<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 33-16366
SUMMIT BANK CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
GEORGIA 58-1722476
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
4360 Chamblee-Dunwoody Road
Atlanta, Georgia 30341
(Address of principal executive offices, including Zip Code)
(770) 454-0400
(Registrant's telephone number, including area code)
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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of capital stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at August 9, 1996
----- -----------------------------
<S> <C>
Common Stock. $.0l par value 1,407,688
</TABLE>
The Exhibit Index Appears on Page 13
PAGE 1 OF 15
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
(In thousands) 1996 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 6,776 $ 7,220
Federal funds sold 3,900 3,525
Interest-bearing deposits in other banks 70 60
Investment securities available for sale, at fair value 38,174 32,110
Other investments 681 592
Loans, net of unearned income 81,304 76,695
Loans held for sale 2,420 1,482
Less: allowance for loan losses (1,964) (1,686)
- ----------------------------------------------------------------------------------------------------------------
Net loans 81,760 76,491
- ----------------------------------------------------------------------------------------------------------------
Premises and equipment, net 3,625 2,932
Customers' acceptance liability 2,487 1,907
Other real estate -- --
Deferred income tax 693 205
Other assets 2,703 5,034
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 140,869 $ 130,076
================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $ 23,994 $ 24,080
Interest-bearing:
Demand 30,716 29,193
Savings 7,700 7,734
Time, $100,000 and over 25,383 22,766
Other time 31,904 26,043
- ----------------------------------------------------------------------------------------------------------------
Total deposits 119,697 109,816
- ----------------------------------------------------------------------------------------------------------------
Obligation under capital lease 136 152
Other borrowed funds 1,000 --
Acceptances outstanding 2,487 1,907
Other liabilities 1,852 2,788
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 125,172 114,663
- ----------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock 14 14
Additional paid-in capital 12,123 12,123
Retained earnings 3,795 2,939
Net unrealized holding (losses)/gains on investment securities
available for sale, net of income taxes (235) 337
- ----------------------------------------------------------------------------------------------------------------
Total stockholders' equity 15,697 15,413
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 140,869 $ 130,076
================================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 2 OF 15
<PAGE> 3
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
(Dollars in thousands, except share and per share amounts) 1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Loans, including fees $ 2,110 $ 1,899 $ 4,240 $ 3,781
Interest-bearing deposits in other banks 1 1 2 2
Federal funds sold 34 105 90 195
Investment securities-taxable 180 273 292 431
Mortgage-backed securities 471 245 934 426
- -------------------------------------------------------------------------------------------------------------------
Total interest income 2,796 2,523 5,558 4,835
- -------------------------------------------------------------------------------------------------------------------
Interest expense
Time deposits, $100,000 and over 318 347 693 620
Other deposits 783 663 1,485 1,271
Short-term borrowings and obligation
under capital lease 20 4 28 9
- -------------------------------------------------------------------------------------------------------------------
Total interest expense 1,121 1,014 2,206 1,900
- -------------------------------------------------------------------------------------------------------------------
Net interest income 1,675 1,509 3,352 2,935
Provision for loan losses 146 163 287 327
- -------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 1,529 1,346 3,065 2,608
- -------------------------------------------------------------------------------------------------------------------
Non-interest income
Fees for international banking services 283 282 558 562
SBA loan servicing fees 123 119 234 213
Service charge income 43 53 95 112
Overdraft and NSF charges 92 95 172 166
Gains on sales of loans 184 82 351 175
Net gains/(losses) on sales of investment securities -- (21) 116 (21)
Other 70 71 162 140
- -------------------------------------------------------------------------------------------------------------------
Total non-interest income 795 681 1,688 1,347
- -------------------------------------------------------------------------------------------------------------------
Non-interest expenses
Salaries and employee benefits 836 713 1,665 1,393
Equipment 106 101 221 195
Net occupancy 102 102 199 198
Other operating expenses 541 517 955 1,010
- -------------------------------------------------------------------------------------------------------------------
Total non-interest expenses 1,585 1,433 3,040 2,796
- -------------------------------------------------------------------------------------------------------------------
Income before income taxes 739 594 1,713 1,159
- -------------------------------------------------------------------------------------------------------------------
Income tax expense 273 220 646 422
- -------------------------------------------------------------------------------------------------------------------
Net income $ 466 $ 374 $ 1,067 $ 737
- -------------------------------------------------------------------------------------------------------------------
Net income per common share and comon share equivalents $ .29 $ .24 $ .67 $ .48
- -------------------------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding and
common share equivalents 1,630,610 1,630,610 1,630,610 1,630,610
- -------------------------------------------------------------------------------------------------------------------
Dividends declared per common share $ .08 $ .07 $ .15 $ .14
===================================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 3 OF 15
<PAGE> 4
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30,
(In thousands) 1996 1995
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,067 $ 737
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of leasehold improvements 130 103
Deferred tax benefit (142) (196)
Net amortization of premiums/discounts on
investment securities 39 31
Amortization of negative goodwill (55) (55)
Provision for loan losses 287 327
Gains on sales of loans (351) (174)
Proceeds from sales of loans 3,281 3,108
Net gains on sales of investment securities (116) (21)
Changes in other assets and liabilities:
Decrease (increase) in other assets 3,064 (123)
Decrease in other liabilities (881) (25)
- --------------------------------------------------------------------------------------------------------------
Net cash provided by operation activities 6,323 3,712
- --------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities available for sale 1,350 1,260
Principal collections on investment securities available for sale 2,740 --
Proceeds from sales of investment securities available for sale 1,920 993
Purchases of investment securities available for sale (13,004) (4,553)
Purchases of investment securities held to maturity -- (14,159)
Proceeds from maturities and principal collections on investment
securities held to maturity -- 1,454
Loans made to customers, net of principal collected on loans (9,219) (91)
Purchases of premises and equipment (823) (418)
- --------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (17,036) (15,514)
- --------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase in demand and savings deposits 1,403 8,398
Net increase in time deposits 8,478 4,508
Principal payments for obligation under capital lease (16) (14)
Dividends paid (211) (197)
Net increase in borrowed funds 1,000 16
- --------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 10,654 12,711
- --------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (59) 909
Cash and cash equivalents at beginning of period 10,805 9,872
- --------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 10,746 $ 10,781
==============================================================================================================
Supplemental disclosures of cash paid during the period:
Interest $ 2,803 $ 1,807
Income taxes $ 775 $ 640
==============================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 4 OF 15
<PAGE> 5
SUMMIT BANK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The financial statements included herein have been prepared by Summit Bank
Corporation and Subsidiaries (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been omitted, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of management, the information
furnished in the condensed consolidated financial statements reflects all
adjustments necessary to present fairly the Company's financial position,
results of operations and cash flows for such interim periods. Management
believes that all interim period adjustments are of a normal recurring
nature. These consolidated financial statements should be read in
conjunction with the Company's audited financial statements and the notes
thereto as of December 31, 1995, included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, The Summit National Bank (the "Bank")
and The Summit Merchant Banking Corporation. All intercompany accounts
and transactions have been eliminated in consolidation.
2. ACCOUNTING POLICIES
Reference is made to the accounting policies of the Company described in
the notes to consolidated financial statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.
3. RECLASSIFICATIONS
Certain 1995 amounts have been reclassified for comparative purposes in
order to conform the prior period to the 1996 presentation.
PAGE 5 OF 15
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the three-month and six-month periods ended June 30, 1996 and 1995
Performance Overview
- --------------------
Summit Bank Corporation and Subsidiaries (the "Company") reported net income of
$466,000 for the second quarter of 1996, representing a 25% increase over
earnings for the same period last year. The earnings improvement is attributed
to higher net interest income resulting primarily from a higher volume of
earning assets. Net earnings per share for second quarter 1996 were $.29 as
compared to $.24 for second quarter 1995. The Company's six-month earnings for
1996 were $1,067,000 compared to $737,000 last year, an increase of 45%. The
annualized return on average stockholders' equity for 1996 was 13.7% compared
to 10.8% for the 1995 six-month period, while the return on average assets
increased to 1.6% compared to 1.2% in 1995. Book value per share increased to
$11.15 at June 30, 1996, from $10.95 at December 31, 1995.
Net interest income increased 11% in second quarter 1996 to $1.7 million as
compared to the same period last year due primarily to a higher level of
earning assets. For the six month comparable periods, 1996 net interest income
increased 14% to $3.4 million from $2.9 million. The Company's net interest
margin through June 30, 1996 remained constant at 5.8% for both six-month
periods.
Provision for loan losses declined slightly to $146,000 from $163,000 for the
respective second quarters of 1996 and 1995. Gross charged off loans for the
six-months ended June 30, 1996 were $125,000 offset by recoveries of $116,000,
resulting in an annualized net charge-off rate of .02% of total loans. This
compares to net losses of $50,000 for the comparable period last year resulting
in annualized net charge-offs of .14%. Non-interest income increased 17% to
$795,000 for second quarter 1996 from $681,000 last year. Net gains from sales
of loans increased to $184,000 during the quarter, up sharply from $82,000 for
second quarter last year. The fluctuation was partly attributed to timing of
several 1995 sales which were delayed to the latter half of the year. This
delay was largely due to several loans in a construction phase that were not
sold until the respective projects were completed. Net gains from sales of
loans also include excess servicing income resulting from loan sales, which, in
1996, is sufficiently material to warrant quarterly recognition. For the
six-month comparable periods, non-interest income increased 25%, to $1.7
million in 1996 from $1.3 million in 1995. Net gains from loan sales accounted
for $176,000 of this increase while net gains from investment securities
accounted for an additional $137,000.
Non-interest expenses increased 11% in the second quarter of 1996 as compared
to the same period last year. This increase was mostly attributed to higher
personnel costs resulting from recent expansion. Total personnel costs
increased $123,000 in 1996 for the comparable three month periods and $272,000
for the comparable six-month periods. In addition to staffing a new branch
which opened in May 1996, the Bank's fourth office, other key positions have
been added over the last twelve months bringing total full-time staff positions
to 80 as compared to 69 at June 30, 1995. Equipment expenses increased $5,000,
or 5%, to $106,000 in second quarter 1996 as compared to the same period last
year. Occupancy expenses remained stable at $102,000 for both quarters. For
the six-month periods equipment expenses and occupancy costs increased $26,000,
or 13%, and $1,000, respectively. Other operating expenses increased 5% to
$541,000 for the three-month period ended June 30, 1996 as compared to the same
quarter last year. For the six month periods, other operating expenses
declined 5%, or $55,000, in 1996 to $955,000. Savings resulting from
suspension of Federal Deposit Insurance Corporation ("FDIC") insurance premiums
accounted for a $103,000 reduction in other operating expenses while data/item
processing expenses increased $71,000. Additionally, marketing expenses
increased $42,000 as compared to the six-month period last year. This increase
was the result of a routine advertising campaign and costs associated with the
new branch opening. The Company's efficiency ratio for six-month period of 1996
improved significantly to 60% compared to 65% for the same period last year.
Total assets at June 30, 1996 increased to $141 million, an increase of 15%
during the last twelve months and 8% since year end 1995. Deposits have grown
$16.2 since June 30, 1995, or 16%, and $9.9 million, or 9%, since December 31,
1995. The Bank's new office which opened in May 1996 generated approximately
$4.8 million of this deposit increase. Net loans increased $5.3 million to
$81.8 million at June 30, 1996, representing a 7% increase since December 31,
1995. During the last twelve months net loans increased 18%, or $12.2 million,
from $69.6 million at June 30, 1995. During 1996 the Company had $1 million
borrowed under an advance from the Federal Home Loan Bank.
PAGE 6 OF 15
<PAGE> 7
Investment in premises and equipment increased to $3.6 million at June 30, 1996
as compared to $2.9 million at year end 1995. This increase represents the
additional branch acquired by the Bank during first quarter 1996.
Additionally, the Bank has entered into an agreement to acquire a new branch
facility in the rapidly growing Gwinnett county market. This will be the
Bank's fifth banking office now placing the Company in the prime North
metropolitan Atlanta markets of DeKalb, Cobb and Gwinnett counties. The Bank
expects to open this new office by year-end 1996. Other assets declined to
$2.7 million at June 30, 1996, from $5 million at year-end 1995, as a result of
the completion of SBA loan sales in early 1996.
Asset Quality
- -------------
Non-performing assets increased to $154,000 at June 30, 1996 compared to
$111,000 at year end 1995. Non-performing assets represented .18% of total
loans as of June 30, 1996 compared to .14% at December 31, 1995. The Company
had $154,000 of loans 90 days or more past due at June 30, 1996.
NON-PERFORMING ASSETS
---------------------
<TABLE>
<CAPTION>
June 30, December 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Loans on nonaccrual $ 154 $ 111
Other real estate -- --
Restructured loans -- --
- ------------------------------------------------------------------------------------------------------------
Total non-performing assets $ 154 $ 111
============================================================================================================
Loans 90 days past due and still accruing interest $ -- --
Total non-performing assets as a
percentage of total loans and ORE .18% .14%
Loans ninety days past due as a
percentage of total loans .18% --%
</TABLE>
PAGE 7 OF 15
<PAGE> 8
The allowance for loan losses increased to $1,964,000 at June 30, 1996 from
$1,686,000 at year end 1995, an increase of 16%. Gross charge-offs of $125,000
offset by recoveries of $116,000, resulted in a net annualized charge-off rate
of .02% of average total loans compared to .43% for the entire year of 1995.
The allowance for loan losses represented 2.35% of total loans outstanding at
June 30, 1996.
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES AT JUNE 30, 1996
<TABLE>
<CAPTION>
(In thousands)
------------------------------------------------------------------------------------------
<S> <C>
Allowance for loan losses at December 31, 1995 $1,686
------------------------------------------------------------------------------------------
Charge-offs:
Commercial, financial, and agricultural 84
Real estate --
Installment loans to individuals 41
------------------------------------------------------------------------------------------
Total 125
------------------------------------------------------------------------------------------
Recoveries:
Commercial, financial, and agricultural 71
Real estate --
Installment loans to individuals 45
------------------------------------------------------------------------------------------
Total 116
------------------------------------------------------------------------------------------
Net charge-offs 9
------------------------------------------------------------------------------------------
Provision for loan losses charged to income 287
------------------------------------------------------------------------------------------
Allowance for loan losses at June 30, 1996 $1,964
------------------------------------------------------------------------------------------
</TABLE>
The loan portfolio is periodically reviewed to evaluate the outstanding loans
and to measure both the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses and internal credit ratings. Based on this analysis,
management considers the allowance for loan losses at June 30, 1996 to be
adequate to cover possible loan losses in the portfolio as of that date.
However, because of the inherent uncertainty of assumptions made during the
evaluation process, there can be no assurance that loan losses in future
periods will not exceed the allowance for loan losses or that additional
allocations to the allowance will not be required.
Page 8 of 15
<PAGE> 9
Liquidity and Capital Adequacy
- ------------------------------
Liquidity has continued to improve during 1996 as a result of the growth in
deposits. At June 30, 1996, the Company's net loan to deposit ratio was 68.3%,
down from 69.7% at year end. The Bank's liquid assets as a percent of total
deposits was 40% at June 30, 1996. Management also analyzes the level of
off-balance sheet assets such as unfunded loan commitments and outstanding
letters of credit as they relate to the levels of cash, cash equivalents,
liquid investments, and available federal funds lines to ensure that no
potential shortfall exists. Additionally, the Bank has $15 million of
borrowing capacity under a secured line of credit available from the Federal
Home Loan Bank of Atlanta. Based on this analysis, management believes that
the Company has adequate liquidity to meet short-term operational requirements.
Stockholders' equity of the Company increased $284,000 to $15.7 million at June
30, 1996, an increase of 1.8% from December 31, 1995, and 12.5% from June 30,
1995. The capital level of the Bank exceeds all prescribed regulatory capital
guidelines. Regulations require that most highly rated national banks maintain
a minimum Tier 1 leverage ratio of 3%, and require other banks to maintain a
minimum Tier 1 leverage ratio of 3% plus an additional cushion of at least 1 to
2 percentage points. Tier 1 capital consists of stockholders' equity less
certain intangible assets. The Bank's Tier 1 leverage ratio was 9.4 % at June
30, 1996 compared to 11.9% at year end 1995 as a result of asset growth.
Regulations require that the Bank maintain a minimum total risk weighted
capital ratio of 8% with 50%, or 4%, of this amount made up of Tier 1 capital.
Risk-weighted assets consist of balance sheet assets adjusted by risk category
and off-balance sheet asset equivalents similarly adjusted. At June 30, 1996,
the Bank had a risk-weighted total capital ratio of 14.8%, unchanged from year
end 1995, and a Tier 1 risk-weighted capital ratio of 13.5% compared to 13.6%
at year end 1995.
Page 9 of 15
<PAGE> 10
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings - Not Applicable
Item 2. Changes in Securities - Not Applicable
Item 3. Defaults Upon Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of the Shareholders (the "Meeting") of
the Company was held on April 27, 1996. Proxies were
solicited prior to the meeting from shareholders of record at
the close of business on March 15, 1996, for the purpose of
electing seven members to the Board of Directors.
Article Fourteen of the Company's Amended and Restated
Articles of Incorporation provides that the Board of Directors
shall be divided into three classes with each class to be as
nearly equal in number as possible. Article Fourteen also
provides that the three classes of directors are to have
staggered terms, so that the terms of only approximately
one-third of the Board will expire at each annual meeting of
shareholders and each director serves a three-year term.
Seven Class I Directors were nominated at the meeting to serve
until the Annual Shareholders Meeting in 1999: Aaron I.
Alembik, Pin Pin Chau, Bruno C. Bucari, W. Clayton Sparrow,
Jr., Sion Nyen (Francis) Lai, Shih Chien (Raymond) Lo, and
Jack N. Halpern. All seven nominees were elected.
Proxies for 59.5%, or 837,906 of the 1,407,688 outstanding
common shares, were received prior to the meeting. A quorum
was present by proxy. All nominees received a majority of the
votes cast for re-election.
The following Class II and Class III directors whose terms did
not expire at the Annual Shareholders meeting continued to
serve as directors following the meeting: Paul C.Y. Chu,
Peter Cohen, Donald R. Harkleroad, Daniel T. Huang, Shafik H.
Ladha, Cecil M. Phillips, Howard H.L. Tai, P. Carl Unger,
Gerald L. Allison, Albert P Behler, James S. Lai, Roger C.C.
Lin, Nack Y. Paek, Carl L. Patrick, Jr., and David Yu.
Item 5. Other Information - Not Applicable
Page 10 of 15
<PAGE> 11
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 11. 1
Statement Regarding Computation of Per Share Earnings
Exhibit 27.1
Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K - none
Page 11 of 15
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed by the undersigned,
thereunto duly authorized.
SUMMIT BANK CORPORATION
BY: /S/ David Yu
----------------------------------------------------
David Yu
President and Chief Executive Officer
BY: /S/ Gary K. McClung
----------------------------------------------------
Gary K. McClung
Executive Vice President
(Principal Financial Officer
and Principal Accounting Officer)
DATE: August 9, 1996
----------------------------------------------------
Page 12 of 15
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
11.1 Statement Regarding Computation of Per Share Earnings 14
27.1 Financial Data Schedule (for SEC use only) 15
</TABLE>
Page 13 of 15
<PAGE> 1
Exhibit 11.1
Statement Regarding Computation
of Per Share Earnings
<TABLE>
<CAPTION>
Statement Regarding Computation of Three months Six months
Per Share Earnings ended June 30, ended June 30,
- ----------------------------------- --------------------------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Earnings per share:
Weighted average shares outstanding 1,407,688 1,407,688 1,407,688 1,407,688
Net income per share $ .33 $ .27 $ .76 $ .52
Primary earnings per share:
Weighted average shares outstanding 1,407,688 1,407,688 1,407,688 1,407,688
Dilutive warrants 463,235 463,235 463,235 463,235
Dilutive stock options 41,225 41,225 41,225 41,225
Repurchased under treasury stock
method(1) (281,538) (281,538) (281,538) (281,538)
---------- ---------- ---------- ----------
Weighted average common shares
outstanding and common share
equivalents 1,630,610 1,630,610 1,630,610 1,630,610
---------- ---------- ---------- ----------
Net income $ 466,000 $ 374,000 $1,067,000 $ 737,000
Imputed interest income under the
treasury stock method (net of tax) 12,000 22,000 30,000 47,000
---------- ---------- ---------- ----------
Imputed net income 478,000 396,000 1,097,000 784,000
========== ========== ========== ==========
Net income per share $ .29 $ .24 $ .67 $ .48
========== ========== ========== ==========
</TABLE>
(1) Dilutive warrants and options calculated up to 20% of total shares
outstanding in the applicable periods.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1996 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,776
<INT-BEARING-DEPOSITS> 70
<FED-FUNDS-SOLD> 3,900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 38,174
<INVESTMENTS-CARRYING> 681
<INVESTMENTS-MARKET> 681
<LOANS> 83,724
<ALLOWANCE> 1,964
<TOTAL-ASSETS> 140,869
<DEPOSITS> 119,697
<SHORT-TERM> 1,000
<LIABILITIES-OTHER> 4,475
<LONG-TERM> 0
0
0
<COMMON> 14
<OTHER-SE> 15,683
<TOTAL-LIABILITIES-AND-EQUITY> 140,869
<INTEREST-LOAN> 4,240
<INTEREST-INVEST> 1,226
<INTEREST-OTHER> 92
<INTEREST-TOTAL> 5,558
<INTEREST-DEPOSIT> 2,178
<INTEREST-EXPENSE> 2,206
<INTEREST-INCOME-NET> 3,352
<LOAN-LOSSES> 287
<SECURITIES-GAINS> 116
<EXPENSE-OTHER> 3,040
<INCOME-PRETAX> 1,713
<INCOME-PRE-EXTRAORDINARY> 1,713
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,067
<EPS-PRIMARY> .67
<EPS-DILUTED> .67
<YIELD-ACTUAL> 5.76
<LOANS-NON> 154
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,686
<CHARGE-OFFS> 125
<RECOVERIES> 116
<ALLOWANCE-CLOSE> 1,964
<ALLOWANCE-DOMESTIC> 1,964
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
