SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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 No. 0-21078
UNION BANKSHARES, LTD.
(Exact name of small business issuer as specified in its charter)
DELAWARE 84-0986148
------------------------------- ------------------
(State or other jurisdiction of (I.R.S Employer)
incorporation or organization) Identification No.)
1825 LAWRENCE STREET, SUITE 444, DENVER, CO 80202
(Address of principal executive offices)
(Zip Code)
(303) 298-5352
(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------
Not Changed
- --------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve 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 .
----- ----
At May 5, 1998, there were 1,168,507 shares of common stock outstanding.
<PAGE>
UNION BANKSHARES, LTD.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements................. 1
Item 2. Management's Discussion and Analysis or
Plan of Operation........... 7
PART II - OTHER INFORMATION............................ 13
SIGNATURES............................................. 14
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
March 31, 1998
UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1998 1997
(Unaudited)
============= ==============
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 16,110,000 $ 15,314,000
Federal funds sold 19,500,000 11,400,000
------------- -------------
Total cash and cash equivalents 35,610,000 26,714,000
Investment securities:
Investment securities held to maturity 26,315,000 27,929,000
Investment securities available for sale 36,819,000 37,180,000
Other investments 935,000 916,000
------------- -------------
Total investment securities 64,069,000 66,025,000
Loans:
Commercial 88,840,000 87,929,000
Real estate mortgage 3,878,000 4,297,000
Real estate construction 11,067,000 9,625,000
Consumer 20,347,000 20,933,000
------------- -------------
Total loans 124,132,000 122,784,000
Less: allowance for loan losses (2,170,000) (2,125,000)
------------- -------------
121,962,000 120,659,000
Mortgage loans held-for-sale 2,835,000 1,253,000
Excess of investment in subsidiary over net
assets acquired 2,664,000 2,720,000
Furniture, equipment and improvements, net 1,466,000 1,378,000
Accrued interest receivable 1,740,000 1,353,000
Other assets 1,419,000 1,403,000
============= =============
TOTAL ASSETS $ 231,765,000 $ 221,505,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand (noninterest -bearing) $ 57,978,000 $ 57,565,000
NOW 16,631,000 18,914,000
Money Market 69,990,000 65,074,000
Savings 12,160,000 10,798,000
Time 43,598,000 37,725,000
------------- -------------
Total deposits 200,357,000 190,076,000
Federal funds purchased -- --
Notes payable 11,600,000 12,000,000
Accrued interest payable 203,000 187,000
Other liabilities 834,000 1,020,000
------------- -------------
Total liabilities 212,994,000 203,283,000
Stockholders' equity
Common stock 1,000 1,000
Common stock surplus 9,595,000 9,584,000
Valuation allowance 298,000 253,000
Retained earnings 8,877,000 8,384,000
------------- -------------
Total stockholders' equity 18,771,000 18,222,000
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 231,765,000 $ 221,505,000
============= =============
</TABLE>
<PAGE>
UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
=======================
1998 1997
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 3,066,000 $ 2,495,000
Interest on investment securities:
U.S. government agencies and corporations 665,000 723,000
States and other political subdivisions 291,000 386,000
Interest on federal funds sold
and interest bearing deposits at other banks 69,000 16,000
----------- -----------
Total interest income 4,091,000 3,620,000
INTEREST EXPENSE:
Interest on deposits 1,153,000 946,000
Interest on federal funds purchased 2,000 28,000
Interest on notes payable 200,000 206,000
----------- -----------
Total interest expense 1,355,000 1,180,000
----------- -----------
NET INTEREST INCOME BEFORE PROVISION FOR
LOAN LOSS 2,736,000 2,440,000
PROVISION FOR LOAN LOSS 99,000 60,000
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSS 2,637,000 2,380,000
NONINTEREST INCOME:
Service charges 92,000 89,000
Gain (loss) on sale of securities available for sale 38,000 (3,000)
Other 113,000 107,000
----------- -----------
Total noninterest income 243,000 193,000
----------- -----------
NONINTEREST EXPENSE:
Salaries and employee benefits 1,324,000 1,057,000
Amortization of investment in subsidiary
over net assets acquired 56,000 57,000
Occupancy and equipment 314,000 297,000
Other 656,000 583,000
----------- -----------
Total noninterest expense 2,350,000 1,994,000
----------- -----------
INCOME BEFORE INCOME TAX EXPENSE 530,000 579,000
INCOME TAX EXPENSE (Note 3) 37,000 135,000
----------- -----------
NET INCOME $ 493,000 $ 444,000
=========== ===========
EARNINGS PER COMMON SHARE BASIC: (Note 4)
Net income per share $ 0.42 $ 0.38
=========== ===========
Weighted average number of common shares outstanding 1,168,263 1,153,812
=========== ===========
EARNINGS PER COMMON SHARE DILUTED (Note 4)
Net income per share $ 0.38 $ 0.36
=========== ===========
Weighted average number of common shares outstanding 1,310,003 243,901
=========== ===========
</TABLE>
<PAGE>
UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
====================
1998 1997
---- ----
<S> <C> <C>
Net income $493,000 $444,000
Other comprehensive income net of tax:
Unrealized gains on securities 298,000 253,000
-------- --------
Comprehensive income $791,000 $697,000
======== ========
</TABLE>
<PAGE>
UNION BANKSHARES, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
<TABLE>
<CAPTION>
(Unaudited)
March 31,
============================
1998 1997
============= ============
<S> <C> <C>
Net cash provided (used) by operating activities ($ 82,000) ($ 284,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available-for-sale
securities 1,413,000 3,039,000
Proceeds from maturities of held-to-maturity
securities 1,561,000 818,000
Proceeds from sale of available-for-sale
securities 2,077,000 239,000
Purchase of available-for-sale securities (3,069,000) (9,471,000)
Purchase of loans held-for-sale (10,247,000) --
Proceeds from sale of loans held-for-sale 8,664,000 --
Purchase of other investments (19,000) (377,000)
Net increase in loans (1,113,000) (858,000)
Purchase of furniture and equipment (181,000) (21,000)
------------ ------------
Net cash used in investing activities (914,000) (6,631,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in deposits 10,281,000 1,322,000
Increase (decrease) in fed funds purchased -- (5,700,000)
New borrowings long-term debt -- 10,000,000
Repayments of long-term debt (400,000) --
Proceeds from issuance of common stock 11,000 23,000
------------ ------------
Net cash provided by financing activities 9,892,000 5,645,000
------------ ------------
Net increase in cash and cash equivalents 8,896,000 (1,270,000)
Cash and cash equivalents, beginning of year 26,714,000 12,356,000
------------ ------------
Cash and cash equivalents, end of quarter $ 35,610,000 $ 11,086,000
============ ============
</TABLE>
<PAGE>
UNION BANKSHARES, LTD. AND SUBSIDIARY
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1998
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not include all the
information and note disclosures required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the consolidated financial statements and related footnotes included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1997. In
the opinion of management, the consolidated financial statements presented
herein include all adjustments (consisting of normal recurring accruals)
necessary to present fairly, in all material respects, the consolidated
financial position of Union Bankshares, Ltd. (the "Company") as of March 31,
1998 and the Company's results of operations for the three months ended
March 31, 1998 and 1997, and statements of cash flows for the three months
ended March 31, 1998 and 1997.
Certain reclassifications have been made to the March 31, 1997 Consolidated
Financial Statements to conform to the March 31, 1998 Consolidated Financial
Statements.
NOTE 2. RESULTS OF OPERATIONS
The results of operations for the three months ended March 31, 1998 are not
indicative of the results to be expected for the full year.
NOTE 3. INCOME TAXES
Income taxes are provided for on the liability method, in accordance with
Financial Accounting Standards Board (FASB) Statement No. 109, whereby deferred
assets are recognized for deductible temporary differences and operating loss
and tax credit carryforwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are defined as the
differences between the reported amounts of assets and liabilities and their tax
basis. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in the tax laws and rates on
the date of enactment.
<PAGE>
NOTE 4. EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing net income available for
common stockholders by the weighted average number of shares of common stock
outstanding during the period plus the equivalent number of shares purchasable
under common stock options, if dilutive. Earnings per common share were affected
by 141,740 shares purchasable pursuant to exercisable options during the three
months ended March 31, 1998. Earnings per common share were affected by 90,089
shares purchasable pursuant to exercisable options during the three months ended
March 31, 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following commentary presents management's discussion and analysis of the
Company's financial performance and financial condition for the first quarter
ended March 31, 1998. The discussion is a supplement to the Consolidated
Financial Statements and should be read in conjunction with those statements and
footnotes.
RESULTS OF OPERATIONS
OVERVIEW: Union Bankshares, Ltd. (the "Company") reported net income of $493,000
for the quarter ended March 31, 1998, a increase of 11.0% from net income of
$444,000 for the first quarter of 1997. 1998 first quarter earnings were
positively impacted by a $296,000 increase in net interest income, a $41,000
increase in gain on sale of securities available for sale and a $98,000 decrease
in income tax expense. These improvements were partially offset by an increase
of $39,000 in provision for loan loss and a $356,000 increase in noninterest
expense for the quarter ended March 31, 1998. Net income per share (diluted) was
$.38 for the three months ended March 31, 1998 compared to $.36 per share
(diluted) for the same period in 1997. Return on average assets and average
equity were .93% and 10.72%, respectively, for the first quarter of 1998
compared to .95% and 10.98%, respectively, for the first quarter of 1997.
During the first quarter of 1998, the Bank's loan portfolio increased $1.3
million and its deposits increased $10.3 million.
INTEREST INCOME: Interest income increased $471,000, or 13.0%, to $4,091,000 for
the first quarter of 1998 from $3,620,000 for the comparable 1997 period. This
increase results from the increase in the Company's interest earning assets. The
Company's net yield on interest earning assets on a fully tax equivalent basis
was 8.76% for the first quarter of 1998, which reflects a decrease of 3 basis
points (each basis point equals 1/100 of 1%) from the comparable 1997 period.
The average yield on loans remained constant at 9.94% between the 1997 period
and the 1998 period, and the average yield on securities held by the Company
decreased from 7.19% in the 1997 period to 6.75% in the 1998 period. Interest
income on loans was $571,000 greater in the 1998 period and interest income on
securities decreased $153,000 in the 1998 period.
INTEREST EXPENSE: Interest expense increased $175,000, or 14.8%, to $1,355,000
for the quarter ended March 31, 1998 from $1,180,000 for the quarter ended March
31, 1997. This increase is primarily due to a $16.0 million increase in average
interest bearing deposit accounts in the 1998 period compared to those in the
1997 period offset by the $1.5 million decrease in average notes payable.
Average rates paid on interest
7
<PAGE>
bearing deposits increased 27 basis points to 3.70% in the first quarter of 1998
from 3.43% in the first quarter of 1997.
NET INTEREST INCOME: Net interest income before provision for loan loss was
$2,736,000 for the quarter ended March 31, 1998, an increase of $296,000, or
12.1%, over the first quarter of 1997. Net interest margin decreased 9 basis
points from 6.03% in the 1997 period to 5.94% in the 1998 period. The increase
in net interest income is primarily due to a $571,000 increase in interest
income on loans and a $53,000 increase in interest income on federal funds sold,
offset by a $153,000 decrease in interest income on investment securities and a
$175,000 increase in interest expense. The Company's average cost of funds for
the quarter ended March 31, 1998 was 12 basis points higher than in the
comparable 1997 period. The Company's average yield on interest earning assets
decreased 3 basis points in the 1998 period compared to the year earlier period
from 8.79% to 8.76%. The Company believes that the increase in its average cost
of funds results from the increase in the percentage of deposits represented by
branch deposits, which tend to be more consumer deposits, and increased
competition.
NONINTEREST INCOME: Noninterest income increased $50,000, or 25.9%, for the
quarter ended March 31, 1998 to $243,000 from $193,000 for the quarter ended
March 31, 1997. This increase was primarily due to a $41,000 increase in the
gain on sale of securities available for sale from a $3,000 loss in the first
quarter of 1997 to a $38,000 gain in the first quarter of 1998.
NONINTEREST EXPENSE: Noninterest expense increased $356,000, or 17.9%, for the
first quarter of 1998 to $2,350,000 compared to $1,994,000 in the first quarter
of 1997. This increase is primarily the result of; (i) increases in salaries and
benefits relating primarily to annual merit increases and staffing expense for
the new branch; and (ii) an increase in other noninterest expenses due to
increases in marketing expenses.
PROVISION FOR LOAN LOSS
The Company charged $99,000 to Provision for Loan Loss in the first quarter of
1998 and $60,000 for the same period in 1997. The ratio of loan loss reserve to
total loans was 1.70% at March 31, 1998 and 1.78% at March 31, 1997. The Company
sets its loan loss reserve at a level considered adequate to provide for
anticipated loan losses based on management's assessment of various factors
affecting the loan portfolio. These factors include a review of problem loans,
business conditions, loan loss experience and an overall evaluation of the
quality of the collateral, holding and disposal costs and costs of capital.
Provision for loan loss is a direct charge against income and is determined by
management based on the adequacy of the loan loss reserve.
8
<PAGE>
LIQUIDITY AND SOURCES OF FUNDS
The Company's total assets increased 4.6% to $231.8 million at March 31, 1998
from $221.5 million at December 31, 1997. During the quarter ended March 31,
1998 deposits increased $10.3 million to $200.4 million at March 31, 1998 from
$190.1 million at December 31, 1997. None of the Company's deposits at March 31,
1998 were brokered deposits.
The Loan Agreement with NationsBank provides for interest on outstanding amounts
to be payable at NationsBank's corporate base rate, which is currently 8.50%.
The Loan Agreement provides for a one-year term loan which is renewable by the
Company unless the Company's credit standing is unsatisfactory based on the
criteria set forth below. The Loan Agreement contains a twelve-year amortization
schedule, with interest only for the first two years, assuming renewal of the
loan in accordance with its terms.
Annual renewal of the loan is based on the compliance by the Bank with the
following criteria:
1. Capital Ratio of not less than 6.25%;
2. Return on Average Assets of not below 1.00%;
3. Loan Loss Reserve/Total Loans Ratio of not below 1.00%;
4. Non-Performing Loans/Total Loans Ratio of not greater than 2.00%;
5. Debt Service Coverage Ratio of not less than 2:1; and
6. Absence of regulatory dividend restrictions.
In the event the Bank does not meet any of these criteria calculated as of
December 31 of each year and based on its financial statements, the Company will
have 90 days from the delivery of the financial statements to cure the
situation.
The loan is secured by the pledge of all of the shares of capital stock of the
Bank, and contains standard representations, warranties and covenants.
At December 31, 1997, the Company met all of the above criteria, and the loan
was renewed for another one year term.
At March 31, 1998, the Company had $1.6 million outstanding under this loan
agreement after making a $400,000 principal payment during the first quarter of
1998. The Company intends to continue to pay down this loan as liquidity allows.
The Company has also entered into a revolving line of credit with NationsBank in
an amount not to exceed $3,000,000. Any monies advanced under this line would be
used solely for capital needs of the Company or to purchase the stock of banks
or bank holding companies. This line of credit would be available for one year
only, with renewals to be negotiated each year. If any principal is advanced on
this line, the
9
<PAGE>
terms of the repayment would also be negotiated depending upon the use of
proceeds. Interest on amounts outstanding under this revolving line of credit,
if any, is due quarterly. At March 31, 1998, this line of credit was also
renewed for an additional one year term. There is currently no amount
outstanding under this line of credit.
On January 14, 1997, the Bank borrowed $10 million from the Federal Home Loan
Bank of Topeka (the "FHLB") in the form of two $5 million loans. The purpose of
securing these loans was primarily to provide liquidity and allow the Bank to
limit its exposure relative to the Available for Sale portion of its securities
portfolio, as discussed below. The first $5 million enabled management to reduce
its current daily purchase of Federal Funds from approximately $8 million to
$3 million. With the remaining $5 million, the Bank purchased approximately
$5 million in short-term U.S. Government securities, which were placed in the
Available for Sale portfolio. This allowed the Bank to transfer approximately
$5 million in long-term GNMA mortgage pool securities with relatively high
coupon yields to Held to Maturity, which limits the Bank's capital exposure
should interest rates increase. The loans are structured as follows: $5 million
at 6.34%, maturing January 14, 1999; and $5 million at 6.50%, maturing January
14, 2000. The loans cannot be prepaid without a prepayment penalty. Interest on
these notes is due monthly. The Company expects that maturities of securities
held in the Available for Sale portfolio will be adequate to fund repayment of
these loans.
Management anticipates that the Company will continue to rely primarily on
customer deposits, sales and maturities of investment securities, loan sales and
loan repayments, as well as retained earnings to provide liquidity. These funds
are used to make loans, to acquire investment securities and other assets and to
fund continuing operations. The Company believes that its customer deposits will
continue to provide a strong source of liquidity because of the high percentage
of core deposits, many of which are held as compensating balances under
long-standing loan relationships. As a secondary source of funds, management
uses federal funds and its membership in the FHLB.
ASSET QUALITY
The Company's lending activities are guided by its Statement of Lending Policies
and Procedures. These policies are annually reviewed and approved by the Bank's
Board of Directors. The Company supplements its internal supervision and audits
of its lending operation with independent examinations performed by professional
experienced consultants and auditors. The Company monitors concentrations of
loans by collateral, purpose and industry. The Company has no significant
exposure to highly leveraged transactions and has no foreign credits in its loan
portfolio.
Total nonperforming assets were $70,000 and $23,000 at March 31, 1998 and
December 31, 1997, respectively. Other Real Estate Owned (OREO) was $0 at both
March 31, 1998 and December 31, 1997. At March 31, 1998
10
<PAGE>
securities held to maturity were $26.3 million, or 41.1% of the total portfolio.
Securities available for sale totaled $36.9 million, or 57.5% of the total
portfolio. Other securities (investment in FHLB stock) totaled $.9 million, or
1.4% of the total portfolio. Securities available for sale are those securities
which may be sold in response to changes in interest rates, changes in the
Company's short term liquidity needs or changes in prepayment risk, and are
stated at the lower of cost or estimated market value. At March 31, 1997, the
market value of investments available for sale exceeded carrying value by
approximately $444,000.
Securities held to maturity are considered longer term assets which are normally
held until maturity and are carried at amortized cost. The market value of
securities held to maturity exceeded carrying value by approximately $709,000 at
March 31, 1998. U.S. government securities make up $41.5 million, or 64.7% of
the investment portfolio, and obligations of states and political subdivisions
(municipal securities), comprise $22.6 million, or 35.3% of the portfolio at
March 31, 1998.
As noted in the Company's Form 10-KSB for the year ended December 31, 1997,
management has generally sought to control the exposure of the Company's
securities portfolio to rising interest rates by maintaining a position within a
narrow range around an "earnings neutral position" (i.e. the mix of assets and
liabilities that generate a net interest margin that is least affected by
interest rate changes). The Company uses a measurement tool known as dollar
duration to help maintain an earnings neutral position. As of March 31, 1998,
the dollar duration of the investment portfolio was 3.20 compared to 3.20 at
December 31, 1997. The Company may also engage in hedging transactions to
control interest rate risk. The effect of these efforts in any given period may
be to negatively impact reported net non-interest income and the interest earned
on the securities.
CAPITAL RESOURCES
The Company's capital adequacy is a direct measurement of the overall financial
strength of the Company and its ability to absorb adverse market conditions. In
addition, the capital position of the Company provides a mechanism to promote
public confidence in the Company and the Bank.
The Company's total stockholders' equity increased $549,000 to $18.8 million at
March 31, 1998 from $18.2 million at December 31, 1997. This increase in
stockholders' equity was due to the retention of earnings in the current year,
the exercise of options to purchase 1,500 shares of common stock, and the net
effect of FAS 115 which requires financial institutions to mark their available
for sale securities portfolio to market.
11
<PAGE>
The Federal Reserve Board and FDIC guidelines require a minimum of a 4% Tier 1
core capital to risk-weighted assets ratio and an 8% total qualifying capital to
risk-weighted assets ratio. Due to the Company's high level of capital and the
level of risk in its current asset mix, the Company's risk based capital ratios
exceed the regulatory minimum ratios. The Company's core capital to risk
weighted assets was 9.97% at March 31, 1998 and its total qualifying capital to
risk weighted assets was 11.24%. As of March 31, 1998 the Bank also exceeded the
minimum regulatory risk based capital ratios.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995.
Statements which are not historical facts contained in this document are forward
looking statements that involve risks and uncertainties that could cause actual
results to differ from projected results. Factors that could cause actual
results to differ materially include, among others: general economic conditions,
economic conditions in the Denver metropolitan area, the monetary policy of the
Federal Reserve Board, changes in interest rates, inflation, competition in the
banking business, changes in the state and federal regulatory regime applicable
to the Company's and the Bank's operations, the results of financing efforts and
other risk factors detailed in the Company's Forms 10-KSB, 10-QSB and 8-K filed
with the Securities and Exchange Commission.
12
<PAGE>
UNION BANKSHARES, LTD.
PART II - OTHER INFORMATION
Item 6. Exhibits
Exhibit 27 Financial Data Schedule
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the issuer caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
UNION BANKSHARES, LTD.
----------------------
(Registrant)
May 6, 1998 /S/ BRUCE E. HALL
----------------------
Bruce E. Hall
Vice President, Treasurer and
Secretary
(Authorized Officer and Principal
Financial Officer of the Registrant)
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 16,110,000
<INT-BEARING-DEPOSITS> 142,379,000
<FED-FUNDS-SOLD> 19,500,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 36,819,000
<INVESTMENTS-CARRYING> 63,134,000
<INVESTMENTS-MARKET> 63,843,000
<LOANS> 126,967,000
<ALLOWANCE> (2,170,000)
<TOTAL-ASSETS> 231,765,000
<DEPOSITS> 200,357,000
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,037,000
<LONG-TERM> 11,600,000
<COMMON> 9,596,000
0
0
<OTHER-SE> 9,175,000
<TOTAL-LIABILITIES-AND-EQUITY> 231,765,000
<INTEREST-LOAN> 3,066,000
<INTEREST-INVEST> 956,000
<INTEREST-OTHER> 69,000
<INTEREST-TOTAL> 4,091,000
<INTEREST-DEPOSIT> 1,153,000
<INTEREST-EXPENSE> 1,355,000
<INTEREST-INCOME-NET> 2,736,000
<LOAN-LOSSES> 54,000
<SECURITIES-GAINS> 38,000
<EXPENSE-OTHER> 2,350,000
<INCOME-PRETAX> 530,000
<INCOME-PRE-EXTRAORDINARY> 530,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 492,000
<EPS-PRIMARY> .42
<EPS-DILUTED> .38
<YIELD-ACTUAL> 8.76
<LOANS-NON> 70,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,125,000
<CHARGE-OFFS> 61,000
<RECOVERIES> 7,000
<ALLOWANCE-CLOSE> 2,170,000
<ALLOWANCE-DOMESTIC> 2,170,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
