<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: Comission File Number 0-18279
-------
June 30, 1996
MARYLAND 52-0692188
- --------------------------------- ----------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number
Incorporation or Organization)
Tri-County Financial Corporation
---------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
3035 Leonardtown Road
Waldorf, Maryland 20601
- -------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number: (301) 645-5601
Securities Registered Pursuant to Section 12(g) of Act:
CAPITAL STOCK, PAR VALUE $.01 PER SHARE
---------------------------------------
(Title Of Class)
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
---- ----
Number of Shares of Capital Stock
Outstanding as of July 31, 1996 740,854
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Index
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Statements of Financial Condition at
June 30, 1996 and December 31, 1995 2
Consolidated Statements of Operations for the Six-Month
and the Three-Month Periods Ended June 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the Six-Month
Periods Ended June 30, 1996 and 1995 4-5
Notes to Unaudited Consolidated Financial Statements 6-7
Management's Discussion and Analysis of Operations 8-10
PART II - OTHER INFORMATION 11
SIGNATURES 12
<PAGE>
<TABLE>
TRI-COUNTY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 1996 AND DECEMBER 31, 1995
- -------------------------------------------------------------------------------
June 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS:
Noninterest-bearing $ 805,907 786,113
Interest-bearing 3,935,102 3,264,106
------------ -------------
Total cash and cash equivalents 4,741,009 4,050,219
INVESTMENT SECURITIES AVAILABLE
FOR SALE--At fair value 12,295,324 14,903,798
INVESTMENT SECURITIES HELD TO
MATURITY--At amortized cost 881,600 881,600
MORTGAGE-BACKED SECURITIES AVAILABLE
FOR SALE--At fair value 33,270,559 30,793,682
MORTGAGE-BACKED SECURITIES HELD TO
MATURITY--At amortized cost 1,030,283 1,160,672
LOANS RECEIVABLE--Net 108,642,609 107,340,325
LOANS HELD FOR SALE 90,000 476,750
NET PREMISES AND EQUIPMENT 3,349,767 3,178,806
ACCRUED INTEREST RECEIVABLE 1,147,932 1,093,113
OTHER ASSETS 715,337 383,678
------------ -------------
TOTAL ASSETS $166,164,420 $164,262,643
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $133,408,867 $129,348,276
Advances from Federal Home Loan Bank 13,000,000 13,250,000
Notes payable and other borrowings 1,100,109 4,302,845
Advance payments by borrowers for taxes and
insurance 1,451,127 685,767
Current and deferred income taxes 49,190 89,655
Accounts payable, accrued expenses, and other
liabilities 643,363 614,952
------------ -------------
Total liabilities 149,652,656 148,291,495
------------ -------------
STOCKHOLDERS' EQUITY:
Common stock 7,408 6,851
Capital in excess of par 5,650,196 5,021,350
Net unrealized (loss) gain on investment
securities and mortgage-backed securities
available for sale (192,082) 232,123
Retained earnings 11,046,242 10,710,824
------------ -------------
Total stockholders' equity 16,511,764 15,971,148
------------ -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $166,164,420 $164,262,643
============ =============
See notes to consolidated financial statements.
</TABLE>
2
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
SIX-MONTH AND THREE-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- -----------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INTEREST REVENUES:
Interest on loans $4,974,819 $4,849,445 $2,444,209 $2,423,152
Interest on
mortgage-backed
securities 1,154,274 999,375 593,900 497,079
Interest and
dividends on
investment
securities 460,957 568,216 204,960 294,363
---------- ---------- ---------- ----------
Total interest
revenues 6,590,050 6,417,036 3,243,069 3,214,594
---------- ---------- ---------- ----------
INTEREST EXPENSES:
Deposits 2,707,374 2,479,998 1,354,635 1,285,704
Federal Home Loan
Bank advances 365,407 227,484 183,694 111,043
Notes payable and
other borrowings 110,463 223,411 27,858 95,860
---------- ---------- ---------- -----------
Total interest
expenses 3,183,244 2,930,893 1,566,187 1,492,607
---------- ---------- ---------- -----------
NET INTEREST INCOME 3,406,806 3,486,143 1,676,882 1,721,987
LOAN LOSS PROVISION 120,000 80,000 60,000 44,000
---------- ---------- ---------- -----------
Net interest
income after
loan loss
provision 3,286,806 3,406,143 1,616,882 1,677,987
---------- ---------- ---------- -----------
OTHER INCOME:
Loan service charges 134,046 129,372 66,290 70,062
Gain on sale of
investment and
mortgage-backed
securities available
for sale -- 17,625 -- --
Gain (loss) on sale
of loans held for
sale 71,312 (919) 30,092 (919)
Service charges 174,492 171,152 100,618 94,769
Other 42,058 3,006 24,054 19,603
---------- ---------- ---------- -----------
Total other
income 421,908 321,155 221,054 183,515
---------- ---------- ---------- -----------
OPERATING EXPENSES:
Employee compensation
and benefits 1,179,368 1,017,216 642,792 502,316
Occupancy expense 173,450 151,454 80,758 77,597
Federal insurance
premium and surety
bond premiums 173,914 173,445 86,860 88,369
Data processing
expense 116,903 93,888 57,601 49,441
Other 562,076 499,554 270,543 272,488
---------- ---------- ---------- -----------
Total operating
expenses 2,205,711 1,935,557 1,138,554 990,211
---------- ---------- ---------- -----------
INCOME BEFORE INCOME
TAXES 1,503,003 1,791,741 699,382 871,291
INCOME TAXES 567,700 697,505 281,766 365,883
---------- ---------- ---------- ----------
NET INCOME $ 935,303 $1,094,236 $ 417,616 $ 505,408
---------- ---------- ---------- ----------
EARNINGS PER SHARE
(Note 2):
Primary $ 1.21 $ 1.49(1) $ 0.54 $ 0.69(1)
On a fully diluted
basis 1.21 1.46(1) 0.54 0.67(1)
</TABLE>
(1) Restated to reflect 1996 stock dividends
See notes to consolidated financial statements.
-3-
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 935,303 $ 1,094,236
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 120,000 48,573
Net loan charge-offs and recoveries (18,081) --
Provision for depreciation and amortization 120,979 133,261
Amortization of premium/discount on
mortgage-backed securities and investments (48,308) (41,062)
Capitalization of interest expense on
notes payable -- 38,553
Provision for deferred income tax (benefit) (300) 40,311
Increase in interest receivable (54,819) (62,785)
Decrease in deferred loan fees (31,966) (68,588)
Increase in accounts payable, accrued
expenses, and other liabilities 149,086 105,864
(Increase) decrease in other assets (70,592) 312,448
(Gain) loss on sale of premises and equipment (9,610) 33,595
Origination of loans available for sale (3,930,155) (1,461,000)
Gain on sale of investment and
mortgage-backed securities available for
sale -- (18,544)
(Gain) loss on sales of loans available
for sale (71,312) 919
Proceeds from sale of loans available
for sale 5,006,312 1,303,000
Federal Home Loan Bank stock dividends -- (10,200)
------------ ------------
Net cash provided by operating activities 2,096,537 1,448,581
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities available
for sale (9,851,574) (2,962,012)
Principal collected on loans 23,515,339 20,751,338
Principal collected on mortgage-backed
securities 2,126,215 620,915
Loans originated or acquired (25,505,670) (26,783,963)
Purchase of mortgage-backed securities
available for sale (5,030,000) --
Proceeds from sale or redemption of
mortgage-backed securities available for
sale -- 1,805,572
Proceeds from maturities of investment
securities held to maturity -- 3,165
Proceeds from sale or maturity of investment
securities available for sale 12,427,478 1,776,941
</TABLE>
(Continued)
4
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------
1996 1995
<S> <C> <C>
Purchase of mortgage-backed securities held to
maturity -- (1,000,000)
Purchase of premises and equipment (266,754) (52,105)
Proceeds from sales of premises and equipment 9,610 --
Investment in real estate (207,936) (284,336)
Proceeds from sale of foreclosed real estate -- 53,833
------------ -----------
Net cash used in investing activities (2,783,292) (6,070,652)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 4,060,591 515,629
Proceeds from Federal Home Loan Bank advances 41,500,000 9,500,000
Payments of maturing Federal Home Loan Bank
advances (41,750,000) (8,000,000)
Net (decrease) increase in other short-term
borrowings (3,038,351) 2,090,308
Net increase in advance payments by borrowers
for taxes and insurance 765,360 767,127
Dividends paid (74,046) (69,014)
Exercise of stock options 103,562 30,750
Payments on notes payable (189,571) (174,159)
------------ -----------
Net cash provided by financing activities 1,377,545 4,660,641
------------ -----------
INCREASE IN CASH AND CASH EQUIVALENTS 690,790 38,750
CASH AND CASH EQUIVALENTS--JANUARY 1, 4,050,219 3,471,953
------------ -----------
CASH AND CASH EQUIVALENTS--JUNE 30, $ 4,741,009 $ 3,510,703
============ ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Accounting Policies:
Cash equivalents include short-term amounts
due from banks.
Noncash transactions:
Cash paid during the six months for:
Interest $ 3,224,332 $ 2,906,568
Income taxes 470,000 236,384
</TABLE>
Tri-County Financial Corporation declared a 5% stock dividend payable April 15,
1996, and April 17, 1995, to shareholders of record on March 4, 1996, and March
3, 1995, respectively. Retained earnings in the amount of $525,840 in 1996 and
$708,004 in 1995 was transferred to capital in excess of par and common stock to
reflect these dividends.
See notes to consolidated financial statements. (Concluded)
5
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
- -----------------------------------------------------------------------------
1. BASIS OF PRESENTATION
General-The consolidated financial statements of Tri-County Financial
Corporation (the Company) and its wholly owned subsidiary, Tri-County
Federal Savings Bank (the Bank) included herein are unaudited; however, they
reflect all adjustments consisting only of normal recurring accruals that,
in the opinion of Management, are necessary to present fairly the results
for the periods presented. Certain information and note disclosures
normally included in financial statements prepared in accordance with
Generally Accepted Accounting Principles have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission and the Office of Thrift Supervision. The Company believes that
the disclosures are adequate to make the information presented not
misleading. The results of operations for the six months ended June 30,
1996, are not necessarily indicative of the results of operations to be
expected for the remainder of the year.
It is suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report for the year ended December 31,
1995.
2. EARNINGS PER SHARE
Primary and fully diluted earnings per share, as adjusted for the stock
dividend, have been computed based on weighted-average common and common
equivalent shares outstanding as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
----------------- -------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary 771,558 736,503 774,021 749,842
Fully diluted 774,560 749,842 774,829 749,842
</TABLE>
3. NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1996, the Company adopted SFAS No. 122, "Accounting for
Mortgage Servicing Rights," which amended certain provisions of SFAS No. 65
to eliminate the accounting distinction between rights to service mortgage
loans for others that are acquired through loan origination activities and
those acquired through purchase transactions. When the Company purchases or
originates mortgage loans, the cost of acquiring those loans includes the
cost of the related mortgage servicing rights (MSRs). If the Company sells
or securitizes the loans and retains the MSRs, the Company allocates the
total cost of the mortgage loans between the MSRs and the loans (without
MSRs) based on their relative fair values, if practicable. Any cost
allocated to the MSRs is recognized as a separate asset. MSRs are amortized
in proportion to and over the period of estimated net servicing income and
are evaluated for impairment based on their fair value. During 1996 and
1995, the Company did not sell or securitize a material number or amount of
loans and retain the MSRs.
6
<PAGE>
Effective January 1, 1996, the Company adopted SFAS 123, "Accounting for
Stock-Based Compensation." This Statement gives the Company the option of
either (1) continuing to account for stock options and other forms of stock
compensation under the accounting rules defined in APB No. 25, "Accounting for
Stock Issued to Employees," while providing the disclosures required under
SFAS 123 or (2) adopting SFAS 123 accounting for all stock compensation
arrangements. The Company continues to account for stock options under the
accounting rules stated in APB No. 25, and will provide the additional
disclosures required under SFAS 123.
Regulatory Issues--The Federal Deposit Insurance Corporation administers two
separate deposit insurance funds, the BIF and SAIF. Congress is considering
legislation that would recapitalize the SAIF fund through a special assessment
on FDIC-insured institutions with SAIF deposits. While the specifics of the
legislation have not been finalized, the impact of this deposit assessment
could result in a future after-tax expense to the Company in an amount in
excess of $700,000. This amount would be recorded as an expense if and when
the legislation is enacted.
* * * * * *
7
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
GENERAL
Tri-County Financial Corporation owns 100% of the issued and outstanding common
stock of Tri-County Federal Savings Bank of Waldorf (the Bank), which is the
principal asset of the Company. Tri-County Financial Corporation does not
presently own or operate any subsidiaries other than the Bank and its
subsidiary, and the entities are collectively referred to as "the Company".
The Company is primarily engaged in the business of obtaining funds in the form
of savings deposits and investing such funds in mortgage loans on residential
and commercial real estate and various types of consumer and other loans,
mortgage-backed securities, and investment and money market securities. The
Company's earnings, therefore, are primarily dependent upon its net interest
income, which is determined by the Company's interest rate spread (the
difference between the yields earned on its interest-earning assets and the
rates paid on its interest-bearing liabilities) and the relative holdings of
interest earning assets and interest-bearing liabilities. Also of significance
to the Company's net income is its noninterest expenses, income taxes, provision
for estimated loan losses, and other noninterest income.
The Company's deposit flows and cost of funds are determined by interest rates
on competing investments and general market rates of interest. Lending
activities are affected by consumer demand, the interest rates in the market and
the level of funds available. The Company grants loans throughout the Southern
Maryland area. Its borrowers' ability to repay is, therefore, dependent upon the
economy of Southern Maryland.
FINANCIAL CONDITION
Total assets as of June 30, 1996 grew $1.9 million from the December 31, 1995
level. This reflects a growth rate of 1.2% as compared to 7.3% asset growth
during the previous year. Rates on long-term real estate loans have increased
significantly, 87.5 basis points during the six months ended June 30, 1996. This
has discouraged many consumers from initiating the purchase of their first or a
larger home, as well as refinancing existing loans for a lower rate. Military
base expansion in the Bank's market area has kept the real estate market strong
despite the rate increase, but has drawn the attention of competing loan
providers who are increasing their presence in the Southern Maryland market.
Loan portfolio growth was slightly less than $1 million for the six-month
period. This resulted from the retention of adjustable rate loans originated, as
compared to the sale of fixed rate loans. Loan origination volume during the
first six months of 1996 was $1.3 million or 4.8% less than during the
corresponding period in 1995.
The Bank is making more consumer and commercial loan products available. As a
result, management considered it prudent to build somewhat higher loan loss
reserves to compensate for the increased risk associated with these products.
The balance in the reserve at June 30, 1996 was $835,000, an increase of
$101,000 over the December 31, 1995 balance of $734,000.
The Company's holdings of investment securities declined $2.6 million since
December 31, 1995. Several securities experienced early payoff since the issuer
was able to obtain better rates by calling the investment and reissuing it at
the more attractive long-term rates currently available in the market.
Approximately $3.4 million of investments were called during the six months
ended June 30, 1996. The funds provided by these called investments were used to
increase the mortgage-backed securities portfolio.
Property and equipment increases of $250,000 since December 31, 1995 resulted as
work continued on the new branch being built in Bryans Road, Maryland, and
slated to open in the fall of 1996. In addition, to
8
<PAGE>
protect our investment in a real estate loan, it was necessary to acquire one
piece of property through foreclosure, resulting in an increase in real estate
owned of $208,000.
Liability growth was controlled to stay in line with the change in asset levels.
Deposit growth has continued to be strong, with a $4 million or 3.1% increase in
the six months ended June 30, 1996. The deposit base provides a source of funds
at a lower average cost than can be realized by borrowing. Since the loan demand
was low, and the Bank's liquidity is at an adequate level and in compliance with
regulatory requirements, the funds were used to reduce the level of borrowed
funds. Advance payments by borrowers for taxes and insurance increased to
$1.4 million from $685,000 due to the steady accumulation of funds to meet tax
payment requirements in September.
Stockholders' equity increased $540,000 or 3.4% to $16.5 million at
June 30, 1996 compared to $15.9 million at December 31, 1995. This reflects the
net income of $935,000 for the six month period, a $424,000 decline in
unrealized holding gains/losses on investment and mortgage-backed securities
available for sale, and a cash distribution to shareholders in the form of a
$0.10 per share cash dividend. A shift in the components of stockholders' equity
occurred as a result of the declaration of a 5% stock dividend to shareholders;
this resulted in a transfer of $525,000 from retained earnings to common stock
and capital in excess of par. Members of senior management exercised options to
purchase shares of stock, bringing an additional $103,000 into capital in excess
of par.
RESULTS OF OPERATIONS
The Company reported net income of $935,000 and $1.1 million during the six
months ended June 30, 1996 and 1995, respectively. Net income decreased $159,000
for the six months ended June 30,1996 compared to the comparable period in 1995.
The decrease in net income resulted from a $79,000 decrease in net interest
income, a $40,000 increase in the level of loan loss provisions, a $169,000
increase in net noninterest expenses, and a $129,000 reduction of income tax
expense.
Net interest income decreased by $119,000, or 3.5%, for the six months ended
June 30, 1996 as compared to the same period in 1995. This is a direct result of
the prolonged flat yield curve wherein the cost of funds remained high while the
yield on longer term loan products declined. The effect of the curve reduced the
marginal spread available to cover the cost of operations.
Earnings per share for the first six months of 1996 were $1.21 per share,
$.28 or 18.8% lower than for the corresponding period in 1995.
As previously discussed, the increased offerings of consumer and commercial loan
products led management to make larger provisions for loan losses. The provision
for the six months ended June 30, 1996, was $120,000, $40,000, or 50%, higher
than for the six months ended June 30, 1995.
Operating expenses for the period increased 14.0% over the comparable period in
1995. The most significant component of operating expenses is employee
compensation and benefits, which increased 15.9%. While individual compensation
level merit and cost of living increases have been held to 4 or 5%, insurance
benefit costs have increased by approximately 11% and new personnel have been
hired to provide the level of expertise required to service the increasingly
complex array of services offered by the Bank.
Facility renovations and repairs were considered prudent to improve security at
various branches. Data processing costs have increased as our customer base has
grown and as a result of the upgrading of systems to provide better customer
service. Advertising costs have increased in response to the higher level of
competition in our market.
9
<PAGE>
REGULATORY MATTERS
The Bank is subject to capital requirements defined by the FDIC Improvement Act
of 1991. At June 30, 1996 the Bank's tangible, core, and risk-based capital was
9.59%, 9.59%, and 16.7%, respectively. These levels are well in excess of the
required 1.5%, 3.0%, and 8.0% ratios.
10
<PAGE>
TRI-COUNTY FINANCIAL CORPORATION
--------------------------------
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
-----------------
None.
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
None.
11
<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.
Tri-County Financial Corporation:
Date: By: /S/ Michael L. Middleton
------------------ ---------------------------------
Michael L. Middleton, President
and Chairman of the Board
Date: By: /S/ Henry A. Shorter, Jr.
------------------ ---------------------------------
Henry A. Shorter, Jr.
Secretary
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,741,009
<INT-BEARING-DEPOSITS> 3,935,102
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 45,565,883
<INVESTMENTS-CARRYING> 1,911,883
<INVESTMENTS-MARKET> 1,941,104
<LOANS> 108,732,609
<ALLOWANCE> 835,492
<TOTAL-ASSETS> 166,164,420
<DEPOSITS> 133,408,867
<SHORT-TERM> 13,479,021
<LIABILITIES-OTHER> 2,143,680
<LONG-TERM> 621,088
0
0
<COMMON> 7,408
<OTHER-SE> 16,504,356
<TOTAL-LIABILITIES-AND-EQUITY> 166,164,420
<INTEREST-LOAN> 4,974,819
<INTEREST-INVEST> 460,957
<INTEREST-OTHER> 1,154,274
<INTEREST-TOTAL> 6,590,050
<INTEREST-DEPOSIT> 2,707,374
<INTEREST-EXPENSE> 3,183,244
<INTEREST-INCOME-NET> 3,406,806
<LOAN-LOSSES> 120,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,205,711
<INCOME-PRETAX> 1,503,003
<INCOME-PRE-EXTRAORDINARY> 1,503,003
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 935,303
<EPS-PRIMARY> 1.21
<EPS-DILUTED> 1.21
<YIELD-ACTUAL> 4.18
<LOANS-NON> 373,694
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 733,573
<CHARGE-OFFS> 18,081
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 835,492
<ALLOWANCE-DOMESTIC> 835,492
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
