage-backed investments have been Federal Home Loan Mortgage
Corporation adjustable rate mortgages and balloon mortgages, and government-
backed collateralized mortgage obligations.
Effective January 1, 1994, the Corporation adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 115
"Accounting for Certain Investments in Debt and Equity Securities". Under
Statement No. 115, all securities must be classified as held-to-maturity,
trading, or available-for-sale.
Management determines the appropriate classification of securities at the
time of purchase and reevaluates the designation as of each balance sheet date.
Debt securities are classified as held-to-maturity when the Corporation has the
positive intent and ability to hold the securities to maturity. Held-to-
maturity securities are stated at amortized cost. Trading securities,
consisting of debt and marketable equity securities are held for resale in
anticipation of short-term market movements. Trading securities are stated at
fair value and gains and losses, both realized and unrealized, are included in
earnings. Debt securities not classified as held-to-maturity or trading and
marketable equity securities not classified as trading are classified as
available-for-sale. Available-for-sale securities are stated at fair value,
with the unrealized gains and losses, net of tax, reported in a separate
component of stockholders' equity. The Corporation does not have any securities
classified as trading as of June 30, 1995.
The following schedule presents the amortized cost and fair value of the
available-for-sale and held-to-maturity investment securities as of June 30,
1995 (dollars in thousands).
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ----------- -------
<S> <C> <C> <C> <C>
Available-for-sale
------------------
U. S. Treasury $102,062 844 (521) 102,385
U. S. Government agencies 23,822 396 (69) 24,149
FHLB stock 2,748 - - 2,748
Mortgage-backed securities 13,370 - (151) 13,219
-------- ----- ------ -------
$142,002 1,240 (741) 142,501
======== ===== ====== =======
Held-to-maturity
----------------
U.S. Treasury $ 5,047 38 - 5,085
U.S. Government agencies 3,000 11 - 3,011
State and political subdivisions 87,622 2,500 (336) 89,786
Mortgage-backed securities 263,786 1,812 (5,173) 260,425
-------- ----- ------ -------
$359,455 4,361 (5,509) 358,307
======== ===== ====== =======
</TABLE>
15
<PAGE>
Investment Portfolio, Continued
The following schedule presents the total book value and fair value of the
investment securities as of December 31, 1994 (dollars in thousands).
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ----------- -------
<S> <C> <C> <C> <C>
Available-for-sale
------------------
U. S. Treasury $ 97,312 14 (2,827) 94,499
U. S. Government agencies 22,407 37 (554) 21,890
FHLB stock 3,482 - - 3,482
Mortgage-backed securities 44,483 - (1,245) 43,238
-------- --- ------- -------
$167,684 51 (4,626) 163,109
======== === ======= =======
Held-to-maturity
----------------
U.S. Treasury $ 5,064 - (108) 4,956
U.S. Government agencies 5,527 - (189) 5,338
State and political subdivisions 53,374 801 (1,196) 52,979
Mortgage-backed securities 277,614 36 (16,784) 260,866
-------- --- ------- -------
$341,579 837 (18,277) 324,139
======== === ======= =======
</TABLE>
Short-term Borrowings
In January 1994, the Corporation initiated a process whereby funds are
borrowed for the purpose of investing in similarly repricing investment
instruments. As of June 30, 1995, the Corporation has $10,000,000 in securities
sold under agreement to repurchase. This borrowing is through the Federal Home
Loan Bank and matures and reprices monthly.
In May 1994, the Corporation began borrowing by offering repurchase
agreements to customers. As of June 30, 1995, through this funding source, the
Corporation has $33,312,085 in securities sold under agreement to repurchase.
These agreements have a maturity of one day and are repricable on a daily basis.
The weighted average interest rate of the agreements on June 30, 1995 was 5.25%.
These agreement were collateralized by U.S. Government securities with a market
value of $47,487,050 as of June 30, 1995.
16
<PAGE>
Interest Rate Sensitivity
Asset/liability management involves the maintenance of an appropriate
balance between interest sensitive assets and interest sensitive liabilities to
reduce interest rate exposure while also providing liquidity to satisfy the cash
flow requirement of operations to meet customers' fluctuating demands for funds,
either in terms of loan requests or deposit withdrawals.
A volatile rate environment combined with industry deregulation has placed
an increased emphasis on interest rate sensitivity management. Interest
sensitive earning assets and interest-bearing liabilities are those which have
yields or rates which are subject to change within a future time period due to
maturity of the instrument or changes in the rate environment. Gap refers to the
difference between the rate sensitive assets and rate sensitive liabilities.
Interest rate sensitivity management seeks to protect earnings by
maintaining an appropriate balance between interest sensitive earning assets and
interest-bearing liabilities in order to minimize fluctuations in the net
interest margin and net earnings in period of volatile interest rates.
The following table quantifies the interest rate sensitivity of both
earning assets and interest-bearing liabilities as of June 30, 1995.
INTEREST RATE SENSITIVITY ANALYSIS AT JUNE 30, 1995
(Dollars in Thousands)
<TABLE>
<CAPTION>
Repriced
Due in After One
Due in Due in 91 Days Total Year or
30 Days 31 to 90 to Rate Non-Rate
or Less Days One Year Sensitive Sensitive Total
---------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans $ 85,199 $ 17,834 $ 78,360 $ 181,393 $126,155 $307,548
Interest-bearing deposits
in other banks 495 - - 495 - 495
Federal funds sold 14,700 - - 14,700 - 14,700
Investment securities:
Taxable 44,573 12,698 40,821 98,092 316,242 414,334
Tax-exempt - 670 2,053 2,723 84,899 87,622
--------- --------- --------- --------- -------- --------
Total investment securities 44,573 13,368 42,874 100,815 401,141 501,956
--------- --------- --------- --------- -------- --------
Total earning assets 144,967 31,202 121,234 297,403 527,296 824,699
--------- --------- --------- --------- -------- --------
Interest-bearing liabilities:
Interest-bearing demand 291,925 - - 291,925 - 291,925
Savings 66,848 - - 66,848 - 66,848
Time deposits are less
than $100,000 29,479 25,361 64,637 119,477 101,627 221,104
Time deposits are greater
than $100,000 7,560 7,487 15,204 30,251 24,178 54,429
Other borrowings 45,880 - 1,500 47,380 - 47,380
--------- --------- --------- --------- -------- --------
Total interest-bearing
liabilities 441,692 32,848 81,341 555,881 125,805 681,686
--------- --------- --------- --------- -------- --------
Interest sensitivity gap $(296,725) $ (1,646) $ 39,893 $(258,478) $401,491 $143,013
========= ========= ========= ========= ======== ========
Cumulative gap $(296,725) $(298,371) $(258,478)
========= ========= =========
Relationship of gap to
total earning assets (36.0)% (36.2)% (31.3)%
========= ========= =========
</TABLE>
17
<PAGE>
Capital
The Corporation recognizes the importance of proper capitalization. The
continuing philosophy is to maintain a highly capitalized organization operating
with capital levels well in excess of those required by regulatory agencies.
The Federal Reserve Board's guidelines to United States banking
organizations provide for the application of a risk-based capital framework.
The guidelines classify capital into two tiers, referred to as Tier 1 and Tier
2. Tier 1 consists of core capital elements less certain intangible assets,
while Tier 2 includes the allowance for loan losses, but is limited to 100% of
Tier 1 and 1.25% of risk-weighted adjusted assets. The denominator or asset
portion of risk-based capital aggregates generic classes of balance sheet and
off-balance-sheet exposures, each weighted by one of four factors, ranging from
0% to 100%, based upon the relative risk of the exposure class. The Federal
Reserve Board guidelines require a minimum capital of 8%, of which at least 4%
must be Tier 1.
Amendments to the capital rules for the adoption of Statement No. 115 have
not yet been adopted and as such, net unrealized gains on available-for-sale
securities resulting from the accounting change have been excluded from the
computation of Tier 1 (and total) capital.
The Federal Reserve Board has also established guidelines that set forth
the leverage standards to be applied to banking organizations in conjunction
with the risk-based capital framework. The leverage standard requires a minimum
ratio of 3% Tier 1 capital to average total adjusted assets, as defined.
However, regulators are given wide discretion to set a level appropriate for
each bank, with most banks expected to maintain a leverage capital ratio of 4%
to 5%.
The following table presents the Corporation's risk-based and leverage
capital ratios (dollars in thousands).
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
----------- ------------
<S> <C> <C>
Tier 1 (Core Capital)
Stockholders' equity $ 62,477 $ 55,326
Plus: Unrealized loss on securities
available-for-sale 487 3,898
Less: Excess cost over
net assets acquired (809) (908)
-------- --------
Total Tier 1 Capital 62,155 58,316
-------- --------
Tier 2 (Supplementary Capital)
Eligible portion of allowance
for loan losses 4,218 3,872
-------- --------
Total risk-based capital $ 66,373 $ 62,188
======== ========
Total risk-weighted assets $394,498 $370,252
======== ========
Tier 1 capital ratio 15.76% 15.75%
Total risk-based capital ratio 16.82% 16.80%
======== ========
Leverage capital ratio 7.03% 7.22%
======== ========
</TABLE>
The above capital ratios, under all regulatory measurements, are in excess
of required minimum levels. The Texas State Banking Department issued a 6%
minimum leverage capital ratio standard for all state banks during 1991.
18
<PAGE>
Dividends
Central Bank & Trust is subject to various restrictions imposed by the
Texas Banking Code relating to the declaration and payment of dividends to the
Corporation, including continued capital adequacy. The Corporation believes that
the policies and procedures currently in place comply with regulatory
requirements.
Cash dividends are paid to the Corporation's shareholders at the discretion
of the Corporation's Board of Directors and depend upon a number of factors,
including future earnings of the Corporation, the financial condition of the
Corporation, the Corporation's cash needs, general business conditions and the
amount of dividends paid to the Corporation by the Subsidiary Bank.
Liquidity
Liquidity ratios are in excess of regulatory guidelines. The Corporation's
primary internal source of liquidity is its short-term marketable assets,
primarily Federal funds sold and United States Government and Agency securities
maturing within the next twelve months.
19
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(FORMERLY TEXAS SECURITY BANCSHARES, INC. AND SUBSIDIARIES)
CONSOLIDATED AVERAGE BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
Assets 1995 1994 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Earning assets:
Loans $ 293,235 $ 246,715 $ 285,680 $ 242,268
Interest-bearing deposits in banks 223 611 240 678
Federal funds sold 26,204 9,365 22,776 13,656
Investment securities:
Taxable 429,513 415,585 439,204 398,513
Tax-exempt 70,605 41,470 61,970 40,645
---------- ---------- ---------- ----------
Total investment securities 500,118 457,055 501,174 439,158
---------- ---------- ---------- ----------
Total earning assets 819,780 713,746 809,870 695,760
Cash and due from banks 40,502 39,669 41,330 40,381
Other real estate 493 300 391 308
Other assets 36,178 35,840 36,592 37,276
Less allowance for possible loan losses (4,009) (4,150) (3,948) (4,128)
---------- ---------- ---------- ----------
Total assets $ 892,944 $ 785,405 $ 884,235 $ 769,597
========== ========== ========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Interest-bearing liabilities:
Deposits $ 614,694 $ 553,919 $ 603,826 $ 549,916
Other borrowings 74,566 46,818 81,203 35,312
---------- ---------- ---------- ----------
Total interest-bearing liabilities 689,260 600,737 685,029 585,228
---------- ---------- ---------- ----------
Noninterest-bearing demand deposits 136,195 127,323 134,307 126,583
Other liabilities 6,750 3,383 6,074 3,360
Stockholders' equity 60,739 53,962 58,825 54,426
---------- ---------- ---------- ----------
Total liabilities and stockholders' equity $ 892,944 $ 785,405 $ 884,235 $ 769,597
========== ========== ========== ==========
</TABLE>
20
<PAGE>
CENTRAL BANCORPORATION, INC AND SUBSIDIARIES
(FORMERLY TEXAS SECURITY BANCSHARES, INC. AND SUBSIDIARIES)
CONSOLIDATED TAXABLE EQUIVALENT STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- -------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans (1) $ 6,856 $ 5,167 $13,164 $10,179
Interest on investment securities:
Taxable securities 6,821 5,801 13,969 10,964
Tax-exempt (1) 1,521 965 2,749 1,917
Interest on deposits in other banks 2 4 3 10
Interest on federal funds sold 399 91 683 230
------- ------- ------- -------
Total interest income 15,599 12,028 30,568 23,300
------- ------- ------- -------
Interest expense:
Interest on interest-bearing demand deposits 2,166 1,240 4,086 2,318
Interest on savings deposits 356 404 713 795
Interest on time deposits 3,565 2,225 6,721 4,370
Interest on other borrowings 1,082 467 2,330 646
------- ------- ------- -------
Total interest expense 7,169 4,336 13,850 8,129
------- ------- ------- -------
Net interest income 8,430 7,692 16,718 15,171
Provision for possible loan losses (225) - (450) -
------- ------- ------- -------
Net interest income after provision
for possible loan losses 8,205 7,692 16,268 15,171
------- ------- ------- -------
Other income:
Service charges and fees 2,311 2,019 4,510 4,038
Gains on sales of investment securities 133 - 133 -
Other income 272 247 420 328
------- ------- ------- -------
Total other income 2,716 2,266 5,063 4,366
------- ------- ------- -------
Other expenses:
Salaries and employee benefits 4,071 3,857 8,042 7,551
Net occupancy expense 739 759 1,396 1,417
Equipment and data processing expense 827 701 1,588 1,353
Communications expense 338 320 678 661
Other real estate owned expense, net (5) (54) (52) (56)
Federal deposit insurance fees 398 375 796 749
Legal and professional 241 235 475 444
Stationery and supplies 242 225 459 432
Marketing expense 224 226 433 391
Other operating expenses 426 384 837 815
------- ------- ------- -------
Total other expenses 7,501 7,028 14,652 13,757
------- ------- ------- -------
Income before Federal income taxes 3,420 2,930 6,679 5,780
------- ------- ------- -------
Tax equivalent adjustment 639 387 1,159 753
------- ------- ------- -------
Income before Federal income taxes 2,781 2,543 5,520 5,027
------- ------- ------- -------
Provision for Federal income taxes 601 644 1,257 1,269
------- ------- ------- -------
Net income $ 2,180 $ 1,899 $ 4,263 $ 3,758
======= ======= ======= =======
</TABLE>
(1) Presented on a taxable equivalent basis using a 34% Federal income tax rate
for 1995 and 1994.
21
<PAGE>
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
(FORMERLY TEXAS SECURITY BANCSHARES, INC. AND SUBSIDIARIES)
AVERAGE INTEREST RATES AND SELECTED RATIOS
(TAX EQUIVALENT BASIS)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- ---------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
Yields on earning assets:
Loans (1) 9.38% 8.40% 9.29% 8.47%
Interest-bearing deposits
in other banks 3.60 2.63 2.52 2.97
Federal funds sold 6.11 3.90 6.05 3.40
Investment securities:
Taxable 6.37 5.60 6.41 5.55
Tax-exempt (1) 8.64 9.33 8.95 9.51
----- ----- ----- -----
Total investment securities 6.69 5.94 6.73 5.91
----- ----- ----- -----
Total earning assets 7.63% 6.76% 7.61% 6.75%
----- ----- ----- -----
Rates on interest-bearing liabilities:
Deposits 3.97% 2.80% 3.85% 2.74%
Other borrowings 5.82 4.00 5.79 3.69
----- ----- ----- -----
Total interest-bearing liabilities 4.17% 2.90% 4.08% 2.80%
----- ----- ----- -----
Net interest spread 3.46% 3.86% 3.53% 3.95%
===== ===== ===== =====
Net interest margin 4.12% 4.32% 4.16% 4.40%
===== ===== ===== =====
Selected ratios:
Net income as a percent of:
Average total assets .98% .97% .97% .98%
===== ===== ===== =====
Average stockholders' equity 14.40% 14.12% 14.62% 13.93%
===== ===== ===== =====
</TABLE>
(1) Presented on a taxable equivalent basis using a 34% Federal income tax
rate for 1995 and 1994.
22
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
---------------------------
Not applicable.
Item 2. Change in Securities.
------------------------------
Not applicable.
Item 3. Defaults Upon Senior Securities.
-----------------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------
Not applicable.
Item 5. Other Information
--------------------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits
--------
(11) Computation of Earnings Per Common Share*
(27) Financial Data Schedule*
______
*Filed herewith.
(b) Reports on Form 8-K
-------------------
No report of Form 8-K was filed by the registrant during the quarter
ended June 30, 1995.
23
<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 hereunto duly authorized.
CENTRAL BANCORPORATION, INC.
-------------------------------
Registrant
/s/ J. Andy Thompson
DATE: August 14, 1995 By: ---------------------------------------
J. Andy Thompson, Chairman of the Board
and Chief Executive Officer
/s/ Michael J. Tyler
DATE: August 14, 1995 By: ---------------------------------------
Michael J. Tyler, Senior Vice President
and Chief Financial Officer
24
<PAGE>
EXHIBIT (11)
COMPUTATION OF EARNINGS PER COMMON SHARE
The details of the computation of earnings per common share are disclosed in the
Consolidated Statements of Earnings for the Three Months and Six Months Ended
June 30, 1995 and 1994 (unaudited) contained in the Quarterly Report on Form
10-Q of the registrant for the quarter ended June 30, 1995.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 44,668,615
<INT-BEARING-DEPOSITS> 494,651
<FED-FUNDS-SOLD> 14,700,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 142,501,000
<INVESTMENTS-CARRYING> 359,455,000
<INVESTMENTS-MARKET> 358,307,000
<LOANS> 307,548,121
<ALLOWANCE> 4,217,625
<TOTAL-ASSETS> 900,935,152
<DEPOSITS> 778,723,890
<SHORT-TERM> 45,879,732
<LIABILITIES-OTHER> 12,354,609
<LONG-TERM> 1,500,000
<COMMON> 6,541,808
0
0
<OTHER-SE> 55,935,113
<TOTAL-LIABILITIES-AND-EQUITY> 900,935,152
<INTEREST-LOAN> 12,938,914
<INTEREST-INVEST> 15,782,817
<INTEREST-OTHER> 686,084
<INTEREST-TOTAL> 29,407,815
<INTEREST-DEPOSIT> 11,519,209
<INTEREST-EXPENSE> 13,849,542
<INTEREST-INCOME-NET> 15,558,273
<LOAN-LOSSES> 450,000
<SECURITIES-GAINS> 133,176
<EXPENSE-OTHER> 14,651,520
<INCOME-PRETAX> 5,520,226
<INCOME-PRE-EXTRAORDINARY> 4,263,226
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,263,226
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.63
<YIELD-ACTUAL> 4.16
<LOANS-NON> 1,985,000
<LOANS-PAST> 112,000
<LOANS-TROUBLED> 231,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,872,000
<CHARGE-OFFS> 562,000
<RECOVERIES> 458,000
<ALLOWANCE-CLOSE> 4,218,000
<ALLOWANCE-DOMESTIC> 1,417,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,801,000
</TABLE>
