<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended SEPTEMBER 30, 1998
COMMISSION FILE NUMBER 33-46573
--------
CAPITAL HOLDINGS, INC.
----------------------
(Exact name of registrant as specified in its Charter)
OHIO 34-1588902
---- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5520 MONROE STREET, SYLVANIA, OH 43560
--------------------------------------
(Address of principal executive offices and zip code)
(419) 885-7379
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) YES X (2) NO
----- -----
As of September 30, 1998, there were 2,005,012 shares of common stock
outstanding.
<PAGE> 2
CAPITAL HOLDINGS, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
- ------------------------------
<S> <C>
Item 1. Financial Statements (Unaudited):
Consolidated balance sheets
September 30, 1998 and December 31, 1997 3
Consolidated statements of income
Three months ended September 30, 1998 and 1997 4
Nine months ended September 30, 1998 and 1997
Consolidated statements of shareholders' equity
Nine months ended September 30, 1998 and 1997 5
Consolidated statements of cash flows
Nine months ended September 30, 1998 and 1997 6
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 13
PART II. OTHER INFORMATION 13
- ---------------------------
SIGNATURES 14
- ----------
</TABLE>
2
<PAGE> 3
CAPITAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED)
SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 18,237,731 $ 15,291,951
Federal Funds Sold 10,500,000 8,000,000
------------ ------------
Total Cash and Cash Equivalents 28,737,731 23,291,951
Investment Securities Available for sale, at fair value 193,922,558 167,520,873
Loans 528,567,601 469,036,091
Less: Allowance for credit losses 7,744,782 6,947,377
------------ ------------
Net loans 520,822,819 462,088,714
Bank premises and equipment 9,702,123 9,548,218
Interest receivable and other assets 7,791,871 7,090,107
============ ============
Total Assets $760,977,102 $669,539,863
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Interest bearing $593,710,405 $544,186,632
Noninterest bearing 52,436,824 49,869,745
------------ ------------
Total deposits 646,147,229 594,056,377
Short-term borrowings 48,555,119 15,900,000
Interest payable and other liabilities 8,613,416 9,036,804
------------ ------------
Total Liabilities 703,315,764 618,993,181
SHAREHOLDERS' EQUITY
Common stock, no par value, $.50 stated value;
3,000,000 shares authorized and 2,005,012 shares
issued and outstanding (1,991,922 at December 31, 1997) 1,002,505 995,961
Capital in excess of stated value 33,641,859 33,179,413
Retained earnings 19,629,741 15,014,646
Other comprehensive income 3,387,233 1,356,662
------------ ------------
Total Shareholders' Equity 57,661,338 50,546,682
------------ ------------
Total Liabilities and Shareholders' Equity $760,977,102 $669,539,863
============ ============
</TABLE>
See Accompanying Notes
3
<PAGE> 4
CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $11,312,961 $ 9,380,805 $32,383,404 $26,993,046
Securities 2,934,723 2,527,214 8,381,921 7,704,506
Federal funds sold 175,949 33,128 384,004 204,575
----------- ----------- ----------- -----------
Total interest income 14,423,633 11,941,147 41,149,329 34,902,127
Interest expense:
Deposits 7,526,701 6,478,048 21,639,212 18,895,954
Short-term borrowings 751,538 347,733 1,893,957 956,788
----------- ----------- ----------- -----------
Total interest expense 8,278,239 6,825,781 23,533,169 19,852,742
----------- ----------- ----------- -----------
Net interest income 6,145,394 5,115,366 17,616,160 15,049,385
Provision for credit losses 320,000 240,000 830,000 720,000
----------- ----------- ----------- -----------
Net interest income after provision for credit losses 5,825,394 4,875,366 16,786,160 14,329,385
Other income:
Securities gains, net 675 5,496 21,802 13,302
Other 391,993 336,009 1,062,787 895,742
----------- ----------- ----------- -----------
Total other income 392,668 341,505 1,084,589 909,044
Other expenses:
Salaries and employee benefits 1,637,396 1,434,221 4,868,686 4,192,802
Equipment 251,406 180,355 607,481 414,179
Taxes other than income 115,875 97,269 354,525 301,033
Courier services 156,552 131,466 451,988 389,449
Net occupancy 80,928 87,054 225,305 234,939
Other 827,663 832,117 2,656,269 2,392,648
----------- ----------- ----------- -----------
Total other expenses 3,069,820 2,762,482 9,164,254 7,925,050
----------- ----------- ----------- -----------
Income before provision for federal income tax 3,148,242 2,454,389 8,706,495 7,313,379
Provision for federal income tax 990,000 790,000 2,830,000 2,350,000
----------- ----------- ----------- -----------
Net income $ 2,158,242 $ 1,664,389 $ 5,876,495 $ 4,963,379
=========== =========== =========== ===========
Net income per share:
Basic $ 1.08 $ 0.88 $ 2.94 $ 2.61
=========== =========== =========== ===========
Diluted $ 1.05 $ 0.84 $ 2.89 $ 2.51
=========== =========== =========== ===========
Average shares outstanding:
Basic 2,003,827 1,899,667 2,001,063 1,898,882
=========== =========== =========== ===========
Diluted 2,046,406 1,975,842 2,032,741 1,975,218
=========== =========== =========== ===========
</TABLE>
See Accompanying Notes
4
<PAGE> 5
CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN OTHER TOTAL
------------------------- EXCESS OF RETAINED COMPREHENSIVE SHAREHOLDERS'
SHARES AMOUNT STATED VALUE EARNINGS INCOME EQUITY
------------- ----------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1998 1,991,922 $995,961 $33,179,413 $15,014,646 $1,356,662 $50,546,682
Net income 5,876,495 5,876,495
Unrealized gains (losses) on securities,
net of tax 2,030,571 2,030,571
-----------------------------
Comprehensive Income 7,907,066
Exercise of common stock options 7,060 3,530 172,526 176,056
Issuance of common stock shares 6,030 3,014 289,920 292,934
Cash dividend declared, $.63 per share (1,261,400) (1,261,400)
------------------------------------------------------------------------------------
Balance at September 30, 1998 2,005,012 $1,002,505 $33,641,859 $19,629,741 $3,387,233 $57,661,338
====================================================================================
Balance at January 1, 1997 1,897,508 $948,754 $30,893,093 $9,217,448 $530,809 $41,590,104
Net income 4,963,379 4,963,379
Unrealized gains (losses) on securities,
net of tax 477,206 477,206
-----------------------------
Comprehensive Income 5,440,585
Exercise of 1,022 common stock options at
$10.78 per share 1,022 511 10,506 11,017
Issuance of 1778 shares of common stock 1,778 889 72,257 73,146
Cash dividend declared, $.34 per share (645,860) (645,860)
------------------------------------------------------------------------------------
Balance at September 30, 1997 1,900,308 $950,154 $30,975,856 $13,534,967 $1,008,015 $46,468,992
====================================================================================
</TABLE>
See Accompanying Notes
5
<PAGE> 6
CAPITAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
1998 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 5,876,495 $ 4,963,379
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for credit losses 830,000 720,000
Depreciation and amortization 490,828 301,256
Amortization and accretion of security premiums and discounts (34,993) (63,532)
Gain on sale of securities (21,802) (13,302)
Deferred income taxes (282,200) (244,800)
Changes in assets and liabilities:
Increase in interest receivable and other assets (1,467,912) (1,297,397)
(Decrease)/increase in interest payable and other liabilities (506,009) 1,369,097
------------ ------------
Total adjustments (992,088) 771,322
------------ ------------
Net cash provided by operating activities 4,884,407 5,734,701
INVESTING ACTIVITIES:
Purchase of securities available for sale (56,887,506) (28,708,336)
Net increase in loans (59,564,105) (47,798,067)
Purchase of bank premises and equipment (644,733) (3,702,466)
Proceeds from maturities of securities available for sale 6,971,596 11,546,926
Proceeds from sales of securities available for sale 26,649,939 14,511,281
------------ ------------
Net cash used in investing activities (83,474,809) (54,150,662)
FINANCING ACTIVITIES:
Net increase in deposits 52,090,852 61,157,020
Net increase/(decrease) in short-term borrowings 32,655,119 (12,172,199)
Issuance of common stock 468,990 84,163
Dividends paid (1,178,779) (322,808)
------------ ------------
Net cash provided by financing activities 84,036,182 48,746,176
------------ ------------
Increase in cash and cash equivalents 5,445,780 330,215
Cash and cash equivalents at beginning of period 23,291,951 13,958,201
============ ============
Cash and cash equivalents at end of period $ 28,737,731 $ 14,288,416
============ ============
Supplemental disclosures:
Interest paid $ 23,069,870 $ 19,383,415
============ ============
Income taxes paid $ 2,776,000 $ 2,225,000
============ ============
</TABLE>
See Accompanying Notes
6
<PAGE> 7
CAPITAL HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
BASIS OF PRESENTATION
- ---------------------
The unaudited consolidated financial statements include the accounts of Capital
Holdings, Inc. (the Company) and its wholly owned subsidiaries, Capital Bank,
N.A. (the Bank) and CBNA Building Company, which is a real estate subsidiary
that owns and leases to the Bank, its only operating facility.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions of Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. All adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Significant
intercompany balances and transactions have been eliminated in the consolidated
financial statements. For further information refer to the consolidated
financial statements and notes thereto appearing in the Company's annual report
on Form 10-K for the year ended December 31, 1997.
The Bank's maximum exposure to credit losses for loan commitments and standby
letters of credit outstanding at September 30, 1998 was $222,385,000 and
$13,641,000, respectively, compared to $186,909,000 and $13,439,000,
respectively, at December 31, 1997. The increase in loan commitments is due to
owner-occupied real estate construction to take place within the next twelve
months. Management does not anticipate any significant losses as a result of
these commitments.
COMPREHENSIVE INCOME
- --------------------
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Company's net income or shareholders'
equity. Statement 130 requires unrealized gains or losses on the Company's
available-for-sale securities, which prior to adoption were reported separately
in shareholders' equity, to be included in other comprehensive income. Prior
year financial statements have been reclassified to conform to the requirements
of Statement 130.
7
<PAGE> 8
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's primary asset is its subsidiary bank, which is in its tenth year
of operation. During the third quarter and for the nine months ended
September 30, 1998, the Bank experienced an increase in net deposits. Deposits
increased $4,211,000 or .7% for the third quarter and $52,091,000 or 8.8% for
the nine months ended September 30, 1998.
Loan growth for the third quarter of 1998 was $7,074,000 or 1.4% and $59,532,000
or 12.7% for the nine months ended September 30, 1998. The allowance for credit
losses at September 30, 1998, was $7,745,000 or 1.5% of total loans, compared to
$6,947,000 or 1.5% of total loans at December 31, 1997. The Bank had write offs
totaling $36,000 for the nine months ended September 30, 1998. This was the
Bank's first loss in four years. Nonperforming loans represent .12% of total
loans at September 30, 1998. Management considers the allowance to be adequate
at this time. At September 30, 1998, the Bank had no impaired loans.
Securities available for sale totaled $193,923,000 or 25.5% of total assets at
September 30, 1998. The Bank continues to maintain very high investment quality
with 82.2% of total securities in U.S. Treasury and Agency securities. The Bank
has no high-risk on or off balance-sheet derivatives. The total market value of
the portfolio increased $2,031,000 (net of tax) for the nine months ended
September 30, 1998. This is a reflection of the fluctuation in bond rates on
both long and short-term security maturities. The Bank's portfolio has a
weighted average life to maturity of approximately 2.2 years.
Consolidated net income for the third quarter of 1998 was $2,158,000 or $1.05
per diluted share, and $5,876,000 or $2.89 per diluted share for the nine months
ended September 30, 1998. This compares to $1,664,000 or $.84 per diluted share
for the third quarter of 1997 and $4,963,000 or $2.51 per diluted share for the
nine months ended September 30, 1997. The increase in income before provision
for federal income taxes, excluding securities gains, for the nine months ended
September 30, 1998, was 18.3%, compared to the same period of 1997. This
increase is a direct result of growth in earning assets, careful attention to
noninterest expenses and an increase in fees collected on lending transactions.
The income tax provision of approximately 32% for the nine months ended
September 30, 1998, remained comparable to the same period last year.
8
<PAGE> 9
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Other expenses continue to increase as the Bank grows. Net overhead as a
percentage of average assets has decreased slightly from 1.77% for the year
ended December 31, 1997, to 1.72% for the nine months ended September 30, 1998.
Salaries and benefits represent 53.1% of other expenses for the nine months
ended September 30, 1998, compared to 52.9% for the nine months ended
September 30, 1997. Salary expense for the nine months ended September 30,
1998, increased 16.1% over the same period for 1997. Staff levels have
increased from 96 to 111 (full time equivalents) over the past 12 months, to
accommodate the increased growth of the bank. Average assets per employee has
increased from $6,203,000 at December 31, 1997, to $6,729,000 at September 30,
1998.
The Tier I Capital ratio was 9.53%, the Total Capital ratio was 10.78%, and the
Leverage ratio was 7.25% at September 30, 1998, compared to regulatory capital
requirements of 4%, 8% and 4%, respectively. These ratios are well in excess of
the regulatory capital requirements.
Shareholders equity has continued to increase from retained earnings of net
income. A $.21 per share cash dividend was paid on April 25, 1998 and July 25,
1998. Another $.21 per share cash dividend was declared on September 30, 1998,
payable on October 25, 1998. Annualized, these cash dividends represent 22% of
the current years projected earnings.
In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of
an Enterprise and Related Information. The Company expects that adoption of this
Statement will not have a significant impact on the consolidated financial
statements.
9
<PAGE> 10
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
In June 1998, the FASB issued Statement No. 133. "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for hedging activities and for derivative instruments,
including certain derivative instruments embedded in other contracts. This
statement requires a company to recognize all derivatives as either assets or
liabilities in its balance sheet and measure those instruments at fair value. If
certain conditions are met, a derivative may be specifically designated as a
fair value, cash flow, or foreign currency hedge. The accounting for changes in
the fair value of a derivative (i.e. gains and losses) depends on the intended
use of the derivative and the resulting designation. This statement is effective
for all fiscal quarters of fiscal years beginning after June 15, 1999. Presently
the Company does not utilize derivative or related types of financial
instruments except for Federal agency collateralized mortgage obligations.
Therefore, this Statement is not anticipated to have a material impact on the
Company.
Y2K DISCLOSURE
- --------------
The Company initiated a company-wide project to prepare its computer systems,
application and infrastructure for Year 2000 compliance. The following
discussion of the implications of the Year 2000 issue for the Company contains
numerous forward-looking statements based on inherently uncertain information.
The cost of the project and the date on which the Company plans to complete the
internal Year 2000 modifications are based on management's best estimates, which
management derived utilizing a number of assumptions of future events including
the continued availability of internal and external resources, including
employees, third party modifications and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could differ.
In 1996, management determined that many of the Company's critical processes
might not be ready to operate normally in the year 2000 and beyond without
remediation. Since then, the Company completed an assessment and efforts are
underway to correct and validate compliance. In 1997, the Company alerted its
business customers of the Year 2000 problem and is now assessing the readiness
preparations of its major customers and suppliers. Resolution of the Year 2000
problem is among the Company's highest priorities, and the Company established a
comprehensive program to address its many aspects.
10
<PAGE> 11
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company prepared a project plan, identified its major application and
processing systems, and is using internal and external resources to modify or
replace non-ready systems. The Company will test identified critical systems for
readiness as part of this process. In addition, the Company will evaluate
customers and vendors who have significant relationships with the Company to
determine whether they are preparing and will be ready for the year 2000. The
Company considered the potential failure of those customers to be adequately
prepared as part of the credit and review process. However, there can be no
guarantee that the remediation of the systems of the Company's vendors or
customers will be completed on a timely basis.
The Company upgraded computer hardware and software during the second and third
quarter of 1998 to meet our strategic plan of enhancing our products and
services from a competitive viewpoint. This decision was not related to Year
2000 compliance issues. The newly installed systems are Year 2000 compliant. The
cost of these systems was approximately $600,000 which was capitalized. The
Company is currently reviewing other systems, including desktop computers and
facilities related items for Year 2000 compliance. Anticipated costs related to
the remaining hardware and software purchases, associated reprogramming, and
remedial actions will not exceed $250,000 in 1998 and 1999. The Company will
fund the costs through normal operating cash flow. The project is staffed
primarily with internal staff redeployed from less time-sensitive assignments.
The Company is reliant on suppliers and customers, and we are addressing Year
2000 issues with both groups. As of September 30, 1998, we have identified
critical vendors and are completing formalized risk assessments of their Year
2000 readiness plans and status. We expect to complete risk assessments on the
critical vendors by year-end 1998, and replace vendors or make alternative
arrangements when sources are limited or unavailable.
The Company is also reliant on its customers to make the necessary preparations
for Year 2000 so that their business operations will not be interrupted, as an
interruption could threaten their ability to honor financial commitments. We
have identified approximately 316 relationships, consisting of borrowers,
capital market counter parties, funding sources, and large depositors as having
financial volumes sufficiently large to warrant inquiry as to Year 2000
preparation. We have substantially completed a formal assessment of risk based
on these initital reports as of September 30, 1998. Customers found to have a
significant risk of not being ready for Year 2000 are encouraged to make the
necessary effort. We are undertaking measures to minimize risk with those that
appear to pose a significant risk.
11
<PAGE> 12
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's Year 2000 change program includes the active involvement of senior
executives as well as seasoned project managers from throughout the company.
Senior executive, the board of directors and a project steering committee
regularly review the overall program. The federal and state agencies that
regulate the banking industry also monitor the program.
We grouped the principal risks associated with the Year 2000 problem into three
categories. The first is the risk that the Company does not successfully ready
its operations for the year 2000. The Company, like other financial
institutions, is heavily dependent on its computer systems. Year 2000 compliant
systems have already been implemented and management believes it will be able to
make any other necessary corrections in a timely manner.
Computer failure of third parties may also impact the Company's operations. The
most serious impact on the Company's operations from suppliers would result if
basic services such as telecommunications, electric power suppliers, and
services provided by other financial institutions and governmental agencies were
disrupted. While we have inquiries underway, the Company does not yet have
sufficient information to estimate the likelihood of significant disruptions
among its suppliers.
Operational failures among the Company's sources of major funding and larger
borrowers could affect their ability to continue to provide funding or meet
obligations when due. It is not possible to accurately estimate the likelihood,
or potential impact, of significant disruptions among the Company's funding
sources and obligors at this time.
The Company is developing remediation contingency plans and business resumption
contingency plans specific to the Year 2000. Remediation contingency plans
address the actions to be taken if the current approach to remediating a system
is falling behind schedule or otherwise appears in jeopardy of failing to
deliver a Year 2000 ready system when needed. Business resumption contingency
plans address the actions that would be taken if critical business functions can
not be carried out in the normal manner due to system or supplier failure.
12
<PAGE> 13
CAPITAL HOLDINGS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company developed remediation contingency plans with trigger dates for
review and implementation for critical data systems. The Company is also
enhancing its existing business resumption plans to reflect Year 2000 issues and
is developing plans designed to coordinate the efforts of its personnel and
resources in addressing any Year 2000 problems that become known after
December 31, 1999.
PART II. OTHER INFORMATION
- ---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) No reports on Form 8-K were filed for the quarter ended
September 30, 1998.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements for 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.
CAPITAL HOLDINGS, INC.
Date 11/5/98 /s/ Michael P. Killian
-------------------- ----------------------------------------------
Michael P. Killian, Chief Financial Officer,
Senior Vice President
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 18,237,731
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 10,500,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 193,922,558
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 528,567,601
<ALLOWANCE> 7,744,782
<TOTAL-ASSETS> 760,977,102
<DEPOSITS> 646,147,229
<SHORT-TERM> 48,555,119
<LIABILITIES-OTHER> 8,613,416
<LONG-TERM> 0
0
0
<COMMON> 1,002,505
<OTHER-SE> 56,658,833
<TOTAL-LIABILITIES-AND-EQUITY> 760,977,102
<INTEREST-LOAN> 32,383,404
<INTEREST-INVEST> 8,765,925
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 41,149,329
<INTEREST-DEPOSIT> 21,639,212
<INTEREST-EXPENSE> 23,533,169
<INTEREST-INCOME-NET> 17,616,160
<LOAN-LOSSES> 830,000
<SECURITIES-GAINS> 21,803
<EXPENSE-OTHER> 9,164,254
<INCOME-PRETAX> 8,706,495
<INCOME-PRE-EXTRAORDINARY> 8,706,495
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,876,495
<EPS-PRIMARY> 2.94
<EPS-DILUTED> 2.89
<YIELD-ACTUAL> 3.467
<LOANS-NON> 153,000
<LOANS-PAST> 491,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,947,000
<CHARGE-OFFS> 36,000
<RECOVERIES> 4,000
<ALLOWANCE-CLOSE> 7,745,000
<ALLOWANCE-DOMESTIC> 7,187,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 558,000
</TABLE>
