<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934 (no fee required)
For the quarterly period ended March 31, 1997
---------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934 (no fee required)
For the transition period from to
----- ------
Commission File No. 0-25988
CNB, Inc.
----------
(Name of Small Business Issuer)
FLORIDA 59-2958616
---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Post Office Box 3239
201 North Marion Street
Lake City, Florida 32056
- ------------------------ ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 755-3240
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
--- ---
The number of shares of the registrant's common stock outstanding as of
April 30, 1997 was 1,937,905 shares, $0.01 par value per share.
<PAGE>
CNB, INC.
FINANCIAL REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)....................................................3
Consolidated Statements of Income (Unaudited)..............................................4
Consolidated Statements of Shareholders' Equity (Unaudited)................................5
Consolidated Statement of Cash Flows (Unaudited)...........................................6
Notes to Consolidated Financial Statements (Unaudited).....................................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Selected Financial Data....................................................................8
Overview...................................................................................9
Results of Operations......................................................................9
Earning Assets............................................................................13
Funding Sources...........................................................................17
Interest Rate Sensitivity / Liquidity.....................................................17
Capital Ratios............................................................................19
PART II-OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................................................20
</TABLE>
2
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
CNB, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31,
ASSETS 1997
----------
<S> <C>
Cash and due from banks.................................... $ 12,962
Federal funds sold......................................... 3,800
Interest bearing deposits in other banks................... 99
---------
Total Cash and Cash Equivalents........................ 16,861
Securities available for sale.............................. 64,808
Securities held to maturity................................ 9,593
Loans:
Commercial, Financial & Agricultural..................... 67,488
Real Estate--Construction................................ 3,884
Real Estate--Mortgage.................................... 60,830
Installment & Consumer Lines............................. 18,996
----------
Total Loans, net of unearned discount.................. 151,198
Less: Allowance for Loan Losses............................ (1,489)
----------
Net Loans................................................ 149,709
Premises and equipment, net................................ 9,605
Other assets............................................... 4,859
----------
TOTAL ASSETS........................................... $ 255,435
----------
----------
LIABILITIES
Deposits:
Non-interest bearing demand............................ $ 31,773
Savings, Time & Demand................................. 170,815
Time, $100,000 & over.................................. 23,774
----------
Total Deposits....................................... 226,362
Securities sold under repurchase agreements................. 4,676
Notes payable............................................... 2,350
Other liabilities........................................... 2,029
----------
Total Liabilities..................................... 235,417
----------
SHAREHOLDERS' EQUITY
Common stock:
$.01 par value, 10,000,000 shares authorized;
1,937,905 shares issued and outstanding.................... 19
Additional paid-in capital................................... 12,683
Retained earnings............................................ 7,526
Net unrealized gain (loss) on securities available for sale.. (210)
----------
Total Shareholders' Equity............................... 20,018
----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY................................................$ 255,435
----------
----------
</TABLE>
3
<PAGE>
CNB, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
<S> <C> <C>
1997 1996
------------ ----------
Interest Income
Interest and fees on loans.......................................... $ 3,496 $ 2,464
Interest on securities held to maturity.............................. 132 179
Interest on securities available for sale............................ 883 569
Interest on federal funds sold....................................... 176 92
Interest on interest bearing deposits................................ 2 6
------------ ----------
Total Interest Income............................................... 4,689 3,310
Interest Expense
Interest on deposits................................................. 1,948 1,465
Interest on notes payable............................................ 50 26
Interest on short-term borrowings.................................... 50 --
---------- ---------
Total Interest Expense 2,048 1,491
------------ ----------
Net Interest Income.............................................. 2,641 1,819
Provision for Loan Loss.............................................. 130 115
------------ ----------
Net Interest Income After Loan Loss Provision........................ 2,511 1,704
Non-interest Income
Service charges..................................................... 413 290
Other fees and charges.............................................. 142 136
------------ ----------
Total Non-Interest Income.......................................... 555 426
------------ ----------
Non-interest Expense
Salaries and employee benefits...................................... 981 682
Occupancy and equipment expenses.................................... 330 206
Other operating expenses............................................ 616 425
------------ ----------
Total Non-interest Expense......................................... 1,927 1,313
------------ ----------
Income Before Income Taxes........................................... 1,139 817
Income Taxes....................................................... 398 286
------------ ----------
NET INCOME........................................................... $ 741 $ 531
------------ ----------
------------ ----------
Earnings Per Share:
NET INCOME PER COMMON SHARE........................................ $ 0.38 $ 0.32
------------ ----------
------------ ----------
Weighted average common shares outstanding......................... 1,937,905 1,639,733
------------ ----------
------------ ----------
</TABLE>
4
<PAGE>
CNB, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED SHAREHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
--------- ---------------- --------- -------------
<S> <C> <C> <C> <C>
(thousands)
BALANCE, DECEMBER 31, 1995.............................. $ 16 $ 9,784 $ 4,967 $ 14,754
Net Income for Three Months
Ended March 31, 1996.................................... -- -- 531 531
Cash Dividends........................................... -- -- (82) (82)
Change in Unrealized Loss on Securities Available for
Sale, net of taxes...................................... -- -- -- (31)
--------- ---------------- --------- -------------
BALANCE, MARCH 31, 1996.................................. $ 16 $ 9,784 $ 5,416 $ 15,172
--------- ---------------- --------- -------------
--------- ---------------- --------- -------------
BALANCE, DECEMBER 31, 1996............................... $ 19 $ 12,683 $ 6,901 $ 19,669
Net income for the Three Months
Ended March 31, 1997..................................... -- -- 741 741
Cash Dividends........................................... -- -- (116) (116)
Change in Unrealized Loss on Securities Available for
Sale, net of taxes...................................... -- -- -- (276)
--------- ---------------- --------- -------------
BALANCE, MARCH 31, 1997.................................. $ 19 $ 12,683 $ 7,526 $ 20,018
--------- ---------------- --------- -------------
--------- ---------------- --------- -------------
</TABLE>
5
<PAGE>
CNB, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
----------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................................................... $ 741 $ 531
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization.......................................................... 196 126
Provision for loan loss................................................................ 130 115
Security amortization--net............................................................. 45 68
Changes in period-end balances of:
Other Assets......................................................................... (440) 101
Other Liabilities.................................................................... (6) 73
----------- ---------
Net Cash Provided By Operating Activities............................................ 666 1,014
----------- ---------
INVESTING ACTIVITIES
Purchases of securities available for sale............................................... (6,759) (37)
Securities available for sale called by issuer........................................... 2,000 2,500
Maturities of securities held to maturity -.............................................. --
Mortgage Backed Securities--Principal Payments........................................... 747 1,984
Net increase in loans.................................................................... (2,411) (2,741)
Net increase in premises and equipment................................................... (294) (65)
----------- ---------
Net Cash Provided By (Used In) Investing Activities.................................. (6,717) 1,641
----------- ---------
FINANCING ACTIVITIES
Net increase in deposits................................................................. (462) 4,820
Securities sold under repurchase agreements.............................................. 910 --
Repayment of note payable................................................................ (300) (300)
Cash dividend(s)......................................................................... (116) (82)
----------- ---------
Net Cash Provided By Financing Activities............................................ 32 4,438
----------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents................................. (6,019) 7,093
Beginning Balance........................................................................ 22,880 12,972
----------- ---------
Cash and Cash Equivalents at End of Period............................................... $ 16,861 $ 20,065
----------- ---------
----------- ---------
SUPPLEMENTAL DISCLOSURES:
Interest Paid........................................................................ $ 2,088 $ 1,613
----------- ---------
----------- ---------
Taxes Paid........................................................................... $ 100 $ 3
----------- ---------
----------- ---------
</TABLE>
6
<PAGE>
CNB, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
NOTE 1. CONSOLIDATION
The consolidated financial statements include the accounts of CNB, Inc.
and its subsidiary bank, CNB National Bank. All significant intercompany
accounts and transactions have been eliminated.
NOTE 2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB which do not require all
information and footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. In the opinion of management, such financial
statements reflect all adjustments (consisting only of normal recurring
adjustments) necessary for a fair statement of the results for the interim
periods presented. Operating results for the three months ended March 31,
1997 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997.
NOTE 3. RIHERD ACQUISITION
The financial statements and tables for March 31, 1997 include the
results of the Riherd merger which was completed in the third quarter of
1996, whereas they were not included in results for the period ending March
31, 1996. The acquired institution had total assets of $48.0 million,
deposits of $43.4 million, loans of $24.7 million, and shareholders' equity
of $4.6 million.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following tables and discussion set forth certain selected financial
information and should be read in conjunction with the consolidated financial
statements (unaudited) of the Company and the Bank included in "Item 1.
Financial Statements". The Company has no foreign operations;
accordingly, there are no assets or liabilities attributable to foreign
operations.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
MARCH 31,
<S> <C> <C> <C>
1997 1996 CHANGE%
---------- ---------- -------------
DOLLARS IN THOUSANDS EXCEPT PER SHARE INFORMATION.
- --------------------------------------------------------------------------------------------------------------------
SUMMARY OF OPERATIONS:
Total Interest Income........................................................ $ 4,689 $ 3,310 42%
Total Interest Expense....................................................... (2,048) (1,491) 37
---
---------- ---------
Net Interest Income......................................................... 2,641 1,819 45
Loan Loss Provision.......................................................... (130) (115) 13
--
---------- ----------
Net Interest Income After Provision for Loan Losses.......................... 2,511 1,704 47
Non-Interest Income.......................................................... 555 426 30
Non-Interest Expense......................................................... (1,927) (1,313) 47
--
---------- ----------
Income Before Taxes.......................................................... 1,139 817 39
Income Taxes................................................................. (398) (286) 39
--
---------- ----------
Net Income................................................................... $ 741 $ 531 40%
--
--
---------- ----------
---------- ----------
PER COMMON SHARE:
Net Income Per Common Share.................................................. $ 0.38 $ 0.32 19%
Book Value................................................................... 10.33 9.25 12
Dividends.................................................................... 0.06 0.05 20
Shares Outstanding........................................................... 1,937,905 1,639,733 18
Weighted Average Shares Outstanding.......................................... 1,937,905 1,639,733 18
KEY RATIOS:
Return on Average Assets..................................................... 1.17% 1.20% (3)%
Return on Average Shareholders' Equity....................................... 15.08 14.17 6
Dividend Payout-computed on a per share basis................................ 15.79 15.63 1
Overhead Ratio............................................................... 62.83 61.66 2
Total Risk-Based Capital Ratio............................................... 14.17 14.88 (5)
Average Shareholders' Equity to Assets....................................... 7.78 8.46 (8)
Tier 1 Leverage.............................................................. 7.28 8.07 (10)
FINANCIAL CONDITION AT PERIOD-END:
Assets....................................................................... $ 255,435 $ 181,744 41%
Total Loans, net of unearned discount........................................ 151,198 104,957 44
Total Deposits............................................................... 226,362 163,823 38
Common Shareholders' Equity.................................................. 20,018 15,172 32
</TABLE>
8
<PAGE>
SELECTED FINANCIAL DATA (CONTINUED)
OVERVIEW
Total assets increased during the first quarter of 1997 to $255.4 million
or 40.5% compared to $181.7 million for the comparable period in 1996.
Approximately $48.0 million of the growth was the result of the Riherd
acquisition. In addition to the acquired assets, the Company experienced
$25.7 million or 14.1% growth from the core Bank during the period.
Shareholders' equity increased to $20.0 million or 31.9% in 1997 compared to
$15.2 million in 1996 with $2.9 million attributable to the acquisition and
the remaining $1.9 million from retained earnings. Outstanding shares on
Common Stock for the first quarter of 1997 increased by 298,172 or 18.2%, all
of which was directly attributable to the Riherd merger. During the quarter
the Bank begun construction on a new branch located on US 90 West, near I-75,
in Lake City. This will be the Bank's eleventh branch location and is
expected to open in the third quarter of 1997.
Earnings for the quarter ended March 31, 1997 increased by 39.5% to
$741,000 from $531,000 for the same quarter in 1996. This resulted in
earnings per share increasing to $0.38 per share or 18.8% from $0.32 per
share in the comparable 1996 quarter. Return on average equity increased to
15.08% in 1997 from 14.17% in 1996. Return on average assets declined
slightly to 1.17% from 1.20% for the comparable quarters.
Allowance for loan losses was increased to $1.5 million or .98% of total
loans outstanding from $.9 million or 88% on March 31, 1996.
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income, the primary source of revenue for the Bank, was $2.6
million for the first quarter of 1997, an increase of $822,000, or 45.2%,
from the first quarter of 1996. This increase was substantially the result of
the overall asset growth during the past year. Contributing less
significantly was an improvement in net interest margins to 4.59% in 1997
from 4.49% in 1996. Interest margins improved primarily because of a modest
increase in security yields coupled with a decrease in interest bearing
liabilities cost to 4.12% for the first quarter of 1997, compared to 4.26%
for the same 1996 period. Also contributing was an increase of non-interest
bearing deposits as a percentage of total deposits increasing to 13.8% from
12.6% in the comparative quarters. Table 1: "Average Balances - Yields and
Rates", below, provides the Company's average volume of interest earning
assets and interest bearing liabilities for the first quarter of 1997 and
1996.
9
<PAGE>
SELECTED FINANCIAL DATA (CONTINUED)
Table 1: Average Balances--Yields and Rates
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, 1997 MARCH 31, 1996
--------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INTEREST
AVERAGE INCOME OR AVERAGE AVERAGE INCOME OR AVERAGE
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
---------- ---------- --------- ---------- ----------- -----------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Federal Funds Sold.................................. $ 13,853 $ 176 5.15% $ 6,913 $ 92 5.35%
Securities Available for Sale....................... 59,343 883 6.03 38,501 569 5.94
Securities Held to Maturity......................... 9,830 132 5.45 13,100 179 5.50
Loans, net unearned (1)............................. 149,960 3,496 9.45 103,845 2,464 9.54
Interest Bearing Deposits........................... 143 2 5.68 421 6 5.73
---------- ---------- --------- ---------- ----------- ---
TOTAL EARNING ASSETS................................. 233,129 4,689 8.16 162,780 3,310 8.18
All Other Assets.................................... 23,052 15,390
---------- ----------
TOTAL ASSETS......................................... $ 256,181 $ 178,170
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
NOW & Money Markets................................. $ 64,200 $ 385 2.43% $ 43,427 $ 282 2.62%
Savings............................................. 15,038 72 1.94 12,526 66 2.11
Time Deposits....................................... 115,426 1,491 5.24 83,934 1,117 5.35
Short Term Borrowings................................ 4,169 50 4.86 -- -- --
Notes Payable & Debentures........................... 2,550 50 7.95 1,024 26 10.15
---------- ------- ------- --------- -------- -------
TOTAL INTEREST BEARING LIABILITIES................... 201,383 2,048 4.12 140,911 1,491 4.26
Demand Deposits...................................... 32,369 20,230
Other Liabilities.................................... 2,491 1,954
Shareholders' Equity................................. 19,938 15,075
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........... $ 256,181 $ 178,170
---------- ----------
---------- --------- ---------- ----
INTEREST SPREAD (2).................................. 4.04% 3.92%
--------- ----
---------- --------- ----------- ----
NET INTEREST INCOME.................................. $ 2,641 $ 1,819
---------- -----------
---------- -----------
NET INTEREST MARGIN (3).............................. 4.59% 4.49%
--------- ---
--------- ---
</TABLE>
- ------------------------
(1) Interest income on average loans includes loan fee recognition of $150,000
and $85,000 in 1997 and 1996 respectively.
(2) Represents the average rate earned minus average rate paid.
(3) Represents net interest income divided by total earning assets.
10
<PAGE>
SELECTED FINANCIAL DATA (CONTINUED)
Table 1a: Analysis of Changes in Interest Income and Expense
(Unaudited)
<TABLE>
<CAPTION>
NET CHANGE MARCH 31, NET CHANGE MARCH 31,
1996-1997 ATTRIBUTABLE TO: 1995-1996 ATTRIBUTABLE TO:
--------------------------------------- --------------------------
<S> <C> <C> <C> <C> <C>
NET
VOLUME (1) RATE (2) CHANGE VOLUME (1) RATE (2)
------------- ----------- ----------- ------------- -----------
<CAPTION>
(THOUSANDS)
<S> <C> <C> <C> <C> <C>
INTEREST INCOME:
Federal Funds Sold....................................... $ 90 $ (6) $ 84 $ (11) $ (5)
Securities Available for Sale............................ 300 14 314 247 74
Securities Held to Maturity.............................. (45) (2) (47) (353) (1)
Loans.................................................... 1,064 (32) 1,032 435 (46)
Interest Bearing Deposits................................ (4) -- (4) 1 1
--
----- --- ----- ---
Total.................................................. 1,405 (26) 1,379 319 23
--
----- --- ----- ---
INTEREST EXPENSE:
Deposits:
NOW & Money Markets...................................... 133 (30) 103 1 (1)
Savings.................................................. 12 (6) 6 3 (19)
Time Deposits............................................ 406 (32) 374 67 101
Short Term Borrowings..................................... 50 -- 50 -- --
Notes Payable & Debentures................................ 38 (14) 24 (20) 1
--
----- --- ----- ---
Total.................................................. 639 (82) 557 51 82
--
----- --- ----- ---
Net Interest Income.................................. $ 766 $ 56 $ 822 $ 268 $ (59)
--
--
----- --- ----- ---
----- --- ----- ---
<CAPTION>
<S> <C>
NET
CHANGE
-----------
<S> <C>
INTEREST INCOME:
Federal Funds Sold....................................... $ (16)
Securities Available for Sale............................ 321
Securities Held to Maturity.............................. (354)
Loans.................................................... 389
Interest Bearing Deposits................................ 2
---
Total.................................................. 342
---
INTEREST EXPENSE:
Deposits:
NOW & Money Markets.................................... --
Savings................................................ (16)
Time Deposits.......................................... 168
Short Term Borrowings.................................. --
Notes Payable & Debentures............................. (19)
---
Total................................................ 133
---
Net Interest Income................................ $ 209
---
---
</TABLE>
- ------------------------
(1) The volume variance reflects the change in the average balance outstanding
multiplied by the actual average rate during the prior period.
(2) The rate variance reflects the change in the actual average rate multiplied
by the average balance outstanding during the prior period.
11
<PAGE>
PROVISION FOR LOAN LOSS
The allowance for loan losses represents a reserve for potential losses
in the loan portfolio. The provision for loan loss is a charge to earnings in
the current period to maintain the allowance at a level management has
determined to be adequate. Management periodically evaluates the adequacy of
the allowance for loan losses based on a review of all significant loans,
with a particular emphasis on past due and other loans that management
believes require attention. The allowance for loan losses increased to $1.5
million or .98% of loans outstanding in 1997 from $.9 million or .88%
respectively in 1996. Approximately $.4 million was attributable to the
Riherd acquisition. The provision for loan losses increased $15,000, or
13.0%, to $130,000 during the first quarter of 1997 as compared to $115,000
for the comparable period in 1996.
NON-INTEREST INCOME
Non-Interest income for the quarter ended March 31, 1997 was $555,000, an
increase of $129,000 or 30.3% from the first quarter of 1996. The increase is
directly a result of asset growth of 40.5% for the comparative periods.
Non-interest income as a percentage of average assets was .88% for the first
quarter of 1997 compared to .96% for 1996.
NON-INTEREST EXPENSE
Non-interest expense increased in the first quarter 1997 by 46.7% to $1.9
million compared to $1.3 million for the first quarter of 1996. When analyzing
this change, the asset growth during the period of 40.5% should be considered.
Non-interest expense as a percentage of average assets for the first quarter of
1997 and 1996 was 3.05% and 2.96%, respectively. Contributing significantly to
the increase was an increase in data processing cost of $80,000 or 145.5% from
1996. This increase was the result of the data processing service contract
expiring in late 1996 and renewing at present market rates. Another factor
contributing to the increased overhead was the start-up cost of the Bank's
operation center and new items processing system.
The overhead efficiency ratio, which is the percentage of overhead expense
to total revenue less interest expense and provision for loan losses, was 62.8%
from 61.6% for the quarter ended March 31, 1997, compared to 1996.
Table 2: Other Operating Expenses
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
<S> <C> <C>
1997 1996
--------- ---------
<CAPTION>
(THOUSANDS)
<S> <C> <C>
Data Processing............................................................... $ 135 $ 55
Advertising and Promotion..................................................... 77 60
Supplies...................................................................... 63 29
Other......................................................................... 63 48
Postage and Delivery.......................................................... 52 33
Amortization of Intangible Assets............................................. 51 34
Telephone..................................................................... 39 23
Legal and Professional........................................................ 34 19
Courier....................................................................... 33 16
Loan Expenses................................................................. 26 38
Regulatory Fees............................................................... 22 49
Administrative................................................................ 21 21
--------- ---------
Total Other Operating Expenses................................................ $ 616 $ 425
--------- ---------
--------- ---------
</TABLE>
12
<PAGE>
INCOME TAXES
The Company's income tax expense in interim reporting periods is determined
by estimating the combined federal and state effective tax rate for the year and
applying such rate to interim pre-tax income. The Company's estimated tax rate
for 1997 is 35%.
EARNING ASSETS
LOANS
During the first quarter of 1997, average loans were $150.0 million and were
64.3% of average earning assets, compared to $103.8 million and 63.8% for 1996.
Total loans have increased by $46.2 million, or 44.1%, since March 31, 1996. As
a result, the Company's loan-to-deposit ratio has climbed to 66.8% at March 31,
1997, compared to 64.1% at the end of the comparable period in 1996. The
following table compares the composition of the Company's loan portfolio as of
March 31, 1997, to 1996. Management expects this loan portfolio composition to
stay approximately the same throughout 1997.
Table 3: Loan Portfolio Composition
<TABLE>
<CAPTION>
MARCH 31,
TYPES OF LOANS 1997 1996
---------- ----------
(THOUSANDS)
<S> <C> <C>
Commercial, Financial and Agricultural............... $ 67,488 $ 49,709
Real Estate--Construction............................ 3,884 2,478
Real Estate--Mortgage................................ 60,830 36,176
Installment and Consumer Lines....................... 18,996 16,594
---------- ----------
Total Loans, Net of Unearned Discount................ 151,198 104,957
Less: Allowance for Loan Losses...................... 1,489 928
---------- ----------
Net Loans............................................ $ 149,709 $ 104,029
---------- ----------
---------- ----------
</TABLE>
The following table sets forth the maturity distribution for selected
components of the Company's loan portfolio including unearned discounts of
$142,000 on March 31, 1997. Demand loans and overdrafts are reported as due in
one year or less, and loan maturity is based upon scheduled principal payments.
Table 4: Maturity Schedule of Selected Loans
March 31, 1997
<TABLE>
<CAPTION>
0-12 1-5 OVER 5
MONTHS YEARS YEARS TOTAL
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
(THOUSANDS)
All Loans Other Than Construction... $ 16,881 $ 60,275 $ 70,300 $ 147,456
Real Estate--Construction........... 3,884 -- -- 3,884
--------- --------- --------- ----------
Total.............................. $ 20,765 $ 60,275 $ 70,300 $ 151,340
--------- --------- --------- ----------
--------- --------- --------- ----------
Fixed Interest Rate................ $ 9,931 $ 36,613 $ 18,443 $ 64,987
Variable Interest Rate............. $ 10,834 $ 23,662 $ 51,857 $ 86,353
</TABLE>
13
<PAGE>
LOAN QUALITY. The allowance for loan losses on March 31, 1997, was 0.98% of
total loans, compared to 0.88% one year earlier. Table 5: "Allocation of
Allowance for Loan Losses", set forth below, indicates the specific reserves
allocated by loan type.
Table 5: Allocation of Allowance for Loan Losses
<TABLE>
<CAPTION>
MARCH 31,
1997 1996
----------------------- ---------------------
<S> <C> <C> <C> <C>
<CAPTION>
PERCENT OF PERCENT OF
LOANS IN EACH LOANS IN EACH
CATEGORY TO CATEGORY TO
AMOUNT TOTAL LOANS AMOUNT TOTAL LOANS
--------- --------------- ----------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural..$ 929 62% $ 525 57%
Real Estate--Construction............... 4 -- 5 --
Real Estate- Mortgage................... 131 9% 71 8%
Consumer................................ 425 29% 323 35%
Unallocated............................. -- -- 4 --
--------- --- ----- ---
Total...................................$ 1,489 100% $ 928 100%
--------- --- ----- ---
--------- --- ----- ---
</TABLE>
Total Non-Performing Assets on March 31, 1997 increased $496,000 or 75% to
$1.2 million compared to $.7 million on the same date in 1996. Non-performing
loans, plus other real estate owned, as a percentage of total assets for March
31, 1997 and 1996 was .45% and .36%, respectively. The increase in
non-performing assets is mainly attributable to four loan relationships
totalling $.8 million in process of collection. Anticipated losses applicable to
these loans have been provided for in the allowance for loan losses on March 31,
1997.
Table 6: Non-Performing Assets
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996 1996
---- ---- ----
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Non-Accrual Loans.............................. $ 939 $ 505 $ 87
Past Due Loans 90 Days or
More and Still Accruing....................... 130 102 229
Other Real Estate Owned........................ 88 54 88
--------- --- ---
Total Non-Performing Assets.................... $ 1,157 $ 661 $ 404
--------- --- ---
--------- --- ---
Percent of Total Assets........................ 0.45% 0.36% 0.16%
</TABLE>
The determination of the reserve level rests upon management's judgment
about factors affecting loan quality and assumptions about the economy.
Management considers the period-end allowance appropriate and adequate to cover
possible losses in the loan portfolio; however, management's judgment is based
upon a number of assumptions about future events, which are believed to be
reasonable, but which may or may not prove to be valid. Thus, there can be no
assurance that charge-offs in future periods will not exceed the allowance for
loan losses or that additional increases in the allowance for loan losses will
not be required. Table 7: "Activity in Allowance for Loan Losses", below,
indicates activity in the allowance for loan losses for the first three month
period of 1997 as compared to 1996.
14
<PAGE>
Table 7: Activity in Allowance for Loan Losses
<TABLE>
<CAPTION>
MARCH 31,
1997 1996
---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Allowance for loan loss balance applicable to:
Balance at Beginning of Year........................... $ 1,396 $ 946
Loans Charged-Off:
Commercial, Financial and Agricultural................. -- 56
Real Estate, Construction.............................. -- --
Real Estate, Mortgage.................................. -- 1
Consumer............................................... 45 84
---------- ----------
Total Loans Charged-Off................................ 45 141
Recoveries on Loans Previously Charged-Off:
Commercial, Financial and Agricultural................. -- 2
Real Estate, Construction.............................. -- --
Real Estate, Mortgage.................................. -- 1
Consumer............................................... 8 5
---------- ----------
Total Loan Recoveries.................................. 8 8
---------- ----------
Net Loans Charged-Off.................................. 37 133
---------- ----------
Provision for Loan Losses Charged to Expense........... 130 115
---------- ----------
Ending Balance......................................... $ 1,489 $ 928
---------- ----------
---------- ----------
Total Loans Outstanding................................ $ 151,198 $ 104,957
Average Loans Outstanding.............................. $ 149,960 $ 103,845
Allowance for Loan Losses to Loans Outstanding......... 0.98% 0.88%
Net Charge-Offs to Average Loans Outstanding........... 0.02% 0.13%
</TABLE>
SECURITIES
When the Company's liquidity position exceeds expected loan demand, other
investments are considered by management as a secondary earnings alternative.
Typically, management remains short-term (under 5 years) in its decision to
invest in certain securities and always strives to ensure a portion of its
investment portfolio to be maturing in the next quarter. As these investments
mature, they will be used to meet cash needs or will be reinvested to maintain a
desired liquidity position. Most of the investment portfolio is designated as
available for sale to provide the company flexibility, and in case an immediate
need for liquidity arises. The Federal Reserve Bank and the Federal Home Loan
Bank also require equity investments to be maintained by the Bank as a member of
their services.
15
<PAGE>
The following tables set forth the maturity distribution and the weighted
average yields of the Company's investment portfolio by those securities held to
maturity and available for sale.
<TABLE>
<CAPTION>
TABLE 8: MATURITY DISTRIBUTION OF INVESTMENT SECURITIES
MARCH 31, 1997
THOUSANDS HELD TO MATURITY (4) AVAILABLE FOR SALE
- --------------------------------------------------------------------------------------------------------------------
AMORTIZED ESTIMATED AMORTIZED ESTIMATED
COST MARKET VALUE COST MARKET VALUE
- ------------------------------------------------------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury:
One Year or Less............................................ $ -- $ -- $ 11,559 $ 11,509
Over One Through Five Years................................. -- -- 25,424 25,308
----------- ------ ----------- ------------
Total U.S. Treasury.......................................... -- -- 36,983 36,817
U.S. Government Agencies
and Corporations:
One Year or Less............................................ 92 92 650 649
Over One Through Five Years................................. 9,501 9,128 9,858 9,738
Over Five Through Ten Years (4)............................. -- -- 6,151 6,099
Over Ten Years (4).......................................... -- -- 8,452 8,434
----------- ------ ----------- ------------
Total U.S. Government Agencies
and Corporations............................................. 9,593 9,220 25,111 24,920
Obligations of State and Political
Subdivisions:
Over One Through Five Years................................. -- -- 100 102
Over Five Through Ten Years................................. -- -- 705 737
Over Ten Years.............................................. -- -- 858 850
----------- ------ ----------- ------------
Total Obligations of State and
Political Subdivisions....................................... -- -- 1,663 1,689
Other Securities:
One Year or Less (2)........................................ -- -- 22 22
Over One Through Five Years (2)............................. -- -- 77 77
Over Ten Years (3).......................................... -- -- 1,388 1,382
----------- ------ ----------- ------------
Total Other Securities....................................... -- -- 1,487 1,481
----------- ------ ----------- ------------
Total Securities............................................. $ 9,593 $ 9,220 $ 65,244 $ 64,907
----------- ------ ----------- ------------
----------- ------ ----------- ------------
</TABLE>
- ------------------------
(1) All securities, excluding Obligations of State and Political Subdivisions,
are taxable.
(2) Represents Interest-bearing deposits in other banks.
(3) Represents investment in Federal Reserve Bank and Federal Home Loan Bank
stock and other marketable equity securities.
(4) Includes investments in mortgage-backed securities which are subject to
early repayment.
<TABLE>
<CAPTION>
TABLE 9: WEIGHTED AVERAGE YIELD BY RANGE OF MATURITIES
MARCH 31, 1997 DECEMBER 31,1996 MARCH 31, 1996
----------------- ------------------- -----------------
<S> <C> <C> <C>
One Year or Less.............................................. 5.03% 4.99% 5.72%
Over One through Five Years................................... 6.06% 6.09% 5.58%
Over Five through Ten Years................................... 6.67% 6.43% 8.07%
Over Ten Years (1)............................................ 5.52% 5.71% 7.08%
</TABLE>
- ------------------------
(1) Represents adjustable rate mortgage-backed securities which are repriceable
within one year.
16
<PAGE>
OTHER EARNING ASSETS
Temporary investment needs are created in the day-to-day liquidity movement
of the Bank and are satisfied by selling excess funds overnight (Fed Funds Sold)
to larger, well capitalized banking institutions. If these funds become
excessive, management determines what portion, if any, of the liquidity may be
rolled into longer term investments as securities.
FUNDING SOURCES
DEPOSITS
The Bank does not rely on purchased or brokered deposits as a source of
funds. Instead, competing for deposits within its market area serves as the
Bank's fundamental tool in providing a source of funds to be invested primarily
in loans. The following table sets forth certain deposit categories for the
periods ended March 31, 1997 and 1996.
Table 10: Total Deposits
<TABLE>
<CAPTION>
MARCH 31,
1997 1996
---------- ----------
<CAPTION> (THOUSANDS)
<S> <C> <C>
Non-Interest Bearing:
Demand Checking.............................................. $ 31,773 $ 21,566
Interest Bearing:
NOW Checking................................................. 37,707 23,997
Money Market Checking........................................ 26,731 21,677
Savings...................................................... 15,441 13,011
Certificates of Deposit...................................... 114,710 83,572
---------- -----------
Total Deposits............................................... $ 226,362 $163,823
----------- -----------
----------- -----------
</TABLE>
NOTE PAYABLE
The Company borrowed $2.7 million in connection with the acquisition of
Riherd Bank Holding Company. Total notes outstanding on March 31, 1997 were $2.3
million compared to $.7 million in 1996. During the past year, the Company has
continued to voluntarily accelerate principal payments on its note payable. This
effort is reflected by the $.3 million decrease in outstanding balance when
comparing March 31, 1997 to year end 1996.
REPURCHASE AGREEMENTS
The Bank has entered into repurchase agreements with several customers under
which the Bank pledges investment securities owned and under its control as
collateral against the one-day agreements. The daily average balance of these
agreements during 1997 has been $4.2 million. Interest expense was $50,000.
There were no agreements of this nature during the period ended March 31, 1996.
INTEREST RATE SENSITIVITY / LIQUIDITY
Net interest income, the Company's primary source of revenue, is affected by
changes in interest rates as well as levels and mix of earning assets and
interest-bearing liabilities. The impact on net interest income as a result of
changes in interest rate and balance sheet mix constitutes the Company's
interest rate sensitivity. The interest rate sensitivity position at the end of
the first quarter of 1997 is presented in Table 11: "Rate Sensitivity Analysis."
The difference between rate-sensitive assets and rate-sensitive liabilities, or
the interest rate sensitivity gap, is shown at the bottom of the table.
The Company would benefit from increasing market rates when it is asset
sensitive and would benefit from decreasing market rates when it is liability
sensitive. At March 31, 1997, the Company had a liability sensitive gap (more
17
<PAGE>
liabilities than assets subject to repricing within the stated time frame) of
$34.3 million within a one-year period. This suggests that if interest rates
should decline over this period, the net interest margin should improve, and if
interest rates should increase, the net interest margin should decline. Since
all interest rates and yields do not adjust at the same velocity, the gap is
only a general indicator of rate sensitivity.
Table 11: Rate Sensitivity Analysis
March 31, 1997
<TABLE>
<CAPTION>
0-3 4-6 7-12 1-5 OVER 5
(DOLLARS IN THOUSANDS) MONTHS MONTHS MONTHS YEARS YEARS TOTAL
---------- ---------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
Federal Funds Sold................................... $ 3,800 $ -- $ -- $ -- $ -- $ 3,800
Securities Held to Maturity.......................... -- -- 92 9,501 -- 9,593
Securities Available for Sale (1,2).................. 4,119 4,026 10,810 35,460 10,829 65,244
Loans (3)............................................ 49,836 11,508 20,429 51,842 17,725 151,340
---------- ---------- ---------- --------- ---------- ---------
Total Earning Assets................................. 57,755 15,534 31,331 96,803 28,554 229,977
---------- ---------- ---------- --------- ---------- ---------
INTEREST BEARING LIABILITIES:
NOW & Money Market (4)............................... 32,849 -- -- -- 31,589 64,438
Savings (4).......................................... 4,632 -- -- -- 10,809 15,441
Time Deposits........................................ 28,906 24,533 40,945 20,303 23 114,710
Securities Sold Under Repurchase Agreements.......... 4,676 -- -- -- -- 4,676
Notes Payable & Debentures........................... 2,350 -- -- -- -- 2,350
---------- ---------- ---------- --------- ---------- ---------
Total Interest Bearing............................... 73,413 24,533 40,945 20,303 42,421 201,615
---------- ---------- ---------- --------- ---------- ---------
Int. Rate Sens. Gap.................................. $ (15,658) $ (8,999) $ (9,614) $ 76,500 $ (13,867) $ 28,362
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Cum. Int. Rate Sens. Gap............................. $ (15,658) $ (24,657) $ (34,271) $ 42,229 $ 28,362 $ 28,362
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Int. Rate Sens. Gap Ratio............................ 0.79 0.63 0.77 4.77 0.67 1.14
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Cum. Int. Rate Sens. Gap Ratio....................... 0.79 0.75 0.75 1.27 1.14 1.14
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Ratio of Cumulative Gap to Total Earning Assets:
March 31, 1997....................................... (6.81)% (10.72)% (14.90)% 18.36% 12.33%
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
March 31, 1996....................................... (2.36)% (8.51)% (5.89)% 24.88% 13.34%
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
</TABLE>
- ------------------------
(1) Includes Interest Bearing Deposits of $99,000.
(2) Includes equity in Federal Home Loan Bank of $764,000 and Federal Reserve
Bank of $518,000. Securities are shown at their amortized cost, excluding
market value adjustment for unrealized gains of $336,000.
(3) Total Loans including Unearned Discount of $142,000
(4) Certain deposit accounts are included in the After Five Years category.
If these deposit accounts had been included in the Within Three Months
category, the ratio of cumulative gap to total earning assets would have been
(28.64) for the one year category at March 31, 1997.
The Bank's interest rate sensitivity, gap and liquidity positions are
formally reviewed quarterly by management to determine whether or not changes in
policies and procedures are necessary to achieve
dfinancial goals. Included in the review is an internal analysis of the possible
impact on net interest income due to market rate changes of plus and minus 1%.
In the rate sensitivity analysis, current average rates within the repricing
periods of affected balance sheet categories are adjusted to an historical
percentage of market change according to each rate shock scenario. The adjusted
rates are then substituted in interest computations and compared to actual
results. These efforts will continue to provide the tools necessary in the
Company's attempt to maximize its primary earnings factor: net interest income.
18
<PAGE>
Liquidity represents the ability to provide steady sources of funds for loan
commitments and investment activities, as well as to provide sufficient funds to
cover deposit withdrawals and payment of debt and operating obligations. These
funds can be obtained by converting assets to cash or by attracting new
deposits. Average liquid assets (cash and amounts due from banks, interest
bearing deposits in other banks, federal funds sold and securities available for
sale) totaled $81.0 million and represented 35.7% of average total deposits
during the first quarter of 1997, compared to $52.8 million and 33.0% for 1996.
Average loans were 66.1% and 64.9% of average deposits for the three month
period ended March 31, 1997 and 1996, respectively. As noted in Table 3: "Loan
Portfolio Composition", approximately $132.2 million, or 87.4%, of the loan
portfolio consisted of commercial loans, real estate mortgage loans and real
estate construction loans. Approximately 13.7% of the portfolio matures within
one year.
Core deposits, which represent all deposits other than time deposits in
excess of $100,000, were 89.5% of total deposits in the first quarter of 1997
and 92.3% in the comparable period in 1996. The Bank closely monitors its
reliance on time deposits in excess of $100,000, which are generally considered
less stable and less reliable than core deposits. Table 12, below, sets forth
the amounts of time deposits with balances of $100,000 or more that mature
within indicated periods. The Bank does not nor has it ever solicited brokered
deposits.
Table 12: Maturity of Time Deposits of $100,000 or More
March 31, 1997
<TABLE>
<CAPTION>
AMOUNT
(THOUSANDS)
-----------
<S> <C>
Three Months or Less......................................... $ 5,746
Three Through Six Months..................................... 5,318
Six Through Twelve Months.................................... 8,418
Over Twelve Months........................................... 4,292
-----------
Total........................................................ $ 23,774
-----------
-----------
</TABLE>
CAPITAL RESOURCES
The OCC regulates risk based capital guidelines for national banks. These
guidelines are intended to provide an additional measure of a bank's capital
adequacy by assigning weighted levels of risk to asset categories. Banks are
also required to systematically hold capital against such "off balance sheet"
activities as loans sold with recourse, loan commitments, guarantees and standby
letters of credit. These guidelines are intended to strengthen the quality of
capital by increasing the emphasis on common equity and restricting the amount
of loss reserves and other forms of equity such as preferred stock that may be
included in capital.
Under the terms of the guidelines, banks must meet minimum capital adequacy
based upon both total assets and risk adjusted assets. All banks are required to
maintain a minimum ratio of total capital to risk-weighted assets of 8% and a
minimum ratio of Tier 1 capital to risk-weighted assets of 4%. Adherence to
these guidelines has not had an adverse impact on the Company or the Bank.
Selected capital ratios at March 31, 1997 compared to 1996 are as follows:
Table 13: Capital Ratios
<TABLE>
<CAPTION>
MARCH 31, WELL CAPITALIZED REGULATORY
1997 1996 REQUIREMENTS MINIMUMS
--------- -------- ----------------- -----------
<S> <C> <C> <C> <C>
Risk Based Capital Ratios:
Tier 1 Capital Ratio....... 13.1% 13.7% 6.0% 4.0%
Total Capital to
Risk-Weighted Assets...... 14.2% 14.9% 10.0% 8.0%
Tier 1 Leverage Ratio........ 7.3% 8.1% 5.0% 4.0%
</TABLE>
19
<PAGE>
PART II--OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings--There are no
material pending legal proceedings to which
the Company or any of its subsidiaries is a
party or of which any of their property is
the subject.
Item 2. Changes in Securities -
(a) Not applicable.
(b) Not applicable.
Item 3. Defaults Upon Senior Securities--Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders--There
were no matters submitted to a vote of security holders
during the three months ended March 31, 1997. On April 16,
1997, the Company held its Annual Meeting of Shareholders,
whereby the Board of Directors (Thomas R. Andrews, C. Lavoye
Boggus, Audrey S. Bullard, Seymour Chotiner, Roy C. Dicks,
Marvin H. Pritchett, Helen B. Real, Paul M. Riherd, Leonard
Schloffman, Jimmie L. Scott, T. Allison Scott, William
Streicher and K. C. Trowell) was elected. The total vote
consisted of 1,414,262 votes for the election of directors
and 240 votes against certain directorship nominees. Of the
1,937,905 total outstanding shares of the Company common
stock, there were 1,414,502 shares, or 72.99%, represented
at the meeting; 607,224 votes, or 31.33% were made by the
Company's solicitation of proxies, and 807,278 votes, or
41.66% were made in person.
Item 5. Other Information--Not applicable.
Item 6. Exhibits and Reports on Form 8-K -
(a) Exhibits
None
(b) Reports on Form 8-K--No reports on Form 8-K were filed by the
registrant during the three month period ended March 31, 1997.
</TABLE>
20
<PAGE>
SIGNATURE
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.
CNB, Inc.
----------------------
(Registrant)
By: /s/ K. C. Trowell
--------------------------------------------
K. C. Trowell
President, Principal Executive
Officer, and Chief Financial
Officer
Date: May 12, 1997
21
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,962
<INT-BEARING-DEPOSITS> 99
<FED-FUNDS-SOLD> 3,800
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 64,808
<INVESTMENTS-CARRYING> 9,593
<INVESTMENTS-MARKET> 9,220
<LOANS> 151,198
<ALLOWANCE> 1,489
<TOTAL-ASSETS> 255,435
<DEPOSITS> 226,362
<SHORT-TERM> 4,676
<LIABILITIES-OTHER> 2,029
<LONG-TERM> 2,350
0
0
<COMMON> 19
<OTHER-SE> 19,999
<TOTAL-LIABILITIES-AND-EQUITY> 255,435
<INTEREST-LOAN> 3,496
<INTEREST-INVEST> 1,015
<INTEREST-OTHER> 178
<INTEREST-TOTAL> 4,689
<INTEREST-DEPOSIT> 1,948
<INTEREST-EXPENSE> 2,048
<INTEREST-INCOME-NET> 2,641
<LOAN-LOSSES> 130
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,927
<INCOME-PRETAX> 1,139
<INCOME-PRE-EXTRAORDINARY> 741
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 741
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
<YIELD-ACTUAL> 4.59
<LOANS-NON> 939
<LOANS-PAST> 130
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,396
<CHARGE-OFFS> 45
<RECOVERIES> 8
<ALLOWANCE-CLOSE> 1,489
<ALLOWANCE-DOMESTIC> 1,489
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
