SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996.
Commission File No. 0-27448
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Georgia
(State of Incorporation)
58-1756713
(I.R.S. Employer Identification No.)
200 Plantation Chase, St. Simons Island,
Georgia 31522
(Address of Principal Executive Offices)
(912) 638-0667
(Issuer's Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer (1) 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 issuer 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 common equity as
of the latest practicable date.
Common Stock, no par value per share: 2,344,302 shares issued and
outstanding as of November 13, 1996.
Transitional Small Business Disclosure Format:
Yes No X
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Consolidated Balance Sheets
September 30, December 31,
1996 1995
ASSETS (Unaudited) (Unaudited)
Cash and due from banks $ 4,208,744 $ 3,567,228
Federal funds sold - - 5,010,000
---------- ---------
Total cash and cash equivalents $ 4,208,744 $ 8,577,228
Investment securities:
Securities available-for-sale,
at estimated market values 8,184,941 6,626,386
Securities held-to-maturity
(approximate estimated market
value of $2,071,309 (09-30-96)
and $2,255,620 (12-31-95) 2,115,761 2,273,605
Loans, net 75,665,027 56,420,884
Loans held-for-sale 7,420,993 7,842,230
Property and equipment, net 4,490,037 3,359,481
Other assets 1,366,569 1,463,276
----------- -----------
Total Assets $103,452,072 $86,563,090
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Non-interest bearing deposits $ 7,816,995 $ 7,366,505
Interest bearing deposits 66,604,164 60,661,737
------------ -----------
Total deposits $ 74,421,159 $68,028,242
------------ -----------
Notes payable 12,506,496 2,849,683
Federal Home Loan Bank borrowings 4,682,428 4,185,214
Federal funds purchased 160,000 - -
Other liabilities 1,213,840 699,161
------------ -----------
Total Liabilities $ 92,983,923 $75,762,300
------------ -----------
Commitments and contingencies
Shareholders' Equity:
Common stock, no par value
15 million shares authorized,
2,344,302 shares (09-30-96)
2,336,982 (12-31-95) shares
issued and outstanding $ 1,094,338 $ 1,094,338
Paid-in-capital 9,952,949 9,849,147
Retained (deficit) (566,950) (140,182)
Unrealized (loss) on fair value
of securities available-for-sale (12,188) (2,513)
----------- -----------
Total Shareholders' Equity $ 10,468,149 $10,800,790
----------- -----------
Total Liabilities
and Shareholders' Equity $103,452,072 $86,563,090
----------- -----------
Refer to notes to the financial statements.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Consolidated Income Statements
(Unaudited)
Three Months Ended
September 30,
1996 1995
Interest income $ 2,824,377 $1,750,175
Interest expense 1,187,612 776,275
---------- --------
Net interest income $ 1,636,765 $ 973,900
Provision for possible loan losses 255,933 77,959
---------- --------
Net interest income after provision
for possible loan losses $ 1,380,832 $ 895,941
---------- ---------
Other income:
Fee income from mortgage subsidiary $ 230,662 $ 137,266
Other income 39,705 125,654
---------- ----------
Total other income $ 270,367 $ 262,920
---------- ----------
Salaries and benefits $ 1,144,284 $ 551,307
Depreciation and amortization 106,313 41,711
Regulatory fees and assessments 1,751 4,703
Supplies and printing 50,137 64,255
Legal & professional 86,680 41,714
Advertising 71,434 35,990
Other operating expenses 495,501 550,111
---------- ---------
Total operating expenses $ 1,956,100 $1,289,791
---------- ----------
Net income (loss) before taxes $ (304,901) $ (130,930)
Income taxes/(benefit) (24,459) (59,100)
---------- ----------
Net income/(loss) $ (280,442) $ (71,830)
---------- ----------
Income (loss) per share $ (.12) $ (.03)
---------- ----------
Refer to notes to the financial statements.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Consolidated Income Statements
(Unaudited)
Nine Months Ended
September 30,
1996 1995
Interest income $ 7,456,334 $5,003,963
Interest expense 3,504,199 2,297,398
---------- ----------
Net interest income $ 3,952,135 $2,706,565
Provision for possible loan losses 587,685 233,822
---------- ----------
Net interest income after provision
for possible loan losses $ 3,364,450 $2,472,743
---------- ----------
Other income:
Fee income from mortgage subsidiary $ 1,078,901 $ 288,733
Other income 540,286 319,128
---------- ----------
Total other income $ 1,619,187 $ 607,861
---------- ----------
Salaries and benefits $ 3,186,969 $1,358,277
Depreciation and amortization 281,907 96,437
Regulatory fees and assessments 11,748 53,823
Supplies and printing 156,387 120,511
Legal & professional 167,661 121,627
Advertising 225,682 77,692
Other operating expenses 1,367,797 1,075,742
---------- ----------
Total operating expenses $ 5,398,151 $2,904,109
---------- ----------
Net income (loss) before taxes $ (414,514) $ 176,495
Income taxes 12,251 142,601
---------- ----------
Net income (loss) $ (426,765) $ 33,894
---------- ----------
Income (loss) per share $ (.18) $ .02
---------- ----------
---------- ----------
Refer to notes to the financial statements.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities: $ 467,075 $ 537,061
----------- -----------
Cash flows from Investing Activities:
Decrease in loans held-for-sale $ 421,237 $ - -
Purchase of fixed assets (1,397,936) (2,069,549)
(Increase) in loans (19,831,828) (13,723,604)
Securities - available-for-sale
Maturity and paydowns 2,024,521 589,015
Sale of securities - - 1,558,491
Purchase of securities (3,020,143) (1,911,437)
Securities - held-to-maturity
Maturity and paydowns 157,844 889,955
Purchase of securities - - - -
----------- ------------
Net cash used in investing activities $(21,646,305) $(14,667,129)
----------- ------------
Cash flows from Financing Activities:
Increase in federal funds purchased $ 160,000 $ - -
Increase in various borrowings 10,154,027 3,565,000
Sale of stock/option amortization 103,802 5,489,988
Increase in deposits 6,392,917 5,905,315
----------- -----------
Cash provided from financing
activities $ 16,810,746 $ 14,960,303
----------- -----------
Net decrease in cash and cash
equivalents $ (4,368,484) $ 830,235
Cash and cash equivalents,
beginning of period 8,577,228 1,822,966
----------- -----------
Cash and cash equivalents, end of
period $ 4,208,744 $ 2,653,201
----------- -----------
----------- -----------
Refer to notes to the financial statements.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Notes to Financial Statements (Unaudited)
September 30, 1996
Note 1 - Basis of Presentation
The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
10-QSB. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the nine-month period ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1996. For further information, refer to
the financial statements and footnotes thereto included in Form
10-KSB for the year ended December 31, 1995.
Note 2 - Summary of Significant Accounting Policies
Basis of Presentation and Reclassification. The consolidated
financial statements include the accounts of the parent company
and the Subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. Certain prior
year amounts have been reclassified to conform to the current year
presentation.
Basis of Accounting. The accounting and reporting policies of
GIFH conform to generally accepted accounting principles and to
general practices in the banking industry. GIFH uses the accrual
basis of accounting by recognizing revenues when earned and
expenses in the period incurred, without regard to the time of
receipt or payment of cash.
Investment Securities. GIFH adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investment in
Debt and Equity Securities (SFAS 115) on January 1, 1994. SFAS
115 requires investments in equity and debt securities to be
classified into three categories:
1. Held-to-maturity securities: These are securities which
GIFH has the ability and intent to hold until maturity.
These securities are stated at cost, adjusted for
amortization of premiums and the accretion of discounts.
2. Trading securities: These are securities which are bought
and held principally for the purpose of selling in the near
future. Trading securities are reported at fair market
value, and related unrealized gains and losses are
recognized in the income statement.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Notes to Financial Statements (Unaudited)
September 30, 1996
3. Available-for-sale securities: These are securities which
are not classified as either held-to-maturity or as trading
securities. These securities are reported at fair market
value. Unrealized gains and losses are reported, net of
tax, as separate components of shareholders' equity.
Unrealized gains and losses are excluded from the income
statement.
Loans, Interest and Fee Income on Loans. Loans are stated at the
principal balance outstanding. Unearned discount, unamortized
loan fees and the allowance for possible loan losses are deducted
from total loans in the statement of condition. Interest income
is recognized over the term of the loan based on the principal
amount outstanding. Points on real estate loans are taken into
income to the extent they represent the direct cost of initiating
a loan. The amounts in excess of direct costs are deferred and
amortized over the expected life of the loan.
Loans are generally placed on non-accrual status when principal or
interest becomes ninety days past due, or when payment in full is
not anticipated. When a loan is placed on non-accrual status,
interest accrued but not received is generally reversed against
interest income. If collectibility is in doubt, cash receipts on
non-accrual loans are not recorded as interest income, but are
used to reduce principal.
Allowance for Possible Loan Losses. The provisions for loan
losses charged to operating expense reflect the amount deemed
appropriate by management to establish an adequate reserve to meet
the present and foreseeable risk characteristics of the current
loan portfolio. Management's judgement is based on periodic and
regular evaluation of individual loans, the overall risk
characteristics of the various portfolio segments, past experience
with losses and prevailing and anticipated economic conditions.
Loans which are determined to be uncollectible are charged against
the allowance. Provisions for loan losses and recoveries on loans
previously charged-off are added to the allowance.
GIFH adopted Statement of Financial Accounting Standards No.
114, Accounting by Creditors for Impairment of a Loan, (SFAS 114)
on January 1, 1995. Under the new standard, a loan is considered
impaired, based on current information and events, if it is
probable that GIFH will be unable to collect the scheduled
payments of principal or interest when due according to the
contractual terms of the loan agreement. The measurement of
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Notes to Financial Statements (Unaudited)
September 30, 1996
impaired loans is generally based on the present value of expected
future cash flows discounted at the historical effective interest
rate. All collateral-dependent loans, however, are measured for
impairment based on the fair value of the collateral. The
adoption of SFAS 114 resulted in no change to the allowance for
credit losses at January 1, 1995.
In October, 1994, FASB issued Statement of Financial Accounting
Standards No. 118, Accounting by Creditors for Impairment of a
Loan - Income Recognition and Disclosure (SFAS 118). SFAS 118
amends SFAS 114 to allow a creditor to use existing methods for
recognizing interest income on an impaired loan, rather than the
methods prescribed in SFAS 114.
Mortgage Loan Administration. GIFH, through FBMC, purchases and
sells real estate mortgage loans in the secondary market as part
of normal operations. Loans originated pending sale are
classified as loans held-for-sale. Such loans are valued at the
lower of cost or market. All loans sold are subject to a recourse
provision relating only to documentation deficiencies, which GIFH
may correct. Gains and losses resulting from sales of these loans
are recognized in the period the sale occurs, as the recourse
provisions are not considered to significantly affect the earnings
process.
In May 1995, FASB issued Statement of Financial Accounting
Standards No. 122, Accounting for Mortgage Servicing Rights, (SFAS
122). SFAS 122 amends SFAS 65, Accounting for Certain Mortgage
Banking Activities, to require that a mortgage banking enterprise
recognize as an asset rights to service mortgage loans for others
regardless of the manner in which those servicing rights are
acquired. It also requires an enterprise to assess its
capitalized mortgage servicing rights for impairment based on the
fair value of those rights. In assessing impairment, Management
believes that the adoption of SFAS 122 will not have a material
impact on the financial position of GIFH.
Property and Equipment. Building, furniture and equipment are
stated at cost, net of accumulated depreciation. Depreciation is
computed using the straight line method over the estimated useful
lives of the related assets. Maintenance and repairs are charged
to mortgage operations, while major improvements are capitalized.
Upon retirement, sale or other disposition of property and
equipment, the cost and accumulated depreciation are eliminated
from the accounts, and gain or loss is included in income from
operations.
Golden Isles Financial Holdings, Inc.
St. Simons Island, Georgia
Notes to Financial Statements (Unaudited)
September 30, 1996
Income Taxes. The consolidated financial statements have been
prepared on the accrual basis. When income and expenses are
recognized in different periods for financial reporting purposes
and for purposes of computing income taxes currently payable,
deferred taxes are provided on such temporary differences.
Effective January 1, 1993, GIFH adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS
109). Under SFAS 109, deferred tax assets and liabilities are
recognized for the expected future tax consequences of events that
have been recognized in the financial statements or tax return.
Deferred tax assets and liabilities are measured using the enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be realized or
settled.
Statement of Cash Flows. For purposes of reporting cash flows,
cash and cash equivalents include cash on hand, amounts due from
banks and federal funds sold. Generally, federal funds are
purchased or sold for one day periods.
Net Income/(Loss) Per Share. Net income/(loss) per share was
computed by dividing net income by the weighted average number of
shares outstanding for each period. Common stock equivalents in
the form of outstanding stock options were included in the
determination of the weighted average number of shares outstanding
only if they were dilutive. Loss per share of $(.18)for the
nine-month period ended September 30, 1996 may not be indicative of
projected earnings/(losses) for the year ending December 31, 1996.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Sources of Capital
Golden Isles Financial Holdings, Inc., St. Simons Island, Georgia
(GIFH) was incorporated under the laws of the State of Georgia in
1987 for the purpose of becoming a holding company for its then
proposed de novo bank, The First Bank of Brunswick, Brunswick,
Georgia (the Bank). Upon commencement of the Bank's principal
operations on July 2, 1990, GIFH acquired 100 percent of the
Bank's voting stock by injecting $4.5 million into the Bank's
capital accounts. Subsequently, an additional $1.1 million was
injected into the Bank's capital accounts. Deposits at the Bank
are each insured up to $100,000 by the Federal Deposit Insurance
Corporation.
In late 1993, GIFH formed two subsidiaries, First Credit Service
Corporation, Brunswick, Georgia (FCC) and First Bank Mortgage
Corporation, Brunswick, Georgia (FBMC). FCC engages in consumer
finance and credit related insurance activities, while FBMC
engages in the origination, processing, purchase and sale of
mortgage loans, as well as in making funds available to other
mortgage lenders through warehouse lines of credit. From
inception to September 30, 1996, GIFH injected $1,605,000 and
$3,875,000 into the capital accounts of FCC and FBMC,
respectively. GIFH owns 100 percent of the voting shares of the
Bank, FCC and FBMC.
In the following discussion, unless any information is
specifically identified as reflecting the financial condition of
the Bank, FCC or FBMC, it is intended to reflect the financial
condition of GIFH on a consolidated basis.
Total consolidated assets increased by $16.9 million to $103.5
million during the nine-month period ended September 30, 1996.
The increase was funded primarily through a $6.4 million increase
in deposits and a $10.9 million increase in notes payable and
other borrowings. The new funds were utilized primarily to
increase (i) the loan portfolio by $21.3 million, (ii) property
and equipment by $1.1 million, and (iii) the investment portfolio
by $1.4 million. During the same time span, cash and cash
equivalents as well as loans available-for-sale declined by $4.4
million and $.4 million, respectively.
Liquidity is the company's ability to meet all deposit withdrawals
immediately, while also providing for the credit needs of
customers. The September 30, 1996 financial statements evidence a
fair liquidity position as total cash and cash equivalents
amounted to $4.2 million, representing 4.1% of total assets.
Investment securities amounted to $10.3 million, representing
10.1% of total assets; these securities provide a secondary source
of liquidity since they can be converted into cash in a timely
manner. Additionally, at September 30, 1996, GIFH had $7.4
million in loans held-for-sale. These loans are generally
converted into cash within 90 days from origination. Note that
the company's ability to maintain and expand its deposit base and
borrowing capabilities are a source of liquidity. For the
nine-month period ended September 30, 1996, total deposits increased
from $68.0 million to $74.4 million, representing an annualized
increase of 12.5%. Also, for the nine-month period ended
September 30, 1996, GIFH was able to increase its borrowings from
$7.0 million to $17.3 million, a net increase of $10.3 million.
Borrowings, however, have declined by $8.4 million since June 30,
1996. GIFH's management closely monitors and maintains
appropriate levels of interest earning assets and interest bearing
liabilities, so that maturities of assets are such that adequate
funds are provided to meet customer withdrawals and loan demand.
There are no trends, demands, commitments, events or uncertainties
that will result in or are reasonably likely to result in GIFH's
liquidity increasing or decreasing in any material way.
The Bank maintains an adequate level of capitalization as measured
by the following capital ratios and the respective minimum capital
requirements by the Bank's primary regulators.
Bank's Minimum required by
Sept. 30, 1996 regulatory authorities
Leverage ratio 7.9% 4.0%
Risk weighted ratio 10.9% 8.0%
Note that with respect to the leverage ratio, the regulators
expect a minimum of 5.0 percent to 6.0 percent ratio for banks
that are not rated CAMEL 1. Although the Bank is not rated CAMEL
1, its leverage ratio of 7.9 percent is well above the required
minimum.
Results of Operations
Net loss for the nine-month period ended September 30, 1996
amounted to $(426,765), or $(.18) per share. For the nine-month
period ended September 30, 1995, net income amounted to $33,894,
or $.02 per share. The primary reason for the decline in income
is attributed to the increased costs associated with the expanding
operations of FCC and FBMC. Five major items are of a particular
interest when one compares the September 30, 1996 results to those
of September 30, 1995.
a. Net interest income, which represents the difference between
interest received on interest earning assets and interest
paid on interest bearing liabilities, has increased from
$2,706,565 for the nine-month period ended September 30,
1995 to $3,952,135 for the same period one year later,
representing an increase of $1,245,570, or 46.0%. This
increase was attained because total interest earning assets
increased from $68.9 million at September 30, 1995 to $90.4
million at September 30,1996.
b. The net interest yield, defined as net interest income
divided by interest earning assets, has increased from 5.24%
for the nine-month period ended September 30, 1995 to 5.30%
for the nine-month period ended September 30, 1996. The
increase is primarily attributed to higher yields at FCC.
c. Other income for the nine-month period ended September 30,
1996 and 1995 amounted to $1,619,187 and $607,861,
respectively. The significant increase in other income is
due primarily to the increase in fee income and other
charges that are earned through FBMC.
d. Operating expenses for the nine-month period ended September
30, 1996 and 1995 amounted to $5,398,151 and $2,904,109,
respectively, representing an increase of $2,494,042, or
85.9%. Operating expenses represented an annualized 7.0%
and 5.1% of total assets as of September 30, 1996 and 1995,
respectively.
<PAGE>
e. The provision for loan losses increased from $233,822 for
the nine-month period ended September 30, 1995 to $587,685
for the nine-month period ended September 30, 1996. The
increase is due primarily to the increase in loan volume.
For the three-month period ended September 30, 1996, net loss
amounted to $(280,442), or $(.12) per share. For the same period,
one year earlier, net loss amounted to $(71,830), or $(.03) per
share.
The increase in the loss for the quarter ended September 30, 1996
as compared to the quarter ended September 30, 1995 is due to
increases in operating expenses of $666M and provisions for loan
losses of $178M; the increase in the net interest income of $663M
was not sufficient to mitigate the increases in operating expenses
and loan-loss provisions.
At December 31, 1995, the allowance for loan losses amounted to
$718,057. By September 30, 1996, the allowance had grown to
$1,227,052. The allowance for loan losses, as a percentage of
gross loans, increased from 1.26% to 1.60% during the nine-month
period ended September 30, 1996. Management considers the
allowance for loan losses to be adequate and sufficient to absorb
possible future losses; however, there can be no assurance that
charge-offs in future periods will not exceed the allowance for
loan losses or that additional provisions to the allowance will
not be required.
GIFH is not aware of any current recommendation by the regulatory
authorities which, if they were to be implemented, would have a
material effect on GIFH's liquidity, capital resources, or results
of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. As of September 30, 1996 there are no
material pending legal proceedings to which the Company or any of
its subsidiaries is a party or of which any of their property is
the subject.
Item 2. Changes in Securities.
(a) None.
(b) None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter has been submitted to a vote of security-holders during
the quarter ended September 30, 1996.
Item 5. Other Information. - None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No: Description
27 Financial Data Schedule
(b) Reports on Form 8-K - There were no reports
on Form 8-K filed during the quarter ended
September 30, 1996.
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.
GOLDEN ISLES FINANCIAL HOLDINGS, INC.
(Registrants
Date: November 13, 1996
By: /s/ J. Thomas Whelchel
J. Thomas Whelchel
Vice Chairman<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page Number
27 Financial Data Schedule 17
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,208,744
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,184,941
<INVESTMENTS-CARRYING> 2,115,761
<INVESTMENTS-MARKET> 2,071,309
<LOANS> 84,313,072
<ALLOWANCE> 1,227,052
<TOTAL-ASSETS> 103,452,072
<DEPOSITS> 74,421,159
<SHORT-TERM> 17,348,924
<LIABILITIES-OTHER> 1,213,840
<LONG-TERM> 0
<COMMON> 1,094,338
0
0
<OTHER-SE> 9,373,811
<TOTAL-LIABILITIES-AND-EQUITY> 103,452,072
<INTEREST-LOAN> 6,973,943
<INTEREST-INVEST> 482,391
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 7,456,334
<INTEREST-DEPOSIT> 2,567,372
<INTEREST-EXPENSE> 3,504,199
<INTEREST-INCOME-NET> 3,952,135
<LOAN-LOSSES> 587,685
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,398,151
<INCOME-PRETAX> (414,514)
<INCOME-PRE-EXTRAORDINARY> (414,514)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (426,765)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
<YIELD-ACTUAL> 5.30
<LOANS-NON> 487,703
<LOANS-PAST> 2,133
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 929,000
<ALLOWANCE-OPEN> 718,057
<CHARGE-OFFS> 91,755
<RECOVERIES> 13,065
<ALLOWANCE-CLOSE> 1,227,052
<ALLOWANCE-DOMESTIC> 1,200,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 27,052
</TABLE>
