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: March 31, 1999
-----------------
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)
Maryland 52-1745344
------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
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 May 4, 1999, 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>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1999 1998
------------ --------------
<S> <C> <C>
ASSETS
Cash and due from banks. . . . . . . . . . . . . . . . $ 851,768 $ 976,682
Federal funds sold . . . . . . . . . . . . . . . . . . 2,510,550 7,269,903
Investment in Federal Home Loan Bank stock . . . . . . 150,000 145,600
Investment securities available for sale . . . . . . . 5,020,903 4,840,026
Loans, less allowance for credit losses of
$530,033 and $530,000, respectively. . . . . . . . . 36,064,863 33,254,808
Premises and equipment, net. . . . . . . . . . . . . . 1,731,916 1,662,127
Intangible assets, net . . . . . . . . . . . . . . . . 3,061 1,853
Accrued interest receivable. . . . . . . . . . . . . . 274,967 246,470
Loan payment held in escrow. . . . . . . . . . . . . . 550,000 1,175,000
Other assets . . . . . . . . . . . . . . . . . . . . . 156,807 92,924
Deferred income taxes. . . . . . . . . . . . . . . . . 385,326 401,551
------------ --------------
Total assets. . . . . . . . . . . . . . . . $47,700,161 $ 50,066,944
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing. . . . . . . . . . . . . . . . . $ 4,258,513 $ 4,682,618
Interest-bearing . . . . . . . . . . . . . . . . . . 37,401,459 39,436,342
------------ --------------
Total deposits. . . . . . . . . . . . . . . 41,659,972 44,118,960
Accrued interest payable . . . . . . . . . . . . . . . 89,944 95,611
Securities sold under agreements to repurchase . . . . 80,131 281,019
Note payable . . . . . . . . . . . . . . . . . . . . . 1,308,522 1,000,000
Other liabilities. . . . . . . . . . . . . . . . . . . 72,201 111,685
------------ --------------
Total liabilities . . . . . . . . . . . . . 43,210,770 45,607,275
------------ --------------
Stockholders' equity
Common stock, par value $.10 per share;
authorized 5,000,000 shares; 560,318
shares issued and outstanding. . . . . . . . . . . 56,032 56,032
Additional paid-in-capital . . . . . . . . . . . . . 5,227,487 5,227,487
Retained earnings (deficit). . . . . . . . . . . . . (772,435) (816,863)
------------ --------------
4,511,084 4,466,656
Accumulated other comprehensive income . . . . . . . (21,693) (6,987)
------------ --------------
Total stockholders' equity. . . . . . . . . 4,489,391 4,459,669
------------ --------------
Total liabilities and stockholders' equity. $47,700,161 $ 50,066,944
============ ==============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Interest revenue
Loans, including fees. . . . . . . $766,937 $752,408
Investment securities. . . . . . . 72,659 24,552
Federal funds sold . . . . . . . . 62,399 52,700
-------- --------
Total interest revenue . . . . . 901,995 829,660
Interest expense. . . . . . . . . . 446,677 448,055
-------- --------
Net interest income. . . . . . . 455,318 381,605
Provision for loan losses . . . . . 18,000 36,533
-------- --------
Net interest income after
provision for loan losses. . . 437,318 345,072
-------- --------
Other operating revenue . . . . . . 38,308 26,761
-------- --------
Other expenses
Salaries and benefits. . . . . . . 252,197 204,318
Occupancy. . . . . . . . . . . . . 17,431 13,521
Furniture and equipment. . . . . . 18,160 24,901
Other operating. . . . . . . . . . 119,610 101,494
-------- --------
Total operating expenses . . . . 407,398 344,234
-------- --------
Net income before income taxes. . . 68,228 27,599
Income taxes. . . . . . . . . . . . 23,800 -
-------- --------
Net income. . . . . . . . . . . . . $ 44,428 $ 27,599
======== ========
Earnings per common share - basic . $ 0.08 $ 0.05
======== ========
Earnings per common share - diluted $ 0.07 $ 0.05
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
EASTON BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
-------------------------
1999 1998
------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received . . . . . . . . . . . . . . . . . . $ 872,599 $ 862,718
Other revenue received. . . . . . . . . . . . . . . . 87,711 27,795
Cash paid for operating expenses. . . . . . . . . . . (537,755) (337,275)
Interest paid . . . . . . . . . . . . . . . . . . . . (452,344) (446,703)
------------ -----------
(29,789) 106,535
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for premises and equipment. . . . . . . . (32,959) (2,043)
Net loans to customers. . . . . . . . . . . . . . . (2,200,386) (187,382)
Investment securities purchased . . . . . . . . . . (968,613) (271,200)
Proceeds from sales/maturities of investments . . . . 759,284 250,000
Purchase of Foreclosed Property . . . . . . . . . . . (60,450) -
------------ -----------
(2,503,124) (210,625)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in time deposits. . . . . . . (2,069,243) 673,331
Net increase (decrease) in other deposits . . . . . . (389,745) 392,873
Net increase (decrease) in securities sold
under agreements to repurchase. . . . . . . . . . (200,888) 3,265
Proceeds from stock options exercised . . . . . . . . - 1,500
Debt advances . . . . . . . . . . . . . . . . . . . . 308,522 -
------------ -----------
2,351,354 1,070,969
------------ -----------
NET INCREASE (DECREASE) IN CASH. . . . . . . . . . . . (4,884,267) 966,879
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD . . . 8,246,585 4,382,348
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . . . $ 3,362,318 $5,349,227
============ ===========
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED (USED) IN OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . . . . . . . . $ 44,428 $ 27,599
Adjustments to reconcile net income to net cash
provided (used) in operating activities:
Depreciation and amortization . . . . . . . . . . . . 24,182 40,809
Provision for loan losses . . . . . . . . . . . . . . 18,000 36,533
Decrease (increase) in accrued interest receivable
and other assets. . . . . . . . . . . . . . . . . . (68,579) 43,912
Increase (decrease) in operating accounts payable
and other liabilities . . . . . . . . . . . . . . . (45,151) (29,760)
Increase (decrease) in deferred loan origination fees (2,669) (12,561)
------------ -----------
($29,789) $ 106,532
============ ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
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
three months ended March 31, 1999, are not necessarily indicative of the results
that may be expected for the year ended December 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto for the Company's fiscal year ended December 31, 1998, included in the
Company's Form 10-KSB for the year ended December 31, 1998.
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.
4
<PAGE>
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 was organized as a nonmember
state bank under the laws of the State of Maryland. The Bank is engaged in a
general commercial banking business, emphasizing in its marketing the Bank's
local management and ownership, from its main office location in its primary
service area, Talbot County, Maryland. In addition, in February 1999 the Bank
opened a loan production office in Denton, Maryland, which is in Caroline
County. In April 1999, the Bank received approval from the Federal Deposit
Insurance Corporation and the State of Maryland State Banking Department to
establish a branch at 108 Market Street, in Denton, Maryland. The Bank intends
to open a branch at this location in Denton by September 1999. The Bank offers
a full range of deposit services that are typically available in most banks and
savings and loan associations, including checking accounts, NOW accounts,
savings accounts and other time deposits of various types, ranging from daily
money market accounts to longer-term certificates of deposit. In addition, the
Bank offers certain retirement account services, such as Individual Retirement
Accounts. The Bank offers a full range of short- to medium-term commercial and
personal loans. The Bank also originates and holds or sells into the secondary
market fixed and variable rate mortgage loans and real estate construction and
acquisition loans. Other bank services include cash management services, safe
deposit boxes, travelers checks, direct deposit of payroll and social security
checks, and automatic drafts for various accounts.
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 March 31, 1999, was
$44,428, compared to $27,599 during the corresponding period of 1998. Net
income before income taxes was $68,228 for the three months ended March 31,
1999, compared to $27,599 during the corresponding period of 1998. The increase
in earnings before income taxes can be attributed to an increase in net interest
income of approximately $74,000, a decrease of approximately $19,000 in the
provision for loan losses, and an increase of approximately $12,000 in other
operating income, offset by an increase of approximately $63,000 in total
operating expenses. The increase in net interest income is primarily due to an
increase of approximately $48,000 in interest earned on the growth in the
investment portfolio. The increase in total operating expenses is primarily
attributed to an increase in salaries and benefits of approximately $48,000.
The Bank's loan portfolio increased from $33.3 million at December 31,
1998, to $36.1 million at March 31, 1999. The Bank's provision for loan losses
was $18,000 for the quarter ended March 31, 1999, compared to $36,533 for the
quarter ended March 31, 1998. The allowance for loan losses was $530,033 at
5
<PAGE>
March 31, 1999, or 1.45% of total loans, compared to $530,000 at December 31,
1998, or 1.57% 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.
Noninterest expense increased $63,164 to $407,398 for the quarter ended
March 31, 1999, from $344,234 for the quarter ended March 31, 1998. The
increase was primarily related to the increases in salaries and benefits of
$47,879. The increase in salaries and benefits was due to annual salary
increases, one new full-time employee and one new part-time employee hired for
the main office, and two new full-time employees hired for the Bank's new loan
production office in Denton, Maryland, which was opened in February 1999.
Return on average assets and average equity, on an annualized basis, for
the quarter ended March 31, 1999, were .43% and 4.74%, respectively, compared to
.29% and 3.19%, respectively, for the same quarter of 1998. Earnings per share
on a fully diluted basis for the quarters ended March 31, 1999, and March 31,
1998, amounted to $.07 and $.05.
The Company's assets ended the first quarter of 1999 at $47.7 million, a
decrease of $2.4 million, or 4.7%, from $50.1 million at December 31, 1998.
This decrease can be attributed primarily to the decrease in federal funds sold
of $4.8 million, offset by the increase in the Bank's loans of $2.8 million.
The Company borrowed an additional $300,000 from the Federal Home Loan Bank of
Atlanta that brings total borrowings from the Federal Home Loan Bank of Atlanta
to $1.3 million, that are match funded on two loans.
Management expects that its 1999 income will exceed expenses. Although
management expects that the Company's current profitably will continue, future
events, such as an unanticipated deterioration in the loan portfolio, could
reverse this trend. Management's expectations are based on management's best
judgment and actual results will depend on a number of factors that cannot be
predicted with certainty and thus fulfillment of management's expectations
cannot be assured.
Liquidity and Sources of Capital
- ------------------------------------
The $2.5 million decrease in deposits from December 31, 1998, to March 31,
1999, is primarily reflected in the $4.8 million decrease in federal funds sold,
offset by the increase in the Bank's loans of $2.8 million. The Company's
primary source of liquidity is cash on hand plus short-term investments. At
March 31, 1999, the Company's liquid assets totaled $8.5 million, or 17.9% of
total assets, compared to $13.2 million, or 26.4% of total assets, at December
31, 1998. Another source of liquidity is the $6 million secured line of credit
the Company has from the Federal Home Loan Bank of Atlanta, of which $1.3
million is used, the $1 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 $75,000 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 exceeded all prescribed regulatory
capital guidelines at March 31, 1999. At March 31, 1999, the Tier 1 leverage
ratio for the Bank was 8.90%. At March 31, 1999, the Bank had a risk-weighted
total capital ratio of 13.33%, and a Tier 1 risk-weighted capital ratio of
12.08%. 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>
Accounting Rule Changes
- -------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities. The Company currently has no derivative
instruments or hedging activities but elected early adoption of this
pronouncement. The standard allows, at adoption, a one-time transfer of
securities between the held-to-maturity and available-for-sale securities
without affecting the classification of other securities. The Company
transferred its remaining securities classified as held-to-maturity to the
available-for-sale portfolio.
Year 2000 Issues
- ------------------
The Year 2000 issue relates to computer programs that use only two digits
to identify a year in the date field. Unless corrected, these programs could
read the year 2000 as the year 1900 and likely would adversely affect any number
of calculations that are made using the date field. Financial institutions are
highly computerized organizations and the Year 2000 issue represents a
significant risk to the industry. The Company faces the same risks as the
industry. The failure of a major loan or deposit system due to the Year 2000
issue could result in interest and balances being calculated inaccurately. Such
failures could have a significant impact on a financial institution's operations
and liquidity.
Management has a Year 2000 Committee, which reports to the Board,
responsible for assessing progress in the Company's plans to minimize the
effects of the Year 2000 issue. In its assessment of the Year 2000 issue, the
committee identified five major phases: Awareness, Assessment, Renovation,
Validation and Implementation.
The awareness phase is a continuing effort to educate employees, customers,
business partners and vendors of the impact of the Year 2000 issue. The effort
is well under way through communication with the appropriate constituencies and
training for all employees. During the assessment phase, which was completed by
March 31, 1998, a detailed list was compiled of all vendors, hardware, software,
and equipment owned or used by the Company. Each item was assigned a priority
based on its importance to the operations of the Company and the risk associated
with non-compliance. All manufacturers, software providers and vendors were
requested to provide information relating to the readiness of their product or
process for the Year 2000. The mission critical areas were identified as the
third party data processor, the loan documentation and compliance software, the
new accounts platform software, the proof machines, the microfilmer and fische
reader and the security system. The Company has also assessed non-information
technology systems, including the alarm systems of the Company.
The validation phase consisted of testing all mission critical hardware and
software for Year 2000 readiness. Validation of the core banking systems has
been completed. Test transactions were processed on loan and deposit accounts
to validate the accuracy of the Company's third party data processing service
provider. Validation tests were also run on the loan and compliance software
and the Federal Reserve Bank FedLine system. All tests were successful and no
Year 2000 problems were indicated. Contingency planning for all mission
critical functions is underway and will be completed by June 1999.
Of concern to management is the amount of funds which may be necessary to
have in the Bank and the ATM at the end of 1999 in the event customers desire to
withdraw extra cash. The Company is currently working to estimate the most
likely level of cash requirements, the source of these funds, and the required
level of security and insurance for the additional cash. It may be necessary to
build significant levels of cash at the end of 1999 which could reduce earning
assets or increase borrowings for a period of time, thereby negatively affecting
earnings. In addition, it may be necessary to purchase commitments from current
cash sources to guarantee funds availability and to purchase commitments from
vendors who transport cash.
7
<PAGE>
Another concern is the preparedness of the Bank's customers for the Year
2000 issue. For example, commercial loan customers may be unable to repay their
loans from the Bank if their business is negatively impacted by the Year 2000
issue. Management continues to attempt to address this issue by educating its
customers as to the possible consequences of not being prepared for the Year
2000 issue. In addition, loan underwriting for the past year has included
issues relating to the customer's preparedness for the Year 2000 and their
reliance on computers in their business operations.
The Company's total costs associated with the Year 2000 issue will
primarily include the costs incurred to upgrade the existing software and
hardware not currently Year 2000 compliant. The Company expects that these
costs will be incurred in the normal course of business as software and hardware
is ordinarily upgraded to keep pace with technological advances. The Company
estimates that $1,000 has been spent to date which could be related to the Year
2000 issue. The Company does not track internal costs for personnel devoted to
the Year 2000 issue; however, one individual has spent significant time on the
project and many individuals have spent numerous hours working on the Year 2000
issue.
Market Risk
- ------------
Net interest income of the Company is one of the most important factors in
evaluating the financial performance of the Company. The Company uses interest
sensitivity analysis to determine the effect of rate changes. Net interest
income is projected over a one-year period to determine the effect of an
increase or decrease in the prime rate of 100 basis points. If prime were to
decrease 100 basis points, the Company would experience a decrease in net
interest income of $17,348 if all assets and liabilities maturing within that
period were adjusted for the rate change. The sensitivity analysis does not
consider the likelihood of these rate changes nor whether management's reaction
to this rate change would be to reprice its loans and deposits.
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.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to security holders for a vote during the
quarter ended March 31, 1999.
8
<PAGE>
ITEM 5. OTHER INFORMATION.
On April 12, 1999, the Bank received approval from the Federal Deposit
Insurance Corporation and the State of Maryland State Banking Department to
establish a branch at 108 Market Street, Denton, Caroline County, Maryland. The
Bank intends to open a full service branch at this location by September 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
11.1 Computation of Earnings Per Share.
27.1 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during the
quarter ended March 31, 1999.
9
<PAGE>
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: May 7, 1999 By: /s/ W. David Hill
--------------- ---------------------
W. David Hill
Chairman of the Board
Date: May 7, 1999 By: /s/ Pamela A. Mussenden
--------------- ---------------------------
Pamela A. Mussenden
Assistant Treasurer
(Principal Financial Officer)
10
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page Number
- ------- ----------- ------------
11.1 Computation of Earnings Per Share.
27.1 Financial Data Schedule (for SEC use only).
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.1
EASTON BANCORP, INC.
COMPUTATION OF EARNINGS PER SHARE
QUARTER ENDED MARCH 31, 1999
<S> <C>
Net income. . . . . . . . . . . . . . . . . . . . . . $ 44,428
==========
Average shares outstanding. . . . . . . . . . . . . . 560,318
Basic earnings per share. . . . . . . . . . . . . . . $ 0.08
==========
Average shares outstanding. . . . . . . . . . . . . . 560,318
Dilutive average shares outstanding under
warrants and options . . . . . . . . . . . . . . . . 207,800
Exercise price. . . . . . . . . . . . . . . . . . . . $ 10.00
Assumed proceeds on exercise. . . . . . . . . . . . . $2,078,000
Average market value. . . . . . . . . . . . . . . . . $ 12.50
Less: Treasury stock purchased with assumed proceeds
from exercise of warrants and options. . . . . . . . 166,240
Adjusted average shares - diluted . . . . . . . . . . 601,878
Diluted earnings per share. . . . . . . . . . . . . . $ 0.07
==========
</TABLE>
The stock of the Company is not traded on any public exchange. The average
market value is derived from trades known to management. Private sales may
occur where management of the Company is unaware of the sales price.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 851768
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2510550
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5020903
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 36064863
<ALLOWANCE> 530033
<TOTAL-ASSETS> 47700161
<DEPOSITS> 41659972
<SHORT-TERM> 80131
<LIABILITIES-OTHER> 162145
<LONG-TERM> 1308522
0
0
<COMMON> 56032
<OTHER-SE> 4433359
<TOTAL-LIABILITIES-AND-EQUITY> 47700161
<INTEREST-LOAN> 766937
<INTEREST-INVEST> 72659
<INTEREST-OTHER> 62399
<INTEREST-TOTAL> 901995
<INTEREST-DEPOSIT> 429004
<INTEREST-EXPENSE> 446677
<INTEREST-INCOME-NET> 455318
<LOAN-LOSSES> 18000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 407398
<INCOME-PRETAX> 68228
<INCOME-PRE-EXTRAORDINARY> 44428
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44428
<EPS-PRIMARY> .08
<EPS-DILUTED> .07
<YIELD-ACTUAL> 3.52
<LOANS-NON> 531000
<LOANS-PAST> 92000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 451211
<ALLOWANCE-OPEN> 530000
<CHARGE-OFFS> 21682
<RECOVERIES> 3715
<ALLOWANCE-CLOSE> 530033
<ALLOWANCE-DOMESTIC> 444189
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 85844
</TABLE>
