<PAGE>
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 quarter ended: March 31, 1998 Commission file number: 33-42286
HENDERSON CITIZENS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 6712 75-2371232
- ---------------------------- ---------------------------- -------------------
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Identification No.)
or organization) Number)
201 WEST MAIN STREET, P.O. BOX 1009
HENDERSON, TEXAS 75653
(903) 657-8521
(Address, including ZIP code, and telephone number, including
area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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.
X Yes No
----------- ----------
At March 31, 1998, 2,017,494 shares of Common Stock, $5.00 par value, were
outstanding.
1
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)
March 31, 1998 and December 31, 1997
(dollars in thousands)
<TABLE>
<CAPTION>
Assets 1998 1997
--------------- -------------- --------------
<S> <C> <C>
Cash and due from banks $ 6,632 8,886
Interest-bearing deposits with
financial institutions 16,167 8,212
Federal funds sold 5,090 5,040
Securities:
Held-to-maturity, approximate market value of $63,393
in 1998 and $69,598 in 1997 62,882 69,233
Available-for-sale 147,276 148,740
-------------- --------------
210,158 217,973
Loans, net 109,829 106,061
Premises and equipment, net 5,282 5,209
Accrued interest receivable 3,227 3,311
Other assets 3,180 3,801
-------------- --------------
$ 359,565 358,493
============== ==============
Liabilities and Stockholders' Equity
----------------------------------------------
Deposits:
Demand - non interest-bearing 35,228 32,860
Interest-bearing transaction accounts 75,510 79,810
Money market and savings 45,605 46,206
Certificates of deposit and other time deposits 167,070 163,231
-------------- --------------
Total deposits 323,413 322,107
-------------- --------------
Accrued interest payable 1,058 1,105
Notes payable 444 844
Other liabilities 841 1,708
-------------- --------------
325,756 325,764
Stockholders' equity:
Preferred stock, $5 par value; 2,000,000 shares authorized
none issued or outstanding -- --
Common stock, $5 par value; 10,000,000 shares authorized,
2,160,000 issued 10,800 10,800
Surplus 5,400 5,400
Retained earnings 19,459 18,875
Accumulated other comprehensive income 161 (335)
-------------- --------------
35,820 34,740
Less treasury stock 142,506 shares at cost (2,011) (2,011)
-------------- --------------
Total stockholders' equity 33,809 32,729
Commitments and contingencies
-------------- --------------
$ 359,565 358,493
============== ==============
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three months
ended March 31,
1998 1997
------------- -------------
<S> <C> <C>
Interest income:
Loans $ 2,276 2,095
Securities
Taxable - available-for-sale 2,198 2,194
Taxable - held-to-maturity 535 734
Tax-exempt 356 437
Federal funds sold 80 53
Interest-bearing deposits with financial institutions 198 105
------------- -------------
Total interest income 5,643 5,618
------------- -------------
Interest expense:
Deposits:
Transaction accounts 491 517
Money market and savings 322 322
Certificates of deposit and other time deposits 2,106 2,080
Other 7 13
------------- -------------
Total interest expense 2,926 2,932
------------- -------------
Net interest income 2,717 2,686
Provision for loan losses 129 87
------------- -------------
Net interest income after provision for loan 2,588 2,599
losses
------------- -------------
Other income:
Gains (losses) on securities transactions, net 26 (38)
Income from fiduciary activities 205 138
Service charges, commissions, and fees 611 443
Other 148 75
------------- -------------
Total other income 990 618
------------- -------------
Other expenses:
Salaries and employee benefits 1,390 1,262
Occupancy and equipment 308 233
Regulatory assessments 34 26
Other 674 603
------------- -------------
Total other expenses 2,406 2,124
------------- -------------
Income before income taxes 1,172 1,093
Income tax expense 265 258
------------- -------------
Net income $ 907 835
============= =============
Net income per common share $ 0.45 0.39
============= =============
Average number of shares outstanding 2,017,494 2,130,300
============= =============
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(unaudited)
Three months ended March 31, 1998 and 1997
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive
Income
--------------------
Net Unrealized
Gain (Losses)
On Securities Total
Preferred Common Retained Available Treasury Stockholder's
Stock Stock Surplus Earnings for Sale Stock Equity
----------- ------- ------- -------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1996 $ -- 10,800 5,400 16,825 (703) (334) 31,988
Net income -- -- -- 835 -- -- 835
Net change in unrealized
losses
on securities available for -- -- -- -- (217) -- (217)
sale
Cash dividends ($0.16 per -- -- -- (341) -- -- (341)
share)
----------- ------- ------- -------- -------------- -------- -------------
Balances at March 31, 1997 $ -- 10,800 5,400 17,319 (920) (334) 32,265
=========== ======= ======= ======== ============== ======== =============
Balances at December 31, 1997 $ -- 10,800 5,400 18,875 (335) (2,011) 32,729
Net income -- -- -- 907 -- -- 907
Net change in unrealized gains
on securities available for -- -- -- -- 496 -- 496
sale
Cash dividends ($0.16 per -- -- -- (323) -- -- (323)
share)
----------- ------- ------- -------- -------------- -------- -------------
Balances at March 31, 1998 $ -- 10,800 5,400 19,459 161 (2,011) 33,809
=========== ======= ======= ======== ============== ======== =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(unaudited)
Three months ended March 31, 1998 and 1997
(dollars in thousands)
<TABLE>
<CAPTION>
1998 1997
-------------- --------------
<S> <C> <C>
Operating activities:
Net income $ 907 835
Adjustments to reconcile net income to net cash
provided by operating activities:
Net amortization of premium on securities 86 94
Net (gains) losses on securities transactions (26) 38
Provision for loan losses 129 87
Depreciation and amortization 212 132
Decrease in accrued interest receivable 84 103
(Increase) decrease in other assets 307 (192)
Increase (decrease) in accrued interest payable (47) 60
Decrease in other liabilities (544) (541)
-------------- --------------
Net cash provided by operating activities 1,108 616
-------------- --------------
Investing activities:
Proceeds from maturities and paydowns of held-to-maturity securities 9,183 7,577
Purchases of held-to-maturity securities (2,918) (3,548)
Proceeds from sales of available-for-sale securities 4,977 9,982
Proceeds from maturities and paydowns of available-for-sale securities 15,337 2,966
Purchases of available-for-sale securities (18,063) (16,100)
Net increase in loans (3,897) (779)
Purchases of bank premises and equipment (236) (746)
-------------- --------------
Net cash provided by (used in) investing activities 4,383 (648)
-------------- --------------
Financing activities:
Net increase (decrease) in deposits 1,306 (128)
Payment on notes payable (400) (667)
Cash dividends paid (646) (341)
-------------- --------------
Net cash provided by (used in) financing activities 260 (1,136)
-------------- --------------
Increase (decrease) in cash and cash equivalents 5,751 (1,168)
Cash and cash equivalents at beginning of period 22,138 17,455
-------------- --------------
Cash and cash equivalents at end of period $ 27,889 16,287
============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES
Income taxes paid, net of refunds $ 395 320
============== ==============
Interest paid $ 2,973 2,872
============== ==============
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1998
(1) BASIS OF PRESENTATION
---------------------
The accompanying consolidated financial statements are unaudited, but
include all adjustments, consisting of normal recurring accruals, which
management considers necessary for a fair presentation of the financial
position, results of operations, and cash flows.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to Securities and
Exchange Commission rules and regulations. The consolidated financial
statements and footnotes included herein should be read in conjunction with
the Company's annual consolidated financial statements as of December 31,
1997 and 1996, and for each of the years in the three year period ended
December 31, 1997 included in the Company's Form 10-K.
(2) SECURITIES
----------
The amortized cost (carrying value) and approximate market values of
securities held-to-maturity at March 31, 1998, are summarized as follows
(in thousands of dollars):
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
U.S. Treasury $ 7,032 35 (5) 7,062
U.S. Government agencies 6,121 20 -- 6,141
31,567 481 (34) 32,014
State and municipal
Mortgage-backed securities
and collateralized mortgage
obligations 18,162 49 (35) 18,176
------------ ------------- ------------ -----------
$ 62,882 585 (74) 63,393
------------ ------------- ------------ -----------
</TABLE>
The amortized cost and approximate market values (carrying value) of
securities available-for-sale at March 31, 1998, are summarized as follows
(in thousands of dollars):
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
U.S. Treasury $ 60,011 536 (4) 60,543
16,462 17 (16) 16,463
U.S. Government agencies
Mortgage-backed securities
and collateralized mortgage
obligations 70,182 287 (567) 69,902
368 368
Other -- --
------------ ------------- ------------ -----------
$ 147,023 840 (587) 147,276
------------ ------------- ------------ -----------
</TABLE>
6
<PAGE>
HENDERSON CITIZENS BANCSHARES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1998
(3) LOANS AND ALLOWANCE FOR LOAN LOSSES
-----------------------------------
The composition of the Company's loan portfolio is as follows (in thousands
of dollars):
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------------- -----------------
<S> <C> <C>
Commercial and industrial $ 29,846 28,195
Real estate mortgage 52,838 49,979
Installment and other 29,130 29,832
-------------- -----------------
Total 111,814 108,006
Less:
Allowance for loan losses (1,398) (1,249)
Unearned discount (587) (696)
-------------- -----------------
Loans, net $ 109,829 106,061
============== =================
</TABLE>
Changes in the allowance for loan losses for the three months ended March 31,
1998 and 1997 summarized as follows (in thousands of dollars):
<TABLE>
<CAPTION>
1998 1997
-------------- -----------------
<S> <C> <C>
Balance, January 1 $ 1,249 1,146
Provision charged to operating expense 129 87
Loans charged off (31) (143)
Recoveries on loans 51 15
-------------- -----------------
Balance, March 31 $ 1,398 1,105
============== =================
</TABLE>
(4) TOTAL COMPREHENSIVE INCOME
--------------------------
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income".
SFAS 130 requires that an entity include in total comprehensive income certain
amounts which were previously recorded directly in stockholders' equity. For
the three-month period ended March 31, 1998 and 1997, other comprehensive income
amounts included in total comprehensive income consisted only of net unrealized
gains (losses) on securities available for sale, net of income taxes. Total
comprehensive income for the three-month period ended March 31, 1998 and 1997,
were $1,403,000 and $618,000, respectively.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF HENDERSON CITIZENS BANCSHARES, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
The following discussion and analysis of the financial condition and results of
operations of the Company and its primary bank subsidiaries, Citizens National
Bank, Henderson, Texas, and First State Bank, Waskom, Texas, should be read in
conjunction with the financial statements and the notes thereto, and other
financial and statistical information appearing elsewhere in this report.
Results of Operations
- ---------------------
Net income for the first three months of 1998 increased to $907,000 compared to
$835,000 for the same period in 1997. The increase was primarily caused by an
increase in non-interest income. During the first three months of 1998, net
interest income increased due to increased loan demand. The Company made a
provision of $129,000 to the allowance for loan losses during the first three
months of 1998. A provision of $87,000 was made for loan losses during the same
period in 1997. The Company experienced a gain on securities transactions
totaling approximately $26,000 in the first three months of 1998 compared to
losses of $38,000 in the first three months of 1997. Other income, excluding
gains on securities transactions, for the first three months of 1998 was
$964,000 compared to $656,000 for the same period in 1997 due to increased
volume and the establishment of a trust office in Corsicana, Texas on March 24,
1997. Total other expenses for the first three months of 1998 were $2,407,000
compared to $2,124,000 for the same period in 1997. Income tax expense for the
first three months of 1998 and 1997 was $265,000 and $258,000, respectively.
MERGER
- ------
Citizens National Bank and First State Bank have filed an application with the
Comptroller for prior approval to merge First State Bank with and into Citizens
National Bank under the charter and title of Citizens National Bank (the
"merger"). The sole banking office of First State Bank will be operated as a
full-service branch of Citizens National Bank upon completion of the merger. It
is not anticipated that the merger will result in any diminution of products and
services currently available to customers of First State Bank or Citizens
National Bank. It is anticipated, however, that the merger will generate
certain operational efficiencies by operating under one bank charter rather than
two separate charters regulated by different regulatory authorities.
It is anticipated that the merger will be completed during the third quarter of
1998, although no assurance can be given that the merger will be completed or
that such timetable will be met.
NET INTEREST INCOME
- -------------------
For the three months ended March 31, 1998, net interest income was $2,717,000
compared to $2,686,000 for the first three months of 1997. The increase is the
result of continued loan growth.
PROVISION FOR LOAN LOSSES
- -------------------------
During the first three months of 1998, the Company increased its allowance for
loan losses through a provision of $129,000. The Company increased its allowance
for loan losses during the same period of 1997 by $87,000. The Company
experienced net recoveries of $20,000 in the first three months of 1998 compared
to net charge offs of $128,000 in the same period in 1997.
See additional information related to the Company's loan operations in the
Allowance for Loan Loss section below.
8
<PAGE>
OTHER INCOME AND EXPENSES
- -------------------------
Non-interest income, excluding securities gains (losses), was $964,000 for the
first three months of 1998 as compared to $656,000 in the first three months of
1997. This increase is due to increases in service charges and volumes as well
as an increase in trust revenues due to the establishment of a trust office in
Corsicana, Texas on March 24, 1997. The Company experienced gains on securities
transactions for the first three months of 1998 of $26,000 that compares to
losses on securities transactions for the first three months of 1997 of
$38,000. Other expenses for the three-month period ended March 31, 1998 were
$2,407,000 compared to $2,124,000 during the same period in 1997. The increase
in other expenses is due to increases in general salaries and benefits, and
occupancy and equipment due to remodeling of the main bank facility in
Henderson, Texas.
INCOME TAXES
- ------------
Income tax expense for the first three months of 1998 was $265,000, compared to
$258,000 in the same period in 1997. The effective tax rate for the first three
months of 1998 and 1997, respectively, was 22.6% and 23.6%. This effective rate
is less than the statutory rate primarily because of tax-free income provided
from state and municipal bonds, leases and obligations. As these tax-free
investments, leases, and obligations mature and are replaced, the effective tax
rate is expected to increase.
FINANCIAL CONDITION
- -------------------
The Company's total assets at March 31, 1998 of $359,565,000 increased from the
total assets at December 31, 1997 of $358,493,000. Total deposits were
$323,413,000 at March 31, 1998, compared to the December 31, 1997 total of
$322,107,000.
Equity capital of the Company, excluding unrealized gains or losses on
securities available for sale, as a percentage of total assets was 9.4% at March
31, 1998, compared to 9.2% at December 31, 1997. The risk-based Tier I and Tier
II capital ratios and the leverage ratio of Citizens National Bank amounted to
23.9%, 25.0%, and 9.1%, respectively at March 31, 1998 compared to 23.7%, 24.7%,
and 9.1%, respectively, at December 31, 1997. At March 31, 1998, First State
Bank had Tier I and Tier II capital ratios and a leverage ratio of 24.4%, 24.9%,
and 9.2%, respectively, compared to 27.5%, 28.0%, and 9.1%, respectively at
December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At March 31 1998, the Company's cash and cash equivalents of $27,889,000
increased from the December 31, 1997 amount of $22,138,000. The Company's
stockholders' equity of $33,809,000 remains at a level considered to be adequate
by management. Profits in excess of dividends paid to shareholders are
reflected in the increase in undivided profits from 1997.
9
<PAGE>
ALLOWANCE FOR LOAN LOSSES
- -------------------------
The allowance for loan losses at March 31, 1998 and December 31, 1997 was 1.25%
and 1.16% of outstanding loans, respectively. By its nature, the process through
which management determines the appropriate level of the allowance requires
considerable judgment. The determination of the necessary allowance, and
correspondingly the provision for loan losses, involves assumptions about
projections of national and local economic conditions, the composition of the
loan portfolio, and prior loss experience, in addition to other considerations.
As a result, no assurance can be given that future losses will not vary from the
current estimates. However, management believes that the allowance at March 31,
1998 is adequate to cover losses inherent in its loan portfolio. A migration
analysis and an internal classification system for loans also helps identify
potential problems, if any, that are not identified otherwise. From these
analyses, management determines which loans are potential candidates for
nonaccrual status, including impaired loan status, or charge-off. Management
continually reviews loans and classifies them consistent with the Comptroller's
guidelines to help ensure that an adequate allowance is maintained.
The allocation of the allowance for loan losses is based upon the inherent risks
in the various components of the loan portfolio. Amounts allocated to each
component are determined based on management's evaluations of concentrations of
credit risks, current and anticipated economic conditions, historical analyses,
and classification and estimated loss exposure assigned to specific credits.
These reserve allocations are subject to change as various economic conditions
dictate. The following table is an analysis of the Allowance for Loan Losses.
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
1998 1997
--------------- --------------
<S> <C> <C>
Balance at beginning of period $ 1,249 1,146
Charge-offs:
Commercial, financial, and agricultural 1 55
Real estate-mortgage -- 1
Installment loans to individuals 30 87
--------------- --------------
31 143
Recoveries:
Commercial, financial, and agricultural 29 3
Installment loans to individuals 22 12
51 15
--------------- --------------
Net charge-offs (recoveries) (20) 128
--------------- --------------
Additions charged to operations 129 87
--------------- --------------
Balance at end of period $ 1,398 1,105
=============== ==============
Ratio of net charge-offs during the period to average
Loans outstanding during the period (.02%) .13%
=============== ==============
</TABLE>
10
<PAGE>
NON ACCRUAL, PAST DUE AND RESTRUCTURED LOANS
- --------------------------------------------
The Company's policy is to discontinue the accrual of interest income on loans
whenever it is determined that reasonable doubt exists with respect to timely
collectibility of interest and principal. Loans are placed on nonaccrual status
if either material deterioration occurs in the financial position of the
borrower, payment in full of interest or principal is not anticipated, payment
in full of interest or principal is past due 90 days or more unless well
secured, payment in full of interest or principal on a loan is past due 180 days
or more, regardless of collateral, or the loan in whole or in part is classified
as doubtful. A loan may remain on accrual status if it is in the process of
collection and is either guaranteed or well secured. When a loan is placed on
nonaccrual status, interest is no longer accrued or included in interest income
and previously accrued income is reversed.
The following is a summary of the Company's problem loans as of March 31, 1998
and 1997.
At March 31,
1998 1997
-------------- --------------
(dollars in thousands)
Nonaccrual loans $ 167 152
Restructured loans -- --
Other impaired loans -- --
Other real estate 185 151
-------------- --------------
Total nonperforming loans 352 303
============== ==============
Loans past due 90+ days and still accruing 47 60
============== ==============
Other potential problem loans -- --
============== ==============
Income that would have been recorded in
accordance with original terms 2 3
Less income actually recorded -- --
-------------- --------------
Loss of income $ 2 3
============== ==============
CONCENTRATION OF CREDIT RISK
- ----------------------------
The Company grants real estate, commercial, and industrial loans to customers
primarily in Henderson, Texas, and surrounding areas of east Texas. Although the
Company has a diversified loan portfolio, a substantial portion (approximately
47.5% at March 31, 1998) of its loans are secured by real estate and its ability
to fully collect its loans is dependent upon the real estate market in this
region. The Company typically requires collateral sufficient in value to cover
the principal amount of the loan. Such collateral is evidenced by mortgages on
property held and readily accessible to the Company. See additional information
related to the composition of the Company's loan portfolio included in note 3 to
the consolidated financial statements.
CORPORATE OBJECTIVES
- --------------------
It is the philosophy of the Company to continue to remain independent in
ownership, to foster its image as the community leader in banking, to increase
its market share through selected acquisitions and aggressive marketing, to
maintain a sound earning-asset portfolio, and to assess liquidity needs while
maximizing its profitability and return to its shareholders.
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the information related to the market
risk of the Company since December 31, 1997.
11
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On April 14, 1998, the Company held its annual meeting of shareholders. At
the meeting, the following directors were elected for a term of one year:
E. Landon Alford James M. Kangerga
R. Max Ballenger J. Mark Mann
Stayton M. Bonner Milton S. McGee, Jr.
David J. Burks Charles H. Richardson
Billy Crawford Tony Wooster
Sheila Gresham Alfred Wylie
The ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company was also voted upon.
Item 5. Other Information
None
Item 6. Exhibits and Reports on form 8-K.
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HENDERSON CITIZENS BANCSHARES, INC.
Date: May 11, 1998 By: /s/ Milton S. McGee, Jr.
------------------- ----------------------------
Milton S. McGee, Jr., CPA
President
Date: May 11, 1998 By: /s/ Rebecca G. Tanner
------------------- ----------------------------
Rebecca G. Tanner, CPA
Chief Accounting Officer
13
<TABLE> <S> <C>
<PAGE>
<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> 6,632
<INT-BEARING-DEPOSITS> 16,167
<FED-FUNDS-SOLD> 5,090
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 147,276
<INVESTMENTS-CARRYING> 62,882
<INVESTMENTS-MARKET> 63,393
<LOANS> 111,227
<ALLOWANCE> 1,398
<TOTAL-ASSETS> 359,565
<DEPOSITS> 323,413
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,343
<LONG-TERM> 0
0
0
<COMMON> 10,800
<OTHER-SE> 25,020
<TOTAL-LIABILITIES-AND-EQUITY> 359,565
<INTEREST-LOAN> 2,276
<INTEREST-INVEST> 3,367
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 5,643
<INTEREST-DEPOSIT> 2,919
<INTEREST-EXPENSE> 2,926
<INTEREST-INCOME-NET> 2,717
<LOAN-LOSSES> 129
<SECURITIES-GAINS> 26
<EXPENSE-OTHER> 2,406
<INCOME-PRETAX> 1,172
<INCOME-PRE-EXTRAORDINARY> 1,172
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 907
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.45
<YIELD-ACTUAL> 0
<LOANS-NON> 167
<LOANS-PAST> 47
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,249
<CHARGE-OFFS> 31
<RECOVERIES> 51
<ALLOWANCE-CLOSE> 1,398
<ALLOWANCE-DOMESTIC> 1,398
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
