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 June 30,1999 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 July 31,1999
(Common Stock, no par value)
2,062,054
ORRSTOWN FINANCIAL SERVICES, INC.
INDEX
Page
Part I - FINANCIAL INFORMATION
Item 1. Financial statements ( unaudited )
Condensed consolidated balance sheets - June 30,1999
and December 31, 1998 3
Condensed consolidated statements of income - Three months
ended June 30,1999 and 1998 4
Condensed consolidated statements of income - Six months
ended June 30,1999 and 1998 5
Condensed consolidated statements of comprehensive income -
Three months & Six months ended June 30,1999 and 6
Condensed consolidated statements of cash flows - Six months
ended June 30,1999 and 1998 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
Other Information 15
Signatures 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)
June 30,
December 31,
1999
1998*
(Unaudited)
ASSETS
(000 Omitted)
Cash and due from banks 6,733
7,028
Interest - bearing deposits with banks 21
27
Federal funds sold 0
8,072
Securities available for sale 53,705
49,852
Federal Home Loan Bank, Federal Reserve and
Atlantic Central Bankers Bank Stock, at cost
which approximates market value 1,285
1,285
Loans 169,902
158,632
Allowance for loan losses (2,049)
(1,971)
-----------
- -----------
Net Loans 167,853
156,661
Bank premises and equipment, net 5,565
5,224
Accrued interest receivable 1,401
1,235
Cash surrender value of life insurance 5,217
5,099
Other assets 1,594
1,339
-----------
- -----------
Total assets 243,374
$ 235,822
===========
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing $ 23,889
$ 22,020
Interest bearing 164,646
161,744
-----------
- -----------
Total deposits 188,535
183,764
Federal funds purchased and other borrowed money 8,876
6,234
Other borrowed funds 20,822
20,828
Accrued interest payable 2,105
2,129
Other liabilities 1,385
1,787
-----------
- -----------
Total liabilities 221,723
214,742
-----------
- -----------
STOCKHOLDERS' EQUITY
Common stock, no par value - $ .1041 stated
value per share at June 30, 1999 and
December 31, 1998, 10,000,000 shares authorized
with 2,059,915 shares issued at June 30, 1999 and
2,055,315 issued at December 31, 1998 214
214
Additional paid - in capital 12,619
12,476
Retained earnings 8,167
6,863
Unrealized holding gain, net of tax
$335 and $786 at June 30, 1999 and
December 31, 1998, respectively 651
1527
-----------
- -----------
Total stockholders' equity 21,651
21,080
-----------
- -----------
Total liabilities and stockholders'
equity $ 243,374
$ 235,822
===========
===========
* 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 June 30, 1999 and 1998
(UNAUDITED)
1999
1998
(Unaudited)
(Unaudited)
(000
Omitted)
Interest Income
Interest and fees on loans $ 3,550
$ 3,105
Interest on federal funds sold 79
85
Interest and dividends on investment securities 801
787
Interest income on deposits with banks 3
2
-----------
- ------------
Total interest income 4,433
3,979
Interest Expense
Interest on deposits 1,590
1,630
Interest on borrowed money 351
170
-----------
- ------------
Total interest expense 1,941
1,800
-----------
- ------------
Net interest income 2,492
2,179
Provision for loan losses 90
75
-----------
- ------------
Net interest income after provision for loan
losses 2,402
2,104
-----------
- ------------
Other Income
Service charges on deposits 298
208
Other service charges 130
128
Trust department income 231
154
Brokerage income 120
31
Other income 83
14
Net gains on available for sale securities (6)
(2)
-----------
- ------------
Total other income 856
533
-----------
- ------------
Other Expenses
Salaries and employee benefits 1,052
830
Net occupancy and equipment expenses 229
207
Other operating expenses 639
519
-----------
- ------------
Total other expense 1,920
1,556
-----------
- ------------
Income before income taxes 1,338
1081
Income tax expenses 349
296
-----------
- ------------
Net income $ 989
$ 785
===========
============
Weighted average number of shares outstanding 2,059,406
2,050,190
Net income per share $ 0.48
$ 0.38
Cash dividends declared per share $ 0.13
$ 0.115
The accompanying notes are an integral part of these condensed
financial statements.
All per share amounts have been adjusted to give retroactive
recognition to a 2 for 1 stock split effective
November 21,1998
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended June 30, 1999 and 1998
(UNAUDITED)
1999
1998
(Unaudited)
(Unaudited)
(000
Omitted)
Interest Income
Interest and fees on loans $ 7,015
$ 5,995
Interest on federal funds sold 159
175
Interest and dividends on investment securities 1,563
1,521
Interest income on deposits with banks 5
3
---------
- ---------
Total interest income 8,742
7,694
Interest Expense
Interest on deposits 3,171
3,190
Interest on borrowed money 692
317
---------
- ---------
Total interest expense 3,863
3,507
---------
- ---------
Net interest income 4,879
4,187
Provision for loan losses 180
150
---------
- ---------
Net interest income after provision for loan
losses 4,699
4,037
---------
- ---------
Other Income
Service charges on deposits 505
394
Other service charges 282
224
Trust department income 415
320
Brokerage income 202
57
Other income 171
31
Net gains on available for sale securities (15)
(12)
---------
- ---------
Total other income 1,560
1,014
---------
- ---------
Other Expenses
Salaries and employee benefits 2,053
1,638
Net occupancy and equipment expenses 444
409
Other operating expenses 1,252
1,036
---------
- ---------
Total other expense 3,749
3,083
---------
- ---------
Income before income taxes 2,510
1,968
Income tax expenses 672
541
---------
- ---------
Net income $ 1,838
$ 1,427
=========
=========
Weighted average number of shares outstanding *********
*********
Net income per share $ 0.89
$ 0.70
Cash dividends declared per share $ 0.26
$ 0.23
The accompanying notes are an integral part of these condensed
financial statements.
All per share amounts have been adjusted to give retroactive
recognition to a 2 for 1 stock split effective
November 21,1998
ORRSTOWN FINANCIAL SERVICES, INC.
AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended June 30, 1999 and 1998
(UNAUDITED)
1999
1998
(000
Omitted)
Net Income $ 989
$ 785
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale (666)
182
Comprehensive Income $ 323
$ 967
===========
============
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
Six Months Ended June 30,1999 and
1998
(UNAUDITED)
1999
1998
(000
Omitted)
Net Income $ 1,838
$ 1,427
Other comprehensive income, net of tax
Unrealized gain (loss) on investment securities
available for sale (876)
(7)
Comprehensive Income $ 962
$ 1,420
===========
============
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
Six Months Ended June 30,
1999 and 1998
(UNAUDITED)
1999 1998
(Unaudited) (Unaudited)
(000 Omitted)
Cash flows from operating activities:
Net income $
1,838 $ 1,427
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
232 200
Provision for loan losses
180 150
Other, net
24 134
----
- ------ ---------
Net cash provided by operating activities
2,274 1,911
Cash flows from investing activities:
Net (increase) decrease in interest bearing
deposits with banks
6 (73)
Purchase of available for sale securities
(9,016) (8,205)
Maturities of available for sale securities
3,829 3,576
Net (increase) in loans
(11,372) (14,924)
Purchases of bank premises and equipment
(542) (115)
(Increase) in other assets
(562)
----
- ------ ---------
Net cash (used) by investing activities
(17,657) (19,741)
----
- ------ ---------
Cash flows from financing activities:
Net increase in deposits
4,771 14,889
Cash dividends paid
(534) (472)
Dividend reinvestment plan purchases
143 0
Net increase in purchased funds
2,642 3,387
Payments on debt
(6) (6)
----
- ------ ---------
Net cash provided by financing activities
7,016 17,798
----
- ------ ---------
Net increase (decrease) in cash and cash equivalents
(8,367) (32)
Cash and cash equivalents at beginning of period
15,100 8,821
----
- ------ ---------
Cash and cash equivalents at end of period $
6,733 $ 8,789
========== =========
Supplemental disclosure of cash flows information:
Cash paid during the period for:
Interest $
3,887 $ 3,159
Income Taxes
650 602
Supplemental schedule of noncash investing and financing activities:
Unrealized gain (loss) on investments available for
sale (net of deferred taxes of $(450) and $(4) at
June 30, 1999 and 1998, respectively
(876) (7)
The accompanying notes are an integral part of these condensed
financial statements.
ORRSTOWN FINANCIAL SERVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(UNAUDITED)
NOTE 1. Basis of Presentation
The financial information presented at and for the three
months ended and six
months ended June 30, 1999 and 1998 is unaudited. Information
presented
at December 31, 1998 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
In October, 1998 the Board of Directors of Orrstown Financial
Services, Inc. approved
a two for one stock split effective November 21, 1998 for
shareholders of record on
November 2, 1998. Earnings per share, dividends per share and
weighted average
shares outstanding references have been restated to reflect
the two for one stock split
for all periods presented.
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 June 30
1999 fair value exceeded amortized cost by $987,000. This
resulted in an increase
in stockholders' equity of $651,000 after recognizing the tax
effects of the unrealized
gains. At December 31, 1998, fair market value exceeded
amortized cost by $ 2,313,000
resulting in an increase in stockholders' equity of $1,527,000
after recognizing the tax
effects of the unrealized gains.
Note 8. Year 2000 (Y2K) Data Processing Position
The Corporation's last mission critical function, check
processing, was converted to a Y2K
compliant system effective May 6, 1999. Renovation of other
systems has been completed
and a Phase II regulatory examination was satisfactorily
completed during February, 1999.
Thus, the Corporation does not expect Y2K expenses recorded in
1999 to have a material
effect on its liquidity, capital position or results of
operations.
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 $ 989,000 for the second quarter of
1999 compared to $ 785,000 for the same
period in 1998, representing an increase of
$ 204,000 or 26.0 %. Net income per share
was $ .48 during 1999's second quarter up $ .10
from the $ .38 earned during 1998's second
quarter.
Net income for the first six months of 1999
was $ 1,838,000 compared to $ 1,427,000 for
the same period in 1998, representing an
increase of $ 411,000 or 28.8 %. Net income
per share for the first six months of 1999
was $ .89 up $ .19 from the .70 per share realized
during the six months ended June 30, 1998.
Robust balance sheet growth has fueled 1999's
earnings gains. Despite slightly narrowing
interest rate margins versus those of 1998,
net income has grown significantly due to volume
factors. Average daily earning assets are up
17.5% during the first half of 1999 versus the
first six months of 1998. In addition,
noninterest income has grown at a rate more than double
that of noninterest income increases. In
addition, second quarter 1999 results have improved
considerably over first quarter 1999 results.
Net income of $ 989,000 represents an increase
of 16.5 % over the $ 849,000 earned during
the first quarter of 1999. A net interest margin
increase from 4.63% during first quarter 1999
to 4.67% during second quarter 1999 has
contributed to the gain. Continued steady
loan growth has fueled the net interest margin
increase.
The following statistics compare 1999's year
to date performance to that of 1998:
Second Quarter Six Months Year to Date
1999 1998 1999 1998
Return on average assets
1.62 % 1.51 % 1.54 % 1.43 %
Return on average equity
17.92 % 16.61 % 16.95 % 15.32 %
Average equity / Average assets
9.06 % 9.11 % 9.07 % 9.31 %
A more detailed discussion of the elements
having the greatest impact on net income follows.
Net Interest Income
Second Quarter 1999 vs. Second Quarter 1998
Net interest income for the second
quarter of 1999 was $ 2,492,000 representing a
growth of $ 313,000, or 14.4 % , over the $
2,179,000 realized during 1998's second quarter.
The growth in net interest income is driven
by volume factors since spreads have tightened.
Earning asset growth of 15.5 % has generated
14.4 % net interest income growth despite a
7 basis point tightening of net interest
margin.
Six Months 1999 vs. Six Months 1998
Net interest income for the first six
months of 1999 was $ 4,879,000 representing
an increase of $ 692,000, or 16.5 %, over the
$ 4,187,000 generated during the first six
months of 1998. Volume factors have
generated the increase a 5 basis point tightening of
net interest margin versus 1998. Spreads
have improved as we have progressed through
1999, however.
The table that follows states rates on a
fully taxable equivalent basis, ( F.T.E. ) and
demonstrates the aforementioned effects:
SECOND QUARTER
SIX MONTHS YEAR TO DATE
1999
1998 1999
1998
(in thousands) Avg. Balances Rates Avg.
Balances Rates Avg. Balances Rates
Avg. Balances Rates
Interest earning assets $ 226,613 8.11% $
196,248 8.42% $ 223,578 8.13%
$ 190,336 8.42%
Interest bearing liabilities 193,720 4.01%
166,230 4.34% 191,989 4.05%
161,283 4.38%
--------- --------- ----
- ------ --------- ---------- --------
- --------- ---------
Free Funds $ 32,893 $
30,018 $ 31,589
$ 29,053
=========
========== ==========
=========
Net interest income $ 2,492 $
2,179 $ 4,879
$ 4,187
=========
========== ==========
=========
Net interest sprted (F.T.E.) 4.10%
4.08% 4.08%
4.04% =========
========= ========
=========
Free funds ratio 14.52%
15.30% 14.13%
15.26%
=========
========== ==========
=========
Net interest margin ( F.T.E ) 4.67%
4.74% 4.65%
4.70%
=========
========= ========
=========
Other Income and Other Expenses
Second Quarter 1999 vs. Second Quarter 1998
Other income increased $ 323,000, or 60.6 %, from $ 533,000 during the
second quarter of 1998 to $ 856,000
during the second quarter of 1999. Increases in service charges on
deposit accounts accounted for
$ 90,000 of the increase due to growth of the deposit base and the
adoption of a new service charge schedule
effective May, 1999. Trust and brokerage services have contributed a
combined increase of $ 166,000,
or 89.7 %, over second quarter 1998 results and represent our fastest
growing area.
Other expense rose $ 364,000, or 23.4 %, from $ 1,556,000 for second
quarter 1998 to $ 1,920,000
for 1999's second quarter. Salary and benefit increases contributed $
222,000 of the growth. All
expense categories grew due to general growth of the bank.
Six Months 1999 vs. Six Months 1998
Other income increased $ 546,000, or 53.8 %, to $ 1,560,000 from $
1,014,000 a year ago. A $ 240,000,
or 63.7 %, increase in trust and brokerage income, plus a $169,000
increase in service charges were the
primary contributors. Other expenses rose $ 666,000, or 21.6 % from $
3,083,000 during the first six
months of 1998 to $ 3,749,000 for the same period of 1999. All
categories of noninterest expense rose
due to the aforementioned growth plus a material change in backroom
operations including a change in
check processing and a change in commercial bank data processing from a
third party processor to an
in-house system that was completed during July, 1999. These system
changes will enable us to handle
the growth we have been experiencing more economically moving forward.
Staff increases contributed
to growth in salaries and benefits of $ 415,000, the largest single
component of increase. Third quarter
1999 should bring the opening of our eighth full service office as we
are scheduled to complete the
aqcuisition of a branch located in Chambersburg, Pennsylvania from
Sovereign Bank in early September.
The completion of this transaction is dependant upon regulatory
approval and will add approximately
$ 6,000,000 to our deposit base and provide our second Chambersburg
office enabling increased
service to that market.
Preliminary work has begun on the proposed expansion of our operations
area, which will include increased
retail space in Shippensburg, Pennsylvania and the opening of a ninth
full service branch in Mechanicsburg,
Pennsylvania. Both projects are expected to be completed in early
2000.
Income Tax Expense
Income tax expense increased $ 53,000, or 17.9 %, during 1999's second
quarter versus second quarter
1998. Income tax expense rose $ 131,000, or 24.2 % for the first six
months of 1999 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:
Second Quarter
Six Months Year to Date
1999 1998 1999
1998
Effective income tax rate 26.1% 27.4%
26.8% 27.5%
The marginal 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 Six
Months Ended
June 30 June
30
1999 1998
1999 1998
Balance, beginning of
period $ 2,057 $ 1,846 $
1,971 $ 1,767
Recoveries 1 3
2 14
Provision for loan loss
charged to income 90 75
180 150
--------- -------- -----
- --- ---------
Total 2,148 1,924
2,153 1,931
Losses 99 19
104 26
--------- -------- -----
- --- ---------
Balance, end of pe $ 2,049 $ 1,905 $
2,049 $ 1,905
========= ========
======== =========
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
approximates 50% at June 30, 1999.
Loans 90 days or more past due (still accruing
interest) and those on nonaccrual
status were as follows at June 30 (in thousands) :
90 Days or More
Past Due
Nonaccrual Status
1999 1998
1999 1998
Real estate mortgage $ 242 $ 255 $
0 $ 68
Installment loans 44 5
19 0
Commercial loans 0 588
45 454
Credit card 2 3
0 1
--------- -------- -----
- --- ---------
Total $ 288 $ 851 $
64 $ 523
========= ========
======== =========
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
June 30, 1999 is as follows:
Orrstown
Financia Regulatory Minimum
Services
Requirements
Leverage ratio 8.42 %
4 %
Risk based capital ratios:
Tier I (core capital) 13.04 %
4 %
Combined tier I and tier II
(core capital plus allowance
for loan losses) 14.29 %
8 %
The growth experienced during 1999 has been supported by capital growth
in the form of retained
earnings. Equity represented 8.90 % of assets at June 30, 1999 which
is down slightly from 8.94 %
at December 31, 1998.
All balance sheet fluctuations exceeding 5 % have been created by
either the growth that has
been experienced during 1999 or single day fluctuations.
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
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)
(Duly
Authorized Officer)
/s/
------------------ -----------------
- -------------------
(Bradley S.
Everly, Senior Vice President)
(Chief
Financial Officer)
/s/
-----------------
- -------------------
(Robert B.
Russell, Controller)
(Chief
Accounting Officer)
DATA TABLE
FOR 10-Q AT JUNE 30, 1999
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 6,733
<INT-BEARING-DEPOSITS> 21
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 53,705
<INVESTMENTS-CARRYING> 53,705
<INVESTMENTS-MARKET> 53,705
<LOANS> 169,902
<ALLOWANCE> 2,049
<TOTAL-ASSETS> 243,374
<DEPOSITS> 188,535
<SHORT-TERM> 8,876
<LIABILITIES-OTHER> 3,490
<LONG-TERM> 20,822
<COMMON> 214
0
0
<OTHER-SE> 21,651
<TOTAL-LIABILITIES-AND-EQUITY> 243,374
<INTEREST-LOAN> 7,015
<INTEREST-INVEST> 1,563
<INTEREST-OTHER> 164
<INTEREST-TOTAL> 8,742
<INTEREST-DEPOSIT> 3,171
<INTEREST-EXPENSE> 3,863
<INTEREST-INCOME-NET> 4,879
<LOAN-LOSSES> 180
<SECURITIES-GAINS> (15)
<EXPENSE-OTHER> 3,749
<INCOME-PRETAX> 2,510
<INCOME-PRE-EXTRAORDINARY> 1,838
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,838
<EPS-BASIC> 0.89
<EPS-DILUTED> 0.89
<YIELD-ACTUAL> 4.65
<LOANS-NON> 64
<LOANS-PAST> 288
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,971
<CHARGE-OFFS> 104
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 2,049
<ALLOWANCE-DOMESTIC> 2,049
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
