<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from to
---------- ----------
Commission file number: 0-23322
--------
CASCADE BANCORP
(Name of small business issuer in its charter)
Oregon 93-1034484
(State of Incorporation) (I.R.S. Employer Identification #)
1100 NW Wall Street, Bend, Oregon 97701
(541) 385-6205
(Address and telephone number of issuer's principal executive offices)
----------------
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 1,939,061 shares of no par value
Common Stock on April 30, 1996. ---------------------------------
- -------------------------------
Transitional Small Business Disclosure Format (check one): Yes ; No X
---- ----
<PAGE>
CASCADE BANCORP
FORM 10-QSB
QUARTERLY REPORT
MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
- ------------------------------ ----
<S> <C>
Condensed Consolidated Balance Sheets as of
March 31, 1996 and December 31, 1995. . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income for the three months ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Changes in Stockholders' Equity for the
three months ended March 31, 1996 and 1995. . . . . . . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PART II: OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security-Holders. . . . . . . . .12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . .12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
</TABLE>
2
<PAGE>
PART I
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 12,165,751 $ 14,012,461
Federal funds sold 10,300,000 13,100,000
------------- ----------------
Total cash and cash equivalents 22,465,751 27,112,461
Investment securities available-for-sale 9,913,758 9,965,676
Investment securities held-to-maturity 3,159,489 3,402,179
Loans, net 129,634,688 124,711,355
Mortgage loans held for sale 2,774,923 3,009,584
Premises and equipment, net 3,425,912 3,467,085
Accrued interest and other assets 5,988,441 5,893,932
------------- ----------------
Total assets $ 177,362,962 $ 177,562,272
------------- ----------------
------------- ----------------
LIABILITIES & STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $ 43,733,646 $ 43,692,451
Interest bearing demand 77,895,456 80,186,924
Savings 13,195,008 13,149,653
Time deposits 16,281,685 15,409,039
------------- ----------------
Total deposits 151,105,795 152,438,067
Long-term debt 5,000,000 5,000,000
Accrued interest and other liabilities 1,181,870 1,084,250
------------- ----------------
Total liabilities 157,287,665 158,522,317
Stockholders' equity:
Common stock, no par value;
10,000,000 shares authorized;
1,939,061 issued and outstanding 9,253,012 9,253,012
Retained earnings 10,802,794 9,734,936
Unrealized gains on investment securities
available-for-sale, net of deferred income taxes 19,490 52,007
------------- ----------------
Total stockholders' equity 20,075,296 19,039,955
------------- ----------------
Total liabilities and stockholders' equity $ 177,362,961 $ 177,562,272
------------- ----------------
------------- ----------------
</TABLE>
See accompanying notes.
3
<PAGE>
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 3,402,702 $ 2,546,761
Taxable interest on investments 174,317 410,079
Nontaxable interest on investments 22,480 37,820
Interest on federal funds sold 103,307 15,481
----------- ------------
Total interest income 3,702,806 3,010,141
Interest expense:
Deposits:
Interest bearing demand 596,808 552,893
Savings 70,010 81,779
Time 203,029 117,741
Other borrowings 87,063 72,832
----------- ------------
Total interest expense 956,910 825,245
----------- ------------
Net interest income 2,745,896 2,184,896
Loan loss provision 82,267 56,932
----------- ------------
Net interest income after loan loss provision 2,663,629 2,127,964
Noninterest income:
Service charges on deposit accounts 305,231 302,962
Mortgage loan origination and processing fees 210,339 118,301
Gains on sales of mortgage loans 107,936 56,652
Losses on sales of investment securities
available-for-sale - (149,096)
Other income 305,228 137,993
----------- ------------
Total noninterest income 928,734 466,812
Noninterest expense:
Salaries and employee benefits 1,049,948 749,570
Net occupancy & equipment 315,543 317,069
Other expenses 515,872 467,349
----------- ------------
Total noninterest expense 1,881,363 1,533,988
----------- ------------
Income before income taxes 1,711,000 1,060,788
Provision for income taxes 643,142 403,215
----------- ------------
Net income $ 1,067,858 $ 657,573
----------- ------------
----------- ------------
Net income per common share $ 0.55 $ 0.34
----------- ------------
----------- ------------
</TABLE>
See accompanying notes.
4
<PAGE>
CASCADE BANCORP AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
Unrealized
gains(losses) Total
Common Retained on securities stockholders'
stock earnings available-for-sale equity
------------ -------------- ---------------------- -----------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 $ 7,093,607 $ 8,262,066 $ (544,738) $ 14,810,935
Net change in unrealized gains (losses) on
securities available-for-sale -- -- 388,575 388,575
Net income -- 657,573 -- 657,573
------------- -------------- -------------- -------------
Balance at March 31, 1995 $ 7,093,607 $ 8,919,639 $ (156,163) $ 15,857,083
------------- -------------- -------------- -------------
------------- -------------- -------------- -------------
Balance at December 31, 1995 $ 9,253,012 $ 9,734,936 $ 52,007 $ 19,039,955
Net change in unrealized gains (losses) on
securities available-for-sale -- -- (32,517) (32,517)
Net income -- 1,067,858 -- 1,067,858
------------- -------------- --------------- -------------
Balance at March 31, 1996 $ 9,253,012 $ 10,802,794 $ 19,490 $ 20,075,296
------------- -------------- --------------- -------------
------------- -------------- --------------- -------------
</TABLE>
See accompanying notes.
5
<PAGE>
CASCADE BANCORP & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------------- --------------
<S> <C> <C>
Net cash provided by operating activities $ 1,352,840 $ 105,581
Investing activities:
Proceeds from maturities and calls of investment securities
available-for-sale -- 3,123,543
Proceeds from sales of investment securities available-for-sale -- 3,893,092
Proceeds from maturities and calls of investment securities
held-to-maturity 261,000 200,000
Net increase in loans (4,897,664) (9,108,556)
Purchases of premises and equipment, net (30,614) (47,298)
-------------- ---------------
Net cash used in investing activities (4,667,278) (1,939,219)
Financing activities:
Net decrease in deposits (1,332,272) (289,890)
Net increase in short-term borrowings -- 2,200,000
-------------- --------------
Net cash provided (used) by financing activities (1,332,272) 1,910,110
-------------- --------------
Net increase (decrease) in cash and cash equivalents (4,646,710) 76,472
Cash and cash equivalents at beginning of period 27,112,461 9,811,579
-------------- --------------
Cash and cash equivalents at end of period $ 22,465,751 $ 9,888,051
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes.
6
<PAGE>
CASCADE BANCORP & SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
1. BASIS OF PRESENTATION
The interim condensed consolidated financial statements include the
accounts of Cascade Bancorp (Bancorp), a bank holding company, and its
wholly-owned subsidiary, Bank of the Cascades (the Bank). All significant
intercompany accounts and transactions have been eliminated in consolidation.
The interim condensed consolidated financial statements are unaudited,
but include all adjustments, consisting of only normal accruals, which
Bancorp considers necessary for a fair presentation of the results of
operations for such interim periods. In preparing the condensed consolidated
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and income and expenses for the period. Actual
results could differ from those estimates.
The interim condensed consolidated financial statements should be read in
conjunction with the December 31, 1995 consolidated financial statements,
including the notes thereto, included in Bancorp's Annual Report to
Shareholders for 1995.
Certain amounts for 1995 have been reclassified to conform with the 1996
presentation.
2. INVESTMENT SECURITIES
Investment securities at March 31, 1996 and December 31, 1995 consisted of
the following:
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
MARCH 31, 1996 COST GAINS LOSSES VALUE
- ------------------------ ---------- ---------- ---------- ----------
AVAILABLE-FOR-SALE
U.S. Treasury securities $4,487,890 $32,891 $ - $4,520,781
U.S. Government agencies 5,394,433 1,250 2,706 5,392,977
---------- ------- ---------- ----------
$9,882,323 $34,141 $ 2,706 $9,913,758
---------- ------- ---------- ----------
---------- ------- ---------- ----------
HELD-TO-MATURITY
Obligations of state and
political subdivisions $1,925,025 $ 5,380 $ 2,139 $1,928,266
Other 1,234,464 - - 1,234,464
---------- ------- ---------- ----------
$3,159,489 $ 5,380 $ 2,139 $3,162,730
---------- ------- ---------- ----------
---------- ------- ---------- ----------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
DECEMBER 31, 1995 COST GAINS LOSSES VALUE
- ------------------------ ---------- ---------- ---------- ----------
AVAILABLE-FOR-SALE
U.S. Treasury securities $5,394,386 $13,828 $ - $5,408,214
U.S. Government agencies 4,487,408 70,054 - 4,557,462
---------- ------- ---------- ----------
$9,881,794 $83,882 $ - $9,965,676
---------- ------- ---------- ----------
---------- ------- ---------- ----------
HELD-TO-MATURITY
Obligations of state and
political subdivisions $2,189,815 $16,527 $ - $2,206,342
Other 1,212,364 - - 1,212,364
---------- ------- ---------- ----------
$3,402,179 $16,527 $ - $3,418,706
---------- ------- ---------- ----------
---------- ------- ---------- ----------
7
<PAGE>
3. LOANS AND RESERVE FOR LOAN LOSSES
The composition of the loan portfolio at March 31, 1996 and December 31,
1995 was as follows:
1996 1995
------------ ------------
Commercial $ 21,844,460 $ 21,710,608
Real Estate:
Construction 35,905,327 33,983,778
Mortgage 25,070,497 24,749,955
Commercial 34,361,937 31,018,825
Installment 14,529,807 15,271,595
------------ ------------
131,712,028 126,734,761
Less:
Reserve for loan losses 1,723,013 1,651,352
Deferred loan fees 354,327 372,054
------------ ------------
2,077,340 2,023,406
------------ ------------
Loans, net $129,634,688 $ 124,711,355
------------ ------------
------------ ------------
Mortgage loans held for sale of $2,774,923 and $3,009,584 at March 31,
1996 and December 31, 1995, respectively, represent real estate mortgage
loans. These loans are recorded at cost which approximates market.
As of March 31, 1996 and December 31, 1995, the Bank also held servicing
rights to approximately $123,226,000 and $123,574,000, respectively, in
mortgage loans which have been sold to the Federal National Mortgage
Association. These mortgage loans are being serviced for the Bank by another
financial institution under a sub-servicing agreement. The sale of these
mortgage loans are subject to technical underwriting exceptions and related
repurchase risks. Such risks are considered in the determination of the
reserve for loan losses.
Effective January 1, 1996, the Bank prospectively adopted Statement of
Financial Accounting Standards (SFAS) No. 122, "Accounting for Mortgage
Servicing Rights" (SFAS 122). SFAS 122 requires the Bank to recognize as
separate assets the rights to service mortgage loans which are acquired
through loan origination activities. The effect of the adoption of SFAS 122
was an increase to other income and other assets by approximately $77,000 for
the three months ended March 31, 1996.
The fair value of mortgage servicing rights was determined based on
estimates of the present value of expected future cash flows and comparisons
to current market transactions involving mortgage servicing rights with
similar portfolio characteristics.
There were no significant changes in the valuation on allowance for
capitalized mortgage servicing rights during the three months ended March 31,
1996. The predominant risk characteristics of the underlying loans used to
stratify the capitalized mortgage servicing rights for purposes of measuring
impairment are note rates, terms and interest methods (i.e., fixed and
variable).
Transactions in the reserve for loan losses for the three months ended
March 31, 1996 and 1995 were as follows:
1996 1995
----------- -----------
Balance at beginning of period $ 1,651,352 $ 1,172,238
Provisions charged to operations 82,267 56,932
Loans charged off (15,256) (6,106)
Recoveries of loans previously charged off 4,650 69,979
----------- -----------
Balance at end of period $ 1,723,013 $ 1,293,043
----------- -----------
----------- -----------
8
<PAGE>
The reserve for loan losses represents management's recognition of the
assumed risks of extending credit and the quality of the existing loan
portfolio. The reserve is maintained at a level considered adequate to
provide for potential loan losses based on management's assessment of various
factors affecting the portfolio. Such factors include loss experience,
review of problem loans, current economic conditions, and an overall
evaluation of the quality, risk characteristics and concentration of loans in
the portfolio. The reserve is increased by provisions charged to operations
and reduced by loans charged-off, net of recoveries.
Although a risk of nonpayment exists with respect to all loans, certain
specific types of risks are associated with different types of loans. Due to
the nature of the Bank's customer base and the growth experienced in the
Bank's market area, real estate is frequently a material component of
collateral for the Bank's loans. The expected source of repayment of these
loans is generally the operations of the borrower's business or personal
income; however, real estate provides an additional measure of security.
Risks associated with real estate loans include fluctuating land values,
local economic conditions, changes in tax policies, and a concentration of
loans within the Bank's market area.
The Bank mitigates risks on construction loans by generally lending funds
to customers that have been prequalified for long term financing and who are
using experienced contractors approved by the Bank. The commercial real
estate risk is further mitigated by making the majority of commercial real
estate loans to owner-occupied users of the property.
The Bank manages the general risks inherent in the loan portfolio by
following loan policies and underwriting practices designed to result in
prudent lending activities. The following table presents information with
respect to non-performing assets at March 31, 1996 and December 31, 1995
(dollars in thousands):
1996 1995
---- ----
Loans on non-accrual status $45 $45
Loans past due greater than 90 days
but not on non-accrual status - 21
Other real estate owned - -
---- ----
Total non-performing asset $45 $66
--- ---
--- ---
Percentage of non-performing assets
to total asset .03% .04%
The accrual of interest on a loan is discontinued when, in management's
judgment, the future collectibility of principal or interest is in doubt.
Loans placed on nonaccrual status may or may not be contractually past due at
the time of such determination, and may or may not be secured. When a loan
is placed on nonaccrual status, it is the Bank's policy to reverse, and
charge against current income, interest previously accrued but uncollected.
Interest subsequently collected on such loans is credited to loan principal
if, in the opinion of management, full collectibility of principal is
doubtful. If interest on nonaccrual loans had been accrued, such income
would have been insignificant for the three months ended March 31, 1996 and
1995.
At March 31, 1996, there were no potential problem loans, except as
discussed above, where known information about possible credit problems of
the borrower caused management to have serious doubts as to the ability of
such borrower to comply with the present loan repayment terms and which may
result in such loans being placed on a non-accrual basis.
4. LONG-TERM BORROWINGS
At March 31, 1996 and December 31, 1995, the Bank had $5.0 million in
long-term debt from the Federal Home Loan Bank of Seattle (FHLB) on a three
year note payable due in May 1998, with a fixed interest rate of 6.96%. The
borrowings from FHLB are secured by Bank assets.
9
<PAGE>
5. NET INCOME PER COMMON SHARE
Net income per common share is net income divided by the weighted average
shares outstanding for that period. The weighted average number of common
shares outstanding used to compute net income per common share, was
approximately 1,939,061 for the three-month periods ended March 31, 1996 and
1995. Weighted average shares outstanding consists of common shares
outstanding and common stock equivalents attributable to stock options. Net
income per common share and weighted average shares outstanding have been
restated to retroactively reflect the 10% stock dividend declared In June
1995.
6. ADOPTION OF ADDITIONAL NEW ACCOUNTING STANDARDS
Effective January 1, 1996, Bancorp adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" (SFAS 121). SFAS 121 requires that long-lived assets, certain
identifiable intangibles, and goodwill related to those assets be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. SFAS 121 does not apply
to core deposit or credit card intangibles, mortgage servicing rights, or
deferred tax assets. Under SFAS 121, a loss is to be recognized to the extent
that the fair value of an impaired asset is less than the asset's carrying
amount. The effect of adopting SFAS 121 was not significant.
Effective January 1, 1996, Bancorp adopted SFAS 123, "Accounting for
Stock-Based Compensation" (SFAS 123). SFAS 123 establishes financial
accounting and reporting standards for stock-based employee compensation
plans. The effect of adopting SFAS 123 was not significant.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
The following discussion should be read in conjunction with Bancorp's
unaudited condensed consolidated financial statements and the notes thereto for
the three-month periods ended March 31, 1996 and 1995 included in this report.
RESULTS OF OPERATIONS
The Company reported net income of $1,068,000, or $.55 per share, for the
quarter ended March 31, 1996, compared to net income of $658,000, or $.34 per
share, for the same period in 1995. This represents an increase in net income
of 62.3 percent.
Net interest income increased 25.7 percent in the three-month period ended
March 31, 1996 over the same period in 1995. This change resulted from a
$692,665 increase in interest income in conjunction with a $131,665 increase in
interest expense. Net interest income increased primarily as a result of an
increase in the volume of loans and a slight increase in net interest spread.
The loan loss provision increased $25,355 during the quarter ended March
31, 1996 as compared to the same period in 1995, primarily due to loan growth.
Management believes the current loan loss provision maintains the reserve for
loan losses at an appropriate level. The Bank's ratio of reserve for loan
losses to total loans was 1.28 percent at March 31, 1996 compared to 1.27
percent at December 31, 1995.
Total noninterest income increased 99.0 percent in the first three months
of 1996 as compared to the same period of 1995. Although there were increases
in all categories of noninterest income, the increase was predominately due to
the decrease in losses on sales of investment securities available-for-sale of
approximately $149,000 and an increase in other income of approximately
$167,000. Other income increased primarily as a result of two new components,
gains on mortgage servicing rights and earnings on insurance policies. Gains on
mortgage servicing rights totaled approximately $77,000 during the first
quarter of 1996 as a result of the Bank's implementation of SFAS 122. The
future income from SFAS 122 will be dependent primarily on the volume of future
mortgage loan originations. In connection with certain compensation plans
established during the fourth quarter of 1995, the Bank purchased various life
insurance policies. During the quarter ended March 31, 1996, the income
generated on those life insurance policies was approximately $47,000.
Total noninterest expense increased 22.6 percent during the first quarter
of 1996 compared to the same period in 1995. This increase is primarily the
result of increased personnel and operating expenses due to continued growth of
the Bank.
Income tax expense increased between the periods presented primarily as a
result of higher pre-tax income.
FINANCIAL CONDITION
Bancorp's total assets decreased slightly to $177.4 million at March 31,
1996 compared to $177.6 million at December 31, 1995. Loan demand continues to
be strong with total loans increasing 3.9 percent to $131.7 million at March 31,
1996 compared to $126.7 million at December 31, 1995. As in prior years, the
Bank experienced some seasonal deposit runoff in the first quarter of 1996 with
deposits decreasing less than 1 percent to $151.1 million at March 31, 1996
compared to $152.4 million at December 31, 1995.
Bancorp's unrealized gains on investment securities available-for-sale
decreased by $32,517 during the three months ended March 31, 1996, primarily due
to changes in market rates.
11
<PAGE>
CAPITAL RESOURCES
During the first quarter of 1996 Bancorp continued to expand its capital
resources as total capital increased to $20.1 million, or 11.3 percent of total
assets. The increase was the result of the Bank's first quarter net income and
the decrease in unrealized gains on investment securities available-for-sale.
At March 31, 1996, Bancorp had a Risk Based Capital Ratio of 14.77 percent
and Tier 1 Capital Ratio of 13.58 percent. This was compared to 14.29 percent
and 13.13 percent for Risk Based Capital and Tier 1 Capital at December 31,
1995.
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
(a) April 24, 1996, Annual Meeting
(b) Need not be completed
-C- The following matters were voted on at the Annual Meeting of
Shareholders held on April 24, 1996:
1. The election of two directors:
<TABLE>
<CAPTION>
Number Number Total
of Votes of Votes Number of
Director "FOR" "WITHHELD" Votes
--------------- --------- -------- ---------
<S> <C> <C> <C>
Gary L. Capps 1,506,646 74,699 1,581,345
James E. Petersen 1,506,646 74,699 1,581,345
</TABLE>
(d) None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this Quarterly
Report on Form 10-QSB.
22.1 PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO VOTE OF
SECURITY HOLDERS. Bancorp's Notice of Annual Meeting and
Proxy Statement for the Annual Meeting of shareholders held
on April 24, 1996, located on pages 12 through 20.
(b) REPORTS ON FORM 8-K. Cascade Bancorp did not file any reports on
Form 8-K during the quarter ended March 31, 1996.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CASCADE BANCORP
----------------------------------------
(Registrant)
Date 5/14/96 By /s/ Roger J. Shields
----------------------------- --------------------------------------
Roger J. Shields, President
Date 5/10/96 By /s/ Patricia L. Moss
----------------------------- --------------------------------------
Patricia L. Moss, Chief Financial
Officer
13
Form 10-QSB, March 31, 1996
<PAGE>
Exhibit 22.1
- --------------------------------------------------------------------------------
CASCADE BANCORP
[LOGO]
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
APRIL 24, 1996
1100 N.W. Wall Street, Bend, Oregon 97701 (541) 385-6205
- --------------------------------------------------------------------------------
14
<PAGE>
CASCADE BANCORP
1100 NW WALL STREET
BEND, OREGON 97701
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
APRIL 24, 1996
NOTICE IS HEREBY GIVEN THAT the 1996 Annual Meeting of Shareholders (the
"Meeting") of Cascade Bancorp (the "Company"), a bank holding company, will be
held on Wednesday, April 24, 1996, at 5:30 p.m., Local Time, at the Riverhouse
Motor Inn, 3075 N. Highway 97, Bend, Oregon.
A Proxy and Proxy Statement for the Meeting are enclosed herewith.
The Meeting is for the purpose of considering and acting upon:
(1) The election of two directors of the Company; and
(2) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting and at any
adjournments or postponements thereof.
NOTE: The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Shareholders of record at the close
of business on March 20, 1996, are the shareholders entitled to vote at the
Meeting and any adjournments thereof.
YOU ARE REQUESTED TO FILL IN AND SIGN THE ENCLOSED FORM OF PROXY WHICH IS
SOLICITED BY THE BOARD OF DIRECTORS AND TO MAIL IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ PATRICIA L. MOSS
PATRICIA L. MOSS
SECRETARY
Bend, Oregon
March 29, 1996
15
<PAGE>
PROXY STATEMENT
OF
CASCADE BANCORP
1100 N.W. Wall Street
Bend, Oregon 97701
(541) 385-6205
ANNUAL MEETING OF SHAREHOLDERS
APRIL 24, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Cascade Bancorp (the "Company"), a bank
holding company, to be used at the 1996 Annual Meeting of Shareholders of the
Company (hereinafter called the "Meeting") which will be held on Wednesday,
April 24, 1996, at 5:30 p.m., Local Time, at the Riverhouse Motor Inn, 3075 N.
Highway 97, Bend, Oregon 97701, or at any adjournment or adjournments thereof.
The accompanying notice of Meeting, Proxy Statement and form of proxy are being
first mailed to shareholders on or about March 29, 1996.
REVOCATION OF PROXIES
Shareholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted
at the Meeting and all adjournments thereof. A proxy may be revoked prior to
its exercise upon written notice to the Secretary of the Company or the filing
of a later proxy prior to a vote being taken on a particular proposal at the
Meeting. Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions
are indicated, proxies will be voted for the nominees for directors set forth
below. Mere presence of a shareholder at the meeting will not revoke a proxy.
The presence, in person or by proxy, of a simple majority of the total number of
shares of Common Stock outstanding will be necessary to constitute a quorum at
the Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business on March 20, 1996, are
entitled to one vote for each share held. As of March 20, 1996, the Company had
1,939,061 shares of Common Stock issued and outstanding. The Company did not
have any other class of equity securities outstanding on the record date. A
simple majority of the total shares voted in person or by proxy is required to
elect directors and ratify or approve any other items being voted on, provided
that a quorum of the shares is represented.
Persons and groups who beneficially own in excess of 5 percent of the
Common Stock are required to file certain reports regarding such ownership
pursuant to the Securities Exchange Act of 1934, as amended, with the Company
and the Federal Deposit Insurance Corporation. Based on such reports,
management knows of no person who owned more than 5 percent of the outstanding
shares of Common Stock as of March 20, 1996.
The following table sets forth, as of March 20, 1996, certain information
as to the shares of Common Stock beneficially owned by all executive officers
and directors as a group.
<TABLE>
<CAPTION>
Beneficial Ownership (1) % of Shares Outstanding
------------------------ -----------------------
<S> <C> <C>
All Executive Officers and
Directors as a Group
(8 persons) 242,150 (2) 12.49%
</TABLE>
- ----------
(1) Includes all shares held directly as well as by spouses or as custodian or
trustee for minor children, over which shares the named individuals
effectively exercise sole or shared voting and investment power, unless
otherwise stated.
(2) Includes 21,065 shares of common stock which may be received upon the
exercise of stock options that have previously been granted and that are
exercisable within 60 days of March 20, 1996.
16
<PAGE>
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of eight
members. The Company's by-laws provide that directors will be elected for three
year staggered terms with approximately one-third of the directors elected each
year. The nominees for election this year are Gary L. Capps and James E.
Petersen.
It is intended that the proxies solicited by the Board of Directors
will be voted for the election of the above named nominees for a term of three
years. If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time the Board of directors knows of no reason
why any nominee might be unavailable to serve.
The by-laws of the Company do not allow nominations from the floor at
the annual meeting. Any shareholder wishing to nominate a person for election
as a director must submit that nomination to the Company on or before March 30,
1996 along with a statement of the nominees background and business experience.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES NAMED BELOW FOR
DIRECTOR OF THE COMPANY.
The following table sets forth the name of the Board of Directors'
nominees for election as director and those directors who will continue to serve
as such after the Meeting. Also set forth is certain other information with
respect to each current director's age, the year he or she first became a
director and the number of shares of the Company's Common Stock beneficially
owned.
<TABLE>
<CAPTION>
Shares of
Year First Common Stock
Elected Term to Owned at Percent
Name Age Director Expire March 20, 1996(1)(2) of Class
---- --- -------- ------ -------------------- --------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES
Gary L. Capps 60 1978 1999(3) 42,270 2.18%
James E. Petersen 55 1986 1999(3) 8,378 .43%
DIRECTORS CONTINUING IN OFFICE
Jerol E. Andres 51 1993 1997 5,445 .28%
Roger J. Shields 56 1977 1997 20,460 1.06%
Jacob M. Wolfe 71 1976 1997 57,927 2.99%
Gary L. Hoffman 55 1984 1998 33,130 1.71%
Patricia L. Moss 42 1993 1998 22,213 1.15%
L.A. Swarens 63 1976 1998 52,327 2.70%
</TABLE>
- ----------
(1) Includes all shares owned directly by the named individuals or by the
individuals indirectly through a trust or corporation, or by the
individuals' spouses and minor children, except as otherwise noted.
The named individuals effectively exercise sole or shared voting and
investment power over these shares.
(2) Includes shares of common stock subject to outstanding stock options which
are exercisable within 60 days after March 20, 1996. Such options were
granted under the Company's 1994 Incentive Stock Option Plan. See
"Benefits - Stock Option Plan."
(3) Assuming the individual is re-elected.
17
<PAGE>
The principal occupation of each director of the Company for the last
five years is set forth below. Unless otherwise stated, each director resides
in the State of Oregon.
JEROL E. ANDRES. Mr. Andres was elected to the board in 1993. Since
1988 Mr. Andres has served as CEO/President of Eagle Crest, a Central Oregon
real estate development and resort. From 1973 to 1988 Mr. Andres was Vice
President of Thousand Trails. He is and has been active in the Central Oregon
Community.
GARY L. CAPPS. Mr. Capps has served as Chairman of the Board since
1984. From 1963 to 1989 Mr. Capps served as CEO of Capps Broadcasting. He is
currently serving as Executive Director of the Bend Chamber of Commerce and
serves as director of Crabbe Huson Company (Mutual Fund Investments) in
Portland, Oregon.
GARY L. HOFFMAN, M.D. Since 1975 Dr. Hoffman has been in private
practice as a surgeon and is a partner in the Bend Memorial Clinic. Dr. Hoffman
serves as Chairman of the Audit Committee.
JAMES E. PETERSEN. Since 1980 Mr. Petersen has been a partner in the
Bend law firm of Karnopp, Petersen, Noteboom, Hubel, Hansen and Arnett where he
practices in the areas of business and corporate law and tax and estate
planning. He currently serves as General Counsel for the Company and the Bank.
L.A. SWARENS. Mr. Swarens was an organizer and founder of the Bank.
Since 1958 Mr. Swarens has owned and operated Arnie Swarens Town & Country
Realty. Mr. Swarens is a partner in the Riverhouse Motor Inn and River's Edge
Golf Course & Development in Bend. Mr. Swarens also serves as Chairman of the
Loan Committee of the Bank.
JACOB M. WOLFE. Mr. Wolfe was an organizer and founder of the Bank.
Since 1982 Mr. Wolfe has owned and served as Chairman of the Board of Jake's
Truck Stop in Bend, Oregon. Mr. Wolfe serves as Vice-Chairman of the Board of
the Bank.
ROGER J. SHIELDS. Since 1977 Mr. Shields has served as President and
Chief Executive Officer of the Bank. He joined the Bank at its inception and
has over 35 years of banking experience.
PATRICIA L. MOSS. Since 1987 Mrs. Moss has served as Executive Vice
President, Chief Financial Officer, and Secretary to the Board of Directors. She
joined the Bank at its inception and has over 20 years of banking experience.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the
Board and through its committees. During the fiscal year ended December 31,
1995, the Board of Directors of the Company held 6 meetings and the Board of
Directors of the Bank held 12 regular meetings, as well as numerous committee
meetings. No director attended fewer than 75% of the total number of meetings
of the Board of Directors and board committees on which the director served.
The Board of Directors of the Company has an Audit Committee
consisting of Hoffman (Chair), Wolfe and Andres. The purpose of the committee
is to provide direction and oversight to the internal auditor. The committee
also bears responsibility for the audit function and review of the examinations
of the Company by federal and state regulatory authorities and the audit by the
independent auditing firm. The Audit Committee met 3 times during the 1995
fiscal year.
The Compensation Committee consists of Shields, Capps, Hoffman and
Wolfe. The purpose of the committee is to act as an ongoing advisory group to
the Board of Directors on executive compensation policies and procedures and
other compensation related items (i.e., profit sharing plans, benefit plans,
etc.). The committee meets annually or on an as-needed basis and met 1 time
during the 1995 fiscal year.
The Loan Committee consists of all of the directors with L.A. Swarens
as chairman. Loan committee meetings are scheduled on an as needed basis and
consists of any 2 directors & the loan officer seeking the approval. The Loan
Committee met approximately 60 times during the 1995 fiscal year.
18
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ended December
31, 1995, 1994 and 1993, information as to the compensation received by each
executive officer of the Company who received total cash and cash equivalent
forms of compensation in excess of $100,000 during this period.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Long-term
compensation
Annual compensation awards
------------------- ------------
Number of
securities
underlying All other
Name and Principal Year Salary Bonus options compensation (1)
Position ($) ($) (#) ($)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Roger J. Shields 1995 $70,040 $134,750 11,385 $15,198
President/Chief Executive 1994 68,000 107,500 7,150 16,078
Officer/Director 1993 66,000 137,500 - 13,751
Patricia L. Moss 1995 61,550 96,250 9,680 13,358
Executive Vice President/ 1994 59,750 75,000 6,050 14,158
Chief Financial Officer/ 1993 58,000 96,250 - 12,069
Director/Secretary
</TABLE>
- ----------
(1) Consists of the Company's contributions to the 401(k) profit sharing plan
for the benefit of the named executive officers. See "Benefits - 401(k)
Profit Sharing Plan."
The following table sets forth information regarding options for the
purchase of the Bancorp's Common Stock, which were granted during 1995 to the
executive officers named in the Executive Compensation summary table.
Option Grants in Fiscal 1995
Individual Grants
- -----------------------------------------------------------------------------
Number of % of total
securities options
underlying granted to Exercise or
options employees in base price Expiration
Name granted (1) fiscal year ($/Sh) date
- ---------------- ---------- ------------ ------------ ----------
Roger J. Shields 3,520 21.4% $12.05 01/21/2005
Patricia L. Moss 3,025 18.4% $12.05 01/21/2005
- ----------
(1) None of the above options were vested at the 1995 fiscal year end.
The following table sets forth information regarding option holdings
for the year ended December 31, 1995 with respect to the executive officers
named in the Executive Compensation summary table.
19
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year end Option Values
---------------------------------
Shares Value of unexercised
acquired Number of unexercised in-the-money
on Value options at FY-End (#) options at FY-End ($)(1)
exercise realized ---------------------- ------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger J. Shields - - 7,865 3,520 66,774 16,544
Patricia L. Moss - - 6,655 3,025 56,501 14,218
</TABLE>
- ----------
(1) On December 31, 1995, the fair market value of the Company's Common Stock
was $16.75. For purposes of the foregoing table, stock options with an
exercise price less than that amount are considered to be "in-the-money"
and are considered to have a value equal to the difference between that
amount and the exercise price of the stock option multiplied by the number
of shares covered by the stock option.
CONTINGENT COMPENSATION AGREEMENT
The Bank has agreed to pay Roger J. Shields additional compensation
should his employment with the Bank be terminated under certain conditions.
The agreement is effective only if Mr. Shields' employment is involuntarily
terminated in connection with the merger or sale of the Bank and/or the
Company, or if he elects to terminate his employment within one year of a
merger or sale. In the event of such a termination, the Bank has agreed to
pay Mr. Shields a sum equal to twelve times his monthly "base salary" in
effect at the time of the merger or sale. The base salary includes monthly
gross salary but does not include bonuses or other compensation.
DIRECTOR COMPENSATION
Members of the Board of Directors (excluding executive officers)
receive $1,500 for attendance at each monthly Board meeting, the Chairman of the
Board receives $1,850. Directors receive $50 per loan committee and are not
compensated for other committee meetings.
BENEFITS
The Company does not provide any fringe benefits because it does not
have any employees who work solely for the Company. All fringe benefits are
paid by the Bank.
BONUS PLAN. The Board of Directors of the Bank believes that an
incentive bonus based on earnings motivates management to perform at the
highest levels. Management performance has a direct impact on the
short-range and long-range profitability and viability of the institution and
an incentive bonus promotes the retention of qualified management. Directors
also believe that compensation programs with incentive pay as a significant
portion of compensation allow base salaries to remain relatively constant,
even during highly profitable periods, thereby containing salary costs during
less profitable periods. The management incentive bonus program is at the
discretion of the Board. Specific programs are developed through the
Compensation Committee of the Board and approved annually by the Board of
Directors.
STOCK OPTION PLAN. In 1994, the Company's Board of Directors
adopted a Stock Option Plan for key employees. Under the Stock Option Plan,
the Company may grant Incentive Stock Options (ISO's) and Non-qualified Stock
Options (NSO's). Pursuant to the Plan an aggregate of 150,000 shares have
been reserved for future issuance by the Company upon exercise of stock
options. This figure was adjusted automatically to 181,500 shares of Common
Stock because of the 10% stock dividends declared in June 1994 and 1995.
Options are intended to be granted to officers and selected key employees.
The purposes of the Plan are to attract and retain key officers and employees
and to encourage their continued participation in the Bank by facilitating
their purchase of an equity interest in the Bank's parent corporation,
Cascade Bancorp.
20
<PAGE>
The option price of ISO's is the fair market value at the date of
grant and the option price of NSO's is to be at a price not less than 85% of
fair market value at the date of grant. Generally, options are granted for a
period of ten years and become exercisable in varying amounts commencing one
year from the date of grant.
As of December 31, 1995, ISO's for 52,745 shares were granted at
prices ranging from $8.26 to $12.05 per share, and 128,755 shares remained
available for future grant. In January 1996, ISO's for an additional 16,200
shares were granted at a price of $16.75 per share.
401(k) PROFIT SHARING PLAN. Effective December 31, 1979, the Bank
adopted the Bank of the Cascades Employees' 401(k) Profit Sharing Plan. The
purpose of the Plan is to reward eligible employees for long and loyal
service and to provide incentives to employees that encourage employment
retention and participation in the growth and increased profitability of the
Bank. The Plan was amended and restated in its entirety on January 1, 1987.
Employees who are 18 years of age become eligible to participate upon
completion of (6) months or 1,000 hours of service prior to the entry dates
of January 1st or July 1st. Employees are allowed to contribute up to 10% of
their salary to the Plan pre-tax. Annually, at the discretion of the Board,
a matching contribution up to 6% of the amount of the employee's salary
level, will be set aside on their behalf. In addition, the Board of Directors
may make a discretionary profit sharing contribution that eligible employees
may receive in cash or defer through the 401(k) Plan. Employees are 100%
vested in their contribution to the Plan and are fully vested in the Bank's
contributions under the Plan after seven years of service at the Bank.
Employees are entitled to withdraw funds from the Plan upon retirement,
death, disability, termination of employment, or in the case of certain
defined instances of hardship
OTHER BENEFIT PLANS. During the fourth quarter of 1995, the Bank
established deferred compensation plans for the Board and certain key
executives and managers, a salary continuation plan for certain key
executives, and a fee continuation plan for the Board. In accordance with
the provisions of the deferred compensation plans, participants can elect to
defer portions of their annual compensation or fees. The deferred amounts
generally vest as deferred. The deferred compensation plus interest is
generally payable upon termination in either a lump sum or monthly
installments.
The salary continuation plan for certain key executives and the fee
continuation plan for the Board, provide defined benefits to the participants
upon termination. The defined benefits for the key executives and the Board
are for periods of fifteen years and ten years, respectively. The benefits
are subject to certain vesting requirements and vested amounts are generally
payable upon termination in either a lump sum or monthly installments.
The plans also include death benefit provisions for certain
participants. To assist in the funding of the plans, the Bank has purchased
life insurance policies on most of the participants for which the Bank is
named the beneficiary. The Bank annually expenses amounts sufficient to
accrue for the present value of the benefits payable to the participants
under these plans.
The cash surrender value of these policies at December 31, 1995 was
approximately $3,136,000. Interest is earned on the insurance policies to
substantially offset the ongoing annual expense. The amount of expense in
1995 related to the deferred compensation plans and the salary and fee
continuation plans was approximately $100,000 and $25,000, respectively.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that
all executive officers and directors of the Company and all persons who
beneficially own more than 10 percent of the Company's Common Stock file an
initial report of their ownership of the Company's securities on Form 3 and
report changes in their ownership of the Company's securities on Form 4 and
Form 5. These filings must be made with the Securities and Exchange
Commission and the National Association of Securities Dealers.
Based solely upon the Company's review of the copies of the filings
that it received with respect to the fiscal year ended December 31, 1995, and
written representations from certain reporting persons, the Company believes
that all reporting persons made all required Section 16 filings with respect
to such fiscal year on a timely basis.
21
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and officers of the Company and of the Bank,
and members of their immediate families and firms and corporations with which
they are associated, have had transactions with the Bank, including
borrowings and investments in time deposits. All such loans and investments
have been made in the ordinary course of business, have been made on
substantially the same terms, including interest rates paid or charged and
collateral required, as those prevailing at the time for comparable
transactions with unaffiliated persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features. As of
December 31, 1995, the aggregate outstanding amount of all loans to officers
and directors of the Company and to firms and corporations in which they have
at least a 10% beneficial interest was approximately $1.8 million, which
represented approximately 9% of the Company's consolidated stockholders'
equity at that date.
James E. Petersen, a director and stockholder of the Company, is a
partner in the law firm of Karnopp, Petersen, Noteboom, Hubel, Hansen &
Arnett, and serves as general counsel to the Company and the Bank.
AUDITORS
Symonds, Evans & Larson served as the Company's auditors for the
fiscal year ended December 31, 1995. A representative of Symonds, Evans &
Larson will be present at the Meeting to respond to questions from
shareholders and will have the opportunity to make a statement if he or she
so desires.
OTHER MATTERS
The Board of Directors is not aware of any business to come before
the Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in accordance
with the judgment of the person or persons voting the proxies.
The cost of solicitation of proxies will be borne by Cascade
Bancorp. In addition to solicitation by mail, employees of the Company may
request of shareholders the return of proxies personally, or by mail,
telephone or FAX. Cascade Bancorp will, upon request, reimburse brokers or
other persons holding shares for the benefit of others for their expenses in
forwarding proxies and accompanying material and obtaining authorization from
beneficial owners of the Company's stock to execute proxies.
INFORMATION AVAILABLE TO SHAREHOLDERS
THE COMPANY'S 1995 ANNUAL REPORT IS BEING MAILED TO SHAREHOLDERS
WITH THIS PROXY STATEMENT. ADDITIONAL COPIES OF THE ANNUAL REPORT AND THE
COMPANY'S FILINGS OF FORM 10-KSB AND QUARTERLY REPORTS ON FORM 10-0QSB FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED WITHOUT CHARGE
FROM PATRICIA L. MOSS, CHIEF FINANCIAL OFFICER, CASCADE BANCORP, P.O. BOX
369, BEND, OREGON 97709, OR E-MAIL [email protected].
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the proxy materials of
Cascade Bancorp for next year's Annual Meeting of Shareholders, any
shareholder proposal to take action at such meeting must be received at the
Company's main office at 1100 N.W. Wall Street, Bend, Oregon, 97701 no later
than December 31, 1996. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the 1934 Exchange Act.
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 12,165,751
<INT-BEARING-DEPOSITS> 107,372,149
<FED-FUNDS-SOLD> 10,300,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,913,758
<INVESTMENTS-CARRYING> 3,159,489
<INVESTMENTS-MARKET> 3,162,730
<LOANS> 131,712,028
<ALLOWANCE> 1,723,013
<TOTAL-ASSETS> 177,362,962
<DEPOSITS> 151,105,795
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,181,870
<LONG-TERM> 5,000,000
0
0
<COMMON> 9,253,012
<OTHER-SE> 10,822,284
<TOTAL-LIABILITIES-AND-EQUITY> 20,075,296
<INTEREST-LOAN> 3,402,702
<INTEREST-INVEST> 196,797
<INTEREST-OTHER> 103,307
<INTEREST-TOTAL> 3,702,806
<INTEREST-DEPOSIT> 869,847
<INTEREST-EXPENSE> 956,910
<INTEREST-INCOME-NET> 2,745,896
<LOAN-LOSSES> 82,267
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 515,372
<INCOME-PRETAX> 1,711,000
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,067,858
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
<YIELD-ACTUAL> 10.06
<LOANS-NON> 45
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,651,352
<CHARGE-OFFS> 15,256
<RECOVERIES> 4,650
<ALLOWANCE-CLOSE> 1,723,013
<ALLOWANCE-DOMESTIC> 964,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 759,013
</TABLE>
