<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1998
- ----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------- -------------------
Commission file number: 33-43317
--------
EASTON BANCORP, INC.
----------------------
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
Maryland 52-1745344
---------------------- ----------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
</TABLE>
501 Idlewild Avenue, Easton, Maryland 21601
-------------------------------------------
(Address of principal executive offices)
(410) 819-0300
---------------
(Issuer's telephone number)
Not Applicable
----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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:
On August 3, 1998, 560,318 shares of the issuer's common stock, par value
$.10 per share, were issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------ ------------
ASSETS
<S> <C> <C>
Cash and due from banks $ 1,770,250 $ 642,726
Federal funds sold 5,453,654 3,739,622
Investment in Federal Home Loan Bank stock 145,600 124,500
Investment securities held-to-maturity (market
value of $1,249,890 and $1,502,794, respectively) 1,250,081 1,500,000
Investment securities available-for-sale 1,447,157 -
Loans, less allowance for credit losses of
$418,000 and $378,000, respectively 33,751,250 34,682,279
Premises and equipment, net 1,671,307 1,713,683
Intangible assets, net - 30,261
Accrued interest receivable 246,125 248,303
Other assets 44,392 58,323
------------ ------------
Total assets $ 45,779,816 $ 42,739,697
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 2,640,429 $ 2,060,848
Interest-bearing 37,490,703 36,027,304
------------ ------------
Total deposits 40,131,132 38,088,152
Accrued interest payable 99,559 99,980
Securities sold under agreements to repurchase 461,851 481,490
Federal Home Loan Bank borrowings 1,000,000 -
Other liabilities 29,638 57,363
------------ ------------
Total liabilities 41,722,180 38,726,985
------------ ------------
Stockholders' equity
Common stock, par value $.10 per share;
authorized 5,000,000 shares, 560,318 and 559,328
shares issued and outstanding, respectively 56,032 55,933
Additional paid-in-capital 5,227,487 5,217,686
Retained earnings (deficit) (1,224,290) (1,260,907)
Unrealized gain/(loss) net - AFS investments (1,593) -
------------ ------------
Total stockholders' equity 4,057,636 4,012,712
------------ ------------
Total liabilities and stockholders' equity $ 45,779,816 $ 42,739,697
============ ============
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
1
<PAGE> 3
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------------
1998 1997 1998 1997
-------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Interest revenue
Loans, including fees $761,797 $722,032 $ 1,514,205 $ 1,408,710
Investment securities 28,907 20,778 53,459 39,857
Federal funds sold 67,043 58,020 119,743 106,413
-------- -------- ------------ ------------
Total interest revenue 857,747 800,830 1,687,407 1,554,980
Interest expense 461,264 401,518 909,319 780,810
-------- -------- ------------ ------------
Net interest income 396,483 399,312 778,088 774,170
Provision for loan losses 34,812 19,608 71,345 41,466
-------- -------- ------------ ------------
Net interest income after
provision for loan losses 361,671 379,704 706,743 732,704
-------- -------- ------------ ------------
Other operating revenue 33,854 22,375 60,615 49,516
-------- -------- ------------ ------------
Other expenses
Salaries and benefits 216,809 175,217 421,127 349,403
Occupancy 14,884 19,183 28,405 37,727
Furniture and equipment 24,486 23,629 49,387 48,004
Other operating 130,328 120,683 231,822 219,963
-------- -------- ------------ ------------
Total operating expenses 386,507 338,712 730,741 655,097
-------- -------- ------------ ------------
Net income before income taxes 9,018 63,367 36,617 127,123
Income taxes - - - -
-------- -------- ------------ ------------
Net income $ 9,018 $ 63,367 $ 36,617 $ 127,123
======== ======== ============ ============
Earnings per common share - basic $ .02 $ .11 $ .07 $ .23
======== ======== ============ ============
Earnings per common share - diluted $ .01 $ .10 $ .06 $ .21
======== ======== ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE> 4
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 1,672,106 $ 1,519,936
Other revenue received 61,648 49,736
Cash paid for operating expenses (661,378) (687,913)
Interest paid (909,740) (780,235)
----------- -----------
162,636 101,524
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for premises, equipment and software (11,553) (142,211)
Net loans to customers 877,193 (1,266,329)
Loan participations sold - 359,766
Proceeds from sales/maturities of investments 500,000 500,000
Purchase of investment securities (1,719,961) (502,900)
----------- -----------
(354,321) (1,051,674)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in time deposits 1,438,640 1,663,674
Net increase in other deposits 604,340 1,220,969
Net decrease in securities sold under agreements
to repurchase (19,639) (123,389)
Proceeds from long term borrowings 1,000,000 -
Proceeds from exercise of stock options 9,900 -
----------- -----------
3,033,241 2,761,254
----------- -----------
NET INCREASE (DECREASE) IN CASH 2,841,556 1,811,104
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,382,348 4,035,909
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,223,904 $ 5,847,013
=========== ===========
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED (USED)
FROM OPERATING ACTIVITIES
Net income $ 36,617 $ 127,123
Adjustments to reconcile net income to net cash
provided (used) from operating activities:
Depreciation and amortization 81,719 76,461
Provision for loan losses 71,345 41,466
Decrease (increase) in accrued interest receivable
and other assets 18,580 (30,279)
Increase (decrease) in operating accounts payable and
other liabilities (28,146) (112,469)
Deferred loan origination fees (17,509) (778)
Investment amortization, net of accretion 30 -
----------- -----------
$ 162,636 $ 101,524
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 5
Notes to Consolidated Financial Statements:
1. Basis of Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B of the Securities and Exchange Commission. Accordingly, they
do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. 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
six months ended June 30, 1998, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1998. For further
information, refer to the consolidated financial statements and footnotes
thereto for the Company's fiscal year ended December 31, 1997, included in the
Company's Form 10-KSB for the year ended December 31, 1997.
2. Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, unrestricted amounts due from banks, overnight investments in
repurchase agreements, and federal funds sold.
3. Adoption of New Accounting Principles
During the fourth quarter of 1997, the Company adopted Financial
Accounting Standards Board Statement No. 128, "Earnings Per Share." SFAS 128
replaces the presentation of primary earnings per share with a presentation of
basic earnings per share and it requires a dual presentation of basic and
diluted earnings per share on the face of the income statement. SFAS 128 was
effective for financial statements issued for periods ending after December 15,
1997. The adoption of this pronouncement by the Company in 1997 has resulted in
the recalculation and restatement, where necessary, of the Company's prior
period earnings per share disclosures.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS No.
130 requires the reporting of comprehensive income which includes unrealized
gains and losses not recognized in net income. Unrealized gains and losses on
available-for-sale securities which have been reported as a separate component
of stockholders' equity are included in comprehensive income. The adoption of
SFAS No. 130 had no impact on the Company's net income or stockholders' equity.
For the six months ended June 30, 1998 and 1997, total comprehensive income, net
of taxes, was $35,024 and $127,123, respectively.
4
<PAGE> 6
This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements appear in a
number of places in this Report and include all statements regarding the intent,
belief or current expectations of the Company, its directors or its officers
with respect to, among other things: (i) the Company's financing plans; (ii)
trends affecting the Company's financial condition or results of operations;
(iii) the Company's growth strategy and operating strategy; and (iv) the
declaration and payment of dividends. Investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various factors
discussed herein and those factors discussed in detail in the Company's filings
with the Securities and Exchange Commission.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Easton Bancorp, Inc. (the "Company") was incorporated in Maryland on
July 19, 1991, primarily to own and control all of the capital stock of Easton
Bank & Trust Company (the "Bank") upon its formation. The Bank commenced
business on July 1, 1993, and the only activity of the Company since then has
been the ownership and operation of the Bank. The Bank conducts a general
commercial banking business in its service area, emphasizing the banking needs
of individuals and small- to medium-sized businesses and professional concerns.
The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
financial statements and related notes and other statistical information
included elsewhere herein.
Results of Operations
Net income for the Company for the three months ended June 30, 1998,
was $9,018, compared to $63,367 during the corresponding period of 1997. Net
income for the six months ended June 30, 1998, was $36,617, compared to $127,123
for the corresponding period of 1997. The decrease in earnings can be attributed
primarily to an increase in noninterest expenses which have grown as the Bank
has expanded, and the retarded growth in net interest income which was the
result of placing one loan in the amount of $2.3 million on non-accrual status
as of March 31, 1998. Lost interest on this nonperforming asset totals
approximately $19,500 each month. The loan is fully secured by real estate and
is guaranteed by the U.S. Department of Agriculture Rural Community &
Development Program. The U.S. Government is responsible for 80% of any
deficiency after liquidation of the collateral. Collection efforts on this loan
are progressing in conjunction with the U.S. Government Agency. Management
estimates that the Bank's risk of loss on this loan is approximately $116,000.
The Bank's loan portfolio decreased from $34.7 million at December 31,
1997, to $33.8 million at June 30, 1998. The Bank's provision for loan losses
was $34,812 for the quarter ended June 30, 1998, and $71,345 for the six months
ended June 30, 1998, compared to $19,608 for the quarter ended June 30, 1997,
and $41,466 for the six months ended June 30, 1997. The allowance for loan
losses was $418,000 at June 30, 1998, or 1.22% of total loans, compared to
$387,400 at March 31, 1998, or 1.11% of total loans, and $378,000 at December
31, 1997, or 1.08% of total loans. The level of the allowance for loan losses
represents management's current estimate of future losses in the loan portfolio;
however, there can be no assurance that loan losses in future periods will not
exceed the allowance for loan losses or that additional increases in the
allowance will not be required.
5
<PAGE> 7
Noninterest expense increased $47,795 to $386,507 for the quarter ended
June 30, 1998, from $338,712 for the quarter ended June 30, 1997. The increase
was primarily related to the increase in other operating expenses of $9,645, and
increases in salaries and benefits of $41,592. The increase in salaries and
benefits was due to annual salary increases and two new full time and two new
part time employees hired since the second quarter of 1997. Also, on March 6,
1998, the Company and its former President and Chief Executive Officer, Thomas
P. McDavid, entered into a mutual agreement regarding his resignation while
honoring his employment contract. This employment contract represents
compensation expense of $22,000 between May 1, 1998 and June 30, 1998. On May 1,
1998, the Company hired a new President and Chief Executive Officer, R. Michael
S. Menzies.
Return on average assets and average equity, on an annualized basis,
for the quarter ended June 30, 1998, were .32% and 3.49%, respectively, compared
to .64% and 6.66%, respectively, for the same quarter of 1997. Return on average
assets and average equity, on an annualized basis, for the six months ended June
30, 1998, were .30% and 3.28%, respectively. Earnings per share on a fully
diluted basis for the quarter and the six months ended June 30, 1998, were $.01
and $.06, respectively, compared to $.10 and $.21, respectively, for the same
periods of 1997.
The Company's assets ended the second quarter of 1998 at $45.8 million,
an increase of $3.1 million, or 7.1%, from $42.7 million at December 31, 1997.
This increase can be attributed primarily to the increase in the Bank's deposits
which contributed significantly to the $1.7 million increase in federal funds
sold and $1.1 million increase in due from banks. The Company borrowed $1.0
million from the Federal Home Loan Bank of Atlanta that will be match funded on
two loans. Total deposits ended the quarter at $40.1 million, up 5.4% from $38.1
million at December 31, 1997. At June 30, 1998, the Company's loan to deposit
ratio was 84.1%, compared to 91.1% at December 31, 1997.
Liquidity and Sources of Capital
The $2.0 million increase in deposits from December 31, 1997, to June
30, 1998, is primarily reflected in the $1.7 million increase in federal funds
sold. The Company's primary source of liquidity is cash on hand plus short term
investments. At June 30, 1998, the Company's liquid assets totaled $10.1
million, or 22.0% of total assets, compared to $6.0 million, or 14.1% of total
assets, at December 31, 1997. Another source of liquidity is the $6.0 million
secured line of credit the Company has from the Federal Home Loan Bank of
Atlanta, of which $1.0 million is currently used, the $1.0 million unsecured
line of credit the Company has from a correspondent bank, and the $1.5 million
secured line of credit the Company has from another correspondent bank, of which
$425,000 of the $1.5 million line of credit is pledged to secure repurchase
agreements. If additional liquidity is needed, the Bank will sell participations
in its loans.
The capital of the Company and the Bank exceed all prescribed
regulatory capital guidelines at June 30, 1998. At June 30, 1998, the Tier 1
leverage ratio for the Bank was 9.10%. At June 30, 1998, the Bank had a
risk-weighted total capital ratio of 13.31%, and a Tier I risk-weighted capital
ratio of 12.06%. The Company expects that its current capital and short-term
investments will satisfy the Company's cash requirements for the foreseeable
future. However, no assurance can be given in this regard as rapid growth,
deterioration in the loan quality or poor earnings, or a combination of these
factors, could change the Company's capital position in a relatively short
period of time.
6
<PAGE> 8
Year 2000 Issues
The Company uses a third-party data processor for most of its
accounting functions. The processor has implemented many changes in preparation
for the year 2000 ("Year 2000"). Testing should be complete by the end of 1998.
The Company also has a number of portable computers, most of which, due to
their age, are Year 2000 compliant. Management expects no significant costs to
get its systems Year 2000 compliant. The largest Year 2000 exposure to most
banks is the preparedness of the customers of the banks. Management is
addressing with its customers the possible consequences of not being prepared
for Year 2000. Should large borrowers not sufficiently address this issue, the
Company may experience an increase in loan defaults. The amount of potential
loss from this issue is not quantifiable. Management is attempting to reduce
this exposure by educating its customers.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or
the Bank is a party or of which any of their property is the subject.
ITEM 2. CHANGES IN SECURITIES.
On March 5, 1998, a director and officer of the Company exercised
options to acquire 150 shares of the Company's Common Stock, and on April 6,
1998, a former officer and director of the Company exercised options to acquire
840 shares of the Company's Common Stock. The options in both transactions had
an exercise price of $10 per share and thus the Company received $9,900. The
Common Stock issued pursuant to the exercise of the options represents
unregistered securities, which issuance was considered to be exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) as a
transaction by an issuer not involving any public offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its Annual Meeting of Stockholders on May 20, 1998, at
which meeting all three of management's nominees for the Board of Directors were
reelected to serve as Class I Directors for three year terms. The individuals
reelected as Class I Directors were: Sheila W. Bateman, receiving 319,141 votes
for and 200 votes against or withheld, with no votes abstaining; W. David Hill,
receiving 319,141 votes for and 200 votes against or withheld, with no votes
abstaining; and Mahmood S. Shariff, receiving 319,141 votes for and 200 votes
against or withheld, with no votes abstaining. Class II and Class III Directors
continuing in office are: Jack H. Bishop, J. Parker Callahan, J. Fredrick
Heaton, William C. Hill, David F. Lesperance, Vinodrai Mehta, Roger A.
Orsini and Jerry L. Wilcoxon.
ITEM 5. OTHER INFORMATION.
Any stockholder of the Company who intends to present a proposal at the
1999 Annual Meeting of Stockholders, which proposal is not included in the
Company's Proxy Statement, must deliver notice
7
<PAGE> 9
of such proposal to the Company no later than March 1, 1999. If the proposing
stockholder fails to deliver notice of such proposal to the Company by such
date, then the person or persons designated as proxies in connection with the
Company's solicitation of proxies shall have the discretionary voting authority
to vote the shares of the Company's Common Stock represented by the proxy cards
returned to the Company in accordance with their judgment on such matter when
such proposal is presented at the 1999 Annual Meeting. Any such notice of a
stockholder proposal must be made in writing addressed to Sheila W. Bateman,
Easton Bancorp, Inc., P.O. Box 629, Easton, Maryland 21601.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
<TABLE>
<S> <C>
3.1 Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 of Registration Statement on Form S-18,
File No. 33-43317).
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2
of Registration Statement on Form S-18, File No. 33-43317).
10.1 Employment Agreement dated July 22, 1991, between the Company and
Thomas P. McDavid (incorporated by reference to Exhibit 10.1 of
Registration Statement on Form S-18, File No. 33-43317).
10.2 Easton Bancorp, Inc. 1991 Stock Option Plan (incorporated by
reference to Exhibit 10.2 of Registration Statement on Form S-18,
File No. 33-43317).
10.3 Form of Warrant Agreement (incorporated by reference to Exhibit
10.3 of Registration Statement on Form S-18, File No. 33-43317).
10.4 Agreement with Thomas P. McDavid dated March 6, 1998
(incorporated by reference to Exhibit 10.4 of the Quarterly
Report on Form 10-QSB filed by the Company for the quarter ended
March 31, 1998).
11 Computation of Earnings Per Share.
27.1 Financial Data Schedule (for SEC use only).
27.2 Restated Financial Data Schedule for Six Months Ended June 30,
1996 (for SEC use only).
27.3 Restated Financial Data Schedule for Six Months Ended June 30,
1997 (for SEC use only).
</TABLE>
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during the
quarter ended June 30, 1998.
8
<PAGE> 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EASTON BANCORP, INC.
----------------------------------
(Registrant)
Date: August 12, 1998 By: /s/ W. David Hill
-------------------- ------------------------------
W. David Hill
Chairman of the Board
Date: August 12, 1998 By: /s/ Pamela A. Mussenden
------------------- ------------------------------
Pamela A. Mussenden
Assistant Treasurer
(Principal Financial Officer)
9
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
------- ----------- -----------
<S> <C> <C>
3.1 Articles of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 of Registration Statement on Form S-18, File No. 33-43317).
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 of
Registration Statement on Form S-18, File No. 33-43317).
10.1 Employment Agreement dated July 22, 1991, between the Company and Thomas
P. McDavid (incorporated by reference to Exhibit 10.1 of Registration
Statement on Form S-18, File No. 33-43317).
10.2 Easton Bancorp, Inc. 1991 Stock Option Plan (incorporated by reference to
Exhibit 10.2 of Registration Statement on Form S-18, File No. 33-43317).
10.3 Form of Warrant Agreement (incorporated by reference to Exhibit 10.3 of
Registration Statement on Form S-18, File No. 33-43317).
10.4 Agreement with Thomas P. McDavid dated March 6, 1998 (incorporated by
reference to Exhibit 10.4 of the Quarterly Report on Form 10-QSB filed by
the Company for the quarter ended March 31, 1998).
11 Computation of Earnings Per Share.
27.1 Financial Data Schedule (for SEC use only).
27.2 Restated Financial Data Schedule for Six Months Ended June 30, 1996 (for
SEC use only).
27.3 Restated Financial Data Schedule for Six Months Ended June 30, 1997 (for
SEC use only).
</TABLE>
<PAGE> 1
EXHIBIT 11
EASTON BANCORP, INC.
COMPUTATION OF EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30, 1998 June 30, 1998
------------- -------------
<S> <C> <C>
Net income $ 9,018 $ 36,617
============= =============
Average shares outstanding 560,272 559,819
Basic earnings per share $ .02 $ .07
============= =============
Average shares outstanding 560,272 559,819
Dilutive average shares outstanding under
warrants and options 207,800 207,800
Exercise price $ 10.00 $ 10.00
Assumed proceeds on exercise $ 2,078,000 $ 2,078,000
Average market value $ 12.50 $ 12.50
Less: Treasury stock purchased with assumed
proceeds from exercise of warrants and options 166,240 166,240
Adjusted average shares-diluted 601,832 601,379
Diluted earnings per share $ .01 $ .06
============= =============
</TABLE>
The stock of the Company is not traded on any public exchange. The
average market values are derived from trades known to management. Private sales
may occur where management of the Company is unaware of the sales price.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 758,003
<INT-BEARING-DEPOSITS> 1,012,247
<FED-FUNDS-SOLD> 5,453,654
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,447,157
<INVESTMENTS-CARRYING> 1,250,081
<INVESTMENTS-MARKET> 1,249,890
<LOANS> 33,751,250
<ALLOWANCE> 418,000
<TOTAL-ASSETS> 45,779,816
<DEPOSITS> 40,131,132
<SHORT-TERM> 461,851
<LIABILITIES-OTHER> 129,197
<LONG-TERM> 1,000,000
0
0
<COMMON> 56,032
<OTHER-SE> 4,001,604
<TOTAL-LIABILITIES-AND-EQUITY> 45,779,816
<INTEREST-LOAN> 1,514,205
<INTEREST-INVEST> 53,459
<INTEREST-OTHER> 119,743
<INTEREST-TOTAL> 1,687,407
<INTEREST-DEPOSIT> 897,156
<INTEREST-EXPENSE> 909,319
<INTEREST-INCOME-NET> 778,088
<LOAN-LOSSES> 71,345
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 730,741
<INCOME-PRETAX> 36,617
<INCOME-PRE-EXTRAORDINARY> 36,617
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,617
<EPS-PRIMARY> .07
<EPS-DILUTED> .06
<YIELD-ACTUAL> 3.33
<LOANS-NON> 2,481,000
<LOANS-PAST> 80,000
<LOANS-TROUBLED> 12,277
<LOANS-PROBLEM> 902,105
<ALLOWANCE-OPEN> 378,000
<CHARGE-OFFS> 52,675
<RECOVERIES> 21,330
<ALLOWANCE-CLOSE> 71,345
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 418,000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS FINANCIAL DATA SCHEDULE IS RESTATED FROM 6/30/96.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 685,168
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,250,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 750,000
<INVESTMENTS-MARKET> 739,073
<LOANS> 24,504,498
<ALLOWANCE> 279,000
<TOTAL-ASSETS> 36,049,809
<DEPOSITS> 32,103,178
<SHORT-TERM> 242,538
<LIABILITIES-OTHER> 118,192
<LONG-TERM> 0
0
0
<COMMON> 55,933
<OTHER-SE> 3,529,968
<TOTAL-LIABILITIES-AND-EQUITY> 36,049,809
<INTEREST-LOAN> 1,126,850
<INTEREST-INVEST> 16,012
<INTEREST-OTHER> 208,072
<INTEREST-TOTAL> 1,350,934
<INTEREST-DEPOSIT> 752,340
<INTEREST-EXPENSE> 752,340
<INTEREST-INCOME-NET> 598,594
<LOAN-LOSSES> 25,096
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 575,251
<INCOME-PRETAX> 54,224
<INCOME-PRE-EXTRAORDINARY> 54,224
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,244
<EPS-PRIMARY> .10
<EPS-DILUTED> .09
<YIELD-ACTUAL> 3.71
<LOANS-NON> 70,000
<LOANS-PAST> 55,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 29,000
<ALLOWANCE-OPEN> 260,000
<CHARGE-OFFS> 12,412
<RECOVERIES> 6,316
<ALLOWANCE-CLOSE> 279,000
<ALLOWANCE-DOMESTIC> 279,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS FINANCIAL DATA SCHEDULE IS RESTATED FROM JUNE 30, 1997.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 892,165
<INT-BEARING-DEPOSITS> 2,692
<FED-FUNDS-SOLD> 4,952,156
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 124,500
<INVESTMENTS-CARRYING> 1,250,000
<INVESTMENTS-MARKET> 1,248,319
<LOANS> 31,276,305
<ALLOWANCE> 348,000
<TOTAL-ASSETS> 40,070,848
<DEPOSITS> 35,643,202
<SHORT-TERM> 450,939
<LIABILITIES-OTHER> 126,793
<LONG-TERM> 0
0
0
<COMMON> 55,933
<OTHER-SE> 3,793,981
<TOTAL-LIABILITIES-AND-EQUITY> 40,070,848
<INTEREST-LOAN> 1,408,710
<INTEREST-INVEST> 39,857
<INTEREST-OTHER> 106,413
<INTEREST-TOTAL> 1,554,980
<INTEREST-DEPOSIT> 769,101
<INTEREST-EXPENSE> 780,810
<INTEREST-INCOME-NET> 774,170
<LOAN-LOSSES> 41,466
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 659,066
<INCOME-PRETAX> 127,123
<INCOME-PRE-EXTRAORDINARY> 127,123
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 127,123
<EPS-PRIMARY> .23
<EPS-DILUTED> .21
<YIELD-ACTUAL> 4.38
<LOANS-NON> 7,000
<LOANS-PAST> 95,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 289,639
<ALLOWANCE-OPEN> 332,253
<CHARGE-OFFS> 36,382
<RECOVERIES> 10,663
<ALLOWANCE-CLOSE> 348,000
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 348,000
</TABLE>
