UNITED STATES
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 September 30, 1997
------------------------------------
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: 33-14252
FIRST NATIONAL BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
West Virginia 62-1306172
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
One Cedar Street, Ronceverte, West Virginia 24970
(Address of principal executive offices) (Zip Code)
(304) 647-4500
(Registrant's telephone number, including area code)
N/A
(Former name, address or 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 outstanding of the issuer's classes of common stock as of
September 30, 1997:
Common Stock, $5 par value -- 192,500 shares
THIS REPORT CONTAINS 25 PAGES
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION
FORM 10-Q
For the Quarterly Period Ended September 30, 1997
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 30, 1997 and December 31, 1996 ................. 3
Condensed Consolidated Statements of Income -
Three Months Ended September 30, 1997 and 1996 and
Nine months Ended September 30, 1997 and 1996 ............. 4
Condensed Consolidated Statements of Shareholders' Equity -
Three Months Ended September 30, 1997 and 1996 and
Nine months Ended September 30, 1997 and 1996 ............. 5
Condensed Consolidated Statements of Cash Flows -
Nine months Ended September 30, 1997 and 1996 ............. 6-7
Notes to Condensed Consolidated Financial Statements ........ 8-11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ................................. 12-20
PART II OTHER INFORMATION
Item 1. Legal Proceedings ............................................ 21
Item 2. Changes in Securities ........................................ none
Item 3. Defaults upon Senior Securities .............................. none
Item 4. Submission of Matters to a Vote of Security Holders .......... 21
Item 5. Other Information ............................................ none
Item 6. Exhibits and Reports on Form 8-K ............................ 21
Item 11 - Computation of Per Share Earnings ............. 23
Item 27 - Financial Data Schedule ....................... 24
SIGNATURES 22
2
<PAGE>
PART I. FINANCIAL INFORMATION
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except per share data)
Sept 30, Dec 31,
1997 1996
ASSETS (Unaudited) (1)
Cash and due from banks .................................... $ 3,754 $ 2,576
Federal funds sold ......................................... 4,540 2,663
Securities held to maturity (estimated fair value
$11,387 and $18,850, respectively) (Note 2) ........... 11,323 18,836
Securities available for sale (Note 2) ..................... 5,038 3,782
Loans, net of allowance of $613 and
$654, respectively (Notes 3 and 4) ................... 66,977 52,800
Bank premises and equipment ................................ 2,122 1,965
Accrued interest receivable ................................ 582 659
Other assets ............................................... 404 387
------- -------
Total assets ................................. $94,740 $83,668
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing .............................. $10,174 $10,211
Interest bearing ................................. 66,957 63,105
------- -------
Total deposits ............................... 77,131 73,316
Repurchase Agreements ................................. 2,437 493
Long-term borrowings (Note 7) ......................... 5,000 0
Other liabilities ..................................... 1,010 1,018
------- -------
Total liabilities ............................ 85,578 74,827
------- -------
Commitments and Contingencies (Note 5)
Shareholders' equity
Common stock, $5.00 par value, authorized
500,000 shares, issued 192,500 shares ............ 963 963
Surplus ............................................... 1,000 1,000
Retained earnings ..................................... 7,197 6,878
Net Unrealized gain (loss) on securities .............. 2 0
------- -------
Total shareholders' equity ................... 9,162 8,841
------- -------
Total liabilities and shareholders' equity ... $94,740 $83,668
======= =======
(1) Extracted from December 31, 1996 audited financial statements.
See Notes to Condensed Consolidated Financial Statements
3
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands of dollars, except per share data)
<TABLE>
Three Months Ended Nine months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans ................... $1,523 $1,169 $4,279 $3,429
Interest and dividends on
securities:
Taxable ................................. 187 256 657 812
Tax-exempt .............................. 49 53 149 160
Interest on Federal funds sold ............... 58 64 92 152
------ ------ ------ ------
Total interest income ................... 1,817 1,542 5,177 4,553
------ ------ ------ ------
Interest Expense
Interest on deposits ......................... 716 599 2,015 1,757
Interest on Repurchase Agreements ............ 14 4 28 5
Interest on Fed Funds Purchased .............. 0 0 5 0
Interest on Long-term Borrowings ............. 84 0 175 0
------ ------ ------ ------
Total Interest Expense .................. 814 603 2,223 1,762
Net interest income ..................... 1,003 939 2,954 2,791
Provision for loan losses ......................... 9 0 22 0
------ ------ ------ ------
Net interest income after provision
for loan losses ..................... 994 939 2,932 2,791
------ ------ ------ ------
Other income
Service fees ................................. 62 68 198 166
Insurance commissions ........................ 4 4 13 15
Securities gains ............................. 0 0 0 1
Trust income ................................. 32 7 44 47
Insurance Proceeds ........................... 0 94 0 94
Other income ................................. 18 10 64 66
------ ------ ------ ------
116 183 319 389
------ ------ ------ ------
Other expense
Salaries and employee benefits ............... 400 413 1,256 1,168
Net occupancy expense ........................ 41 70 155 165
Equipment rental, depreciation and maintenance 82 79 222 192
Data Processing .............................. 31 39 98 123
Flood Damage Expenses ........................ 0 55 0 55
Other operating expenses ..................... 229 230 653 676
------ ------ ------ ------
783 886 2,384 2,379
------ ------ ------ ------
Income before income taxes ........................ 327 236 867 801
Income tax expense ........................... 129 70 317 232
------ ------ ------ ------
Net income .............................. $ 198 $ 166 $ 550 $ 569
====== ====== ====== ======
Earnings per common share (Note 6) ................ $ 1.03 $ 0.86 $ 2.86 $ 2.95
====== ====== ====== ======
Dividends per common share ........................ $ 0.40 $ 0.33 $ 1.20 $ 0.99
====== ====== ====== ======
</TABLE>
(Continued)
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands of dollars, except per share data)
Three Months Ended Nine months Ended
September 30, September 30,
1997 1996 1997 1996
Balance, beginning of period .......... $9,035 $ 8,648 $ 8,841 $8,416
Net income ....................... 198 166 550 569
Cash dividends declared .......... (77) (63) (231) (189)
Change in net unrealized (loss) on
securities available for sale 6 (1) 2 (46)
------ ------- ------- -------
Balance, end of period ................ $9,162 $ 8,750 $ 9,162 $ 8,750
======= ======= ======= =======
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of dollars)
<TABLE>
Nine months Ended
September 30,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................. $ 550 $ 569
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation ...................................... 169 121
Provision for loan losses ......................... 22 0
Amortization of security premiums (accretion) of
security discounts, net ....................... (29) 21
(Gain) Loss on asset disposal ..................... (2) 0
(Increase) Decrease in accrued interest receivable 77 243
(Increase) Decrease in other assets ............... (17) (390)
Increase (Decrease) in other liabilities .......... 226 327
-------- --------
Net cash provided by (used in) operating activities 996 891
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities held
to maturity ....................................... 8,735 4,272
Proceeds from maturities and calls of securities
available for sale ................................ 1,500 7,141
Purchases of securities held to maturity ............... (1,197) (6,994)
Purchases of securities available for sale ............. (3,004) 0
Principal collected on (loans made to) customers, net .. (14,177) (2,322)
Purchases of bank premises and equipment ............... (326) (903)
-------- --------
Net cash provided by (used in) investing activities (8,469) 1,194
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW
and savings accounts .............................. (381) 5,207
Proceeds from sales of (payments for matured)
time deposits, net ................................ 4,196 832
Net increase (decrease) in Repurchase Agreements ....... 1,944 328
Proceeds from long-term borrowings ..................... 5,000 0
Dividends paid ......................................... (231) (189)
-------- --------
Net cash provided by (used in) financing activities 10,528 6,178
-------- --------
Increase (decrease) in cash and cash equivalents .. $ 3,055 $ 8,263
Cash and cash equivalents:
Beginning .............................................. $ 5,239 $ 3,614
-------- --------
Ending ................................................. $ 8,294 $ 11,877
======== ========
</TABLE>
(Continued)
See Notes to Condensed Consolidated Financial Statements
6
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Unaudited)
(In thousands of dollars)
Nine months Ended
September 30,
1997 1996
-------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest paid to depositors $ 1,961 $ 1,742
========= ==========
Income taxes $ 358 $ 159
========= ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Dividends declared and unpaid $ 77 $ 63
========= ==========
See Notes to Condensed Consolidated Financial Statements
7
<PAGE>
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The accounting and reporting policies of First National Bankshares
Corporation and Subsidiary (the "Company") conform to generally
accepted accounting principles and to general policies within the
financial services industry. 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 assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
The condensed consolidated statements include the accounts of the
Company and its wholly-owned subsidiary, First National Bank. All
significant intercompany balances and transactions have been
eliminated. The information contained in the condensed
consolidated financial statements is unaudited except where
indicated. In the opinion of management, all adjustments for a
fair presentation of the results of the interim periods have been
made. All such adjustments were of a normal, recurring nature. The
results of operations for the three and nine months ended
September 30, 1997 are not necessarily indicative of the results
to be expected for the full year. The condensed consolidated
financial statements and notes included herein should be read in
conjunction with the Company's 1996 audited financial statements
and Form 10-K.
Certain amounts in the condensed consolidated financial statements
for the prior year, as previously presented, have been
reclassified to conform to current year classifications.
Note 2. Securities
The amortized cost, unrealized gains, unrealized losses and
estimated fair values of securities at September 30, 1997 and
December 31, 1996 are summarized as follows (in thousands):
<TABLE>
September 30, 1997
Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Held to maturity:
Taxable:
U.S. Treasury Securities $ 1,500 $ 0 $ 0 $ 1,500
U.S. Government Agencies
and corporations 5,233 7 6 5,234
Corporate Debt Securities 500 0 3 497
----------- ----------- ----------- -----------
Total Taxable 7,233 7 9 7,231
Tax Exempt:
State & political subdivisions 4,090 66 0 4,156
----------- ----------- ----------- -----------
Total securities held to maturity $ 11,323 $ 73 $ 9 $ 11,387
=========== =========== =========== ===========
</TABLE>
8
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
September 30, 1997
Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Available for Sale:
Taxable:
U.S. Treasury Securities $ 1,992 $ 4 $ 0 $ 1,996
U.S. Government Agencies
and corporations 2,500 4 2 2,502
Federal Home Loan Bank Stock 481 0 0 481
Federal Reserve Bank Stock 57 0 0 57
---------- ----------- ----------- -----------
Total Taxable 5,030 8 2 5,036
Tax Exempt:
Federal Reserve Bank Stock 2 0 0 2
---------- ----------- ----------- -----------
Total securities available for sale $ 5,032 $ 8 $ 2 $ 5,038
========== =========== =========== ===========
</TABLE>
<TABLE>
December 31, 1996
Estimated
Amortized Unrealized Unrealized Fair
<S> <C> <C> <C> <C>
Cost Gains Losses Value
Held to maturity:
Taxable:
U.S. Treasury Securities $ 3,003 $ 2 $ 0 $ 3,005
U.S. Government Agencies
and corporations 11,203 20 31 11,192
Corporate Debt Securities 500 0 7 493
---------- ----------- ----------- -----------
Total Taxable 14,706 22 38 14,690
Tax Exempt:
State & political subdivisions 4,130 44 14 4,160
---------- ----------- ----------- -----------
Total securities held to maturity $ 18,836 $ 66 $ 52 $ 18,850
========== =========== =========== ===========
</TABLE>
<TABLE>
December 31, 1996
Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Available for Sale:
Taxable:
U.S. Treasury Securities $ 980 $ 3 $ 0 $ 983
U.S. Government Agencies
and corporations 2,500 6 8 2,498
Federal Home Loan Bank Stock 242 0 0 242
Federal Reserve Bank Stock 57 0 0 57
---------- ----------- ----------- -----------
Total Taxable 3,779 9 8 3,780
Tax Exempt:
Federal Reserve Bank Stock 2 0 0 2
---------- ----------- ----------- -----------
Total securities available for sale $ 3,781 $ 9 $ 8 $ 3,782
========== =========== =========== ===========
</TABLE>
9
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The maturities, amortized cost and estimated fair values of the Company's
securities at September 30, 1997 are summarized as follows (in thousands):
Held to Maturity Available for Sale
Estimated Estimated
Amortized Fair Amortized Fair
Cost Value Cost Value
Due within 1 year ............. $ 5,353 $ 5,359 $ 1,992 $ 1,996
Due after 1 but within 5 years 3,461 3,462 2,500 2,502
Due after 5 but within 10 years 2,509 2,566 0 0
Equity Securities ............. 0 0 540 540
------- ------- ------- -------
$11,323 $11,387 $ 5,032 $ 5,038
======= ======= ======= =======
The Company's Federal Reserve Bank stock and Federal Home Loan Bank stock
are equity securities which are included in securities available for sale
in the accompanying condensed consolidated financial statements. Such
securities are carried at cost, since they may only be sold back to the
respective Federal Reserve or Federal Home Loan Bank at par value.
The proceeds from sales and calls and maturities of securities and the
related gross gains and losses realized for the nine month periods ended
September 30, 1997 and 1996 are as follows (in thousands):
Proceeds From Gross Realized
Calls and Principal
Sales Maturities Payments Gains Losses
Nine months ended Sept. 30, 1997
Securities held to maturity . $ 0 $ 8,735 $ 0 $ 0 $ 0
Securities available for sale 0 1,500 0 0 0
------- ------- ------- ------- -------
$ 0 $10,235 $ 0 $ 0 $ 0
======= ======= ======= ======= =======
Nine months ended Sept. 30, 1996:
Securities held to maturity . $ 0 $ 4,272 $ 0 $ 0 $ 0
Securities available for sale 0 7,141 0 0 0
------- ------- ------- ------- -------
$ 0 $11,413 $ 0 $ 0 $ 0
======= ======= ======= ======= =======
Note 3. Loans
Total loans as of September 30, 1997 and December 31, 1996 are
summarized as follows (in thousands):
September 30, December 31,
1997 1996
--------- ---------
Commercial, financial and agricultural $ 27,221 $ 19,578
Real estate - construction ........... 3,193 2,396
Real estate - mortgage ............... 28,907 24,031
Installment loans to individuals ..... 6,657 6,254
Other ................................ 1,633 1,300
-------- --------
Total loans ...................... 67,611 53,559
Less unearned income ................. (21) (105)
-------- --------
Total loans net of unearned income 67,590 53,454
Less allowance for loan losses ....... (613) (654)
-------- --------
Loans, net ................... $ 66,977 $ 52,800
======== ========
10
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 4. Allowance for Loan Losses
Analyses of the allowance for loan losses are presented below (in
thousands) for the nine month periods ended September 30, 1997 and
1996:
Nine months Ended
September 30,
1997 1996
-------- -------
Balance, beginning of period .. $ 654 $ 643
----- -----
Loans charged off ......... (105) (171)
Recoveries ................ 42 132
----- -----
Net (losses) recoveries (63) (39)
----- -----
Provision for loan losses . 22 0
----- -----
Balance, end of period ........ $ 613 $ 604
===== =====
Note 5. Commitments and Contingencies
The Company's subsidiary bank is, through the ordinary course of
business, party to financial instruments with off-balance sheet
risk. These financial instruments include standby letters of
credit and commitments to extend credit. The contract amount of
unused portions of existing Lines of Credit and other commitments
to lend as of September 30, 1997 and 1996 are as follows, in
thousands of dollars:
September 30,
1997 1996
----------- ------------
Commitments to extend credit $ 11,713 $ 8,599
=========== -------=====
Management is not aware of any commitments or contingencies which
may reasonably be expected to have a material impact on operating
results, liquidity or capital resources. The Company continues to
have commitments related to various legal actions, commitments to
extend credit, and employment contracts arising in the normal
course of business.
Note 6. Earnings Per Share
Earnings per common share are computed based on the
weighted-average shares outstanding. For the nine month periods
ended September 30, 1997 and 1996, the weighted-average common
shares outstanding was 192,500. The weighted average common shares
outstanding for the three month periods then ended was also
192,500.
Note 7. Long-Term Borrowings
The Company's subsidiary bank is a member of the Federal Home Loan
Bank of Pittsburgh, Pennsylvania ("FHLB"). On March 24, 1997, the
Bank entered into a long-term borrowing arrangement with the FHLB
of Pittsburgh. This advance is secured by stock in the FHLB of
Pittsburgh, qualifying first mortgage loans and investment
securities not otherwise pledged. The advance is payable in one
balloon payment on March 24, 2000. Interest is payable monthly at
a fixed rate of 6.68% per annum.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis focused on significant changes in the
financial condition and results of operations of First National Bankshares
Corporation (the "Company" ), and its subsidiary, First National Bank for the
periods indicated. This discussion and analysis should be read in conjunction
with the Company's 1996 consolidated financial statements and notes included in
its Annual Report to Shareholders and Form 10-K. This discussion may include
forward-looking statements based upon management's expectations, and actual
results may differ materially.
EARNINGS SUMMARY
The Company reported net income of $198,000 for the three months ended September
30, 1997 compared to $166,000 for the quarter ended September 30, 1996,
representing a 19.3% increase. For the nine month period ended September 30,
1997, the Company's net income of $550,000 decreased 3.3% from the $569,000
reported for the same period of 1996. The increase in quarterly earnings was due
largely to increased trust revenues, while the decrease in year-to-date earnings
were primarily attributable to an increased loan loss provision and increased
income tax expense as further discussed in the analysis below. Also, during 1996
the Company had a non-recurring $39,000 book gain, before income taxes, from
insurance proceeds related to flood damage, as previously reported in the
Company's September 30, 1996 report on Form 10-Q. This $39,000 book gain was
realized during the third quarter of 1996, which was an additional contributor
to both third quarter and year-to-date 1996 earnings.
Earning per common share were $1.03 for the quarter ended September 30, 1997
compared to the $0.86 reported for the third quarter of 1996, an increase of
19.8%. For the nine month period ended September 30, 1997, earnings per common
share totaled $2.86 compared with $2.95 for the same period of 1996, a decrease
of 3.1%. An analysis of the contribution of each major component of the
statement of income to earnings per share is presented in the following chart
both for the three month and for the nine month periods ended September 30, 1997
and 1996.
<TABLE>
Three Months Ended Nine months Ended
September 30, September 30,
Increase Increase
1997 1996 (Decrease) 1997 1996 (Decrease)
--------- --------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $ 9.44 $ 8.00 $ 1.44 $ 26.89 $ 23.65 $ 3.25
Interest expense 4.23 3.13 1.10 11.55 9.15 2.40
--------- --------- ------------ ---------- ---------- ------------
Net interest income 5.21 4.87 0.34 15.34 14.50 0.85
Provision for loan losses 0.05 0.00 0.05 0.11 0.00 0.11
--------- --------- ------------ ---------- ---------- ------------
Net interest income after
provision for loan losses 5.16 4.87 0.29 15.23 14.50 0.74
--------- --------- ------------ ---------- ---------- ------------
Non-interest income 0.60 0.95 (0.35) 1.66 2.02 (0.36)
Non-interest expense 4.06 4.60 (0.53) 12.38 12.36 0.02
--------- --------- ------------ ---------- ---------- ------------
Income before income taxes 1.70 1.22 0.47 4.51 4.16 0.36
Income tax expense 0.67 0.36 0.31 1.65 1.21 0.44
--------- --------- ------------ ---------- ---------- ------------
Net income $ 1.03 $ 0.86 $ 0.16 $ 2.86 $ 2.95 $ (0.08)
========= ========= ============ ========== ========== ============
</TABLE>
The Company's annualized return on average assets (ROA) for the third quarter of
1997 was 0.89% compared to 0.83% for the third quarter of 1996. This compares
with ROA of 0.83% and 0.96% for the nine month periods ended September 30, 1997
and 1996, respectively. Annualized return on average shareholders' equity (ROE)
was 8.80% for the third quarter of 1997 compared to 7.55% in the third quarter
of 1996, while year-to-date ROE was 8.15% and 8.75% as of September 30, 1997 and
1996, respectively.
NET INTEREST INCOME
The most significant component of the Company's net earnings is net interest
income, which represents the excess of interest income earned on earning assets
over the interest expense paid for sources of funds. Net interest income is
affected by changes in volume resulting from growth and alteration of the
balance sheet's composition, as well as by fluctuations in market interest rates
and maturities of sources and uses of funds.
12
<PAGE>
For purposes of this discussion, net interest income is presented on a fully
tax-equivalent basis to enhance the comparability of the performance of
tax-exempt to fully taxable earning assets. For the periods ended September 30,
1997 and 1996, the tax-equivalent adjustment was $77,000 and $79,000,
respectively.
The Company's net interest income on a fully tax-equivalent basis totaled
$3,031,000 for the nine month period ended September 30, 1997 compared to
$2,870,000 for the same period of 1996, representing an increase of $161,000 or
5.6%. For the quarters ended September 30, 1997 and 1996, net interest income on
a fully tax- equivalent basis totaled $1,029,000 and $964,000, respectively. The
Company's net yield on interest earning assets decreased to 4.84% in 1997 from
5.14% in 1996. The decrease in the net yield on earning assets is due to a
higher cost of rate-sensitive liabilities. The cost of interest bearing
liabilities increased to 4.29% versus the previous year's 3.93%, and was
primarily due to increased rates paid on time and savings deposits and the
additional interest expense associated with the Bank's Federal Home Loan Bank
borrowings. Further analysis of the Company's yields on interest earning assets
and interest bearing liabilities and changes in its net interest income are
presented in TABLE I and TABLE II.
13
<PAGE>
<TABLE>
TABLE I
AVERAGE BALANCE SHEET AND
NET INTEREST INCOME ANALYSIS
(In thousands of dollars)
Nine months Ended Nine months Ended
September 30, 1997 September 30, 1996
----------------------------------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest(1) Rate Balance Interest(1) Rate
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS
Loans $ 62,023 $ 4,279 9.20% $ 47,002 $ 3,426 9.72%
Securities:
Taxable 15,126 657 5.79 19,080 812 5.67
Tax-exempt 4,129 226 7.29 4,518 242 7.15
---------- ---------- ------- ---------- ---------- --------
Total securities 19,255 883 6.11 23,598 1,054 5.96
---------- ---------- ------- ---------- ---------- --------
Federal funds sold 2,247 92 5.46 3,884 152 5.23
---------- ---------- ------- ---------- ---------- --------
Total interest earning
assets 83,525 5,254 8.39 74,484 4,632 8.29
---------- ---------- ------- ---------- ---------- --------
NON-INTEREST EARNING ASSETS
Cash and due from banks 2,606 2,397
Bank premises and equipment 2,089 1,362
Other assets 1,128 1,156
Allowance for loan losses (643) (654)
---------- ----------
Total assets $ 88,705 $ 78,745
========== ==========
INTEREST BEARING LIABILITIES
Demand deposits $ 13,285 $ 259 2.60 $ 13,384 $ 268 2.67
Savings deposits 21,744 628 3.85 20,148 532 3.52
Time deposits 29,426 1,128 5.11 26,126 958 4.89
---------- ---------- --------- ---------- ---------- -------
Total Interest-bearing deposits 64,455 2,015 4.17 59,658 1,757 3.93
Repurchase Agreements 975 28 3.83 159 5 4.19
Federal Funds Purchased 168 5 3.97 0 0 0.00
Long-term FHLB borrowings 3,462 175 6.74 0 0 0.00
---------- ---------- --------- ---------- ---------- --------
Total other interest bearing liabilities 4,605 208 6.02 159 5 4.19
Total Interest bearing liabilities 69,060 2,223 4.29 59,817 1,762 3.93
NON-INTEREST BEARING LIABILITIES
AND SHAREHOLDERS' EQUITY
Demand deposits $ 9,440 $ 9,220
Other liabilities 990 1,071
Shareholders' equity 9,215 8,637
---------- ----------
Total liabilities and
shareholders' equity $ 88,705 $ 78,745
========== ==========
NET INTEREST
EARNINGS $ 3,031 $ 2,870
========== ==========
NET YIELD ON INTEREST EARNING
ASSETS 4.84% 5.14%
========= =========
</TABLE>
(1) - Calculated on a fully tax-equivalent basis using the rate of 34% for 1997
and 1996.
14
<PAGE>
TABLE II
CHANGES IN INTEREST INCOME AND EXPENSE
DUE TO CHANGES IN AVERAGE VOLUME AND INTEREST RATES
(In thousands of dollars)
Nine months Ended
Sep 30, 1997 vs. Sep 30, 1996
Increase (Decrease)
Due to Changes in:
Volume(1) Rate(1) Total
INTEREST EARNING ASSETS
Loans ................................. $ 1,045 $ (192) $ 853
Securities:
Taxable .......................... (172) 17 (155)
Tax-exempt (2) ................... (21) 5 (16)
------- ------- -------
Total securities ............. (193) 22 (171)
------- ------- -------
Federal funds sold .................... (66) 6 (60)
------- ------- -------
Total interest earning assets .... 786 (164) 622
------- ------- -------
INTEREST BEARING LIABILITIES
Demand deposits ....................... (2) (7) (9)
Savings deposits ...................... 44 52 96
Time deposits ......................... 125 45 170
Repurchase agreements ................. 23 0 23
Federal funds purchased ............... 0 5 5
Long-term FHLB borrowings ............. 0 175 175
------- ------- -------
Total interest bearing liabilities 190 270 460
------- ------- -------
NET INTEREST EARNINGS ........ $ 596 $ (434) $ 162
======= ======= =======
(1) - The change in interest due to both rate and volume has been allocated
between the factors in proportion to the relationship of the absolute dollar
amounts of the change in each.
(2) - Calculated on a fully tax-equivalent basis using the rate of 34%.
15
<PAGE>
PROVISION FOR LOAN LOSSES
The provision for loan losses represents charges to earnings necessary to
maintain an adequate allowance for potential future loan losses. Management's
determination of the appropriate level of the allowance is based on an ongoing
analysis of credit quality and loss potential in the loan portfolio, actual loan
loss experience relative to the size and characteristics of the loan portfolio,
change in the composition and risk characteristics of the loan portfolio and the
anticipated influence of national and local economic conditions. The adequacy of
the allowance for loan losses is reviewed quarterly and adjustments are made as
considered necessary.
During the third quarter of 1997, the Bank made a $9,000 provision for loan
losses bringing the year-to-date provision to $22,000. Prior to the second
quarter of 1997, no provision had been made since 1994 due to the general
strengthening of the Bank's underwriting standards and loan loss experience. The
provision for loan losses was initiated again during the second quarter of 1997
due to the strong growth in the loan portfolio. For additional discussion of the
Allowance, refer to the Loan section of this discussion.
NON-INTEREST INCOME
Non-interest income includes revenues for all sources other than interest income
and yield related loan fees. For the nine month period ended September 30, 1997,
non-interest income totaled $319,000, representing a decrease of $70,000 from
the $389,000 recorded during the same period of 1996. This decrease is due to
the non-recurring gain from insurance proceeds realized during the third quarter
of 1996, as fully disclosed in the Company's September 30, 1996, Report on Form
10-Q. As a percentage of average assets, non-interest income was 0.36% and 0.49%
for the nine month periods ended September 30, 1997 and 1996, respectively.
Service fees increased 19.3% to $198,000 from $166,000 as a result of the Bank's
concentrated effort to increase fee income on deposits and related products.
On a quarter-to-quarter basis, non-interest income decreased to $116,000 for the
third quarter of 1997 compared to $183,000 for the third quarter of 1996 due to
the non-recurring income outlined above. Trust income increased to $32,000
compared to only $7,000 for the third quarter of 1996 due to the administration
of two large trusts. While the Company seeks to attract new trust business,
estates and other trust services tend to fluctuate, and trust revenues may
revert to historical levels in the future. However, management anticipates that
trust revenues will be slightly ahead of 1996's levels for the remainder of
1997.
NON-INTEREST EXPENSE
Non-interest expense comprises overhead costs which are not related to interest
expense or to losses from loans or securities. As of September 30, 1997, the
Company's non-interest expense totaled $2,384,000, representing an increase of
$5,000, or 0.2%, over total non-interest expense incurred for the nine months
ended September 30, 1996. However, expressed as a percentage of average assets,
non-interest expense decreased to 2.69% at September 30, 1997, versus 3.02% at
September 30, 1996.
Salaries and employee benefits are the Company's largest non-interest cost,
representing approximately 53% and 49% of total non-interest expense at
September 30, 1997 and 1996, respectively. Salaries and employee benefits
increased $88,000, or 7.5% as of September 30, 1997 compared to September 30,
1996. This increase is primarily due to the addition of four new employees for
the Company's new Charleston branch location during the second half of 1996, as
well as normal merit increases for certain members of the existing staff.
Net occupancy expense decreased 6.1%, or $10,000 to $155,000 for the first nine
months of 1997. However, equipment rentals, depreciation and maintenance
expenditures increased 15.6%, or $30,000 to $222,000 due to the additional fixed
assets associated with the new Charleston branch and the new Lewisburg facility.
Other operating expenses decreased to $653,000 as of September 30, 1997, from
$676,000 for the first nine months of 1996 as a result of the Company's
deliberate efforts to reduce fixed and variable non-interest expenses. During
1996, the Company experienced an additional $55,000 in costs associated with
flood damage disclosed in September 30, 1996 Form 10-Q.
On a quarter-to-quarter basis, other non-interest expense decreased to $783,000,
or 11.6%, for the third quarter of 1997 from $886,000 during the third quarter
of 1996. This is due to the $55,000 in non-recurring flood expenses during 1996
mentioned above. Salaries and employee benefits decreased to $400,000 for the
third quarter of 1997 from $413,000 for the same period of 1996, due largely to
one-time signing incentives paid in 1996 and the elimination of two salaried
positions during 1997. Net occupancy expense decreased to $41,000 for the third
quarter of 1997 from $70,000 for the third quarter of 1996 due largely to
increased operating efficiencies at the Company's Ronceverte and Lewisburg
locations, and certain start-up expenses associated with the new Charleston
branch during the third quarter of 1996. Other operating expenses remained
relatively consistent, decreasing only $1,000 from $230,000 in the third quarter
of 1996 to $229,000 during the third quarter of 1997.
16
<PAGE>
INCOME TAXES
The Company's income tax expense, which includes both Federal and State income
taxes, totaled $317,000 for the nine month period ended September 30, 1997,
reflecting a $85,000 increase when compared to the same period of 1996. Income
tax expense equaled 36.6% and 29.0% of income before taxes at September 30, 1997
and 1996, respectively. For financial reporting purposes, income tax expense
does not equal the Federal statutory income tax rate of 34.0% when applied to
pre-tax income, primarily because of State income taxes and tax-exempt interest
income included in income before income taxes.
FINANCIAL CONDITION
The Company's total assets were $94,740,000 at September 30, 1997, compared to
$83,668,000 at December 31, 1996, representing a 13.2% increase, primarily as a
result of loan growth in the Charleston, WV, market. This growth was funded
through increases in deposits and long-term Federal Home Loan Bank borrowings as
further discussed below.
Securities
The Bank's total securities portfolio decreased by $6,257,000 or 27.7% from
December 31, 1996. This decrease is a result of normal maturities in the
Company's securities portfolio and the corresponding shift of funds into
higher-yielding loan products. A summary of the Company's securities portfolio
(both held-to-maturity and available- for-sale) is included as Note 2 to the
condensed consolidated financial statements.
Loans
Loans, net of unearned income, increased by $14,136,000 or 26.4% during the
first nine months of 1997. A summary of the Bank's loans by category is included
as Note 3 to the condensed consolidated financial statements. This increase is a
result of the Bank's concentrated effort to grow its loan portfolio, and
management believes that loan growth will continue throughout 1997, although at
a slower rate. The majority of this growth has been in high-quality commercial
and commercial real estate loans. Refer to Note 3 to the Condensed Consolidated
Financial Statements for a detailed breakdown of loans by type at September 30,
1997, compared with December 31, 1996.
The allowance for loan losses is maintained at a level considered to be adequate
to provide for losses that can be reasonably anticipated. The allowance is
increased by provisions charged to operating expense and reduced by net
charge-offs. The Company's management, on a quarterly basis, performs a
comprehensive loan evaluation which encompasses the identification of all
potential problem credits, which are included on an internally generated "watch"
list. The allowance for loan losses was $613,000 at September 30, 1997 compared
to $654,000 at December 31, 1996. Expressed as a percentage of loans (net of
unearned income), the allowance for loan losses was 0.91% at September 30, 1997
compared to 1.22% at December 31, 1996. Loans charged-off, net of recoveries of
previously charged-off loans, totaled $63,000 and $39,000 for the periods ended
September 30, 1997 and 1996, respectively. See Note 4 of the notes to the
condensed consolidated financial statements for an analysis of the activity in
the Company's allowance for loan losses for the nine month periods ended
September 30, 1997 and 1996. Management believes that the current allowance is
sufficient to cover any potential losses in the current portfolio.
A summary of the Company's past due loans and non-performing assets is provided
in the following table.
SUMMARY OF PAST DUE LOANS AND NON-PERFORMING ASSETS
(in thousands of dollars)
September 30, December 31,
1997 1996 1996
---- ---- ----
Loans past due 90 or more days
still accruing interest . $ 0 $ 0 $ 0
==== ==== ====
Non-performing assets:
Non-accruing loans ...... $851 $253 $161
Other real estate owned . 22 24 22
---- ---- ----
$873 $277 $183
==== ==== ====
Non-accrual loans increased to $851,000 as of September 30, 1997, compared to
$253,000 at September 30, 1996. Included in the non-accrual totals above are
impaired loans totaling $791,000 and $131,000 as of September 30, 1997 and 1996,
respectively. The Company places into non-accrual status those loans which the
17
<PAGE>
full collection of principal and interest are unlikely or which are past due 90
or more days, unless the loans are adequately secured and in the process of
collection. The increase in non-accruing loans is related to a single line of
credit secured by accounts receivable that is in the process of collection.
Management and bank counsel are still in the process of evaluating this credit,
however at the present time it appears that the unallocated portion of the
current allowance for loan losses is sufficient to cover any possible losses. It
is currently anticipated that any under-secured balances will be restructured on
an amortizing basis at a later date.
Deposits
Total deposits increased 5.2% to $77,131,000 as of September 30, 1997, from
$73,316,000 at December 31, 1996. This increase was centered in the
interest-bearing deposit accounts, primarily savings deposits and certificates
of deposits. This increase resulted from an increase in interest rates on
certificates of deposit, special promotions, and other local competitive
conditions.
Long-term Borrowings
Due to increased loan demand, the Company obtained a $5,000,000, 3-year advance
from the Federal Home Loan Bank. In anticipation of an increase in interest
rates on borrowed funds, the Company's subsidiary bank borrowed the funds from
the FHLB of Pittsburgh at a fixed rate of interest to lock-in a funding source
for its anticipated loan growth. For more information on this FHLB debt please
see Note 7 to the condensed consolidated financial statements.
LIQUIDITY AND INTEREST RATE RISK MANAGEMENT
Liquidity reflects the Company's ability to ensure the availability of adequate
funds to meet loan commitments and deposit withdrawals, as well as provide for
other Company transactional requirements. Liquidity is provided primarily by
funds invested in cash and due from banks and Federal funds sold, which totaled
$8,294,000 at September 30, 1997 versus $5,239,000 at December 31, 1996. The
Company's liquidity position is monitored continuously to ensure that day-to-day
as well as anticipated funding needs are met.
Further enhancing the Company's liquidity is the availability as of September
30, 1997 of $7,349,000 in securities maturing within one year. Also, the Company
has classified additional securities with an estimated fair value totaling
$2,502,000 as available for sale in response to an unforeseen need for
liquidity. Additionally, the Company's subsidiary bank has unused lines of
credit available under existing borrowing arrangements.
Management is not aware of any trends, commitments, events or uncertainties that
have resulted in or are reasonably likely to result in a material change to the
Company's liquidity position.
Interest rate risk represents the volatility in earnings and market values of
interest earning assets and liabilities resulting from changes in market rates.
The Company seeks to minimize interest rate risk through asset/liability
management. The Company's principal asset/liability management strategy is gap
management. Gap is the measure of the difference between the volume of repricing
interest earning assets and interest bearing liabilities during given time
periods. When the volume of repricing interest earning assets exceeds the volume
of repricing interest bearing liabilities, the gap is positive -- a condition
which usually is favorable during a rising rate environment. The opposite case,
a negative gap, generally is favorable during a falling rate environment. When
the interest rate sensitivity gap is near zero, the impact of interest rate risk
is limited, for at this point changes in net interest income are minimal
regardless of whether interest rates are rising or falling. An analysis of the
Company's current gap position is presented in TABLE III.
18
<PAGE>
<TABLE>
TABLE III
INTEREST RATE SENSITIVITY GAPS
September 30, 1997
(In thousands of dollars)
Repricing (1)
0 to 3 3 to 6 6 to 12 After
Months Months Months 12 Months Total
<S> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS
Loans, net of unearned income $ 22,758 $ 4,647 $ 7,555 $ 32,630 $ 67,590
Securities 1,000 1,500 4,849 9,012 16,361
Federal funds sold 4,540 - - - 4,540
----------- ---------- --------- --------- ---------
Total interest earning assets 28,298 6,147 12,404 41,642 88,491
----------- ---------- --------- --------- ---------
INTEREST BEARING LIABILITIES
Demand deposits 12,232 - - - 12,232
Savings deposits 22,909 - - - 22,909
Time deposits 10,840 7,453 5,919 7,604 31,816
Repurchase agreements 2,437 - - - 2,437
Long-term FHLB borrowings - - - 5,000 5,000
----------- ---------- --------- --------- ---------
Total interest bearing liabilities 48,418 7,453 5,919 12,604 74,394
----------- ---------- --------- --------- ---------
Contractual interest sensitivity gap (20,120) (1,306) 6,485 29,038 14,097
Adjustment (2) 35,141 (35,141)
----------- ----------
Adjusted interest sensitivity gap $ 15,021 $ (36,477) $ 6,485 $ 29,038 $ 14,097
=========== =========== ========= ========= =========
Cumulative adjusted interest sensitivity gap $ 15,021 $ (21,426) $ (14,941) $ 14,097
=========== =========== ========== =========
Cumulative adjusted gap ratio 2.13 0.14 0.76 1.19
=========== ========== ========= =========
Cumulative adjusted gap as a percentage
of Total Earning Assets 16.97% (24.21%) (16.88%) 15.93%
========== ========== ========= =========
</TABLE>
(1) - Repricing on a contractual basis unless otherwise noted.
(2) - Adjustment to approximate the actual repricing of interest bearing demand
deposits and savings accounts based upon historical experience.
The preceding table reflects the Bank's cumulative one year net interest
sensitivity position, or gap, as 0.76, or ($14,941,000.) Thus, the Bank is in a
negative gap position within a one year time frame. This indicates that a
significant increase in interest rates within a short time frame during the next
12 months could have a significant negative impact on the Bank's net interest
income. However, interest rates on the majority of the Bank's interest-bearing
deposits may be changed by management at any time based on their terms. Since
management believes that repricing of interest bearing deposits in an increasing
interest rate environment will generally lag behind the repricing of interest
bearing assets, the Bank's interest rate risk within one year is at an
acceptable level.
The information presented in the table above represents a static view of the
Bank's gap position as of September 30, 1997, and as such, does not consider
variables such as future loan and deposit volumes, mixes and interest rates. The
Company seeks to maintain its adjusted interest sensitivity gap within 12 months
to a relatively small balance, positive or negative, regardless of anticipated
upward or down movements in interest rates in an effort to limit the effects of
interest rate risk on Company net interest income.
19
<PAGE>
CAPITAL RESOURCES
Maintenance of a strong capital position is a continuing goal of the Company's
management. Through management of its capital resources, the Company seeks to
provide an attractive financial return to its shareholders while retaining
sufficient capital to support future growth.
Total shareholders' equity at September 30, 1997 was $9,162,000 compared to
$8,841,000 at December 31, 1996, representing an increase of $321,000, or 3.6%.
Total shareholders' equity expressed as a percentage of total assets decreased
from 10.6% at December 31, 1996 to 9.7% at September 30, 1997, due to the
increased asset level and increased dividend payout. Cash dividends totaling
$231,000, or $1.20 per share were declared during the first nine months of 1997
versus dividends of $191,000, or $0.99 per share, during the first three
quarters of 1996. These payout levels represented 42% and 34% of the company's
year-to-date earnings for September 30, 1997 and 1996, respectively.
REGULATORY RESTRICTIONS ON CAPITAL AND DIVIDENDS
The primary source of funds for the dividends paid by First National Bankshares
Corporation is dividends received from its subsidiary bank. Dividends paid by
the subsidiary bank are subject to restrictions by banking regulations. The most
restrictive provision requires approval by the regulatory agency if dividends
declared in any year exceed the year's net income, as defined, plus the net
retained profits of the two preceding years.
Quantitative measures established by regulation to ensure capital adequacy
require the subsidiary bank to maintain minimum amounts and ratios of total and
Tier I capital (as defined in the regulations) to risk-weighted assets (as
defined), and of Tier capital (as defined) to average assets (as defined).
Management believes, as of September 30, 1997, that the subsidiary bank meets
all capital adequacy requirements to which it is subject. As of September 30,
1997, the subsidiary bank's Risk Based Capital Ratios are as follows:
RISK-BASED CAPITAL RATIOS
September 30, 1997
Minimum
Actual Requirement
Total risk-based capital ratio 15.09% 8.00%
Tier 1 risk-based capital ratio 14.14% 4.00%
Leverage ratio 9.81% 3.00%
Improved operating results and a consistent dividend program, coupled with an
effective management of credit and interest rate risk will be the key elements
towards the Company continuing to maintain its present strong capital position
in the future.
20
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Neither the Company nor its subsidiary Bank is currently involved in
any material legal proceedings, other than routine litigation
incidental to their business.
Item 2 - Changes in Securities
None
Item 3 - Defaults upon Senior Securities
None
Item. 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to stockholders during the third quarter
of 1997.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) All exhibits included with this filing follow the signature page.
1. Exhibit 11, Computation of Per Share Earnings, is filed
herewith. 2. Exhibit 27, Financial Data Schedule, is filed
herewith.
b). The Company did not file any Form 8-K, Current Reports during the
quarter ended September 30, 1997.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST NATIONAL BANKSHARES CORPORATION
By /S/ L. Thomas Bulla
--------------------------------------
L. Thomas Bulla
President and Chief Executive Officer
By /S/ Keith E. Morgan
--------------------------------------
Keith E. Morgan
Secretary & Treasurer
By /S/ Jack D. Whitt
--------------------------------------
Jack D. Whitt
Chief Financial Officer
First National Bank
(Principal Financial and
Accounting Officer)
Date: 11/12/97
--------
22
<PAGE>
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
Primary Earnings Per Share
Primary Earnings per Share is calculated based upon the Company's net
income after income taxes, divided by the weighted average number of shares
outstanding during the fiscal period.
Fully Diluted Earnings Per Share
Fully Diluted Earnings Per Share is calculated based upon the Company's net
income after income taxes, divided by the weighted average number of shares
outstanding during the period plus all exercisable stock options
outstanding but not yet exercised at the end of the period.
As of September 30, 1997, the Company had 3,000 exercisable stock options
outstanding. No options have yet been exercised.
23
<PAGE>
EXHIBIT 27
FINANCIAL DATA SCHEDULE
DATE: 09/30/97
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000814178
<NAME> FIRST NATIONAL BANKSHARES CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1.00000
<CASH> 3,754
<INT-BEARING-DEPOSITS> 66,957
<FED-FUNDS-SOLD> 4,540
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,038
<INVESTMENTS-CARRYING> 11,323
<INVESTMENTS-MARKET> 11,387
<LOANS> 66,977
<ALLOWANCE> 613
<TOTAL-ASSETS> 94,740
<DEPOSITS> 77,131
<SHORT-TERM> 2,437
<LIABILITIES-OTHER> 1,010
<LONG-TERM> 5,000
0
0
<COMMON> 963
<OTHER-SE> 8,197
<TOTAL-LIABILITIES-AND-EQUITY> 94,740
<INTEREST-LOAN> 4,279
<INTEREST-INVEST> 806
<INTEREST-OTHER> 92
<INTEREST-TOTAL> 5,177
<INTEREST-DEPOSIT> 2,015
<INTEREST-EXPENSE> 2,223
<INTEREST-INCOME-NET> 2,954
<LOAN-LOSSES> 22
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,384
<INCOME-PRETAX> 868
<INCOME-PRE-EXTRAORDINARY> 868
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 550
<EPS-PRIMARY> 2.86
<EPS-DILUTED> 2.81
<YIELD-ACTUAL> 4.84
<LOANS-NON> 851
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 654
<CHARGE-OFFS> 105
<RECOVERIES> 42
<ALLOWANCE-CLOSE> 613
<ALLOWANCE-DOMESTIC> 613
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
