<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1997
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
0-18261
COMMUNITY FINANCIAL CORPORATION
(Exact name of small business issuer as specified in its charter)
VIRGINIA 54-1532044
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
38 North Central Ave., Staunton, Va. 24401
(Address of principal executive offices zip code)
(540) 886-0796
(Issuer's telephone number, including area
code)
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 preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
Number of shares of Common Stock, par value per share, $.01, outstanding at
the close of business on January 31, 1998: 1,279,723.
Transitional Small Business Disclosure Format (Check one)
Yes No X
PAGE
<PAGE>
COMMUNITY FINANCIAL CORPORATION
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statements of Financial
Condition at December 31, 1997 (unaudited)
and March 31, 1997.............................................1
Consolidated Statements of Income for the Three and
Nine Months Ended December 31, 1997 and 1996 (unaudited).......2
Consolidated Statements of Cash Flows for the
Nine Months Ended December 31, 1997 and 1996 (unaudited).......3
Notes to Unaudited Interim Consolidated
Financial Statements...........................................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................5
PART II. OTHER INFORMATION ............................................10
Signature Page................................................11
Exhibit Index.................................................12
<PAGE>
COMMUNITY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31, March 31,
1997 1997
------------ -------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash (including interest bearing
deposits of approximately
$2,592,000 and $1,015,000) $ 7,385,691 $ 4,922,213
Securities
Held to maturity 4,357,866 5,197,437
Available for sale 3,452,295 2,243,220
Investment in Federal Home Loan
Bank stock, at cost 1,600,000 1,400,000
Loans receivable, net 160,792,465 148,905,485
Real estate owned 294,226 173,245
Property and equipment, net 3,541,503 3,542,108
Accrued interest receivable
Loans 935,711 851,365
Investments 146,343 138,073
Prepaid expenses and other assets 373,365
334,036
$182,879,465 $167,707,182
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $132,962,517 $116,594,885
Advances from Federal Home Loan
Bank 23,000,000 26,000,000
Advance payments by borrowers for
taxes and insurance 126,664 135,561
Other liabilities 1,866,582 1,639,740
Total Liabilities 157,955,763 144,370,186
Stockholders' Equity
Preferred stock $.01 par value,
authorized 3,000,000 shares,
none outstanding
Common stock, $.01 par value,
authorized 10,000,000 shares,
1,277,223 and 1,275,348 shares
outstanding 12,772 12,753
Additional paid in capital 4,726,159 4,716,677
Retained earnings 18,094,323 17,266,745
Net unrealized gain on securities
available for sale 2,090,448 1,340,821
Total Stockholders' Equity 24,923,702 23,336,996
$182,879,465 $167,707,182
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMMUNITY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
------------------ -----------------
1997 1996 1997 1996
-------- ------ ------ ------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $3,387,279 $3,091,911 $ 9,940,155$ 9,082,320
Investment securities 118,382 113,482 378,684 363,173
Other 32,472 27,087 92,946 81,605
Total interest income 3,538,133 3,232,480 10,411,785 9,527,098
INTEREST EXPENSE
Deposits 1,520,598 1,278,307 4,299,177 3,773,232
Borrowed money 363,245 375,014 1,188,240 1,113,329
Total interest expense 1,883,843 1,653,321 5,487,417 4,886,561
NET INTEREST INCOME 1,654,290 1,579,159 4,924,368 4,640,537
PROVISION FOR LOAN LOSSES 25,001 53,296 417,631 155,933
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,629,289 1,525,863 4,506,737 4,484,604
NONINTEREST INCOME
Service charges, fees
and commissions 206,597 131,351 538,805 370,462
Miscellaneous 636 4,835 11,422 18,752
Total noninterest
income 207,233 136,186 550,227
389,214
NONINTEREST EXPENSE
Compensation & benefits 488,816 311,808 1,355,513 896,424
Occupancy 125,311 89,787 351,663 288,030
Data processing 99,581 79,691 307,233 254,466
Federal insurance premium 18,235 48,161 54,521 842,261
Miscellaneous 252,132 204,145 819,912 636,412
Total noninterest
expense 984,075 733,592 2,888,842 2,917,593
INCOME BEFORE TAXES 852,447 928,457 2,168,122 1,956,225
INCOME TAXES 313,349 349,117 804,647 732,599
NET INCOME $ 539,098 $ 579,340 $ 1,363,475 $1,223,626
BASIC EARNINGS PER SHARE $ 0.42 $ 0.46 $ 1.07 $ 0.96
DILUTED EARNINGS PER SHARE $ 0.42 $ 0.45 $ 1.06 $ 0.96
DIVIDENDS PER SHARE $ 0.14 $ 0.13 $ .42 $ 0.39
</TABLE>
See accompanying notes to consolidated financial
statements.
PAGE
<PAGE>
COMMUNITY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
---------------------------
1997 1996
----------- -----------
(Unaudited) <S>
<C> <C>
OPERATING ACTIVITIES
Net income $1,363,475 $1,223,626
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses 417,630 155,933
Depreciation 171,278 163,725
Amortization of premium and accretion
of discount on securities, net (1,054)
(4,320) (Decrease) in net deferred loan fees (85,313)
(14,335)
Increase in deferred income taxes 11,389 47,434
Decrease (increase) in other assets (252,926) 124,745
Increase (decrease) in other liabilities (252,892) (32,074)
(Gain)loss on sale of loans 6,079 (11,227)
Proceeds from sale of loans 2,078,400 876,600
Loans originated for resale (2,359,400) (1,048,350)
Net cash provided by operating activities 1,096,666 1,481,757
INVESTING ACTIVITIES
Proceeds from maturities of held for
investment securities 2,550,000 2,000,000
Purchases of investment securities (2,149,375) (1,000,234)
Net decrease (increase) in loans (11,517,190) (6,645,492)
Purchases of property and equipment (157,858) (24,893)
Redemption (purchase) of FHLB stock (200,000) -0-
Net cash provided (absorbed) by
investing activities (11,474,423) (5,670,619)
FINANCING ACTIVITIES
Dividends paid (535,898) (496,027)
Net increase (decrease) in deposits 16,367,632 4,599,790
Proceeds from advances and other
borrowed money 76,000,000 33,000,000
Repayments of advances and other
borrowed money (79,000,000) (32,000,000)
Proceeds from issuance of common stock 9,501 10,600
Net cash provided (absorbed) by
financing activities 12,841,235 5,114,363
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,463,478 925,501
CASH AND CASH EQUIVALENT-beginning of period 4,922,213 3,673,085
CASH AND CASH EQUIVALENTS-end of period $7,385,691 $4,598,586
</TABLE>
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
COMMUNITY FINANCIAL CORPORATION
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997
NOTE 1. - BASIS OF PRESENTATION
The accompanying unaudited interim 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
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
The accompanying consolidated financial statements include the accounts of
Community Financial Corporation(the "Company"), its wholly-owned subsidiary,
Community Bank(the "Bank") and Community First Mortgage Corporation, a
wholly-owned subsidiary of the Bank ("First Mortgage"). First Mortgage was
incorporated on November 12, 1997. All significant intercompany balances and
transactions have been eliminated in consolidation.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included.
Operating results for the three and nine months ended December 31, 1997, are
not necessarily indicative of the results that may be expected for the year
ending March 31, 1998.
NOTE 2. - EARNINGS PER SHARE
Basic and diluted earnings per share for the periods presented in 1997 and
1996 are computed under a new accounting standard effective in the quarter
ended December 31, 1997. All prior amounts have been restated to be
comparable. Basic earnings per share is based on net income divided by the
weighted average number of common shares outstanding during the period.
Diluted earnings per share shows the dilutive effect of additional common
shares issuable under stock option plans. Basic earnings per share for the
three months ended December 31, 1997 and 1996 have been determined by dividing
net income by the weighted average number of shares of common stock
outstanding during these periods (1,276,741 and 1,272,348, respectively).The
number of shares used to determine diluted earnings per share for the same
three month periods is 1,288,923 and 1,279,424, respectively. Earnings per
share for the nine months ended December 31, 1997 and 1996 have been
determined by dividing net income by the weighted average number of shares of
common stock outstanding during these periods (1,275,825 and 1,271,690,
respectively). The number of shares used to determine diluted earnings per
share for the same nine month periods as above was 1,284,946 and 1,277,715,
respectively.
NOTE 3. - REGULATORY CAPITAL AND DIVIDENDS DISCUSSION
The following table presents the Bank's capital levels at December 31, 1997,
relative to the Office of Thrift Supervision (the "OTS")requirements
applicable at that date:
<TABLE>
<CAPTION>
Amount Percent Actual Actual
Excess Required Required Amount
Percent Amount ---------- ---------
- --------- ------- -----------
<S> <C> <C> <C> <C>
<C>
Tangible Capital $ 2,722,000 1.50% $21,184,000 11.68% $18,462,000
Core Capital 5,443,000 3.00 21,184,000 11.68 15,741,000
Risk-based Capital 10,173,000 8.00 22,194,000 17.45 12,021,000
</TABLE>
<PAGE>
NOTE 3. - REGULATORY CAPITAL AND DIVIDEND DISCUSSION (cont.)
Capital distributions by the Bank are limited by federal regulations
("Capital Distribution Regulation"). Capital distributions are defined to
include, in part, dividends, stock repurchases and cash-out mergers. The
Capital Distribution Regulation permits a "Tier 1" association to make capital
distributions during a calendar year up to 100% of its net income to date plus
the amount that would reduce by one-half its surplus capital ratio at the
beginning of the calendar year. Any distributions in excess of that amount
requires prior notice to the OTS with the opportunity for the OTS to object to
the distribution. A Tier 1 association is defined as an association that has
capital immediately prior to and on a pro forma basis after the proposed
distribution, equal to or greater than the OTS fully phased-in capital
requirement and has not been deemed by the OTS to be "in need of more than
normal supervision". The Bank is currently classified as a Tier 1 institution
for these purposes. The Capital Distribution Regulation requires that
associations provide the applicable OTS District Director with a 30-day
advance written notice of all proposed capital distributions whether or not
advance approval is required by the regulation.
NOTE 4. - SUPPLEMENTAL INFORMATION - STATEMENT OF CASH FLOWS
Total interest paid for the three months ended December 31, 1997 and 1996 was
$1,902,043 and $1,630,547, respectively. Total interest paid for the nine
months ended December 31, 1997 and 1996 was $5,559,029 and $4,899,937. Total
income taxes paid for the three months ended December 31, 1997 and 1996 was
$375,382 and $156,077. Total income taxes paid for the nine months ended
December 31, 1997 and 1996 was $1,045,174 and $704,737.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
FINANCIAL CONDITION
The Company's total assets increased $15.2 million to $182.9 million at
December 31, 1997, due primarily to a increase in loans of $11.9 million. The
increase in loans receivable was due primarily to the origination of variable
rate mortgage loans and consumer loans. Deposits increased $16.4 million to
$133.0 million at December 31, 1997, from $116.6 million at March 31, l997
while Federal Home Loan Bank advances decreased during the same period from
$26.0 million to $23.0 million. The increase in deposits was used primarily to
fund the increase in loans and repay borrowings. Stockholders' equity
increased to $24.9 million at December 31, 1997, from $23.3 million at March
31, 1997, due primarily to earnings for the nine month period ended December
31, 1997 and an adjustment in the market value of Federal Home Loan Mortgage
Corporation stock, which was partially offset by the payment of cash
dividends.
At December 31, 1997, the Bank's non-performing assets totaled $810,000 or
0.44% of total assets compared to $676,000 or .40% of total assets at March
31, 1997. At December 31, 1997 the Company's non-performing assets were
comprised of four residential rental properties which were more than 90 days
past due and various consumer loans. Also included in non-performing assets is
approximately $270,000 of one-to-four residential rental properties
<PAGE>
which were acquired by foreclosure and various repossessed vehicles. Based on
current market values of the collateral securing these loans, management
anticipates no significant losses in excess of the reserves for losses
previously recorded. At December 31, 1997 the Company's allowance for loan
losses totaled $1,050,961 or .65% of net loans receivable and 130% of
non-performing loans, compared to $1,039,013 or .70% of net loans receivable
and 154% of non-performing loans at March 31, 1997. See "Results of Operations
- -Three Months Ended December 31, 1997 and 1996 - Provision for Loan Losses."
Management establishes an allowance for loan losses based on an analysis
of risk factors in the loan portfolio. This analysis includes the evaluation
of concentrations of credit, past loss experience, current economic
conditions, amount and composition of the loan portfolio, estimated fair value
of underlying collateral, loan commitments outstanding, delinquencies, and
other factors. Since the Company has had extremely low loan losses during its
history, management also considers loss experience of similar portfolios in
comparable lending markets. Accordingly, the calculation of the adequacy of
the allowance for loan losses was not based directly on the level of
non-performing assets.
Management will continue to monitor the allowance for loan losses through
the provision for loan losses as economic conditions dictate. Although the
Company maintains its allowance for loan losses at a level which it considers
to be adequate to provide for losses, there can be no assurance that future
losses will not exceed estimated amounts or that additional provisions for
loan losses will not be required in future periods. In addition, management's
determination as to the amount of the allowance for loan losses is subject to
review by the OTS and the Federal Deposit Insurance Corporation as part of
their examination process, which may result in the establishment of an
additional allowance based upon their judgement of the information available
to them at the time of their examination.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of funds are deposits, principal and
interest repayments on loans, interest-bearing deposits and securities
available for sale. While scheduled loan repayments and maturing investments
are relatively predictable , deposit flows and early loan prepayments are more
influenced by interest rates, general economic conditions and competition.
Historically, the Bank has maintained its liquid assets above the minimum
requirements imposed by federal regulations and at a level believed adequate
to meet requirements of normal daily activities, repayment of maturing debt
and potential deposit outflows. Cash flow projections are regularly reviewed
and updated to assure that adequate liquidity is provided. As of December 31,
1997, the Bank's liquidity ratio (liquid assets as a percentage of net
withdrawable savings and current borrowings) was 7.09%, which exceeds the
regulatory requirement of 4.00%.
The Company uses its liquidity resources principally to meet ongoing
commitments, to fund maturing certificates of deposit and deposit withdrawals,
and to meet operation expenses. The Company anticipates that it will have
sufficient funds available to meet current loan commitments. At December 31,
1997, the Company had outstanding commitments to extend credit which amounted
to $13.7 million (including $1.8 million in available home equity lines of
credit). At December 31, 1997, the Company had $23.0 million in advances from
the Federal Home Loan Bank of Atlanta. Management believes
that loan repayments and other sources of funds,
including Federal Home Loan Bank PAGE
<PAGE>
borrowings, will be adequate to meet the Company's foreseeable liquidity
needs.
The Bank is subject to certain capital to asset requirements in
accordance with Bank regulations. See Note 3 of the Notes to Consolidated
Financial Statements contained in this report.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1997 and 1996.
- ----------------------------------------------
General. Net income for the three months ended December 31, 1997 was $539,000
compared to $579,000 for the three months ended December 31, 1996. The
decrease was due primarily to an increase in noninterest expense which was
offset in part by an increase in net interest income and noninterest income
all as further described below. Income before taxes decreased to $852,000
for the three months ended December 31, 1997 from $928,000 for the three
months ended December 31,
1997.
Interest Income. Total interest income increased to $3.5 million for the
three months ended December 31, 1997, from $3.2 million for the three months
ended December 31, 1996, due to an increase in the balances of loans for the
three months ended December 31, 1997 as compared to the period ended December
31, 1996.
Interest Expense. Total interest expense increased to $1.9 million for the
three months ended December 31, 1997, from $1.7 million for the three months
ended December 31, 1996. Interest on deposits increased to $1.5 million for
the three months ended December 31, 1997 from $1.3 million for the three
months ended December 31, 1996 due primarily to an increase in the average
outstanding balance of deposits, primarily certificates of deposit. Interest
expense on borrowed money decreased to $363,000 for the quarter ended December
31, 1997, from $375,000 for the quarter ended December 31, 1996, due to a
decrease in the average rate on borrowings from 5.78% for the three months
ended December 31, 1996 to 5.69% for same period ended December 31, 1997. The
average rate paid on interest-bearing liabilities was 4.83% for the three
months ended December 31, 1997 compared to 4.78% for the three months ended
December 31,
1996.
Provision for Loan Losses. The provision for loan losses decreased
to $25,000 for the three months ended December 31, 1997, from $53,000 for
the three months ended December 31, 1996. The decrease in provision for loan
losses is attributable primarily to a decrease in delinquent loans. See --
"Financial
Condition."
Noninterest Income. Noninterest income increased to $207,000 for the three
months ended December 31, 1997, from $136,000 for the three months ended
December 31, 1996 due primarily to an increase in checking account charges
which is related to an increase in account volume. The number of checking
accounts increased due to marketing through direct mail. As the volume of
checking accounts increased, so did the volume of overdraft charges which
increased noninterest income.
<PAGE>
Noninterest Expenses. Noninterest expense increased to $984,000 for the three
months ended December 31, 1997, from $734,000 for the three months ended
December 31, 1996. The increase in noninterest expense is primarily
attributable to an increase in compensation and other expenses related to the
opening of a branch location on April 9, 1997 in Virginia Beach, Virginia and
the formation of First Mortgage which operates in Richmond, Virginia. The
formation expenses were office space and furniture rental and salary expense
for two employees. First Mortgage was formed to originate mortgage loans.
Taxes. Taxes decreased to $313,000 for the three months ended December 31,
1997, from $349,000 for the three months ended December 31, 1996, due to the
decrease in income before taxes.
Nine Months Ended December 31, 1997 and 1996
- --------------------------------------------
General. Net income for the nine months ended December 31, 1997 was $1.4
million compared to $1.2 million for the nine months ended December 31, l996.
The primary reason for the increase in net income was the absence of the
one-time assessment paid by the Bank in 1996 of $416,000, net of tax, to
recapitalize the SAIF. Excluding the SAIF assessment, net income decreased
$276,000 for the nine months ended December 31, 1997 compared to the same
period in 1996.
Interest Income. Total interest income increased to $10.4 million for the
nine months ended December 31, 1997, from $9.5 million for the nine months
ended December 31, 1996, due primarily to an increase in the balance of loans.
Interest Expense. Total interest expense increased to $5.5 million for the
nine months ended December 31, 1997, from $4.9 million for the nine months
ended December 31, 1996. Interest on deposits, primarily certificates of
deposit, increased to $4.3 million for the nine months ended December 31,
1997, from $3.8 million for the same period last year due primarily to an
increase in the average outstanding deposit balances. The deposit balances
increased because of a special promotion at rates offered on certificates of
deposit. Interest expense on borrowed money increased to $1.2 million for the
nine months ended December 31, 1997 from $1.1 million for the nine months
ended December 31, 1996, due to both an increase in the cost of borrowings
and increased borrowings from the Federal Home Loan Bank of Atlanta. The cost
of borrowings increased from 5.68% for the nine months ended December 31, 1996
to 5.78% for the period ended December 31, 1997.
Provision for Loan Losses. The provision for loan losses increased to
$417,630 for the nine months ended December 31, 1997, from $155,933 for the
same period last year due to an increase in the size of the loan portfolio and
the origination of a greater number of consumer loans, which generally carry a
higher risk of default than residential mortgage loans and one secured by
rapidly depreciating collateral. Chargeoffs on one-to-four family loans also
increased during the year.
Noninterest Income. Noninterest income increased to $550,227 for the nine
months ended December 31, 1997, from $389,214 for the nine months ended
December 31, 1996, due to an increase in the fees and service charges on
checking accounts as the volume of accounts increased and gains resulting from
the sale of fixed rate mortgage loans.
Noninterest Expenses. Noninterest expenses decreased to $2.8 million for the
nine months ended December 31, 1997, from $2.9 million for the same period
last year. The decrease is related primarily to the one-time SAIF premium
discussed above, offset, in part, by an increase in compensation and other
expenses related to the opening of a branch location on April 9, 1997 in
Virginia Beach, Virginia and the formation of First Mortgage which operates in
Richmond, Virginia.
<PAGE>
Taxes. Taxes increased to $804,647 for the nine months ended December 31,
1997, from $732,599 for the nine months ended December 31, 1996, due to an
increase in income before taxes for the nine months ended December 31, 1997.
Forward-Looking Statements
This Quarterly Report on Form 10-QSB contains certain forward-looking
statements with respect to the financial condition, results of operations and
business of the Company. These forward-looking statements involve certain
risks and uncertainties. When used in this Quarterly Report on Form 10-QSB or
future filings by the Company with the Securities and Exchange Commission, in
the Company's press releases or other public or shareholder communications, or
in oral statements made with the approval of an authorized executive officer,
the words or phrases "will likely result", "are expected to", "will continue",
"is anticipated", "estimate", "project", "believe" or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made, and to advise readers that
various factors including regional and national economic conditions, changes
in levels of market interest rates, credit risks of lending activities, and
competitive and regulatory factors could affect the Company's financial
performance and could cause the Company's actual results for future periods to
differ materially from those anticipated or projected.
The Company does not undertake and specifically disclaims any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect the
occurrence of anticipated or
unanticipated events or circumstances
after the date of such statements.PAGE
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
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
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index
(b) No Reports on Form 8-k were filed during the quarter ended
December 31, 1997.
<PAGE>
<PAGE>
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.
COMMUNITY FINANCIAL CORPORATION
Date: February 11, 1998
By: (s) R. Jerry Giles
-------------------------------
R. Jerry Giles
Chief Financial Officer
(Duly Authorized Officer)
<PAGE>
COMMUNITY FINANCIAL CORPORATION
EXHIBIT INDEX
Exhibit No. Description
11 Computation of Per Share Earnings.
27 Financial Data Schedule (Edgar Only).
<PAGE>
PAGE><PAGE
<PAGE>
<TABLE>
<CAPTION>
For the Three Months Ended
December 31, 1997 December
31, 1996
Weighted Weighted
Average Per Share
Average Per Share
Income Shares Amount Income
Shares Amount
<S> <C> <C> <C> <C>
<C> <C>
Basic EPS
Income available to
common stockholders $539,098 1,276,741 $0.42 $579,340
1,272,348 $0.46
Effect of Dilutive
Securities
Options --- 12,182 --- ---
7,076
Diluted EPS
Income available to
common stockholders $539,098 1,288,923 $0.42 $579,340
1,279,424 $0.45
====================================================================
For the Nine Months Ended
December 31, 1997 December
31, 1996
Weighted Weighted
Average Per Share
Average Per Share
Income Shares Amount Income
Shares Amount
<S> <C> <C> <C> <C>
<C> <C>
Basic EPS
Income available to
common stockholders $1,363,475 1,275,825 $1.07 $1,223,626
1,271,690 $0.96
Effect of Dilutive
Securities
Options --- 9,121 --- ---
6,025
Diluted EPS
Income available to
common stockholders $1,363,475 1,284,946 $1.06 $1,223,626
1,277,715 $0.96
====================================================================
</TABLE>
<TABLE> <S> <C>
PAGE><PAGE
<PAGE>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-QSB FOR THE QUARTER ENDED DECEMBER 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 7,385,691
<INT-BEARING-DEPOSITS> 2,592,000
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0
0
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</TABLE>
