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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the quarterly period ended September 30, 1997 or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the transition period from to
Commission file number 0-27590
SECURITY BANK HOLDING COMPANY
(Exact name of small business issuer as specified in its charter)
Oregon 93-0800253
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
170 S. Second St., Coos Bay, Oregon 97420
(Address of Principal Executive Offices) (Zip Code)
(541) 267-5356
(Issuer's telephone number)
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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at October 29, 1997
Common Stock, $5.00 par value 3,180,800
Transitional Small Business Disclosure Format (check one): YES NO X
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
SECURITY BANK HOLDING COMPANY & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
Sept. 30, 1997 Dec. 31, 1996
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $7,487 $8,437
Federal funds sold 29,137 --
Total cash and cash equivalents 36,624 8,437
Time deposits - domestic financial institutions -- 270
Investment securities available for sale 64,975 77,416
Loans, net 102,197 88,754
Mortgage loans held for sale, at cost which approximates market 1,729 2,184
Net investment in direct financing leases 3,241 3,002
Premises and equipment, net 5,871 5,122
Federal Home Loan Bank stock, at cost 2,741 2,169
Other assets 3,608 4,070
Total assets $220,986 $191,424
LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Demand $27,046 $20,954
Interest bearing demand 4,116 3,854
NOW accounts 27,348 23,986
Money market accounts 24,113 19,903
Savings accounts 15,070 14,709
Time deposit 67,746 65,188
Total deposits 165,439 148,594
Securities sold under agreements to repurchase 7,101 4,562
Short term borrowings 613 578
Federal Home Loan Bank borrowings 25,439 17,028
Other liabilities 1,613 1,178
Total liabilities 200,205 171,940
Minority interest in subsidiary 921 938
Shareholders' equity:
Nonvoting preferred stock, $5 par value.
Authorized 5,000,000 shares; none issued -- --
Voting preferred stock, $5 par value.
Authorized 5,000,000 shares; none issued -- --
Common stock, $5 par value.
Authorized 10,000,000 shares - issued and outstanding
3,180,791 shares in 1997 (3,164,860 shares in 1996) 15,904 15,825
Surplus 1,215 1,041
Retained earnings 4,028 3,295
Unearned ESOP shares at cost (1,622) (1,728)
Unrealized gain on investment securities available for sale, net of tax 335 113
Total shareholders' equity 19,860 18,546
Total liabilities, minority interest and shareholders' equity $220,986 $191,424
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
SECURITY BANK HOLDING COMPANY & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Interest on loans $2,615 $2,181 $7,341 $6,272
Interest and dividends on securities:
Taxable 1,002 946 3,132 2,435
Exempt from Federal income tax 262 238 743 748
Interest on time deposits-domestic financial institutions -- 6 5 18
Dividend income on Federal Home Loan Bank stock 61 43 150 110
Interest on Federal funds sold 167 14 193 93
Income on direct financing leases 75 83 219 252
Total interest income 4,182 3,511 11,783 9,928
Interest expense:
Deposits
Interest bearing demand 32 26 91 73
NOW 71 58 201 168
Money market 213 160 599 449
Savings 99 99 276 291
Time 890 796 2,596 2,275
Securities sold under agreements to repurchase 76 49 204 129
ESOP debt -- 13 -- 40
Short term borrowings 5 5 17 16
Federal Home Loan Bank borrowings 434 244 1,113 635
Total interest expense 1,820 1,450 5,097 4,076
Net interest income 2,362 2,061 6,686 5,852
Provision for loan losses 24 55 190 145
Net interest income after provision for loan losses 2,338 2,006 6,496 5,707
Other income:
Service charges on deposit accounts 229 241 715 682
Gain(loss) on sale/call of investments available for sale, net 186 - 188 18
Loan servicing fees 60 84 187 245
Sold real estate loan fees 385 256 972 741
Other 178 134 535 386
Total other income 1,038 715 2,597 2,072
Other expense:
Salaries and employee benefits 1,260 1,123 3,777 3,212
Occupancy of bank premises 126 113 369 321
Furniture and equipment 214 157 645 500
Professional fees 272 97 516 343
FDIC assessment 5 1 13 3
Supplies 58 64 218 181
Other 771 519 1,662 1,476
Total other expense 2,706 2,074 7,200 6,036
Income before provision for income taxes 670 647 1,893 1,743
Provision for income taxes 194 160 580 440
Net income before minority interest 476 487 1,313 1,303
Net (income) loss attributable to minority interest - 16 17 24
Net income $475 $503 $1,330 $1,327
Net income per share $.18 $.22 $.50 $.59
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
SECURITY BANK HOLDING COMPANY & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months ended September 30,
1997 1996
<S> <C> <C>
Cash flows provided by operating activities:
Net income $1,330
$1,327
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 456 422
Provision for loan losses 190 145
Origination of mortgage loans held for sale (38,249) (42,536)
Proceeds from mortgage loans sold 38,704 42,220
Net loss on sale of fixed assets -- 9
Net gain on call of investment securities available for sale (3) --
Net gain on sale of investment securities available for sale (185) (18)
Federal Home Loan Bank stock dividend (150) (109)
ESOP related compensation expense 296 437
(Increase)decrease in other assets 462 (1,113)
(Decrease)increase in other liabilities 300 745
Net cash provided by operating activities 3,151 1,529
Cash flows from investing activities:
Net decrease in time deposits-domestic financial institutions 270 180
Purchase of investment securities available for sale (21,733) (35,258)
Proceeds from sale of investment securities available for sale 22,506 10,185
Proceeds from maturities/call of investment securities a.f.s. 12,222 6,913
Net loan originations (12,327) (9,562)
Purchase of participations (1,306) (178)
Additions to premises and equipment (1,216) (375)
Purchase of Federal Home Loan Bank stock (3,192) (1,547)
Redemption of Federal Home Loan Bank stock 2,770 935
Proceeds from sale of premises and equipment 2 27
Originations of direct financing leases (1,240) (634)
Gross payments on direct financing leases 1,001 644
Minority interest in subsidiary (17) 961
Net cash used in investing activities (2,260) (27,709)
Cash flows from financing activities:
Net increase in deposits 16,845 18,373
Increase in securities sold with agreements to repurchase 2,539 964
Increase of Federal Home Loan Bank borrowings 8,411 5,885
Proceeds from issuance of common stock 63 2,753
Payment of dividends (597) (449)
Other 35 76
Net cash provided by financing activities 27,296 27,602
Net increase in cash and cash equivalents 28,187 1,422
Cash and cash equivalents at beginning of period 8,437 8,097
Cash and cash equivalents at end of period $36,624 $9,519
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $5,080 $3,969
Income taxes $591 $288
Supplemental disclosures of investing activities:
Unrealized gain(loss) on investment
securities available for sale, net of tax $222 $(1,008)
Loans transferred to other real estate owned $-- $--
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
SECURITY BANK HOLDING COMPANY & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) Summary of Significant Accounting Policies
(a) Basis of Financial Statement Preparation
The accompanying consolidated financial statements have been prepared by the
Company without audit and in conformity with generally accepted accounting
principles for interim financial information. Accordingly, certain financial
information and footnotes have been omitted or condensed. In the opinion of
management, the consolidated financial statements include all necessary
adjustments (which are of a normal and recurring nature) for the fair
presentation of the results of the interim periods presented. These financial
statements should be read in conjunction with the Company's audited consolidated
financial statements for the year ended December 31, 1996. The results of
operations for the interim period shown in this report are not necessarily
indicative of results for any future interim period or the entire fiscal year.
(b) Net Income Per Share
Net income per share is based on the weighted average number of common and
dilutive common equivalent shares outstanding during the period. Common
equivalent shares consist of the shares issuable upon the exercise of stock
options (using the treasury stock method). For the period ended September 30,
1997 and 1996, the weighted average number of common shares outstanding did not
include 455,824 and 522,471 shares respectively, held by the Company's Employee
Stock Ownership Plan as these shares have not been allocated to participant
accounts nor have they been committed to be released. The weighted average
number of common shares outstanding were 2,715,491 and 2,240,641 at September
30, 1997 and 1996, respectively.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time the Company will be required to change the method currently used to
compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. The impact of Statement 128 on the calculation
of primary and fully diluted earnings per share for the nine months ended
September 30, 1997 and September 30, 1996 is not material.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the Quarter ending September 30, 1997 and 1996
General. Net income decreased to $475,000 for the three months ended September
30, 1997 from $503,000 for the same period of 1996, a 5.6% decrease. The
decrease in net income is mostly attributable to an increase in other expenses
incurred in conjunction with the Company's expansion strategy.
Net Interest Income. Net interest income before the provision for loan losses
increased $301,000 or 14.6% for the three months ended September 30, 1997 over
the same period in 1996. The increase in interest income was primarily due to
$33.3 million or 19.9% increase in average interest-earning assets for the three
months ended September 30, 1997 over the same period in 1996. The increase in
average interest-earning assets was mostly attributable to an increase in loan
volume of $18.0 million, which accounted for $520,000 of the total increase in
interest income, and an increase in federal funds sold volume of $10.7 million,
which accounted for $97,000 of the total increase in interest income. Average
interest-bearing liabilities increased $32.1 million or 19.9% for the three
months ended September 30, 1997, compared to the same period in 1996. The
volume increase accounted for $358,000 of the total increase in interest
expense.
Provision for Loan Losses. The loan loss provision during the three month
period ended September 30, 1997, was $24,000 and $55,000 for the same period
in 1996. Net charge-offs during the three month periods were $14,000 and
$31,000 for 1997 and 1996, respectively.
Management believes the loan loss provision maintains the reserve for loan
losses at an appropriate level. The reserve for loan losses was $1,181,000 at
September 30, 1997, as compared to $1,083,000 at September 30, 1996. The
Company's ratio of reserve for loan losses to total loans was 1.09% at September
30, 1997, compared to 1.15% at September 30, 1996.
Non-performing assets (defined as loans on non-accrual status, 90 days or more
past due, and other real estate owned) were $920,000 and $338,000 at September
30, 1997 and 1996, respectively. Management believes the loans are adequately
secured and that no significant losses will be incurred.
Other Income. Other income increased 45.2% to $1,038,000 for the three months
ended September 30, 1997 as compared to $715,000 for the same period in 1996.
The increase in other income is due primarily to an increase in gain on sale of
investments available for sale, resulting from the restructuring of the
Company's investment portfolio based on its interest rate risk strategy and
liquidity needs. The increase in other income is also due in part to an
increase in sold real estate loan fees, resulting from favorable market factors
and expansion of Security Mortgage Company. Loan servicing fees have decreased
approximately $24,000 from the third quarter of 1996, resulting from a sale of
the servicing portfolio in November 1996.
Other Expense. Other expense increased 30.5% to $2,706,000 for the three
months ended September 30, 1997 compared to $2,074,000 for the same period in
1996. Two non-recurring items contributed to the bulk of this increase in other
expense: (1) professional fees incurred as a result of the pending acquisition
of Pacific State Bank and (2) the substantial addition of a contingency reserve.
This reserve of $324,000 was established in the event that a Private Letter
Ruling requested from the IRS for the refinancing the company's leveraged ESOP
is unfavorable (as discussed in more detail in the next paragraph). The primary
other expenses are salaries and the related employee benefits, and expenses
relating to occupancy and equipment. Salaries and employee benefits were up due
to increased staff levels and approximately $104,000 in additional operating
expenses associated with Lincoln Security Bank, which commenced operations in
May 1996.
Compensation expense associated with the Employee Stock Ownership Plan (ESOP), a
leveraged employee-retirement benefit plan which owns approximately 30.7% of the
common stock of the Company, has been adjusted in anticipation of a
<PAGE>
restructuring of the related ESOP debt in fiscal 1997. The net result of this
adjustment is approximately $53,000 in lower compensation expense for the three
months ended September 30, 1997 as compared to the same period in 1996. ESOP
compensation expense is based upon the number of shares of stock released during
the year at the average share price during the year. Given the recent increase
in share price of the Company's stock, and given the planned retirement benefit
levels provided to the employees of the Company, the Company is in the process
of restructuring the related ESOP debt, which determines the total number of
shares released during the year. It is anticipated the ESOP debt will be
extended past its present maturity, thereby reducing ESOP related compensation
expense recorded by the Company. The Company is currently in the process of
requesting a Private Letter Ruling (PLR) from the Internal Revenue Service.
Recently issued PLR's suggest the Company will be able to restructure the ESOP
debt. However, there can be no assurance the restructuring will be successful
at this time. Based on the original debt structure, and given the recent
increase in the price of the Company's common stock, compensation expense for
the third quarter of 1997 would have been approximately $116,000 higher, for a
total of $186,000, compared to $123,000 for the third quarter of 1996.
For the nine months ending September 30, 1997 and 1996
General. Net income increased to $1,330,000 for the nine months ended
September 30, 1997 from $1,327,000 for the same period of 1996, a 0.2% increase.
The increase in both interest expense and other expense were offset by increases
in interest income and other income. The increase in net income is mostly
attributable to an increase in net earning assets over the same period in 1996.
Net Interest Income. Net interest income before the provision for loan losses
increased $834,000 or 14.3% for the nine months ended September 30, 1997 over
the same period in 1996. The increase in interest income was primarily due to
$32.3 million or 20.4% increase in average interest-earning assets for the nine
months ended September 30, 1997 over the same period in 1996. The increase in
average interest-earning assets was mostly attributable to an increase in loan
volume of $16.6 million, which accounted for $1,241,000 of the total increase in
interest income, and an increase in investment securities volume of $13.0
million, which accounted for $629,000 of the total increase in interest income.
Average interest-bearing liabilities increased $27.5 million or 18.0% for the
nine months ended September 30, 1997, compared to the same period in 1996. The
volume increase accounted for $1,027,000 of the total increase in interest
expense.
Provision for Loan Losses. The loan loss provision during the nine month
period ended September 30, 1997, was $190,000 and $145,000 for the same period
in 1996. Net charge-offs during the nine month periods were $128,000 and
$125,000 for 1997 and 1996, respectively. The increase in loan loss provision
includes $75,500 for Lincoln Security Bank, which commenced operations in May,
1996.
Other Income. Other income increased 25.3% to $2,597,000 for the nine months
ended September 30, 1997 as compared to $2,072,000 for the same period in 1996.
The increase in other income is due primarily to an increase in sold real estate
loan fees, resulting from favorable market factors and expansion of Security
Mortgage Company. The increase in other income is also due in part to an
increase in gain on sale of investments available for sale, resulting from the
restructuring of the Company's investment portfolio based on its interest rate
risk strategy and liquidity needs. Loan servicing fees have decreased
approximately $58,000 from the first nine months of 1996, resulting from a sale
of the servicing portfolio in November 1996.
Other Expense. Other expense increased 19.3% to $7,200,000 for the nine months
ended September 30, 1997 compared to $6,036,000 for the same period in 1996.
The primary other expenses are salaries and the related employee benefits, and
expenses relating to occupancy and equipment. Salaries and employee benefits
were up due to increased staff levels and approximately $493,000 in additional
operating expenses associated with Lincoln Security Bank, which, as discussed
previously, commenced operations in May 1996. Two non-recurring items also
contributed to the increase in other expense: (1) professional fees incurred as
a result of the pending acquisition of Pacific State Bank and (2) the
substantial addition of a contingency reserve. This reserve of $324,000 was
established in the event that a Private Letter Ruling requested from the IRS for
the refinancing the company's leveraged ESOP is unfavorable (as discussed in
more detail in the next paragraph).
<PAGE>
Compensation expense associated with the Employee Stock Ownership Plan (ESOP), a
leveraged employee-retirement benefit plan which owns approximately 30.7% of the
common stock of the Company, has been adjusted in anticipation of a
restructuring of the related ESOP debt in fiscal 1997. The net result of this
adjustment is approximately $158,000 in lower compensation expense for the nine
months ended September 30, 1997 as compared to the same period in 1996. ESOP
compensation expense is based upon the number of shares of stock released during
the year at the average share price during the year. Given the recent increase
in share price of the Company's stock, and given the planned retirement benefit
levels provided to the employees of the Company, the Company is in the process
of restructuring the related ESOP debt, which determines the total number of
shares released during the year. It is anticipated the ESOP debt will be
extended past its present maturity, thereby reducing ESOP related compensation
expense recorded by the Company. The process of restructuring the ESOP debt
will involve obtaining a Private Letter Ruling (PLR) from the Internal Revenue
Service. Recently issued PLR's suggest the Company will be able to restructure
the ESOP debt. However, there can be no assurance the restructuring will be
successful at this time. Based on the original debt structure, and given the
recent increase in the price of the Company's common stock, compensation expense
for the first nine months of 1997 would have been approximately $347,000 higher,
for a total of $557,000, compared to $368,000 for the first nine months of 1996.
Financial Condition
Total assets have continued to grow in 1997 as compared to the prior periods.
Total assets have grown 15% to $221.0 million at September 30, 1997, compared to
$191.4 million at December 31, 1996. The growth in assets in 1997 was primarily
the result of loan demand, as the southern Oregon coast's growth and economic
factors continue to be favorable. The ratio of gross loans and leases to
deposits increased to 65% at September 30, 1997, compared to 64% at December 31,
1996. Lincoln Security Bank, opened in May 1996 in Newport, Oregon, had total
assets of $23.6 million and total deposits of $20.6 million as of September 30,
1997.
The growth in interest-earning assets has been predominantly in loans and
federal funds sold. Net loans, mortgage loans held for sale and leases
increased $13.2 million from December 31, 1996, to September 30, 1997.
Investment securities decreased $12.4 million as of September 30, 1997 due to
Security Bank's restructure of their investment portfolio in response to
interest rate risk strategy and liquidity needs. The funds derived from the
restructure of investment securities were temporarily invested in federal funds
sold, reflecting short term (over-night) investments which increased $29.1
million from December 31, 1996 to September 30, 1997. Management intends to
reinvest the majority of federal funds sold in investment securities available
for sale. The level of federal funds sold fluctuates daily relative to loan
demand, deposit fluctuations and investment activity, and provides a source of
liquidity for the Company.
Deposit growth continued for the nine months ended September 30, 1997. Total
deposits increased $16.8 million to $165.4 million at September 30, 1997,
compared to $148.6 million at December 31, 1996. The growth in 1997 has been
predominantly in interest-bearing deposits. The ratio of interest-bearing
deposits to total deposits decreased slightly from 85.9% at December 31, 1996,
to 83.7% at September 30, 1997.
Security Bank and Lincoln Security Bank are members of the Federal Home Loan
Bank of Seattle. This membership allows the Banks access to low cost, long-term
funding otherwise unavailable. Security Bank has utilized this funding, and in
1996 borrowed $5.5 million to support loan and investment growth. In the nine
months ended September 30, 1997, Security Bank has borrowed an additional $8.4
million, leaving the balance at $25.4 million as of September 30, 1997.
Liquidity
Liquidity enables the Company to meet the withdrawals of its depositors and the
borrowing needs of its loan customers. The Company maintains its liquidity
position through maintenance of cash resources and a stable core deposit base.
A further source of liquidity is the Company's ability to borrow funds. The
Company maintains three unsecured lines of credit totaling $11.0 million for the
purchase of funds on an overnight basis. As discussed above, Security Bank and
Lincoln Security are also a members of the Federal Home loan Bank which provides
a secured line of credit in the amount of $51.3 million (25% of total assets),
and other funding opportunities for liquidity and asset/liability matching.
Over the past four years these lines have been used periodically. As of
September 30, 1997 no funds were borrowed under the Company's unsecured lines of
<PAGE>
credit and $25.4 million were borrowed from the Federal Home Loan Bank.
Interest rates charged on the lines are determined by market factors. In
addition, the Company has approximately $34 million in repurchase agreement
availability. The Company's liquidity has been stable and adequate over the
past four years. Short-term deposits have continued to grow and excess
investable cash is loaned on a short term basis (federal funds sold). The
Company's primary source of funds is consumer deposits and commercial accounts.
These funds are not subject to significant movements as a result of changing
interest rates and other economic factors, and therefore enhance the Company's
long term liquidity.
Capital Resources
Beginning in 1990, federal regulators required the calculation of Risk-based
Capital. This is an analysis that weights balance sheet and off-balance sheet
items for their inherent risk. It requires minimum standards for Risk-based
Capital by Capital Tier. Full implementation of this analysis was required in
1992, requiring a minimum total Risk-based Capital ratio of 8.00%, a minimum
Tier 1 Capital Ratio of 4.00% and a minimum Leverage Capital Ratio of 3%. At
September 30, 1997, the Company's estimated regulatory capital ratios were as
follows: Total Risk-based Capital Ratio of 15.30%, Tier 1 Capital Ratio of
14.45% and Leverage Capital Ratio of 9.24%. This was compared to 17.02%, 16.07%
and 10.87% for total Risk-based Capital Ratio, Tier 1 Capital Ratio and Leverage
Capital Ratio, respectively, at December 31, 1996. If the Company were fully
leveraged, further growth would be restricted to the level attainable through
generation and retention of net income unless the Company were to seek
additional capital from outside sources.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
The following exhibit is being filed herewith:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
Press release announcing the filing of the registration statement
covering shares of the
registrant's common stock to be issued in connection with the
previously announced acquisition of Pacific State Bank
No financial statements filed
Form 8-K dated August 11, 1997
<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.
DATED: October 30, 1997.
SECURITY BANK HOLDING COMPANY
By: /s/ Charles D. Brummel
Charles D. Brummel
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS OF THE
COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 7487
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 29137
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 64975
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 103926
<ALLOWANCE> 1181
<TOTAL-ASSETS> 220986
<DEPOSITS> 165439
<SHORT-TERM> 33153
<LIABILITIES-OTHER> 1613
<LONG-TERM> 0
0
0
<COMMON> 15904
<OTHER-SE> 3956
<TOTAL-LIABILITIES-AND-EQUITY> 220986
<INTEREST-LOAN> 7341
<INTEREST-INVEST> 3875
<INTEREST-OTHER> 567
<INTEREST-TOTAL> 11783
<INTEREST-DEPOSIT> 3763
<INTEREST-EXPENSE> 5097
<INTEREST-INCOME-NET> 6686
<LOAN-LOSSES> 190
<SECURITIES-GAINS> 188
<EXPENSE-OTHER> 7200
<INCOME-PRETAX> 1893
<INCOME-PRE-EXTRAORDINARY> 1330
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1330
<EPS-PRIMARY> .50
<EPS-DILUTED> .50
<YIELD-ACTUAL> 4.55
<LOANS-NON> 873
<LOANS-PAST> 47
<LOANS-TROUBLED> 0<F1>
<LOANS-PROBLEM> 0<F1>
<ALLOWANCE-OPEN> 1119
<CHARGE-OFFS> 227
<RECOVERIES> 99
<ALLOWANCE-CLOSE> 1181
<ALLOWANCE-DOMESTIC> 0<F1>
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0<F1>
<FN>
<F1>THESE ITEMS NOT REQUIRED BY REGULATION SB.
</FN>
</TABLE>
