<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File Number
MARCH 31, 1997 0-25938
MERIT HOLDING CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-1934011
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 LAVISTA ROAD, P. O. BOX 49, TUCKER, GEORGIA 30085-0049
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 770-491-8808
Not Applicable
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by 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
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $2.50 Par Value 3,713,233
- ----------------------------- --------------------------------
Class Outstanding as of April 30, 1997
<PAGE> 2
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
MERIT HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
ASSETS ------------- -------------
<S> <C> <C>
Cash and due from banks $ 11,294,753 $ 14,295,260
Federal funds sold and other short-term investments 5,078,266 7,759,285
Interest bearing deposits with other
financial institutions 100,000 100,000
Investment securities, at cost (market
value of $1,405,369 and $1,666,200 respectively) 1,522,432 1,757,813
Mortgage-backed securities available for sale 6,369,181 6,987,783
Securities available for sale (Note 4) 36,650,078 36,493,983
Federal Reserve Bank stock 299,850 299,850
Federal Home Loan Bank stock 1,262,700 1,041,600
Loans, less allowance for loan losses
of $2,847,911 and $2,771,784 (Notes 2 and 3) 160,110,888 157,915,964
Real estate owned 425,619 110,747
Premises and equipment, net 5,767,900 5,633,032
Accrued interest receivable and other assets 3,983,490 3,784,986
------------- -------------
Total assets $ 232,865,157 $ 236,180,303
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 54,434,279 $ 57,396,092
Checking with interest 27,626,664 27,227,950
Money-market accounts 35,844,202 34,457,084
Savings 3,586,568 3,508,905
Time, $100,000 and over 22,192,007 25,916,972
Other time 46,729,020 44,189,759
------------- -------------
190,412,740 192,696,762
Short-term borrowings 8,506,986 11,715,438
Long-term debt 3,936,864 3,085,796
Accrued interest payable and other liabilities 2,606,402 1,882,759
------------- -------------
Total liabilities 205,462,992 209,380,755
------------- -------------
Stockholders' equity
Common stock, $2.50 par value; 10,000,000 shares
authorized; 3,713,233 and 3,704,102 shares issued and
outstanding, respectively 9,283,083 9,260,255
Paid-in capital 8,079,429 8,061,624
Retained earnings 10,098,436 9,314,117
Unrealized (losses) gains on securities available for sale, net of tax (58,783) 163,552
------------- -------------
Total stockholders' equity 27,402,165 26,799,548
------------- -------------
Total liabilities and stockholders'
equity $ 232,865,157 $ 236,180,303
============= =============
</TABLE>
(See notes to consolidated financial statements)
<PAGE> 3
MERIT HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the three month period ended
March 31,
1997 1996
----------- -----------
<S> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 3,952,749 $ 3,334,382
Interest on securities 712,167 616,360
Interest on federal funds sold
and other short-term investments 58,964 81,606
Interest on time deposits with other
financial institutions 1,521 2,987
Dividends on Federal Reserve Bank stock 4,498 4,498
Dividends on Federal Home Loan Bank stock 20,455 12,548
----------- -----------
Total interest and dividend income 4,750,354 4,052,381
Interest expense on deposits 1,406,221 1,324,067
Interest expense on long-term debt 61,717 41,790
Interest expense on short-term borrowings 129,329 35,887
----------- -----------
Total interest expense 1,597,267 1,401,744
----------- -----------
Net interest income 3,153,087 2,650,637
Provision for loan losses 150,000 165,000
----------- -----------
Net interest income after
provision for loan losses 3,003,087 2,485,637
----------- -----------
Non-interest income:
Service charges and fees on deposits 270,538 201,275
Gain on sale of SBA loans 852 852
Mutual fund sales fees 8,782 5,448
Other income 76,284 75,006
----------- -----------
Total non-interest income 356,456 282,581
----------- -----------
Non-interest expense:
Salaries and other personnel 977,191 868,952
Occupancy and equipment 274,815 214,370
Advertising and marketing 28,159 20,268
Legal 131,000 30,000
Data processing 44,596 31,385
FDIC fees 2,166 4,386
Other operating 474,619 318,130
----------- -----------
Total non-interest expense 1,932,546 1,487,491
----------- -----------
Income before income taxes 1,426,997 1,280,727
Provision for income taxes 494,149 456,024
----------- -----------
Net income $ 932,848 $ 824,703
=========== ===========
Net income per share $ .21 $ .19
=========== ===========
</TABLE>
(See notes to consolidated financial statements)
- 2 -
<PAGE> 4
MERIT HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Unaudited)
<TABLE>
<CAPTION>
For the three month period ended
March 31,
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 932,848 $ 824,703
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 132,968 108,466
Net amortization of premiums on securities 10,270 15,484
Provision for loan losses 150,000 165,000
Gain on sale of SBA loans (852) (852)
Gain on sale of other real estate (8,639)
Decrease in interest receivable 33,103 142,332
Decrease (increase) in interest payable 111,287 (139,187)
Increase in accrued expenses and other liabilities 594,055 592,767
Increase in prepaid expenses and other assets (551,883) (627,262)
------------ ------------
Net cash provided by operating activities 1,411,796 1,072,812
------------ ------------
Cash flows from investing activities:
Purchases of "available for sale" investment securities (1,000,000) (761,762)
Proceeds from maturities of "held to maturity" investment securities 235,000
Proceeds from maturities of "available for sale" investment securities 1,094,012 975,422
Purchases of Federal Home Loan Bank stock (221,100) (52,300)
Proceeds from sale of other real estate 237,275
Loans made to customers, net (2,344,066) (2,460,080)
Capital expenditures (256,396) (175,054)
------------ ------------
Net cash used in investing activities (2,492,550) (2,236,499)
------------ ------------
Cash flows from financing activities:
Repayment of short-term borrowing (1,000,000)
Net increase (decrease) in Federal Home Loan Bank advances 851,068 (32,443)
Net decrease in deposits (2,284,022) (1,063,510)
Net decrease in securities sold under
agreements to repurchase (2,208,452) (1,103,717)
Exercise of stock warrants 40,634 207,881
------------ ------------
Net cash used by financing activities (4,600,772) (1,991,789)
------------ ------------
Net decrease in cash and cash equivalents (5,681,526) (3,155,476)
Cash and cash equivalents at beginning of period 22,054,545 26,752,927
------------ ------------
Cash and cash equivalents at end of period $ 16,373,019 $ 23,597,451
============ ============
Supplemental data:
Interest paid $ 1,500,399 $ 1,540,932
============ ============
Income taxes paid $ 0 $ 442,000
============ ============
</TABLE>
(notes to consolidated financial statements)
- 3 -
<PAGE> 5
MERIT HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited consolidated financial statements for Merit Holding
Corporation (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and Regulation
S- X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statement presentation. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1997 are not necessarily indicative of trends or results to be
expected for the year ended December 31, 1997. For further information, refer
to the consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.
NOTE 2 - LOANS
- --------------
Loans are stated at unpaid principal balances, net of unearned income and
deferred loan fees. Interest is accrued only if deemed collectible. Generally
the Company's policy is not to accrue interest on loans delinquent over ninety
days unless the loan is well secured and in the process of collection.
<TABLE>
<CAPTION>
Loans consist of :
(in thousands)
March 31, 1997 December 31, 1996
--------------- -----------------
<S> <C> <C> <C> <C>
Commercial $ 93,146 57% $ 91,125 57%
Real estate - construction
and land development 33,767 21% 34,407 21%
Real estate - mortgages 21,571 13% 20,242 13%
Installment and other
Consumer 14,272 9% 14,686 9%
Other 203 0% 228 0%
-------- ----- -------- -----
162,959 100% 160,688 100%
Less allowance for loan losses (2,848) (2,772)
-------- --------
$160,111 $157,916
======== ========
</TABLE>
-4-
<PAGE> 6
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
A provision for loan losses is charged to operations based on management's
evaluation of potential losses in the loan portfolio. Such evaluation includes
a review of all loans on which full collectibility may not be reasonably
assured and considers, among other matters, management's estimate of the fair
value of the underlying collateral on specific loans, inherent losses in the
loan portfolio, and prevailing and anticipated economic conditions.
Activity in the allowance for loan losses for the three months ended March 31,
1997 and March 31, 1996 follows:
<TABLE>
<S> <C> <C>
March 31, 1997 March 31,1996
-------------- --------------
Balance, January 1 $ 2,771,784 $ 2,543,408
Provision charged to expense 150,000 165,000
Net charge-offs (73,873) (26,526)
----------- -----------
Balance, March 31 $ 2,847,911 $ 2,681,882
=========== ===========
</TABLE>
NOTE 4 - SECURITIES AVAILABLE-FOR-SALE AND HELD -TO-MATURITY
Securities available-for-sale are securities which management believes may be
sold prior to maturity for liquidity or other reasons and are reported at fair
value, with unrealized gains and losses, net of related income taxes, reported
as a separate component of stockholders' equity. Securities held-to-maturity
are those securities for which management has both the ability and intent to
hold to maturity and are carried at amortized cost.
The amortized cost and estimated market value of investment securities
held-to-maturity at March 31, 1997 and December 31, 1996 are presented below:
<TABLE>
<CAPTION>
1997
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
U.S. Government Agencies $ 1,000,000 $ - $ 121,950 $ 878,050
Tax exempt bonds 522,432 10,197 5,310 527,319
----------- ----------- --------- -----------
$ 1,522,432 $ 10,197 $ 127,260 $ 1,405,369
=========== =========== ========= ===========
1996
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- --------- -----------
U.S. Government Agencies $ 1,000,000 $ - $ 104,940 $ 895,060
Tax exempt bonds 757,813 14,410 1,083 771,140
----------- ----------- --------- -----------
$ 1,757,813 $ 14,410 $ 106,023 $ 1,666,200
=========== =========== ========= ===========
</TABLE>
-5-
<PAGE> 7
The amortized cost and estimated market value of investment securities
available-for-sale at March 31, 1997 and December 31, 1996 are presented below:
<TABLE>
<CAPTION>
1997
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- --------- ------------
<S> <C> <C> <C> <C>
U.S. Treasuries $ 13,960,101 $ 28,912 $ 8,857 $ 13,980,156
U.S. Government Agencies 22,776,904 52,599 159,581 22,669,922
Mortgage-backed certificates 6,377,064 26,560 34,443 6,369,181
------------ ----------- --------- ------------
$ 43,114,069 $ 108,071 $ 202,881 $ 43,019,259
============ =========== ========= ============
</TABLE>
<TABLE>
<CAPTION>
1996
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
U.S.Treasuries $ 13,950,786 $ 96,707 $ 151 $ 14,047,342
U.S. Government Agencies 22,286,193 205,283 44,835 22,446,641
Mortgage-backed certificates 6,980,992 34,990 28,199 6,987,783
------------ ---------- ---------- ------------
$ 43,217,971 $ 336,980 $ 73,185 $ 43,481,766
============ =========== ========= ============
</TABLE>
NOTE 5 - NET INCOME PER SHARE
The Company is required to calculate net income per share based on the
"modified treasury stock" method. Under this method, net income and weighted
average shares are adjusted for the effects of assumed exercise of common stock
equivalents. The number of shares used to compute earnings per share for the
three months ended March 31, 1997 was 4,450,559 and 4,317,587 for the three
months ended March 31, 1996.
NOTE 6 - NEW ACCOUNTING PRONOUNCEMENTS
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS
125"), which prescribes accounting standards to be followed when the Company
transfers control over financial assets to third parties. SFAS 125 is effective
for the Company for transactions occurring after December 31, 1996; however,
the FASB has delayed implementation of certain of the provisions of SFAS 125
for one year. The Company does not believe this Statement will have a
significant impact on its financial statements based upon the current
scope of the Company's operations.
-6-
<PAGE> 8
On March 3, 1997, FASB issued SFAS 128, "Earnings per Share" and SFAS 129,
"Disclosure of Information about Capital Structure." SFAS 128 changes the
methods for calculation of earnings per share and is effective for financial
statements issued for both interim and annual periods ending after December 15,
1997. If this pronouncement has been adopted , the earnings per share for the
first quarter of 1997 and 1996 would have been $.25 and $.22, respectively.
-7-
<PAGE> 9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion addresses the factors that have affected the financial
condition and results of operations of Merit Holding Corporation (the
"Company") as reflected in the unaudited consolidated financial statements for
the three months ended March 31, 1997 and 1996. The Company's operating
subsidiaries are Mountain National Bank ("Mountain") and Charter Bank & Trust
Co. ("Charter").
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's net income for the first quarter of 1997 was $932,848, a 13.1%
increase compared to $824,703 for the same period in 1996. Earnings per share
increased to $.21 in the first quarter of 1997 compared to $ .19 for the
same period in 1996. The increase in net income resulted primarily from an
increase of $502,450, or 19.0%, in net interest income; an increase of $73,875,
or 26.1%, in non-interest income; offset by an increase of $445,055, or 29.9%,
in non- interest expense.
Return on average equity for the three months ended March 31, 1997 was 13.70%
on average equity of $27,235,000, compared to 13.78% on average equity of
$23,936,000 for the same period in 1996. Return on average assets of
$233,094,000 for the three months ended March 31, 1997 was 1.60%, compared to
1.68% on average assets of $196,844,000 for the same period in 1996.
Total assets at March 31, 1997 were $232,865,000, down slightly from total
assets of $236,180,000 at December 31, 1996. Total average assets for the
first three months of 1997 were $233,094,000, up $36,250,000, or 18.4% from
the same period in 1996. Average loans for the first quarter of 1997 were
$159,429,000, up $27,557,000, or 20.9% over the same period in 1996. The loan
growth was funded by increased average interest-bearing deposits, up
$16,472,000, or 13.7%, higher short term borrowings, up $8,390,000, or 237.1%,
and higher average noninterest-bearing deposits, up $6,845,000, or 15.3%.
On January 15, 1997, the Company paid an initial regular quarterly dividend of
$.04 per share. The Company paid a second quarter dividend of $.04 per share
on April 15 , 1997.
Net interest income for the first quarter of 1997 increased $502,450 or 19.0%
over the first quarter of 1996. The net interest margin for the three months
ended March 31, 1997 was 5.97% on average total earning assets of $211,210,000.
For the same period in 1996, the net interest margin was 5.95% on average
earning assets of $178,121,000. The increase in net interest income is the
result of growth in average earning assets outstanding
-8-
<PAGE> 10
of $33,089,000 in 1997 over 1996, and a decrease in the rate paid on
interest-bearing liabilities from 4.45% in the first quarter of 1996 to 4.20%
in the same period in 1997, partly offset by slightly lower yields on earning
assets, down 10 basis points in the first quarter of 1997 from the first
quarter of 1996.
The provision for loan losses for the first quarter of 1997 was $150,000
compared to $165,000 in the first quarter of 1996. The allowance for
loan losses at March 31, 1997 was $2,847,911 compared to $2,771,784 at December
31, 1996. At March 31, 1997 and December 31, 1996, the allowance for loan
losses represented 1.75% and 1.73% of loans outstanding, respectively. The
provision for loan losses and the adequacy of the allowance for loan losses are
based upon management's continuing evaluation of the collectibility of the loan
portfolio under current economic conditions and includes analysis of underlying
collateral value and other factors which could affect that collectibility.
Management considers the allowance for loan losses to be adequate based upon
evaluations of specific loans, internal loan rating systems, guidelines
provided by the banking regulatory authorities governing Mountain and Charter,
and an annual independent loan review performed by a consultant.
Through the three months ended March 31, 1997, charged-off loans totaled
$73,873 net of recoveries, or .05% of total loans outstanding. This compares
to $26,526 or .02% through the three months ended March 31, 1996. At March 31,
1997, the Company had aggregate non-accrual loans of $1,136,292 compared to
$1,062,206 at December 31, 1996. The ratio of non- performing loans (including
loans 90 days or more past due and still accruing) to total outstanding loans
was 0.70% at March 31, 1997 compared to 0.66% at December 31, 1996 and 1.07%
at March 31, 1996.
Included in other assets is a receivable of $685,000 from SouthTrust Bank of
Georgia, N.A. ("SouthTrust) which failed to remit to Mountain amounts it
received from customers of an insolvent lender who had sold participations in
loans to Mountain. Mountain believes an additional $250,000 is due Mountain
from SouthTrust for another participation loan which SouthTrust assumed. These
transactions are the subject of a lawsuit initiated in August 1995 by Mountain
and three other lenders contending that SouthTrust improperly seized these loan
repayments which Mountain and the other plaintiffs claim are due them by virtue
of their direct ownership interest in these loans. SouthTrust contends, among
other things, that it had not consented to the original sale of these
participations to Mountain and these other lenders as permitted by its
arrangements with the originator of these loans and that it had rights superior
to Mountain and the other lenders in the loan repayments. On September 30,
1996, Mountain and the other plaintiffs amended their lawsuits against
SouthTrust alleging additional claims, including conversion and violations of
the Georgia RICO statutes. Management of Mountain intends to vigorously pursue
this action.
-9-
<PAGE> 11
At March 31, 1997, the Company owned three foreclosed residential properties
carried in other real estate owned totaling $425,619. One of the properties was
sold on April 17, 1997 at a small gain. The Company does not anticipate any
material loss on the sale of the remaining properties.
At March 31, 1997, the Company had $8,506,986 in short-term borrowings compared
to $11,715,438 at year ended December 31, 1996. Short-term borrowings include
$5,224,924 in securities sold under agreements to repurchase with customers and
$3,000,000 in borrowings from the Federal Home Loan Bank of Atlanta (FHLB").
Long-term debt at March 31, 1997 was $3,936,864 compared to $3,085,796 at year
end December 31, 1996. Long-term debt consists of advances from the FHLB for
the purpose of match funding loans. One new advance of $1,000,000 was obtained
in the first quarter of 1997.
Non-interest income increased $73,875 or 26.1% during the first quarter ended
March 31, 1997 as compared to the same period in 1996. This change resulted
mainly from higher service charges on deposits, up $69,263, or 34.4%, over the
first quarter of 1996. The service fee increase is attributable to increased
volumes, while fee rates were basically unchanged.
Non-interest expense increased $445,055 or 29.9% for the three months ended
March 31, 1997 as compared to the same period in 1996. Salaries and other
personnel expenses increased $108,239, or 12.4%, and occupancy and equipment
expense increased $60,445, or 28.2%, partly the result of Mountain opening a
new combined branch/operations center in April 1996, and Charter opening a new
branch in November 1996. Legal expense increased $101,000, or 336.7%, for the
first quarter of 1997 compared to the same period in 1996, as a result of the
lawsuit discussed above. Other operating expenses rose $156,489, or 49.2%, in
1997 compared to 1996, attributable to the continued growth of the Company.
Management continues to closely monitor operating expenses.
CAPITAL ADEQUACY
Federal banking regulators have established certain capital adequacy standards
required to be maintained by banks and bank holding companies. These
regulations establish minimum requirements for risk-based capital of 4% for
core capital (tier I), 8% for total risk-based capital and 3% for the leverage
ratio. At March 31, 1997 the Company's tier I risk- based capital was 15.1%
and total risk-based capital was 16.3%, compared to 14.7% and 15.9% at
year-ended December 31, 1996, respectively. At March 31, 1997 the Company's
leverage ratio was 13.7% compared to 11.3% at December 31, 1996.
-10-
<PAGE> 12
The Company does not have any commitments which it believes would reduce its
capital to levels inconsistent with the regulatory definition of a 'well
capitalized' financial institution.
LIQUIDITY
The goal of liquidity management is to ensure the availability of an adequate
level of funds to meet the loan demand and deposit withdrawal needs of the
Company's customers. The Company does not anticipate any events which would
require liquidity beyond that which is available through deposit growth,
federal funds balances, or investment portfolio maturities. The Company
actively manages the levels, types and maturities of earning assets in relation
to the sources available to fund current and future needs to ensure that
adequate funding will be available at all times. At March 31, 1997 the Company
had $7,638,000 in carrying value of investment securities in its
held-to-maturity and available-for-sale portfolios that would mature in one
year or less.
At March 31, 1997 and December 31, 1996, the Company had federal funds lines
of credit from other banks totaling $22,750,000 and $20,500,000, respectively
to meet short term funding needs. There were no amounts outstanding under
these short term commitments at March 31, 1997.
There are no known trends or any known commitments or uncertainties that will
result in the Company's liquidity increasing or decreasing in any material way.
-11-
<PAGE> 13
Part II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule (SEC use only)
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1997.
-12-
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MERIT HOLDING CORPORATION
Date: April 30, 1997 /S/ J. Randall Carroll
-------------- ----------------------
J. Randall Carroll
Chairman and
Chief Executive Officer
Date: April 30, 1997 /S/ Ronald H. Francis
-------------- ---------------------
Ronald H. Francis
President and
Chief Financial Officer
(principal financial and
accounting officer)
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,294,753
<INT-BEARING-DEPOSITS> 100,000
<FED-FUNDS-SOLD> 5,078,266
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 44,581,809
<INVESTMENTS-CARRYING> 1,522,432
<INVESTMENTS-MARKET> 1,405,369
<LOANS> 162,958,799
<ALLOWANCE> 2,847,911
<TOTAL-ASSETS> 232,865,157
<DEPOSITS> 190,412,740
<SHORT-TERM> 8,506,986
<LIABILITIES-OTHER> 2,606,402
<LONG-TERM> 3,936,864
0
0
<COMMON> 9,283,083
<OTHER-SE> 18,119,082
<TOTAL-LIABILITIES-AND-EQUITY> 232,865,157
<INTEREST-LOAN> 3,952,749
<INTEREST-INVEST> 712,167
<INTEREST-OTHER> 85,438
<INTEREST-TOTAL> 4,750,354
<INTEREST-DEPOSIT> 1,406,221
<INTEREST-EXPENSE> 1,597,267
<INTEREST-INCOME-NET> 3,153,087
<LOAN-LOSSES> 150,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,932,546
<INCOME-PRETAX> 1,426,997
<INCOME-PRE-EXTRAORDINARY> 932,848
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 932,848
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
<YIELD-ACTUAL> 5.95
<LOANS-NON> 1,136,292
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,771,784
<CHARGE-OFFS> 181,073
<RECOVERIES> 107,200
<ALLOWANCE-CLOSE> 2,847,911
<ALLOWANCE-DOMESTIC> 2,847,911
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
