<PAGE>
U.S. 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 June 30, 1997.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ______________.
COMMISSION FILE NUMBER 22-25144
FIRST STATE BANCORPORATION
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
NEW MEXICO 85-0366665
(STATE OF INCORPORATION) (IRS EMPLOYER
IDENTIFICATION NO.)
111 LOMAS AVENUE N.W.
ALBUQUERQUE, NEW MEXICO 87102
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(505) 241-7500
(ISSUER'S TELEPHONE NUMBER)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days. Yes XX No
-- --
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,580,540 shares of common stock, no
par value, outstanding as of August 5, 1997.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check One):
Yes No XX
-- --
<PAGE>
FIRST STATE BANCORPORATION
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 5
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 7
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Balance Sheets
(unaudited)
<TABLE>
<CAPTION>
June 30 December 31
Assets 1997 1996
------ ---- ----
<S> <C> <C>
Cash and due from banks $ 17,428,028 $ 15,711,932
Federal funds sold 5,200,000 -
----------------------------
Total cash and cash equivalents 22,628,028 15,711,932
Investment securities:
Held to maturity (at amortized cost, market value of $15,838,000 at
June 30, 1997, and $19,597,000 at December 31, 1996) 15,833,282 19,547,433
Available for sale (at market, amortized cost of $34,353,720 at
June 30, 1997, and $20,979,000 at December 31, 1996) 34,362,552 21,048,140
----------------------------
Total Investments 50,195,834 40,595,573
----------------------------
Loans and leases net of unearned interest 274,240,148 250,926,023
Less allowance for loan and lease losses 2,908,105 2,510,155
----------------------------
Net loans and leases 271,332,043 248,415,868
Other assets 22,728,693 20,245,072
----------------------------
Total assets 366,884,598 324,968,445
============================
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits:
Noninterest-bearing $ 64,434,711 $ 52,038,847
Interest-bearing 247,790,813 225,314,476
----------------------------
Total deposits 312,225,524 277,353,323
Other liabilities 28,759,727 26,564,610
----------------------------
Total liabilities 340,985,251 303,917,933
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized, none
issued or outstanding - -
Common stock, no par value, 20,000,000 shares authorized, issued and
outstanding 2,577,794 at June 30, 1997 and 2,172,357 at December 31, 15,862,208 11,906,581
1996
Retained earnings 10,031,310 9,097,986
Unrealized gains on investment securities available for sale 5,829 45,945
----------------------------
Total stockholders' equity 25,899,347 21,050,512
----------------------------
Total liabilities and stockholders' equity $366,884,598 $324,968,445
============================
Book value per share $10.05 $9.69
============================
Tangible book value per share $9.71 $9.26
============================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
1
<PAGE>
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Operations
For the three and six months ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
1997 1996 1997 1996
-------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans and leases $7,009,509 $5,693,538 $13,497,671 $10,904,724
Interest on investment securities:
Taxable 724,241 474,192 1,378,752 954,423
Nontaxable 43,489 53,568 43,384 54,963 86,873 108,531
Federal funds sold 50,703 28,754 75,894 94,562
-------------------------------------------------------
Total interest income 7,827,837 6,251,447 15,039,190 12,062,240
-------------------------------------------------------
Interest expense:
Deposits 2,645,045 1,954,273 5,171,498 3,881,264
Short-term borrowings 214,240 219,004 414,949 335,889
Long-term debt and capital lease 179,867 111,654 251,169 218,626
-------------------------------------------------------
Total interest expense 3,039,152 2,284,931 5,837,616 4,435,779
-------------------------------------------------------
Net interest income before provision for loan and lease losses 4,788,685 3,966,516 9,201,574 7,626,461
Provision for loan and lease losses 397,500 515,903 660,000 634,403
-------------------------------------------------------
Net interest income after provision for loan and lease losses 4,391,185 3,450,613 8,541,574 6,992,058
-------------------------------------------------------
Other Income:
Service charges on deposit accounts 338,211 270,778 656,022 530,951
Other banking service fees 60,491 40,510 92,276 71,574
Credit card discount income 274,226 179,676 520,711 306,905
Operating lease income 255,701 - 493,264 -
Gain on sale or call of investment securities - - - 156
Other 110,706 107,806 254,672 226,860
-------------------------------------------------------
Total other income 1,039,335 598,770 2,016,945 1,136,446
-------------------------------------------------------
Other expenses:
Salaries and employee benefits 1,788,336 1,550,089 3,525,450 2,997,593
Occupancy 519,463 423,423 1,045,947 835,679
Data Processing 145,115 320,697 282,758 490,627
Credit card interchange 167,786 140,427 312,305 233,897
Equipment 312,250 273,872 612,522 529,665
Leased equipment depreciation 167,321 - 321,845 -
Legal, accounting and consulting 88,522 85,811 196,357 165,381
Marketing 207,360 158,562 401,877 319,651
Other real estate owned expenses 63,150 (3,153) 123,499 7,867
Amortization of intangibles 47,576 47,238 97,404 94,474
Other 736,071 611,669 1,407,874 1,269,934
-------------------------------------------------------
Total other expenses 4,242,950 3,608,635 8,327,838 6,944,768
-------------------------------------------------------
Income before income taxes 1,187,570 440,748 2,230,681 1,183,736
Income tax expense 417,042 165,546 750,581 403,939
-------------------------------------------------------
Net income $ 770,528 $ 275,202 $ 1,480,100 $ 779,797
=======================================================
Earnings per common and common equivalent share $0.30 $0.13 $0.60 $0.38
=======================================================
Earnings per common share-assuming full dilution $0.28 $0.13 $0.56 $0.36
=======================================================
Dividends per common share $0.05 $0.05 $0.10 $0.10
=======================================================
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE>
FIRST STATE BANCORPORATION AND SUBSIDIARY
Consolidated Condensed Statements of Cash Flows
For the three and six months ended June 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
1997 1996 1997 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Operating activities:
Net Income $ 770,528 $ 275,202 $ 1,480,100 $ 779,797
-----------------------------------------------------------
Adjustments to reconcile net income to cash provide by operations:
Provisions for loan and lease losses 397,500 515,903 660,000 634,403
Provision for decline in value of other real estate owned 20,007 - 41,307 -
Depreciation and amortization 636,720 383,094 927,746 686,951
Gain on call or sale of investment securities - - (156)
Increase in accrued interest receivable (45,664) (923,667) (434,258) (791,006)
(Increase) decrease in other assets, net (491,151) 416,632 (1,476,626) 173,473
Increase (decrease) in other liabilities, net (403,613) (424,551) 234,619 (65,105)
-----------------------------------------------------------
Total adjustments 113,799 (32,589) (47,212) 638,560
-----------------------------------------------------------
Net cash provided by operating activities 884,327 242,613 1,432,888 1,418,357
-----------------------------------------------------------
Cash flows from investing activities:
Net increase in loans (12,239,537) (20,991,549) (23,669,753) (38,762,941)
Purchases of investment securities available for sale (3,201,000) (454,400) (14,818,368) (3,606,000)
Maturities of investment securities available for sale 1,450,000 1,000,000 1,450,000 6,000,000
Purchases of investment securities held to maturity (3,743,339) - (6,243,339)
Maturities of investment securities held to maturity 1,020,000 1,025,000 3,720,000 6,135,000
Sale of investment securities available for sale - - 500,156
Purchases of premises and equipment (1,087,299) (640,950) (1,113,102) (1,152,682)
Sales of premises and equipment - 1,209,483 - 1,209,483
Sales of other real estate owned 622,863 - 622,863 67,917
Additions to other real estate owned, net - - (145,156)
-----------------------------------------------------------
Net cash used in investing activities (13,434,973) (22,595,297) (33,808,360) (35,997,562)
-----------------------------------------------------------
Cash flows from financing activities:
Net increase (decrease) in interest bearing deposits (1,101,241) 3,906,340 22,476,337 12,704,374
Net increase in noninterest bearing deposits 6,280,622 5,660,804 12,395,864 6,913,119
Net increase (decrease) in securities sold under repurchase
agreements 20,872 2,116,034 (2,585,701) 2,732,998
Federal Home Loan Bank borrowings - 8,000,000 - 8,000,000
Payments on Federal Home Loan Bank borrowings (4,000,000) - (4,970,000) - - -
Issuance of subordinated debentures 13,800,000 - 13,800,000 -
Payments on long-term debt (12,247) (8,395) (22,323) (16,605)
Federal funds purchased, net - 3,970,000 (1,500,000) 3,970,000
Common stock issued 126,205 37,113 244,166 135,309
Dividends paid (128,815) (99,251) (238,775) (198,334)
Exercise of put warrants (308,000) - (308,000) -
-----------------------------------------------------------
Net Cash provided by financing activities: 14,677,396 23,582,645 39,291,568 34,240,861
-----------------------------------------------------------
Increase (decrease) in cash and cash equivalents 2,126,750 1,229,961 6,916,096 (338,344)
Cash and cash equivalents at beginning of period 20,501,278 13,218,961 15,771,932 14,787,266
-----------------------------------------------------------
Cash and cash equivalents at end of period $ 22,628,028 $ 14,448,922 $ 22,688,028 $ 14,448,922
===========================================================
Supplemental disclosure of noncash investing and financing activities:
Additions to other real estate owned in settlement of loans - $ 143,395 $ 93,578 $ 271,635
===========================================================
Issuance of common stock upon conversion of subordinated debentures $ 3,362,460 - $ 3,711,460 -
===========================================================
Issuance of long term debt for purchase of premises and equipment $ 1,050,000 - $ 1,050,000 -
===========================================================
</TABLE>
3
<PAGE>
FIRST STATE BANCORPORATION AND SUBSIDIARY
Notes to Consolidated Condensed Financial Statements
(Unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated condensed financial statements are unaudited and
include the accounts of First State Bancorporation (the "Company") and its
subsidiary, First State Bank of Taos (100% owned).
All significant intercompany accounts and transactions have been eliminated.
Information contained in the consolidated condensed financial statements and
notes thereto of the Company should be read in conjunction with the Company's
consolidated financial statements and notes thereto contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1996.
The consolidated condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. 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, all
adjustments (consisting only of normally recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six month periods ended June 30, 1997, are not necessarily indicative
of the results that may be expected for the year ending December 31, 1997.
Net income per common share and common equivalent share are computed by dividing
net income applicable to common stock by the total of the weighted average
number of common shares outstanding and any additional dilutive effect of stock
options and warrants outstanding during the respective periods. The dilutive
effect of stock options and warrants is computed using the average market price
of the Company's common stock for the period.
Net income per common share, assuming full dilution, is computed based on the
weighted average number of common shares outstanding during the period, and any
additional dilutive effect of stock options and warrants during the period. The
dilutive effect of outstanding stock options and warrants is computed using the
greater of the closing price or the average market price of the Company's common
stock for the period. Net income per common share, assuming full dilution, also
includes the dilution which would result if the convertible debentures
outstanding during the period had been converted at the beginning of the period.
The number of shares used in the net income per share calculations at June 30,
1997, and 1996, are as follows:
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30 June 30 June 30 June 30
1997 1996 1997 1996
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Earnings per common and common equivalent share 2,600,795 2,078,060 2,471,023 2,075,378
Earnings per common share assuming full dilution 3,225,041 2,641,171 2,965,529 2,639,197
</TABLE>
2. CONVERTIBLE SUBORDINATED DEBENTURES
On April 30, 1997, the Company called for redemption its 7% Convertible
Subordinated Debentures due November 3, 2003, with a balance of $3,439,000 at
March 31, 1997. Prior to the redemption date, $3,424,000 principal amount of the
debentures were converted into the Company's common stock at a conversion rate
of $10.50 per share or 326,058 shares. The remaining $15,000 were redeemed at
101% of the original principal balance plus accrued interest.
4
<PAGE>
On May 2, 1997, the Company completed an offering for $13,800,000 of 7.5%
Convertible Subordinated Debentures due 2017. The debentures pay interest semi-
annually on April 30 and October 30 until maturity, are convertible into the
Company's common stock at $16.75 per share, are callable at the Company's option
if the price of its common stock equals or exceeds 140% of the exercise price
for at least 30 consecutive trading days without any premium or at a redemption
premium as defined in the Prospectus dated April 28, 1997, beginning May 1,
2001. During the second quarter of 1997, the company made a capital
contribution of $4.0 million to First State Bank of Taos. As a result of this
contribution, First State Bank of Taos has sufficient capital to be considered
well-capitalized. Management intends to use the remaining proceeds of these
debentures to provide capital to First State Bank of Taos, if necessary, for
general corporate purposes and for possible future acquisitions.
3. ACCOUNTING STANDARD ISSUED NOT YET IMPLEMENTED
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share,
which supersedes Accounting Practice Bulletin No. 15, Earnings per share. SFAS
No. 128, which specifies the computation, presentation, and disclosures
requirements for earnings per share (EPS), was issued to simplify the
computation of EPS. It replaces the presentation of primary EPS with a
presentation of basic EPS and fully diluted EPS with diluted EPS. Basic EPS,
unlike primary EPS, excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock. Diluted EPS is computed similarly to
fully diluted EPS under APB 15. SFAS No. 128 is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
The impact of SFAS No. 128 is not expected to be material in relation to the
consolidated financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONSOLIDATED CONDENSED BALANCE SHEETS
The Company's total assets increased by $41.9 million from $325.0 million as of
December 31, 1996, to $366.9 million as of June 30, 1997, due to internal
growth. For the first six months of 1997, net loans increased by $22.9 million
from $248.4 million to $271.3 million while investment securities increased by
$9.6 million from $40.6 million to $50.2 million. For the first six months of
1997, other assets increased $2.5 million from $20.2 million to $22.7 million.
The increase in loans is due largely to the Company's efforts to increase its
market share and increased economic activity and demand for loans in the
Company's market area. Total commercial loans increased by approximately $5.6
million, real estate loans increased by approximately $10.1 million and leases
increased by approximately $5.4 million.
Investment securities increased by $9.6 million as a result of an increase in
deposits.
Deposits, which are the Company's main source of funds for loans, investments
and federal funds sold, increased by $34.8 million from $277.4 million as of
December 31, 1996, to $312.2 million as of June 30, 1997. Non interest-bearing
deposits increased by $12.3 million and interest-bearing deposits increased by
$22.5 million. For the first six months of 1997, other liabilities increased by
$2.2 million due to the issuance of $13.8 million in 7.5% Convertible
Subordinated Debentures offset by the conversion into Common Stock of $3.8
million in 7% Convertible Subordinated Debentures, the repayment of $5.0 million
in Fedearl Home Loan Bank advances and a $2.6 million decrease in securities
sold under repurchase agreements and a $1.5 million decrease in Federal funds
purchased.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997.
Net income for the Company for the three months ended June 30, 1997, was
$771,000, an increase of $496,000 or 180% from $275,000 for the same period of
1996. The Company's annualized return on average assets was 0.87% for the
second quarter of 1997, compared to 0.40% for the same period of 1996.
5
<PAGE>
The provision for loan losses decreased by $118,000 from $516,000 for the three
months ended June 30, 1996, to $398,000 for the three months ended June 30,
1997. The June 30, 1996 provision was significantly increased from previous
quarters due to $20.0 million in loan growth in the second quarter of 1996.
Net interest income before provision for loan losses increased $800,000 to $4.8
million for the three months ended June 30, 1997, from $4.0 million for the
three months ended June 30, 1996, primarily due to increased loan and investment
security volume. The Company's net interest margin decreased to 6.00% at June
30, 1997, from 6.45% at June 30, 1996. This decrease is due primarily to
increased competition resulting in lower yields on real estate loans.
Total non-interest income increased by $400,000 to $1.0 million for the three
months ended June 30, 1997, compared to $0.6 million for the same period of
1996, primarily due to an increase in credit card discount income of $95,000,
an increase in income from operating leases of $255,000 and increased service
charge income of $67.000.
Total non-interest expense increased by $600,000 to $4.2 million for the second
quarter of 1997, compared to $3.6 million for the same period of 1996. The
opening and staffing of the Bernalillo branch in August 1996, additions to
personnel to service loan and deposit growth, increased credit card interchange
expense and lease equipment depreciation accounted for a substantial portion of
the increase in non-interest expense.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997.
Net income for the Company for the six months ended June 30, 1997, was
$1,480,000, an increase of $700,000 or 90% from $780,000 for the same period of
1996. The Company's annualized return on average assets was 0.86% for the
second quarter of 1997, compared to 0.56% for the same period of 1996.
The provision for loan losses increased by $26,000 from $634,000 for the six
months ended June 30, 1996, to $660,000 for the six months ended June 30, 1997.
Net interest income before provision for loan losses increased $1.6 million to
$9.2 million for the six months ended June 30, 1997, from $7.6 million for the
three months ended June 30, 1996, primarily due to increased loan and investment
securities volume. The Company's net interest margin decreased to 5.96% at June
30, 1997, from 6.42% at June 30, 1996. This decrease is due primarily to
increased competition resulting in lower yields on real estate loans.
Total non-interest income increased by $900,000 to $2.0 million for the six
months ended June 30, 1997, compared to $1.1 million for the same period of
1996, primarily due to an increase in credit card discount income of $214,000,
an increase in income from operating leases of $493,000 and increased service
charge income of $125,000.
Total non-interest expense increased by $1.4 million to $8.3 million for the
first six months of 1997, compared to $6.9 million for the same period of 1996.
The opening and staffing of the Bernalillo branch in August 1996, additions to
personnel to service loan and deposit growth, increased credit card interchange
expense and lease equipment depreciation accounted for a substantial portion of
the increase in non-interest expense.
LIQUIDITY AND CAPITAL EXPENDITURES
The Company's primary sources of funds are customer deposits, loan repayments,
and maturities of investment securities. The Company has additional sources of
liquidity in the form of borrowings. Borrowings include federal funds
purchased, securities sold under repurchase agreements and borrowings from the
Federal Home Loan Bank.
On April 30, 1997, the Company called for redemption its 7% Convertible
Subordinated Debentures due November 3, 2003, with a balance of $3,439,000 at
March 31, 1997. Prior to the redemption date, $3,424,000 principal amount of the
debentures were converted into the Company's common stock at a conversion rate
of $10.50 per share or 326,058 shares. The remaining $15,000 were redeemed at
101% of the original principal balance plus accrued interest.
6
<PAGE>
On May 2, 1997, the Company completed an offering for $13,800,000 of 7.5%
Convertible Subordinated Debentures due 2017. The debentures pay interest semi-
annually on April 30 and October 30 until maturity, are convertible into the
Company's common stock at $16.75 per share, are callable at the Company's option
if the price of its common stock equals or exceeds 140% of the exercise price
for at least 30 consecutive trading days without any premium or at a redemption
premium as defined in the Prospectus dated April 28, 1997, beginning May 1,
2001. During the second quarter of 1997, the company made a capital
contribution of $4.0 million to First State Bank of Taos. As a result of this
contribution, First State Bank of Taos has sufficient capital to be considered
well-capitalized. Management intends to use the remaining proceeds of these
debentures to provide capital to First State Bank of Taos, if necessary, for
general corporate purposes and for possible future acquisitions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 6, 1997 the company held its annual meeting of shareholders. At that
meeting the following items were submitted to a vote of security holders:
1. The following three directors were elected:
NAME TERM
---- ----
Eloy A Jeantete 3 Years
Michael R. Stanford 3 Years
Marshall Martin 3 Years
2. To approve an amendment to the Restated Articles of Incorporation of the
Company to increase the number of authorized shares of Common Stock from
4,000,000 to 20,000,000. Votes: For 2,070,783; Against 26,894; Abstain
22,445; Not Voted 433,258.
3. To ratify the appointment of KPMG Peat Marwick LLP as independent public
accountants for the year ending December 31, 1997. Votes: For 2,109,759;
Against 496; Abstain 9,867.
ITEM 6. EXHIBIT 3.4 AMENDMENT TO RESTATE ARTICLES OF INCORPORATION
EXHIBIT 27 FINANCIAL DATA SCHEDULE
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FIRST STATE BANCORPORATION
Date: August 8, 1997 By: Michael R. Stanford
----------------------------------------------------------
Michael R. Stanford, President & Chief Executive Officer
Date: August 8, 1997 By: H. Patrick Dee
----------------------------------------------------------
H. Patrick Dee, Executive Vice President & Chief
Operating Officer
Date: August 8, 1997 By: Brian C. Reinhardt
----------------------------------------------------------
Brian C. Reinhardt, Senior Vice President and Chief
Financial Officer
7
<PAGE>
Exhibit 3.4
AMENDMENT TO RESTATE ARTICLES OF INCORPORATION
ARTICLE FOUR
Section 4.1 Authorized Shares. The total number of shares that the corporation
------------------
shall have authority to issue is twenty-one million (21,000,000) shares, of
which twenty million (20,000,000) shares shall be common stock, no par value,
and one million (1,000,000) shares shall be preferred shares as determined
pursuant to Section 4.3 hereof.
8
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATD CONDENSED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 17,428,028
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,200,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 34,362,552
<INVESTMENTS-CARRYING> 15,833,282
<INVESTMENTS-MARKET> 15,838,000
<LOANS> 274,240,148
<ALLOWANCE> 2,908,105
<TOTAL-ASSETS> 366,884,598
<DEPOSITS> 312,225,524
<SHORT-TERM> 11,342,813
<LIABILITIES-OTHER> 2,319,118
<LONG-TERM> 15,097,796
0
0
<COMMON> 25,893,518
<OTHER-SE> 5,829
<TOTAL-LIABILITIES-AND-EQUITY> 366,884,598
<INTEREST-LOAN> 13,497,671
<INTEREST-INVEST> 1,541,519
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 15,039,190
<INTEREST-DEPOSIT> 5,171,498
<INTEREST-EXPENSE> 5,837,616
<INTEREST-INCOME-NET> 9,201,574
<LOAN-LOSSES> 660,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 8,327,838
<INCOME-PRETAX> 2,230,681
<INCOME-PRE-EXTRAORDINARY> 1,480,100
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,480,100
<EPS-PRIMARY> 0.60
<EPS-DILUTED> 0.56
<YIELD-ACTUAL> 5.58
<LOANS-NON> 4,140,000
<LOANS-PAST> 279,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,510,000
<CHARGE-OFFS> 368,000
<RECOVERIES> 106,000
<ALLOWANCE-CLOSE> 2,908,000
<ALLOWANCE-DOMESTIC> 2,908,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
