<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X Quarterly report under Section 13 of 15 (d) of the Securities Exchange
- ---- Act of 1934 for the quarterly period ended March 31, 1996
Transition report under Section 13 or 15 (d) of the Exchange Act for the
- ---- transition period from _____ to ______
COMMISSION FILE NUMBER 0-18827
-------
FAYETTE COUNTY BANCSHARES, INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
Georgia 58-1835725
- --------------------------------------------------------------- --------------------------------------------
(State or other Jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
300 Peachtree Parkway South, Peachtree City, Georgia 30269
------------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number, including area code: (770) 631-2265
--------------
Not Applicable
--------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (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, and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No
----- -----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at May 10, 1996
- ----------------------------- ---------------------------
Common Stock, $1.00 Par Value 612,440 shares
Transitional Small Business Disclosure Format:
Yes No x
----- -----
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are provided for Fayette County
Bancshares, Inc. and subsidiary:
A. Consolidated Balance Sheets as of March 31, 1996 and December 31,
1995.
B. Consolidated Statements of Operations for the three month periods
ended March 31, 1996 and 1995.
C. Consolidated Statements of Cash Flows for the three month periods
ended March 31, 1996 and 1995.
D. Notes to Consolidated Financial Statements.
1
<PAGE> 3
FAYETTE COUNTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
---------------------------------
1996 1995
---------- ---------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,554,735 $ 2,972,249
Federal funds sold 5,710,000 2,880,000
Interest-bearing deposits in other financial institutions 195,000 195,000
Investment securities held to maturity (market value of $1,861,509
and $1,643,049, respectively) 1,658,877 1,858,720
Investment securities available for sale 13,124,465 10,891,420
Other investments 273,200 251,000
Loans, net of deferred loan fees 72,163,188 67,771,350
Less: Allowance for loan losses 962,718 918,036
------------ -----------
Loans, net 71,200,470 66,853,314
Premises and equipment, net 3,219,942 3,266,404
Other real estate 68,931 68,931
Accrued interest receivable 651,880 700,771
Intangible assets, net of accumulated amortization of $465,833 and
$441,369, respectively 544,166 568,631
Other assets 611,214 426,163
------------ -----------
TOTAL ASSETS $100,812,880 $90,932,603
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest-bearing demand $ 15,650,955 $13,650,114
Interest-bearing demand and money market 22,005,178 21,964,114
Savings 6,002,146 5,333,685
Time deposits of $100,000 or more 16,671,158 12,301,137
Other time deposits 30,789,754 28,187,826
------------ -----------
TOTAL DEPOSITS 91,119,191 81,436,876
Federal funds purchased and securities sold under agreements to
repurchase -0- 1,161
Accrued interest payable 945,144 1,169,413
Other liabilities 531,550 189,550
------------ -----------
TOTAL LIABILITIES 92,595,885 82,797,000
------------ -----------
STOCKHOLDERS' EQUITY
Preferred stock - $1.00 par value:
5,000,000 shares authorized, no shares issued and outstanding -0- -0-
Common stock - $1.00 par value:
5,000,000 shares authorized, 612,440 shares issued and outstanding 612,440 612,440
Surplus 5,561,016 5,561,016
Retained earnings 2,148,212 2,058,615
Market valuation reserve on investment securities available for sale (104,673) (96,468)
------------ -----------
TOTAL STOCKHOLDERS' EQUITY 8,216,995 8,135,603
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $100,812,880 $90,932,603
============ ===========
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE> 4
FAYETTE COUNTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
1996 1995
----------------- -----------------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $1,889,704 $1,193,685
Investment securities:
Taxable Securities 180,273 204,995
Tax Exempt Securities 20,795 21,509
Federal funds sold 52,834 53,390
Interest-bearing deposits in other financial institutions 2,654 3,101
---------- ----------
TOTAL INTEREST INCOME 2,146,260 1,476,680
---------- ----------
INTEREST EXPENSE
Interest-bearing demand and money market 163,839 130,552
Savings 34,005 29,709
Time deposits 673,314 329,603
Federal funds purchased and securities sold under agreement to
repurchase 512 7,288
---------- ----------
TOTAL INTEREST EXPENSE 871,670 497,152
---------- ----------
NET INTEREST INCOME 1,274,590 979,528
PROVISION FOR LOAN LOSSES 120,000 35,000
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,154,590 944,528
---------- ----------
OTHER INCOME
Service charges on deposit accounts 113,311 89,714
Investment securities gains (losses), net (967) 5
Gains on sales of SBA loans -0- -0-
Other income 20,152 470
---------- ----------
TOTAL OTHER INCOME 132,496 90,189
---------- ----------
OTHER EXPENSE
Salaries and wages 403,810 305,972
Net occupancy expense 107,270 100,829
Other expense (NOTE B) 327,976 293,604
---------- ----------
TOTAL OTHER EXPENSE 839,056 700,405
---------- ----------
INCOME BEFORE INCOME TAX EXPENSE 448,030 334,312
INCOME TAX EXPENSE 174,700 129,700
---------- ----------
NET INCOME $ 273,330 $ 204,612
========== ==========
NET INCOME PER SHARE - (NOTE C) $ 0.45 $ 0.34
========== ==========
WEIGHTED AVG NUMBER OF SHARES OUTSTANDING 612,440 608,440
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 5
FAYETTE COUNTY BANCSHARES, INC., AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 273,330 $ 204,612
Adjustments to reconcile net income
to net cash provided by operating activities:
Amortization of intangibles 24,464 24,464
Depreciation, amortization and accretion 45,268 48,130
Provision for loan losses 120,000 35,000
Securities gains, net 967 (5)
Change in:
(Increase) decrease in interest receivable 48,891 26,770
Increase (Decrease) in interest payable (224,269) 121,267
(Increase) decrease in other assets (180,825) (113,277)
Increase (Decrease) in other liabilities 342,000 118,414
---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 449,826 465,375
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in interest-bearing deposits
with other banks -0- 100,000
Purchases of investment securities available for sale (5,734,047) (1,461,721)
Purchases of other investments (22,200) -0-
Proceeds from sales of investment securities
available for sale 1,239,523 7,083
Proceeds from maturities of investment securities 200,000 -0-
Proceeds from maturities of investment securities
available for sale 2,250,000 40,000
Net (increase) decrease in loans (4,467,156) (1,822,749)
Purchase of bank premises and equipment (882) (30,279)
---------- -----------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (6,534,762) (3,167,666)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in Federal Funds purchased
and securities sold under agreements to repurchase (1,161) (1,037,478)
Net increase (decrease) in demand and savings
deposits 2,710,366 8,345,622
Net increase (decrease) in time deposits 6,971,949 7,897,370
Proceeds from Stock Sales -0- 30,000
Cash Dividend Payment (183,732) -0-
---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 9,497,422 15,235,514
---------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,412,486 12,533,223
========== ===========
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,852,249 2,774,407
---------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $9,264,735 $15,307,360
========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH PAID:
Interest $1,095,939 $ 375,885
========== ===========
Income Taxes $ -0- $ -0-
========== ===========
SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING AND
INVESTING ACTIVITIES:
Acquisition of real estate in settlement of loans $ 66,097 $ -0-
========== ===========
</TABLE>
4
<PAGE> 6
FAYETTE COUNTY BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information, and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B of the Securities and Exchange Commission.
Accordingly, they do not include all of 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 three month period ended March 31, 1996, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996. For further information refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995.
PENDING ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of. The Company is
required to implement SFAS 121 by December 31, 1996. The provisions of SFAS
121 will require the Company to review long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. The adoption is not expected to have a
significant impact on the Company.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 122 (SFAS 122). "Mortgage Servicing Rights," as an
amendment to SFAS 65. The Company is required to implement SFAS 122 by
December 31, 1996. The provisions of SFAS 122 eliminate the accounting
distinction between rights to service mortgage loans that are acquired through
loan origination and those acquired through purchase. The adoption is not
expected to have a significant impact on the Company.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 123 (SFAS 123), Accounting for Stock-Based
Compensation." The Company is required to implement SFAS 123 in 1996. SFAS
123 establishes a method of accounting for stock compensation plans based on
fair value. Companies are permitted to continue to use the existing method of
accounting but are required to disclose pro forma net income and earnings per
share as if SFAS 123 had been used to measure compensation cost. The adoption
of SFAS 123 is not expected to have a significant impact on the Company.
NOTE B
SUPPLEMENTAL FINANCIAL DATA
Components of other operating expense in excess of 1% of total interest and
other income for the periods ended March 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Printing and supplies $ 22,821 $ 21,732
Data Processing fees 65,997 28,690
FDIC assessment - 36,495
Director fees 29,000 21,150
Amortization of intangibles 24,464 24,464
Postage - 19,445
</TABLE>
NOTE C
EARNINGS PER SHARE
Earnings per share have been computed on the weighted average number of common
shares outstanding during the period.
5
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
PERIOD ENDED MARCH 31, 1996
Fayette County Bancshares, Inc. (the "Company"), reported net income of
$273,330 for the first quarter of 1996, a 33.58% increase as compared to
$204,612 for the same period in 1995. Net earnings per share for the first
quarter of 1996 and 1995 were $.45 and $.34, respectively. The increase in net
income is primarily attributable to the increase in interest income including
fees from loans. Total assets increased $9,880,277 to $100,812,880 between
December 31, 1995 and March 31, 1996, an increase of 10.87%.
The return on average assets for the Company was 1.19% for the three month
period ended March 31, 1996, as compared to 1.26% for the same period last
year. The return on average shareholders' equity increased for the first three
months of 1996 to 13.91% as compared to 13.11% for the first three months of
1995. Book value at March 31, 1996, was $13.42, an increase of $.14 from
December 31, 1995.
Deposits grew $9,682,315 from December 31, 1995, an increase of 11.89%, to
$91,119,191. Noninterest bearing demand deposits accounted for $2,000,841 of
this increase, or 14.66%. Time deposits over $100,000 increased $4,370,021 to
$16,671,158, at March 31, 1996. Deposit growth is attributed to Fayette County
Bank (the "Bank") increasing its rates on time deposits in order to attract
more deposits to fund loan demand. Loans, net of the allowance for loan
losses, increased $4,347,156 during the three month period ended March 31,
1996. The Bank continues to experience increases in loan demand since the
hiring of two senior lending officers from two local financial institutions
during the second quarter of 1995. Management believes that most of these
additional deposits are with individuals and businesses within the Bank's local
market area and with whom or which the Bank has had consistent deposit
relationships. The Bank does not solicit brokered deposits. However, because
these additional deposits resulted from the Bank's decision to increase its
rates on deposits, management believes that these deposit relationships may not
remain with the Bank if the Bank does not continue to pay market or above
market rates on the deposits.
Deposit funds in excess of those needed to support loan growth were allocated
to purchases of investment securities and to federal funds sold, which
increased from $2,880,000 at December 31, 1995 to $5,710,000 at March 31, 1996.
Investment securities available-for-sale increased $2,233,045 during the first
quarter of 1996. The Statement of Cash Flows shows the Bank had $3,489,523 in
available-for-sale securities to be sold or mature during the first quarter of
1996, while the Bank purchased $5,734,047 of available-for-sale securities. The
Bank also had one held-to-maturity security to mature during the first quarter
of 1996 in the amount of $200,000.
The Bank's increase in earning assets, coupled with the faster repricing of
earning assets than interest-bearing liabilities in an increasing interest rate
environment, resulted in an increase in the Company's net interest income for
the first three months of 1996 as compared to the first three months of 1995.
Net interest income for the three month period ended March 31, 1996, increased
30.12% to $1,274,590, as compared to $979,528 for the same period in 1995. The
interest margin for the first three months of 1996 declined only slightly to
5.90%, as compared to 5.99% for the same three month period in 1995.
Other income increased to $132,496, from $90,189, for the three month periods
ended March 31, 1996 and 1995, respectively. Service charges on deposit
accounts increased to $113,311, up $23,597 or 26.31% from $89,714 during the
first quarter of 1996, as compared to the same period of 1995. This is
primarily attributed to the increase in new accounts during the period. Other
miscellaneous income increased to $20,152, compared to $470 for the three month
periods ended March 31, 1996 and 1995, respectively. This increase is due to
the closing of the Bank's permanent mortgage department during 1995.
Other expenses increased $138,651 to $839,056, from $700,405, for the three
month periods ended March 31, 1996 and 1995, respectively. Salaries and
employee benefits accounted for approximately $98,000 of this increase.
Management attributes this increase to the addition of two senior lending
officers and support staff brought on during the second quarter of 1995 as well
as salary increases given at the beginning of 1996.
6
<PAGE> 8
ASSET QUALITY
Nonperforming assets (nonaccrual and restructured loans and real estate
acquired through foreclosure (OREO) declined to 1.45% of total loans and OREO
at March 31, 1996, compared to 1.63% at December 31, 1995. This decline is
primarily attributable to increases in loans and decreases in non-accrual
loans.
Nonperforming Assets
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
<S> <C> <C>
Loans on nonaccrual $ 61,808 $ 118,130
Other real estate owned 68,931 68,931
Restructured/Impaired loans 912,199 912,199
---------- ----------
Total non-performing assets $1,042,938 $1,099,260
Loans 90 days past due $ 82,941 $ 19,552
Total nonperforming assets as a percentage of total loans and other real estate 1.45% 1.63%
Loans ninety days past due as a percentage of total loans 0.12% 0.03%
</TABLE>
The allowance for loan losses at March 31, 1996, increased $44,682 from
December 31, 1995, to $962,718. The Bank funded the reserve with $120,000 and
had net charge offs of $75,318. The allowance at March 31, 1996, represented
1.34% of total loans compared to 1.36% at December 31, 1995. The allowance at
March 31, 1996 represented 98.84% of nonperforming loans (nonaccrual and
restructured/impaired) at March 31, 1996, compared to 89.10% of non-performing
loans at December 31, 1995.
Analysis of the Allowance for Loan Losses at
March 31, 1996
<TABLE>
<S> <C>
Allowance for loan losses at December 31, 1995 $918,036
--------
Charge-offs:
Commercial 50,000
Real Estate -0-
Installment 5,266
Credit card related 23,203
--------
Total 78,469
Recoveries:
Commercial 600
Real Estate -0-
Installment 2,551
Credit card related -0-
--------
Total 3,151
Net Charge-offs 75,318
--------
Provision charged to income 120,000
--------
Allowance for loan losses at March 31, 1996 $962,718
========
</TABLE>
7
<PAGE> 9
The loan portfolio is periodically reviewed to evaluate the outstanding
loans and to measure both the performance of the portfolio and the adequacy of
the allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses, and internal credit ratings. Management's judgment as
to the adequacy of the allowance is based upon a number of assumptions about
future events which it believes to be reasonable, but which may or may not be
reasonable. However, because of the inherent uncertainty of assumptions made
during the evaluation process, there can be no assurance that loan losses in
future periods will not exceed the allowance for loan losses or that additional
allocations to the allowance will not be required.
LIQUIDITY AND CAPITAL ADEQUACY
The Bank's net loan to deposit ratio decreased by 4.82% at March 31, 1996, to
78.14%, as compared to 82.10% at December 31, 1995. This change is a result of
the Bank maintaining a level of loan growth below the level of deposit growth.
During the first three months of 1996, deposits grew by more than $9.6 million
while gross loans increased by approximately $4.4 million. The Bank's liquid
assets as a percentage of total deposits were 9.58% at March 31, 1996, compared
to 6.66% at December 31, 1995. Management also analyzes the level of
off-balance sheet assets such as unfunded loan equivalents, liquid investments,
and available fund lines in an attempt to minimize the possibility that a
potential shortfall will exist. Based on this analysis, management believes
that the Company has adequate liquidity to meet short-term operating
requirements. However, no assurances can be given in this regard.
Shareholders equity increased 1.01% from December 31, 1995, to $8,216,995 at
March 31, 1996. The capital of the Company and the Bank exceeded all
prescribed regulatory capital guidelines. Regulations require that the most
highly rated banks maintain a minimum Tier l leverage ratio of 3% plus an
additional cushion of at least 1 to 2 percentage points. Tier 1 capital
consists of common shareholders' equity, less certain intangibles. The Bank's
Tier 1 leverage ratio was 7.83% at March 31, 1996, compared to 8.29% at
December 31, 1995, a decline which was due to growth in the Bank's assets.
Regulations require that the Bank maintain a minimum total risk-weighted
capital ratio of 8%, with one-half of this amount, or 4%, made up of Tier 1
capital. Risk-weighted assets consist of balance sheet assets adjusted by risk
category, and off-balance sheet asset equivalents similarly adjusted. At March
31, 1996, the Bank had a risk-weighted total capital ratio of 11.46%, compared
to 11.83% at December 31, 1995, and a Tier 1 risk-weighted capital ratio of
10.21%, compared to 10.58% at December 31, 1994.
INVESTMENT SECURITIES
At March 31,1996, the Bank had $13,124,465 in investment securities
available-for-sale and $1,658,877 in securities held-to-maturity. The net
unrealized loss on available-for-sale securities, net of deferred income taxes,
was $104,673 on March 31, 996.
Investment securities comprised approximately 15% and 14% of the Bank's assets
on March 31, 1996 and December 31, 1995, respectively. The Bank invests
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable and tax exempt
securities. The Bank has included in its investment portfolio instruments
described as a derivative, primarily, structured note derivatives. Structured
notes are debt securities whose cash flow characteristics depend on one or more
indexes. Structured notes carry high credit ratings and are issued as
floating-rate instruments. In a rising interest rate environment, the market
value of these securities can decrease due to the fact that the embedded
options, puts, calls, etc., become evident and in contrast to predictions.
The Bank, as shown on the cash flows statement, sold $1,239,523 in investment
securities available for sale during the first quarter of 1996. Of the
securities sold approximately $620,000 were structured notes, leaving $250,000
in the investment portfolio at March 31, 1996, classified as a structured note.
There can be no assurance that as interest rates change in the future the
amount of unrealized loss will not increase, but if these securities are held
until they mature and are repaid in accordance with their terms, these
principal losses will not be realized. The Bank also engages in Federal Funds
transactions with its principal correspondent banks and primarily acts as a net
seller of such funds. The sale of Federal Funds amounts to a short-term loan
from the Bank to another Bank.
8
<PAGE> 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the Company is a party
or of which its property is the subject.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
quarter ended March 31, 1996.
Item 5. Other information
Not applicable.
Item 6. Exhibits and Report on Form 8-K
a) Exhibits.
Exhibit
Number Description
------- ------------
3.1(*) Articles of Incorporation
3.2(*) Bylaws
10.1(**) Settlement Agreement and Release with Fayette
County Bancshares, Inc. and Terry L. Miller as
of October 21, 1994.
10.2(**) Fayette County Bancshares, Inc. Stock Option
Plan.
(*) Items 3.1 and 3.2 were previously filed by the Company as Exhibits (with
the same respective Exhibit Numbers as indicated herein) to the Company's
Registration Statement on Form S-18 (Registration No. 33-26658-A) and such
documents are incorporated herein by reference.
(**) Items 10.1 and 10.2 were previously filed by the Company as Exhibits 10.5
and 10.6 respectively, to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, and such documents are incorporated herein by
reference.
b) Reports on Form 8-K. No report on Form 8-K was filed during the quarter
ended March 31, 1996.
9
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FAYETTE COUNTY BANCSHARES, INC.
-------------------------------
(Registrant)
Date: May 12, 1996
-------------------------------
Ira Pat Shepherd,
Principal Executive Officer
Date: May 12, 1996
-------------------------------
Mark Kearsley,
Principal Financial Officer
10
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
<S> <C> <C>
3.1 Articles of Incorporation of Company (Incorporated by reference to
Exhibit 3.1 of Registration Statement on Form S-18,
File No. 33-26658-A).
3.2 Bylaws of Company (incorporated by reference to Exhibit 3.2 of
Registration Statement on Form S-18, File No. 33-26658-A).
10.1 Settlement Agreement and Release with Company and Terry L. Miller
as of October 21, 1994, (incorporated by reference to Exhibit 10.5 on
the Annual Report on Form 10-K for the year ended December 31, 1994).
10.2 Company Stock Option Plan (incorporated by reference to Exhibit 10.6 of
the Annual Report on Form 10-K for the year ended December 31, 1994).
11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,554,735
<INT-BEARING-DEPOSITS> 195,000
<FED-FUNDS-SOLD> 5,710,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 13,124,465
<INVESTMENTS-CARRYING> 1,658,877
<INVESTMENTS-MARKET> 1,643,049
<LOANS> 72,163,188
<ALLOWANCE> 962,718
<TOTAL-ASSETS> 100,812,880
<DEPOSITS> 91,119,191
<SHORT-TERM> 0
<LIABILITIES-OTHER> 531,550
<LONG-TERM> 0
0
0
<COMMON> 612,440
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 100,812,880
<INTEREST-LOAN> 1,889,704
<INTEREST-INVEST> 201,068
<INTEREST-OTHER> 55,488
<INTEREST-TOTAL> 2,146,260
<INTEREST-DEPOSIT> 871,158
<INTEREST-EXPENSE> 871,670
<INTEREST-INCOME-NET> 1,274,590
<LOAN-LOSSES> 120,000
<SECURITIES-GAINS> (967)
<EXPENSE-OTHER> 839,056
<INCOME-PRETAX> 448,030
<INCOME-PRE-EXTRAORDINARY> 448,030
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 273,330
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.40
<YIELD-ACTUAL> 0
<LOANS-NON> 61,808
<LOANS-PAST> 82,941
<LOANS-TROUBLED> 912,199
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 918,036
<CHARGE-OFFS> 78,469
<RECOVERIES> 3,151
<ALLOWANCE-CLOSE> 962,718
<ALLOWANCE-DOMESTIC> 962,718
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
