<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF
1934
________________
FOR THE QUARTER ENDED MARCH 31, 1999 COMMISSION FILE NO. 0-21482
MBLA FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1637679
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
101 VINE STREET
MACON, MISSOURI 63552
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (660) 385-2122
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 of the issuer's common stock, par value $.01
per share, was 1,247,021 at May 4, 1999.
================================================================================
<PAGE>
MBLA FINANCIAL CORPORATION AND SUBSIDIARY
FORM 10-Q
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
- -----------------------------
Item 1 Financial Statements Page
----
<S> <C>
Consolidated Statements of Financial Condition as of March 31,
1999 (unaudited) and June 30, 1998............................... 2
Consolidated Statements of Income for the Three Months
ended March 31, 1999 and 1998 (unaudited) and for the
Nine Months ended March 31, 1999 and 1998 (unaudited)............ 3
Consolidated Statements of Comprehensive Income for the
Three Months ended March 31, 1999 and 1998 (unaudited)
and for the Nine Months ended March 31, 1999 and 1998
(unaudited)...................................................... 4
Consolidated Statements of Changes in Stockholders' Equity
for the Nine Months ended March 31, 1999 and
1998 (unaudited)................................................. 5
Consolidated Statements of Cash Flows for the Nine Months
ended March 31, 1999 and 1998 (unaudited)........................ 7
Notes to Unaudited Consolidated Financial Statements............. 9
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................ 11
Item 3 Quantitative and Qualitative Disclosures About Market Risk....... 21
PART II. OTHER INFORMATION
- ----------------------------
Item 1 Legal Proceedings................................................ 22
Item 2 Changes in Securities and Use of Proceeds........................ 22
Item 3 Default upon Senior Securities................................... 22
Item 4 Submission of Matters to a Vote of Security Holders.............. 22
Item 5 Other Information................................................ 22
Item 6 Exhibits and Reports on Form 8-K................................. 22
Signature Page............................................................ 23
</TABLE>
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
March 31,
1999 June 30,
(unaudited) 1998
----------- --------
ASSETS (In thousands)
<S> <C> <C>
Cash on hand and noninterest-earning deposits $ 77 $ 580
Interest-earning deposits in other institutions 7,787 3,055
Investment securities available-for-sale, at fair value 7,512 9,770
Mortgage-backed and related securities
available-for-sale, at fair value 44,628 48,226
Loans receivable, net 141,121 136,647
FHLB stock 3,134 3,134
Accrued interest receivable 1,093 1,162
Real estate owned 138 -
Premises and equipment 268 282
Other assets 430 372
-------- --------
Total assets $206,188 $203,228
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $118,842 $115,330
Advances from Federal Home Loan Bank 57,456 58,640
Advances from borrowers for taxes and insurance 128 165
Income taxes payable 550 541
Accrued expenses and other liabilities 376 711
-------- --------
Total liabilities $177,352 $175,387
-------- --------
Preferred stock, $.01 par value;
authorized 500,000 shares; none outstanding $ - $ -
Common stock, $.01 par value; authorized 2,500,000
shares, issued 1,765,211 shares at March 31, 1999
and June 30, 1998 17 17
Additional paid-in capital 17,754 17,526
Retained earnings, substantially restricted 20,068 19,022
Less:
Treasury stock, at cost - 518,190 shares at March 31, 1999
and June 30, 1998 (9,395) (9,395)
Common stock acquired by the ESOP (139) (188)
Unrealized gain on securities available-for-sale,
net of applicable deferred income taxes 531 859
-------- --------
Total stockholders' equity $ 28,836 $ 27,841
-------- --------
Total liabilities and stockholders' equity $206,188 $203,228
======== ========
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
2
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
------------------ -----------------
1999 1998 1999 1998
-------- -------- -------- -------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $2,618 $ 2,412 $ 7,784 $ 7,172
Investment securities 154 301 509 928
Mortgage-backed and related securities 690 1,016 2,252 3,389
Other interest-earning assets 83 87 197 254
------ -------- -------- -------
Total interest income 3,545 3,816 10,742 11,743
Interest expense:
Deposits 1,590 1,547 4,890 4,532
Advances 746 1,105 2,413 3,686
------ -------- -------- -------
Total interest expense 2,336 2,652 7,303 8,218
Net interest income 1,209 1,164 3,439 3,525
Provision for loan losses 5 15 35 45
------ -------- -------- -------
Net interest income after provision for loan losses 1,204 1,149 3,404 3,480
------ -------- -------- -------
Noninterest income:
Commitment fees - - - 1
Other 7 2 62 6
------ -------- -------- -------
Total noninterest income 7 2 62 7
------ -------- -------- -------
Noninterest expense:
Compensation and benefits 248 363 742 838
Occupancy and equipment 40 43 107 116
SAIF deposit insurance premiums 30 33 94 94
Loss on sale of real estate owned 32 - 32 -
Net gain on sale of investments - - - (14)
Net gain of sale of loans (26) (8) (54) (8)
Other 103 63 242 172
------ -------- -------- -------
Total noninterest expense 427 494 1,163 1,198
------ -------- -------- -------
Income before income taxes 784 657 2,303 2,289
Income tax expense 332 152 888 805
------ -------- -------- -------
Net income $ 452 $ 505 $ 1,415 $ 1,484
====== ======== ======== =======
Earnings per share:
Basic $ 0.37 $ 0.41 $ 1.15 $ 1.19
Diluted $ 0.35 $ 0.39 $ 1.11 $ 1.13
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
3
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
------------------ -----------------
1999 1998 1999 1998
------- -------- ------- ------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Net income $452 $505 $1,415 $1,484
Other comprehensive gain (loss),
net of tax:
Unrealized holding gains (losses)
arising during period (53) 22 (328) 181
----- ------ ------- ------
Comprehensive income $399 $527 $1,087 $1,665
===== ====== ======= ======
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
4
<PAGE>
MBLA FINANCIAL CORPORATION
CONSOLIATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
SECURITIES
AVAILABLE-
FOR-SALE,
NET OF
COMMON COMMON APPLICABLE
ADDITIONAL STOCK STOCK DEFERRED
COMMON PAID-IN RETAINED TREASURY ACQUIRED ACQUIRED INCOME
STOCK CAPITAL EARNINGS STOCK BY ESOP BY RRP TAXES TOTAL
------ ---------- -------- -------- -------- -------- ----- -----
(IN THOUSANDS)
NINE MONTHS ENDED
- -----------------
MARCH 31, 1998
- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1997 $ 17 $16,944 $18,535 ($7,347) ($282) ($58) $727 $28,536
Additions (deductions) for
the nine months ended
March 31, 1998:
Net income - - 1,484 - - - - 1,484
Compensation expense
related to ESOP - 115 - - - - - 115
Reduction of ESOP
obligation - - - - 47 - - 47
Deferred tax on RRP - 55 - - - - - 55
Amortization of RRPs - - - - - 58 - 58
Dividends on unallocated
ESOP shares - - 6 - - - - 6
Purchase of treasury stock
(74,466 shares) - - - (1,955) - - - (1,955)
RRP shares released - 89 - - - - - 89
Stock options exercised - 271 - - - - - 271
Stock options retired - - (632) - - - - (632)
Dividends declared - - (257) - - - - (257)
Unrealized gain (loss) on
securities available-for-
sale, net of defered
income tax of $106,000 - - - - - - 181 181
--------------------------------------------------------------------------------------------------
Balance, March 31, 1998 $ 17 $17,474 $19,136 ($9,302) ($235) $ 0 $908 $ 27,998
==================================================================================================
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
5
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statement of Changes in Stockholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Unrealized
Gain (Loss)
Securities
Available-
For-Sale,
Common Net of
Additional Stock Applicable
Common Paid-In Retained Treasury Acquired Deferred
Stock Capital Earnings Stock by ESOP Taxes Total
------ ---------- -------- -------- -------- ---------- -------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Nine Months Ended
- -----------------
March 31, 1999
- --------------
Balance at June 30, 1998 $ 17 $ 17,526 $19,022 ($9,395) ($188) $ 859 $27,841
Additions (deductions) for
the nine months ended
March 31, 1999:
Net income - - 1,415 - - - 1,415
Compensation expense
related to ESOP - 71 - - - - 71
Reduction of ESOP
obligation - - - - 49 - 49
Deferred tax on RRP - 24 - - - - 24
Dividends on unallocated
ESOP shares - - 5 - - - 5
Deferred tax on incentive
options exercised - 133 - - - - 133
Dividends declared - - (374) - - - (374)
Unrealized gain (loss) on
securities available-for-sale,
net of deferred income tax of
$193,000 - - - - - (328) (328)
-----------------------------------------------------------------------------------------
Balance, March 31, 1999 $ 17 $ 17,754 $20,068 ($9,395) ($139) $ 531 $28,836
=========================================================================================
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements.
6
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------------
1999 1998
------- --------
(In thousands)
<S> <C> <C>
Cash flow from operating activities:
Net income $ 1,415 $ 1,484
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Provision for loan losses 35 45
Net loss on sale of real estate owned 32 -
Net gain on sale of mortgage-backed and related securities - (14)
Net loss on disposal of fixed assets - 2
Depreciation 28 33
Amortization of premiums and discounts (8) (52)
Excess of fair value over cost of ESOP unallocated shares 71 115
Amortization of RRP - 147
Deferred tax on RRP 24 54
Deferred tax on incentive options exercised 133 -
Decrease (increase) in interest receivable 70 286
Decrease (increase) in other assets (57) 3
Increase (decrease) in income tax payable 202 (156)
Increase (decrease) in other liabilities (340) (85)
---------- ----------
Net cash provided by operating activities $ 1,605 $ 1,862
---------- ----------
Cash flow from investing activities:
Loans purchased and originated (34,867) (23,725)
Proceeds from loans sold 4,606 735
(Increase) decrease in loans, net 25,753 16,403
Proceeds from maturities of available-for-sale investment securities 4,500 27,186
Purchase of available-for-sale investment securities (2,249) (11,147)
Principal collected on repayments and maturities of available-
for-sale mortgage-backed and related securities 3,094 20,004
Proceeds from sale of mortgage-backed and related securities - 3,905
Purchase of mortgage-backed and related securities - (4,000)
Loans transferred to REO (174) -
Proceeds from REO insurance claims 4 -
Purchase of equipment and office building improvements (15) (23)
---------- ----------
Net cash provided (used) by investing activities $ 652 $ 29,338
---------- ----------
Cash flows from financing activities:
Net increase in deposits 3,512 11,783
Net decrease in advances from borrowers for taxes and insurance (37) (50)
Proceeds from FHLB advances 2,000 2,000
Principal payments on FHLB advances (3,184) (40,171)
Dividends paid (368) (511)
Purchase of treasury stock - (1,955)
Proceeds from issuance of common stock - 271
Unearned ESOP compensation decrease 49 47
Stock options retired - (632)
---------- ----------
Net cash provided (used) by financing activities $ 1,972 ($ 29,218)
---------- ----------
Increase (decrease) in cash and cash equivalents $ 4,229 $ 1,982
Cash and cash equivalents at beginning of period 3,635 4,714
---------- ----------
Cash and cash equivalents at end of period $ 7,864 $ 6,696
========== ==========
</TABLE>
7
<PAGE>
MBLA FINANCIAL CORPORATION
Consolidated Statements of Cash Flows
(Continued)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------------
1999 1998
------- --------
(In thousands)
<S> <C> <C>
Supplemental cash flow disclosures:
Cash paid for:
Interest $ 3,906 $ 5,386
========== ==========
Income Taxes $ 657 $ 908
========== ==========
Noncash activity:
Loans transferred to real estate owned $ 174 -
========== ==========
</TABLE>
See accompanying Notes to Unaudited Consolidated Financial Statements
8
<PAGE>
MBLA FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Generally Accepted Accounting Principles (GAAP)
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by GAAP for complete financial
statements. In the opinion of management, all adjustments (consisting of
only normal recurring accruals) necessary for a fair presentation have been
included. The results of operations and other data for the three and nine
month periods ended March 31, 1999 are not necessarily indicative of
results that may be expected for the entire fiscal year ending June 30,
1999.
The unaudited consolidated financial statements include the amounts of MBLA
Financial Corporation (the "Holding Company") and its wholly-owned
subsidiary, Macon Building and Loan Association, F.A. (the "Association"),
and the Association's wholly-owned subsidiary, MBL Financial Services, for
the three and nine month periods ended March 31, 1999. The consolidated
financial statements for the prior period include accounts of the Holding
Company and its subsidiaries. Material intercompany accounts and
transactions have been eliminated in consolidation.
(2) CONVERSION TO STOCK OWNERSHIP
The Holding Company, a Delaware corporation, was incorporated on February
23, 1993 for the purpose of becoming the holding company for the
Association upon the Association's conversion from the mutual to stock form
of ownership. The conversion was completed on June 24, 1993. The proceeds
from the conversion, after recognizing conversion expenses and underwriting
costs of approximately $840,000, were $16.41million and are recorded as
common stock and additional paid in capital on the accompanying unaudited
consolidated statement of financial condition. The Holding Company utilized
approximately $8.205 million of the net proceeds to purchase all of the
capital stock of the Association.
The Association has established for eligible employees an Employee Stock
Ownership Plan ("ESOP") in connection with the conversion. The ESOP
borrowed $685,000 from the Holding Company and purchased 68,500 common
shares issued in the conversion. The Association is making the scheduled
discretionary cash contributions to the ESOP sufficient to service the
amount borrowed. To date, the Association has made payments of $643,000
($546,000 in principal) to the Holding Company. The $139,000 ESOP
obligation ($685,000 in stock issued by the Holding Company on June 30,
1993 less the principal payments made by the Association) is reflected in
the accompanying consolidated financial statements as a charge to unearned
compensation and a credit to common stock and paid-in capital. The
unamortized balance of unearned compensation is shown as a deduction of
stockholders' equity. The unpaid balance of the ESOP loan is eliminated in
consolidation.
The Association established several Recognition and Retention Plans
("RRP's") which purchased in the aggregate 69,000 shares of common stock in
the conversion. The Association contributed $690,000 to fund the purchase
of the RRP shares. All but 4,692 shares were awarded to directors and
officers at conversion and were earned over varying annual rates, depending
upon the individual's position in the Association. The aggregate purchase
price of these shares was amortized as compensation expense over the
participants' vesting period. The remaining 4,692 shares were awarded to
directors on January 2, 1998 and were accordingly expensed at that time.
9
<PAGE>
The Holding Company has adopted stock option plans for the benefit of
directors, officers, and other key employees of the Association. The number
of shares of common stock reserved for issuance under the stock option
plans was equal to 10% of the total number of common shares issued pursuant
to the Association's conversion to the stock form of ownership. The option
exercise price was $10.00 as of the date of the option grant, and the
maximum option term cannot exceed ten years. The stock options awarded to
directors may be exercised at any time after grant. The stock options
awarded to officers and other key employees are exercisable on a cumulative
basis in equal installments over varying time periods, depending upon the
officer's or employee's position with the Association. At June 24, 1993,
172,500 stock options were issued with 9,833 reserved for future use and
162,667 granted. The remaining 9,833 options were awarded to directors
during the quarter ended September 30, 1997 at an exercise price of $23.50.
As of March 31, 1999, 94,275 options had been exercised or retired, leaving
a total of 78,225 which had not been exercised.
(3) EARNINGS PER SHARE
Earnings per share (EPS) computations follow SFAS No. 128 which is
effective for financial statements issued for periods ending after December
15, 1997. Basic EPS have been determined by dividing net income for the
period (numerator) by the weighted-average number of common shares
outstanding during the period (denominator). Weighted-average common shares
include shares held by the RRP plan and allocated ESOP shares. Unallocated
ESOP shares are not used in either basic or diluted EPS calculations.
Shares issued during the period and shares reacquired during the period are
weighted for the portion of the period outstanding. In determining diluted
EPS, the denominator used for basic EPS is increased to include the number
of additional common shares (common stock equivalents) that would have been
outstanding if the dilutive potential common shares had been issued. Stock
options are regarded as common stock equivalents and are computed using the
treasury stock method. Prior periods EPS have been restated to comply with
SFAS No. 128.
(4) STOCK REPURCHASE PROGRAM
During the quarter ended March 31, 1999, the Company did not repurchase any
shares of its common stock. As of March 31, 1999, MBLA Financial
Corporation had repurchased a total of 518,190 shares of its common stock.
(5) COMMITMENTS AND CONTINGENCIES
Commitments to originate and purchase mortgage loans of $6.663 million at
March 31, 1999, represent amounts which the Association plans to fund
within the normal commitment period of sixty to ninety days. As of March
31, 1999, the Association had no commitments to purchase mortgage-backed
securities, CMOs or investment securities. The Association had commitments
outstanding of $1.136 million to sell mortgage loans at March 31, 1999. The
Association did not have any commitments outstanding at March 31, 1999 to
sell mortgage-backed and related securities or investment securities.
(6) RECLASSIFICATIONS
None.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
MBLA Financial Corporation was organized, as a Delaware corporation, in
February 1993 at the direction of the Association's Board of Directors to
acquire all of the capital stock that the Association issued upon its conversion
from the mutual to stock form of ownership. The business of the Holding Company
consists primarily of the business of the Association. There are no current
arrangements, understandings or agreements to expand its business activities or
make any business acquisitions.
Macon Building and Loan Association, F.A., originally founded in 1885, is a
Federally chartered stock savings and loan association headquartered in Macon,
Missouri. Its deposits are insured up to the maximum allowable amount by the
Federal Deposit Insurance Corporation (the "FDIC"). The Association serves Macon
and Randolph Counties, Missouri. The Association conducts business through its
main office and one branch office in Moberly, Missouri.
The business of the Association consists principally of attracting deposits
from the general public and using such deposits to purchase and originate
mortgage loans secured by one- to four-family residences. The servicing rights
on substantially all loans purchased by the Association are retained by the
sellers. To a lesser extent, the Association invests in U.S. government and
federal agency securities and mortgage-backed and related securities, interest-
earning deposits and commercial and multi-family real estate loans and consumer
loans.
The Association's results of operations are dependent primarily on net
interest income, which is the difference between the interest income earned on
its loans and investment portfolio, and its cost of funds, consisting of the
interest paid on its deposits and also interest paid on FHLB advances. The
Association's operating expenses consist primarily of employee compensation,
occupancy expenses, FDIC insurance premiums and other general and administrative
expenses. The Association's results of operations are also significantly
affected by general economic and competitive conditions, particularly changes in
market interest rates, government policies, and actions of regulatory
authorities.
The Association's operating strategies have been developed to respond to
the economic conditions prevailing in the Association's primary market area.
Macon's deposits are generated primarily from customers located in the
Association's primary market area. However, due to insufficient loan demand, the
Association has, for over 30 years, purchased the majority of its loans from
selected mortgage banking companies and financial institutions located primarily
in Columbia, Boone County, Missouri, and to a lesser extent, the Kansas City,
St. Louis, Springfield and Cape Girardeau areas. The sellers retain servicing
rights on the loans purchased by the Association. By extending its lending
market area and employing alternative investment opportunities, such as
mortgage-backed and related securities and other investment securities, the
Association has attempted to limit, and believes it has been successful in
limiting, the impact of these economic conditions on its results of operations.
The economy of Boone County is primarily dependent on the services and
government industries. The education industry also plays an important role in
the economy of Boone County as three colleges and universities are located
there.
The Association continues to maintain a high level of asset quality and has
remained profitable. The local economies of both Macon County and Randolph
County have improved and the demand for mortgage loans is good but the
Association still must purchase the majority of their mortgage loans. Past
performance, however, is not a guarantee of future results.
The operations of Macon Building and Loan Association are influenced
significantly by local economic conditions and by policies of the Office of
Thrift Supervision (OTS) and the FDIC. The
11
<PAGE>
Association's cost of funds is influenced by interest rates on competing
investments and general market interest rates. Lending activities are affected
by the demand for financing of real estate and other types of loans, which in
turn is affected by the interest rates at which such financing may be offered.
LIQUIDITY AND CAPITAL RESOURCES
The Holding Company and Association's most liquid assets are cash, due from
banks and interest-earning deposits. The levels of these assets are dependent on
the Association's lending, investing, operating, and deposit activities during
any given period. At March 31, 1999, cash, due from banks and interest-earning
deposits totalled $7.864 million.
The Association's primary sources of funds are deposits, advances from the
FHLB, proceeds from principal and interest payments on loans, proceeds from
principal and interest payments on mortgage-backed and related securities, and
proceeds from the maturing of investment securities. While maturity and
scheduled amortization of loans and investment securities are predictable
sources of funds, deposit inflows and mortgage prepayments are greatly
influenced by local conditions, general interest rates and regulatory changes.
The Association is required to maintain minimum levels of liquid assets as
defined by OTS regulations. Liquid assets consist of cash, due from banks,
interest-earning deposits, short and intermediate term U.S. Government and
government agency securities. This requirement, which periodically varies
depending upon economic conditions and deposit flows, is based upon a percentage
of deposits and short term borrowings. The current required liquidity ratio is
4%. The Association historically has maintained a level of liquid assets in
excess of this regulatory requirement. The Association's liquidity ratios were
11.84% and 9.14% at March 31, 1999 and 1998, respectively. Liquidity management
for the Association is both a daily and long term function of the Association's
management strategy. In the event that the Association should require funds
beyond its ability to generate internally, additional sources of funds are
available through the use of Federal Home Loan Bank advances and reverse
repurchase agreements.
The primary investment activity of the Association is the origination and
purchase of mortgage loans. During the three months ended March 31, 1999 and
1998, the Association originated and purchased mortgage loans in the aggregate
amount of $10.090 million and $10.532 million, respectively. During the three
months ended March 31, 1999, the Association sold loans in the amount of $2.459
million. Another investment activity of the Association is investment in U.S.
Treasury securities, agency bonds, mortgage-backed securities, collateralized
mortgage obligations and FHLB overnight funds. During periods when the
Association's loan demand is limited, the Association may purchase short-term
investment securities to obtain a higher yield than otherwise available.
At March 31, 1999, the Association had outstanding loan commitments to
originate and purchase $6.663 million of loans. The Association believes that it
will have sufficient funds available to meet all of these commitments. At March
31, 1999, the Association had outstanding commitments of $1.136 million to sell
mortgage loans. The Association did not have any outstanding commitments to sell
mortgage-backed and related securities or any other investment securities at
March 31, 1999. Should the Association need to, the Board of Directors has
authorized management to obtain additional short-term advances from the Federal
Home Loan Bank ("FHLB") of Des Moines to fund loan purchases. At March 31, 1999,
the Association had an available credit line of approximately $19 million with
the FHLB of Des Moines, under which $57.456 million was outstanding. If needed,
the Association can pledge more collateral to obtain a higher credit line.
At March 31, 1999, certificates of deposit which are scheduled to mature in
one year or less from March 31, 1999, totalled $86.245 million. Management
believes that a significant portion of these funds will remain with the
Association.
12
<PAGE>
CAPITAL AND PROMPT CORRECTIVE ACTION RATIOS
At March 31, 1999, the Association exceeded each OTS capital and prompt
corrective action ratio. The following table sets forth the OTS minimum ratios
for "adequately capitalized" and "well capitalized", as well as the Association
ratio, for each category.
<TABLE>
<CAPTION>
MINIMUM MINIMUM
"ADEQUATELY "WELL
CAPITALIZED" CAPITALIZED" ASSOCIATION
RATIO RATIO RATIO RATIO
- ------- ------------- ------------- -----------
<S> <C> <C> <C>
Tier 1 (Core)
Capital Ratio 4% 5% 13.66%
Total Risk-Based
Capital Ratio 8% 10% 32.49%
Tier 1 Risk-Based
Capital Ratio 4% 6% 31.67%
</TABLE>
The minimum OTS Tangible Equity Ratio to be deemed other than "critically under
capitalized" is 2%. At March 31, 1999, the Association's tangible equity ratio
was 13.66%.
CHANGES IN FINANCIAL CONDITION
Total assets increased $2.960 million to $206.188 million at March 31, 1999
from $203.228 million at June 30, 1998. The increase in assets is primarily
attributable to the increase in loans receivable and interest-earning deposits,
partially offset by decreases in investment securities and mortgage-backed and
related securities.
Cash due from banks and interest-earning deposits increased from $3.635
million to $7.864 million. This increase was due, in part, to a net inflow of
deposits and the maturing of investment securities which were invested in
overnight funds. The increased balance on cash due from bank and interest-
earning deposits are expected to be used to fund outstanding loan commitments
and to repay borrowings.
Investment securities decreased $2.258 million to $7.512 million at March
31, 1999 from $9.770 million at June 30, 1998. The decrease is attributable to
the maturing of investment securities in an amount greater than the purchase of
investment securities during the nine months ended March 31, 1999.
Mortgage-backed and related securities decreased $3.598 million to $44.628
million at March 31, 1999 from $48.226 million at June 30, 1998. This decrease
is due to the repayments of mortgage-backed and related securities during the
nine months ended March 31, 1999. There were not any purchases of mortgage-
backed and related securities during the period.
Loans receivable increased $4.474 million to $141.121 million at March 31,
1999 from $136.647 million at June 30, 1998. This increase is due to loan
originations and purchases in an amount greater than loan repayments and loans
sold during the period.
Deposits increased $3.512 million or 3.05% from $115.330 million at June
30, 1998 to $118.842 million at March 31, 1999. The average cost of deposits
decreased from 5.65% at June 30, 1998 to 5.24% at March 31, 1999. The increase
in deposits is due to a net increase in certificates
13
<PAGE>
of deposit. Certificates of deposit with maturities of one year or less
increased $96,000 million; 18 to 48 month certificates of deposit increased
$1.810 million; jumbo certificates of deposit increased $858,000; and passbook
savings increased $748,000. A significant portion of the deposit growth of
approximately $3.169 million was from the Moberly branch office.
Advances from the FHLB of Des Moines decreased $1.184 million to $57.456
million from $58.640 million at June 30, 1998. This decrease in advances
reflects the normal principal repayment of mortgage-matched advances, along with
repayments of LIBOR advances funded with proceeds received from deposit growth
and loan repayments. The average cost of advances decreased from 5.63% at June
30, 1998 to 4.98% at March 31, 1999.
Stockholders' equity increased $995,000 to $28.836 million at March 31,
1999 from $27.841 million at June 30, 1998. The increase in stockholders' equity
is attributable to earnings during the period which was reduced by dividends
paid to shareholders and a market value decline in available-for-sale securities
at March 31, 1999 as compared to June 30, 1998. MBLA Financial Corporation's
capital to asset ratio was 13.99% as of March 31, 1999 as compared to 13.70% at
June 30, 1998.
INTEREST RATE SENSITIVITY
Macon Building and Loan Association, F.A., has employed various strategies
intended to minimize the adverse effect of interest rate risk on future
operations by providing a close match between the interest rate sensitivity of
its assets and liabilities and by expanding its activities which are not
directly dependent on interest rate spreads. The Association's strategies are
intended to stabilize net interest income for the long-term by protecting its
interest rate spread against changes in interest rates.
The Association utilizes ARMs to provide repricing opportunities more
closely matched within the time frames in which its deposits are repriced.
Management is charged with the responsibility to manage interest rate risk while
remaining sensitive to the Board's directive that credit risk not be substituted
for interest rate risk. As a result of these efforts, approximately 89% of Macon
Building and Loan Association's mortgage loan portfolio as of March 31, 1999,
consisted of ARMs, including ARM loans secured by commercial real estate.
Approximately 80% of all ARMs, or 71% of all loans, are adjustable in one, two,
or three years from March 31, 1999.
INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES AVAILABLE-FOR-SALE
MBLA Financial Corporation and Macon Building and Loan Association have
classified all investment securities and mortgage-backed and related securities
as available-for-sale with all investments reported at fair value with
unrealized holding gains and losses excluded from earnings and reported as a
separate component of shareholders' equity. At March 31, 1999, the effect on
stockholders' equity was an addition of $531,000 net of deferred income taxes as
compared to an addition of $859,000 at June 30, 1998 net of deferred income
taxes.
YEAR 2000
The Association utilizes FISERV's thrift platform for data processing.
The Association installed new teller terminals during the quarter ended December
31, 1998 at an approximate installed cost of $12,000. These new terminals are
Y2K compliant as is all other computer hardware currently in use.
Y2K testing of the FISERV thrift platform processing system has been
completed. Macon Building & Loan Association participated in proxy testing with
FISERV and has received written
14
<PAGE>
documentation of testing. Proxy testing of FISERV's thrift platform indicates
the system is Y2K compliant. Testing of the "connectivity" to FISERV was
successfully completed in March 1999.
The Association has contacted major multi-family and commercial borrowers
regarding their Y2K compliance. All responses received by the Association
indicate borrowers' awareness of Y2K issues; borrowers' awareness, and if
appropriate steps are being taken to correct any problems; if borrowers'
computer/software is compliant and has been tested; if testing has not been
undertaken, when to expect completion; and Y2K awareness but computers not used
for their accounting system. Responses received by borrowers indicate awareness
of issues and systems are either currently Y2K compliant or will be in 1999.
The Association has contacted all other major software vendors and mission
critical third-party providers regarding Y2K compliance. All major software
vendors and mission critical third-party providers who responded to the
Association inquiries have indicated their software and/or systems are Y2K
compliant.
The Association has adopted a "Business Resumption Contingency Plan" in the
event of a "worst-case" failure or interruption of mission critical systems. A
"worst-case" scenario would involve complete failure of Association computer
systems caused by either power failure by local utility companies who supply
electricity or by inability of Association computer system to function/operate
on January 3, 2000. Association management and personnel will be available
January 1 and January 2, 2000 to further test systems and to again validate
Association systems. The Association does not expect any major capital
expenditures on these areas at this time.
SUBSEQUENT EVENTS
On May 3, 1999, MBLA Financial Corporation ("MBLA") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Citizens BancShares
Company ("Citizens"). The Merger Agreement provides that a wholly-owned
subsidiary of Citizens will be merged with and into MBLA, with MBLA being the
surviving entity (the "Merger") and becoming a wholly-owned subsidiary of
Citizens. Immediately following the consummation of the Merger, Macon Building
and Loan Association, F.A., a federally-chartered stock savings and loan
association and a subsidiary of MBLA, will merge with and into Citizens Bank and
Trust Company, a bank organized under the laws of the State of Missouri and a
subsidiary of Citizens.
Pursuant to the terms of the Merger Agreement, each share of MBLA common
stock, par value $.01 per share, outstanding at the effective time of the
Merger, will be exchanged for a cash payment of $24.15 plus an amount equal to
the change in adjusted book value per share of MBLA from December 31, 1998 to
the end of the month prior to closing.
Consummation of the Merger is subject to various conditions, including the
approval of the shareholders of MBLA and the receipt of all requisite regulatory
approvals.
ASSET QUALITY
The Holding Company and the Association regularly review interest earning
assets to determine proper valuation. Management's monitoring of the asset
portfolio includes reviews of historical loss experience, known and inherent
risks in the portfolio, the value of any underlying collateral, prospective
economic conditions and the regulatory environment. The Association's non-
accrual mortgage loans delinquent more than 90 days decreased from $887,000 at
June 30, 1998 to $605,000 at March 31, 1999.
15
<PAGE>
The table on the following page sets forth information regarding the
Association's non-accrual loans and foreclosed real estate at the dates
indicated. The Association discontinues accruing interest on delinquent loans no
later than ninety days past due, at which time all accrued but uncollected
interest is reversed. At March 31, 1999, the Association has no restructured
loans within the meaning of Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 15.
16
<PAGE>
MBLA FINANCIAL CORPORATION
ASSET QUALITY
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31,
1999 1998 1998 1998 1998
--------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Non-accrual mortgage loans
delinquent more than 90 days $ 605 $ 1,488 $ 878 $ 887 $1,137
Non-accrual other loans
delinquent more than 90 days 0 0 0 0 0
--------------------------------------------------------------------------------
Total non-performing loans 605 1,488 878 887 1,137
Real estate owned and in-
substance foreclosed loans
net of related allowance 138 4 4 0 0
--------------------------------------------------------------------------------
Total non-performing assets $ 743 $ 1,492 $ 882 $ 887 $1,137
================================================================================
Non-performing loans to
total loans 0.43% 1.05% 0.62% 0.65% 0.85%
Non-performing assets to
total assets 0.36% 0.72% 0.42% 0.44% 0.55%
Allowance for loans losses
to non-performing loans 119.83% 48.39% 79.93% 77.79% 59.37%
</TABLE>
17
<PAGE>
RESULTS OF OPERATIONS
Comparison of quarterly results in this section are between the three month
periods ended March 31, 1999, and March 31, 1998 and between the nine month
periods then ended.
GENERAL
Net income for the quarter ended March 31, 1999 was $452,000, a decrease of
$53,000 from the $505,000 net income for the quarter ended March 31, 1998. Basic
earnings per share for the quarter ended March 31, 1999 were 37c per share as
compared to 41c per share for the quarter ended March 31, 1998. Diluted earnings
per share were 35c per share for the quarter ended March 31, 1999 as compared to
39c per share for the quarter ended March 31, 1998.
Comprehensive income for the quarter ended March 31, 1999 was $399,000 as
compared to $527,000 for the quarter ended March 31, 1998. The quarter ended
March 31, 1999 had a net unrealized holding loss of $53,000 net of deferred
taxes while the quarter ended March 31, 1998 had a net unrealized holding gain
of $22,000 net of deferred income taxes.
Net income for the nine months ended March 31, 1999 was $1.415 million as
compared to $1.484 million for the nine months ended March 31, 1998. Basic
earnings per share were $1.15 for the nine months ended March 31, 1999 as
compared to $1.19 for the nine months ended March 31, 1998. Diluted earnings per
share were $1.11 per share for the nine months ended March 31, 1999 and $1.13
per share for the nine months ended March 31, 1998.
Comprehensive income for the nine months ended March 31, 1999 was $1.087
million as compared to $1.665 million for the same period ended March 31, 1998.
The nine month period ended March 31, 1999 had a net unrealized holding loss of
$328,000 on available-for-sale securities as compared to a net unrealized
holding gain of $181,000 for the nine months ended March 31, 1998. Both are net
of deferred income taxes.
INTEREST INCOME
Total interest income decreased $271,000 to $3.545 million for the quarter
ended March 31, 1999 from $3.816 million for the quarter ended March 31, 1998.
Interest on mortgage loans increased $206,000 to $2.618 million for the three
month period ended March 31, 1999 over the same period ended March 31, 1998.
Interest on investment securities decreased $147,000 to $154,000 for the three
month period ended March 31, 1999 as compared to the quarter ended March 31,
1998. Interest on mortgage-backed and related securities decreased $326,000 to
$690,000 for the three month period ended March 31, 1999 as compared to the same
period ended March 31, 1998. Interest on other interest-earning assets decreased
$4,000 to $83,000 for the three month period ended March 31, 1999 as compared to
the same period ended March 31, 1998.
Total interest income decreased $1.001 million to $10.742 million for the
nine months ended March 31, 1999 from $11.743 million for the nine months ended
March 31, 1998. Interest on mortgage loans increased $612,000 to $7.784 million
for the nine month period ended March 31, 1999 over the same period ended March
31, 1998. Interest on investment securities decreased $419,000 to $509,000 for
the nine month period ended March 31, 1999 as compared to the nine months ended
March 31, 1998. Interest on mortgage-backed and related securities decreased
$1.137 million to $2.252 million for the nine month period ended March 31, 1999
as compared to the same period ended March 31, 1998. Interest on other interest-
earning assets decreased $57,000 to $197,000 for the nine month period ended
March 31, 1999 as compared to the same period ended March 31, 1998.
18
<PAGE>
Total interest income decreased during both periods because of lower
average earning asset balances during the period ended March 31, 1999 as
compared to the period ended March 31, 1998 in conjunction with lower interest
rates on earning assets. Interest on mortgage loans increased both periods
because of the higher mortgage loan balances ended March 31, 1999 as compared to
March 31, 1998 due to increased loan originations and purchases. Interest on
investment securities decreased both periods ended March 31, 1999 as compared to
periods ended March 31, 1998 because of maturities of investment securities
outpacing any new investments. The decrease in interest income on mortgage-
backed and related securities for each period was due primarily to mortgage
securities which were called during the third quarter of fiscal year ended June
30, 1998 in addition to normal principal payments received. The decrease in
interest on other interest-earning assets was attributable to the lower interest
rate environment coupled with slightly lower average balances on earning assets
during both periods ended March 31, 1999 as compared to the periods ended March
31, 1998.
INTEREST EXPENSE
Total interest expense for the quarter ended March 31, 1999 was $2.336
million as compared to $2.652 million for the quarter ended March 31, 1998, a
decrease of $316,000 or 11.92%. Interest expense on deposits increased $143,000
to $1.590 million at March 31, 1999 from $1.547 million at March 31, 1998.
Interest expense on advances decreased $359,000 to $746,000 at March 31, 1999
from $1.105 million at March 31, 1998. The average cost of funds which includes
both interest paid on deposits and interest paid on advances, decreased from
5.66% at March 31, 1998 to 5.15% at March 31, 1999.
Total interest expense for the nine months ended March 31, 1999 was $7.303
million as compared to $8.218 million for the nine months ended March 31, 1998,
a decrease of $915,000 or 11.13%. Interest expense on deposits increased
$358,000 to $4.890 million at March 31, 1999 from $4.532 million at March 31,
1998. Interest expense on advances decreased $1.273 million to $2.413 million at
March 31, 1999 from $3.686 million at March 31, 1998.
The decrease in total interest expense for each period ended March 31, 1999
as compared to the same periods ended March 31, 1998 is attributable to the
lower average balances in FHLB advances during the most recent periods. The
Association had mortgage securities called during the third quarter of fiscal
year ended June 30, 1998 and then paid-off the corresponding advances at the
same time. Part of this decrease in interest expense was offset by the higher
expense in deposits. The increase in interest expense on deposits resulted from
the deposit growth which the Association has been experiencing. The decrease of
interest expense on advances was discussed above.
NET INTEREST INCOME
Net interest income before provisions for loan losses was $1.209 million
for the quarter ended March 31, 1999 as compared to $1.164 million for the
quarter ended March 31, 1998, an increase of $45,000. Net interest income before
provisions for loan losses was $3.439 million for the nine months ended March
31, 1999 as compared to $3.525 million for the nine months ended March 31, 1998,
a decrease of $86,000. The decrease in net interest income for both periods is
due to the overall net decrease in earning assets between the comparable
periods.
PROVISION FOR LOAN LOSSES
At March 31, 1999, the provision for loan losses general loan valuation
allowance is $725,000. For the three months ended March 31, 1999, provision for
loan losses was increased $5,000 as compared to an increase of $15,000 during
the quarter ended March 31, 1998. For the nine months
19
<PAGE>
ended March 31, 1999 and March 31, 1998, provision for loan losses was increased
$35,000 and $45,000 respectively each period. The Association has a policy of
maintaining a general loan valuation allowance of one-half of one percent of
outstanding loans. The Association continuously monitors this provision on a
quarterly basis. As of March 31, 1999, the provision for loan losses was .514%
of outstanding loans.
NONINTEREST INCOME
Other income for the quarter ended March 31, 1999 was $7,000 as compared to
$2,000 for the quarter ended March 31, 1998. Other income for the nine months
ended March 31, 1999 was $62,000 as compared to $7,000 for the nine months ended
March 31, 1998. Other noninterest income for the nine months ended March 31,
1999 was enhanced by a $42,000 Missouri state income tax refund for tax years
1996 and 1997. Other income is not considered a significant part of the overall
income of the company.
NONINTEREST EXPENSE
Noninterest expense for the quarter ended March 31, 1999 decreased $67,000
to $427,000, as compared to $494,000 for the quarter ended March 31, 1998.
Compensation and benefits decreased $115,000 and other noninterest expense
increased $40,000 for the quarter ended March 31, 1999 as compared to the
quarter ended March 31, 1998. A net gain on sale of loans of $26,000 offset a
$32,000 loss on sale of real estate owned for the quarter ended March 31, 1999.
Noninterest expense for the nine months ended March 31, 1999 decreased
$35,000 to $1.163 million, as compared to $1.198 million for the nine months
ended March 31, 1998. Compensation and benefits decreased $96,000 and other
noninterest expense increased $70,000 for the nine months ended March 31, 1999
as compared to the nine months ended March 31, 1998. The increase in expenses
was partially offset by a net gain on sale of loans of $54,000 for the period
ended March 31, 1999.
INCOME TAX
The provision for federal and state income taxes increased $180,000 to
$332,000 for the quarter ended March 31, 1999 as compared to $152,000 for the
quarter ended March 31, 1998. The provision for federal and state income taxes
increased $83,000 to $888,000 for the nine months ended March 31, 1999 as
compared to $805,000 for the nine months ended March 31, 1998.
20
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of March 31, 1999, there have been no material changes in the
quantitative and qualitative disclosures about market risk presented in the
Holding Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1998 based on December 31, 1998 data provided by the Office of Thrift
Supervision ("OTS"). The Association experiences approximately a 60-day lag time
from the end of the quarter until receiving data from OTS.
21
<PAGE>
MBLA FINANCIAL CORPORATION AND SUBSIDIARY
PART II -- OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The Holding Company and the Association are not involved in any
pending legal proceedings other than legal proceedings incident to the
business of the Holding Company and the Association, which involve
amounts in the aggregate which management believes are immaterial to
the financial condition and results of operations of the Holding
Company and the Association.
ITEM 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3 DEFAULT UPON SENIOR SECURITIES
Not applicable.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5 OTHER INFORMATION
None.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11. Statement re: Computation of Per Share Earnings
Exhibit 27. Financial Data Schedule*
*Submitted only with filing in electronic format.
(b) There were not any reports filed on Form 8-K.
22
<PAGE>
MBLA FINANCIAL CORPORATION AND SUBSIDIARY
SIGNATURES
Pursuant to the requirement 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.
MBLA Financial Corporation
---------------------------------------------
(Registrant)
Dated May 5, 1999 /s/ John T. Neer
---------------------------------------------
John T. Neer
President and Chief Executive Officer
(Duly Authorized Officer)
Dated May 5, 1999 /s/ Clyde D. Smith
---------------------------------------------
Clyde D. Smith
Vice President and Chief Financial Officer
(Principal Financial Officer)
23
<PAGE>
EXHIBIT 11
Exhibit 11. Statement re: Computation of Per Share Earnings
<TABLE>
<CAPTION>
Quarter Ended
Mar. 31, 1999
-------------
<S> <C>
1. Net income $ 452,000
=============
2. Weighted average common shares outstanding 1,234,772
=============
3. Basic earnings per share $ 0.37
=============
4. Weighted average common shares outstanding 1,234,772
5. Additional dilutive shares using the average market value for
the period utilizing the treasury stock method regarding
stock options 43,603
-------------
6. Total weighted average common shares and equivalents
outstanding for fully diluted earnings per share 1,278,375
=============
7. Diluted earnings per share $ 0.35
=============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains financial information extracted from the consolidated
financial statements of MBLA Financial Corporation for the nine months ended
March 31, 1999 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 77
<INT-BEARING-DEPOSITS> 7,787
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 52,140
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 141,846
<ALLOWANCE> 725
<TOTAL-ASSETS> 206,188
<DEPOSITS> 118,842
<SHORT-TERM> 57,456
<LIABILITIES-OTHER> 1,054
<LONG-TERM> 0
0
0
<COMMON> 17
<OTHER-SE> 28,819
<TOTAL-LIABILITIES-AND-EQUITY> 206,188
<INTEREST-LOAN> 7,784
<INTEREST-INVEST> 2,761
<INTEREST-OTHER> 197
<INTEREST-TOTAL> 10,742
<INTEREST-DEPOSIT> 4,890
<INTEREST-EXPENSE> 7,303
<INTEREST-INCOME-NET> 3,439
<LOAN-LOSSES> 35
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,217
<INCOME-PRETAX> 2,303
<INCOME-PRE-EXTRAORDINARY> 2,303
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,415
<EPS-PRIMARY> 1.15
<EPS-DILUTED> 1.11
<YIELD-ACTUAL> 6.92
<LOANS-NON> 605
<LOANS-PAST> 0
<LOANS-TROUBLED> 138
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 720
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 725
<ALLOWANCE-DOMESTIC> 725
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
