SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended September 30, 1996
Commission File Number 33-20685
SEAWAY FINANCIAL CORPORATION
200 S. Riverside Avenue
St. Clair, Michigan 48079
Incorporated in the State of Michigan.
I.R.S. Employer I.D. Number 38-2785653
Registrant's Telephone Number, (including area code):
(810) 326-2244
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
Number of shares of Registrant's Common Stock, $1.00 par value,
outstanding as of September 30, 1996 - 1,685,000.
<PAGE> 1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and September 30, 1995
1996 1995
(000's) (000's)
ASSETS
<TABLE>
<S> <C> <C>
CASH AND CASH EQUIVALENTS
Cash and due from banks $ 13,622 $ 10,982
Federal Funds Sold 4,400 700
_______ ______
Total cash and cash equivalents 18,022 11,682
TIME DEPOSITS WITH OTHER BANKS 0 0
MORTGAGES HELD FOR SALE 1,288 326
INVESTMENT SECURITIES HELD TO MATURITY 53,010 49,662
(At cost)
INVESTMENT SECURITIES AVAILABLE FOR SALE 72,214 79,844
(At market) _______ _______
Total Investment Securities 125,224 129,506
LOANS 207,949 186,506
LESS RESERVE FOR POSSIBLE LOAN LOSSES (2,495) (2,231)
_________ ________
Net Loans 205,454 184,275
BANK PREMISES AND EQUIPMENT 7,693 7,254
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 4,160 5,309
_______ _______
Total Assets $361,841 $338,352
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Interest Bearing $279,950 $261,306
Non-interest Bearing 39,778 35,226
_______ _______
Total Deposits 319,728 296,532
SHORT-TERM BORROWINGS 31 2,078
ACCRUED INTEREST, TAXES AND OTHER LIABILITIES 1,550 1,477
_______ _______
Total Liabilities 321,309 300,087
STOCKHOLDERS' EQUITY
Common Stock 1,685 1,685
Capital Surplus 31,288 31,288
Undivided Profits 7,670 5,411
Unrealized gain/loss on sec- A-F-S (111) (119)
_______ ________
Total stockholders' equity 40,532 38,265
--------- --------
Total liabilities and stockholders' equity $361,841 $338,352
======= =======
</TABLE>
<PAGE> 2
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995
1996 1995
(000's) (000's)
ASSETS
<TABLE>
<S> <C> <C>
CASH AND CASH EQUIVALENTS
Cash and due from banks $ 13,622 $ 11,058
Federal Funds Sold 4,400 10,700
_______ ______
Total cash and cash equivalents 18,022 21,758
TIME DEPOSITS WITH OTHER BANKS 0 0
MORTGAGES HELD FOR SALE 1,288 0
INVESTMENT SECURITIES HELD TO MATURITY 53,010 46,779
(At cost)
INVESTMENT SECURITIES AVAILABLE FOR SALE 72,214 77,423
(At market) _______ _______
Total Investment Securities 125,224 189,989
LOANS 207,949 192,283
LESS RESERVE FOR POSSIBLE LOAN LOSSES (2,495) (2,294)
_________ ________
Net Loans 205,454 189,989
BANK PREMISES AND EQUIPMENT 7,693 7,626
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 4,160 4,254
_______ _______
Total Assets $361,841 $347,829
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
DEPOSITS
Interest Bearing $279,950 $269,640
Non-interest Bearing 39,778 36,736
_______ _______
Total Deposits 319,728 306,376
SHORT-TERM BORROWINGS 31 760
ACCRUED INTEREST, TAXES AND OTHER LIABILITIES 1,550 1,662
_______ _______
Total Liabilities 321,309 308,798
STOCKHOLDERS' EQUITY
Common Stock 1,685 1,685
Capital Surplus 31,288 31,288
Undivided Profits 7,670 5,965
Unrealized gain/loss on sec- A-F-S (111) 93
_______ ________
Total stockholders' equity 40,532 39,031
------- --------
Total liabilities and stockholders' equity $361,841 $347,829
======= =======
</TABLE>
<PAGE> 3
SEAWAY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Three months ending September 30, 1996 and 1995
1996 1995
(000's) (000's)
<TABLE>
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 4,631 $ 4,186
Investment Securities
Taxable 1,255 1,355
Tax Exempt 519 516
Short-term investments 132 37
Mortgages held for sale 3 3
______ ______
Total interest income 6,540 6,097
______ ______
INTEREST EXPENSE
Deposits 2,740 2,439
Short-term borrowings 1 124
______ ______
Total interest expense 2,741 2,563
______ ______
NET INTEREST INCOME 3,799 3,474
PROVISION FOR LOAN LOSSES 60 60
______ ______
NET INTEREST INCOME AFTER PROVISION 3,739 3,474
______ _____
OTHER OPERATING INCOME
Service Charges on deposit accounts 296 261
Income from fiduciary activities 382 274
Gains(losses) on security transactions (15) (11)
Gains(losses) on sales of mortgage loans (5) 1
Bankcard processing fees 66 63
Other 309 319
______ ______
Total other operating income 1,033 907
______ ______
OTHER OPERATING EXPENSE
Salaries and employee benefits 1,935 1,960
Net occupancy costs 491 419
Supplies 119 130
Processing fees 199 209
Professional fees 124 101
FDIC assessment 2 (18)
Marketing 62 41
Other 350 296
______ ______
Total other operating expense 3,282 3,138
INCOME BEFORE INCOME TAXES 1,490 1,243
PROVISION FOR INCOME TAXES 340 241
______ ______
NET INCOME $ 1,150 $ 1,002
====== ======
NET INCOME PER COMMON SHARE $ .68 $ .59
====== ======
CASH DIVIDENDS PER COMMON SHARE $ .32 $ .30
====== ======
AVG NUMBER OF COMMON SHARES OUTSTANDING 1,685,430 1,685,430
<PAGE> 4
</TABLE> SEAWAY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Nine months ending September 30, 1996 and 1995
1996 1995
(000's) (000's)
<TABLE>
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 13,502 $ 12,266
Investment Securities
Taxable 3,777 4,225
Tax Exempt 1,588 1,579
Short-term investments 355 129
Mortgages held for sale 12 7
______ ______
Total interest income 19,234 18,206
______ ______
INTEREST EXPENSE
Deposits 8,092 7,073
Short-term borrowings 11 713
______ ______
Total interest expense 8,103 7,786
______ ______
NET INTEREST INCOME 11,131 10,420
PROVISION FOR LOAN LOSSES 227 101
______ ______
NET INTEREST INCOME AFTER PROVISION 10,904 10,319
______ _____
OTHER OPERATING INCOME
Service Charges on deposit accounts 850 781
Income from fiduciary activities 1,240 1,123
Gains(losses) on security transactions (38) (1)
Gains(losses) on sales of mortgage loans (31) 7
Bankcard processing fees 153 141
Other 769 747
______ ______
Total other operating income 2,943 2,798
______ ______
OTHER OPERATING EXPENSE
Salaries and employee benefits 5,609 5,461
Net occupancy costs 1,500 1,317
Supplies 395 380
Processing fees 530 561
Professional fees 341 297
FDIC assessment 4 301
Marketing 195 129
Other 1,007 919
______ ______
Total other operating expense 9,581 9,365
INCOME BEFORE INCOME TAXES 4,266 3,752
PROVISION FOR INCOME TAXES 944 750
______ ______
NET INCOME $ 3,322 $ 3,002
====== ======
NET INCOME PER COMMON SHARE $ 1.97 $ 1.78
====== ======
CASH DIVIDENDS PER COMMON SHARE $ 0.96 $ 0.90
====== ======
AVG NUMBER OF COMMON SHARES OUTSTANDING 1,685,430 1,685,430
</TABLE>
<PAGE> 5
SEAWAY FINANCIAL CORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1996 and 1995
1996 1995
(000's) (000's)
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,322 $ 3,002
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain(loss) on sale of investment
securities (37) 0
Loss on sale of fixed assets 126 0
Depreciation and amortization 802 770
Provision for possible loan losses 227 101
Decrease (Increase) in accr. int.
& other assets 202 (447)
Decrease in accrued expenses and
other liabilities (63) (240)
Amortization and accretion on securities 634 1,583
Net increase in mortgages held for sale (1,288) (326)
______ ______
Total adjustments 603 1,442
______ ______
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,925 4,443
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment securities
Proceeds from maturities A-F-S 29,710 11,508
Proceeds from maturities H-T-M 46,338 9,802
Proceeds from sales A-F-S 2,765 2,433
Purchases A-F-S (28,126) 1,004
Proceeds from sales H-T-M -0- (11,450)
Purchases H-T-M (52,615) (3,392)
Net increase in loans (15,692) (7,664)
Capital expenditures (1,046) (1,570)
______ ______
NET CASH USED IN INVESTING ACTIVITIES (18,666) 671
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in demand, now and
savings deposits 632 (893)
Net increase in certificate of deposit 12,720 15,134
Dividends paid (1,618) (1,477)
Net (decrease) increase in short term
borrowing (729) (16,789)
______ ______
NET CASH USED IN FINANCING ACTIVITIES 11,005 (4,025)
______ ______
Net increase (decrease) in cash
and cash equivalents (3,736) 1,089
CASH AND CASH EQUIVALENTS AT JANUARY 1 21,758 10,593
______ ______
CASH AND CASH EQUIVALENTS AT JUNE 30 $ 18,022 $ 11,682
====== ======
</TABLE>
<PAGE> 6
Item 2. Management's discussion and analysis of financial
condition and results of operations.
Interim Financial Statement: The Interim Financial Statements
furnished include all adjustments which, in the opinion of
management, are necessary to reflect fair statements of the
results for the interim period presented and are recurring in
nature.
Earnings: Seaway reported net income of $3,322,000 in the first
nine months of 1996 compared to $3,002,000 in the same period in
1995. Net income for the nine months was $1.97 per share, or a
10.7% increase in earnings per share, as compared to the first
nine months of 1995 at $1.78. On an annualized basis, return on
beginning stockholders' equity was 11.3% in the first nine months
of 1996 versus 10.9% in the first nine months of 1995. On an
annualized basis, return on average assets are at 1.25% in the
first nine months of 1996, from 1.17% in the same period for
1995. Earnings of $1,150,000 were recorded for third quarter of
1996. Third quarter per share earnings were $.68 compared to
third quarter 1995 earnings of $.59 per share.
Net Interest Income: For the first nine months of 1996, net
interest income, after provision for loan losses, was
$10,904,000, a 5.7% increase from the first nine months of 1995
net interest income after loan loss provision of $10,319,000.
The increase was due primarily to a 11.5% increase in the loan
portfolios of the two subsidiary banks. Deposits increased by
$21,118,000 or 7.1%, after adding Repurchase Agreements, in the
first nine months of 1996 as compared to the first nine months of
1995.
Total loans increased by $21,443,000 with an additional increase
of $962,000 in Mortgages held for sale from September 30, 1995.
Loan quality remained strong as non-performing loans represent
1.3% of total loans outstanding. Net loan charge offs for the
first nine months were $27,000.
Other Income: Total other income in the first nine months of
1996 increased to $2,943,000 from $2,798,000 in the first nine
months of 1995, for a increase of 5.2%. The major factors
were a 10.4% increase in fiduciary income from trust operations
totaling $117,000; an increase of $69,000 in Service Charges on
Deposit accounts; an increase of $35,000 in Brokerage Fees; an
increase of $120,000 in income from other real estate; a decrease
in Canadian Exchange of $40,000; a decrease in sale of bank owned
real estate of $76,000; a decrease of $37,000 in sale of
Securities; and a decrease of $38,000 in the Sale of Mortgage
Loans. With the constant pressure on interest margins,
management is very conscious that other income must be developed
to offset the continuing increase in the cost of doing business.
Mortgages Originated and Sold totaled $5,494,000 for the first
nine months of 1996 and totaled $3,973,000 for the first nine
months of 1995.
LOANS HELD FOR SALE
(in thousands)
YTD YTD YTD
09/30/96 12/31/95 09/30/95
<TABLE>
<S> <C> <C> <C>
Loan originations sold for the
period ending $5,494 $ 6,959 $ 3,973
Gains (losses) on loan originations
sold for the period ending $ (31) $ 41 $ 7
Loans originated for sale -
not yet sold $ 1,288 $ 0 $ 0
</TABLE>
SFAS 122, Mortgage Servicing Rights accounting was implemented
effective January 1, 1996. The calculation of the capitalized
amounts have not been material in the quarters ending
March 30, 1996, June 30, 1996 or September 30, 1996.
<PAGE> 7
Other Expenses: Total Other Expenses increased by 2.3% or
$216,000 in the first nine months of 1996 compared to the first
nine months of 1995. Salary and benefits expenses were
increased $148,000 or 2.7% above 1995 levels. If current
performance levels continue through December 31, 1996 as they
have in the first nine months of 1996, the Incentive Compensation
and Profit Sharing Plans will provide for a payout to
participants in the plans. Accruals have been established in the
financial information for the anticipated amounts as if the
current financial performance is continued through the end of
year 1996. This handling of anticipated payout is consistent
with the handling in previous years. Net Occupancy costs have
increased by $183,000, or 13.9% above 1995 levels. Professional
Fees increased by $44,000 and FDIC Assessment Fees have
decreased by $297,000 below 1995 levels. Marketing costs have
increased by $66,000 above 1995 levels. Management continues to
look at ways to reduce our operating costs.
Reserve/Provision for Loan Losses: Management at each
subsidiary Bank monitors the adequacy of the reserve on a
quarterly basis with an in-depth review of all non-accrual
loans, other real estate, loans 90 days past due and all
other loans where the financial statements of the Borrower
reveal a deterioration in financial strength. After each
review, specific sums in the loan loss reserve are allocated
to weak situations and the remaining balance is tested
for adequacy when measured by historical loss experience
and anticipated changes in the economic environment.
At all times during the past three years, the reserve accounts
were deemed to be fully adequate to cover the credit risks in
each of the bank portfolios. A specific loan loss reserve
does not exist for potential losses on loan commitments. No
losses from loan commitments have occurred in 1996, 1995
or 1994.
Management is not aware of any loans classified for regulatory
purposes as loss, doubtful, substandard, or special mention
that have not been disclosed under Item III of Industry Guide
III that (1) represent or result from trends or uncertainties
which management reasonably expects will materially impact
future operating results, liquidity or capital resources, or
(2) represent material credits about which management is aware
of any information which causes management to have serious
doubts as to the ability of such borrowers to comply
with the loan repayment terms. We know of no trends, events
or uncertainties that presently exist that are reasonably likely
to have a material effect on our liquidity, capital resources or
operations. The regulatory authorities have not made any
recommendations that would impact our liquidity, capital
resources or operations. FAS 114, which is based on the analysis
of expected cash flows and collateral values, required no
additional reserve for possible loan losses for impaired loans as
of September 30, 1996.
At September 30, 1996 the reserve account was $2,495,000 which
represented 1.20% of total loans outstanding. Our current goal
is to maintain the reserve for loan losses at 1.20% of total
loans outstanding. At September 30, 1995 this reserve account
was $2,231,000 or 1.20% of total loans outstanding. At December
31, 1995 the reserve for loan losses was $2,294,000 which was
1.19% of total loans outstanding. Loan losses net of recoveries
for the first nine months of 1996 were a net loss of $27,000
versus a net loss of $52,000 for the first nine months of 1995.
<PAGE> 8
RESERVE FOR LOAN LOSSES
(in thousands)
as of September 30, 1996
09/30/96 12/31/95 09/30/95
<TABLE>
<S> <C> <C> <C>
Reserve for loan losses as a
percentage of nonperforming
loans 89.5% 145.6% 204.3%
Reserve for loan losses as a
percentage of nonperforming
assets 88.4% 135.3% 149.1%
Reserve for loan losses as a
percentage of loans outstanding
at six months end 1.20% 1.19% 1.20%
</TABLE>
Non-Performing Assets: Non-Performing Assets are defined as
Non-Accrual, Other Real Estate Owned and Restructured Loans.
Generally, the accrual of interest income on a loan is suspended
when the loan becomes 90 days past due unless the loan is fully
collateralized and is in the process of collection. A
restructured loan is one that is accruing interest, but on
which concessions in the original terms of the loan have
been made due to a weakening in the financial strength of
the borrower. Management's policy for returning a non-performing
loan to a performing loan status is that the loan must be
current (all principal and interest payment made.) Any loan that
is returned to performing status is watched closely. It is not
our practice to loan split.
<PAGE> 9
NON-PERFORMING ASSETS
(In Thousands)
as of September 30, 1996
09-30-96 12-31-95 09-30-95
<TABLE>
<S> <C> <C> <C>
Impaired loans under FAS 114 (1) $ 1,963 $ 1,236 $ 0
Non-accrual loans:
Restructured loans 282 0 189
Original terms 457 130 442
Accruing loans past due
90 Days or more 86 210 461
________ _________ ________
Total nonperforming loans $ 2,788 $ 1,576 $ 1,092
Other real estate owned 33 120 404
________ ________ ________
Total nonperforming assets $ 2,821 $ 1,696 $ 1,496
======== ======== ========
Nonperforming loans as a
percentage of total loans 1.34% .82% .58%
Nonperforming assets as a
percentage of total loans
plus other real estate owned 1.36% .88% .80%
Nonperforming assets as a
percentage of total assets .77% .49% .44%
</TABLE>
Investment Securities: Securities are recorded in accordance
with Financial Accounting Standards Board Statement No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities", which requires an investment in a security to be
classified based on the Corporation's intent with respect to
holding securities. The following summarizes the classification
of securities held at September 30, 1996 and 1995 as well as
December 31, 1995. The effect of SFAS 115 in the first nine
months of 1996 was a decrease in assets of $170,000 and a
decrease in equity of $111,000, net of deferred tax credits of
$59,000.
<PAGE> 10
INVESTMENT SECURITIES
09/30/96 09/30/95
Amort Cost Amort Cost
<TABLE>
<S> <C> <C> <C> <C>
U.S. Government agencies $31,437 $31,371 $41,935 $41,762
and obligations - A.F.S.
U.S. Government agencies 0 0 0 0
and obligations - H.T.M.
Municipal Bonds - H.T.M. 40,931 41,751 38,082 40,156
Municipal Bonds - A.F.S. 1,087 1,095 774 781
Other Securities - A.F.S. 1,863 1,912 1,863 1,981
Other Securities - H.T.M. 12,079 11,981 11,580 11,392
Mortgage Backed 37,997 37,836 35,452 35,320
Securities - A.F.S. _______ _______ _______ _______
Total Investments $125,394 $125,946 $129,686 $131,392
======== ======== ======== ========
Available for Sale
U.S. Government agencies $31,371 $41,762
and obligations
Municipal Bonds 1,095 781
Other Securities 1,912 1,981
Mortgage Backed Securities 37,836 35,320
_______ _______
Total $72,214 $79,844
======= =======
Held to Maturity:
U.S. Government agencies $ 0 $ 0
and obligations
Municipal Bonds 40,931 38,082
Other Securities 12,079 11,580
Mortgage Back Securities 0 0
_______ _______
Total $53,010 $49,662
======= =======
</TABLE>
<PAGE> 11
INVESTMENT SECURITIES
09/30/96 12/31/95
Amort Cost Amort Cost
<TABLE>
<S> <C> <C> <C> <C>
U.S. Government agencies $31,437 $31,371 $39,278 $39,316
and obligations - A.F.S.
U.S. Government agencies 0 0 0 0
and obligations - H.T.M.
Municipal Bonds - H.T.M. 40,931 41,751 38,136 39,462
Municipal Bonds - A.F.S. 1,087 1,095 1,097 1,114
Other Securities - A.F.S. 1,863 1,912 1,863 1,950
Other Securities - H.T.M. 12,079 11,981 8,643 8,537
Mortgage Backed 37,997 37,836 35,044 35,043
Securities - A.F.S. _______ _______ _______ _______
Total Investments $125,394 $125,946 $124,061 $125,422
======== ======== ======== ========
Available for Sale
U.S. Government agencies $31,371 $39,316
and obligations
Municipal Bonds 1,095 1,114
Other Securities 1,912 1,950
Mortgage Backed Securities 37,836 35,043
_______ _______
Total $72,214 $77,423
======= =======
Held to Maturity:
U.S. Government agencies $ 0 $ 0
and obligations
Municipal Bonds 40,931 38,136
Other 12,079 8,643
Mortgage Back Securities 0 0
_______ _______
Total $53,010 $46,779
======= =======
</TABLE>
<PAGE> 12
Liquidity: At September 30, 1996, Seaway's net liquidity ratio
was 40.3%. At December 31, 1995, this ratio was 35.7% and at
September 30, 1995, it was 42.4%. Net liquid assets are
comprised of investment securities that are not pledged, federal
funds sold, bankers acceptances, cash and due from banks and time
deposits in other banks, less any reserve requirements.
This strong liquidity position allows us to meet any increasing
loan demands of our customers or to absorb any short term
decline in deposits which might be experienced.
Capital Management: Seaway is dedicated to maintaining a
capital position in excess of eight percent equity capital to
total assets. In light of the current regulatory and banking
environment, this is more important today than it ever has been.
Depositor and investor confidence is necessary to continue to
operate profitably. This also places the Corporation in a
position to expand through new offices or acquisitions should
these opportunities arise. Seaway's primary capital ratio which
includes stockholders' equity and loan reserves, at September 30,
1996 was 11.9% as well as 12.0% at September 30, 1995 and 11.9%
at December 31, 1995. Return on equity capital at September 30,
1996 was 11.2%. This same ratio was 10.9% at September 30, 1995
and 11.0% at December 31, 1995.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the reqistrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SEAWAY FINANCIAL CORPORATION
Date: November 8, 1996 /s/Franklin H. Moore, Jr.
Franklin H. Moore, Jr.
Chairman of the Board of Directors
and Treasury as Principal Executive
Officer and Principal Financial and
Chief Accounting Officer of the
Registrant
<PAGE> 14
PART II OTHER INFORMATION
Item 1. Legal Proceedings:
None
Item 2. Changes in Securities:
None
Item 3. Defaults upon Senior Securities:
None
Item 4. Submission of Matters to a Vote of Security Holders:
None
Item 5. Other Information:
We completed a definitive agreement with Old Kent
Financial Corporation in August 1996. Proxies and
Prospectus were mailed in early November with a
scheduled Stockholders' Meeting date of December 5,
1996. Regulatory approvals are being processed. A
Task Force has been formed by Old Kent Financial
Corporation and Seaway Financial Corporation personnel
to plan and implement necessary changes to systems and
procedures upon completion of the acquisition. We
continue to be hopeful of completing the transaction
at year end.
The Directors at their October meeting declared a $.32
per share dividend payable on December 10, 1996, to
shareholders of record on November 20, 1996.
Item 6. Exhibits and Reports on Form 8-K
None
<PAGE> 15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 13,622
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 72,214
<INVESTMENTS-CARRYING> 53,010
<INVESTMENTS-MARKET> 53,732
<LOANS> 209,237
<ALLOWANCE> 2,495
<TOTAL-ASSETS> 361,841
<DEPOSITS> 319,728
<SHORT-TERM> 31
<LIABILITIES-OTHER> 1,550
<LONG-TERM> 0
<COMMON> 1,685
0
0
<OTHER-SE> 38,847
<TOTAL-LIABILITIES-AND-EQUITY> 361,841
<INTEREST-LOAN> 13,502
<INTEREST-INVEST> 3,814
<INTEREST-OTHER> 9
<INTEREST-TOTAL> 12,694
<INTEREST-DEPOSIT> 5,352
<INTEREST-EXPENSE> 5,362
<INTEREST-INCOME-NET> 7,332
<LOAN-LOSSES> 167
<SECURITIES-GAINS> (23)
<EXPENSE-OTHER> 6,299
<INCOME-PRETAX> 2,776
<INCOME-PRE-EXTRAORDINARY> 2,776
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,172
<EPS-PRIMARY> 1.29
<EPS-DILUTED> 1.29
<YIELD-ACTUAL> 4.45
<LOANS-NON> 200
<LOANS-PAST> 1,508
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,294
<CHARGE-OFFS> 53
<RECOVERIES> 26
<ALLOWANCE-CLOSE> 2,494
<ALLOWANCE-DOMESTIC> 2,494
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,079
</TABLE>
