<PAGE> 1
Securities and Exchange Commission
WASHINGTON, D. C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended: March 31, 2000
or
[ ] 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: 0-23101
LAUREL CAPITAL GROUP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1717451
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2724 Harts Run Road
Allison Park, Pennsylvania 15101
- --------------------------------------- ----------
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (412) 487-7404
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
--- ---
The number of shares outstanding for each of the issuer's classes of common
stock, as of the latest practicable date is:
Class: Common stock, par value $.01 per share
Outstanding at May 1, 2000: 2,048,202 shares
<PAGE> 2
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
INDEX
Part I - Financial Information Page
- ------------------------------ ----
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition as of
March 31, 2000 and June 30, 1999 ................................... 1
Consolidated Statements of Operations for the Three
and Nine Months Ended March 31, 2000 and 1999 ...................... 2
Consolidated Statement of Stockholders' Equity for the
Nine months Ended March 31, 2000 .....................................3
Consolidated Statement of Cash Flows for the Nine
Months Ended March 31, 2000 and 1999 .................................4
Notes to Unaudited Consolidated Financial Statements ...............5-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..............................10-17
Item 3. Quantitative and Qualitative Disclosures about Market Risk ..........18
Part II - Other Information
- ---------------------------
Item 1. Legal Proceedings ...........................................18
Item 2. Changes in Securities and Use of Proceeds ...................18
Item 3. Defaults Upon Senior Securities .............................18
Item 4. Submission of Matters to a Vote of Security Holders .........18
Item 5. Other Information ...........................................18
Item 6. Exhibits and Reports on Form 8-K ............................18
Signatures ...................................................................19
<PAGE> 3
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
(In thousands)
<TABLE>
<CAPTION>
March 31, June 30,
2000 1999
- -----------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
Cash $ 816 $ 690
Money market investments -- 3,711
Interest-earning deposits with other institutions 4,041 7,710
Investment securities available for sale 38,616 35,549
Investment securities held to maturity (market value of $21,179 and $12,224) 21,929 12,439
Mortgage-backed securities available for sale 11,245 11,868
Mortgage-backed securities held to maturity (market value of $445 and $1,074) 447 1,072
Loans receivable, held for sale 1,622 1,562
Loans receivable, net of unearned discounts of $1 and $2 160,576 153,256
Allowance for loan losses (1,809) (1,866)
- -----------------------------------------------------------------------------------------------------------------------------------
Loans receivable, net 158,767 151,390
Federal Home Loan Bank Stock 1,281 1,277
Real estate owned 199 377
Accrued interest receivable:
Loans 834 846
Interest-earning deposits and investments 580 492
Mortgage-backed securities 67 71
Office properties and equipment, net of accumulated depreciation 1,454 1,458
Prepaid expenses and sundry assets 1,319 962
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets $243,217 $231,474
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Savings deposits $190,257 $182,118
FHLB Advances 24,425 20,029
Advance deposits by borrowers for taxes and insurance 2,368 3,020
Accrued interest payable 1,495 500
Accrued income taxes 208 294
Other accrued expenses and sundry liabilities 955 983
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 219,708 206,944
- -----------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity
Common stock, $.01 par value; 5,000,000
shares authorized; 2,329,172 and 2,324,298 shares
issued, respectively 23 23
Additional paid-in capital 5,223 5,197
Treasury stock, at cost (275,370 and 152,120 shares) (3,984) (2,270)
Retained earnings 23,529 22,070
Accumulated other comprehensive loss, net of tax (882) (190)
Stock held in deferred compensation trust (400) (300)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 23,509 24,530
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $243,217 $231,474
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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<PAGE> 4
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Three and Nine Months Ended March 31, 2000 and 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31, March 31,
------------------ -------------------
2000 1999 2000 1999
------ ------ ------- -------
<S> <C> <C> <C> <C>
Interest Income:
Loans $2,976 $2,962 $ 8,812 $ 8,924
Mortgage-backed securities 207 188 631 598
Investments 951 628 2,718 1,901
Interest-earning deposits 20 122 65 334
------ ------ ------- -------
Total interest income 4,154 3,900 12,226 11,757
Interest expense:
Savings deposits 1,849 1,730 5,410 5,322
Borrowings 309 265 869 737
------ ------ ------- -------
Total interest expense 2,158 1,995 6,279 6,059
------ ------ ------- -------
Net interest income before provision
for loan losses 1,996 1,905 5,947 5,698
Provision for loan losses 4 5 13 14
------ ------ ------- -------
Net interest income after provision
for loan losses 1,992 1,900 5,934 5,684
------ ------ ------- -------
Other income:
Service charges 134 122 406 425
Net gain on sale of investments and
mortgage-backed securities available for sale -- -- -- 225
Gain on the sale of loans held for sale -- 1 11 15
Other operating income 65 48 186 147
------ ------ ------- -------
Total other income 199 171 603 812
------ ------ ------- -------
Operating expenses:
Compensation, payroll taxes and
fringe benefits 488 454 1,422 1,356
Premises and occupancy costs 138 128 426 361
Federal insurance premiums 9 27 62 79
Net loss on real estate owned (1) 5 39 21
Data processing expense 53 50 157 159
Professional fees 34 45 149 178
Other operating expenses 213 206 677 678
------ ------ ------- -------
Total operating expenses 934 915 2,932 2,832
------ ------ ------- -------
Income before income taxes 1,257 1,156 3,605 3,664
------ ------ ------- -------
Provision for income taxes:
Federal 330 306 943 1,013
State 58 79 173 250
------ ------ ------- -------
Total income taxes 388 385 1,116 1,263
------ ------ ------- -------
Net income $ 869 $ 771 $ 2,489 $ 2,401
====== ====== ======= =======
Earnings per share
Basic $ 0.41 $ 0.35 $ 1.17 $ 1.10
====== ====== ======= =======
Diluted $ 0.40 $ 0.34 $ 1.13 $ 1.04
====== ====== ======= =======
Dividends per share $ 0.16 $ 0.15 $ 0.48 $ 0.45
====== ====== ======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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<PAGE> 5
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
(Unaudited)
For the Nine Months Ended March 31, 2000
(In thousands)
<TABLE>
<CAPTION>
Accumulated
Other Stock Held in
Additional Comprehensive Deferred Total
Common Paid-in Treasury Retained Income Compensation Stockholders'
Stock Capital Stock Earnings Net of Tax Trust Equity
------ ---------- -------- -------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, June 30, 1999 $ 23 $5,197 $(2,270) $22,070 $(190) $(300) $24,530
Comprehensive income:
Net income -- -- -- 2,489 -- -- 2,489
Other comprehensive loss,
net of tax $(356) -- -- -- -- (692) -- (692)
---- ------ ------- ------- ----- ----- -------
Total comprehensive income -- -- -- 2,489 (692) -- 1,797
Stock options exercised
(4,874 shares) -- 26 -- -- -- -- 26
Dividends on common stock
at $0.48 per share -- -- -- (1,030) -- -- (1,030)
Treasury stock purchased -- -- (1,714) -- -- -- (1,714)
Net purchase of stock in
deferred compensation trust -- -- -- -- -- (100) (100)
---- ------ ------- ------- ----- ----- -------
Balance, March 31, 2000 $ 23 $5,223 $(3,984) $23,529 $(882) $(400) $23,509
==== ====== ======= ======= ===== ===== =======
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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<PAGE> 6
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended March 31, 2000 and 1999
(In thousands)
<TABLE>
<CAPTION>
2000 1999
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income: $ 2,489 $ 2,401
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 147 109
Provision for loan losses 13 14
Net loss on sale of real estate owned 19 15
Net gain on sale of investment securities available for sale -- (225)
Gain on the sale of loans held for sale (11) (15)
Amortization of deferred loan fees (79) (131)
Origination of loans held for sale (772) (800)
Proceeds from sale of loans held for sale 723 807
(Increase) decrease in accrued interest receivable (72) 82
Increase in accrued interest payable 995 968
Other - net (152) 30
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 3,300 3,255
- -------------------------------------------------------------------------------------------------------------------
Investing activities:
Purchase of investment securities held to maturity (13,523) (9,891)
Purchase of investment securities available for sale (4,019) (11,114)
Purchase of mortgage-backed securities held to maturity -- (1,011)
Purchase of mortgage-backed securities available for sale (1,000) (1,981)
Proceeds from maturities of investment securities held to maturity 4,050 15,500
Proceeds from maturities of investment securities available for sale -- 3
Proceeds from maturities of mortgage-backed securities available for sale 164 28
Proceeds from sale of investment securities available for sale -- 2,567
Principal repayments of investment and
mortgage-backed securities available for sale 1,288 2,231
Principal repayments of investment and
mortgage-backed securities held to maturity 625 375
Increase in loans (7,529) (1,390)
Proceeds from sale of real estate owned 368 85
Net additions to office properties and equipment (143) (166)
- -------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (19,719) (4,764)
- -------------------------------------------------------------------------------------------------------------------
Financing activities:
Net increase (decrease) in demand and club accounts 3,828 (407)
Net increase in time deposit accounts 4,311 1,782
Net increase (decrease) in FHLB advances 4,396 2,997
Decrease in advance deposits by borrowers
for taxes and insurance (652) (673)
Stock options exercised 26 129
Acquisition of treasury stock (1,714) (456)
Dividends paid (1,030) (987)
- -------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 9,165 2,385
- -------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents (7,254) 876
Cash and cash equivalents at beginning of period 12,111 11,377
- -------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 4,857 $ 12,253
- -------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
- -------------------------------------------------------------------------------------------------------------------
Cash paid during the period for:
Interest on savings deposits $ 4,415 $ 4,354
Interest on FHLB advances 920 731
Income taxes 1,143 1,185
Transfer of loans to real estate owned 204 155
Cash paid during the period for interest includes interest credited on
deposits of $3,745 and $3,700 for the nine months ended March 31, 2000 and
1999, respectively.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
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<PAGE> 7
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND JUNE 30, 1999
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions for Form 10-Q and, therefore, do not include
all the information or footnotes necessary for a complete presentation of
financial condition, results of operation and cash flows in conformity with
generally accepted accounting principles. However, all adjustments, consisting
only of normal recurring adjustments which, in the opinion of management, are
necessary for a fair presentation, have been included. Significant accounting
policies have not changed since June 30, 1999. The results of operations for the
three and nine months ended March 31, 2000 are not necessarily indicative of the
results which may be expected for the entire fiscal year. The financial
statements should be read in conjunction with the audited consolidated financial
statements and the notes thereto included in Laurel Capital Group, Inc.'s (the
"Company") 1999 Annual Report to Stockholders for the year ended June 30, 1999.
All amounts presented in the Notes to Unaudited Consolidated Financial
Statements are presented in thousands except share and per share data.
EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
-------------------- ------------------
<S> <C> <C> <C> <C>
Basic earnings per share:
Net income $869 $771 $2,489 $2,401
Weighted average shares outstanding 2,097,002 2,185,078 2,130,553 2,192,630
Earnings per share $0.41 $0.35 $1.17 $1.10
Diluted earnings per share:
Net income $869 $771 $2,489 $2,401
Weighted average shares outstanding 2,097,002 2,185,078 2,130,553 2,192,630
Dilutive effect of employee
stock options 67,869 98,937 77,774 109,800
--------- --------- --------- ---------
Diluted weighted shares outstanding 2,164,871 2,284,015 2,208,327 2,302,430
Earnings per share $0.40 $0.34 $1.13 $1.04
</TABLE>
Options to purchase 73,596 shares of common stock at prices ranging from $14.69
to $19.00 per share were outstanding during the three and nine months ended
March 31, 2000 but were not included in the computation of diluted earnings per
share because the options exercise price was greater than the average market
price of the common shares, and therefore, the effect would be antidilutive.
-5-
<PAGE> 8
For the three and nine months ended March 31, 1999, options to purchase 16,860
shares of common stock at prices ranging from $18.50 to $19.00 per share were
not included in the computation of diluted earnings per share due to their
antidilutive effect.
SECURITIES
The Company accounts for investments in debt and equity securities in accordance
with the Financial Accounting Standards Board's ("FASB") Statement No. 115
("SFAS 115"). SFAS 115 requires that investments be classified as either: (1)
Securities Held to Maturity- reported at amortized cost, (2) Trading Securities-
reported at fair value, or (3) Securities Available for Sale- reported at fair
value. Unrealized gains and losses for trading securities are reported in
earnings while unrealized gains and losses for securities available for sale are
reported as other comprehensive income in stockholders' equity.
COMPREHENSIVE INCOME
The Company reports Comprehensive Income in accordance with SFAS No. 130 which
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set of general
purpose financial statements. SFAS No. 130 requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. SFAS No. 130 requires that an
enterprise (a) classify items of other comprehensive income by their nature in a
financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of a statement of financial position. For the nine
months ended March 31, 2000 and 1999, the Company's total comprehensive income
was $1,797 and $2,437, respectively. Total comprehensive income is comprised of
net income of $2,489 and $2,401, respectively, and other comprehensive income
(loss) of $(692) and $36, net of tax, respectively. Other comprehensive income
consists of unrealized gains and losses on investment securities and
mortgage-backed securities available for sale, net of tax.
LOANS RECEIVABLE
Loans receivable are stated at unpaid principal balances net of the allowance
for possible loan losses, net deferred loan fees and discounts. The Company
accounts for impaired loans in accordance with SFAS 114, "Accounting by
Creditors for Impairment of a Loan" and SFAS 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures", an amendment of SFAS
114. These statements address the accounting by creditors for impairment of
certain loans. They apply to all creditors and to all loans, uncollateralized as
well as collateralized, except for large groups of smaller-balance homogeneous
loans that are collectively evaluated for impairment. The Bank considers all
one-to-four family residential mortgage loans and all consumer loans (as
presented in Note 4) to be smaller-balance homogeneous loans. Loans within the
scope of these statements are considered impaired when, based on current
information and events, it is probable that all principal and interest will not
be collected in accordance with the contractual terms of the loans. Management
determines the
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<PAGE> 9
impairment of loans based on knowledge of the borrower's ability to repay the
loan according to the contractual agreement, the borrower's repayment history
and the fair value of collateral for certain collateral dependent loans.
Pursuant to SFAS 114 paragraph 8, management does not consider an insignificant
delay or insignificant shortfall to impair a loan. Management has determined
that a delay less than 90 days will be considered an insignificant delay and
that an amount less than $5,000 will be considered an insignificant shortfall.
The Bank does not apply SFAS 114 using major risk characteristics for groups of
loans, but on a loan by loan basis. All loans are charged off when management
determines that principal and interest are not collectible.
The accrual of interest on all loans is discontinued when, in management's
opinion, the borrower may be unable to meet payments as they become due or when
the loan becomes 90 days past due, whichever occurs first. When interest accrual
is discontinued, all unpaid accrued interest is reserved. Such interest
ultimately collected is credited to income in the period of recovery or applied
to reduce principal if there is sufficient doubt about the collectability of
principal. Consumer loans more than 120 days or 180 days delinquent (depending
on the nature of the loan) are generally required to be written off.
Any excess of the Bank's recorded investment in the loans over the measured
value of the loans in accordance with FAS 114 is provided for in the allowance
for loan losses. The Bank reviews its loans for impairment on a quarterly basis.
Loans receivable classified as held for sale are recorded in the financial
statements in the aggregate at the lower of cost or market.
(2) CONTINGENT LIABILITIES
The Company is subject to a number of asserted and unasserted potential claims
encountered in the normal course of business. In the opinion of management and
legal counsel, the resolution of these claims is not expected to have a material
adverse effect on the Company's financial position, liquidity or results of
operations.
-7-
<PAGE> 10
(3) INVESTMENT AND MORTGAGE-BACKED SECURITIES
Investment securities available for sale are comprised of the following:
<TABLE>
<CAPTION>
Amortized Gross Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
<S> <C> <C> <C> <C>
AT MARCH 31, 2000:
Municipal obligations $21,479 $123 $1,107 $20,495
FNMA preferred stock 250 -- -- 250
FHLMC preferred stock 250 -- -- 250
FNMA common stock 723 34 50 707
FHLMC common stock 590 23 61 552
SLM Student Loan Trust 646 18 -- 664
Standard Insurance Company stock 4 1 -- 5
Shay Financial Services
ARMs Fund 15,892 -- 199 15,693
-----------------------------------------------
39,834 199 1,417 38,616
Mortgage-backed securities available for sale 11,364 82 201 11,245
-----------------------------------------------
Total $51,198 $281 $1,618 $49,861
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
At March 31, 2000, the contractual maturities of the Amortized Fair
debt securities available for sale are: Cost Value
-----------------------
<S> <C> <C>
Due after five years through ten years $ 646 $ 664
Due after ten years 21,479 20,495
-----------------------
Total $22,125 $21,159
=======================
</TABLE>
Mortgage-backed securities have various contractual maturity dates.
Actual repayments may be different due to prepayments on the loans
underlying the securities. The FNMA stock, FHLMC stock, Standard
Insurance Company stock and the Shay Financial Services ARMs Fund have
no stated maturity.
Note: There were no sales of investment securities available for sale during
the nine months ended March 31, 2000. Gross realized gains of $225 were
recorded during the nine months ended March 31, 1999 on the. sale of
such securities. Proceeds from the sale of investments available for
sale during the nine months ended March 31, 1999 were $2,567.
Investment and mortgage-backed securities held to maturity are
comprised of the following:
<TABLE>
<CAPTION>
Amortized Gross Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
<S> <C> <C> <C> <C>
AT MARCH 31, 2000:
Corporate notes and commercial paper $21,929 $4 $754 $21,179
Mortgage-backed securities 447 2 4 445
-----------------------------------------------
Total $22,376 $6 $758 $21,624
-----------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
At March 31, 2000, the contractual maturities of the debt securities Amortized Fair
held to maturity are: Cost Value
------------------------
<S> <C> <C>
Due after one year through five years $ 1,499 $ 1,445
Due after five years through ten years 8,497 8,271
Due after ten years 11,933 11,463
------------------------
Total $21,929 $21,179
========================
</TABLE>
Mortgage-backed securities have various contractual maturity dates.
Actual repayments may be different due to prepayments on the loans
underlying the securities.
-8-
<PAGE> 11
(4) LOANS RECEIVABLE
Loans receivable are comprised of the following:
<TABLE>
<CAPTION>
March 31, June 30,
2000 1999
-------------------------------------------------------------------------------------------------
<S> <C> <C>
First mortgage loans:
1 to 4 family dwellings $116,348 $112,295
Multi-family dwellings 2,506 1,612
Commercial 5,302 5,375
Guaranteed or insured 36 39
Construction and development loans 5,724 2,268
-------------------------------------------------------------------------------------------------
129,916 121,589
Consumer loans:
Home improvement loans (net of unearned
discounts of $1 and $2) 4 21
Loans secured by savings accounts 221 276
Commercial loans 1,266 941
Installment loans 34,132 31,802
-------------------------------------------------------------------------------------------------
35,623 33,040
-------------------------------------------------------------------------------------------------
Loans receivable, net of unearned discounts 165,539 154,629
Less: Allowance for loan losses (1,809) (1,866)
Loans in process (4,693) (987)
Deferred loan fees (270) (386)
-------------------------------------------------------------------------------------------------
Loans receivable, net $158,767 $151,390
-------------------------------------------------------------------------------------------------
</TABLE>
Changes in the allowance for loan losses for the nine months ended
March 31, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
Fiscal Fiscal
2000 1999
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance at beginning of the fiscal year $1,866 $1,852
Provision for losses 13 14
Charge-offs (80) (49)
Recoveries 10 45
-------------------------------------------------------------------------------------------------
Balance at March 31, $1,809 $1,862
-------------------------------------------------------------------------------------------------
</TABLE>
At March 31, 2000, the recorded investment in loans that are considered
to be impaired under SFAS 114 was $314. Included in this amount is $78
of impaired loans for which the related allowance for loan losses is
$3, and $236 of impaired loans that as a result of write-downs do not
have an allowance for loan losses. The average recorded investment in
impaired loans during the nine months ended March 31, 2000 was
approximately $297. For the nine months ended March 31, 2000, the
Company recognized interest income on those impaired loans of $2 which
was recognized using the cash basis method of income recognition.
<TABLE>
<CAPTION>
March 31,
2000 1999
---------------
<S> <C> <C>
Non-accrual loans $586 $515
Non-accrual loans as a percent of total loans 0.37% 0.34%
</TABLE>
---------
All loans 90 days or more past due are reported as non-accrual.
-9-
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
BALANCE SHEET DATA At March 31,
2000 1999
---- ----
(In thousands except per share data)
------------------------------------
(Unaudited)
<S> <C> <C>
Total assets $243,217 $226,840
Money market investments -- 3,668
Interest-earning deposits with other institutions 4,041 7,934
Investment securities available for sale 38,616 34,385
Investment securities held to maturity 21,929 8,441
Mortgage-backed securities available for sale 11,245 11,179
Mortgage-backed securities held to maturity 447 1,687
Loans receivable held for sale 1,622 1,641
Loans receivable, net 158,767 152,476
Savings deposits 190,257 176,765
FHLB advances 24,425 20,030
Retained earnings 23,529 21,614
Stockholders' equity 23,509 24,776
Stockholders' equity per share $ 11.45 $ 11.36
</TABLE>
<TABLE>
<CAPTION>
STATISTICAL PROFILE Three months ended Nine months ended
March 31, March 31,
------------------ -----------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average yield earned on all interest-earning assets 7.22% 7.04% 7.16% 7.17%
Average rate paid on all interest-bearing liabilities 4.36 4.27 4.24 4.33
Average interest rate spread 2.86 2.77 2.92 2.84
Net yield on average interest-earning assets 3.45 3.42 3.47 3.46
Average interest-earning assets as a percentage of
average interest-bearing liabilities 115.24 117.47 115.72 117.58
Return on average assets (1) 1.46 1.36 1.41 4.43
Return on average equity (1) 14.70 12.47 13.82 13.16
Average equity to average assets 9.91 10.91 10.22 10.88
</TABLE>
- ---------
(1) Amounts are annualized.
-10-
<PAGE> 13
COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
GENERAL. Laurel Capital Group, Inc.'s (the "Company") only significant asset is
the stock it owns of its wholly-owned subsidiary, Laurel Savings Bank (the
"Bank"). The Company's net income for the three months ended March 31, 2000 was
$869,000 compared to $771,000 for the same period in the prior year. The
increase of $98,000 or 12.7% was primarily the result of a $91,000 or 4.8%
increase in net interest income and a $28,000 or 16.4% increase in other income
partially offset by a $19,0000 or 2.1% increase in other operating expenses and
a $3,000 or .8% increase in income tax expense. These and other significant
fluctuations are discussed below.
NET INTEREST INCOME. The Company's operating results depend substantially on the
Bank's net interest income, which is determined by the average interest rate
spread between the Bank's interest-earning assets and interest-bearing
liabilities and the relative amounts of such assets and liabilities. Net
interest income increased by $91,000 or 4.8% during the three months ended March
31, 2000 as compared to the same period of the prior year. The increase was
primarily due to a $15.3 million or 33.3% increase in the average outstanding
balance of investment securities for the quarter ended March 31, 2000 as
compared to the quarter ended March 31, 1999. Also contributing to the increase
in net interest income was an increase in the average interest rate spread from
2.77% for the quarter ended March 31, 1999 to 2.86% for the quarter ended March
31, 2000. These increases were partially offset by a $2.5 million or 7.7%
decrease in the average outstanding balance of net earning assets for the
quarter ended March 31, 2000 compared to the quarter ended March 31, 1999.
Interest income on loans receivable and loans held for sale increased by $14,000
or .5% during the three months ended March 31, 2000 as compared to the same
period in the prior year. This increase was primarily due to an $1.9 million or
1.2% increase in the average outstanding balance of loans receivable for the
quarter ended March 31, 2000 as compared to the same period in the prior year.
This increase was partially offset by a decrease in the average yield on loans
receivable from 7.65% for the quarter ended March 31, 1999 to 7.59% for the
quarter ended March 31, 2000. The increase in the average outstanding balance of
loans receivable was due to a $2.7 million or 8.3% increase in the average
outstanding balance of consumer loans which was partially offset by a $834,000
or .7% decrease in the average outstanding balance of mortgage loans. The
decrease in the average yield was primarily due to lower market interest rates
preceding the period ended March 31, 2000. The Bank continues to emphasize the
origination of consumer loan products as part of its Asset/Liability management
due to their generally shorter terms.
Interest on mortgage-backed securities held to maturity and mortgage-backed
securities available for sale increased by $19,000 or 10.1% during the quarter
ended March 31, 2000 as compared to the March 31, 1999 quarter. This increase
was due to a $557,000 or 4.9% increase in the average outstanding balance of
mortgage-backed securities during the quarter ended March 31, 2000 as compared
to the March 31, 1999 quarter. Also contributing to the increase was an increase
in the average yield on mortgage-backed securities from 6.60% for the quarter
ended March 31, 1999 to 6.93% for the quarter ended March 31, 2000. At March 31,
2000,
-11-
<PAGE> 14
the Bank's portfolio of mortgage-backed securities available for sale had net
unrealized losses of $119,000. This portfolio consists of fixed and adjustable
rate securities with an average yield of 6.98% at March 31, 2000. Rising
interest rates would increase the unrealized losses in this portfolio if the
fixed rate securities are not sold. The mortgage-backed securities held to
maturity portfolio consists of two adjustable-rate and one fixed-rate
collateralized mortgage obligations (CMO's) with an average yield of 6.19% at
March 31, 2000. At March 31, 2000, the Bank's portfolio of mortgage-backed
securities held to maturity had net unrealized losses of $2,000. In periods of
rising interest rates, unrealized losses could occur due to the timing
difference of when the securities reprice. The Bank uses these securities as
part of its Asset/Liability strategy. See Note 3 of "Notes to Unaudited
Consolidated Financial Statements."
Interest income on investments held to maturity and investments available for
sale increased during the three months ended March 31, 2000 by $323,000 or 51.4%
from the comparable period in 1999, primarily due to a $15.3 million or 33.3%
increase in the average outstanding balance of such securities for the quarter
ended March 31, 2000 as compared to the quarter ended March 31, 1999. In
addition, the average yield on investment securities increased from 5.56% for
the quarter ended March 31, 1999 to 6.31% for the quarter ended March 31, 2000.
The increase in the average outstanding balance was primarily due to the
investment of increased savings deposits and funds borrowed from the Federal
Home Loan Bank ("FHLB") of Pittsburgh. At March 31, 2000, the Bank's portfolio
of investment securities available for sale and investment securities held to
maturity had net unrealized losses of $1.2 million and $750,000, respectively.
See Note 3 of "Notes to Unaudited Consolidated Financial Statements."
Interest income on interest-earning deposits decreased during the three months
ended March 31, 2000 by $102,000 or 83.6% from the comparable period in 1999.
This decrease was primarily due to a decrease of $9.1 million or 85.6% in the
average outstanding balance of interest-earning deposits for the quarter ended
March 31, 2000 as compared to the March 31, 1999 quarter. The average yield on
interest-earning deposits increased from 4.64% for the quarter ended March 31,
1999 to 5.28% for the quarter ended March 31, 2000.
Interest expense on interest-bearing deposits increased by $119,000 or 6.9% for
the quarter ended March 31, 2000, compared to the same period in 1999. The
increase was primarily due to a $9.4 million or 5.6% increase in the average
outstanding balance of such deposits during the three months ended March 31,
2000 as compared to the same period of the prior year. Also contributing to the
increase was an increase in the average interest rate paid on savings deposits
from 4.14% for the three months ended March 31, 1999 to 4.19% for the three
months ended March 31, 2000.
Interest expense on borrowings increased $44,000 or 16.6% for the quarter ended
March 31, 2000 compared to the quarter ended March 31, 1999 due to a $1.7
million or 8.7% increase in the average outstanding balance of FHLB advances.
The average rate paid on borrowings increased from 5.37% for the quarter ended
March 31, 1999 to 5.76% for the quarter ended March 31, 2000.
-12-
<PAGE> 15
PROVISION FOR LOAN LOSSES. The Bank provided $4,000 and $5,000 to its allowance
for loan losses for the quarters ended March 31, 2000 and 1999, respectively.
Such provisions were the result of an analysis of the allowance for loan losses
in connection with a review of the Bank's loan portfolio.
At March 31, 2000 and 1999, the Bank's allowance for loan losses amounted to
$1.8 million and $1.9 million or 1.1% and 1.2%, respectively, of the total loan
portfolio.
A review of the loan portfolio is conducted at least quarterly by management to
determine that the allowance for loan losses is appropriate to absorb estimated
loan losses. In determining the appropriate level of the allowance for loan
losses, consideration is given to general economic conditions, diversification
of loan portfolios, historic loss experience, identified credit problems,
delinquency levels and adequacy of collateral. In consideration of the above,
management has assessed the risks in the loan portfolio and has determined that
no significant changes have occurred during the three months ended March 31,
2000. Thus, the level of the allowance for loan losses is substantially
unchanged from June 30, 1999. Although management believes that the current
allowance for loan losses is appropriate, future additions to the reserve may be
necessary due to changes in economic conditions and other factors. In addition,
as an integral part of their periodic examination, certain regulatory agencies
review the adequacy of the Bank's allowance for loan losses and may direct the
Bank to make additions to the allowance based on their judgement. No such
additions were required to be made during the Company's most recent examination.
OTHER INCOME. Total other income increased by $28,000 or 16.4% to $199,000 for
the quarter ended March 31, 2000 as compared to the same period in 1999. This
was primarily due to a $17,000 increase in other operating income and a $12,000
increase in fees and service charges.
OPERATING EXPENSES. Total operating expenses increased by $19,000 or 2.1% during
the quarter ended March 31, 2000 as compared to the comparable quarter in 1999.
This increase was primarily due to a $34,000 increase in compensation and
benefits expense, a $10,000 increase in premises and occupancy expense, a $7,000
increase in other operating expenses and a $3,000 increase in data processing
expense. These increases were partially offset by a decrease of $18,000 in
federal insurance premiums, a $11,000 decrease in professional fees and a $6,000
decrease in net real estate owned expense.
INCOME TAX EXPENSE. Income tax expense increased by $3,000 for the quarter ended
March 31, 2000 as compared to the quarter ended March 31, 1999 primarily as a
result of higher pre-tax income partially offset by a decrease in the effective
tax rate from 33.3% for the 1999 quarter to 30.9% for the 2000 quarter. This
decrease was primarily due to increased purchases of non-taxable municipal
obligations by the Company during the past year.
-13-
<PAGE> 16
COMPARISON OF THE NINE MONTHS ENDED MARCH 31, 2000 AND 1999
GENERAL. The Company's net income for the nine months ended March 31, 2000 was
$2,489,000 compared to $2,401,000 for the same period in the prior year. The
increase of $88,000 or 3.7% was primarily the result of a $249,000 or 4.4%
increase in net interest income and a $147,000 or 11.6% decrease in income tax
expense partially offset by a $209,000 or 25.7% decrease in net gains on the
sale of investments and mortgage-backed securities available for sale and a
$100,000 or 3.5% increase in other operating expenses. These and other
significant fluctuations are discussed below.
NET INTEREST INCOME. Net interest income increased by $249,000 or 4.4% during
the nine months ended March 31, 2000 as compared to the same period of the prior
year. The increase was primarily due to a $14.9 million or 33.3% increase in the
average outstanding balance of investment securities for the nine months ended
March 31, 2000 as compared to the nine months ended March 31, 1999. Also
contributing to the increase in net interest income was an increase in the
average interest rate spread from 2.84% for the nine months ended March 31, 1999
to 2.92% for the nine months ended March 31, 2000. These increases were
partially offset by a $1.8 million or 5.4% decrease in the average outstanding
balance of net earning assets for the nine months ended March 31, 2000 compared
to the nine months ended March 31, 1999.
Interest income on loans receivable and loans held for sale decreased by
$112,000 or 1.3% during the nine months ended March 31, 2000 as compared to the
same period in the prior year. This decrease was primarily due to a decrease in
the average yield on loans receivable from 7.73% for the nine months ended March
31, 1999 to 7.60% for the nine months ended March 31, 2000. This decrease was
partially offset by a $775,000 or .5% increase in the average outstanding
balance of loans receivable for the nine months ended March 31, 2000 as compared
to the same period in the prior year. The increase in the average outstanding
balance of loans receivable was due to a $4.0 million or 12.8% increase in the
average outstanding balance of consumer loans and a $3.2 million or 2.6%
decrease in the average outstanding balance of mortgage loans. The decrease in
the average yield was primarily due to lower market interest rates. The Bank
continues to emphasize the origination of consumer loan products as part of its
Asset/Liability management due to their generally shorter terms.
Interest on mortgage-backed securities held to maturity and mortgage-backed
securities available for sale increased by $33,000 or 5.5% during the nine
months ended March 31, 2000 as compared to the nine months ended March 31, 1999.
This increase was primarily due to an $749,000 or 6.4% increase in the average
outstanding balance of mortgage-backed securities during the nine months ended
March 31, 2000 as compared to the nine months ended March 31, 1999. The average
yield on mortgage-backed securities decreased from 6.80% for the nine months
ended March 31, 1999 to 6.74% for the nine months ended March 31, 2000. See
"Comparison of the Three Months Ended March 31, 2000 and 1999 - Net Interest
Income."
-14-
<PAGE> 17
Interest income on investments held to maturity and investments available for
sale increased during the nine months ended March 31, 2000 by $817,000 or 43.0%
from the comparable period in 1999, primarily due to a $14.9 million or 33.3%
increase in the average outstanding balance of such securities for the nine
months ended March 31, 2000 as compared to the nine months ended March 31, 1999.
In addition, the average yield on investment securities increased from 5.67% for
the nine months ended March 31, 1999 to 6.08% for the nine months ended March
31, 2000. The increase in the average outstanding balance was primarily due to
the investment of increased savings deposits and funds borrowed from the FHLB of
Pittsburgh. See "Comparison of the Three Months Ended March 31, 2000 and 1999 -
Net Interest Income."
Interest income on interest-earning deposits decreased during the nine months
ended March 31, 2000 by $269,000 or 80.5% from the comparable period in 1999.
This decrease was primarily due to a decrease of $7.4 million or 81.2% in the
average outstanding balance of interest-earning deposits for the nine months
ended March 31, 2000 as compared to the same period in the prior year. The
average yield on interest-earning deposits increased from 4.91% for the nine
months ended March 31, 1999 to 5.09% for the nine months ended March 31, 2000.
Interest expense on interest-bearing deposits increased by $88,000 or 1.7% for
the nine months ended March 31, 2000, compared to the same period in 1999. The
increase was primarily due to a $7.7 million or 4.6% increase in the average
outstanding balance of such deposits during the nine months ended March 31, 2000
as compared to the same period of the prior year. This increase was partially
offset by a decrease in the average interest rate paid on savings deposits from
4.21% for the nine months ended March 31, 1999 to 4.09% for the nine months
ended March 31, 2000.
Interest expense on borrowings increased $132,000 or 17.9% for the nine months
ended March 31, 2000 compared to the nine months ended March 31, 1999 due to a
$3.1 million or 17.0% increase in the average outstanding balance of FHLB
advances. The average rate paid on borrowings increased from 5.43% for the nine
months ended March 31, 1999 to 5.48% for the nine months ended March 31, 2000.
PROVISION FOR LOAN LOSSES. The Bank provided $13,000 and $14,000 to its
allowance for loan losses for the nine months ended March 31, 2000 and 1999,
respectively. Such provisions were the result of an analysis of the allowance
for loan losses in connection with a review of the Bank's loan portfolio. See
"Comparison of the Three Months Ended March 31, 2000 and 1999 - Provision For
Loan Losses."
OTHER INCOME. Total other income decreased by $209,000 or 25.7% to $603,000 for
the nine months ended March 31, 2000 as compared to the same period in 1999.
This was primarily due to a $225,000 decrease in net gains on the sale of
investments available for sale and a $19,000 decrease in fees and service
charges partially offset by a $39,000 increase in other operating income. The
decrease in net gains on the sale of investments available for sale was a result
of no such securities being sold during the nine months ended March 31, 2000.
-15-
<PAGE> 18
OPERATING EXPENSES. Total operating expenses increased by $100,000 or 3.5%
during the nine months ended March 31, 2000 as compared to the comparable period
in 1999. This increase was primarily due to a $66,000 increase in compensation
and benefits, a $65,000 increase in premises and occupancy costs, and a $18,000
increase in net real estate owned expense. These increases were partially offset
by a $29,000 decrease in professional fees and a $17,000 decrease in federal
insurance premiums. The increase in premises and occupancy costs was primarily
due to an increase in depreciation as a result of new teller equipment purchased
during fiscal 1999.
INCOME TAX EXPENSE. Income tax expense decreased by $147,000 for the nine months
ended March 31, 2000 as compared to the nine months ended March 31, 1999
primarily as a result of a decrease in the effective tax rate from 34.5% for the
1999 period to 31.0% for the 2000 period. This decrease was primarily due to
increased purchases of non-taxable municipal obligations by the Company during
the past year.
YEAR 2000
In December 1997, the Company established a management committee to identify all
of its functions potentially affected by the year 2000 date change, help ensure
that re-programming or replacement of all critical systems occurred and to
formulate contingency plans in the event any of those critical systems failed.
The Company experienced no known disruptions as a result of the year 2000 date
change and intends to continue monitoring its critical systems at various other
date changes during the year 2000.
FINANCIAL CONDITION AND CAPITAL RESOURCES
Total assets increased by $11.7 million or 5.1% from June 30, 1999 to March 31,
2000. The largest increases were a $9.5 million increase in investment
securities held to maturity, a $7.4 million increase in loans receivable, net
and a $3.1 million increase in securities available for sale. These increases
were partially offset by a $3.7 million decrease in money market investments and
a $3.7 million decrease in interest-earning deposits in other institutions. The
largest components of change in liabilities were a $8.1 million increase in
deposits and a $4.4 million increase in FHLB advances and partially offset by a
$652,000 decrease in advance deposits by borrowers for taxes and insurance.
Under regulations adopted by the FDIC, the Bank is required to maintain Tier I
(Core) capital equal to at least 4% of the Bank's adjusted total assets, and
Tier II (Supplementary) risk-based capital equal to at least 8% of the
risk-weighted assets. At March 31, 2000, the Bank exceeded all of these
requirements, with Tier I and Tier II ratios of 9.89% and 18.75%, respectively.
-16-
<PAGE> 19
The following table sets forth certain information concerning the Bank's
regulatory capital at March 31, 2000.
<TABLE>
<CAPTION>
Tier I Tier I Tier II
Core Risk-Based Risk-Based
Capital Capital Capital
------- ---------- ----------
(Dollar amounts in thousands)
<S> <C> <C> <C>
Equity Capital (1) $23,624 $23,624 $23,624
Plus general valuation allowances (2) -- -- 1,689
------- ------- ------
Total regulatory capital 23,624 23,624 25,313
Minimum required capital 9,552 5,404 10,807
------- ------- ------
Excess regulatory capital $14,072 $18,220 $14,506
======= ======= =======
Minimum required capital to be well
capitalized under Prompt Corrective
Action Provisions $11,940 $ 8,098 $13,497
======= ======= =======
Regulatory capital as a percentage (3) 9.89% 17.50% 18.75%
Minimum required capital percentage 4.00 4.00 8.00
---- ----- ----
Excess regulatory capital percentage 5.89% 13.50% 10.75%
==== ===== =====
Minimum required capital percentage
to be well capitalized under Prompt
Corrective Action Provisions 5.00% 6.00% 10.00%
==== ===== =====
</TABLE>
(1) Represents equity capital of the Bank as reported to the FDIC and the
Pennsylvania Department of Banking on Form 033 for the three months ended
March 31, 2000.
(2) Limited to 1.25% of risk adjusted assets.
(3) Tier I capital is calculated as a percentage of adjusted total assets of
$238,805. Tier I and Tier II risk-based capital are calculated as a
percentage of adjusted risk-weighted assets of $134,969.
IMPACT OF INFLATION AND CHANGING PRICES
The financial statements and related data presented herein have been prepared in
accordance with generally accepted accounting principles, which require the
measurement of financial position and operating results in terms of historical
dollars without considering changes in the relative purchasing power of money
over time due to inflation. Unlike most industrial companies, substantially all
of the assets and liabilities of a financial institution are monetary in nature.
As a result, interest rates have a more significant impact on a financial
institution's performance than the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or in the same
magnitude as the prices of goods and services as measured by the consumer price
index.
-17-
<PAGE> 20
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of the Company's asset and liability management policies as
well as the potential impact of interest rate changes upon the market value of
the Bank's portfolio equity, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 1999 Annual Report to
Stockholders. There has been no material change in the Company's asset and
liability position or market value of portfolio equity since June 30, 1999.
LAUREL CAPITAL GROUP, INC. AND SUBSIDIARY
PART II
Item 1. Legal Proceedings
The Company is not engaged in any legal proceedings at the present time
other than those generally associated with the normal course of
business. In the opinion of management and legal counsel, the
resolution of these claims are not expected to have a material adverse
effect on the Company's financial position, liquidity or results of
operations.
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
On February 18, 2000, the Company announced its intent to repurchase up
to 105,000 shares or approximately 5.00% of the Company's common stock
over the next twelve months. As of May 9, 2000, the Company has
repurchased 57,400 shares.
Item 6. Exhibits and Reports on Form 8-K
None
-18-
<PAGE> 21
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
LAUREL CAPITAL GROUP, INC.
/s/ Edwin R. Maus
- -------------------------------------
Edwin R. Maus
President and Chief Executive Officer
/s/ John A. Howard, Jr.
- -------------------------------------
John A. Howard, Jr.
Senior Vice President and
Chief Financial Officer
Date: May 12, 2000
-19-
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000892158
<NAME> LAUREL CAPITAL GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 816
<INT-BEARING-DEPOSITS> 4,041
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 49,861
<INVESTMENTS-CARRYING> 22,376
<INVESTMENTS-MARKET> 21,624
<LOANS> 160,576
<ALLOWANCE> 1,809
<TOTAL-ASSETS> 243,217
<DEPOSITS> 190,257
<SHORT-TERM> 16,793
<LIABILITIES-OTHER> 5,026
<LONG-TERM> 7,632
0
0
<COMMON> 23
<OTHER-SE> 23,486
<TOTAL-LIABILITIES-AND-EQUITY> 243,217
<INTEREST-LOAN> 8,812
<INTEREST-INVEST> 3,349
<INTEREST-OTHER> 65
<INTEREST-TOTAL> 12,226
<INTEREST-DEPOSIT> 5,410
<INTEREST-EXPENSE> 6,279
<INTEREST-INCOME-NET> 5,947
<LOAN-LOSSES> 13
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,932
<INCOME-PRETAX> 3,605
<INCOME-PRE-EXTRAORDINARY> 3,605
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,489
<EPS-BASIC> 1.17
<EPS-DILUTED> 1.13
<YIELD-ACTUAL> 3.47
<LOANS-NON> 586
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,866
<CHARGE-OFFS> 80
<RECOVERIES> 13
<ALLOWANCE-CLOSE> 1,809
<ALLOWANCE-DOMESTIC> 1,780
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 29
</TABLE>
