FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30,1998 Commission file
number: 33-18888
ORRSTOWN FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its
charter)
Commonwealth of Pennsylvania
23-2530374
(State or other jurisdiction of incorporation
(I.R.S. Employer
or organization)
Identification No.)
77 East King Street
17257
P.O. Box 250, Shippensburg, Pennsylvania
(Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(717) 532-6114
Indicate by check mark whether the registrant (1) has filed all reports
required
to be filled by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding
12 months
(or for 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.
X
YES --------------- N----
- ----------
Class Outstanding at
October 31,1998
(Common Stock, no par value)
1,027,658
ORRSTOWN FINANCIAL SERVICES, INC.
INDEX
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial statements ( unaudited )
Condensed consolidated balance sheets - September 30,1998
and December 31, 1997 3
Condensed consolidated statements of income - Three months
ended September 30,1998 and 1997 4
Condensed consolidated statements of income - Nine months
ended September 30,1998 and 1997 5
Condensed consolidated statements of comprehensive income -
Three months & Nine months ended September 30,199 6
Condensed consolidated statements of cash flows - Nine months
ended September 30,1998 and 1997 7
Notes to condensed consolidated financial statements 8-9
Item 2. Management's discussion and analysis of financial condition
and results of operations 10-13
PART II - OTHER INFORMATION 14
Signatures 15
Data Table 16
PART I - FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30,
December 31,
1998
1997*
(Unaudited)
ASSETS
(000
Omitted)
Cash and due from banks 5,947
5,963
Interest - bearing deposits with banks 18
16
Federal funds sold 1,116
2,858
Securities available for sale 45,875
46,208
Federal Home Loan Bank, Federal Reserve and
Atlantic Central Bankers Bank Stock, at cost
which approximates market value 1,119
983
Loans 156,209
128,331
Allowance for loan losses (1,971)
(1,767)
-----------
- -----------
Net Loans 154,238
126,564
Bank premises and equipment, net 5,232
5,130
Other assets 7,457
2,520
-----------
- -----------
Total assets 221,002
$ 190,242
===========
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing $ 20,997
$ 17,649
Interest bearing 155,050
142,931
-----------
- -----------
Total deposits 176,047
160,580
Federal funds purchased and other borrowed money 21,093
8,569
Other liabilities 3,609
2,828
-----------
- -----------
Total liabilities 200,749
171,977
-----------
- -----------
STOCKHOLDERS' EQUITY
Common stock, no par value - $ .2083 stated
value per share at September 30, 1998 and
December 31, 1997, 2, 000, 000 shares authorized
with 1, 026,417 shares issued at September 30, 1998 and
1,025,094 issued at December 31, 1997 214
214
Additional paid - in capital 12,410
12,352
Retained earnings 6,305
4,730
Unrealized holding gain, net of tax
$682 and $499 at September 30, 1998 and
December 31, 1997, respectively 1,324
969
-----------
- -----------
Total stockholders' equity 20,253
18,265
-----------
- -----------
Total liabilities and stockholders'
equity $ 221,002
$ 190,242
===========
===========
* Condensed from audited financial statements
The accompanying notes are an integral part of these condensed financial
statements.
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended September 30, 1998 and 1997
(UNAUDITED)
1998 1997
(Unaudited)
(Unaudited)
(000 Omitted)
Interest Income
Interest and fees on loans $ 3,372 $
2,764
Interest on federal funds sold 23
44
Interest and dividends on investment securities 741
666
Interest income on deposits with banks 2
0
--------- -------
- --
Total interest income 4,138
3,474
Interest Expense
Interest on deposits 1,648
1,421
Interest on borrowed money 209
83
--------- -------
- --
Total interest expense 1,857
1,504
--------- -------
- --
Net interest income 2,281
1,970
Provision for loan losses 75
45
--------- -------
- --
Net interest income after provision for loan
losses 2,206
1,925
--------- -------
- --
Other Income
Service charges on deposits 220
155
Other service charges 122
81
Trust department income 194
115
Other income 14
0
Net gains on available for sale securities 11
5
--------- -------
- --
Total other income 561
356
--------- -------
- --
Other Expenses
Salaries and employee benefits 864
707
Net occupancy and equipment expenses 212
170
Other operating expenses 491
420
--------- -------
- --
Total other expense 1,567
1,297
--------- -------
- --
Income before income taxes 1,200
984
Income tax expenses 335
256
--------- -------
- --
Net income $ 865 $
728
=========
=========
Weighted average number of shares outstanding *********
*********
Net income per share $ 0.85 $
0.71
Cash dividends declared per share $ 0.24 $
0.20
The accompanying notes are an integral part of these condensed financial
statements.
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 1998 and 1997
(UNAUDITED)
1998 1997
(Unaudited)
(Unaudited)
(000 Omitted)
Interest Income
Interest and fees on loans $ 9,367 $ 7,901
Interest on federal funds sold 198 164
Interest and dividends on investment securities 2,262 1,845
Interest income on deposits with banks 5 4
--------- --------
- -
Total interest income 11,832 9,914
Interest Expense
Interest on deposits 4,838 4,011
Interest on borrowed money 526 211
--------- --------
- -
Total interest expense 5,364 4,222
--------- --------
- -
Net interest income 6,468 5,692
Provision for loan losses 225 135
--------- --------
- -
Net interest income after provision for loan
losses 6,243 5,557
--------- --------
- -
Other Income
Service charges on deposits 614 449
Other service charges 346 225
Trust department income 571 402
Other income 45 41
Net gains(losses) on available for sale securitie (1) 5
--------- --------
- -
Total other income 1,575 1,122
--------- --------
- -
Other Expenses
Salaries and employee benefits 2,502 2,103
Net occupancy and equipment expenses 621 539
Other operating expenses 1,527 1,273
--------- --------
- -
Total other expense 4,650 3,915
--------- --------
- -
Income before income taxes 3,168 2,764
Income tax expenses 876 758
--------- --------
- -
Net income $ 2,292 $ 2,006
=========
=========
Weighted average number of shares outstanding *********
*********
Net income per share $ 2.24 $ 1.96
Cash dividends declared per share $ 0.70 $ 0.57
The accompanying notes are an integral part of these condensed financial
statements.
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended September 30, 1998 and 1997
(UNAUDITED)
1998
1997
(000 Omitted)
Net Income $ 865 $
728
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale 362
348
Comprehensive Income $ 1,227 $
1,076
===========
============
The accompanying notes are integral part of these condensed financial
statements.
********************************************************************************
*********
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Nine Months Ended September 30,1998 and
1997
(UNAUDITED)
1998
1997
(000 Omitted)
Net Income $ 2,292 $
2,006
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale 356
426
Comprehensive Income $ 2,648 $
2,432
===========
============
The accompanying notes are integral part of these condensed financial
statements.
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN
BANK
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30,
1998
and 1997
(UNAUDITED)
1998
1997
(Unaudited)
(Unaudited)
(000 Omitted)
Cash flows from operating activities:
Net income $ 2,292
$ 2,006
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 314
252
Provision for loan losses 225
135
Other, net (37)
(14)
----------
- ---------
Net cash provided by operating activities 2,794
2,379
Cash flows from investing activities:
Net (increase) decrease in interest bearing
deposits with banks (2)
1,532
Purchase of available for sale securities (8,267)
(11,818)
Sales and Maturities of available for sale securities 9,003
2,595
Net (increase) in loans (27,857)
(13,920)
Purchases of bank premises and equipment (384)
(1,026)
Increase in other assets (4,969)
0
Increase in other liabilities 598
0
----------
- ---------
Net cash (used) by investing activities (31,878)
(22,637)
----------
- ---------
Cash flows from financing activities:
Net increase in deposits 15,467
14,578
Cash dividends paid (718)
(585)
Cash paid in lieu of fractional shares 0
(22)
Dividend reinvestment plan purchases 59
0
Net increase in purchased funds 5,024
0
Proceeds from long - term debt 7,500
3,000
Payments on debt (6)
(5)
----------
- ---------
Net cash provided by financing activities 27,326
16,966
----------
- ---------
Net increase (decrease) in cash and cash equivalents (1,758)
(3,292)
Cash and cash equivalents at beginning of period 8,821
8,172
----------
- ---------
Cash and cash equivalents at end of period $ 7,063
$ 4,880
==========
=========
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest $ 4,839
$ 3,860
Income Taxes 902
724
Supplemental schedule of noncash investing and financing activities:
Unrealized gain (loss) on investments available for
sale (net of deferred taxes of $183 and $219 at
September 30, 1998 and 1997, respectively 356
425
5% Stock dividend issued May, 1997 0
1,736
The accompanying notes are an integral part of these condensed financial
statements.
ORRSTOWN FINANCIAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(UNAUDITED)
NOTE 1. Basis of Presentation
The financial information presented at and for the three months ended
and nine
months ended September 30, 1998 and 1997 is unaudited. Information
presented
at December 31, 1997 is condensed from audited year-end financial
statements. However, unaudited information reflects all adjustments
(consisting solely of normal recurring adjustments) that are, in the
opinion of management, necessary for a fair presentation of the
financial
position, results of operations and cash flows for the interim period.
NOTE 2. Principles of Consolidation
The consolidated financial statements include the accounts of the
corporation and its
wholly-owned subsidiary, Orrstown Bank. All significant intercompany
transactions
and accounts have been eliminated.
NOTE 3. Cash Flows
For purposes of the statements of cash flows, the corporation has
defined cash and
cash equivalents as those amounts included in the balance sheet
captions " cash
and due from banks " and " federal funds sold ". As permitted by
Statement of Financial
Accounting Standards No. 104, the corporation has elected to present
the net increase
or decrease in deposits in banks, loans and time deposits in the
statement of cash flows.
NOTE 4. Federal Income Taxes
For financial reporting purposes the provision for loan losses charged
to operating
expense is based on management's judgment, whereas for federal income
tax purposes,
the amount allowable under present tax law is deducted. Additionally,
certain expenses
are charged to operating expense in the period the liability is
incurred for financial reporting
purposes, whereas for federal income tax purposes, these expenses are
deducted when
paid. As a result of these timing differences, deferred income taxes
are provided in the
financial statements. Income tax expense is less than the amount
calculated using the
statutory tax rate primarily as a result of tax exempt income earned
from state and political
subdivision obligations.
NOTE 5. Other Commitments
In the normal course of business, the bank makes various commitments
and incurs
certain contingent liabilities which are not reflected in the
accompanying financial
statements. These commitments include various guarantees and
commitments
to extend credit and the bank does not anticipate any losses as a
result of these
transactions.
Note 6. Changes in Common Stock
On March 20, 1997 the Board of Directors of Orrstown Financial
Services, Inc. declared
a 5 % stock dividend payable May 15, 1997 to shareholders of record
May
1, 1997.
Earnings per share, dividends per share and weighted average shares
outstanding
references have been restated to reflect the 5 % stock dividend for
all
periods presented.
In 1998, a dividend reinvestment plan was approved and installed. The
dividend paid
during the third quarter of 1998 was the first where shareholders were
able to elect
reinvestment.
In October 1998, the Board of Directors approved a two for one stock
split, effective
November 21, 1998 for shareholders of record on November 2, 1998.
Note 7. Investment Securities
Management determines the appropriate classification of securities at
the time of
purchase. If management has the intent and the corporation has the
ability at the time
of purchase to hold securities until maturity or on a long - term
basis, they are classified
as securities held to maturity and carried at amortized historical
cost. Securities to be held
for indefinite periods of time and not intended to be held to maturity
or on a long - term
basis are classified as available for sale and carried at fair value.
Securities held for indefinite
periods of time include securities that management intends to use as
part of its asset
and liability management strategy and that may be sold in response to
changes in interest
rates, resultant prepayment risk and other factors related to
interest
rate and resultant
prepayment risk changes.
Realized gains and losses on dispositions are based on the net
proceeds
and the adjusted
book value of the securities sold, using the specific indentification
method. Unrealized
gains and losses on investment securities available for sale are based
on the difference
between book value and fair value of each security. These gains and
losses are credited
or charged to shareholders' equity, whereas realized gains and losses
flow through the
corporation's operations.
Management has classified all investments securities as "available for
sale". At September 30
1998 fair value exceeded amortized cost by $2,006,000. This resulted
in an increase
in stockholders' equity of $1,324,000 after recognizing the tax
effects
of the unrealized
gains. At December 31, 1997, fair market value exceeded amortized
cost
by $ 1,468,000
resulting in an increase in stockholders' equity of $969,000 after
recognizing the tax
effects of the unrealized gains.
Note 8. Year 2000 (Y2K) Data Processing Position
The Corporation is in the renovation and testing stage of its Y2K
preparedness. The original
Y2K budget called for $100,000 of expenditures. The $100,000 estimate
still appears to be
appropriate of which approximately $70,000 has been expensed to date.
Note 9. New Pronouncements
The adoption of Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income has resulted in the addition of the
statement of comprehensive income.
ORRSTOWN FINANCIAL SERVICES, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION
AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Summary
Orrstown Financial Services, Inc. recorded net income
of $ 865,000 for the third quarter of
1998 compared to $ 728,000 for the same period in
1997, representing an increase of
$ 137,000 or 18.8 %. Net income per share was $ .85
during 1998's third quarter up $ .14
from the $ .71 earned during 1997's third quarter.
Net income for the first nine months of 1998 was $
2,292,000 compared to $ 2,006,000 for
the same period in 1997, representing an increase
of $
286,000 or 14.3 %. Net income
per share for the first nine months of 1998 was
$ 2.24
up $ .28 from the 1.96 per share realized
during the nine months ended September 30, 1997.
Robust balance sheet growth has fueled 1998's
earnings
gains. Despite tightening net
interest rate margins versus those of 1997, net
income
has grown significantly due to volume
factors. In addition, noninterest income has grown
at
a rate of 40.4%, more than double that of
noninterest expenses increases of 18.8%. Mergers of
competitors within our geographical
markets have provided opportunities for growth and
1998 net interest margins have improved
as we have advanced through the year with loan demand
providing outlets for the funds growth
realized in early 1998. Consequently, 1998 results
have improved each quarter.
Net income of $ 865,000 represents an increase of
10.2
% over the $785,000
earned during the second quarter of 1998.
The following statistics compare 1998's year to date
performance to that of 1997:
Third Quarter Nine Months Year to Date
1998 1997 1998 1997
Return on average assets
1.60 % 1.65 % 1.49 % 1.59 %
Return on average equity
17.42 % 16.89 % 16.05 % 16.20 %
Average equity / Average assets
9.19 % 9.73 % 9.27 % 9.83 %
A more detailed discussion of the elements having the
greatest impact on net income follows.
Net Interest Income
Third Quarter 1998 vs. Third Quarter 1997
Net interest income for the third quarter of
1998 was $ 2,281,000 representing a
growth of $ 311,000, or 15.8 % , over the $ 1,970,000
realized during 1997's third quarter.
The growth in net interest income is driven by volume
factors since spreads have tightened
Earning asset growth of 21.2 % has generated 15.8 %
net interest income growth despite a 21 basis
point tightening of net interest margin. Net
interest
margin has widened by 9 basis points over
1998's second quarter however, as loan demand has
increased.
Nine Months 1998 vs. Nine Months 1997
Net interest income for the first nine months
of 1998 was $ 6,468,000 representing
an increase of $ 776,000, or 13.6 %, over the $
5,692,000 generated during the first nine
months of 1997. Volume factors have generated the
increase despite tightened spreads from
1997. Spreads have improved as we have progressed
through 1998, however.
The table that follows states rates on a fully
taxable
equivalent basis, ( F.T.E. ) and
demonstrates the aforementioned effects:
THIRD QUARTER
NINE MONTHS YEAR TO DATE
1998
1997 1998
1997
(in thousands) Avg. Balances Rates Avg. Balances
Rates Avg. Balances Rates Avg. Balances Rates
Interest earning assets $ 201,492 8.48% $ 166,275
8.63% $ 194,096 8.44% $ 158,754
8.64%
Interest bearing liabilities 169,611 4.34% 138,969
4.29% 164,089 4.37% 132,493
4.26%
--------- --------- ----------
- -------- ---------- -------- --------- -----
- ----
Free Funds $ 31,881 $ 27,306
$ 30,007 $ 26,261
========= ==========
========== =========
Net interest income $ 2,281 $ 1,970
$ 6,468 $ 5,692
========= ==========
========== =========
Net interest sprted (F.T.E.) 4.14%
4.33% 4.07%
4.38%
=========
======== ========
=========
Free funds ratio 15.82% 16.42%
15.46% 16.54%
========= ==========
========== =========
Net interest margin ( F.T.E ) 4.83%
5.04% 4.75%
5.09%
=========
======== ========
=========
Other Income and Other Expenses
Third Quarter 1998 vs. Third Quarter 1997
Other income increased $ 205,000, or 57.6 %, from $ 356,000 during the third
quarter of 1997 to
$ 561,000 during the third quarter of 1998. Increases in service charges on
deposit accounts
accounted for $ 65,000 of the increase and trust department income increased $
79,000 as all
areas of the bank have experienced robust growth.
Other expense rose $ 270,000, or 20.8 %, from $ 1,297,000 for third quarter
1997
to $ 1,567,000
for 1998's third quarter. Salary and benefit increases contributed
$ 157,000 of
the growth. All
expense categories grew due to general growth of the bank plus the opening of a
seventh branch office
during November 1997 in Chambersburg, Pennsylvania.
Nine Months 1998 vs. Nine Months 1997
Other income increased $ 453,000, or 40.4 %, to $ 1,575,000 from $ 1,122,000 a
year ago. A $ 169,000,
or 42.0 %, increase in trust department income, plus a $165,000 increase in
service charges were the
primary contributors.
Other expenses rose $ 735,000, or 18.8 % from $ 3,915,000 during the first nine
months of 1997 to
$ 4,650,000 for the same period of 1998. All categories of noninterest expense
rose due to the
aforementioned growth plus the addition of a new branch office in late 1997.
Staff increases
contributed to growth in salaries and benefits of $399,000, the largest single
component of increase.
Income Tax Expense
Income tax expense increased $ 79,000, or 30.9 %, during 1998's third quarter
versus third quarter
1997. Income tax expense rose $ 118,000, or 15.6 % for the first nine
months of
1998 versus the same
period a year ago. The growth in income tax expense is the byproduct of
similar
increases in pretax
income since effective federal income tax rates has remained relatively stable,
as shown below:
Third Quarter Nine Months
Year to Date
1998 1997 1998
1997
Effective income tax rate 27.9% 26.0% 27.7%
27.4%
The margined federal income tax bracket is 34 % for all periods presented.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses and the other changes in the
allowance for loan
losses are shown below (in thousands) :
Quarter Ended Nine Months
Ended
September 30 September 30
1998 1997 1998
1997
Balance, beginning of
period $ 1,905 $ 1,684 $ 1,767
$ 1,620
Recoveries 2 0 16
1
Provision for loan loss
charged to income 75 45 225
135
--------- -------- --------
- ---------
Total 1,982 1,729 2,008
1,756
Losses 11 38 37
65
--------- -------- --------
- ---------
Balance, end of pe $ 1,971 $ 1,691 $ 1,971
$ 1,691
========= ======== ========
=========
In the opinion of management, the allowance, when taken as a
whole, is adequate
to absorb reasonably estimated loan losses inherent in the Bank's
loan portfolio. The
unallocated portion of the allowance for loan losses exceeds 50% at
September 30, 1998.
Loans 90 days or more past due (still accruing interest) and
those on nonaccrual
status were as follows at September 30 (in thousands) :
90 Days or More
Past Due Nonaccrual
Status
1998 1997 1998
1997
Real estate mortgage $ 241 $ 463 $ 0
$ 405
Installment loans 81 42 24
15
Commercial loans 0 12 596
0
Credit card 1 5 0
0
--------- -------- --------
- ---------
Total $ 323 $ 522 $ 620
$ 420
========= ======== ========
=========
There were no restructured loans for any of the time periods set
forth
above.
Any loans classified for regulatory purposes as loss, doubtful,
substandard or special
mention that have not been disclosed under Item III of Industry Guide
3 do not represent
or result from trends or uncertainties which management reasonably
expects will materially
impact future operating results, liquidity or capital resources.
CAPITAL RESOURCES AND BALANCE SHEET FLUCTUATIONS
A comparison of Orrstown Financial Services' capital ratios to regulatory
minimum requirements at
September 30, 1998 is as follows:
Orrstown Financia
Regulatory Minimum
Services
Requirements
Leverage ratio 8.61 %
4 %
Risk based capital ratios:
Tier I (core capital) 10.71 %
4 %
Combined tier I and tier II
(core capital plus allowance
for loan losses) 11.85 %
8 %
The robust growth experienced during 1998 has been supported by capital growth
in the form of retained
earnings. Equity represented 9.16 % of assets at September 30, 1998 which is
down slightly from 9.60 %
at December 31, 1997.
All balance sheet fluctuations exceeding 5 % have been created by either the
robust growth that has
been experienced during 1998 or single day fluctuations, except the $4,937,000,
or 196%, increase
in other assets. This was caused by the investment of approximately $4,700,000
in single premium
life insurance policy cash values supporting supplemental employee retirement
plan benefits provided
to the director and executive management groups. In addition, the $12,524,000,
or 146%, increase in
federal funds purchased and other borrowed money was caused by the borrowing of
$5,000,000
from the Federal Home Loan Bank to support an in-house fixed rate residential
mortgage program
and the popularity of the short-term repurchase aggreement program.
Management is not aware of any current recommendations by regulatory
authorities
which, if implemented,
would have a material effect on the corporation's liquidity, capital resources
or operations.
PART II - OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
Not applicable
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8 - K
(a) Exhibits - None
(b) Reports on Form 8 - K - None
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.
/s/
--------------------------
- ----------
(Kenneth R. Shoemaker,
President and CEO)
(Chief Executive
Officer)
/s/
November 10, 1998 --------------------------
- ----------
(Bradley S. Everly,
Senior Vice President and CFO)
(Chief Financial
Officer)
/s/
--------------------------
- ----------
(Robert B. Russell,
Vice President)
(Chief Accounting
Officer)
DATA TABLE
FOR 10-Q AT SEPTEMBER 30, 1998
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 5,947
<INT-BEARING-DEPOSITS> 18
<FED-FUNDS-SOLD> 1,116
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 45,875
<INVESTMENTS-CARRYING> 45,875
<INVESTMENTS-MARKET> 45,875
<LOANS> 156,209
<ALLOWANCE> 1,971
<TOTAL-ASSETS> 221,002
<DEPOSITS> 176,047
<SHORT-TERM> 5,593
<LIABILITIES-OTHER> 3,609
<LONG-TERM> 15,500
<COMMON> 214
0
0
<OTHER-SE> 20,253
<TOTAL-LIABILITIES-AND-EQUITY> 221,002
<INTEREST-LOAN> 9,367
<INTEREST-INVEST> 2,262
<INTEREST-OTHER> 203
<INTEREST-TOTAL> 11,832
<INTEREST-DEPOSIT> 4,838
<INTEREST-EXPENSE> 5,364
<INTEREST-INCOME-NET> 6,468
<LOAN-LOSSES> 225
<SECURITIES-GAINS> (1)
<EXPENSE-OTHER> 4,650
<INCOME-PRETAX> 3,168
<INCOME-PRE-EXTRAORDINARY> 2,292
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,292
<EPS-PRIMARY> 2.24
<EPS-DILUTED> 2.24
<YIELD-ACTUAL> 4.75
<LOANS-NON> 620
<LOANS-PAST> 323
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,767
<CHARGE-OFFS> 42
<RECOVERIES> 21
<ALLOWANCE-CLOSE> 1,971
<ALLOWANCE-DOMESTIC> 1,971
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
