SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1995
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
____________________ to ____________________.
Commission File Number 0-17494
DIME FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Connecticut 06-1237470
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
95 Barnes Road, Wallingford, Connecticut 06492
- -----------------------------------------------------------------------------
(address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (203) 269-8881
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock - $1.00 par value; 5,013,295 shares were outstanding as of
September 30, 1995.
The total number of pages in this report is 25
Exhibit Index is on page 21
DIME FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Part I Financial Information Page No.
<S> <S> <C>
Item 1. Financial Statements
Consolidated Statements of Condition September 30, 1995
and 1994 (unaudited) and December 31, 1994 3.
Consolidated Statements of Operations Three months ended
September 30, 1995 and 1994 (unaudited) and nine months
ended September 30, 1995 and 1994 (unaudited) 3.
Selected Financial Highlights 3.
Consolidated Statement of Changes in Shareholders' Equity 4.
Consolidated Statements of Cash Flows Nine months ended
September 30, 1995 and 1994 (unaudited) 5.
Notes to Consolidated Financial Statements (unaudited) 6-9.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-18.
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 19.
Signatures 20.
Exhibit Index 21.
</TABLE>
Part I. - FINANCIAL INFORMATION
Item 1. Financial Statements
The registrant incorporates herein by reference the following information
from its Quarterly Report to Shareholders for the quarters ended
September 30, 1995 and 1994, filed as Exhibit 20 hereto:
Consolidated Statements of Condition
Consolidated Statements of Operations
Selected Financial Highlights
Dime Financial Corporation and Subsidiary
Consolidated Statement of Changes in Shareholders' Equity
Nine Months Ended September 30, 1995
<TABLE>
<CAPTION>
Net Unrealized
Gain on
Additional Retained Available
Common Paid-In Earnings for Sale Treasury
(dollars in thousands) Stock Capital (Deficit) Securities Stock Total
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $5,345 $50,846 ($8,207) $110 ($2,898) $45,196
Net Income 3,365 3,365
Options Excercised 20 146 166
Change in net unrealized gain on
securities available for sale (75) (75)
-----------------------------------------------------------------------
Balance at September 30, 1995 $5,365 $50,992 ($4,842) $ 35 ($2,898) $48,652
=======================================================================
</TABLE>
Item 1 (cont'd)
DIME FINANCIAL CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994 (unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands) 1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,365 $ 3,613
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 6,700 2,375
Depreciation and amortization 1,126 1,076
Amortization/Accretion investments, net 184 941
Amortization of intangible assets 262 262
Amortization of net deferred loan fees (124) (776)
Gain on investment securities (298) (6)
Deferred income tax benefit (2,000) --
Write down - Assets held for sale -- 234
Gains on sale of other real estate owned (1,247) (459)
(Increase) decrease in accrued income receivable (747) 596
Decrease in other assets 1,668 2,760
Increase in other liabilities 1,107 3,256
------- -------
Net cash provided by operating activities 9,996 13,872
------- -------
Cash flows from investing activities:
Available for sale securities:
Investment securities purchases (10,120) --
Proceeds from principal payments 326 --
Proceeds from sale of investment securities 4,660 18
Proceeds from maturity of investment securities 4,000 --
Held to maturity securities:
Investment securities purchased (89,308) (36,250)
Proceeds from principal payments 2,057 --
Proceeds from maturity of investment securities 31,599 57,500
Net (increase) decrease in loans 27,693 (34,361)
Net decrease in assets held for sale -- 38,177
Purchase of premises and equipment (176) (767)
Proceeds from sale of other real estate owned 3,618 5,086
------- -------
Net cash provided by investing activities (25,651) 29,403
------- -------
Cash flows from financing activities:
Net decrease in deposits (7,154) (25,284)
Proceeds from exercise of DFC stock options 126 --
Payments of FHLBB advances (2,000) (1,000)
------- -------
Net cash used by financing activities (9,028) (26,284)
------- -------
Net (increase) decrease in cash and cash equivalents (24,683) 16,991
Cash and cash equivalents at beginning of period 49,960 28,955
------- -------
Cash and cash equivalents at end of period $25,277 $45,946
======= =======
</TABLE>
Item 1 (cont'd)
DIME FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Consolidated Financial Statements
September 30, 1995 (unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements should be read
in conjunction with the audited financial statements and notes thereto
included in Dime Financial Corporation's 1994 Annual Report and Proxy
Statement dated April 7, 1995. In the opinion of management, the
accompanying consolidated financial statements reflect all necessary
adjustments, consisting of normal recurring accruals for a fair presentation
of results as of the dates and for the periods covered by the consolidated
financial statements. The results of operations of the interim period may
not be indicative of results for the entire 1995 fiscal year.
2. EARNINGS PER SHARE
The calculation of earnings per share is based on the weighted average
number of common shares outstanding during the periods presented as follows:
<TABLE>
<CAPTION>
(dollars in thousands, except share data) Three Months Ended Nine Months Ended
9/30/95 9/30/94 9/30/95 9/30/94
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net income (loss) $2,120 $1,080 $3,365 $3,613
====================================================================================
Weighted Average
Common Shares Outstanding 5,011 4,994 5,001 4,994
Earnings per share $ 0.42 $ 0.21 $ 0.67 $ 0.72
====================================================================================
</TABLE>
3. INVESTMENT SECURITIES
The carrying values, approximate market values, and maturity groupings of
investment securities are as follows:
<TABLE>
<CAPTION>
September 30, 1995 September 30, 1994
-------------------------------------------------
Carrying Market Carrying Market
Value Value Value Value
-------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
HELD TO MATURITY:
U.S. treasury securities:
Within 1 year $ 9,076 $ 9,032 $ 11,511 $ 11,475
After 1 but within 5 years ---- ---- 9,204 8,964
After 5 but within 10 years 1,013 1,070 1,015 1,001
- -------------------------------------------------------------------------------------------------------
Total U.S. treasury securities 10,089 10,102 21,730 21,440
- -------------------------------------------------------------------------------------------------------
U.S. Government agency obligations and
U.S Government-sponsored agency obligations:
Within 1 year 12,994 13,000 17,986 17,859
After 1 but within 5 years 29,876 29,953 ---- ----
- -------------------------------------------------------------------------------------------------------
Total U.S. Government agency obligations and
U.S.Government-sponsored agency obligations 42,870 42,953 17,986 17,859
- -------------------------------------------------------------------------------------------------------
Domestic obligations:
Within 1 year 5,861 5,833 6,002 6,042
After 1 but within 5 years ---- ---- 10,226 9,940
After 5 but within 10 years ---- ---- 994 1,018
- -------------------------------------------------------------------------------------------------------
Total domestic obligations 5,861 5,833 17,222 17,000
- -------------------------------------------------------------------------------------------------------
REMIC's / CMO's:
After 5 but within 10 years 5,231 5,257 ---- ----
After 10 years 25,569 25,506 ---- ----
- -------------------------------------------------------------------------------------------------------
Total REMIC's / CMO's 30,800 30,763 ---- ----
- -------------------------------------------------------------------------------------------------------
Mortgage backed securities:
After 10 years 13,739 13,732 53 53
- -------------------------------------------------------------------------------------------------------
TOTAL HELD TO MATURITY $103,359 $103,383 $ 56,991 $ 56,352
=======================================================================================================
AVAILABLE FOR SALE:
Mortgage backed securities:
After 10 years $ 9,826 $ 9,879 ---- ----
Equity Securities 12 12 $ 425 $ 624
- -------------------------------------------------------------------------------------------------------
TOTAL AVAILABLE FOR SALE $ 9,838 $ 9,891 $ 425 $ 624
=======================================================================================================
</TABLE>
<TABLE>
<CAPTION>
September 30, 1995 September 30, 1994
-------------------------------------------
<S> <C> <C>
HELD TO MATURITY:
Gross unrealized gains $224 $ 64
Gross unrealized losses ($200) ($ 703)
AVAILABLE FOR SALE:
Gross unrealized gains $ 56 $ 199
Gross unrealized holding losses ($ 3) $----
</TABLE>
4. ALLOWANCE FOR LOAN LOSSES
Changes in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1995 1994
--------------------------------
(In Thousands)
<S> <C> <C>
Balance at January 1, $ 9,326 $ 14,062
Provision for loan losses 6,700 2,375
Charge-offs (2,544) (6,931)
Recoveries 240 855
- ---------------------------------------------------------------------------------
Balance at September 30, $ 13,722 $ 10,361
=================================================================================
Average loans, excluding loans held for sale $498,719 $516,261
Net charge-offs as a percentage of average loans 0.46% 1.18%
Non-performing loans $ 10,763 $ 5,639
Loans classified as held for sale $ --- $ 2,007
Allowance for loan losses as a percentage of
non-performing loans (including assets held for sale) 127.49% 135.50%
Allowance for loan losses as a percentage of
non-performing loans (excluding assets held for sale) 127.49% 183.75%
</TABLE>
5. NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
September 30,
---------------------
1995 1994
---------------------
(In Thousands)
<S> <C> <C>
Mortgage loans on real estate $ 9,314 $ 3,763
Commercial loans 1,151 1,567
Consumer loans 298 309
- -----------------------------------------------------------------------------
Total non-performing loans 10,763 5,639
Loans classified as held for sale -- 2,007
Other real estate owned, net 1,649 2,998
Other real estate owned held for sale -- 9,433
- -----------------------------------------------------------------------------
Total non-performing assets $12,412 $20,077
=============================================================================
Restructured loans (1) $ 391 $ 4,640
Non-performing loans including loans classified
as held for sale as a percentage of total loans 2.24% 1.49%
Non-performing assets including assets classified
as held for sale as a percentage of total assets 1.96% 3.08%
<FN>
<F1> (1) Performing loans.
</TABLE>
6. FHLBB ADVANCES
Federal Home Loan Bank of Boston advances consisted of the following:
<TABLE>
<CAPTION>
September 30,
-------------------
1995 1994
-------------------
(In Thousands)
<S> <C> <C>
7.07% due 1996 33,000 35,000
7.16% due 1997 25,000 25,000
Total FHLBB advances $58,000 $60,000
</TABLE>
7. ADOPTION OF NEW ACCOUNTING STANDARD
In May 1993, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan" ("SFAS 114") which was amended in
October 1994 by SFAS 118, "Accounting by Creditors for Impairment of a Loan
- - Income Recognition and Disclosure" which are effective for fiscal years
beginning after December 15, 1994. These Statements apply to all loans
except large groups of smaller-balance homogeneous loans that are
collectively evaluated for impairment, or loans otherwise carried at fair
value or the lower of cost or fair value. SFAS No. 114 and SFAS No. 118
specifically exclude leases and debt securities from their valuation
standards. These Statements require that all loans that are impaired be
measured and valued based on (1) the present value of expected future cash
flows discounted at the loan's effective rate of interest, (2) the loan's
observable market price, or (3) the fair value of supporting collateral if
the loan is collateral dependent. The Company adopted these standards during
the quarter ended March 31, 1995, with no impact on the Company's financial
position or results of operations. Loans classified as impaired totalled
$6.8 million at September 30, 1995 with a valuation allowance within the
allowance for loan losses of $913,000 at that date. Management believes
that the valuation allowance for impaired loans at September 30, 1995 is
adequate.
Item 2:
DIME FINANCIAL CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Dime Financial Corporation of Wallingford, Connecticut (the "Company"),
organized in 1988, is the parent company of one wholly-owned subsidiary, The
Dime Savings Bank of Wallingford ("Dime"). Consolidated assets as of
September 30, 1995 were $632.6 million.
On February 3, 1993, the Board of Directors of Dime approved, and Dime
thereupon signed, a Consent Agreement with the Federal Deposit Insurance
Corporation ("FDIC") and the Connecticut Banking Commissioner (the
"Commissioner"), wherein Dime agreed to the issuance of a Cease and Desist
Order (the "Order") by the FDIC pursuant to the provisions of applicable
federal banking law. The Order was subsequently issued and became effective
on February 22, 1993.
On January 31, 1995 the FDIC and the Commissioner took action to remove the
Order. At the request of the regulatory authorities, the Board of Directors
of Dime adopted resolutions committing Dime to continue certain actions
designed to maintain and improve the financial and operating condition of
the institution. Among these is a resolution that continues the requirement
that Dime maintain a Tier 1 leverage capital ratio at or in excess of 6% and
provide advance notice to the FDIC and the Banking Commissioner of any
action of the Board to declare or pay dividends.
The Company began a restructuring program in the second quarter of 1995
which reduced the Company's workforce by approximately 24%. Additional
restructuring plans have been authorized by the Board of Directors to take
effect in the fourth quarter with regard to the outsourcing of the Bank's
data processing operations and other staff reductions. Approximately 10
positions, or 5% of the total workforce, are affected. This additional
restructuring is expected to result in a fourth quarter charge to earnings
of approximately $800,000 from the combination of severance charges and the
writedown to estimated salvage value of fixed assets associated with data
processing. These charges are expected to be substantially offset by
recognition in the fourth quarter of a deferred tax benefit as a result of
improved earnings projections for realization of the Company's deferred tax
asset.
FINANCIAL CONDITION
In the third quarter of 1995, the Company reported net income of $2.1
million or $0.42 per share compared to net income of $1.1 million, or $0.21
per share for the quarter ended September 30, 1994. The third quarter
results were affected primarily by an addition to the allowance for loan
losses of $1.4 million compared with a provision in the third quarter of
1994 of $1.0 million. In addition, the third quarter of 1995 was positively
influenced by the receipt of a refund of $282,000 representing previously
paid FDIC deposit insurance premiums, a net gain of $256,000 from the
operation of OREO, and a reduction in other operating expenses. The
provision for the nine months ended September 30, 1995 totalled $6.7 million
compared with a provision for the same period of 1994 of $2.4 million. The
increase in the loan loss provision for 1995 is due to the higher level of
non-performing loans and the change to a new methodology adopted in the
first quarter of 1995 regarding the increased risk on 1-4 family residential
loans. Historical charge-off experience and ongoing reviews during 1995 of
specific concentrations within that portfolio indicated that collateral
values have declined substantially on many loans since their original
funding date.
The Company's earnings primarily depend upon the difference between the
interest and dividend income earned on loans and investments and the
interest expense paid on deposits and borrowed money ("net interest
income"). The difference between the average interest rate earned on loans
and investments and the average interest rate paid on deposits and
borrowings ("net spread") is affected by economic factors influencing
general interest rates, loan demand, the level of non-performing loans, and
savings flows as well as the effects of competition for loans and deposits.
Net income is also affected by gains and losses on investment securities
transactions and other operating income such as service charges and fees
offset by additions to the provision for loan losses, other operating
expenses and income tax expense.
At September 30, 1995, the Company's allowance for loan losses was $13.7
million or 127.49% of non-performing loans, 110.56% of non-performing
assets, and 2.86% of total loans. At December 31, 1994, the allowance for
loan losses was $9.3 million, or 117.17% of non-performing loans, 79.91% of
non-performing assets, and 1.83% of total loans. At September 30, 1994, the
allowance for loan losses was $10.4 million, or 183.75% of non-performing
loans, 119.96% of non-performing assets, and 2.01% of total loans, excluding
$11.4 million of loans and other real estate owned held for sale.
At September 30, 1995, non-performing loans, totalled $10.8 million, or
2.24% of total loans, compared with $8.0 million, or 1.56% of total loans at
December 31, 1994, and compared with $5.7 million, or 1.10% of total loans
at September 30, 1994, excluding $2.0 million of loans classified as held
for sale. Other real estate owned totalled $1.6 million at September 30,
1995, compared to $3.7 million, at December 31, 1994 and $3.0 million at
September 30, 1994 excluding $9.4 million of other real estate owned
classified as held for sale. Total non-performing assets, were $12.4
million, or 1.96% of total assets at September 30, 1995, compared with $11.7
million or 1.83% of total assets at December 31, 1994, and compared with
$8.7 million or 1.32% of total assets at September 30, 1994, excluding $11.4
million of loans and other real estate classified as held for sale. All
assets classified as held for sale were disposed of during 1994 at prices
consistent with management's expectations.
Total loans decreased by $30.2 million, or 5.92% from $510.4 million at
December 31, 1994 to $480.2 million at September 30, 1995 and decreased
$34.4 million or 6.69% from $514.6 million at September 30, 1994, excluding
$2.0 million of loans classified as held for sale.
Federal Home Loan Bank of Boston ("FHLBB") advances totalled $58.0 million
at September 30, 1995 compared with $60.0 million on December 31, 1994 and
September 30, 1994.
Net deposits, including escrow deposits, declined $7.2 million from $526.6
million at December 31, 1994 to $519.4 million at September 30, 1995 and
decreased by $19.0 million from September 30, 1994.
ASSET QUALITY
In order to maintain asset quality, areas within Dime are present to assist
in the assessment of loan quality in addition to providing the Board and
management with analysis to determine that the allowance for loan losses is
sufficient given the risks inherent in the loan portfolio at a point in
time. During the third quarter of 1995 the Company added $1.4 million to the
allowance for loan losses compared with a provision of $1.0 million in the
third quarter of 1994. The increase in the provision was due to the
increased level of non-performing loans. For the nine months ended September
30, 1995, the Company added $6.7 million to the allowance for loan losses
compared with $2.4 million during the first nine months of 1994. The
increase in the provision during 1995 was primarily due to increased non-
performing loans and the adoption of a new methodology regarding the
increased risk on 1 - 4 family residential loans.
Loan review, which is independent of the lending department, reviews and
monitors Dime's loan portfolio based on loan performance, property re-
appraisal, current and prospective economic conditions, facts known about
specific borrowers, or any other relevant factors. This function rates
loans and assists management in determining that the level of the allowance
for loan losses is adequate relative to the risks inherent in the portfolio.
The net cost of operation of other real estate owned ("OREO") may include;
gains or losses on the sale of OREO, writedowns of OREO, and expenses to
operate and maintain OREO. The net cost of operation of other real estate
owned equalled a net gain of $256,000 for the third quarter of 1995 compared
with a net cost of $469,000 for the third quarter of 1994. The net cost of
OREO for the nine months ended September 30, 1995 equalled a net gain of
$432,000 compared with a net cost of $659,000 during the nine months ended
September 30, 1994. The reduction in costs during 1995 are primarily due to
gains realized on the sales of OREO coupled with reduced levels of OREO.
As part of the Company's independent loan review function, a process is in
place whereby all loans are reviewed and classified into one of seven
categories. In addition to the disclosure on page 7 in the table entitled,
"Non-performing Assets," management has classified loans totalling $12.0
million at September 30, 1995 as substandard for internal purposes. At
September 30, 1994 loans classified as substandard totalled $20.0 million.
At December 31, 1994 loans classified as substandard totalled $22.2 million.
These loans are still performing. Management does not have serious doubt as
to their collectability and believes that the amounts specifically allocated
to these loans in the allowance for loan losses are adequate. Management had
performing loans classified as doubtful for internal purposes at September
30, 1995 totalling $24,000 compared with $687,000 at September 30, 1994 and
compared with $206,000 at December 31, 1994.
Under FDIC guidelines substandard loans are inadequately protected by the
current sound worth and paying capacity of the obligor or of the collateral
pledged, if any, and must have a well-defined weakness or weaknesses that
jeopardize the liquidation of the debt. Doubtful loans have all the
weaknesses inherent in those classified as substandard with the added
characteristic that the weaknesses make collection or liquidation in full,
on the basis of currently known facts, conditions, and values, highly
questionable and improbable.
Management continues to closely monitor the loan portfolio and the
foreclosed properties of its subsidiary and takes appropriate action when
necessary. The table entitled "Allowance For Loan Losses," on page 7,
indicates that at September 30, 1995 the balance in the allowance for loan
losses represented 127.49% of non-performing loans and 2.86% of total loans.
Management believes that the allowance for loan losses at September 30, 1995
is adequate, based on the quality of the loan portfolio at that date.
LIQUIDITY, SOURCES AND USES OF FUNDS, AND CAPITAL RESOURCES
Liquidity involves the ability to meet cash flow requirements of depositors
wanting to withdraw funds or of borrowers needing assurance that sufficient
funds will be available to meet their credit needs. Cash on hand, demand
deposits at other financial institutions, interest-bearing deposits with an
original maturity of three months or less, and Federal funds sold are the
principal sources of liquidity. Cash and cash equivalents amounted to $25.3
million at September 30, 1995, as compared to $46.0 million at September 30,
1994. Cash and cash equivalents represented 4.00% of total assets at
September 30, 1995 as compared to 7.04% of total assets at September 30,
1994. The Company believes that its liquidity is sufficient to meet
currently known demands and commitments.
The primary objective of asset/liability management is to maximize net
interest income while assuring adequate liquidity combined with the
maintenance of an appropriate balance between interest earning assets and
interest bearing liabilities. Interest rate sensitivity management seeks to
avoid fluctuating net interest margins and to enhance consistent growth of
net interest income through periods of changing interest rates. The Company
regularly monitors deposit rates and loan rates offered by other financial
institutions in its market area in an attempt to achieve a desired balance
of deposits and loans and to minimize interest costs.
Principal sources of funds include cash receipts from deposits, loan
principal and interest payments, earnings on investments, and proceeds from
maturing investments. The current principal uses of funds include
disbursements to fund investments and loan originations, payments of
interest on deposits, and payments to meet the operating expenses of the
Company. During the first nine months of 1995, deposits decreased by $7.2
million from $526.6 million at December 31, 1994 to $519.4 million at
September 30, 1995 compared to a decrease of $19.0 million from $538.5
million at September 30, 1994. The Company may rely on borrowings from the
Federal Home Loan Bank of Boston ("FHLBB") if deposits do not keep pace with
the demand for quality loans. At September 30, 1995, FHLBB borrowings
totalled $58.0 million, compared with $60.0 million at December 31, 1994 and
at September 30, 1994. The Company currently has no plans to increase the
level of borrowings.
The Company's primary source of funds is in the form of dividends received
from its subsidiary bank, Dime. Therefore, the liquidity and the capital
resources of the Company are largely dependent upon the liquidity,
profitability, and capital position of its subsidiary, and the ability of
the subsidiary to declare and pay dividends under applicable laws and
regulatory authorities. As noted above, Dime has agreed not to declare or
pay any dividends without the prior written consent of the FDIC and the
Commissioner. In addition, the Company has agreed not to declare or pay any
dividends without the prior written consent of the Federal Reserve Bank of
Boston. The following table presents the Company's risk-based and leverage
capital ratios:
<TABLE>
<CAPTION>
September 30,
-----------------
Required 1995 1994
----------------------------
<S> <C> <C> <C>
Tier I risk-based capital 4.0% 13.58% 10.38%
Total risk-based capital 8.0% 14.87% 11.65%
Leverage capital 4.0% 7.24% 6.06%
</TABLE>
COMPARATIVE ANALYSIS
The following table sets forth the dollar increases (decreases) in the
components of the Company's consolidated statements of operations during the
periods indicated and is followed by management's discussion of the various
changes.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, 1995 September 30, 1995
compared to compared to
September 30, 1994 September 30, 1994
------------------------------------------
(in thousands)
<S> <C> <C>
Interest income $ 922 $1,950
Interest expense 1,046 2,069
- ------------------------------------------------------------------------
Net interest income (124) (119)
Provision for loan losses 400 4,325
Investment securities gains, net 58 292
Other operating income 19 (18)
Other operating expenses (1,484) (1,913)
- ------------------------------------------------------------------------
Income before income taxes 1,037 (2,257)
Income tax expense (3) (2,009)
- ------------------------------------------------------------------------
Net income $1,040 ($ 248)
========================================================================
</TABLE>
Quarter and Nine Months Ended September 30, 1995
Compared to
Quarter and Nine Months Ended September 30, 1994
General. Net income for the quarter ended September 30, 1995, was $2.1
million or $0.42 per share, compared to net income of $1.1 million, or $0.21
per share for the same period in 1994. Net income for the nine months ended
September 30, 1995 totalled $3.4 million or $0.67 per share compared with
net income of $3.6 million or $0.72 per share for the first nine months of
1994. The change in net income was influenced primarily by an increased
provision for loan losses for the nine months ended September 30, 1995 to
$6.7 million versus a provision of $2.4 million for the first nine months of
1994.
Interest Income. Interest income for the quarter ended September 30, 1995
totalled $12.0 million representing an average yield on interest earning
assets of 7.81% and totalled $35.3 million for the nine months ended
September 30, 1995 representing an average yield on interest earning assets
of 7.69%. Interest income for the quarter ended September 30, 1994 totalled
$11.1 million and represented an average yield on interest earning assets of
7.27%. Interest income for the nine months of 1994 totalled $33.4 million
and represented an average yield on interest earning assets of 7.18%.
Interest Expense. Interest expense totalled $5.7 million for the quarter
ended September 30, 1995 representing an average cost of funds of 4.20% and
totalled $16.1 million for the nine months ended September 30, 1995
representing an average cost of funds of 3.96%. Total interest expense for
the quarter ended September 30, 1994 was $4.7 million representing an
average cost of funds of 3.28% and totalled $14.0 million for the first
nine months of 1994 which represented an average cost of funds of 3.21%.
Net Interest Income. Net interest income totalled $6.3 million for the
quarter ended September 30, 1995 compared with $6.4 million for the quarter
ended September 30, 1994. Net interest income totalled $19.2 million for
the first nine months of 1995 compared with $19.4 million for the first nine
months of 1994. The net interest rate spread for the quarter ended
September 30, 1995 was 3.61% down from the prior year quarter of 3.99%. The
net interest rate spread for the nine months ended September 30, 1995 was
3.73% down from the prior year spread of 3.97%. The net interest margin was
4.11% for the third quarter of 1995 compared with a net interest margin of
4.19% for the third quarter of 1994. The net interest margin was 4.18% for
the first nine months of 1995 compared with a net interest margin of 4.15%
for the nine months ended September 30, 1994.
Comparative Interest Spread Table
For the quarters and nine months ended
<TABLE>
<CAPTION>
Quarter Quarter YTD YTD
9/30/95 9/30/94 9/30/95 9/30/94
----------------------------------------------------
<S> <C> <C> <C> <C>
Interest Earning Assets:
Loans 8.17% 7.63% 8.07% 7.67%
Investment Securities 6.61% 5.70% 6.18% 5.14%
Federal Funds Sold 5.64% 4.54% 5.77% 3.76%
Yield on Interest Earning Assets 7.81% 7.27% 7.69% 7.18%
Interest Bearing Liabilities:
Deposits 3.84% 2.75% 3.57% 2.75%
Borrowings 7.11% 6.87% 7.11% 7.07%
Cost of Interest Bearing Liabilities 4.20% 3.28% 3.96% 3.21%
Net Interest Spread 3.61% 3.99% 3.73% 3.97%
Net Interest Margin 4.11% 4.19% 4.18% 4.15%
</TABLE>
Provision for Loan Losses. The provision for loan losses for the quarter
ended September 30, 1995 totalled $1.4 million compared with a provision of
$1.0 million for the third quarter of 1994. The provision for the first
nine months of 1995 totalled $6.7 million compared with a provision of $2.4
million for the first nine months of 1994. The increase in the loan loss
provision for the third quarter compared with the prior year is due to the
higher level of non-performing loans. The increase in the loan loss
provision for the nine months ended September 30, 1995 compared with the
prior year resulted primarily from a new methodology adopted in the first
quarter of 1995 regarding the increased risk on 1 - 4 family residential
loans which comprise 77% of the total loan portfolio. Historical charge-off
experience and ongoing reviews during 1995 of specific concentrations within
that portfolio indicate that collateral values have declined substantially
on many loans since their original funding date.
Investment Securities Gains (Losses), Net. The Company recorded $64,000 net
investment security gains during the third quarter of 1995 and recorded net
security gains totalling $298,000 for the nine months ended September 30,
1995. This compares to $6,000 net investment security gains during the
third quarter and nine months ended September 30, 1994.
Other Operating Income. Other operating income totalled $528,000 for the
third quarter of 1995 compared with $509,000 in the third quarter of 1994
and totalled $1.6 million for the first nine months of 1995 and the first
nine months of 1994.
Other Operating Expenses. Total operating expenses were $3.3 million for
the third quarter of 1995 compared with total operating expenses of $4.8
million for the third quarter of 1994. The reduction in 1995 reflects
progress achieved under the restructuring plan as well as reduction in the
net cost OREO primarily due to gains recognized on the sales of OREO. The
net cost of OREO for the third quarter equalled a net gain of $256,000
versus a net cost of $469,000 for the third quarter of 1994. For the first
nine months of 1995, operating expenses, exclusive of a net restructuring
charge of $947,000 charged in the second quarter, were $12.1 million versus
$14.9 million for the year earlier period. For the nine months ended
September 30, 1995, the net cost of OREO equalled a net gain of $432,000
compared with a net cost of $659,000 for the prior year period.
Income Taxes. Income tax expense for the third quarter of 1995 totalled
$12,000 compared with income tax expense in the third quarter of 1994 of
$15,000. Income taxes for the first nine months of 1995 totalled a net
benefit of $2.0 million as the Company recognized $2.0 million of a deferred
tax benefit in the second quarter of 1995 as a result of improved earnings
projections. Income tax expense recognized in the first nine months of 1994
totalled $45,000. For 1995 and 1994 the Company has provided only for the
minimum state tax because of tax loss carry forwards that are available to
taxable income.
Net Income. The factors discussed above resulted in net income of $2.1
million or $0.42 per share for the third quarter ended September 30, 1995
compared with net income of $1.1 million or $0.21 per share for the third
quarter ended September 30, 1994. Net income totalled $3.4 million or $0.67
per share for the first nine months of 1995 compared with net income of $3.6
million or $0.72 per share for the first nine months of 1994.
DIME FINANCIAL CORPORATION AND SUBSIDIARY
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K
a. The following exhibits are included in this report:
Exhibit No. Description
11. Statement of Computation of Per Share Earnings
Incorporated by reference to note 2 to Consolidated Financial
Statements for the quarters ended September 30, 1995 and 1994.
(See pages 5-8 for notes to Consolidated Financial Statements.)
20. Report furnished to the Company's shareholders for the quarter
ended September 30, 1995.
b. No report on form 8-K has been filed by the registrant with
the Securities and Exchange Commission during the quarter
ended September 30, 1995.
DIME FINANCIAL CORPORATION AND SUBSIDIARY
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.
DIME FINANCIAL CORPORATION
Date: November 13, 1995 /s/ Richard H. Dionne
Richard H. Dionne
President & Chief Executive Officer
Date: November 13, 1995 /s/ Albert E. Fiacre, Jr.
Albert E. Fiacre, Jr.
Senior Vice President and Chief
Financial Officer
Date: November 13, 1995 /s/ Robert P. Simon
Robert P. Simon
Vice President & Comptroller
EXHIBIT INDEX
Exhibit No. Description Page
- ------------------------------------------------------------------------------
11. Statement of Computation of Per Share Earnings
Incorporated by reference to note 2 to Consolidated Financial
Statements for the quarters ended September 30, 1995, and 1994.
(See pages 6-9 for Notes to Consolidated Financial Statements.)
20. Report furnished to the Company's shareholders for the quarter
ended September 30, 1995.
Dime Financial P.O. Box 700
Corporation Wallingford, CT 06492
(203) 269-8881
Dime Financial Corporation -- Third Quarter Results
Wallingford, Connecticut: Dime Financial Corporation ("DFC") (NASDAQ: DIBK)
announced net income for the third quarter ended September 30, 1995 of $2.1
million or $0.42 per share compared with net income of $1.1 million or $0.21
per share for the quarter ended September 30, 1994. Net income for the nine
months ended September 30, 1995 totalled $3.4 million or $0.67 per share
versus $3.6 million or $0.72 per share for the year earlier period.
As reported previously, the Company began a restructuring program in the
second quarter which reduced the Company's workforce by approximately 24%.
Additional restructuring plans have been authorized by the Board of Directors
to take effect in the fourth quarter with regard to the outsourcing of the
Bank's data processing operations and other staff reductions. Approximately
10 positions, or 5% of the total workforce, are affected. This additional
restructuring is expected to result in a fourth quarter charge to earnings of
approximately $800,000 from the combination of severance charges and the
writedown to estimated salvage value of fixed assets associated with data
processing. These charges are expected to be substantially offset by
recognition in the fourth quarter of a deferred tax benefit as a result of
improved earnings projections for realization of DFC's deferred tax asset.
Net interest income for the quarter ended September 30, 1995 totalled $6.3
million representing a net interest spread of 3.61% and a net interest margin
of 4.11%. Net interest income for the quarter ended September 30, 1994
totalled $6.4 million representing a net interest rate spread of 3.99% and a
net interest margin of 4.19%. Net interest income for the nine months ended
September 30, 1995 totalled $19.2 million representing a net interest spread
of 3.73% and a net interest margin of 4.18%. Net interest income for the nine
months ended September 30, 1994 totalled $19.4 million representing a net
interest spread of 3.97% and a net interest margin of 4.15%. The reduction in
the net interest spread is primarily due to a reduced level of savings account
deposits versus higher costing certificates of deposit.
The provision to the allowance for loan losses totalled $1.4 million for the
third quarter of 1995 compared with $1.0 million for the third quarter of
1994, and totalled $6.7 million for the nine months ended September 30, 1995
compared with $2.4 million for the nine months ended September 30, 1994. The
increase in the loan loss provision for 1995 is due to the higher level of
non-performing loans and the change to a new methodology adopted in the first
quarter of 1995 regarding the increased risk on 1-4 family residential loans
which comprise approximately 77% of the total loan portfolio. Historical
charge-off experience and ongoing reviews during 1995 of specific
concentrations within that portfolio indicate that collateral values have
declined substantially on many loans since their original funding date.
Non-performing loans totalled $10.8 million at September 30, 1995 compared
with $11.3 million at June 30, 1995 and compared with $5.6 million at
September 30, 1994, excluding $2.0 million of loans classified as held for
sale. Other real estate owned ("OREO") totalled $1.6 million at September 30,
1995 compared with $3.5 million at June 30, 1995 and compared with $3.0
million at September 30, 1994, excluding $9.4 million of OREO held for sale.
Total non-performing assets were $12.4 million or 1.96% of total assets at
September 30, 1995, down from $14.8 million or 2.31% of total assets at June
30, 1995 and up from $8.6 million or 1.32% of total assets at September 30,
1994, excluding assets held for sale of $11.4 million. There were no assets
held for sale at September 30, 1995.
The allowance for loan losses totalled $13.7 million at September 30, 1995 an
increase of $245,000 from June 30, 1995 and up $3.4 million from September 30,
1994. The ratio of loan loss reserves to non-performing loans was 127.49% at
September 30, 1995 compared with 119.01% at June 30, 1995 and compared with
183.74% at September 30, 1994, exclusive of assets held for sale.
Total operating expenses were $3.3 million for the third quarter versus $4.1
million in the second quarter of 1995, net of a restructuring charge of
$947,000, and $4.8 million for the third quarter of 1994. Total operating
expenses for the nine months ended September 30, 1995 totalled $13.0 million
compared with $14.9 million for the same period of 1994, a reduction of $1.9
million or 12.81%. The reduction in operating expenses in 1995 reflects
progress achieved under the restructuring plan as well as reductions in the
net cost of the operation of other real estate owned due to gains recognized
on the sales of OREO. For the quarter ended September 30, 1995, the net cost
of the operation of OREO equalled a net gain of $256,000 compared with a net
cost of $469,000 for the third quarter of 1994. For the nine months ended
September 30, 1995, the net cost of OREO equalled a net gain of $432,000
compared with a net cost of $659,000 for the first nine months of 1994.
Total shareholders' equity was $48.7 million at September 30, 1995 compared
with shareholders' equity of $46.5 million at June 30, 1995 and compared with
shareholders' equity of $44.1 million at September 30, 1994. Total assets were
$632.6 million down $6.8 million or 1.05% from June 30, 1995 and down $20.3
million or 3.10% from September 30, 1994. The Tier 1 regulatory capital ratio
for The Dime Savings Bank of Wallingford, the Company's subsidiary bank, was
7.20% at September 30, 1995 compared with a Tier 1 regulatory capital ratio of
6.83% at June 30, 1995 and compared with a Tier 1 ratio of 6.03% at
September 30, 1994. This ratio is in excess of the regulatory minimum.
Dime Financial Corporation and Subsidiary
<TABLE>
<CAPTION>
Consolidated Statements of Condition
- -------------------------------------------------------------------------------------------------
September 30, December 31, September 30,
(In thousands, except share data) 1995 1994 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash and amounts due from banks $ 9,505 $ 9,703 $ 8,020
Interest bearing deposits 3,913 13,695 15,096
Federal funds sold 11,859 26,562 22,830
Investment securities available for sale (a) 9,891 4,582 624
Investment securities held to maturity (b) 103,359 51,869 56,991
Loans receivable: 7,192 7,192 7,192
Mortgage loans:
Residential real estate - owner occupied 341,459 393,906 396,808
Residential real estate - non-owner occupied 29,013 (c) (c)
Commercial real estate 52,190 56,935 60,106
Builders' and land 1,928 4,277 3,720
Commercial loans 4,821 7,047 8,189
Consumer loans 50,785 48,213 45,783
Allowance for loan losses (13,722) (9,326) (10,361)
-------- -------- --------
Loans receivable, net 466,474 501,052 504,245
Loans and other real estate held for sale -- -- 11,440
Other real estate owned, net 1,649 3,711 2,998
Premises and equipment, net 6,816 8,285 8,544
Accrued income receivable 4,745 3,998 4,330
Income tax receivable -- -- 4,831
Other assets 4,321 3,963 2,486
Excess of cost over fair value of net assets
acquired 2,855 3,117 3,204
-------- -------- --------
Total assets $632,579 $637,729 $652,831
======== ======== ========
Liabilities and Shareholders' Equity
Liabilities:
Deposits $519,437 $526,591 $538,470
Federal Home Loan Bank of Boston advances 58,000 60,000 60,000
Other liabilities 6,490 5,942 10,258
-------- -------- --------
Total liabilities 583,927 592,533 608,728
-------- -------- --------
Shareholders' Equity
Preferred stock; no par value; authorized
1,000,000 shares; none issued and outstanding -- -- --
Common stock; $1.00 par value; authorized
9,000,000 shares; issued 5,364,902 shares 5,365 5,345 5,345
Additional paid in capital 50,992 50,846 50,846
Retained deficit (4,842) (8,207) (9,321)
Unrealized gain on securities available
for sale, net of tax 35 110 131
Treasury stock - 351,607 shares at cost (2,898) (2,898) (2,898)
-------- -------- --------
Total shareholders' equity 48,652 45,196 44,103
-------- -------- --------
Total liabilities and shareholders' equity $632,579 $637,729 $652,831
======== ======== ========
<FN>
<F1> (a) amortized cost: $9,838 at September 30, 1995; $4,416 at December 31,
1994; and $425 at September 30, 1994
<F2> (b) market value: $103,383 at September 30, 1995; $51,046 at December 31,
1994; and $56,352 at September 30, 1994
<F3> (c) information for this period is not available, it is included within
"Residential real estate - owner occupied" for prior periods
</TABLE>
Dime Financial Corporation and Subsidiary
<TABLE>
<CAPTION>
Consolidated Statements of Operations
- --------------------------------------------------------------------------------------------------------------------------
Three months ended September 30, Nine months ended September 30,
(In thousands, except share data) 1995 1994 1995 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 9,943 $ 9,966 $30,186 $29,944
Interest bearing deposits 26 28 104 67
Federal funds sold 166 85 909 225
Interest and dividends on investments:
U.S. treasury securities 130 316 563 1,104
U.S. government agency obligations 680 225 1,505 330
REMIC/CMO's 493 -- 708 --
Mortgage backed securities 379 -- 520 --
Other bonds and notes 89 326 420 1,234
Equity securities -- 15 3 39
Dividends on Federal Home Loan Bank of Boston stock 124 147 383 408
------- ------- ------- -------
Total Interest Income 12,030 11,108 35,301 33,351
------- ------- ------- -------
Interest Expense
Interest to depositors 4,687 3,551 12,926 10,658
Interest on FHLBB advances 1,054 1,144 3,132 3,331
------- ------- ------- -------
Total Interest Expense 5,741 4,695 16,058 13,989
------- ------- ------- -------
Net Interest Income 6,289 6,413 19,243 19,362
Provision for loan losses 1,400 1,000 6,700 2,375
------- ------- ------- -------
Net Interest Income after Provision 4,889 5,413 12,543 16,987
Investment securities gains (losses), net 64 6 298 6
Other operating income 528 509 1,586 1,604
------- ------- ------- -------
Income before other operating expenses 5,481 5,928 14,427 18,597
------- ------- ------- -------
Other Operating Expenses
Salaries and employee benefits 1,796 2,021 6,071 6,647
Professional and other services 513 576 1,780 1,953
Bank occupancy and equipment expense 767 775 2,300 2,355
FDIC assessment 52 413 808 1,220
Net cost of operation of other real estate (256) 469 (432) 659
Write down on assets held for sale -- -- -- 234
Other operating expenses 477 579 1,552 1,871
------- ------- ------- -------
Total Other Operating Expenses prior to
Restructure Expense 3,349 4,833 12,079 14,939
------- ------- ------- -------
Restructure expense -- -- 947 --
Total Other Operating Expenses 3,349 4,833 13,026 14,939
------- ------- ------- -------
Income before Income Taxes 2,132 1,095 1,401 3,658
Income tax expense (benefit) 12 15 (1,964) 45
------- ------- ------- -------
Net Income $ 2,120 $ 1,080 $ 3,365 $ 3,613
======= ======= ======= =======
Weighted average common shares (in thousands) 5,011 4,994 5,001 4,994
Earnings per share $ 0.42 $ 0.21 $ 0.67 $ 0.72
</TABLE>
<TABLE>
<CAPTION>
Selected Financial Highlights
- -----------------------------------------------------------------------------------------------
For the three months For the nine months
ended September 30, ended September 30,
(Dollars in thousands) 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average yield on interest-earning assets 7.81% 7.27% 7.69% 7.18%
Average cost of funds 4.20% 3.28% 3.96% 3.21%
Net interest rate spread 3.61% 3.99% 3.73% 3.97%
Net yield on interest-earning assets 4.11% 4.19% 4.18% 4.15%
Net income $2,120 $1,080 $3,365 $3,613
Return on average assets 1.34% 0.65% 0.71% 0.72%
Return on average eqity 17.94% 9.97% 9.69% 11.42%
Leverage capital ratio 7.24% 6.06% 7.24% 6.06%
Earnings per share $ 0.42 $ 0.21 $ 0.67 $ 0.72
Book value per share $ 9.71 $ 8.83 $ 9.71 $ 8.83
</TABLE>
Dime Financial Corporation and Subsidiary
<TABLE>
<CAPTION>
Selected Financial Data
- -----------------------------------------------------------------------------------------------
September 30, December 31, September 30,
(In thousands) 1995 1994 1994*
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-Performing Asset Information:
Non-Performing Loans:
Residential Real Estate - owner occupied $ 3,617 $ 4,194 $2,218
Residential Real Estate - non-owner occupied 1,200 ** **
Commercial Real Estate 4,497 1,604 1,545
------- ------- ------
Total Mortgage Loans 9,314 5,798 3,763
Commercial Loans 1,151 1,858 1,567
Consumer Loans 298 303 309
------- ------- ------
Total Non-Performing Loans 10,763 7,959 5,639
Other Real Estate Owned 2,160 4,452 3,636
Less: Reserve for OREO Losses 511 741 638
------- ------- ------
Total OREO, net 1,649 3,711 2,998
Total Non-Performing Assets $12,412 $11,670 $8,637
<FN>
<F1> * exclusive of assets held for sale totalling $11.4 million
<F2> ** information for this period is not available, it is included within
"Residential real estate - owner occupied" for prior periods
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
September 30, December 31, September 30,
(In thousands) 1995 1994 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Balance Information
For the quarters ended:
Interest Earning Assets:
Gross Loans $486,867 $513,775 $522,594
Investment Securities 114,708 65,980 72,295
Federal Funds sold and Interest Bearing deposits 14,521 36,306 16,960
-------- -------- --------
Total Interest Earning Assets 616,096 616,061 611,849
Total Assets $631,303 $644,908 $663,478
Interest Bearing Liabilities:
Interest Bearing Deposits $483,916 $493,761 $506,767
Borrowings 58,000 60,000 66,522
-------- -------- --------
Total Interest Bearing Liabilities 541,916 553,761 573,289
Total Liabilities 584,023 600,501 620,181
Shareholders' Equity 47,280 44,407 43,297
Total Liabilities & Shareholders' Equity $631,303 $644,908 $663,478
Average Balance Information
For the nine and twelve months ended:
Interest Earning Assets:
Gross Loans $498,719 $515,640 $516,261
Investment Securities 88,499 77,099 80,807
Federal Funds sold and Interest Bearing deposits 24,890 22,165 17,451
-------- -------- --------
Total Interest Earning Assets 612,108 614,904 614,519
Total Assets $630,461 $661,571 $667,125
Interest Bearing Liabilities:
Interest Bearing Deposits $484,655 $511,533 $517,457
Borrowings 58,080 62,081 62,774
-------- -------- --------
Total Interest Bearing Liabilities 542,735 573,614 580,231
Total Liabilities 584,149 618,835 624,946
Shareholders' Equity 46,312 42,736 42,179
Total Liabilities & Shareholders' Equity $630,461 $661,571 $667,125
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 9,505
<INT-BEARING-DEPOSITS> 3,913
<FED-FUNDS-SOLD> 11,859
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,891
<INVESTMENTS-CARRYING> 103,359
<INVESTMENTS-MARKET> 103,383
<LOANS> 480,196
<ALLOWANCE> 13,722
<TOTAL-ASSETS> 632,579
<DEPOSITS> 519,437
<SHORT-TERM> 0
<LIABILITIES-OTHER> 6,490
<LONG-TERM> 58,000
<COMMON> 5,365
0
0
<OTHER-SE> 43,287
<TOTAL-LIABILITIES-AND-EQUITY> 632,579
<INTEREST-LOAN> 30,186
<INTEREST-INVEST> 4,102
<INTEREST-OTHER> 1,013
<INTEREST-TOTAL> 35,301
<INTEREST-DEPOSIT> 12,926
<INTEREST-EXPENSE> 3,132
<INTEREST-INCOME-NET> 19,243
<LOAN-LOSSES> 6,700
<SECURITIES-GAINS> 298
<EXPENSE-OTHER> 13,026
<INCOME-PRETAX> 1,401
<INCOME-PRE-EXTRAORDINARY> 3,365
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,365
<EPS-PRIMARY> 0.67
<EPS-DILUTED> 0.67
<YIELD-ACTUAL> 4.18
<LOANS-NON> 10,763
<LOANS-PAST> 0
<LOANS-TROUBLED> 391
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 9,326
<CHARGE-OFFS> 2,544
<RECOVERIES> 240
<ALLOWANCE-CLOSE> 13,722
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 13,722
</TABLE>
