UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
Form 10-QSB
Quarterly Report Pursuant of Section 13 or 15(d)
of the Securities Exchange Act of 1934
------------------
For the quarterly period ended:
March 31, 1998
Commission File No. 0-18868
MARATHON FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1560968
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
4095 VALLEY PIKE
WINCHESTER, VIRGINIA 22602
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (540) 869-6600
including area code
Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Class Number of Shares Outstanding at
----- ---------------- --------------
Common Stock 2,055,983 5/08/98
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following financial statements are provided at the page numbers indicated.
Consolidated Statements of Condition as of
March 31, 1998 and December 31, 1997 . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for
the Three Months Ended March 31, 1998 and 1997. . . . . . . . . . . .4
Consolidated Statements of Changes in
Shareholders Equity for the Three
Months Ended March 31, 1998 and 1997. . . . . . . . . . . . . . . . .5
Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1998 and 1997. . . . . . . . . . .6-7
Notes to Consolidated Financial Statements. . . . . . . . . . . . 8-10
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . 11-14
Part II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . .. .15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 15-16
Signature . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 18
2
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
as of
March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>
ASSETS 3/31/98 12/31/97
------- --------
<S> <C>
Cash and due from banks $ 3,891,765 $ 3,477,382
Securities (fair value: 1998, $4,743,770 and
1997, $3,506,666) 4,736,406 3,490,709
Federal funds sold 7,057,000 3,570,000
Loans, net 52,823,793 50,517,071
Bank premises and equipment, net 2,638,775 2,499,374
Accrued interest receivable 298,387 285,837
Other real estate 448,123 448,123
Other assets 561,879 537,546
----------- -----------
Total assets $72,456,128 $64,826,042
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing $ 8,869,213 $ 7,992,135
Interest bearing 55,035,779 48,443,086
----------- -----------
Total deposits $63,904,992 $56,435,221
Interest expense payable 119,930 104,753
Accounts payable and accrued expenses 162,634 295,518
Capital lease payable 269,595 279,136
----------- -----------
Total liabilities $64,457,151 $57,114,628
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, Series A, 5% non-cumulative, no par
value; 1,000,000 shares authorized and unissued - - - -
Common stock, $1 par value; 20,000,000 shares
authorized; 1998 and 1997, 2,055,983 shares issued and
outstanding 2,055,983 2,055,983
Capital surplus 7,815,454 7,815,454
Retained earnings (deficit) (1,870,953) (2,164,825)
Accumulated other comprehensive income (1,507) 4,802
Total stockholders equity $ 7,998,977 $ 7,711,414
----------- -----------
Total liabilities and stockholders equity $72,456,128 $64,826,042
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1998 1997
------------- ----------
<S> <C>
Interest income:
Interest and fees on loans $ 1,393,257 $1,018,916
Interest on securities held for maturity 25,959 17,680
Interest on securities available for sale 24,175 21,698
Interest on federal funds sold 70,129 16,774
Dividends 2,948 2,678
----------- ----------
Total interest income $ 1,516,468 $1,077,746
----------- ----------
Interest expense:
Interest on deposits $ 621,471 $ 416,323
Interest on leases payable 5,451 6,126
Interest on fed funds purchased - - 673
----------- ----------
Total interest expense $ 626,922 $ 423,122
----------- ----------
Net interest income $ 889,546 $ 654,624
Provision for loan losses 55,000 35,000
----------- ----------
Net interest income after provision for loan loss $ 834,546 $ 619,624
----------- ----------
Other income:
Service charges on deposit accounts $ 139,180 $ 74,239
Commissions and fees 2,022 7,699
Other 54,298 10,111
----------- ----------
Total other income $ 195,500 $ 92,049
----------- ----------
Other expenses:
Salaries and employee benefits $ 381,082 $ 253,485
Net occupancy expense of premises 54,337 52,883
Furniture and equipment 93,854 20,572
Legal and professional 25,476 14,140
Stationary and Supplies 25,320 14,358
Postage 17,313 10,727
Marketing 15,702 14,603
FDIC assessment 3,192 7,955
Directors' fee 23,760 16,950
ATM expenses 18,435 20,083
Overdraft charge-offs 16,097 12,434
Other operating expenses 103,467 77,651
----------- -----------
Total other expenses $ 778,035 $ 515,841
----------- -----------
Income before income taxes 252,011 195,832
Provision for income tax expense (benefit) (41,861) (45,021)
----------- -----------
Net income $ 293,872 $ 240,853
=========== ===========
Net income per share, basic and assuming dilution $ .14 $ .13
=========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
4
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 1998 and 1997
<TABLE>
<CAPTION>
Accumulated
Other Retained Total
Common Capital Comprehensive Earnings Comprehensive Stockholders
Stock Surplus Income (Deficit) Income Equity
------ ------- ------------- --------- ------------- ------------
<S> <C>
Balance, December 31, 1996 $1,863,495 $7,045,502 $ 507 $(3,019,267) $5,890,237
Comprehensive income:
Net income 240,853 240,853 240,853
Other comprehensive
income:
Unrealized (loss) on
securities available for
sale (15,407) (15,407) (15,407)
-------
Total comprehensive income $225,446
========
Issuance of common stock/
exercise of stock warrants
(2,000 shares) 2,000 8,000 10,000
---------- ---------- ------------ ----------- ----------
Balance, March 31, 1997 $1,865,495 $7,053,502 $ (14,900) $(2,778,414) $6,125,683
========== ========== ============ =========== ==========
Balance, December 31, 1997 $2,055,983 $7,815,454 $ 4,802 $(2,164,825) - - $7,711,414
Comprehensive income:
Net income 293,872 293,872 293,872
Other comprehensive
income:
Unrealized (loss) on
securities available for
sale (6,309) (6,309) (6,309)
----------
Total comprehensive income $287,563
=========
Balance, March 31, 1998 $2,055,983 $7,815,454 $ (1,507) $(1,870,953) $7,988,977
========== ========== ============ =========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
5
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1998 and 1997
1998 1997
------------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 293,872 $ 240,853
Adjustments to reconcile net income
to net cash provided by
operating activities:
Amortization 14,349 9,400
Depreciation 66,516 29,462
Net discount accretion on securities (192) (6,859)
Provision for loan loss 55,000 35,000
Deferred tax (benefit) (50,000) (50,000)
Changes in assets and liabilities:
Decrease in other assets 25,667 8,126
(Increase) in accrued interest
receivable (12,550) (3,231)
Decrease in accounts payable
and accrued expenses (132,884) (49,504)
Increase (decrease) in interest
expense payable 15,177 (7,118)
------------ -----------
Net cash provided by
operating activities $ 274,955 $ 206,129
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and principal
payments on securities held to maturity $ 304,349 $ 1,029,450
Purchase of securities available for sale (756,250) - -
Purchase of securities held to maturity (799,913) (33,600)
Net (increase) in loans (2,361,722) (1,086,239)
Purchase of bank premises and equipment (220,266) (144,351)
---------- -----------
Net cash used in
investing activities $(3,833,802) $ (234,740)
----------- -----------
6
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
For the Three Months Ended March 31, 1998 and 1997
1998 1997
---- ----
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits,
NOW accounts and savings accounts $ 3,799,946 $1,109,451
Net increase in certificates of deposits 3,669,825 1,125,714
Principal payments on capital lease payable (9,541) (8,888)
Cash dividends paid - - (111,810)
Proceeds from issuance of common stock - - 10,000
----------- ----------
Net cash provided by financing activities $ 7,460,230 $2,124,467
----------- ----------
Increase in cash and cash equivalents $ 3,901,383 $2,095,856
Beginning 7,047,382 4,502,434
----------- ----------
Ending $10,948,765 $6,598,290
=========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Payments For:
Interest $ 611,745 $ 430,240
=========== ==========
Income taxes $ 8,139 $ 4,979
=========== ==========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING ACTIVITIES
Unrealized (loss) on securities
available for sale $ (6,309) $ (15,407)
=========== ==========
See Accompanying Notes to Consolidated Financial Statements
7
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
March 31, 1998 and December 31, 1997, and the result of operations and cash
flows for the three months ended March 31, 1998 and 1997. The statements should
be read in conjunction with the Notes to Financial Statements included in the
Company's Annual Report for the year ended December 31, 1997.
2. The results of operations for the three month period ended March 31, 1998 and
1997, are not necessarily indicative of the results to be expected for the full
year.
3. Securities held to maturity and available for sale as of March 31, 1998, and
December 31, 1997, are:
March 31, 1998 December 31, 1997
Amortized Amortized
Held to Maturity Cost Cost
- ---------------- -------------- -----------------
US treasury securities & obligations
of US government corporations &
agencies $2,052,785 $1,452,899
Obligations of state and political
subdivisions 100,985 254,033
---------- ----------
$2,153,770 $1,706,932
========== ==========
Fair Fair
Value Value
----- -----
US treasury securities & obligations
of US government corporations &
agencies $2,057,566 $1,467,012
Obligations of state and political
subdivisions 103,568 255,877
---------- ----------
$2,161,134 $1,722,889
========== ==========
8
<PAGE>
March 31, 1998 December 31, 1997
Amortized Amortized
Available for Sale Cost Cost
- ------------------ -------------- -----------------
US treasury securities & obligations
of US government corporations &
agencies $2,108,212 $1,352,298
Mortgage backed securities 30,831 31,477
Other 445,100 395,200
---------- ----------
$2,584,143 $1,778,975
========== ==========
Fair Fair
Value Value
----- -----
US treasury securities & obligations
of US government corporations &
agencies $2,104,984 $1,355,054
Mortgage backed securities 32,552 33,523
Other 445,100 395,200
---------- ----------
$2,582,636 $1,783,777
========== ==========
4. The consolidated entity's loan portfolio is composed of the following:
March 31, 1998 December 31, 1997
-------------- -----------------
Commercial $26,249,585 $24,399,929
Real estate-mortgage 9,962,788 10,065,627
Real estate-construction 6,566,274 6,075,464
Installment loans to individuals 10,650,436 10,552,548
----------- -----------
$53,429,083 $51,093,568
Less: allowance for loan losses 605,290 576,497
----------- -----------
Loans, net $52,823,793 $50,517,071
=========== ===========
The company had non-accrual loans which were excluded from the impaired loan
disclosure under FASB 114 which amounted to $57,426 on March 31, 1998 and
$38,116 on December 31, 1997.
9
<PAGE>
5. Reserve for Loan Losses:
March 31, 1998 December 31, 1997
-------------- -----------------
Balance, beginning $ 576,497 $ 503,014
Provision charged to
operating expense 55,000 133,000
Recoveries 5,187 27,823
Loan losses charged to the allowance (31,394) (87,340)
--------- ---------
Balance, ending $ 605,290 $ 576,497
========= =========
6. Weighted average shares outstanding computation
The following shows the weighted average number of shares used in computing
basic earnings per share and the effect on weighted average number of shares of
diluted potential common stock.
3/31/98 3/31/97
----------- -----------
Per Per
Share Share
Shares Amount Shares Amount
------ ------ ------ ------
Basic earnings per share 2,055,983 $ .14 1,863,817 $ .13
===== =====
Effect of dilutive securities:
Stock options 60,679 136
Warrants - - 18,216
--------- ---------
Diluted earnings per share 2,116,662 $ .14 1,882,169 $ .13
========= ===== ========= =====
7. New Accounting Pronouncements
There are no new accounting pronouncements affecting Marathon Financial
Corporation.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Total Assets
Total assets for the three months ending March 31, 1998,
increased $7,630,086 or 11.8% since December 31, 1997. This increase in
total assets resulted from a $2,306,722 increase in loans or 4.6%, an
increase in federal funds sold of $3,487,000 or 97.7%, and an increase
of $1,245,697 or 35.7% in securities. This equates to an increase in
earning assets of $7,039,419 or 12.2% in the three months ending March
31, 1998.
Allowance for Loan Losses
The allowance for loan losses, as of March 31, 1998, was $605,290.
This is an increase of $28,793 or 5.0% since December 31, 1997. This
gives the bank a 1.13% allowance for loan losses to total loans.
Management has completed an analysis on the reserve and feels the
reserve is adequate.
Liabilities
Total deposits for the three months ending March 31, 1998, increased
$7,469,771 or 13.2% since December 31, 1997. Non-interest bearing
deposits increased by $877,078 or 11.0% and interest bearing deposits
increased by $6,592,693 or 13.6%.
11
<PAGE>
Stockholders' Equity
Total equity has increased by $287,563 or 3.7% since December 31,
1997. The increase was due to a first quarter profit of $293,872 and an
increase in unrealized losses on securities available for sale of
$6,309. The primary capital to assets ratio is 11.04%.
Interest Income
Interest income totaled $1,516,468 for the three months ending March
31, 1998, $438,722 or 40.7% higher than the three months ending March
31, 1997. This is a direct result of the increase in our earning
assets, which increased the interest and fee income.
Interest Expense
Total interest expense for the three months ending March 31, 1998
was $626,922, $203,800 or 48.2% higher than the three months ending
March 31, 1997. Interest on deposits increased by $205,148 or 49.3%
over the same period in 1997. This was the result of an overall
increase in deposits. Interest on capital leases for the quarter was
$5,451, $675 or 11.0% less than the same period in 1997.
Net Interest Income
Net interest income for the three months ending March 31, 1998 was
$889,546, $234,922 or 35.9% higher than the three months ending March
31, 1997. This was the result of an increase in our earning assets.
12
<PAGE>
Other Income
Total other income for the three months ending March 31, 1998 was
$195,500, $103,451 or 112.4% higher than the same period in 1997. This
is a result of a $45,000 recovery of a charged off account. In addition
the bank experienced an increase in the demand deposit area which has
enhanced our service charge income.
Other Expenses
Total other expenses for the three months ending March 31, 1998 were
$778,035, $262,194 or 50.8% higher than the three months ending March
31, 1997. Salary expense increased $127,597 or 50.3%, occupancy expense
increased $1,454 or 2.7%, furniture and equipment expense increased by
$73,282 or 356.2%, marketing expense increased $1,099 or 7.5%, and
stationery and supplies increased $10,962 or 76.3% over the same period
in 1997. Directors fees were $23,760, an increase of 40.2% due to a
change in the monthly meeting rates. Overdraft charge-offs reflect an
increase of $3,663 or 29.5% as a result of some bad check returns and by
purging demand deposit accounts. Legal and professional fees increased
$11,336 or 80.2%, mainly as a result of legal fees incurred in the
recovery of a charged off account. The net increase in other expenses is
in part a result of staffing and furnishing for two additional branches
which opened later in 1997. The depreciation of new equipment and the
costs of maintenance contracts on this equipment caused a substantial
increase in furniture and equipment expense.
Net Income
Net income for the three months ending March 31, 1998 was $293,872,
compared to $240,853 in the same period in 1997. This is an increase of
$53,019 or 22.0% over the same period of 1997.
13
<PAGE>
Liquidity and Capital Resources
The liquidity position of the Bank is less than its peers' because
of a loan to deposit ratio of 83.6%. In order to maximize earning
assets, management has exceeded the bank's policy by maintaining a
higher ratio than that of its peers'. This policy exception has been
approved by the Board of Directors. As the core deposits of the bank
continue to increase, this ratio has become more in line with that of
the industry.
14
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Change in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2. Plan of acquisition, reorganization, arrangement, liquidation
or succession - N/A
3. (i) Articles of Incorporation. Incorporated by reference as
Exhibit 3(i) to the Corporation's Registration Statement
on Form S-1 filed on August 26, 1992 (File No. 33-51366).
(ii) By-laws. Incorporated by reference as Exhibit 3(ii) to
the Corporation's Registration Statement on Form S-1
filed on August 26, 1992 (File No. 33-51366).
4. Instruments defining the rights of security holders,
including indentures - N/A
10. Material Contracts.
Exhibit 10.1 401(k) Plan of Marathon Financial Corporation,
incorporated herein by reference as Exhibit 10.1 to the
Corporation's Registration Statement on Form S-1 filed
on August 26, 1992 (File No. 33-51366).
Exhibit 10.2 Employment Agreement between The Marathon Bank
and Donald L. Unger, incorporated herein by reference
as Exhibit 10.2 to the Corporation's Registration
Statement on Form S-1 filed on August 26, 1992 (File
No. 33-51366).
Exhibit 10.3 Lease between The Marathon Bank and Post
Office Plaza, L.C. for the branch office at 300 Warren
Avenue, Front Royal, Virginia, incorporated herein by
reference as Exhibit 10.3 to the Corporation's
Registration Statement on Form S-1 filed July 26, 1996
(File No. 333-08995).
15
<PAGE>
Exhibit 10.4 Lease between The Marathon Bank and the
Lessors, Rogers M. Fred and Clifton G. Stoneburner for
the branch office at 1041 Berryville Avenue,
Winchester, Virginia, incorporated herein by reference
to the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1995 (File No. 0-18868).
Exhibit 10.5 Lease between the Marathon Bank and the
Lessors, Keith R. Lantz and Mary G. Lantz for land upon
which the Bank has placed a double-wide modular unit to
house the branch office at 1014 South Main Street,
Woodstock, Virginia, filed herein (File No. 0-18868).
Exhibit 10.6 1996 Long-Term Incentive Plan incorporated
herein by reference as to the Corporation's Proxy
Statement for 1997 Annual Meeting of Stockholders filed
April 7, 1997.
11. Statement re computation of per share earnings
15. Letter re unaudited interim financial information - N/A
18. Letter re change in accounting principles - N/A
19. Report furnished to security holders - N/A
22. Published report regarding matters submitted to vote of
security holders - N/A
23. Consents of experts and counsel - N/A
24. Power of attorney - N/A
27. Financial Data Schedule - N/A
99. Additional Exhibits - None
(b) Reports on Form 8-K - None
16
<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.
MARATHON FINANCIAL CORPORATION
DATE: March 31, 1998 /s/ DONALD L. UNGER
---------------------------
DONALD L. UNGER
PRINCIPAL EXECUTIVE OFFICER
DATE: March 31, 1998 /s/ FREDERICK A. BOARD
------------------------
FREDERICK A. BOARD
PRINCIPAL FINANCIAL OFFICER
17
EXHIBIT 11
MARATHON FINANCIAL CORPORATION
Computation of Weighted Average Shares Outstanding and Earnings Per Share
Weighted Shares Outstanding End of Month
1998 1997
---- ----
January 2,055,983 1,863,495
February 2,055,983 1,863,495
March 2,055,983 1,864,462
--------- ---------
6,167,949 5,591,452
Divided by 3 months 3 months
-------- --------
Weighted Shares Outstanding 2,055,983 1,863,817
========= =========
Net Income $293,872 $ 240,853
========= =========
Net Income Per Share, Basic
and Assuming Dilution* $ .14 $ .13
========= =========
* See disclosure of computation at footnote # 6 of financial statements
incorporated herein.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 3,891,765
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 7,057,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,582,636
<INVESTMENTS-CARRYING> 2,153,770
<INVESTMENTS-MARKET> 2,161,134
<LOANS> 53,429,083
<ALLOWANCE> 605,290
<TOTAL-ASSETS> 72,456,128
<DEPOSITS> 63,904,992
<SHORT-TERM> 0
<LIABILITIES-OTHER> 282,564
<LONG-TERM> 269,595
2,055,983
0
<COMMON> 0
<OTHER-SE> 5,942,994
<TOTAL-LIABILITIES-AND-EQUITY> 72,456,128
<INTEREST-LOAN> 1,393,257
<INTEREST-INVEST> 53,082
<INTEREST-OTHER> 70,129
<INTEREST-TOTAL> 1,516,468
<INTEREST-DEPOSIT> 621,471
<INTEREST-EXPENSE> 626,922
<INTEREST-INCOME-NET> 889,546
<LOAN-LOSSES> 55,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 778,035
<INCOME-PRETAX> 252,011
<INCOME-PRE-EXTRAORDINARY> 252,011
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 293,872
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
<YIELD-ACTUAL> 6.10
<LOANS-NON> 57,426
<LOANS-PAST> 52,601
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 576,497
<CHARGE-OFFS> 31,394
<RECOVERIES> 5,187
<ALLOWANCE-CLOSE> 605,290
<ALLOWANCE-DOMESTIC> 605,290
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
