<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended MARCH 31, 1997
--------------
OR
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission File Number 0-24024
-------
FIRST COMMUNITY FINANCIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
WASHINGTON 91 -1277503
-------------------------- ---------------------------------
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
721 COLLEGE STREET. SE, P.O. BOX 3800, LACEY, WA 98509
-------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (360) 459-1100
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No
--- ---
Number of shares of common stock outstanding as of March 31, 1997: 1,884,893
---------
Transitional Small Business Disclosure Format (Check one) Yes No X
--- ----
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC.
Table of Contents
PART I - FINANCIAL INFORMATION Page
Item 1 Financial Statements
Condensed Consolidated Balance Sheets...............................3
Condensed Consolidated Statements of Income.........................4
Condensed Consolidated Statements of Cash Flows.....................5
Notes to Condensed Consolidated Financial Statements................6
Item 2 Management's Discussion of Financial Condition and
Analysis or Plan of Operations......................................7
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K...................................10
SIGNATURES..................................................................11
2
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
March 31 December 31
1997 1996
- -------------------------------------------------------------------------------
ASSETS
Cash and due from banks $ 10,262 $ 8,467
Interest bearing deposits in banks 10,958 10,141
Federal funds sold 2,000 4,000
Securities available for sale 11,963 7,513
Securities held to maturity 2,180 3,182
Loans held for sale 2,026 726
Loans 172,405 130,632
Less allowance for possible credit losses 1,886 1,420
NET LOANS 170,519 129,212
Premises and equipment 9,432 7,593
Goodwill 5,057 0
Other assets 7,751 5,667
TOTAL ASSETS $232,148 $176,501
LIABILITIES
Deposits:
Non-interest bearing $ 32,596 $ 24,719
Interest bearing 168,508 128,715
TOTAL DEPOSITS 201,104 153,434
Long term debt 2,251 1,294
Other liabilities 3,730 854
TOTAL LIABILITIES 207,085 155,582
STOCKHOLDERS' EQUITY
Common stock, par value $2.50 per share; 3,942 4,246
10,000,000 shares authorized, 1,884,893
shares issued in 1997, and1,698,505
shares issued in 1996
Surplus 18,795 13,745
Retained earnings 3,599 3,186
Unrealized loss on securities available for sale (48) (13)
Guaranteed KSOP Obligation (1,225) (245)
TOTAL STOCKHOLDERS' EQUITY 25,063 20,919
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $232,148 $176,501
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
FIRST COMMUNITY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------
Three months ended
March 31
- -------------------------------------------------------------------------------
<S> <C> <C>
1997 1996
INTEREST INCOME
Interest and fees on loans $4,121 $3,484
Federal funds sold and deposits in banks 46 22
Investments 305 266
TOTAL INTEREST INCOME 4,472 3,772
INTEREST EXPENSE
Deposits 1,601 1,351
Other 26 26
TOTAL INTEREST EXPENSE 1,627 1,377
NET INTEREST INCOME 2,845 2,395
PROVISION FOR POSSIBLE CREDIT LOSSES 60 61
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE CREDIT LOSSES 2,785 2,334
NON-INTEREST INCOME
Service charges on deposit accounts 319 271
Origination fees on mortgage loans sold 118 145
Other income 93 85
TOTAL NON-INTEREST INCOME 530 501
NON-INTEREST EXPENSE
Salaries and employee benefit 1,455 1,097
Occupancy and equipment 427 351
Other expense 856 660
TOTAL NON-INTEREST EXPENSE 2,738 2,108
OPERATING INCOME BEFORE INCOME TAXES 577 727
Income Taxes 164 205
NET INCOME $ 413 $ 522
EARNINGS PER COMMON SHARE AND COMMON
EQUIVALENT SHARE $ .21 $ .29
Average number of common
and equivalent shares outstanding 1,954,258 1,818,655
EARNINGS PER COMMON SHARE
ASSUMING FULL DILUTION $ .21 $ .29
Average number of common and equivalent
shares outstanding-assuming full dilution 1,969,495 1,818,655
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
Three months ended
March 31
1997 1996
- -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 413 $ 522
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Provision for possible credit losses 60 61
Depreciation and amortization 245 182
Gain on sale of loans -- 40
Amortization of goodwill 17 0
Other-net 974 (949)
Originations of loans held for sale (3,954) (7,411)
Proceeds from sales of loans held for sale 2,654 5,493
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 409 (2,062)
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in interest bearing deposits in banks (817) 7,113
Net (increase) decrease in Federal funds sold 2,000 750
Proceeds from maturity of available-for-sale
securities 0 500
Purchase of available-for-sale securities (4,665) (500)
Proceeds from maturities of held-to-maturity
securities 1,000 1,470
Net increase in loans (41,367) (2,210)
Additions to premises and equipment (2,084) (245)
Increase in goodwill (5,074) 0
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (51,007) 6,878
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 47,670 (9,843)
Sale of common stock 7,257 8
Repurchase of common stock (2,511) 0
Repayment of long-term borrowings (23) (21)
Payment for fractional shares 0 (10)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 52,393 (9,866)
NET CHANGE IN CASH AND DUE FROM BANKS 1,795 (5,050)
CASH AND DUE FROM BANKS:
Beginning of period 8,467 15,024
END OF PERIOD $10,262 $9,974
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for:
Interest $1,538 $1,402
Taxes 170 0
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING
ACTIVITIES:
Other real estate acquired in settlement of loans 192 0
Increase (decrease) in depreciation of available
for sale securities (35) (17)
Increase (decrease) in guarantee of KSOP obligation 980 290
5
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and with instructions to Form 10-KSB and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
adjustments considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1997 are not necessarily
indicative of the results anticipated for the year ended December 31, 1997.
2. EARNINGS PER COMMON AND EQUIVALENT SHARE
Earnings per common and equivalent share is calculated by dividing net income
by the weighted average number of common shares and common share equivalents
outstanding during the periods presented. Fully diluted earnings per share
assumes that all dilutive stock options outstanding are issued such that their
dilutive effect is maximized.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL CONDITION
OVERVIEW
The Company's consolidated total assets at March 31, 1997 of $232,148,000
represent a 31.5% increase over December 31, 1996 assets of $176,501,000.
The primary cause of this increase in assets was due to the Company's
acquisition of Prairie Security Bank (PSB) effective February 7, 1997. The
total assets acquired in this transaction were $47,334,000. In addition to
the acquired assets, a recognition of goodwill in the amount of $5,057,000 is
included in the March 31,1997 total assets. Total assets, excluding those
added due to acquisition, still experienced a 1.8% growth over the level at
December 31, 1996.
Total deposit growth in the first quarter of 1997 amounted to $47,670,000
from $153,434,000 at December 31, 1996 to $201,104,000 on March 31, 1997, for
a percentage increase of 31.1%. The acquisition of Prairie Security Bank
provided an additional $40,176,000 in deposits to the existing totals. The
total deposit increase, net of those added by acquisition, represents a 4.9%
increase for the first quarter. The deposit growth is expected to continue
due to the acquisition and its effects of solidifying the Company's position
in certain markets while providing expansion into an additional market.
Deposits will increase by approximately $45,000,000 in the third quarter in
relation to branch purchases. The Company was a successful bidder in the
sale of four Wells Fargo Bank branches. These branches are located in
Hoquiam, Winlock, Toledo and Montesano, Washington. The branches in Winlock,
Toledo and Montesano represent further expansion of the Company's market
area. The Hoquiam branch represents further penetration into our existing
market.
Loan balances in aggregate, net of loan loss reserve, increased by
$41,307,000, or 31.9%, to $170,519,000. The Prairie Security Bank
transaction provided a net increase of $36,923,000. Excluding this
acquisition related increase, loan balances increased $5,684,000 or 4.4%.
The loan to deposit ratio was only slightly changed in the period, increasing
from 84.7% to 85.8%. The balances of cash and due from banks, interest
bearing deposits in banks, Federal funds sold and investment securities
increased $4,028,000. The total acquired assets of this type amounted to
$6,709,000 with the difference becoming available to fund loan growth.
Premise and equipment growth as well as other asset increases relate closely
to acquired asset increases.
The allowance for possible credit losses reflects management's current
estimate of the amount required to absorb losses on existing loans and
commitments to extend credit. Determination of the appropriate level of the
allowance is based on an analysis of various factors including historical
loss experience based on volumes and types of loans; volumes and trends in
delinquencies and non-accrual loans; trends in portfolio volume; results of
internal and independent external credit reviews; and anticipated economic
conditions. An analysis of the adequacy of the allowance is subject to
quarterly review by the Board of Directors. Based on this analysis,
management considers the allowance for possible credit losses to be adequate.
The allowance for possible credit losses increased $466,000 in the first
quarter of 1997, an increase consistent with the gross increase experienced
in loan balances. The ratio of allowance for possible credit losses to total
loans remained at 1.09% for each of the two periods identified. The dollar
value change in the allowance consisted of $469,000 of acquisition related
transfer and $60,000 of provisions, offset by $63,000 in net charge offs.
Non-accrual loans increased from $1,898,000 at December 31, 1996 to
$2,049,000 at March 31,1997. These loans are well secured on which material
losses are not presently expected.
LIQUIDITY AND RATE SENSITIVITY
The Company's assets and liabilities are managed to maximize long-term
shareholder returns by optimizing net interest income within the constraints
of maintaining high credit quality, conservative interest rate risk
disciplines and prudent levels of liquidity. The Asset/Liability Committee
meets regularly to monitor the composition of the balance sheet, to assess
current and projected interest rate trends, and to formulate strategies
consistent with established objectives for liquidity, interest rate risk and
capital adequacy.
7
<PAGE>
Liquidity management involves the ability to meet cash flow requirements of
customers who may be either depositors wanting to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their
credit needs. Liquidity is generated from both internal and external
sources. Internal sources are those assets that can be converted to cash with
little or no risk of loss. These include overnight investments in federal
funds sold and investment securities, particularly those of shorter maturity,
and are the principal source of asset liquidity. At March 31, 1997, cash,
deposits in banks, Federal funds sold and securities available for sale
totaled $35,183,000. External sources refer to the ability to attract new
liabilities and capital. They include increasing savings and demand
deposits, federal funds purchased, and the issuance of capital and debt
securities. At March 31, 1997, federal funds borrowing lines of credit
totaled $3,300,000 and were unused during the first quarter of 1997. This
amount was increased to $4,300,000 effective April 1, 1997. The Bank also
has preestablished borrowing lines available with the Federal Home Loan Bank
of approximately $23,200,000 (10% of total assets). This credit facility has
remained unused in the first quarter of 1997.
Management believes the Bank's liquidity position at March 31, 1997, was
adequate to meet its short term funding requirements.
Interest rate sensitivity is closely related to liquidity, as each is
directly affected by the maturity of assets and liabilities. The Company's
net interest margin is affected by changes in the level of market interest
rates. Management's objectives are to monitor and control interest rate risk
and ensure predictable and consistent growth in net interest income.
Management considers any asset or liability which matures, or is subject to
repricing within one year to be interest sensitive, although continual
monitoring is performed for other time intervals as well. The difference
between interest sensitive assets and liabilities for a defined period of
time is known as the interest sensitivity "gap", and may be either positive
or negative. If positive, more assets reprice before liabilities. If
negative, the reverse is true. Gap analysis provides a general measure of
interest rate risk but does not address complexities such as prepayment risk,
interest rate floors and ceilings imposed on financial instruments, interest
rate dynamics and customers' response to interest rate changes. Currently
the Banks' interest sensitivity gap is negative within one year. Assuming
that general market interest rate changes affected the repricing of assets
and liabilities in equal magnitudes, this indicates that the effects of
rising interest rates on the Company would be a decrease in the net interest
margin, whereas falling interest rates would cause a corresponding increase
in the margin.
CAPITAL
Consolidated capital of FCFG increased $4,144,000 during the first quarter of
1997. The components increasing this amount included surplus as a result of
the acquisition as well as increased retained earnings. Reductions to
capital included a limited stock repurchase of outstanding shares, unrealized
loss adjustment on available for sale securities and an increase in the
guarantee of a loan obligation on behalf of the Company's KSOP.
There are regulatory constraints placed upon capital adequacy, and it is
necessary to maintain an appropriate ratio between capital and assets.
Regulations require banks and holding companies to maintain a minimum
"leverage" ratio (primary capital ratio) of total assets. For the most
highly rated holding companies this ratio must be at least 3%, and for others
it must be 4 to 5%. At March 31, 1997, the Company's leverage ratio was
8.67%, compared to 11.96% at year-end 1996. This decrease is due to the
effects of the use of purchase accounting in the acquisition of PSB. For
regulatory purposes, the associated goodwill is treated as a reduction of
capital. In addition, holding companies are required to meet minimum
risk-based capital guidelines under which risk percentages are assigned to
various categories of assets and off-balance-sheet items to calculate a
risk-adjusted capital ratio. Tier I capital generally consists of common
stockholders' equity, less goodwill, while Tier II capital includes the
allowance for possible loan losses, subject to 1.25% limitation of
risk-adjusted assets. The rules require Tier II capital of 4% of
risk-adjusted assets and total capital (combined Tier I and Tier II) of 8%.
At March 31, 1997, the Tier I capital ratio was 10.31%, and total capital was
11.28%.The similar ratios at December 31, 1996 were a Tier I capital ratio of
14.86% and a total capital ratio of 15.77%.
RESULTS OF OPERATIONS
GENERAL
Net income is largely dependent upon the difference between the interest
received on earning assets and the
8
<PAGE>
interest paid on interest bearing liabilities and is defined as net interest
income. Net income is also affected by the provision for loan losses, other
non-interest income and other non-interest expense.
Net income for the three months ended March 31, 1997 was $413,000, compared
to $522,000 for the three months ended March 31, 1996. This 20.9% decrease
is due to a $630,000 increase in non-interest expense and a $250,000
increase in interest expense. This was primarily offset by a $700,000
increase in net interest income, and a decrease of $41,000 in income taxes.
Each of these increases and the corresponding decrease were primarily a
factor of the acquisition, its related activities and the increased balances
upon which interest was generated.
NET INTEREST INCOME
Net interest income for the three months ended March 31, 1997 increased
$450,000 over the comparable period in 1996. The net interest margin
decreased slightly, moving 2 basis points from 6.37% to 6.35%.
Interest income for the three months ended March 31, 1997 increased $700,000
over the three months ended March 31, 1996. Of this increase,
approximately $720,000 is attributed to an increase in the average volume of
earning assets, offset by approximately $20,000 as a result of a 6 basis
point decrease in the aggregate yield on earning assets from 10.04% to 9.98%.
Total interest expense for the three months ended March 31, 1997 increased
over the comparable period of the prior year by $250,000. Of this increase,
approximately $215,000 was due to an increase in the average volume of
interest bearing liabilities, and $35,000 was due to a 12 basis point
increase in the aggregate cost of funds.
NON-INTEREST INCOME
Total non-interest income for the quarter ended March 31, 1997 increased 5.8%
or $29,000 from the comparable quarter of 1996. Of this amount, $48,000 is
due to an increase in service charges on deposit accounts and an $8,000
increase in other income. These increases are offset by a $27,000 decrease
in origination fees on mortgage loans.
NON-INTEREST EXPENSE
Total non-interest expense for the quarter ended March 31, 1997 increased
$630,000 over the first quarter of 1996. Of this increase in the level of
non-interest expense, $358,000 represents the salaries and employee benefits
of PSB employees, as well as increased expenses incurred in the data
processing systems conversion of Prairie Security Bank. Occupancy and
equipment increased $76,000 as the result of the additional locations and
equipment related to the acquisition. Other expense increased $196,000, also
in conjunction with the merger and conversion activities.
9
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC.
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10)l. Stock option repurchase agreement with Robert Coleman
and Kevin Byrne
(b) Reports on Form 8-K None
10
<PAGE>
FIRST COMMUNITY FINANCIAL GROUP, INC.
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.
FIRST COMMUNITY FINANCIAL GROUP, INC.
(Registrant)
Date: May 14, 1997 By: /s/ Ken F. Parsons
-------------------------------
Ken F. Parsons
President, Chief Executive Officer
By: /s/ James F. Arneson
-------------------------------
James F. Arneson
Executive Vice President,
Chief Financial Officer
(Principal Accounting Officer)
11
<PAGE>
EXHIBIT (10) l.
---------------
AGREEMENT
This Agreement is made and entered into this 15th day of April, 1997, by
and among First Community Financial Group, a Washington corporation and bank
holding company ("FCFG"), Kevin Byrne ("Byrne") and Robert Coleman
("Coleman").
RECITALS
A. Byrne and Coleman each hold options to acquire 33,021 shares of FCFG
common stock (the "Options"). Such Options are, by virtue of the terms of
the Plan and Agreement of Reorganization and Merger between FCFG, First
Community Bank, and Northwest Community Bank dated as of August 10, 1995,
governed by the FCFG Employee Stock Option Plan dated April 19, 1989, as
amended (the "FCFG Stock Option Plan").
B. FCFG, Byrne, and Coleman, together with other parties, have entered
into a Stock Purchase and Sale Agreement dated as of October 31, 1996 (the
"Purchase and Sale Agreement"). Pursuant to Paragraph 9 of the Purchase and
Sale Agreement, FCFG has agreed to purchase, and Byrne and Coleman have
agreed to sell, the Options or the FCFG shares underlying the Options, as the
case may be, on terms and conditions set forth therein.
C. FCFG is contemplating the declaration and payment of a stock
dividend on its common stock (the "Stock Dividend").
4
<PAGE>
D. Pursuant to Paragraph 3.(b) of the FCFG Stock Option Plan, the
number of shares covered by outstanding options and the price per share
specified in such options is to be proportionately adjusted for any increase
in the number of FCFG common shares outstanding which results from any stock
dividend paid on FCFG common stock, or any other increase in the number of
outstanding FCFG common shares effected without receipt of consideration by
FCFG.
E. The parties desire to acknowledge and agree that the proposed Stock
Dividend, if declared and paid, will not affect the aggregate consideration
currently provided by the Purchase and Sale Agreement, to be paid by FCFG to
Byrne and Coleman, respectively.
F. The parties additionally desire to amend, as set forth below, the
date on or before which the purchase of the Options, or the FCFG shares
underlying the Options, as the case may be, shall be consummated.
NOW, THEREFORE, the parties agree as follows:
1. PURCHASE PRICE. The parties acknowledge and agree that the
aggregate purchase price ("Purchase Price") for the Options, or the
underlying shares of FCFG common stock, as the case may be, as provided in
the Purchase and Sale Agreement is as follows:
(i) With respect to unexercised Options: $566,467.25 payable to each of
Byrne and Coleman [33,021 multiplied by $22.00, less 22,014 Options exercisable
at $4.542415, or
5
<PAGE>
$99,996.72 in the aggregate, and less 11,007 Options exercisable at
$5.450898, or $59,998.03 in the aggregate]; or
(ii) With respect to shares held at the time of purchase and sale as a
result of the exercise of the Options: $726,462.00 payable to each of Byrne and
Coleman [33,021 multiplied by $22.00].
2. ADDITIONAL OPTIONS AND/OR SHARES-NO ADDITIONAL PURCHASE PRICE.
Byrne and Coleman hereby agree that when FCFG purchases the Options, and/or
the shares underlying such Options, in accordance with the Purchase and Sale
Agreement, each of them shall at such time also sell, transfer and convey to
FCFG, any and all "Additional Options" and/or "Additional Shares" (as
hereinafter defined) owned by each of them, for no additional consideration
over and above the Purchase Price, provided that payment has been made as set
forth below.
For purposes hereof, "Additional Options" means, as to each of Byrne
and Coleman, any option(s) representing the right to acquire more than 33,021
shares of FCFG common stock, resulting from the adjustment of the original
Options due to any stock split or other subdivision or consolidation of
shares of FCFG common stock or the payment of any stock dividend on such
common stock or any other increase in the number of shares of FCFG common
stock outstanding which is effected without receipt of consideration by FCFG,
occurring prior to the purchase and sale contemplated by Paragraph 9 of the
Purchase and Sale Agreement. "Additional Shares" means any shares of FCFG
common stock acquired pursuant to the exercise of an Additional Option.
6
<PAGE>
3. AMENDMENT OF PURCHASE DATE. Paragraph 9 of the Purchase and Sale
Agreement is hereby amended in the following manner:
(i) The third (3rd) sentence of Paragraph 9 is hereby amended
to read in its entirety as follows:
"Byrne and Coleman will sell, and FCFG and/or assigns will acquire,
the Options and/or the Option Stock, as the case may be, no later
than 12:00 noon, October 30, 1997."
(ii) Immediately following the sixth (6th) sentence of Paragraph 9,
the following sentence is hereby added:
"FCFG's payment shall be made by wire transfer to the respective
accounts of Byrne and Coleman, such accounts being the same
accounts utilized in consummating the purchase of the "Subject
Shares" of Byrne and Coleman on March 7, 1997, pursuant to the
Purchase and Sale Agreement."
4. EFFECT OF AGREEMENT. This Agreement amends and modifies Paragraph 9
of the Purchase and Sale Agreement only to the extent expressly set forth
herein, and shall not be construed to otherwise effect any of the rights or
obligations of the parties hereto, as the same are set forth in such Purchase
and Sale Agreement.
EXECUTED as of the date first above written.
7
<PAGE>
FIRST COMMUNITY
FINANCIAL GROUP
By /s/ Ken Parsons /s/ Kevin Byrne
--------------------------- ---------------
Kevin Byrne
Its PRESIDENT
--------- /s/ Robert Coleman
------------------
Robert Coleman
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 10,262
<INT-BEARING-DEPOSITS> 10,958
<FED-FUNDS-SOLD> 2,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 11,963
<INVESTMENTS-CARRYING> 2,180
<INVESTMENTS-MARKET> 0
<LOANS> 174,431
<ALLOWANCE> 1,886
<TOTAL-ASSETS> 232,148
<DEPOSITS> 201,104
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,730
<LONG-TERM> 2,251
0
0
<COMMON> 3,942
<OTHER-SE> 21,121
<TOTAL-LIABILITIES-AND-EQUITY> 232,148
<INTEREST-LOAN> 4,121
<INTEREST-INVEST> 305
<INTEREST-OTHER> 46
<INTEREST-TOTAL> 4,472
<INTEREST-DEPOSIT> 1,601
<INTEREST-EXPENSE> 1,627
<INTEREST-INCOME-NET> 2,845
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,738
<INCOME-PRETAX> 577
<INCOME-PRE-EXTRAORDINARY> 413
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 413
<EPS-PRIMARY> .21
<EPS-DILUTED> .21
<YIELD-ACTUAL> 9.98
<LOANS-NON> 2,089
<LOANS-PAST> 1,383
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,420
<CHARGE-OFFS> 68
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 1,886
<ALLOWANCE-DOMESTIC> 1,886
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
