<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 1998.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number 0 - 20880
Filing Date: May 14, 1998
- --------------------------------------------------------------------------------
FRANKLIN BANCORPORATION, INC
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 52 - 1632361
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer identification
incorporation or organization) Number)
1722 EYE STREET, N.W.
WASHINGTON, D.C. 20006 (202) 429 - 9888
- ------------------------------- -------------------------------
(Address of principal executive (Registrant's telephone number,
offices) including area code)
- --------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
The total number of shares outstanding of the Registrant's common stock, par
value $0.10 per share, as of May 8, 1998 was 6,840,601.
Page 1 of 15
<PAGE> 2
FRANKLIN BANCORPORATION, INC.
FORM 10-Q
March 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
(a) Consolidated Statements of Financial Condition............... 3
(b) Consolidated Statements of Income............................ 4
(c) Consolidated Statements of Cash Flows........................ 5
Notes to Consolidated Financial Statements....................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS........................................ 9
PART II. OTHER INFORMATION....................................... 13
</TABLE>
Page 2 of 15
<PAGE> 3
PART I - FINANCIAL INFORMATION
- -----------------------------------------------------------------
ITEM 1 - FINANCIAL STATEMENTS
(a) Consolidated Statements of Financial Condition
(Dollars in thousands, except share and per share data)
<TABLE>
<CAPTION>
UNAUDITED
MARCH 31, DECEMBER 31,
ASSETS 1998 1997
- ------ ---------- ------------
<S> <C> <C>
Cash and due from banks $ 28,718 $ 38,590
Federal funds sold and securities purchased
under resale agreements 127,000 122,000
Securities available-for-sale 101,410 96,930
Securities held-to-maturity 88,409 82,458
---------- ------------
Total securities 189,819 179,388
Loans, net of unearned income 306,853 300,441
Less: allowance for loan losses (4,324) (4,192)
---------- ------------
Total loans, net 302,529 296,249
Accrued interest receivable 3,833 4,274
Premises and equipment, net 2,465 2,628
Goodwill, net 957 989
Other assets 3,655 3,330
---------- ------------
TOTAL ASSETS $ 658,976 $ 647,448
========== ============
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Non-interest bearing deposits $ 133,087 $ 139,913
Interest bearing deposits 300,530 287,885
---------- ------------
Total deposits 433,617 427,798
Securities sold under repurchase agreements 175,980 175,708
Accrued interest payable 2,097 1,871
Other liabilities 4,767 2,788
---------- ------------
Total liabilities 616,461 608,165
---------- ------------
STOCKHOLDERS' EQUITY:
Common Stock, $0.10 par value, 25,000,000
shares authorized; 6,798,311 and 6,630,975
shares issued and outstanding, respectively 680 663
Capital surplus 23,246 21,714
Retained earnings 18,179 16,456
Accumulated other comprehensive income 410 450
---------- ------------
Total stockholders' equity 42,515 39,283
---------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 658,976 $ 647,448
========== ============
</TABLE>
The accompanying condensed notes are an integral part of these financial
statements.
Page 3 of 15
<PAGE> 4
(b) Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 6,856 $ 5,329
Interest and dividends on securities 2,715 2,514
Interest on federal funds sold and securities
purchased under resale agreements 1,251 451
-------- --------
Total interest income 10,822 8,294
-------- --------
INTEREST EXPENSE
Interest on deposits 3,207 2,314
Interest on securities sold under
repurchase agreements 1,396 909
-------- --------
Total interest expense 4,603 3,223
-------- --------
Net interest income 6,219 5,071
Provision for loan losses 340 130
-------- --------
Net interest income after provision
for loan losses 5,879 4,941
-------- --------
NON-INTEREST INCOME
Service charges on deposits 376 332
Other fee income 265 194
-------- --------
Total non-interest income 641 526
-------- --------
NON-INTEREST EXPENSE
Compensation and employee benefits 1,942 1,762
Occupancy 471 469
Furniture and equipment 242 225
Other 1,102 744
-------- --------
Total non-interest expense 3,757 3,200
-------- --------
Income before income tax expense 2,763 2,267
Income tax expense 1,040 884
-------- --------
NET INCOME $ 1,723 $ 1,383
======== ========
Other comprehensive income, net of tax:
Unrealized losses on securities:
Unrealized holding losses arising
during period (40) (811)
Less: reclassification adjustment for
losses included in net income -- --
-------- --------
Other comprehensive income (40) (811)
-------- --------
COMPREHENSIVE INCOME $ 1,683 $ 572
======== ========
EARNINGS PER SHARE
Net Income $ 0.26 $ 0.21
EARNINGS PER SHARE - ASSUMING DILUTION
Net Income $ 0.24 $ 0.20
======== ========
</TABLE>
(1) See Exhibit 11 - Computation of Earnings per Share and Earnings per Share,
Assuming Dilution. The accompanying condensed notes are an integral part of
these financial statements.
Page 4 of 15
<PAGE> 5
(c) Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1998 1997
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,723 $ 1,383
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 340 130
Depreciation and amortization 154 182
Change in accrued interest receivable and
other assets 189 (145)
Change in accrued interest payable and other
liabilities 2,562 599
-------- --------
Net cash provided by operating activities 4,968 2,149
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available-for-sale (16,119) (7,307)
Proceeds from maturities/principal paydowns
of securities available-for-sale 11,657 4,126
Purchases of securities held-to-maturity (6,913) (12,766)
Proceeds from maturities/principal paydowns
of securities held-to-maturity 975 705
Net increase in loans receivable (6,620) (2,966)
Additions to premises and equipment, net (57) (171)
-------- --------
Net cash used in investing activities (17,077) (18,379)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits 5,819 (12,117)
Net change in securities sold under
repurchase agreements 272 (1,923)
Proceeds from issuance of common stock 1,146 15
-------- --------
Net cash provided by (used in) financing activities 7,237 (14,025)
-------- --------
Net decrease in cash and cash equivalents (4,872) (30,255)
Cash and cash equivalents at beginning
of period 160,590 94,268
-------- --------
Cash and cash equivalents at end of period $155,718 $ 64,013
======== ========
</TABLE>
The accompanying condensed notes are an integral part of these financial
statements.
Page 5 of 15
<PAGE> 6
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT MARCH 31, 1998
- --------------------------------------------------------------------------
(unaudited) (Dollars in tables in thousands)
1. Basis of Financial Statement Presentation.
The interim financial statements of Franklin Bancorporation, Inc. ("Franklin")
have been prepared pursuant to the requirements for reporting on Form 10-Q and
reflect all adjustments (consisting only of normal recurring adjustments) which
were, in the opinion of management, necessary for a fair statement of the
results of the periods presented. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. Accordingly,
these unaudited statements should be read in conjunction with the audited
financial statements and related notes in Franklin's most current annual
report. The current period's results of operations are not necessarily
indicative of results which ultimately may be achieved for the year.
2. Securities.
The amortized cost and market value of securities are summarized as follows:
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
------------------------- --------------------------
Amortized Market Amortized Market
SECURITIES AVAILABLE-FOR-SALE Cost Value Cost Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S. treasury securities $ 18,795 $ 19,161 $ 18,778 $ 19,170
U.S. government agencies 61,553 61,921 57,012 57,428
Step-up and structured notes 4,002 3,863 5,950 5,838
Mortgage-backed securities 1,968 1,953 2,126 2,076
States and political subdivisions 11,753 11,850 10,113 10,205
Equity securities 2,662 2,662 2,213 2,213
-------- -------- -------- --------
Total $100,733 $101,410 $ 96,192 $ 96,930
======== ======== ======== ========
March 31, 1998 December 31, 1997
------------------------- --------------------------
Amortized Market Amortized Market
SECURITIES HELD-TO-MATURITY Cost Value Cost Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S. treasury securities $ 15,964 $ 16,017 $ 15,960 $ 16,001
U.S. government agencies 21,438 21,591 15,426 15,657
Mortgage-backed securities 32,580 31,871 33,550 32,639
States and political subdivisions 18,427 18,678 17,522 17,758
-------- -------- -------- --------
Total $ 88,409 $ 88,157 $ 82,458 $ 82,055
======== ======== ======== ========
</TABLE>
Page 6 of 15
<PAGE> 7
3. Loans.
Major categories of loans are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- -----------
<S> <C> <C>
Real Estate
Commercial $ 58,001 $ 59,278
Construction and development 10,392 11,336
Residential mortgage 29,734 30,571
-------- ---------
Total Real Estate 98,127 101,185
Commercial and Industrial 194,478 184,360
Consumer
Consumer 9,973 10,848
Home equity 4,783 4,524
-------- ---------
Total Consumer 14,756 15,372
Total 307,361 300,917
-------- ---------
Unearned income (508) (476)
-------- ---------
Loans, net of unearned income $306,853 $ 300,441
======== =========
</TABLE>
At March 31, 1998, impaired loans totaled $704 thousand with a corresponding
valuation allowance of $381 thousand. The loans deemed to be impaired were
primarily commercial loans.
For the quarter ended March 31, 1998, the average recorded investment in
impaired loans was approximately $961 thousand. Had all of these loans
performed in accordance with their original terms, interest income of
approximately $44 thousand would have been recorded during the first three
months of 1998. Franklin recognized $18 thousand in interest on impaired loans
during the quarter.
At March 31, 1998, Franklin had no other loans on non-accrual other than those
deemed to be impaired loans. Loans 90 days or more past due which were still
accruing interest totaled $337 thousand.
Page 7 of 15
<PAGE> 8
Changes in the allowance for loan losses for the three months ended March 31,
1998 are as follows:
<TABLE>
<S> <C>
Balance, January 1 $4,192
Charge-offs:
Real Estate (105)
Commercial (170)
Consumer (10)
------
Total (285)
------
Recoveries:
Real Estate 3
Commercial 73
Consumer 1
------
Total 77
------
Net charge-offs (208)
Provision for loan losses 340
Balance, March 31 $4,324
======
Net charge-offs to average loans 0.07%
</TABLE>
Franklin National Bank, in the normal course of business, makes loans to
executive officers, directors and stockholders, as well as to companies and
individuals affiliated with those officers and directors. In the opinion of
management, these loans are consistent with sound banking practices, are within
regulatory lending limits and do not involve more than normal risk of
collectibility.
Activity in such loans is summarized as follows:
<TABLE>
<S> <C>
Balance, January 1, 1998 $15,427
New loans 863
Repayments (720)
-------
Balance, March 31, 1998 $15,570
=======
</TABLE>
There were no loans to directors, officers or other related parties that were
classified as impaired as of March 31, 1998.
Page 8 of 15
<PAGE> 9
4. Certificates of deposit, including IRA's, are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- ------------
<S> <C> <C>
Certificates less than $100,000 $ 13,282 $ 11,477
Certificates of $100,000 or more 137,728 130,248
</TABLE>
ITEM 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
MERGER ACTIVITY
On December 16, 1997, Franklin announced plans to be acquired in a tax-free
merger with BB&T Corporation ("BB&T") of Winston-Salem, North Carolina. BB&T
is a multi-bank holding company with approximately $31.5 billion in assets
operating throughout the Carolinas and Virginia. Franklin will become part of
BB&T's system of regional bank holding companies which emphasizes autonomy and
local decision-making. The acquisition, which will be accounted for as a
pooling of interests, is expected to be completed on or about the end of the
second quarter of 1998.
FINANCIAL SUMMARY
Net income for the three months ended March 31, 1998, increased by 25% to $1.72
million or $0.24 per share compared to $1.38 million or $0.20 per share for the
same period in 1997. Returns on average assets and average equity for the
first quarter of 1998 were 1.16% and 17.27%, respectively, compared to 1.21%
and 17.30% for the same period in 1997.
Contributing to the increase in earnings for the first quarter of 1998 were
improvements in net interest income and growth in service charges and other
fees. The earnings improvement was partially offset by increases in loan loss
provisions, compensation and other non-interest expenses and income tax
expenses.
Franklin's total assets increased to $659 million at March 31, 1998 compared to
$647 million at December 31, 1997, an increase of $12 million or 2%. In prior
years, Franklin's assets have typically declined slightly during the first
quarter after experiencing a significant increase during the fourth quarter of
Page 9 of 15
<PAGE> 10
the preceding year. However, in 1998, Franklin was able to sustain and improve
slightly on its 1997 fourth quarter asset growth which totalled approximately
$140 million. As compared to March 31, 1997, total assets increased 36% from
$485 million to $659 million.
The increase in assets during the first quarter of 1998 occurred primarily in
the loan and securities portfolios. Loans outstanding at March 31, 1998
totaled $307 million, a 2% increase over loans at year end 1997 of $300
million. Franklin's loan to deposit ratio, a key measure of liquidity, remains
conservative at 71% as compared to 70% on December 31, 1997. In the opinion of
management, nearly all of the customer repurchase agreements represent stable
deposit relationships. If added to deposits, Franklin's liquidity ratio would
be 50% as of both March 31, 1998 and December 31, 1997. In management's view,
these ratios indicate that Franklin is well positioned to fund future liquidity
needs.
Total securities were $190 million as of March 31, 1998, an increase of $11
million, or 6%, over total securities of $179 million at December 31, 1997.
Additions were made almost equally in the available-for-sale and the held-to-
maturity securities portfolios.
Total deposits and customer repurchase agreements were $610 million at March
31, 1998 compared to $604 million at December 31, 1997, representing an
increase of 1%. Franklin's deposit mix at March 31, 1998 included $133 million
in non-interest bearing deposits, representing 22% of total deposits and
customer repurchase agreements, as compared to 23% at December 31, 1997.
Stockholders' equity at March 31, 1998 totaled $43 million compared to $39
million at December 31, 1997. Book value per share of common stock on March
31, 1998 was $6.25 per share compared to $5.92 per share at December 31, 1997.
The increase in equity was attributable to the retention of earnings and new
shares issued through Franklin's stock option plans.
EARNINGS ANALYSIS
Net interest income
Net interest income is Franklin's primary source of earnings and represents the
difference between interest and amortized fee income generated from earning
assets and the interest expense paid on deposits and other interest bearing
liabilities. Net interest income totaled $6.2 million for the first three
months
Page 10 of 15
<PAGE> 11
of 1998 compared to $5.1 million for the same period of 1997, an increase of
22%. The improvement in net interest income was primarily attributable to the
fact that volume increases in total average earning assets of $137 million
exceeded the volume increases of $107 million in total average interest-bearing
liabilities.
Total interest income increased $2.5 million, or 30%, to $10.8 million for the
first three months of 1998 as compared to $8.3 million for the same period of
1997, with 60%, or $1.5 million, of 1998's increase occurring in interest and
fees on loans. Total average earning assets increased 31% to $571 million for
the three months ended March 31, 1998 as compared to $434 million for the three
months ended March 31, 1997. Of that growth, 49% occurred in Franklin's loan
portfolio, its highest yielding asset, 42% occurred in short-term investments,
such as Federal funds sold, and 9% occurred in the securities portfolios.
Interest expense increased $1.4 million, or 43%, to $4.6 million for the first
three months of 1998 as compared to $3.2 million for the same period of 1997.
The increase is primarily due to volume increases in average interest bearing
liabilities which grew 33% to $435 million for the three months ended March 31,
1998 as compared to $327 million for the same period in 1997.
Expressed as a percentage of average earning assets, Franklin's net interest
margin for the three months ended March 31, 1998 decreased to 4.53% as compared
to 4.80% for the same period one year ago. The decline is due to the growth in
Franklin's interest-bearing liabilities occurring in its highest-cost deposit
types, certificates of deposit and customer repurchase agreements, while a
significantly high percentage of growth in earning assets occurred in
Franklin's short-term investments, its lowest yielding asset.
Non-interest income
Non-interest income increased $115 thousand, or 22%, from $526 thousand for the
three months ending March 31, 1997 to $641 thousand for the same period ending
March 31, 1998. The increases are a result of Franklin's growing customer base
as well as the continued expansion of commercial deposit product offerings,
such as cash management and payroll processing services, foreign currency
exchange and ATM services.
Page 11 of 15
<PAGE> 12
Non-interest expense
Total non-interest expense of $3.8 million for the three months ended March 31,
1998 increased $557 thousand, or 17%, compared to $3.2 million for the same
period in 1997. The components of this increase were as follows: compensation
and employee benefits of $180 thousand, or 32% of the increase; occupancy and
furniture and equipment expense of $19 thousand, or 4%; and other operating
expense of $358 thousand, or 64%. The increase in compensation expense is
primarily due to overall salary and benefit increases deemed necessary by
management to attract and retain qualified personnel to more effectively manage
Franklin's growth. The increase in other operating expenses is primarily due
to Franklin's community involvement efforts which include expansion of
charitable contributions and program sponsorships.
ASSET QUALITY
While asset quality continues to be strong, Franklin has deemed it prudent to
increase provisions for loan losses to $340 thousand for the three months ended
March 31, 1998 as compared to $130 thousand for the same period one year ago.
For the three months ended March 31, 1998, Franklin recognized net loan
charge-offs of $208 thousand, as compared to first quarter 1997 net loan
recoveries of $57 thousand. At March 31, 1998, the allowance for loan losses
represented 1.41% of total loans as compared to 1.40% at December 31, 1997.
Non-performing assets decreased to $704 thousand at March 31, 1998 from $1
million at December 31, 1997, representing 0.23% of total loans on March 31,
1998 as compared to 0.35% of total loans on December 31, 1997. The allowance
for loan losses as a percentage of non-performing assets increased from 400% on
December 31, 1997 to 614% on March 31, 1998. Management believes that all
major loan portfolio deficiencies have been identified and adequate reserves
have been established.
RECENT ACCOUNTING DEVELOPMENTS
Effective January 1, 1998, Franklin adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" which requires
all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements.
Page 12 of 15
<PAGE> 13
- --------------------------------------------------------------------------------
PART II - OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 1 - Pending Legal Proceedings
At the present time, there are no material legal proceedings to which Franklin
is a party or to which any of Franklin's property is subject. In addition, to
the best of Franklin's knowledge, no such proceedings are contemplated by
government authorities.
Item 2 - Changes in Securities
There were no changes in the rights of Franklin shareholders during the last
quarter.
Item 3 - Defaults Upon Senior Securities
There were no reportable occurrences during the last quarter.
Item 4 - Submission of Matters to a Vote of Security Holders
There were no reportable occurrences during the last quarter.
Item 5 - Other Information
No other reportable information.
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits:
See Exhibit 11, "Computation of Primary and Fully Diluted Earnings per
Share."
b. Reports on Form 8-K
There were no reportable occurrences during the quarter.
Page 13 of 15
<PAGE> 14
- --------------------------------------------------------------------------------
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.
FRANKLIN BANCORPORATION, INC.
May 15, 1998 /s/ Robert P. Pincus
- ------------- -------------------------------------
Date Robert P. Pincus
President and Chief Executive Officer
May 15, 1998 /s/ Diane M. Begg
- ------------- -------------------------------------
Date Diane M. Begg
Executive Vice President and Chief
Financial Officer
Page 14 of 15
<PAGE> 1
FRANKLIN BANCORPORATION, INC.
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE AND EARNINGS PER SHARE, ASSUMING DILUTION
(DOLLARS IN THOUSANDS - EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTH PERIOD ENDED MARCH 31,
1998 1997
- ---------------------------------------------------------------------------------------------------------------------
INCOME SHARES PER SHARE INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT (NUMERATOR) (DENOMINATOR) AMOUNT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNINGS PER SHARE:
Income available
to stockholders $1,723 6,692,244 $0.26 $1,383 6,487,577 $0.21
EFFECT OF DILUTIVE
SECURITIES:
Options 474,952 399,992
--------- ---------
EARNINGS PER SHARE
ASSUMING DILUTION:
Income available to
stockholders plus
assumed conversions $1,723 7,167,176 $0.24 $1,383 6,887,569 $0.20
------ --------- ----- ------ --------- -----
</TABLE>
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 28,159
<INT-BEARING-DEPOSITS> 559
<FED-FUNDS-SOLD> 127,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 101,410
<INVESTMENTS-CARRYING> 88,409
<INVESTMENTS-MARKET> 88,157
<LOANS> 306,853
<ALLOWANCE> 4,324
<TOTAL-ASSETS> 658,976
<DEPOSITS> 433,617
<SHORT-TERM> 175,980
<LIABILITIES-OTHER> 6,864
<LONG-TERM> 0
0
0
<COMMON> 680
<OTHER-SE> 41,835
<TOTAL-LIABILITIES-AND-EQUITY> 658,976
<INTEREST-LOAN> 6,856
<INTEREST-INVEST> 2,715
<INTEREST-OTHER> 1,251
<INTEREST-TOTAL> 10,822
<INTEREST-DEPOSIT> 3,207
<INTEREST-EXPENSE> 4,603
<INTEREST-INCOME-NET> 6,219
<LOAN-LOSSES> 340
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,757
<INCOME-PRETAX> 2,763
<INCOME-PRE-EXTRAORDINARY> 1,723
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,723
<EPS-PRIMARY> .26
<EPS-DILUTED> .24
<YIELD-ACTUAL> 7.80
<LOANS-NON> 704
<LOANS-PAST> 342
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 5,523
<ALLOWANCE-OPEN> 4,192
<CHARGE-OFFS> 285
<RECOVERIES> 77
<ALLOWANCE-CLOSE> 4,324
<ALLOWANCE-DOMESTIC> 4,247
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 77
</TABLE>
