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, 1998
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:
926,399 shares of common stock, $5.00 par value per share (the "Common
Stock"), issued and outstanding as of September 30, 1998.
Transitional Small Business Disclosure Format (check one):Yes No X
Page 1 of 12. 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, 1998 and
December 31,1997............................................................3
Consolidated Statements of Operations for the Nine Months
Ended September 30, 1998 and 1997...........................................4
Consolidated Statements of Operations for the Three Months
Ended September 30, 1998 and 1997...........................................5
Consolidated Statements of Stockholders' Equity for the
Periods Ended September 30, 1998 and December 31, 1997......................6
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1998 and 1997...........................................7
Consolidated Statements of Cash Flows for the Three Months
Ended September 30, 1998 and 1997...........................................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..................................................................12
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, 1998 and December 31, 1997
________________________________________________________________________________
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
____________ ____________
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 1,978,242 $ 2,290,840
Federal funds sold 4,006,000 1,021,000
Investment securities available for sale 16,325,036 11,736,737
Loans, net of allowance for loan losses
of $316,000 in 1998 and $248,000 in 1997 27,116,762 22,395,227
Property and equipment, net 1,975,435 1,853,855
Accrued income 287,047 241,318
Other assets 173,074 244,089
___________ ___________
Total assets 51,861,596 39,783,066
___________ ___________
Liabilities
Demand deposits 2,819,500 3,581,386
Interest-bearing demand deposits 14,979,497 11,192,361
Savings deposits 6,735,811 3,770,237
Large denomination time deposits 4,747,276 4,442,410
Other time deposits 15,958,901 13,607,494
___________ ___________
Total deposits 45,240,985 36,593,888
Accrued interest payable 98,663 55,448
Loans payable 135,000 -
Other liabilities 67,776 23,111
___________ ___________
Total liabilities 45,542,424 36,672,447
___________ ___________
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; 926,399 shares outstanding in 1998
and 546,399 shares outstanding in 1997 4,631,995 2,731,995
Surplus 2,818,930 1,609,748
Retained deficit (1,173,703) (1,209,973)
Unrealized appreciation (depreciation) on
investment securities available for sale 41,950 (21,151)
___________ ___________
Total stockholders' equity 6,319,172 3,110,619
___________ ___________
Total liabilities and stockholders'
equity $ 51,861,596 $ 39,783,066
___________ ___________
</TABLE>
See Notes to Consolidated Financial Statements 3
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the Nine Months ended September 30, 1998 and 1997 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
Nine Months
Ended
September 30,
_____________
1998 1997
____ ____
<S> <C> <C>
INTEREST INCOME:
Loans and fees on loans $1,690,417 $1,160,466
Interest on securities available for sale 582,316 572,554
Federal funds sold 160,018 30,072
_________ _________
Total interest income 2,432,751 1,763,092
INTEREST EXPENSE:
Deposits 1,321,953 976,274
Federal funds purchased 130 13,661
_________ _________
Total interest expense 1,322,083 989,935
_________ _________
Net interest income 1,110,668 773,157
PROVISION FOR CREDIT LOSSES 94,011 125,693
_________ _________
Net interest income after provision
for credit losses 1,016,657 647,464
_________ _________
OTHER INCOME:
Service charges on deposit accounts 122,420 79,595
Securities gains (losses) - 1,166
Other income 52,146 27,606
Rent income 10,191 -
_________ _________
Total other income 184,757 108,367
OTHER EXPENSE:
Salaries and employee benefits 557,949 420,741
Occupancy expense 89,771 54,059
Equipment expense 99,627 58,222
Other expense 417,797 392,460
_________ _________
Total other expense 1,165,144 925,482
_________ _________
Net income (loss) $ 36,270 $ (169,651)
_________ _________
NET INCOME (LOSS) PER SHARE $ .04 $ (.31)
_________ _________
WEIGHTED AVERAGE SHARES OUTSTANDING 926,399 546,464
_________ _________
</TABLE>
See Notes to Consolidated Financial Statements 4
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statements of Operations
For the three months ended September 30, 1998 and 1997 (unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION> Three Months
Ended
September 30,
____________
1998 1997
____ ____
<S> <C> <C>
INTEREST INCOME:
Loans and fees on loans $ 600,050 $ 468,939
Interest on securities
available for sale 228,186 215,277
Federal funds sold 68,794 15,377
___________ __________
Total interest income 897,030 699,593
INTEREST EXPENSE:
Deposits 497,562 396,050
Federal funds purchased - 3,477
___________ __________
Total interest expense 497,562 399,527
___________ __________
Net interest income 399,468 300,066
PROVISION FOR CREDIT LOSSES 47,134 45,057
___________ ___________
Net interest income after
provision for credit losses 352,334 255,009
___________ ___________
OTHER INCOME:
Service charges on deposit accounts 40,912 29,890
Securities gains (losses) - 2,415
Other income 16,444 8,892
Rent income 4,647 -
___________ ___________
Total other income 62,003 41,197
OTHER EXPENSE:
Salaries and employee benefits 212,624 141,283
Occupancy expense 31,773 20,652
Equipment expense 30,988 17,990
Other expense 132,427 134,781
___________ ___________
Total other expense 407,812 314,706
___________ ___________
Net income (loss) $ 6,525 $ (18,500)
___________ ___________
NET INCOME (LOSS) PER SHARE $ .01 $ (.03)
___________ ___________
WEIGHTED AVERAGE SHARES OUTSTANDING 926,399 546,399
___________ ___________
</TABLE>
See Notes to Consolidated Financial Statements 5
CNB HOLDINGS, INC. AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
For the year ended December 31, 1997 and the Nine Months ended September 30,1998
________________________________________________________________________________
<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,
1996 437,225 $2,186,125 $2,156,782 $ (962,723) $(56,663)$3,323,521
Comprehensive income
Net loss - - - (247,250) - (247,250)
Net change in
unrealized
depreciation
on investment
securities
available
for sale - - - - 35,512 35,512
_________
Total comprehensive
income (211,738)
Stock dividend 109,306 546,530 (546,530) - - -
Reduction of
fractional
shares (132) (660) (504) - - (1,164)
_______ _________ _________ _________ _______ _________
December 31,
1997 546,399 2,731,995 1,609,748 (1,209,973) (21,151) 3,110,619
Comprehensive income
Net income - - - 36,270 - 36,270
Net change in
unrealized
depreciation
on investment
securities
available
for sale - - - - 63,101 63,101
_________
Total comprehensive
income 99,371
Common stock
sold 380,000 1,900,000 1,520,000 - - 3,420,000
Stock issuance
costs - - (310,818) - - (310,818)
_______ _________ _________ __________ _______ _________
September 30,
1998 926,399 $4,631,995 $2,818,930 $(1,173,703) $ 41,950 $6,319,172
_______ _________ _________ __________ _______ _________
</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, 1998 and 1997 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION> Nine Months
Ended
September 30,
1998 1997
____ ____
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 36,270 $ (169,651)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation and amortization 83,217 65,816
Provision for credit losses 94,011 125,693
Net (gain) loss on sale of securities - (1,166)
Accretion of discount on securities, net (5,996) (64,261)
Changes in assets and liabilities:
Accrued interest receivable (45,729) (31,271)
Other assets (55,557) (64,587)
Accrued interest payable 43,215 54,447
Other liabilities 44,665 24,618
___________ ___________
Net cash used by operating activities 194,096 (60,362)
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in federal
funds sold (2,985,000) 368,000
Purchases of securities available for sale (19,921,882) (9,909,056)
Maturities of securities available for sale 15,402,680 7,049,588
Sales of securities available for sale - 1,362,582
Net increase in loans (4,815,546) (7,864,538)
Purchases of properties and equipment (204,797) (280,644)
___________ ___________
Net cash used in investing activities (12,524,545) (9,274,066)
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of common stock - (1,164)
Net increase in demand, NOW,
and savings deposits 5,990,824 1,532,572
Net increase in time deposits 2,656,273 8,753,425
Long-term debt 135,000 -
Sale of common stock 3,235,754 -
___________ ___________
Net cash provided by financing activities 12,017,851 10,284,833
___________ ___________
Net increase in cash and cash equivalents (312,598) 950,405
CASH AND CASH EQUIVALENTS, BEGINNING 2,290,840 1,188,999
___________ ___________
CASH AND CASH EQUIVALENTS, ENDING $ 1,978,242 $ 2,139,404
___________ ___________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 1,278,868 $ 935,488
___________ __________
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, 1998 and 1997 (Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION> Three Months
Ended
September 30,
1998 1997
____ ____
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 6,525 $ (18,500)
Adjustments to reconcile net loss
to net cash used by operations:
Depreciation and ammortization 27,575 13,594
Provision for credit losses 47,134 45,057
Net gains on sale of securities - (2,415)
Accretion of discount on securities,net (1,999) (49,548)
Changes in assets and liabilities:
Accrued interest receivable (9,882) (25,404)
Other assets (7,532) (66,874)
Accrued interest payable 19,293 20,752
Other liabilities 41,031 (16,288)
____________ ____________
Net cash used by operating activities $ 122,145 $ (99,626)
____________ ____________
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) decrease in federal
funds sold (858,000) 1,424,000
Purchases of securities available for sale (12,185,355) (5,374,178)
Maturities of securities available for sale 8,860,392 5,938,544
Sales of securities available for sale - 1,000,125
Net increase in loans (1,879,388) (2,864,527)
Purchases of properties and equipment (40,734) (101,495)
____________ ____________
Net cash used in investing activities (6,103,085) 22,469
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW and savings
accounts 3,259,380 (1,827,670)
Net increase in time deposits 1,009,973 1,532,447)
Net loans 135,000 -
____________ ____________
Net cash provided by financing activities 4,404,353 (295,223)
____________ ____________
Net increase (decrease) in cash and cash
equivalents (1,576,587) (372,350)
CASH AND CASH EQUIVALENTS, BEGINNING 3,554,829 2,511,754
____________ ____________
CASH AND CASH EQUIVALENTS, ENDING $ 1,978,242 $ 2,139,404
____________ ____________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 476,269 $ 378,775
____________ ____________
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 an FDIC insured
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, 1998 and for the
periods ended September 30, 1998 and 1997 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. The consolidated
financial statements and the notes thereto as of December 31, 1997, included
in the Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997, should be read in conjunction with this report.
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. SALE OF COMMON STOCK
After receiving approval in 1997 from the Securities and Exchange
Commission to sell an additional 380,000 shares of common stock, the
Company began offering this stock for sale in December, 1997. The entire
issue was fully subscribed by the offering cut-off date in February, 1998.
Net proceeds from this offering of approximately $3.2 million will be used
for general purposes and to fund future growth.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANACIAL CONDITION
AND RESULTS OF OPERATIONS.
The Company had a net income of $36,270 (or $.04 per share, based on
926,399 weighted average shares of Common Stock outstanding during the period)
for the nine months ended September 30, 1998, compared to a loss of $169,651
(or $.31 per share, based on 546,464 weighted average shares of Common Stock
outstanding during the period) for the quarter ended September 30, 1997.
At September 30, 1998, the Company had total assets of approximately
$51.9 million compared to $39.8 million at December 31, 1997. Total assets
have increased $12.1 million, or 30% since year end 1997. At September 30,
1998, assets were comprised principally of loans and investment securities.
Loans increased $4.7 million, or 21% through September, 1998, as
the Bank experienced loan growth in almost all categories. As loan demand
continues to develop, the bank will be in a position to invest more of its
excess funds into higher yielding loans instead of investment securities.
The Company's liabilities at September 30, 1998 were $45.5 million
compared to $36.7 million at December 31, 1997. These liabilities consisted
almost entirely of deposits for both periods. Interest-bearing demand
deposits increased by $3.8 million or 34% to $15 million, and time deposits
increased $2.7 million, or 15%, to $20.1 million. At September 30, 1998,
$2.8 million, or 6%, of total deposits were noninterest-bearing compared to
$3.6 million, or 9.8%, at December 31, 1997. The Bank offers competitive
interest rates in its local market and has been successful at attracting
depositors.
At September 30, 1998 and December 31, 1997, the Company had stock-
holders' equity of approximately $6.3 million and $3.1 million, respectively.
Stockholders' equity was affected by the Company's first nine months of 1998
net income of $36,270, stock sale proceeds of $3.2 million, and a $53,791
increase in unrealized appreciation on investment securities available
for sale. The Company believes the increase is attributable to the continued
decline of the current interest rate environment.
Management of the Company believes that the Bank has sufficient capital
to fund its operations until the Bank begins to gernerate profits on an
operating basis, but there can be no assurance that this will be the case.
The Bank has applied to become a member of the Federal Home Loan Bank system
which would provide the Bank with borrowing capacity to meet liquidity or
loan needs, however, management has not identified other sources of capital
for the Company or the Bank should they be needed.
At September 30, 1998, 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.
YEAR 2000 PROJECT
STATE OF READINESS
CNB Holdings, Inc. and its subsidiaries have undertaken a variety of
measures to ensure that hardware, software, and other date sensitive
equipment will be century date compliant. CNB Holdings, Inc. has compiled
an inventory of all equipment and software, developed a preliminary impact
10
assessment, and has obtained certifications from its vendors for specific
product confirmation. Currently, the Company is in the testing phase,
with emphasis placed on its "mission critical" systems. The Bank has
already contracted with an indepenent third party to conduct testing and
provide any necessary remediation on its internal computer systems. This
testing was completed during the third quarter. All other applications
are moving to the testing phase, with the goal of March, 1999 for completion
of all testing and required remediation within the organization.
The Company is also dependent on numerous outside vendor systems for
processing, such as: check clearning, Automated Clearing House items,
electronic funds transfer, wire transfer, automated teller machines, and
credit card processing. These outside systems are handled through the
Federal Reserve Bank of Richmond, correspondent banks, or other processing
vedors utilized by the bank. Testing of these applications has been
scheduled for the third and fourth quarters of 1998 and the first quarter
of 1999.
THE COSTS TO ADDRESS YEAR 2000 ISSUES
At this stage, the Company has incurred no material costs related to
Year 2000. All research indicates that the costs for meeting Year 2000
requirements should be relatively minor, primarily because the Company's
computers and network systems are recent acquisitions and any remediation
found to be required can be done so without substantial cost. Additional
costs related to testing and software updates are expected to be less
than $40,000.
THE RISKS OF YEAR 2000 ISSUES
The primary risk to the Company regarding Year 2000 issues is that
the ability to process transactions would be lost due to the system
failures of its processing vendors. To mitigate this risk, the Company has
begun testing of these systems. With completion of testing scheduled for
the first quarter 1999, the Company would have 1999 to consider and conduct
required remediation efforts.
THE CONTINGENCY PLAN
The Company is in the process of formalizing its contingency plan
should processing vendors' systems prove not to be Year 2000 ready. The
Company will review results as testing is completed and make contingency
plan determinations as these results are evaluated. The Company has
already begun to explore contingency options.
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
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on 8-K
None.
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, 1998 By: Hiawatha Nicely, Jr.
Signature
President & Chief Executive Officer
12
<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, 1998
AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER
30, 1998 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-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,978,242
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,006,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 16,325,036
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 27,432,762
<ALLOWANCE> (316,000)
<TOTAL-ASSETS> 51,861,596
<DEPOSITS> 45,240,985
<SHORT-TERM> 0
<LIABILITIES-OTHER> 301,439
<LONG-TERM> 0
0
0
<COMMON> 4,631,995
<OTHER-SE> 1,687,177
<TOTAL-LIABILITIES-AND-EQUITY> 51,861,596
<INTEREST-LOAN> 1,690,417
<INTEREST-INVEST> 582,316
<INTEREST-OTHER> 160,018
<INTEREST-TOTAL> 2,432,751
<INTEREST-DEPOSIT> 1,321,953
<INTEREST-EXPENSE> 1,322,083
<INTEREST-INCOME-NET> 1,110,668
<LOAN-LOSSES> 94,011
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,165,144
<INCOME-PRETAX> 36,270
<INCOME-PRE-EXTRAORDINARY> 36,270
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,270
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
<YIELD-ACTUAL> 3.76
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 270,000
<CHARGE-OFFS> 48,011
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 316,000
<ALLOWANCE-DOMESTIC> 316,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
