<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998 Commission file number 33-45240
-------------- --------
HERITAGE FINANCIAL SERVICES, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
TENNESSEE 62-1484807
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 JEFFERSON STREET, CLARKSVILLE, TENNESSEE 37040
-------------------------------------------------
(Address of Principal Executive Offices)
Issuer's telephone number, including area code: (615) 553-0500
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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: Common Stock, 569,926
shares as of May 4, 1998.
Traditional small business disclosure format (check one):
Yes No X
----- -----
<PAGE> 2
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION 12
SIGNATURES 13
</TABLE>
2
<PAGE> 3
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31,
1998 1997 1997
--------- ---------- ------------
<S> <C> <C> <C>
ASSETS:
Cash and due from banks $ 4,538 $ 4,606 $ 4,531
Securities available-for-sale, at fair value 18,869 19,560 19,153
Mortgage loans held for sale 1,491 1,377 631
Loans 142,124 108,852 134,850
Allowance for loan losses (2,058) (1,611) (1,908)
-------- -------- --------
Net loans 140,066 107,241 132,942
Premises and equipment 6,602 2,716 5,461
Accrued interest receivable 1,481 1,193 1,585
Deferred income taxes 572 626 590
Foreclosed and repossessed assets 243 66 225
Other assets 1,077 1,068 965
-------- -------- --------
TOTAL ASSETS $174,939 $138,453 $166,083
======== ======== ========
LIABILITIES AND STOCKHOLDERS EQUITY:
Deposits:
Noninterest-bearing $ 18,007 $ 17,374 $ 18,821
Interest-bearing 124,378 105,067 115,559
-------- -------- --------
Total deposits 142,385 122,441 134,380
Federal funds purchases and other short-term borrowings 6,110 2,935 8,150
Long-term borrowings 10,775 173 8,786
Accrued interest payable 566 486 556
Other Liabilities 1,091 703 958
-------- -------- --------
TOTAL LIABILITIES 160,927 126,738 152,830
STOCKHOLDERS EQUITY:
Common stock 1,139 1,108 1,137
Additional paid-in capital 5,151 4,931 5,079
Retained earnings 7,648 5,806 6,980
Unrealized gains (losses) on securities
available-for sale, net 74 (130) 57
-------- -------- --------
TOTAL STOCKHOLDERS EQUITY 14,012 11,715 13,253
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $174,939 $138,453 $166,083
======== ======== ========
Common shares issued and outstanding 569,926 554,011 568,574
(Note) The consolidated balance sheet at December 31, 1997, has been derived form
the audited financial statements at that date.
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME:
Loans, including fees $ 3,538 $ 2,687
Investment securities:
Taxable 226 246
Tax-exempt 54 39
-------- --------
TOTAL INTEREST INCOME 3,818 2,972
-------- --------
INTEREST EXPENSE:
Deposits 1,456 1,250
Other 239 48
-------- --------
TOTAL INTEREST EXPENSE 1,695 1,298
-------- --------
NET INTEREST INCOME 2,123 1,674
Provision for loan losses 201 111
-------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,922 1,563
-------- --------
NONINTEREST INCOME:
Service charges on deposit accounts 392 358
Mortgage banking activities 222 164
Net securities gains (losses) 2 (10)
Brokerage fees 88 91
Life and disability insurance premiums 46 63
Other 178 196
-------- --------
TOTAL NONINTEREST INCOME 928 862
-------- --------
NONINTEREST EXPENSES:
Salaries and employee benefits 1,020 851
Occupancy 144 129
Furniture and equipment 185 167
Data Processing 106 109
Advertising and public relations 70 76
Life and disability insurance benefits and expenses 17 54
Other 262 292
-------- --------
TOTAL NONINTEREST EXPENSE 1,804 1,678
-------- --------
INCOME BEFORE INCOME TAXES 1,046 747
Income taxes 378 273
-------- --------
NET INCOME $ 668 $ 474
======== ========
Net income per share $ 1.17 $ 0.86
======== ========
Net income per share - assuming dilution $ 1.16 $ 0.84
======== ========
Average number of common shares 569,628 553,036
Average number of common shares - assuming dilution 576,621 567,098
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
------- --------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 182 $ 1,706
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available-for-sale - 927
Maturities and redemptions of securities available-for-sale 807 16
Purchase of securities available-for-sale (457) (1,477)
Net increase in loans (7,326) (5,119)
Puchases of premises and equipment (1,227) (317)
------- --------
NET CASH USED IN INVESTING ACTIVITIES (8,203) (5,970)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits 8,004 7,130
Decrease in federal funds purchased
and other short-term borrowings (2,040) (1,915)
Repayment of long-term borrowings (1,010) (10)
Proceeds from long-term borrowings 3,000 -
Proceeds from issuance of common stock 74 68
Reacquisition of common stock - (1)
------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,028 5,272
------- --------
NET INCREASE IN CASH AND DUE FROM BANKS 7 1,008
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD 4,531 3,598
------- --------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 4,538 $ 4,606
======= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during period for interest $ 1,685 $ 1,255
Cash paid during period for income taxes $ 81 $ 115
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Heritage Financial Services, Inc. (Heritage Financial or Company) through its
subsidiary, Heritage Bank (the Bank) and its subsidiaries, provides a full range
of banking services to individual and corporate customers in Montgomery County,
Tennessee and the surrounding counties of Tennessee and Kentucky.
The consolidated 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 Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete consolidated financial
statements. The accompanying consolidated financial statements should be read in
conjunction with the notes to the consolidated financial statements contained in
the 1997 annual report on Form 10-KSB. In preparing financial statements,
management is required to make assumptions and estimates which affect the
Company's reported amounts of assets, liabilities and results of operations. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
results of operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the entire year.
2. Investment Securities
The following table reflects the amortized cost and fair values of investment
securities held at March 31, 1998, all of which are classified as
available-for-sale.
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- --------
(in thousands)
<S> <C> <C> <C> <C>
U.S. agencies $ 9,926 $ 61 $ (46) $ 9,941
Mortgage-backed:
U.S. agencies 3,803 46 (42) 3,807
Tax-exempt securities 4,171 97 - 4,268
Equity securities 853 - - 853
-------- -------- -------- --------
$ 18,753 $ 204 $ (88) $ 18,869
======== ======== ======== ========
</TABLE>
6
<PAGE> 7
3. Loans
A summary of loans outstanding by category follows:
<TABLE>
<CAPTION>
March 31, March 31, December 31,
1998 1997 1997
---------- ---------- -----------
<S> <C> <C> <C>
Real Estate: (in thousands)
1 to 4 family residential properties $ 32,403 $ 24,135 $ 30,396
Construction 15,232 14,787 16,759
Commercial 45,876 29,538 41,210
Commercial, financial and agricultural 24,252 21,239 23,114
Consumer 24,689 19,188 23,579
---------- ---------- -----------
142,452 108,887 135,058
Less unearned interest (328) (35) (208)
---------- ---------- -----------
Total loans $ 142,124 $ 108,852 $ 134,850
========== ========== ===========
</TABLE>
4. Allowance for Loan Losses
Changes in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------
1998 1997
------- -------
(in thousands)
<S> <C> <C>
Balance at beginning of period $ 1,908 $ 1,544
Provision charged to operations 201 111
Loan Losses:
Loans charged off (61) (54)
Recoveries on loans previously charged off 10 10
------- -------
Balance at end of period $ 2,058 $ 1,611
======= =======
</TABLE>
7
<PAGE> 8
5. Deposits
A summary of deposits follows:
<TABLE>
<CAPTION>
March 31, March 31, December 31,
1998 1997 1997
--------- --------- -----------
<S> <C> <C> <C>
Noninterest-bearing demand 18,007 $17,374 18,821
Interest checking 11,037 9,653 10,485
Money market accounts 22,640 20,667 22,354
Savings 5,381 5,296 5,196
Retirement accounts 3,654 3,398 3,547
Certificates of deposit of $100,000 or more 12,850 8,638 11,671
Other time deposits 68,816 57,415 62,307
--------- --------- -----------
$ 142,384 $ 122,441 $ 134,380
========= ========= ===========
</TABLE>
6. Stockholders' Equity
The Bank's capital amounts and ratios were as follows:
<TABLE>
<CAPTION>
March 31, March 31, December 31,
1998 1997 1997
--------- --------- -----------
<C> <C> <C> <C>
Amount:
Tier 1 leverage 12,877 10,881 12,210
Tier 1 risk-based 12,877 10,881 12,210
Total risk-based 14,662 12,234 13,899
Ratio:
Tier 1 leverage 7.39% 7.88% 7.38%
Tier 1 risk-based 9.03% 10.08% 9.05%
Total risk-based 10.28% 11.33% 10.30%
</TABLE>
7. Reclassifications
Certain amounts have been reclassified in the previous year's financial
statements to conform with the current year's classifications.
8
<PAGE> 9
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's consolidated results of operations are dependent primarily on net
interest income, which is the difference between the interest income earned on
interest-earning assets, such as loans and securities, and the interest expense
incurred on interest-bearing liabilities, such as deposits and other borrowings.
The Company also generates noninterest income, including service charges on
deposit accounts and fees from mortgage banking activities, insurance sales and
brokerage services. The Company's noninterest expenses consist primarily of
employee compensation and benefits and other general and administrative
expenses.
FINANCIAL CONDITION
EARNING ASSETS. Average earning assets of the Company for the three months ended
March 31, 1998 (the "1998 period") increased 26%, or $33 million to $158.5
million from $125.5 million for the three months ended March 31, 1997 (the "1997
period"). This compares to average earning asset growth of 20% for the first
three months of 1997 over the same 1996 period. The Company's ratio of average
earning assets to average total assets for the first three months of 1998
declined to 93.1%, compared to 94.2% and 93.6% for the first three months of
1997 and 1996, respectively. The 1998 decline is due to a $4.1 million increase
in average nonearning assets. This increase is primarily attributable to the
construction of the new main office building. The total estimated cost of the
new facility has been increased to $8 million.
Economic growth in the local economy has enabled the Bank to achieve continued
loan growth (the primary earning asset). Average loans for the first three
months of 1998 increased 31%, or $33.2 million to $139.5 million from $106.3
million for the first three months of 1997. This compares to average loan growth
of 26% for the first three months of 1997 over the same 1996 period. The
changing mix of earning assets was favorable during the 1998 period. Average
loans for the first three months of 1998 were 88% of total average earning
assets, compared to 85% during the same 1997 period.
Average securities for the first three months of 1998 were 12% of total average
earning assets, compared to 15% during the same 1997 period. Average securities
as a percent of average earning assets declined for the first three months of
1998 and 1997 to fund loan growth.
FUNDING SOURCES. The Bank's primary funding source is its base of local area
deposits which consist of noninterest-bearing demand, interest checking,
savings, money market and retirement accounts, and certificates of deposit. The
average balance of the Bank's local deposit base for the first three months of
1998 increased 15%, or $17.9 million to $135.1 from $117.2 million for the first
three months of 1997. This compares to 19%, or $19.1 million, growth for the
first three months of 1997 over the same period in 1996.
Due to the competitive local market for deposits, the local deposit base has
become a decreasing portion of total funding sources. The Bank supplements its
local deposit base with alternative funding sources, i.e. Federal funds
purchased, FHLB borrowings, brokered certificates of deposit, and certificates
of deposit obtained via a national network. The average balance of these
alternative funding sources for the first three
9
<PAGE> 10
months of 1998 increased $16.5 million to $19.8 million from $3.3 million for
the first three months of 1997.
NONPERFORMING ASSETS, PAST DUE LOANS, POTENTIAL PROBLEM ASSETS AND THE ALLOWANCE
FOR LOAN LOSSES. The following table sets forth information regarding the
Company's nonperforming assets, past due loans, potential problem assets and the
allowance for loan losses:
<TABLE>
<CAPTION>
March 31, March 31, December 31,
1998 1997 1997
---------- ---------- ------------
(in thousands)
<S> <C> <C> <C>
Nonperforming assets:
Nonaccrual loans $ 434 $ 241 $ 95
Restructured loans 103 85 82
Accruing loans that are contractually
past due 90 days or more 996 202 451
Foreclosed and repossessed assets 243 66 225
------- ------ -------
Total nonperforming assets $ 1,776 $ 594 $ 853
======= ====== =======
Potential problem assets not included
in nonperforming assets $ 2,818 $ 522 $ 2,814
======= ====== =======
Nonperforming assets to portfolio loans
and foreclosed and repossessed assets 1.25% 0.55% 0.63%
Allowance for loan losses to portfolio loans 1.45% 1.48% 1.42%
Allowance for loan losses to nonperforming assets 116% 271% 224%
Allowance for loan losses to nonperforming
assets and potential problem loans 45% 144% 52%
</TABLE>
CAPITAL. Because of solid performance and conservative capital management, the
Company has a strong capital position. Stockholders' equity was $14 million or
8.01% of total assets at March 31, 1998, compared to $13.3 million or 7.98% at
December 31, 1997, and $11.7 million or 8.46% at March 31, 1997.
RESULTS OF OPERATIONS
For the first three months of 1998, the Company reported net income of $668,000,
compared to $474,000 for the first three months of 1997. Basic net income per
share for the 1998 period, increased 36% to $1.17 from $.86 for the 1997 period.
Diluted net income per share for the 1998 period, increased 38% to $1.16, from
$.84 for the same 1997 period. Annualized return on average stockholders' equity
for the first three months of 1998 was 19.82% compared to 16.67% for the same
1997 period. Annualized return on average assets for the first three months of
1998 was 1.59% compared to 1.44% for the same 1997 period.
NET INTEREST INCOME. On a fully taxable equivalent (TE) basis, net interest
income for the first three months of 1998 grew 27%, or $456,000 over the first
three months of 1997. The yield on average earning assets increased 17 basis
points to 9.83% while the cost of interest-bearing liabilities decreased 4 basis
points to 5.01%. The increase in average earning assets was primarily due to the
favorable change in the mix of earning assets as the average balance of higher
yielding loans rose $33.2 million or 31%, and comprised 88% of total average
earning assets, up from 85% in the 1997 period. The net interest margin was
5.49% for the 1998 period compared to 5.46% for the 1997 period. However,
capitalized interest of $52,000 and $5,000 for the 1998 and 1997 periods,
respectively, attributable to construction of the new main office building had a
favorable affect upon
10
<PAGE> 11
the cost of interest-bearing liabilities and the net interest margin. If the
capitalized interest had been included in interest expense, the cost of
interest-bearing liabilities would have been 5.16% in the 1998 period and 5.07%
in the 1997 period, and the net interest margin would have been 5.36% in the
1998 period and 5.45% in the 1997 period.
PROVISION FOR LOAN LOSSES. The provision for loan losses was $201,000 and
$111,000 for the first three months of 1998 and 1997, respectively. Annualized
net chargeoffs to average portfolio loans (excludes mortgage loans held for
sale) outstanding was .15% ($51,000) and .17% ($44,000) for the 1998 and 1997
periods, respectively.
NONINTEREST INCOME. For the first three months of 1998, noninterest income
increased 8% or $66,000, as compared to the same period in 1997. Excluding
securities gains or losses, noninterest income contributed 30% of tax equivalent
income for the first three months of 1998, as compared to 34% for the same
period in 1997.
NONINTEREST EXPENSE. For the first three months of 1998, noninterest expense
increased 8% or $126,000, as compared to the same period in 1997. The annualized
expense ratio (noninterest expense minus noninterest income, excluding
securities gains and losses, divided by average assets) was 2.09% and 2.45% for
the first three months of 1998 and 1997, respectively. The annualized efficiency
ratio which is calculated excluding the same items divides noninterest expense
by net interest income (TE) plus noninterest income. The efficiency ratio was
58.73% and 65.50% for the first three months of 1998 and 1997, respectively.
Noninterest expense will increase due to additional occupancy expense following
the completion of the construction of the main office building.
PROVISION FOR INCOME TAXES. The Company's effective income tax rate was 36% and
37% for the first three months of 1998 and 1997, respectively.
11
<PAGE> 12
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) 27.1 Financial Data Schedule (SEC Use Only)
27.2 Restated Financial Data Schedule (SEC Use Only)
(b) There have been no reports filed on form 8-K during
the quarterly period ended March 31, 1998
12
<PAGE> 13
HERITAGE FINANCIAL SERVICES, INC. AND SUBSIDIARY
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.
HERITAGE FINANCIAL SERVICES, INC.
(Registrant)
Date MAY 7, 1998 By EARL O. BRADLEY, III
------------------------------ --------------------------------
Earl O. Bradley, III
President and Chief
Executive Officer
Date MAY 7, 1998 By JACK L. GRAHAM
------------------------------ --------------------------------
Jack L. Graham
Senior Vice President and
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 4,538
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 18,869
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 143,615
<ALLOWANCE> 2,058
<TOTAL-ASSETS> 174,939
<DEPOSITS> 142,385
<SHORT-TERM> 6,110
<LIABILITIES-OTHER> 1,657
<LONG-TERM> 10,775
0
0
<COMMON> 6,290
<OTHER-SE> 7,722
<TOTAL-LIABILITIES-AND-EQUITY> 174,939
<INTEREST-LOAN> 3,538
<INTEREST-INVEST> 280
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 3,818
<INTEREST-DEPOSIT> 1,456
<INTEREST-EXPENSE> 1,695
<INTEREST-INCOME-NET> 2,123
<LOAN-LOSSES> 201
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 1,804
<INCOME-PRETAX> 1,046
<INCOME-PRE-EXTRAORDINARY> 1,046
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 668
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.16
<YIELD-ACTUAL> 9.77
<LOANS-NON> 434
<LOANS-PAST> 996
<LOANS-TROUBLED> 103
<LOANS-PROBLEM> 2,818
<ALLOWANCE-OPEN> 1,908
<CHARGE-OFFS> 61
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 2,058
<ALLOWANCE-DOMESTIC> 1,403
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 655
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,606
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,560
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 110,229
<ALLOWANCE> 1,611
<TOTAL-ASSETS> 138,453
<DEPOSITS> 122,441
<SHORT-TERM> 0
<LIABILITIES-OTHER> 4,124
<LONG-TERM> 173
0
0
<COMMON> 6,039
<OTHER-SE> 5,676
<TOTAL-LIABILITIES-AND-EQUITY> 138,453
<INTEREST-LOAN> 2,687
<INTEREST-INVEST> 285
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,972
<INTEREST-DEPOSIT> 1,250
<INTEREST-EXPENSE> 1,298
<INTEREST-INCOME-NET> 1,674
<LOAN-LOSSES> 111
<SECURITIES-GAINS> (10)
<EXPENSE-OTHER> 1,678
<INCOME-PRETAX> 747
<INCOME-PRE-EXTRAORDINARY> 747
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 474
<EPS-PRIMARY> .86
<EPS-DILUTED> .84
<YIELD-ACTUAL> 9.32
<LOANS-NON> 241
<LOANS-PAST> 202
<LOANS-TROUBLED> 85
<LOANS-PROBLEM> 648
<ALLOWANCE-OPEN> 1,544
<CHARGE-OFFS> 54
<RECOVERIES> 10
<ALLOWANCE-CLOSE> 1,611
<ALLOWANCE-DOMESTIC> 855
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 756
</TABLE>
