<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD
FROM _______________ TO _______________
Commission File Number 0-20402
-------
WILSON BANK HOLDING COMPANY
---------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Tennessee 62-1497076
- --------------------------------- ----------------------------
(State or Other Jurisdiction of (IRS Employer Identification
Incorporation or Organization) Number)
623 West Main Street, Lebanon, TN 37087
-----------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
(615) 444-2265
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common stock outstanding as of the latest practicable date: 1,961,163 shares at
November 8, 1999.
<PAGE> 2
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited consolidated financial statements of the registrant and its
subsidiaries are as follows:
Consolidated Balance Sheets - September 30, 1999 and December 31, 1998.
Consolidated Statements of Earnings - For the three months and nine
months ended September 30, 1999 and 1998.
Consolidated Statements of Comprehensive Earnings - For the three
months and nine months ended September 30, 1999 and 1998.
Consolidated Statements of Cash Flows - For the nine months ended
September 30, 1999 and 1998.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures.
2
<PAGE> 3
WILSON BANK HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ -------------
(In Thousands)
<S> <C> <C>
Assets
Loans $ 343,646 295,930
Less: Allowance for loan losses (3,714) (3,244)
--------- --------
Net loans 339,932 292,686
Securities:
Held-to-maturity, at cost (market value $16,845,000 and
$20,870,000, respectively) 17,037 20,408
Available-for-sale, at market (amortized cost $70,893,000 and
$52,843,000, respectively) 68,171 53,180
--------- --------
Total securities 85,208 73,588
--------- --------
Loans held for sale 1,419 3,881
Federal funds sold 5,963 24,976
--------- --------
Total earning assets 432,522 395,131
Cash and due from banks 13,316 16,024
Bank premises and equipment, net 15,470 14,807
Accrued interest receivable 4,063 3,373
Organizational costs, net of accumulated amortization of
$136,000 and $108,000, respectively -- 28
Other real estate 231 138
Deferred income tax asset 1,884 714
Other assets 1,535 1,760
--------- --------
Total assets $ 469,021 431,975
========= ========
Liabilities and Stockholders' Equity
Deposits $ 419,587 389,105
Securities sold under repurchase agreements 11,447 7,258
Accrued interest and other liabilities 3,189 2,760
Minority interest 3,587 3,587
--------- --------
Total liabilities 437,810 402,710
--------- --------
Stockholders' equity:
Common stock, $2.00 par value; authorized 5,000,000
shares; issued 1,471,144 at September 30, 1999
and 1,438,781 shares at December 31, 1998, respectively 2,942 2,877
Additional paid-in capital 9,747 8,530
Retained earnings 20,044 17,663
Net unrealized gains (losses) on available-for-sale
securities, net of income tax benefit of $931,000
and taxes of $121,000, respectively (1,522) 195
--------- --------
Total stockholders' equity 31,211 29,265
--------- --------
Total liabilities and stockholders' equity $ 469,021 431,975
========= ========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
3
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WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1999 1998 1999 1998
(Dollars In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 7,526 6,451 $ 21,688 18,450
Interest and dividends on securities:
Taxable securities 1,150 974 3,277 2,642
Exempt from Federal income taxes 180 263 575 807
Interest on loans held for sale 30 39 108 166
Interest on federal funds sold 192 321 828 1,079
---------- --------- ---------- ---------
Total interest income 9,078 8,048 26,476 23,144
---------- --------- ---------- ---------
Interest expense:
Interest on negotiable order of withdrawal accounts 106 113 295 327
Interest on money market and savings accounts 965 914 2,982 2,743
Interest on certificates of deposit 3,203 3,010 9,296 8,506
Interest on securities sold under repurchase agreements 119 116 286 268
Interest on Federal funds purchased 1 1 2 1
---------- --------- ---------- ---------
Total interest expense 4,394 4,154 12,861 11,845
---------- --------- ---------- ---------
Net interest income before provision for possible
loan losses 4,684 3,894 13,615 11,299
Provision for possible loan losses 258 270 849 782
---------- --------- ---------- ---------
Net interest income after provision for possible
loan losses 4,426 3,624 12,766 10,517
---------- --------- ---------- ---------
Non-interest income:
Service charges on deposit accounts 548 447 1,520 1,231
Other fees and commissions 410 375 1,206 1,142
Security gains -- 8 -- 8
Gain on sale of loans 193 260 655 803
Gain on sale of fixed assets -- 6 -- 12
Gain on sale of other real estate 5 -- 8 --
--------- --------- ---------- ---------
1,156 1,096 3,389 3,196
---------- --------- ---------- ---------
Non-interest expenses:
Salaries and employee benefits 1,914 1,506 5,601 4,387
Occupancy expenses, net 264 225 796 642
Furniture and equipment expense 310 250 831 694
Data processing expense 109 120 295 342
Other operating expenses 806 699 2,421 2,027
Loss on sale of other real estate -- 6 -- 8
Loss on sale of fixed assets 10 -- 10 --
Minority interest in net earnings of subsidiaries 81 28 181 97
---------- --------- ---------- ---------
3,494 2,834 10,135 8,197
---------- --------- ---------- ---------
Earnings before income taxes 2,088 1,886 6,020 5,516
Income taxes 775 662 2,192 1,909
---------- --------- ---------- ---------
Net earnings $ 1,313 1,224 $ 3,828 3,607
========== ========= ========== =========
Weighted average number of shares outstanding 1,465,974 1,433,499 1,457,076 1,424,602
========== ========= ========== =========
Basic earnings per common share $ .90 .85 $ 2.63 2.53
========== ========= ========== =========
Dividends per share $ .50 .45 $ 1.00 .85
========== ========= ========== =========
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
4
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WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------
1999 1998 1999 1998
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Net earnings $ 1,313 1,224 $ 3,828 3,607
------- ------ ------- -----
Other comprehensive earnings net of tax:
Unrealized gains (losses) on available-for-sale
securities arising during period, net of tax
benefit of $385,000, tax expense of $118,000,
tax benefit of $1,052,000 and tax expense
of $76,000, respectively (629) 192 (1,717) 125
Less: reclassification adjustment for gains included
in net earnings, net of tax expense of $3,000 -- (5) -- (5)
------- ------ ------- -----
Other comprehensive earnings (losses) (629) 187 (1,717) 120
------- ------ ------- -----
Comprehensive earnings $ 684 1,411 $ 2,111 3,727
======= ====== ======= =====
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
5
<PAGE> 6
WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---- ----
(In Thousands)
<S> <C> <C>
Cash flows from operating activities:
Interest received $ 25,727 22,199
Fees and commissions received 2,726 2,373
Proceeds from sale of loans 34,390 47,997
Origination of loans held for sale (31,273) (46,427)
Interest paid (12,941) (11,694)
Cash paid to suppliers and employees (8,583) (7,258)
Income taxes paid (1,901) (1,821)
-------- -------
Net cash provided by operating activities 8,145 5,369
-------- -------
Cash flows from investing activities:
Proceeds from maturities of available-for-sale securities 15,093 29,731
Proceeds from maturities of held-to-maturity securities 4,235 3,854
Proceeds from sales of available-for-sale securities -- 1,507
Purchase of held-to-maturity securities (863) (2,265)
Purchase of available-for-sale securities (33,085) (49,504)
Loans made to customers, net of repayments (48,426) (41,796)
Purchase of premises and equipment (1,572) (2,453)
Proceeds from sale of premises and equipment -- 35
Proceeds from sale of other real estate 246 161
-------- -------
Net cash used in investing activities (64,372) (60,730)
-------- -------
Cash flows from financing activities:
Net increase in non-interest bearing, savings and NOW deposit
accounts 4,608 11,944
Net increase in time deposits 25,874 32,303
Increase in securities sold under repurchase agreement 4,189 5,909
Proceeds from advances from Federal funds purchased 2,355 1,778
Repayment of advances from Federal funds purchased (2,355) (1,426)
Dividends paid (1,447) (1,203)
Proceeds from sale of common stock 1,282 1,065
-------- -------
Net cash provided by financing activities 34,506 50,370
-------- -------
Net decrease in cash and cash equivalents (21,721) (4,991)
Cash and cash equivalents at beginning of period 41,000 31,780
-------- -------
Cash and cash equivalents at end of period $ 19,279 26,789
======== =======
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
6
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WILSON BANK HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
---- ----
(In Thousands)
<S> <C> <C>
Reconciliation of net earnings to net cash provided
by operating activities:
Net earnings $ 3,828 3,607
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 923 888
Provision for loan losses 849 782
Minority interests in net earnings of commercial bank
subsidiaries 181 97
FHLB dividend reinvestment (54) (48)
Loss (gain) on sale of premises and equipment 10 (12)
Gain on sale of securities -- (8)
Loss (gain) on sale of other real estate (8) 8
Decrease in loans held for sale 2,462 767
Decrease in refundable income taxes 347 175
Increase in deferred tax asset (10) (9)
Increase in other assets, net (122) (248)
Increase in interest receivable (690) (886)
Decrease in taxes payable (46) (78)
Increase in other liabilities 555 183
Increase (decrease) in interest payable (80) 151
-------- ------
Total adjustments 4,317 1,762
-------- ------
Net cash provided by operating activities $ 8,145 5,369
======== ======
Supplemental schedule of non-cash activities:
Unrealized gain (loss) in values of securities
available-for-sale, net of income tax benefit
of $1,052,000 and income tax expense of $76,000
for the nine months ended September 30, 1999
and 1998, respectively. $ (1,717) 120
======== ======
Non-cash transfers from loans to other real estate $ 331 106
======== ======
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
7
<PAGE> 8
WILSON BANK HOLDING COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The unaudited consolidated financial statements include the accounts of Wilson
Bank Holding Company (Company), its wholly-owned subsidiary, Wilson Bank &
Trust, Hometown Finance Company, a wholly-owned subsidiary of Wilson Bank and
Trust, DeKalb Community Bank, a 50% owned subsidiary, and Community Bank of
Smith County, a 50% owned subsidiary.
The accompanying consolidated financial statements have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations.
In the opinion of management, the consolidated financial statements contain all
adjustments and disclosures necessary to summarize fairly the financial position
of the Company as of September 30, 1999 and December 31, 1998, and the results
of operations for the three months and nine months ended September 30, 1999 and
1998, comprehensive earnings for the three months and nine months ended
September 30, 1999 and 1998 and changes in cash flows for the nine months ended
September 30, 1999 and 1998. All significant intercompany transactions have been
eliminated. The interim consolidated financial statements should be read in
conjunction with the notes to the consolidated financial statements presented in
the Company's 1998 Annual Report to Stockholders. The results for interim
periods are not necessarily indicative of results to be expected for the
complete fiscal year.
ALLOWANCE FOR LOAN LOSSES
Transactions in the allowance for loan losses were as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
1999 1998
---- ----
(In Thousands)
<S> <C> <C>
Balance, January 1, 1999 and 1998, respectively $ 3,244 2,890
Add (deduct):
Losses charged to allowance (452) (421)
Recoveries credited to allowance 73 43
Provision for loan losses 849 782
----------- ----------
Balance, September 30, 1999 and 1998, respectively $ 3,714 3,294
=========== ==========
</TABLE>
STOCK SPLIT
The Company's Board of Directors voted a 1 for 3 stock split for stockholders of
record as of October 1, 1999. The split will have no impact on the total capital
of the Company.
STOCK OPTION PLAN
On April 13, 1999, the Company's stockholders approved the 1999 Stock Option
Plan. Options totaling 36,250 with an option price of $40.75 per share have been
granted to executive officers and employees of the Bank. On a post stock split
basis there are 48,313 options outstanding at an exercise price of $30.56 per
share.
8
<PAGE> 9
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The purpose of this discussion is to provide insight into the
financial condition and results of operations of the Company and its
subsidiaries. This discussion should be read in conjunction with the
consolidated financial statements. Reference should also be made to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 for a
more complete discussion of factors that impact liquidity, capital and the
results of operations.
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains certain forward-looking statements
regarding, among other things, the anticipated financial and operating results
of the Company. Investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release any modifications or revisions to
these forward-looking statements to reflect events or circumstances occurring
after the date hereof or to reflect the occurrence of unanticipated events.
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions investors that
future financial and operating results may differ materially from those
projected in forward-looking statements made by, or on behalf of, the Company.
Such forward-looking statements involve known and unknown risks and
uncertainties, including, but not limited to sudden adverse interest rate
changes, inadequate allowance for loan losses, loss of key personnel and
interruptions in operations caused by the Year 2000 problem. These risks and
uncertainties may cause the actual results or performance of the Company to be
materially different from any future results or performance expressed or implied
by such forward-looking statements. The Company's future operating results
depend on a number of factors which were derived utilizing numerous assumptions
and other important factors that could cause actual results to differ materially
from those projected in forward-looking statements.
RESULTS OF OPERATIONS
Net earnings increased 6.1% to $3,828,000 for the nine months
ended September 30, 1999 from $3,607,000 in the first nine months of 1998. Net
earnings were $1,313,000 for the quarter ended September 30, 1999, an increase
of $89,000 or 7.3% from $1,224,000 for the three months ended September 30, 1998
and a decrease of $54,000 or 4.0% over the quarter ended June 30, 1999. The
increase in net earnings during the nine months ending September 30, 1999 was
primarily due to a 20.5% increase in net interest income and a 6.0% increase in
non-interest income which was partially offset by a 23.6% increase in
non-interest expenses.
NET INTEREST INCOME
Net interest income represents the amount by which interest earned
on various earning assets exceeds interest paid on deposits and other
interest-bearing liabilities and is the most significant component of the
Company's earnings. The Company's total interest income, excluding tax
equivalent adjustments, increased $3,332,000 or 14.4% during the nine months
ended September 30, 1999 as compared to the same period in 1998. The increase in
total interest income was $1,030,000 or 12.8% for the quarter ended September
30, 1999 as compared to the quarter ended September 30, 1998 and $218,000 or
2.5% over the second quarter of 1999. The increase in 1999 was primarily
attributable to an
9
<PAGE> 10
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
NET INTEREST INCOME, CONTINUED
increase in average earning assets of $68,678,000 to $427,211,000 at September
30, 1999 from $358,533,000 at September 30, 1998. The ratio of average earning
assets to total average assets was 90.5%, 91.1% and 92.6% for the quarters ended
September 30, 1999, June 30, 1999 and March 31, 1999, respectively.
Interest expense increased $1,016,000 or 8.6% for the nine months
ended September 30, 1999 as compared to the same period in 1998. The increase
was $240,000 or 5.8% for the three months ended September 30, 1999 as compared
to the same period in 1998. Interest expense increased $144,000 or 3.4% for the
quarter ended September 30, 1999 over the second quarter of 1999. The overall
increase in total interest expense for the first nine months of 1999 was
primarily attributable to an increase in weighted average interest-bearing
liabilities.
The foregoing resulted in an increase in net interest income of
$2,316,000 or 20.5% for the first nine months of 1999 as compared to the same
period in 1998. The increase was $790,000 or 20.3% for the quarter ended
September 30, 1999 compared to the quarter ended September 30, 1998 and an
increase of $74,000 or 1.6% when compared to the second quarter of 1999.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses was $849,000 and $782,000
for the first nine months of 1999 and 1998, respectively. The provision for
possible loan losses during the three month periods ended September 30, 1999 and
1998 was $258,000 and $270,000, respectively. The provision for possible loan
losses is based on past loan experience and other factors which, in management's
judgment, deserve current recognition in estimating possible loan losses. Such
factors include past loan loss experience, growth and composition of the loan
portfolio, review of specific problem loans, the relationship of the allowance
for loan losses to outstanding loans, and current economic conditions that may
affect the borrower's ability to repay. Management has in place a system
designed for monitoring its loan portfolio in an effort to identify potential
problem loans. The provision for possible loan losses raised the allowance for
possible loan losses to $3,714,000, an increase of 14.5% from $3,244,000 at
December 31, 1998. The allowance for possible loan losses as a percentage of
total outstanding loans was 1.1% at September 30, 1999 and December 31, 1998,
respectively.
The level of the allowance and the amount of the provision involve
evaluation of uncertainties and matters of judgment. Management believes the
allowance for possible loan losses at September 30, 1999 to be adequate.
NON-INTEREST INCOME
The components of the Company's non-interest income include
service charges on deposit accounts, other fees and commissions, gain on sale of
loans, security gains, gain on sale of fixed assets and gain on sale of other
real estate. Total non-interest income for the nine months ended September 30,
1999 increased by 6.0% to $3,389,000 from $3,196,000 for the same period in
1998. The increase was $60,000 or 5.5% during the quarter ended September 30,
1999 compared to the third quarter in 1998 and the decrease was $71,000 or 5.8%
over the quarter ended June 30, 1999. The overall increase in non-interest
income was due primarily to increases in service charges on deposit accounts and
other fees and
10
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WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
NON-INTEREST INCOME, CONTINUED
commissions. Service charges on deposit accounts totaled $1,520,000 and
$1,231,000 during the nine months ended September 30, 1999 and 1998,
respectively, an increase of $289,000 or 23.5%. Service charges on deposit
accounts totaled $548,000 and $447,000 during the quarters ended September 30,
1999 and 1998, respectively, an increase of $101,000 or 22.6%. Other fees and
commissions increased $64,000 or 5.6% during the nine months ended September 30,
1999 compared to the same period in 1998. Other fees and commissions increased
$35,000 or 9.3% during the quarter ended September 30, 1999 compared to the same
period in 1998.
NON-INTEREST EXPENSE
Non-interest expense consists primarily of salaries and employee
benefits, occupancy expenses, furniture and equipment expenses, data processing
expenses, other operating expenses, loss on sale of fixed assets and minority
interest in net earnings of subsidiaries. Total non-interest expense increased
$1,938,000 or 23.6% during the first nine months of 1999 compared to the same
period in 1998. The increase for the quarter ended September 30, 1999 was
$660,000 or 23.3% as compared to the comparable quarter in 1998 and $52,000 or
1.5% as compared to the second quarter of 1999. The increase in non-interest
expense was attributable primarily to increases in salaries and employee
benefits associated with an increase in the number of employees necessary to
support the Company's expanded operations. The number of employees increased to
195 at September 30, 1999, an increase from 188 at September 30, 1998. The
increase in occupancy expenses was also due to the Company's expanded
operations. Other operating expenses for the nine months ended September 30,
1999 increased to $2,421,000 from $2,027,000 for the comparable period in 1998.
Other operating expenses increased $107,000 or 15.3% during the quarter ended
September 30, 1999 as compared to the same period in 1998. These expenses
include Federal deposit insurance premiums, supplies and general operating costs
which increased as a result of continued growth of the Company.
INCOME TAXES
The Company's income tax expense was $2,192,000 for the nine
months ended September 30, 1999, an increase of $283,000 as compared to the
comparable period in 1998. Income tax expense was $775,000 for the quarter ended
September 30, 1999, an increase of $113,000 over the same period in 1998. The
percentage of income tax expense to net income before taxes was 36.4% and 34.6%
for the nine months ended September 30, 1999 and 1998, respectively and 37.1%
and 35.1% for the quarters ended September 30, 1999 and 1998, respectively. The
percentage of income tax expense to net income before tax was 36.0% for the
second quarter of 1999. The increase in the percentage is due to a decrease in
the amount of tax exempt interest income as a percentage of total interest
income. This percentage was 2.2% for the nine months ended September 30, 1999
compared to 3.5% for the nine months ended September 30, 1998.
11
<PAGE> 12
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
FINANCIAL CONDITION
BALANCE SHEET SUMMARY
The Company's total assets increased 8.6% to $469,021,000 during
the nine months ended September 30, 1999 from $431,975,000 at December 31, 1998.
Total assets increased $7,706,000 or 1.7%, $9,431,000 or 2.1% and $19,909,000 or
4.6% during the three month periods ended September 30, 1999, June 30, 1999 and
March 31, 1999, respectively. Loans, net of allowance for possible loan losses
totaled $339,932,000 at September 30, 1999 or a 16.1% increase compared to
$292,686,000 at December 31, 1998. Net loans increased $17,762,000 or 5.5%,
$18,230,000 or 6.0% and $11,254,000 or 3.8% during the quarters ended September
30, 1999, June 30, 1999 and March 31, 1999, respectively. These increases were
primarily due to the continued favorable interest rate environment which
motivated the refinancing of mortgages and the Company's ability to increase its
market share of such loans while maintaining its loan underwriting standards.
Securities increased $11,620,000 or 15.8% to $85,208,000 at September 30, 1999
from $73,588,000 at December 31, 1998. Securities increased $1,308,000 or 1.6%
during the three months ended September 30, 1999. The increase in securities
included a net unrealized loss of $1,717,000 during the nine month period ending
September 30, 1999. Federal funds sold decreased $19,013,000 to $5,963,000 at
September 30, 1999 from $24,976,000 at December 31, 1998.
Total liabilities increased by 8.7% to $437,810,000 for the nine
months ended September 30, 1999 compared to $402,710,000 at December 31, 1998.
The increase by quarter totaled $7,103,000 or 1.6%, $8,892,000 or 2.1% and
$19,105,000 or 4.7% during the quarters ended September 30, 1999, June 30, 1999
and March 31, 1999, respectively. These increases were composed primarily of a
$30,482,000 or 7.8% increase in total deposits and an increase of $4,189,000 or
57.7% in securities sold under repurchase agreements during the nine months
ended September 30, 1999.
The Company follows the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan" and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosures". These pronouncements apply to impaired
loans except for large groups of smaller-balance homogeneous loans that are
collectively evaluated for impairment including credit card, residential
mortgage, and consumer installment loans.
A loan is impaired when it is probable that the Company will be
unable to collect the scheduled payments of principal and interest due under the
contractual terms of the loan agreement. Impaired loans are measured at the
present value of expected future cash flows discounted at the loan's effective
interest rate, at the loan's observable market price, or the fair value of the
collateral if the loan is collateral dependent. If the measure of the impaired
loan is less than the recorded investment in the loan, the Company shall
recognize an impairment by creating a valuation allowance with a corresponding
charge to the provision for loan losses or by adjusting an existing valuation
allowance for the impaired loan with a corresponding charge or credit to the
provision for loan losses.
12
<PAGE> 13
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
The Company's first mortgage single family residential, consumer
and credit card loans, which total approximately $154,996,000, $51,487,000 and
$1,747,000, respectively at September 30, 1999, are divided into various groups
of smaller-balance homogeneous loans that are collectively evaluated for
impairment and thus are not subject to the provisions of SFAS Nos. 114 and 118.
Substantially all other loans of the Company are evaluated for impairment under
the provisions of SFAS Nos. 114 and 118.
The Company considers all loans subject to the provisions of SFAS
114 and 118 that are on nonaccrual status to be impaired. Loans are placed on
nonaccrual status when doubt as to timely collection of principal or interest
exists, or when principal or interest is past due 90 days or more unless such
loans are well-secured and in the process of collection. Delays or shortfalls in
loan payments are evaluated with various other factors to determine if a loan is
impaired. Generally, delinquencies under 90 days are considered insignificant
unless certain other factors are present which indicate impairment is probable.
The decision to place a loan on nonaccrual status is also based on an evaluation
of the borrower's financial condition, collateral, liquidation value, and other
factors that affect the borrower's ability to pay.
Generally, at the time a loan is placed on nonaccrual status, all
interest accrued on the loan in the current fiscal year is reversed from income,
and all interest accrued and uncollected from the prior year is charged off
against the allowance for loan losses. Thereafter, interest on nonaccrual loans
is recognized as interest income only to the extent that cash is received and
future collection of principal is not in doubt. If the collectibility of
outstanding principal is doubtful, such interest received is applied as a
reduction of principal. A nonaccrual loan may be restored to accruing status
when principal and interest are no longer past due and unpaid and future
collection of principal and interest on a timely basis is not in doubt. At
September 30, 1999, the Company had nonaccrual loans totaling $120,000 as
compared to $223,000 at December 31, 1998.
Other loans may be classified as impaired when the current net
worth and financial capacity of the borrower or of the collateral pledged, if
any, is viewed as inadequate. In those cases, such loans have a well-defined
weakness or weaknesses that jeopardize the liquidation of the debt, and if such
deficiencies are not corrected, there is a probability that the Company will
sustain some loss. In such cases, interest income continues to accrue as long as
the loan does not meet the Company's criteria for nonaccrual status.
Generally the Company also classifies as impaired any loans the
terms of which have been modified in a troubled debt restructuring after January
1, 1995. Interest is accrued on such loans that continue to meet the modified
terms of their loan agreements. At September 30, 1999, the Company had no loans
that have had the terms modified in a troubled debt restructuring.
The Company's charge-off policy for impaired loans is similar to
its charge-off policy for all loans in that loans are charged-off in the month
when they are considered uncollectible.
13
<PAGE> 14
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
Impaired loans and related allowance for loan loss amounts at
September 30, 1999 and December 31, 1998 were as follows:
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
---------------------- ------------------------
Allowance Allowance
Recorded for Recorded for
(In Thousands) Investment Loan Loss Investment Loan Loss
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Impaired loans with allowance for
loan loss $ -- -- 241 156
Impaired loans with no allowance for
loan loss -- -- -- --
-------- ------- --------- --------
$ -- -- 241 156
======== ======= ========= ========
</TABLE>
The allowance for loan loss related to impaired loans was measured
based upon the estimated fair value of related collateral.
The average recorded investment in impaired loans for the year
ended December 31, 1998 was $219,000. There was no interest income recognized on
these loans during 1998.
The following schedule details selected information as to
non-performing loans of the Company at September 30, 1999:
<TABLE>
<CAPTION>
September 30, 1999
--------------------------
Past Due
90 Days Non-Accrual
------- -----------
(In Thousands)
<S> <C> <C>
Real estate loans $ 134 --
Installment loans 240 120
Commercial, financial and agricultural
loans 20 --
----------- ---------
$ 394 120
=========== =========
Renegotiated loans $ -- --
============ =========
</TABLE>
Non-performing loans, which included non-accrual loans and loans
90 days past due, at September 30, 1999 totaled $514,000, a decrease of 34.0%
from $779,000 at December 31, 1998. During the three months ended September 30,
1999, non-performing loans decreased $371,000 or 41.9% from $885,000 at June 30,
1999.
14
<PAGE> 15
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
At September 30, 1999, loans totaling $797,000 (including the
above past due and non-accrual loans) were included in the Company's internal
classified loan list. Of these loans, $475,000 are real estate and $322,000 are
personal. The collateral values securing these loans total approximately
$910,000, ($664,000 related to real property and $246,000 related to personal
loans). The internally classified loans have decreased $806,000 or 50.3% from
$1,603,000 at December 31, 1998. Internally classified real estate loans
decreased $711,000 and personal loans decreased $95,000 from December 31, 1998
amounts. Loans are listed as classified when information obtained about possible
credit problems of the borrower has prompted management to question the ability
of the borrower to comply with the repayment terms of the loan agreement. The
loan classifications do not represent or result from trends or uncertainties
which management expects will materially impact future operating results,
liquidity or capital resources.
LIQUIDITY AND ASSET MANAGEMENT
The Company's management seeks to maximize net interest income by
managing the Company's assets and liabilities within appropriate constraints on
capital, liquidity and interest rate risk. Liquidity is the ability to maintain
sufficient cash levels necessary to fund operations, meet the requirements of
depositors and borrowers and fund attractive investment opportunities. Higher
levels of liquidity bear corresponding costs, measured in terms of lower yields
on short-term, more liquid earning assets and higher interest expense involved
in extending liability maturities.
Liquid assets include cash and cash equivalents and securities and
money market instruments that will mature within one year. At September 30,
1999, the Company's liquid assets totaled $41,472,000.
The Company's primary source of liquidity is its core deposit
base. In addition, loan payments, investment security maturities and short-term
borrowings provide a secondary source.
Interest rate risk (sensitivity) focuses on the earnings risk
associated with changing interest rates. Management seeks to maintain
profitability in both immediate and long term earnings through funds
management/interest rate risk management. The Company's rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position of the subsidiary banks.
These meetings focus on the spread between the Company's cost of funds and
interest yields generated primarily through loans and investments.
The Company's securities portfolio consists of earning assets that
provide interest income. For those securities classified as held-to-maturity the
Company has the ability and intent to hold these securities to maturity or on a
long-term basis. Securities classified as available-for-sale include securities
intended to be used as part of the Company's asset/liability strategy and/or
securities that may be sold in response to changes in interest rate, prepayment
risk, the need or desire to increase capital and similar economic factors.
Securities totaling $4.4 million mature or will be subject to rate adjustments
within the next twelve months.
A secondary source of liquidity is the Bank's loan portfolio. At
September 30, 1999 loans of approximately $216.3 million either will become due
or will be subject to rate adjustments within twelve months from that date.
Continued emphasis will be placed on structuring adjustable rate loans.
15
<PAGE> 16
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
LIQUIDITY AND ASSET MANAGEMENT, CONTINUED
As for liabilities, certificates of deposit of $100,000 or greater
totaling approximately $79.7 million will become due during the next twelve
months. Historically, there has been no significant reduction in immediately
withdrawable accounts such as negotiable order of withdrawal accounts, money
market demand accounts, demand deposit and regular savings. Management does not
anticipate that there will be significant withdrawals from these accounts in the
future.
Management believes that with present maturities, the anticipated
growth in deposit base, and the efforts of management in its asset/liability
management program, liquidity will not pose a problem in the near term future.
At the present time there are no known trends or any known commitments, demands,
events or uncertainties that will result in or that are reasonably likely to
result in the Company's liquidity changing in a materially adverse way.
CAPITAL POSITION AND DIVIDENDS
Capital. At September 30, 1999, total stockholders' equity was
$31,211,000 or 6.7% of total assets, which compares with $29,265,000 or 6.8% of
total assets at December 31, 1998. The dollar increase in stockholders' equity
during the nine months ended September 30, 1999 results from the Company's net
income of $3,828,000, the net effect of a $1,717,000 unrealized loss on
investment securities net of applicable income taxes, less cash dividends
declared of $1,447,000, of which $1,282,000 was reinvested under the Company's
dividend reinvestment plan.
The Company's principal regulators have established minimum
risk-based capital requirements and leverage capital requirements for the
Company and its subsidiary banks. These guidelines classify capital into two
categories of Tier I and total risk-based capital. Total risk-based capital
consists of Tier I (or core) capital (essentially common equity less intangible
assets) and Tier II capital (essentially qualifying long-term debt, of which the
Company and its subsidiary banks have none, and a part of the allowance for
possible loans losses). In determining risk-based capital requirements, assets
are assigned risk-weights of 0% to 100%, depending on regulatory assigned levels
of credit risk associated with such assets. The risk-based capital guidelines
requires the subsidiary banks and the Company to have a total risk-based capital
ratio of 8.0% and a Tier I risk-based capital ratio of 4.0%. At September 30,
1999 the Company's total risk-based capital ratio was 12.0% and its Tier I
risk-based capital ratio was approximately 10.9% compared to ratios of 12.3% and
11.2%, respectively at December 31, 1998. The required Tier I leverage capital
ratio (Tier I capital to average assets for the most recent quarter) for the
Company is 4.0%. At September 30, 1999, the Company had a leverage ratio of
7.7%, compared to 7.8% at December 31, 1998.
IMPACT OF INFLATION
Although interest rates are significantly affected by inflation,
the inflation rate is immaterial when reviewing the Company's results of
operations.
16
<PAGE> 17
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
YEAR 2000
The term "Year 2000 issue" refers to the necessity of converting
computer information systems so that such systems recognize more than two digits
to identify a year in any given date field, and are thereby able to
differentiate between years in the twentieth and twenty-first centuries ending
with the same two digits (e.g., 1900 and 2000). To address the Year 2000 issue,
the Company has adopted a broad-based approach designed to encompass the
Company's total environment.
The Company has appointed a Year 2000 committee which was
established in mid-1997. The Y2K Committee has representation from all affected
areas for the purpose of managing the process of assessing and correcting
non-compliance throughout the organization. Areas being addressed by the Y2K
Committee include:
- - Subsidiary banks' primary data processing system. Jack Henry, a major
data processor, provides the primary software and hardware for the data
processing system of the subsidiary banks. This software and hardware is
of the highest priority for day to day operations, accounting and success
of the subsidiary banks.
- - Government systems, such as the Federal Reserve Bank for check clearing,
wire transfers, and the free flow and exchange of funds between
institutions are absolutely critical.
- - The internal PC hardware and software systems within the subsidiary
banks, along with telecommunications systems.
- - The primary securities portfolio accounting and safekeeping system for
the subsidiary banks.
- - Credit administration - the committee is reviewing the risk associated
with Year 2000 status of the subsidiary banks' loan customers and
depositors.
The Company's Y2K Committee is using a 4-phase approach in its
Year 2000 project made up of awareness, assessment, renovation, and
validation-testing. The Company is currently in the final phase of its Y2K
project.
The purpose of the Y2K committee is to assess, test and correct
the Company's hardware, software and equipment to ensure these systems operate
properly in the Year 2000. The Committee has substantially completed its
assessment of the Company's systems, has identified the Company's hardware,
software and equipment that will not operate properly in the Year 2000 and has
remedied the problem with the replacement of hardware that is compliant. As of
September 30, 1999 the Y2K committee has determined that substantially all of
the Company's systems will operate properly in the Year 2000.
17
<PAGE> 18
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
YEAR 2000, CONTINUED
The programming changes and software replacement for systems that
were not Year 2000 compliant were completed during the first quarter of 1999.
The Jack Henry Company has tested the Jack Henry Silver Lake Operating system
and the Company has documentation on file that the operating system is Y2K
compliant. The Company tested the software using its own database to ensure the
readiness of the Company to service its customer base into the Year 2000. The
testing was completed the week of December 7, 1998 and the results have been
reviewed by the Company's Audit Department. A test script has been prepared on
the findings. No problems were noted during the examination of the Company
records.
The Company has requested and received written documentation from
vendors and suppliers with whom the Company has a material relationship
regarding their ability to operate properly in the Year 2000. These vendors and
suppliers have either confirmed their current Y2K readiness or provided target
Y2K readiness dates acceptable to the Company. The Company will consider
alternatives related to vendors and suppliers that do not meet their Year 2000
readiness target dates. There can be no assurance however, that all of the
Company's significant vendors and suppliers will have remedied their Year 2000
issues. The Company will continue to monitor its significant vendors and
suppliers to seek to minimize the Company's risk.
The Company is requiring Y2K readiness information from all of its
major borrowers. The Company believes commercial borrowers must realize the
impact that the Y2K could have on their respective businesses. Seminars,
questionnaires and individual contact with loan customers will be continued as
an ongoing prevention measure during the 1999 year. The Company realizes the
materially adverse impact that the lack of Y2K preparation of loan customers
would have on the Company during the Year 2000.
Customer awareness of the Company's Y2K readiness is critical. The
steps taken by the Company to prepare for the Year 2000 will continue to be
shared with customers through Quarterly Newsletters, statement stuffers and the
Y2K training of employees. The Company believes customers must have a high
confidence level in the Company at the end of 1999 to avoid mass withdrawals of
funds from the Company. The Company is working toward a comprehensive customer
awareness program during the 1999 year.
18
<PAGE> 19
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
YEAR 2000, CONTINUED
Based on the Company's current estimates, the Company has
allocated $250,000 in its 1999 budget to fund testing and replacement costs.
Included in the Company's cost estimates are the cost of replacing hardware and
software of approximately $100,000, which will be capitalized and amortized over
their estimated useful lives. The remaining costs are expensed as incurred.
These projected costs are based upon management's best estimates, which are
derived utilizing numerous assumptions of future events. As of September 30,
1999, the costs that have been incurred on the Year 2000 issue is the cost of
testing the operating system of $30,000 plus the cost of testing the personal
computers of $2,500. The cost of renovations has been minimal because there have
not been any major renovations, upgrades or software conversions needed. The
personnel cost continues to be one of the more costly aspects of the Y2K
project. The current personnel cost to date is approximately $105,000. The
personnel cost have been expensed through the regular salary structure. The cost
expected to be incurred the remaining portion of the year will be used to
promote the Customer Awareness program.
The Company believes that the reasonably likely worse case
scenario that could occur as a result of the Year 2000 issue is loss of
electricity and telephone services. Deposit, withdrawal, and other transaction
processing for customers of the subsidiary banks depends directly on the
Company's information technology systems and also on use of electricity as well
as telephone services. While the Company believes its own systems to be Y2K
ready, loss of power could significantly delay the subsidiary banks' ability to
adequately process bank and customer transactions, thus adversely impacting the
Company's operations. The Company has purchased a generator to help with this
potential problem. In addition, the Company has developed a contingency plan to
address the possibility of power outages and telephone service disruption, as
well as all other operational impairments identified that could occur as a
result of the Y2K problem.
The Board of Directors has approved the Company's written
contingency plan and receives monthly updates on the Company's Y2K readiness and
the Y2K Committee's progress. The contingency plan addresses all aspects of the
Company's operation systems identifying the subsidiary banks' major processing
systems as critical, semi-critical, and non-critical. Alternative plans are in
place for many of the systems identified detailing information on contingency
processes, their capabilities, and the personnel that are responsible for
addressing and correcting system issues and supervising alternative plans. For
example, certain personnel are identified to test electricity and telephone
services at each bank office on Saturday, January 1, 2000. These persons have
addresses, phone, beeper and mobile numbers for other key bank and Company
management in order to communicate findings. The plan identifies contact
individuals' phone numbers, and addresses of electrical service and telephone
service providers. The plan further provides for both on-site and off-site
locations, materials, personnel staff, and procedures to implement back-up
transaction processing in the event electricity is not restored by Monday,
January 3, 2000 going forward. The contingency plan will continually be updated
as final testing of each critical and semi-critical application has been
completed, and if and as new critical and semi-critical systems are identified.
19
<PAGE> 20
WILSON BANK HOLDING COMPANY
FORM 10-Q, CONTINUED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, CONTINUED
YEAR 2000, CONTINUED
The foregoing notwithstanding, management does not currently
believe that the costs of assessment, remediation, or replacement of the
Company's systems, or the potential failure of third parties' systems will have
a material adverse effect on the Company's business, financial condition,
results of operations, or liquidity.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary component of market risk is interest rate
volatility. Fluctuations in interest rates will ultimately impact both the level
of income and expense recorded on a large portion of the Company's assets and
liabilities, and the market value of all interest-earning assets and
interest-bearing liabilities, other than those which possess a short term to
maturity. Based upon the nature of the Company's operations, the Company is not
subject to foreign currency exchange or commodity price risk.
Interest rate risk (sensitivity) management focuses on the
earnings risk associated with changing interest rates. Management seeks to
maintain profitability in both immediate and long term earnings through funds
management/interest rate risk management. The Company's rate sensitivity
position has an important impact on earnings. Senior management of the Company
meets monthly to analyze the rate sensitivity position. These meetings focus on
the spread between the cost of funds and interest yields generated primarily
through loans and investments.
There have been no material changes in reported market risks
during the nine months ended September 30, 1999.
20
<PAGE> 21
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 Financial Data Schedule (for SEC use only) - This
schedule contains summary financial information extracted from
the consolidated financial statements of the Company at September
30, 1999 (unaudited) and is qualified in its entirety by
reference to such financial statements as set forth in the
Company's quarterly report on Form 10-Q for the period ending
September 30, 1999.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
21
<PAGE> 22
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.
WILSON BANK HOLDING COMPANY
--------------------------------------
(Registrant)
DATE: November 8, 1999 /s/ Randall Clemons
---------------------- --------------------------------------
Randall Clemons
President and Chief Executive Officer
DATE: November 8, 1999 /s/ Becky Taylor
---------------------- --------------------------------------
Becky Taylor
Sr. Vice President & Cashier
22
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 13,316
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,963
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 68,171
<INVESTMENTS-CARRYING> 17,037
<INVESTMENTS-MARKET> 16,845
<LOANS> 343,646
<ALLOWANCE> 3,714
<TOTAL-ASSETS> 469,021
<DEPOSITS> 419,587
<SHORT-TERM> 11,447
<LIABILITIES-OTHER> 3,189
<LONG-TERM> 0
0
0
<COMMON> 2,942
<OTHER-SE> 28,269
<TOTAL-LIABILITIES-AND-EQUITY> 469,021
<INTEREST-LOAN> 21,688
<INTEREST-INVEST> 3,852
<INTEREST-OTHER> 936
<INTEREST-TOTAL> 26,476
<INTEREST-DEPOSIT> 12,573
<INTEREST-EXPENSE> 12,861
<INTEREST-INCOME-NET> 13,615
<LOAN-LOSSES> 849
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 10,135
<INCOME-PRETAX> 6,020
<INCOME-PRE-EXTRAORDINARY> 6,020
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,828
<EPS-BASIC> 2.49
<EPS-DILUTED> 2.49
<YIELD-ACTUAL> 3.1
<LOANS-NON> 120
<LOANS-PAST> 394
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 797
<ALLOWANCE-OPEN> 3,244
<CHARGE-OFFS> 452
<RECOVERIES> 73
<ALLOWANCE-CLOSE> 3,714
<ALLOWANCE-DOMESTIC> 3,714
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
