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 September 30, 1997
or
_____Transition Report under Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the transition period from__________________ to __________________.
Commission File No. 33-69326
CNB HOLDINGS, INC.
(Exact name of the registrant as specified in its charter)
Virginia 54-1663340
(State of Incorporation) (I.R.S. Employer Identification No.)
P.O. Box 1060, 900 Memorial Drive, Pulaski, Virginia 24301
(Address of principal executive offices)
(540) 994-0831
(Issuer's telephone number, including area code)
_________________________________________________________________
(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 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
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:
546,399 shares of common stock, $5.00 par value per share (the "Common
Stock"), issued and outstanding as of November 5, 1997.
Transitional Small Business Disclosure Format (check one):Yes No X
Page 1 of 13. There are no Exhibits
_____________________________________________________________________________
CNB Holdings, Inc.
Form 10-QSB
Table of Contents
_____________________________________________________________________________
PART I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL INFORMATION
The financial statements of CNB Holdings, Inc. (the "Company") are set
forth in the following pages.
Consolidated Balance Sheets as of September 30, 1997 and
December 31,1996...........................................................3
Consolidated Statements of Operations for the Nine Months
Ended September 30, 1997 and 1996..........................................4
Consolidated Statements of Operations for the Three Months
Ended September 30, 1997 and 1996..........................................5
Consolidated Statements of Stockholders' Equity for the
Periods Ended September 30, 1997 and December 31, 1996.....................6
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1997 and 1996..........................................7
Consolidated Statements of Cash Flows for the Three Months
Ended September 30, 1997 and 1996..........................................8
Notes to Consolidated Financial Statements..................................9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS...........................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................12
Item 2. Changes in Securities.............................................12
Item 3. Defaults Upon Senior Securities...................................12
Item 4. Submission of Matters to a Vote of Security Holders...............12
Item 5. Other Information.................................................12
Item 6. Exhibits and Reports on Form 8-K..................................12
SIGNATURES.................................................................13
All schedules have been omitted because they are inapplicable or the
required information is provided in the financial statements, including the
notes thereto.
2
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996
________________________________________________________________________________
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
____________ ____________
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 2,139,404 $ 1,188,999
Federal funds sold 34,000 402,000
Investment securities available for sale 12,912,409 11,312,764
Loans, net of allowance for loan losses
of $248,000 in 1997 and $155,000 in 1996 20,419,208 12,722,865
Property and equipment, net 1,638,110 1,408,596
Accrued income 292,819 261,548
Other assets 212,952 120,551
___________ ___________
Total assets 37,648,902 27,417,323
___________ ___________
Liabilities
Demand deposits 2,686,453 2,629,100
Interest-bearing demand deposits 7,668,424 8,266,172
Savings deposits 4,412,375 2,339,408
Large denomination time deposits 6,971,876 3,079,169
Other time deposits 12,587,571 7,726,853
___________ ___________
Total deposits 34,326,699 24,040,702
Accrued interest payable 91,059 36,612
Other liabilities 41,106 16,488
___________ ___________
Total liabilities 34,458,864 24,093,802
___________ ___________
Commitments and contingencies
STOCKHOLDERS'EQUITY:
Preferred stock, $1 par value; 1,000,000 shares
authorized; none outstanding - -
Common stock, $5 par value; 10,000,000 shares
authorized; 546,399 shares outstanding in 1997
and 437,225 shares outstanding in 1996 2,731,995 2,186,125
Surplus 1,609,748 2,156,782
Retained deficit (1,132,374) (962,723)
Unrealized appreciation (depreciation) on
investment securities available for sale (19,331) (56,663)
___________ ___________
Total stockholders' equity 3,190,038 3,323,521
___________ ___________
Total liabilities and stockholders'
equity $ 37,648,902 $ 27,417,323
___________ ___________
</TABLE>
See Notes to Consolidated Financial Statements 3
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the nine months ended September 30, 1997 and 1996 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
_____________
1997 1996
____ ____
<S> <C> <C>
INTEREST INCOME:
Loans and fees on loans $1,160,466 $ 647,510
Interest on securities available for sale 572,554 425,415
Federal funds sold 30,072 40,215
_________ _________
Total interest income 1,763,092 1,113,140
_________ _________
INTEREST EXPENSE:
Deposits 976,274 604,181
Federal funds purchased 13,661 -
_________ _________
Total interest expense 989,935 604,181
_________ _________
Net interest income 773,157 508,959
PROVISION FOR CREDIT LOSSES 125,693 79,745
_________ _________
Net interest income after provision
for credit losses 647,464 429,214
_________ _________
OTHER INCOME:
Service charges on deposit accounts 79,595 62,719
Securities gains (losses) 1,166 22,837
Other income 27,606 19,646
_________ _________
Total other income 108,367 105,202
_________ _________
OTHER EXPENSE:
Salaries and employee benefits 420,741 274,043
Occupancy expense 54,059 48,667
Equipment expense 58,222 46,661
Other expense 392,460 283,216
_________ _________
Total other expense 925,482 652,587
_________ _________
Net loss $ (169,651) $ (118,171)
_________ _________
NET LOSS PER SHARE $ (.31) $ (.22)
_________ _________
WEIGHTED AVERAGE SHARES OUTSTANDING 546,464 546,531
_________ _________
</TABLE>
See Notes to Consolidated Financial Statements 4
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the three months ended September 30, 1997 and 1996 (unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION> Three Months
Ended
September 30,
_____________
1997 1996
____ ____
<S> <C> <C>
INTEREST INCOME:
Loans and fees on loans $ 468,939 $ 251,678
Interest on securities
available for sale 215,277 190,298
Federal funds sold 15,377 16,741
___________ __________
Total interest income 699,593 458,717
___________ __________
INTEREST EXPENSE:
Deposits 396,050 257,017
Federal funds purchased 3,477 -
___________ __________
Total interest expense 399,527 257,017
___________ __________
Net interest income 300,066 201,700
PROVISION FOR CREDIT LOSSES 45,057 11,664
___________ ___________
Net interest income after
provision for credit losses 255,009 190,036
___________ ___________
OTHER INCOME:
Service charges on deposit accounts 29,890 24,057
Securities gains (losses) 2,415 5,483
Other income 8,892 8,332
___________ ___________
Total other income 41,197 37,872
___________ ___________
OTHER EXPENSE:
Salaries and employee benefits 141,283 100,411
Occupancy expense 20,652 11,282
Equipment expense 17,990 15,665
Other expense 134,781 101,678
___________ ___________
Total other expense 314,706 229,036
___________ ___________
Net Loss $ (18,500) $ (1,128)
___________ ___________
NET LOSS PER SHARE $ (.03) $ -
___________ ___________
WEIGHTED AVERAGE SHARES OUTSTANDING 546,399 546,531
___________ ___________
</TABLE>
See Notes to Consolidated Financial Statements 5
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
For the year ended December 31, 1996 and the nine months ended September 30,1997
________________________________________________________________________________
<TABLE>
<CAPTION>
UNREALIZED TOTAL
RETAINED APPRECIATION STOCK-
COMMON STOCK EARNINGS (DEPRECIATION) HOLDERS
SHARES AMOUNT SURPLUS (DEFICIT) SECURITIES EQUITY
______ ______ _______ _________ _____________ ________
<S> <C> <C> <C> <C> <C> <C>
December 31, 1995 437,042 $2,185,210 $2,155,867 $(777,078) $ 58,803 $3,622,802
Net loss - - - (185,645) - (185,645)
Common stock issued 183 915 915 - - 1,830
Net change in unrealized
depreciation on investment
securities available
for sale - - - - (115,466) (115,466)
_______ _________ _________ ________ _______ _________
December 31, 1996 437,225 2,186,125 2,156,782 (962,723) (56,663) 3,323,521
UNAUDITED
Stock dividend 109,306 546,530 (546,530) - - -
Redemption of fractional
shares (132) (660) (504) - - (1,164)
Net loss - - - (169,651) - (169,651)
Net change in unrealized
depreciation on investment
securities available
for sale - - - - 37,332 37,332
_______ _________ _________ ________ _______ _________
September 30,
1997 546,399 $2,731,995 $1,609,748$(1,132,374)$(19,331) $3,190,038
_______ _________ _________ ________ _______ _________
</TABLE>
See Notes to Consolidated Financial Statements 6
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the nine months ended September 30, 1997 and 1996 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
1997 1996
____ ____
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (169,651) $ (118,171)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation and amortization 65,816 63,761
Provision for credit losses 125,693 79,745
Net (gain) loss on sale of securities (1,166) (22,837)
Accretion of discount on securities, net (64,261) (12,090)
Changes in assets and liabilities:
Accrued interest receivable (31,271) (93,459)
Other assets (64,587) (37,764)
Accrued interest payable 54,447 46,555
Other liabilities 24,618 667
___________ ___________
Net cash used by operating activities (60,362) (93,593)
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in federal funds sold 368,000 (1,382,000)
Purchases of securities available for sale (9,909,056) (12,465,306)
Maturities of securities available for sale 7,049,588 426,514
Sales of securities available for sale 1,362,582 7,194,109
Net increase in loans (7,864,536) (4,210,469)
Purchases of properties and equipment (280,644) (135,390)
___________ ___________
Net cash used in investing activities (9,274,066) (10,572,542)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of common stock (1,164) ---
Net increase in demand, NOW,
and savings deposits 1,532,572 7,250,730
Net increase in time deposits 8,753,425 3,527,548
Proceeds from issuance of stock --- 1,830
___________ ___________
Net cash provided by financing activities 10,284,833 10,780,108
___________ ___________
Net increase in cash and cash equivalents 950,405 113,973
CASH AND CASH EQUIVALENTS, BEGINNING 1,188,999 1,143,478
___________ ___________
CASH AND CASH EQUIVALENTS, ENDING $ 2,139,404 $ 1,257,451
___________ ___________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 935,488 $ 557,676
___________ ___________
Income taxes paid $ --- $ ---
___________ ___________
</TABLE>
See Notes to Consolidated Financial Statements 7
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the three months ended September 30, 1997 and 1996 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION> Three Months
Ended
September 30,
1997 1996
____ ____
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (18,500) $ (1,128)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation and ammortization 13,594 21,253
Provision for credit losses 45,057 11,664
Net gains on sale of securities (2,415) (5,483)
Accretion of discount on securities,net (49,518) (7,072)
Changes in assets and liabilities:
Accrued interest receivable (25,404) 20,386
Other assets (66,874) (40,708)
Accrued interest payable 20,752 20,964
Other liabilities (16,288) 3,979
____________ ____________
Net cash used by operating activities $ (99,596) $ 23,855
____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in federal
funds sold 1,424,000 (2,076,000)
Purchases of securities available for sale (5,374,178) (4,981,051)
Maturities of securities available for sale 5,938,544 26,514
Sales of securities available for sale 1,000,125 4,882,666
Net increase in loans (2,864,527) (1,144,478)
Purchases of properties and equipment (101,495) (4,312)
____________ ____________
Net cash used in investing activities 22,469 (3,296,661)
____________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW,
and savings deposits (1,827,670) 4,851,949
Net increase in time deposits 1,532,447 (2,522,236)
Proceeds from sale of common stock --- 1,830
____________ ____________
Net cash provided by financing activities (295,223) 2,331,543
____________ ____________
Net increase (decrease) in cash and cash
equivalents (372,350) (941,263)
CASH AND CASH EQUIVALENTS, BEGINNING 2,511,754 2,198,714
____________ ____________
CASH AND CASH EQUIVALENTS, ENDING $ 2,139,404 $ 1,257,451
____________ ____________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 378,775 $ 260,251
____________ ____________
Income taxes paid $ --- $ ---
____________ ____________
</TABLE>
See Notes to Consolidated Financial Statements 8
CNB HOLDINGS, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
________________________________________________________________________________
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
CNB Holdings, Inc. (the Company) is a bank holding company incorporated
under the laws of Virginia on April 29, 1993. On August 29, 1994, the
Company's wholly owned subsidiary, Community National Bank (the Bank), was
chartered as an FDIC insured National Banking Association under the laws
of the United States and the Bank opened for business in Pulaski, Virginia.
As as FDIC insured National Banking Association, the Bank operates two
banking offices and is subject to regulation by the Comptroller of the
Currency. The Company is regulated by the Federal Reserve.
BASIS OF PRESENTATION:
The consolidated financial statements as of September 30, 1997 and for
the periods ended September 30, 1997 and 1996 included herein, have been
prepared by CNB holdings, Inc., without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, the information furnished in the interim consolidated financial
statements reflects all adjustments necessary to present fairly the Company's
consolidated financial position, results of operations, changes in
stockholders' equity and cash flows for such interim periods. Management
believes that all interim period adjustments are of a normal recurring nature.
These consolidated financial statements should be read in conjunction with the
Company's audited financial statements and the notes thereto as of December 31,
1996, included in the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1996.
The accounting and reporting policies of the Company and the Bank follow
generally accepted accounting principles and general practices within the
financial services industry.
NOTE 2. COMMITMENTS AND CONTINGENCIES
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
Standby letters of credit are conditional commitments issued by the Bank
to guarantee the performance of a customer to a third party. Those guarantees
are primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending other loan facilities to customers. Collateral held
varies as specified above and is required in instances which the Bank deems
necessary.
NOTE 3. SUBSEQUENT EVENT
The Company has filed with the Securities and Exchange Commission for approval
to sell up to 330,000 shares of common stock at $9 per share. Management
expects proceeds of the stock sale, net of commissions and expenses, to be
approximately $2,745,000, assuming the offering is fully subscribed.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANACIAL CONDITION
AND RESULTS OF OPERATIONS.
The Company had a net loss of $169,651 (or $.31 per share, based on
546,464 weighted average shares of Common Stock outstanding during the period)
for the nine months ended September 30, 1997, compared with a loss of $118,171
(or $.22 per share, based on 546,531 weighted average shares of Common Stock
outstanding during the period) for the nine months ended September 30, 1996.
Community National Bank, the Company's banking subsidiary (the "Bank"),
commenced operations on August 29, 1994 (the "Opening Date"), pursuant to an
approval from the Office of Comptroller of the Currency (the "OCC"). Prior to
that time, the Company and the Bank had no operations and their activities
consisted primarily of organizing the Company and the Bank and securing the
approvals necessary for the Bank to begin conducting business. The Company's
losses in the nine months ending September 30, 1997 reflect nine months of
solid growth in deposits and earning assets for the Bank. Net interest income
after provision for credit losses is approximately 70% of the Bank's overhead
and other expenses. Until the Bank's earning assets grow to a level sufficient
to generate substantial interest income which, combined with other income of
the Bank, exceeds other Bank expenses, the Company and the Bank will likely
experience net losses.
Management of the Company and the Bank continues to aggressively market
its loans in the local community, and seek high earning investment assets and
deposits to provide the foundation for continued growth. While management is
anxious to see the bank profitable on an operational basis, it recognizes that
sacrificing loan and investment quality for quantity in order to post an
operating profit earlier is contrary to the long-term profitability of the
Company and the best interests of its shareholders. For this reason, the
Company's credit standards will likely constrain the rate at which it increases
its investment in loans and other higher returning assets.
During the first quarter of 1996, the bank held ribbon cutting and
building dedication ceremonies to celebrate the opening of the attractive new
brick colonial-style structure which offers the bank much needed office space,
2 additional drive-through lanes, a drive-through automated teller machine and
night depository, and safe deposit boxes. During the second quarter of 1997
the Bank announced plans to open its first branch in downtown Pulaski and
the branch began operations on October 4, 1997.
At September 30, 1997, the Company had total assets of approximately $37.6
million compared to $27.4 million at December 31, 1996. Total assets had a
positive increase of $10.2 million, or 37% since year end 1996. At September
30, 1997, assets were comprised principally of loans and investment securities.
Net loans increased $7.7 million, or 60%, to approximately $20.4 million at
September 30, 1997, as the Bank experienced loan growth in almost all
categories. Investment securities increased $1.6 million, or 13%, as
management continued to invest deposits flowing into the Bank in loans and
other higher yielding investments. As loan demand develops, the bank will be
able to invest more of its funds into higher yielding loans and less in
investment securities.
10
The Company's liabilities at September 30,1997 were $34.4 million
compared to $24.1 million at December 31, 1996. These liabilities consisted
almost entirely of deposits for both periods, which posted increases in nearly
all categories during the first nine months of 1997. Interest-bearing demand
deposits decreased $598,000 or 7% to $7.7 million, and time deposits increased
$8.7 million, or 81%, to $19.6 million. At September 30, 1997, about $2.7
million, or 8%, of total deposits were noninterest-bearing compared to $2.6
million, or 11%, at December 31, 1996. Interest-bearing demand deposits were
22% of total deposits at September 30, 1997, compared to 34% at December 31,
1996. The Bank offers competitive interest rates in its local market and has
been successful at attracting depositors.
At September 30, 1997 and December 31, 1996, the Company had stockholders'
equity of approximately $3.2 million and $3.3 million, respectively. The
Company's first nine months of 1997 resulted in an operating loss of $169,651.
During the second quarter of 1997, the Company's Board of Directors
declared a 5 for 4 stock split in the form of a stock dividend. For purposes
of presenting loss per share, this stock dividend has been given retroactive
treatment for all periods presented.
Management of the Company believes that the Bank has sufficient capital
to fund its activities during the initial stages of operation and until the
bank begins to generate profits on an operating basis, but there can be no
assurance that this will be the case. However, management has filed a
prospectus with the Securities and Exchange Commission announcing plans to sell
up to $3.0 million of common stock to fund future growth. At September 30,
1997, the Bank was in compliance with all regulatory capital requirements.
Management believes that the Bank has sufficient liquidity on a short-term
basis to meet any funding needs it may have, and expects that its long term
liquidity needs can be achieved through deposit growth, however there can be
no assurance that such growth will develop.
11
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no matters pending legal proceedings to which the Company or any
of its subsidiaries is a party or of which any of their property is subject.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable.
(b) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On October 4, 1997, the Company opened its first branch located on Main
Street in downtown Pulaski, Virginia. This is a full service branch
including drive-through and ATM.
On October 24, 1997, the Company filed with the Securities and Exchange
Commission for approval to sell up to 330,000 shares of common stock
at $9 per share. Management expects proceeds of the stock sale, net
of commissions and expenses, to be approximately $2,745,000, assuming the
offering is fully subscribed.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on 8-K
None.
12
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CNB HOLDINGS, INC.
Date: November 13, 1997 By: Hiawatha Nicely, Jr.
Signature
President & Chief Executive Officer
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CNB
HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1997
AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,139,404
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 34,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,912,409
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 20,667,208
<ALLOWANCE> (248,000)
<TOTAL-ASSETS> 37,648,902
<DEPOSITS> 34,326,699
<SHORT-TERM> 0
<LIABILITIES-OTHER> 132,165
<LONG-TERM> 0
0
0
<COMMON> 2,731,995
<OTHER-SE> 458,043
<TOTAL-LIABILITIES-AND-EQUITY> 37,648,902
<INTEREST-LOAN> 1,160,466
<INTEREST-INVEST> 572,554
<INTEREST-OTHER> 30,072
<INTEREST-TOTAL> 1,763,092
<INTEREST-DEPOSIT> 976,274
<INTEREST-EXPENSE> 989,935
<INTEREST-INCOME-NET> 773,157
<LOAN-LOSSES> 125,693
<SECURITIES-GAINS> 1,166
<EXPENSE-OTHER> 925,482
<INCOME-PRETAX> (169,651)
<INCOME-PRE-EXTRAORDINARY> (169,651)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (169,651)
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.31)
<YIELD-ACTUAL> 3.49
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 155,000
<CHARGE-OFFS> 44,045
<RECOVERIES> 11,352
<ALLOWANCE-CLOSE> 248,000
<ALLOWANCE-DOMESTIC> 248,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
