<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
September 30, 1998 0-24133
FRANKLIN FINANCIAL CORPORATION
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(Exact name of small business issuer as specified in its charter)
Tennessee 62-1376024
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 Public Square, Franklin, Tennessee 37064
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (615)790-2265
----------------------
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and formal fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
------ ------
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Common Stock, No Par Value 28,694,997
- -------------------------- --------------------------------
Class Outstanding at November 10, 1998
Transitional Small Business Disclosure Format (check one):
Yes No X
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<PAGE> 2
PART I. - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
FRANKLIN FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
(In Thousands)
September 30, December 31,
1998 1997
<S> <C> <C>
ASSETS
Cash and due from banks $ 11,128 10,696
Federal funds sold 7,553 --
Investment securities available-for-sale, at fair value 35,446 25,401
Mortgage-backed securities available-for-sale, at fair value 33,566 29,654
Investment securities held-to-maturity, market value $4,424,000
at September 30, 1998 and $5,232,000 December 31, 1997 4,273 5,103
Mortgage-backed securities held-to-maturity, market value
$711,000 at September 30, 1998 and $863,000
at December 31, 1997 700 857
Federal Home Loan and Federal Reserve Bank Stock 1,353 1,129
Loans held for resale, at cost, which approximates market 15,738 3,737
Loans - portfolio 204,640 190,345
Allowance for loan losses (2,014) (1,828)
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Loans, net 202,626 188,517
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Premises and equipment 7,016 6,306
Accrued income receivable 2,031 1,890
Other assets 1,902 1,143
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$ 323,332 274,433
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing $ 32,451 28,113
Interest-bearing 255,415 219,459
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Total deposits 287,866 247,572
Advances from Federal Home Loan Bank
and other borrowings 12,107 7,451
Other liabilities 1,333 1,620
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Total liabilities 301,306 256,643
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Stockholders' equity:
Common stock, No par value. Authorized 500,000,000 shares; issued 28,689,997
and 6,990,362 at September 30, 1998 and December 31, 1997,
respectively 10,402 9,820
Unrealized gain on securities available-for-sale 262 214
Retained earnings 11,362 7,756
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Total stockholders' equity 22,026 17,790
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$ 323,332 274,433
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</TABLE>
2
<PAGE> 3
FRANKLIN FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands except for per share information)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
------- ----- ------ ------
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $ 5,696 4,971 16,426 13,678
Investment securities, taxable 949 854 2,768 2,305
Investment securities, tax-exempt 107 74 282 221
Federal funds sold 63 71 138 141
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Total interest income 6,815 5,970 19,614 16,345
- -------------------------------------------------------------------------------------------------------------------------
Interest expense:
Deposits 3,209 2,823 9,198 7,570
Other borrowings 183 136 530 353
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Total interest expense 3,392 2,959 9,728 7,923
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Net interest income 3,423 3,011 9,886 8,422
Provision for loan losses 105 85 270 335
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Net interest income after
provision for loan losses 3,318 2,926 9,616 8,087
Other income:
Service charges on deposit accounts 365 268 1,031 787
Mortgage banking activities 658 257 1,465 784
Other service charges, commissions and fees 259 117 777 266
Gains on securities transactions 88 20 229 40
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Total other income 1,370 662 3,502 1,877
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Other expenses:
Salaries and employee benefits 1,512 1,116 4,231 3,217
Occupancy expense 520 425 1,414 1,193
Other operating expenses 668 454 1,803 1,196
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Total other expenses 2,700 1,995 7,448 5,606
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Income before income taxes 1,988 1,593 5,670 4,358
Income taxes 728 585 2,064 1,592
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 1,260 1,008 3,606 2,766
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON
AND COMMON EQUIVALENT SHARE: $ 0.04 0.04 0.13 0.10
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE -
ASSUMING FULL DILUTION: $ 0.04 0.03 0.10 0.09
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
FRANKLIN FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands)
Nine Months
Ended September 30,
1998 1997
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,606 2,766
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 699 495
Provision for loan losses 270 335
Gain on sale of securities (229) (40)
Loss(gain) on sale of loans sold 8 (55)
Increase in accrued income receivable (141) (344)
Increase in other assets (893) (385)
(Decrease)increase in other liabilities (287) 161
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Net cash provided by operating activities 3,033 2,933
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Cash flows from investing activities:
Increase in federal funds sold (7,553) (4,074)
Proceeds from maturities of securities available-for-sale 12,985 14,709
Proceeds from sale of securities available-for-sale 57,518 6,539
Proceeds from maturities of securities held-to-maturity 978 810
Purchases of securities available-for-sale (84,215) (36,201)
Purchases of securities held-to-maturity -- (276)
Purchase of Federal Home Loan and Federal Reserve Stock (224) (177)
Loans originated for resale (78,252) (27,106)
Proceeds from sale of loans 73,281 33,614
Net increase in portfolio loans (21,417) (39,339)
Purchases of premises and equipment (1,234) (1,977)
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Net cash used by investing activities (48,133) (53,478)
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Cash flows from financing activities
Net proceeds from sale of common stock 582 189
Increase in deposits 40,294 45,344
Increase in other borrowings 4,656 6,402
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Net cash provided by financing activities 45,532 51,935
---------------------------------------------------------------------------------------------------------------
Net increase in cash 432 1,390
Cash and due from banks at beginning of period 10,696 8,272
----------------------------------------------------------------------------------------------------------
Cash and due from banks at end of period $ 11,128 9,662
-------------------------------------------------------------------------------------------------------------
Cash payments for interest $ 9,808 7,738
Cash payments for income taxes $ 2,338 1,740
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 5
FRANKLIN FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine month period ended September 30, 1998 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1998. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1997.
NOTE B - COMPREHENSIVE INCOME
On January 1, 1998 the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income." SFAS establishes
standards for reporting comprehensive income. Comprehensive income includes net
income and other comprehensive income which is defined as non-owner related
transactions in equity. The following table sets forth (in thousands) the
amounts of other comprehensive income included in equity for the nine months
ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
Net unrealized gain on securities available for sale for the nine months $48 $156
</TABLE>
NOTE C - STOCK SPLITS AND DIVIDENDS
During April 1998, the Company's Board of Directors approved a four-for-one
stock split which was payable on June 3, 1998 to shareholders of record at the
close of business on May 20, 1998. The Company also had two-for-one stock splits
in May 1997 and February 1998. All per share data and weighted average share
data has been restated as if the splits had occurred at the beginning of the
years presented.
In October, 1998, the Company's Board of Directors declared a $.01 per share
cash dividend payable January 8, 1999 to shareholders of record on December 27,
1998.
5
<PAGE> 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Franklin National Bank (the "Bank") represents virtually all the assets of
Franklin Financial Corporation (the "Company"). The Bank, located in Franklin,
Tennessee, was opened in December of 1989 and continues to experience
substantial growth. The Bank's first full service branch was opened in the
second quarter of 1994 and a stock offering, which netted $3.3 million, was
completed that same quarter. The Bank opened its second full service branch in
January, 1995, its third full service branch in April, 1995 and its fourth full
service branch in May, 1997. In August, 1996 the Bank opened an insurance
subsidiary, Franklin Financial Insurance (formerly Hometown Insurance Agency.)
The agency is located in the Bank's Spring Hill facility. In October, 1997 the
Bank opened a financial services subsidiary, Franklin Financial Securities. The
subsidiary offers financial planning and securities broker services through
Invest Financial Corporation of Tampa, Florida. In January, 1998 the Bank began
operating its mortgage division as a separate subsidiary, Franklin Financial
Mortgage. Also in January, 1998, the mortgage subsidiary began a wholesale
mortgage operation located in an office in Bartlett, Tennessee and in August,
1998 opened a retail mortgage origination office in Chattanooga, Tennessee .
Franklin Financial Mortgage originates, sells and services mortgage loans.
FINANCIAL CONDITION
Total assets have grown $48.9 million since December 31, 1997, for a total of
$323.3 million at September 30, 1998. The growth has been mostly funded by a
$40.3 and $4.7 million increase in deposits and other borrowings, respectively,
and $3.6 million in earnings in 1998.
The Bank continues to experience strong loan demand. Net loans have increased
7.4% or $14.1 million since December 31, 1997, to $202.6 million at September
30, 1998. Securities available-for-sale increased $14.0 million or 25.3% while
securities held-to-maturity decreased $987,000 or 16.5% during the nine months
ended September 30, 1998. Loans held for resale increased $12.0 million or 321%
since December 31, 1997. This is due to an increase in mortgage loan
originations.
Premises and equipment increased by $710,000 since December 31, 1997 primarily
due to the permanent Fairview branch facility completed during the second
quarter and additional computer equipment related to overall Bank and employee
growth.
Accrued income receivable increased $141,000 or 7.4% since December 31, 1997.
This increase is due to the combined increase of $39.1 million in loans and
securities since December 31, 1997.
The allowance for loan losses increased $186,000 since December 31, 1997, for a
total of $2,014,000 or approximately .9% of total loans. This increase is
primarily additional provision for loan losses to allow for growth in the loan
portfolio. Net charge-offs were $84,000 during the first nine months of 1998.
Asset quality remains good and management believes that the allowance for loan
losses is adequate at September 30, 1998. Management reviews in detail the level
of the allowance for loan losses on a quarterly basis. In addition, Professional
Bankers Services, Inc., an external bank consulting firm, performs an annual
review of the loan portfolio to provide management an independent third party
opinion regarding the adequacy of the allowance for loan losses. The allowance
is below the Bank's peer group average as a percentage of loans. However, this
level is supported based on two significant facts: the Bank has no loans
accounted for on a nonaccrual basis at September 30, 1998 and past due loans, at
.3% of total loans, are substantially below the peer group average.
6
<PAGE> 7
LIQUIDITY AND CAPITAL RESOURCES
Management continuously monitors the Bank's liquidity, but strives to maintain
an asset/liability mix that provides the highest possible net interest margin
without taking undue risk with regard to asset quality or liquidity.
Liquidity is at an adequate level with cash and due from banks of $11.1 million
at September 30, 1998. Loans and securities scheduled to mature within one year
exceed $125 million at September 30, 1998, which should provide further
liquidity. In addition, approximately $69.0 million of securities are classified
as available-for-sale to help meet liquidity needs should they arise. The
Company has lines of credit of $7.5 million with lending institutions and the
Bank is approved to borrow up to $7.5 million in funds from the Federal Home
Loan Bank and $24.5 million in federal funds lines to assist with capital and
liquidity needs. The Company has $1.9 million in borrowings against its line of
credit and the Bank has no federal funds purchased outstanding at September 30,
1998. In February and August, 1998 the Bank entered into long term convertible
Federal Home Loan Bank advances with a 10/1 call option totaling $6.0 million.
The Bank has $3.4 million outstanding in repurchase agreements to further
develop it's relationship with a customer. This is included in other borrowings.
The Bank has approximately $41.7 million in brokered deposits at September 30,
1998 to help fund strong loan demand. The majority of these deposits are
$100,000 or less, but they are generally considered to be more volatile than the
Bank's core deposit base.
Approximately $14.2 million in loan commitments are expected to be funded within
the next six months. Furthermore, the Bank has approximately $39.1 million of
other loan commitments, primarily unused lines and letters of credit, which may
or may not be funded.
During the second quarter of 1998, the Bank entered into a lease agreement with
Gordon E. Inman, Chairman of the Company, for a 4,000 square foot building which
adjoins the Bank's main office building property. The annual lease payments on
this facility are approximately $59,000. This lease was entered into on terms no
less favorable to the Bank than it could have obtained from a non-affiliated
third party. The Bank houses its insurance sales function and training facility
at this location. The Bank has been approved to open full service branch
facilities in Nolensville and Belle Meade, Tennessee. To date, no land has been
acquired on which to locate these facilities. The Bank has also been approved to
open a full service branch in the Cool Springs area of Franklin. In October,
1998 the Company purchased a parcel of land in this area for $650,000.
Expenditures related to the facility are expected to be approximately $500,000
with completion in the second quarter of 1999. The Bank has been approved to
open a replacement branch facility in Brentwood, Tennessee with anticipated
opening date of third quarter 1999. The Brentwood facility will be leased with
annual payments of $124,000 and constructed to the Bank's specifications,
therefore, no renovation expenditures will be needed. Other than as set forth
above, there are no known trends, commitments, or uncertainties that will result
in the Company's liquidity increasing or decreasing in a material way.
The Company had a net increase in cash and due from banks of $432,000 during the
nine months ended September 30, 1998 as compared to a $1.4 million increase for
the same period in 1997. Cash provided by operating activities increased
$100,000 during the first nine months of 1998, as compared to the same period in
1997. This increase is due to an increase in net income of $840,000 offset by a
$508,000 increase in cash flow from other assets for the nine months ended
September 30, 1998 as compared to the previous year.
7
<PAGE> 8
Net cash used by investing activities decreased by $5.3 million during the first
nine months of 1998 compared to the same period in 1997. The net increase in
cash flow from portfolio loans used $17.9 million less in funds for the nine
months ended September 30, 1998 as compared to the same period in 1997. Due to
the securities portfolio, investing activities required $1.7 million less use of
funds during the nine months ended September 30, 1998 as compared to the
previous year. Federal funds sold used $3.5 million in additional funds for the
nine months ended September 30, 1998 as compared to the same period in 1997.
Although substantial cash flow has been required related to loans originated for
resale, proceeds from the sale of such loans has served to fund much of the cash
flow requirements with $5.0 million in additional funds used.
Cash provided by financing activities decreased $6.4 million during the first
nine months of 1998 as compared to the same period in 1997. The decrease is
attributable to a $1.7 million decrease in other borrowings and a $5.1 million
decrease in cash flow from deposits during the first nine months of 1998 as
compared to the same period in 1997.
Equity capital exceeds regulatory requirements at September 30, 1998, at 6.9% of
average assets. The Company and Bank's minimum capital requirements and
compliance with the same are shown in the following table.
<TABLE>
<CAPTION>
LEVERAGE CAPITAL TIER 1 CAPITAL TOTAL RISK-BASED CAPITAL
---------------------- ---------------------- ------------------------
REGULATORY REGULATORY REGULATORY
MINIMUM ACTUAL MINIMUM ACTUAL MINIMUM ACTUAL
<S> <C> <C> <C> <C> <C> <C>
Company 3.0% 6.9% 4.0% 9.7% 8.0% 10.6%
Bank 3.0% 7.4% 4.0% 10.5% 8.0% 11.4%
</TABLE>
RESULTS OF OPERATIONS
The Company had net income of $1.3 million in the third quarter and $3.6 million
for the first nine months of 1998 compared to net income of $1.0 million and
$2.8 million for the same periods in 1997. Net income for the third quarter and
nine months ending September 30, 1998 increased $252,000 and $840,000,
respectively, as compared to the same periods in 1997. Increases in net interest
income, mortgage banking fees and other fees offset partially by expenses
related to the overall growth of the Bank are the primary reasons for the
increase in earnings for the three and nine months ended September 30, 1998 as
compared to the same periods in 1997.
Total interest income increased $845,000 or 14.1% in the three months ended
September 30, 1998 and $3.3 million or 20.0% for the first nine months of 1998
compared to the same periods in 1997. The increase in total interest income is
primarily attributable to the similar increase in average earning assets and a
slight increase in prime rate for the first nine months of 1998 compared to
1997. Total interest expense increased $433,000 or 14.6% in the third quarter
and $1.8 million or 22.8% in the first nine months of 1998 as compared to the
same periods in 1997. Total interest-bearing liabilities have increased 16.3%
from December 31, 1997 and 18.7% from September 30, 1997. The increases in
deposits and other borrowings are the primary reasons for the increase in
interest expense. Net interest income increased $412,000 or 13.6% during the
third quarter and $1.5 million or 17.3% in the first nine months of 1998 as
compared to the prior year. Total earning assets increased 19.5% since September
30, 1997 and was the primary factor in the increase in net interest margin.
8
<PAGE> 9
The provision for loan losses was $105,000 for the three months ended September
30, 1998 as compared to $85,000 for the same period in 1997. The year-to-date
provision is $270,000 for the nine months ended September 30, 1998 as compared
to $335,000 for the same period in 1997. While the Bank's asset quality remains
good, provisions for loan losses continue to be needed to allow for growth in
the Bank's loan portfolio.
Total other income of $1.4 million in the third quarter of 1998 is $708,000 or
107% more than the same period in 1997. The increase is primarily attributed to
an increase in mortgage banking fees resulting from an increase in loans
originated. Total other income of $3.5 million for the nine months ended
September 30, 1998 is $1.6 million or 86.5% more than the same period in 1997.
Mortgage banking fees increased $681,000 or 86.8% for the three months ended
September 30, 1998 as compared to the same period in 1997. Other fees increased
$511,000 or 192% for the first nine months of 1998 as compared to the same
period in 1997. The increase is primarily the result of a $168,000 increase in
investment portfolio call option fees, a $57,000 increase in insurance
commissions through Franklin Financial Insurance, a $245,000 increase in income
on the sale of financial products through Franklin Financial Securities and a
$59,000 increase in commercial loan servicing rights.
Total other expenses increased $705,000 or 35.3% during the third quarter and
$1.8 million or 32.8% for the first nine months of 1998 as compared to the same
periods in 1997. The increases are attributable to additional personnel and
other incremental costs related to the overall growth of the Company.
ACCOUNTING PRONOUNCEMENTS
The Company adopted SFAS No. 131 "Disclosures about Segments of an Enterprise
and Related Information" on January 1, 1998. This accounting pronouncement
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports to shareholders. Operating segments are components of
an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. Adoption of SFAS No. 131 will
expand disclosures related to the consolidated financial statements. The Company
is currently evaluating SFAS No. 131's operations to determine the appropriate
disclosures.
YEAR 2000
A critical issue affecting companies that rely extensively on electronic data
processing systems, such as the Company, is the Year 2000 issue. The Year 2000
issue has arisen due to the widespread use of computer programs that rely on
two-digit date codes to perform computations or decision-making functions. Many
of these programs may fail as a result of their inability to properly interpret
date codes beginning January 1, 2000. For example, such programs may
misinterpret "00" as the year 1900 rather than 2000. In addition, some
equipment, being controlled by microprocessor chips, may not deal appropriately
with the year "00." This could result in a system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions or engage in similar normal business
activities.
9
<PAGE> 10
The Bank primarily uses a third-party vendor for processing its primary banking
applications. During 1997, the Company formed an internal task force, chaired by
the Vice President of Information Systems, to address the Year 2000 issue,
conduct a comprehensive review of the Company's systems and insure that the
Company takes any necessary measures. The Company believes that its systems,
those of the Bank and its data processing vendor are currently Year 2000
compliant. The Company believes that it will incur approximately $20,000 to
$40,000 in operating expenditures to support the Year 2000 project. As of
September 30, 1998, no material expenditures have been required to upgrade the
Company's software and hardware systems to help ensure that its systems would be
Year 2000 compliant. Further, the Company has issued a certification request to
its primary data processing vendor seeking assurance that its systems will be
Year 2000 compliant. The vendor has responded that its systems are Year 2000
compliant. However, there can be no assurance that unforeseen difficulties or
costs will not arise. In addition, there can be no assurance that the systems of
other companies on which the Company's systems rely will be modified on a timely
basis, or that the failure by another company to properly modify its systems
will not negatively impact the Company's systems or operations.
As of November 10, 1998, the Company has identified all mission critical
systems and is currently testing these systems. The Company is expecting to
have all mission critical systems tested by December 31, 1998. The Company is
beginning to formulate its contingency plans.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. The following exhibits are filed with this report:
Exhibit
Number Description of Exhibit
------ ----------------------
27.1 - Financial Data Schedule
27.2 - Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
quarter ended September 30, 1998.
11
<PAGE> 12
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.
FRANKLIN FINANCIAL CORPORATION
Dated: November 10, 1998 By: /s/ Richard E. Herrington
----------------- ----------------------------
Richard E. Herrington,
President and Chief
Executive Officer
(principal executive and
financial officer)
12
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 11,128
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 7,553
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 70,365
<INVESTMENTS-CARRYING> 4,973
<INVESTMENTS-MARKET> 5,135
<LOANS> 220,378
<ALLOWANCE> 2,014
<TOTAL-ASSETS> 323,332
<DEPOSITS> 287,866
<SHORT-TERM> 5,361
<LIABILITIES-OTHER> 1,333
<LONG-TERM> 6,746
0
0
<COMMON> 10,402
<OTHER-SE> 11,624
<TOTAL-LIABILITIES-AND-EQUITY> 323,332
<INTEREST-LOAN> 16,426
<INTEREST-INVEST> 3,050
<INTEREST-OTHER> 138
<INTEREST-TOTAL> 19,614
<INTEREST-DEPOSIT> 9,198
<INTEREST-EXPENSE> 9,728
<INTEREST-INCOME-NET> 9,886
<LOAN-LOSSES> 270
<SECURITIES-GAINS> 229
<EXPENSE-OTHER> 7,448
<INCOME-PRETAX> 5,670
<INCOME-PRE-EXTRAORDINARY> 5,670
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,606
<EPS-PRIMARY> 13
<EPS-DILUTED> 10
<YIELD-ACTUAL> 4.65
<LOANS-NON> 0
<LOANS-PAST> 25
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 73
<ALLOWANCE-OPEN> 1,828
<CHARGE-OFFS> 93
<RECOVERIES> 9
<ALLOWANCE-CLOSE> 2,014
<ALLOWANCE-DOMESTIC> 73
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,941
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 9,662
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,307
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 54,419
<INVESTMENTS-CARRYING> 4,648
<INVESTMENTS-MARKET> 4,804
<LOANS> 190,310
<ALLOWANCE> 1,777
<TOTAL-ASSETS> 270,685
<DEPOSITS> 245,255
<SHORT-TERM> 6,701
<LIABILITIES-OTHER> 1,363
<LONG-TERM> 751
0
0
<COMMON> 9,774
<OTHER-SE> 6,841
<TOTAL-LIABILITIES-AND-EQUITY> 270,685
<INTEREST-LOAN> 13,678
<INTEREST-INVEST> 2,526
<INTEREST-OTHER> 141
<INTEREST-TOTAL> 16,345
<INTEREST-DEPOSIT> 7,570
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</TABLE>
