SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-22790
STATEFED FINANCIAL CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 42-1410788
(State of other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) or Number)
519 Sixth Avenue, Des Moines, Iowa 50309
(Address of principal executive offices)
(515) 282-0236
(Issuer's telephone number)
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 [_]
State the number of Shares outstanding of each of the issuer's classes of
common equity, as the latest date:
As of November 11, 1998, there were 1,544,392 shares of the Registrant's
common stock issued and outstanding.
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STATEFED FINANCIAL CORPORATION
Form 10-QSB
Index
Financial Information Page No.
Item 1. Consolidated Financial Statements:
Consolidated Statements of Financial Condition
as of September 30, 1998 and June 30, 1998 3
Consolidated Statements of Income for
the Three Months Ending September 30, 1998
and September 30, 1997. 4
Consolidated Statements of Comprehensive Income for
the Three Months Ending September 30, 1998
and September 30, 1997 5
Consolidated Statement of Stockholders'
Equity for the Three Months Ending September 30, 1998 6
Consolidated Statements of Cash Flows
for the Three Months Ending September 30, 1998 and
September 30, 1997 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. Other Information 15
Signatures 17
2
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<CAPTION>
STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, 1998 and June 30, 1998
ASSETS (Unaudited)
September 30, 1998 June 30, 1998
<S> <C> <C>
Cash and amounts due from depository institutions $ 9,162,418 $ 9,445,404
Investments in certificates of deposit 1,479,119 1,478,514
Investment securities available for sale 2,680,405 2,743,518
Loans receivable, net 68,673,086 68,979,770
Real estate acquired for development 236,596 231,870
Real estate held for investment, net 2,244,137 2,262,060
Property acquired in settlement of loans 1,287,149 1,286,452
Office property and equipment, net 1,550,272 1,564,077
Federal Home Loan Bank stock, at cost 1,147,600 949,000
Accrued interest receivable 514,460 542,246
Other Assets 393,785 318,654
------------ ------------
TOTAL ASSETS $ 89,369,027 $ 89,801,565
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 53,510,966 $ 53,671,860
Advances from Federal Home Loan Bank 18,943,409 18,964,890
Advances from borrowers for taxes and insurance 48,749 340,686
Accrued interest payable 192,719 134,251
Dividends payable 77,470 78,295
Income taxes: current and deferred 334,259 232,019
Other liabilities 178,545 295,278
------------ ------------
TOTAL LIABILITIES $ 73,286,117 $ 73,717,279
------------ ------------
Stockholders' equity:
Common stock $ 8,905 $ 8,905
Additional paid-in capital 8,510,143 8,483,110
Unearned compensation - restricted stock awards (322,726) (341,270)
Accumulated other comprehensive income-
unrealized gain on investments, net of deferred taxes 134,522 119,928
Treasury stock (1,852,760) (1,643,697)
Retained earnings - substantially restricted 9,604,826 9,457,310
------------ ------------
TOTAL STOCKHOLDERS' EQUITY $ 16,082,910 $ 16,084,286
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 89,369,027 $ 89,801,565
============ ============
</TABLE>
3
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<TABLE>
<CAPTION>
STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ending September 30, 1998 and 1997
(Unaudited)
----------- -----------
1998 1997
----------- -----------
<S> <C> <C>
Interest Income:
Loans $ 1,484,172 $ 1,430,883
Investments 92,860 150,888
Other 129,051 51,492
----------- -----------
Total interest income 1,706,083 1,633,263
Interest Expense:
Deposits 744,531 706,047
Borrowings 293,954 291,999
----------- -----------
Total interest expense 1,038,485 998,046
Net interest Income 667,598 635,217
Provision for loan losses 9,000 6,000
----------- -----------
Net interest income after
provision for loan losses 658,598 629,217
Non-interest Income:
Real estate operations 137,909 94,370
Other 23,883 17,064
----------- -----------
Total non-interest income 161,792 111,434
Non-interest expense:
Salaries and benefits 229,289 217,225
Real estate operations 94,945 63,088
Occupancy and equipment 36,695 29,229
FDIC premiums and OTS assessments 15,265 9,938
Data processing 28,701 22,050
Other 88,269 57,515
----------- -----------
Total non-interest expense 493,164 399,045
----------- -----------
Income before income taxes 327,226 341,606
Income tax expense 102,240 117,165
----------- -----------
Net income $ 224,986 $ 224,441
=========== ===========
Basic earnings per share $ 0.15 $ 0.15
Diluted earnings per share $ 0.15 $ 0.15
</TABLE>
4
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STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ending September 30, 1998 and 1997
(Unaudited)
--------- ---------
1998 1997
--------- ---------
Net Income $ 224,986 $ 224,441
Other comprehensive income,
net of tax:
Unrealized holding gains on securities
arising during period 14,594 32,052
--------- ---------
Comprehensive income $ 239,580 $ 256,493
========= =========
5
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STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Three Months Ending September 30, 1998
(Unaudited)
Balance - June 30, 1998 $ 16,084,286
Additional paid in capital 27,033
Other comprehensive income--unrealized gain on
investment securities, net of deferred income taxes 14,594
Dividends declared (77,470)
Repurchase of 5,000 shares treasury stock (209,063)
ESOP common stock released for allocation 18,544
Net income 224,986
------------
Balance - September 30, 1998 $ 16,082,910
============
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<TABLE>
<CAPTION>
STATEFED FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ending September 30, 1998 and September 30, 1997
(Unaudited)
September 30
Cash Flows From Operating Activities 1998 1997
----------- -----------
<S> <C> <C>
Net Income $ 224,985 $ 224,441
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 39,168 21,103
Amortization of ESOP 45,578 45,825
Deferred loan fees (13,410) (5,532)
Provision for losses on loans 9,000 6,000
Change in:
Accrued interest receivable 27,786 30,939
Other Assets (75,131) (82,086)
Accrued interest payable 58,468 60,035
Current income tax liability 102,240 117,165
Other Liabilities (116,732) (11,332)
----------- -----------
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 301,952 $ 406,558
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in certificates of deposit $ 526 $ --
Maturity of investments in certificates of deposit -- 983,418
Purchase of available-for-sale investment securities 76,574 (619,278)
Proceeds from sale or maturity of available-for-sale investment securities -- 200,000
(Purchase) redemption of FHLB Stock (198,600) --
Net (increase) decrease in loans outstanding 311,094 282,659
Investment in real estate held for development (4,725) (9,838)
Investment in real estate acquired in settlement of loans (697) (34,558)
Purchase of office property and equipment (7,440) (54,096)
----------- -----------
NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES $ 176,732 $ 748,307
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits $ (160,895) $ 1,987,124
Advances from the Federal Home Loan Bank (21,481) 4,000,000
Repayment of advances from the Federal Home Loan Bank -- (4,000,000)
Net decrease in advances from borrowers (291,937) (401,217)
Dividends paid (78,295) (78,372)
Purchase of treasury stock (209,063) (111,875)
----------- -----------
NET CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES $ (761,670) $ 1,395,660
----------- -----------
----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS $ (282,985) $ 2,550,525
----------- -----------
CASH AND CASH EQUIVALENTS, beginning of period $ 9,445,404 $ 3,634,086
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 9,162,418 $ 6,184,611
=========== ===========
</TABLE>
7
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STATEFED FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended
September 30, 1998 and September 30, 1997
(Unaudited)
1. BASIS OF PRESENTATIONS
These consolidated financial statements are unaudited (with the exception
of the Consolidated Statement of Financial Condition for June 30, 1998). These
consolidated financial statements were prepared in accordance with institutions
for Form 10-QSB and therefore, do not include all disclosures necessary for a
complete presentation of the statements of financial condition, statements of
income and statements of cash flows in accordance with generally accepted
accounting principles. However, in the opinion of management, all adjustments
necessary for a fair presentation of the consolidated financial statements have
been included. Results for any interim period are not necessarily indicative of
results expected for the year. The interim consolidated financial statements
include the accounts of StateFed Financial Corporation (the "Corporation"), its
subsidiary, State Federal Savings and Loan Association (the "Association" or
"State Federal") and the Association's subsidiary, State Service Corporation.
These statements should be read in conjunction with the consolidated
financial statements and related notes, which are incorporated by reference in
the company's Annual Report on Form 10-KSB for the year, which ended June 30,
1998.
2. EARNINGS PER SHARE OF COMMON STOCK
Basic earnings per share is computed based upon the weighted-average shares
outstanding during the period, less shares in the ESOP that are unallocated and
not committed to be released. Weighted-average common shares outstanding totaled
1,493,089 at September 30, 1998 and 1,486,690 at September 30, 1997.
Diluted earnings per share is computed by considering common shares
outstanding and dilutive potential common shares to be issued under the
Company's stock option plan. Weighted-average common shares deemed outstanding
for the purpose of computing diluted earnings per share totaled 1,541,737 at
September 30, 1998 and 1,538,959 at September 30, 1997.
3. REGULATORY CAPITAL REQUIREMENTS
Pursuant to Federal law, savings institutions must meet four separate
capital requirements. The Association's capital ratios and balances at September
30, 1998 are as follows:
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Amount %
-----------------------------------
(Dollars in thousands)
Tangible Capital:
Association's $10,185 12.19%
Requirement 1,253 1.50
------- -----
Excess $ 8,932 10.69%
Core Capital:
Association's $10,185 12.19%
Requirement 2,506 3.00
------- -----
Excess $ 7,679 9.19%
Risk-Based Capital:
Association's $10,400 21.04%
Requirement 3,955 8.00
------- -----
Excess $ 6,445 13.04%
Tier 1 Risk-Based Capital:
Association's $10,185 20.60%
Requirement 3,342 4.00
------- -----
Excess $ 6,843 16.60%
4. STOCK OPTION PLAN
At June 30, 1998 there were unexercised options for 95,46 shares of common
stock under the terms of the StateFed Financial Corporation 1993 Stock Option
Plan. The options have an exercise price of $5 per share. There were no options
exercised during the three months ended September 30, 1998.
5. STOCK REPURCHASE PLAN
On February 18, 1998, the Company's Board of Directors authorized
management to repurchase up to 77,980 shares of the Company's common stock over
the next twelve months. During the three month period ending September 30, 1998,
16,500 shares were repurchased. As of November 11, 1998, 26,500 shares have been
repurchased since February 18, 1998, at a cost of $340,000.
9
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PART I ITEM 2
STATEFED FINANCIAL CORPORATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
The accompanying Consolidated Financial Statements include StateFed
Financial Corporation (the "Company") and its wholly owned subsidiary, State
Federal Savings and Loan Association (the "Association"). All significant
inter-company transactions and balances are eliminated in consolidation. The
Company's results of operations are primarily dependent on the Association's net
interest margin, which is the difference between interest income earned on
interest-earning assets and interest expense paid on interest-bearing
liabilities. The Association's net income is also affected by the level of its
non-interest expenses, such as employee compensation and benefits, occupancy
expenses, and other expenses.
When used in this Form 10-Q and in future filings with the SEC, in the
Company's press releases or other public or shareholder communications, as well
as in oral statements made by the executive officers of the Company or its
primary subsidiary, the words or phrases "will likely result," "are expected
to," "will continue," "is anticipated," "estimated," "project" or similar
expressions are intended to identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to certain risks and uncertainties, including, among other things,
changes in economic conditions in the Company's market area, changes in policies
by regulatory agencies, fluctuations in interest rates, demand for loans in the
Company's market area and competition, that could cause actual results to differ
materially from historical earnings and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made. The
Company wishes to advise readers that the factors listed above could affect its
financial performance and could cause its actual results for future periods to
differ materially from any opinions or statements expressed with respect to
future periods in any current statements.
The Company does not undertake--and specifically declines any
obligation--to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.
Financial Condition
The Company's total assets decreased $400,000, from $89.8 million at June
30, 1998 to $89.4 million at September 30, 1998. This decrease was due primarily
to a decrease in cash and amounts due
10
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from depository institutions of $283,000, a decrease in net loans receivable of
$307,000, and a decrease in investment securities available-for-sale of $63,000,
partially offset by an increase in Federal Home Loan Bank Stock of $199,000.
Cash and amounts due from depository institutions decreased $283,000, from
$9.4 million at June 30, 1998 to $9.2 million at September 30, 1998. The
decrease in cash and amounts due from depository institutions occurred as a
result of an decrease in deposits of $161,000 and a decrease in advances from
borrowers for taxes and insurance of $292,000.
Net loans receivable decreased $307,000, from $69.0 million at June 30,
1998 to $68.7 million at September 30, 1998. Repayment of principal totaled $4.2
million for the three month period, while loan origination's totaled $3.9
million.
Total deposits decreased by $161,000 from $53.7 million at June 30, 1998 to
$53.5 million at September 30, 1998. Passbook accounts decreased $126,000, money
market fund accounts decreased $123,000, while NOW accounts increased $17,000
and certificate accounts increased $71,000.
Total stockholders' equity decreased $1,400 from $16.084 million at June
30, 1998 to $16.083 million September 30, 1998. The decrease was primarily the
result of the cost to repurchase the Company's stock of $209,000 and dividends
declared of $77,000, partially offset by the result of net earnings of $225,000,
an increase in unrealized gain on investment securities of $15,000, and an
increase of $46,000 relating to the ESOP for the three month period ending
September 30,1998.
Comparison of Operating Results for the Three Month Periods Ending September 30,
1998 and September 30, 1997
General. Net income increased $545 to $225,000 for the three months ended
September 30, 1998 from $224,400 for the three months ended September 30, 1997.
The increase in net income was primarily due an increase in non-interest income
of $50,400, an increase in net interest income of $32,400, and a decrease in
income tax expense of $15,000, partially offset by an increase non-interest
expense of $94,100 and an increase in provision for loan losses of $3,000.
Net Interest Income. Net interest income increased $32,400, from $635,200
for the three months ended September 30, 1997 to $667,600 for the three months
ended September 30, 1998. This increase was primarily the result of an increase
in interest income of $72,800, offset by an increase in interest expense of
$40,400.
Interest Income. Interest income increased $72,800, from $1.6 million for
the three months ended September 30, 1997 to $1.7 million for the three months
ended September 30, 1998, as a result of
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an increase in interest earned on the loan portfolio of $53,300 as well as an
increase in interest on other interest income of $77,600, partially offset by a
decrease in interest on investments of $58,000. Interest on the loan portfolio
increased primarily because of a decrease in non-accrual loans.
Interest Expense. Interest expense increased $40,400 from $998,100 in the
three months ended September 30, 1997 to $1,038,500 in the three months ended
September 30, 1998. This increase resulted primarily from an increase in
interest paid on deposits of $38,500. The average interest rate on deposits
increased slightly from the prior period.
Provision for Loan Losses. The provision for loan losses increased $3,000
in the three months ended September 30, 1998 as compared to the three months
ended September 30, 1997. The provision during the three months ended September
30, 1998 was based on management's analysis of the allowance for loan losses.
The Company will continue to monitor its allowance for loan losses and make
future additions to the allowance through the provision for loan losses as
economic conditions dictate. Although the Company maintains its allowance for
loan losses at a level which it considers to be adequate to provide for
potential losses, there can be no assurance that future losses will not exceed
estimated amounts or that additional provisions for loan losses will not be
required for future periods.
Non-interest Income. Non-interest income increased $50,400 from $111,400 in
the three months ended September 30, 1997 to $161,800 in the three months ended
September 30, 1998. The increase was the result of an increase in income from
real estate operations of $43,500 and an increase of $6,800 in other income. The
increase in income from real estate operations was due to the completion and
occupancy of the 22-unit apartment building.
Non-interest Expense. Non-interest expense increased from $399,000 in the
three months ended September 30, 1997 to $493,200 in the three months ended
September 30, 1998. This increase of $94,200, was primarily the result of an
increase of $5,300 in FDIC premiums and OTS assessments, an increase of $30,800
in other non-interest expense, an increase of $12,100 for salaries and benefits,
an increase of $31,900 in real estate operations, an increase of $7,500 in
occupancy and equipment expense, and an increase of $6,600 in data processing
expense. The increase in real estate operations was due primarily to the
maintenance and deprecation resulting from the completion of the 22-unit
apartment building.
Income Tax Expense. Income tax expense was $102,200 for the three months
ended September 30, 1998 compared to $117,200 for the three months ended
September 30, 1997, a decrease of $15,000, primarily due to the decrease in
taxable income.
Liquidity and Capital Resources. The Company's primary sources of funds are
deposits, principal and interest payments on loans, FHLB Des Moines advances,
and funds provided by operations. While scheduled loan repayments and maturity
of short-term investments are a relatively predictable source of funds; deposit
flows are greatly influenced by general interest rates, economic conditions, and
competition. Current Office of Thrift Supervision regulations require the bank
to maintain cash and
12
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eligible investments in an amount equal to at least 4% of customer accounts and
short-term borrowings to assure its ability to meet demands for withdrawals and
repayment of short-term borrowings. As of September 30, 1998, the Association's
liquidity ratio was 15.77%, which exceeded the minimum regulatory requirement on
such date.
The Company uses its capital resources principally to meet its ongoing
commitments, to fund maturing certificates of deposits and loan commitments,
maintain its liquidity, and meet its foreseeable short- and long term needs. The
Company expects to be able to fund or refinance, on a timely basis, its material
commitments and long-term liabilities.
Regulatory standards impose the following capital requirements: a
risk-based capital standard expressed as a percent of risk adjusted assets, a
leverage ratio of core capital to total adjusted assets, and a tangible capital
ratio expressed as a percent of total adjusted assets. As of September 30, 1998,
the Association exceeded all fully phased-in regulatory capital requirements.
At September 30, 1998, the Association's tangible equity capital was $10.2
million, or 12.19%, of tangible assets, which is in excess of the 1.5%
requirement by $8.9 million. In addition, at September 30, 1998, the Association
had core capital of $10.2 million, or 12.19%, of adjusted total assets, which
exceeds the 3% requirement by $7.7 million. The Association had total risk-based
capital of $10.4 million at September 30, 1998, or 21.04%, of risk-weighted
assets which exceeds the 8.0% risk-based capital requirements by $6.4 million.
The Association had tier I risk-based capital of $10.2 million, or 20.6%, of
risk-weighted assets which exceeds the 4.0% capital requirement by $6.8 million.
As required by Federal law, the OTS has proposed a rule revising its
minimum core capital requirement to be no less stringent than that imposed on
national banks. the OTS has proposed that only those savings associations rated
a composite one (the highest rating) under the MACRO rating system for savings
associations will be permitted to operate at or near the regulatory minimum
leverage ratio of 3%. all other savings associations will be required to
maintain a minimum leverage ratio of 3% plus at least an additional 100 to 200
basis points. The OTS will assess each individual savings association through
the supervisory process on a case-by-case basis to determine the applicable
requirement. No assurance can be given as to the final form of any such
regulation, the date of its effectiveness or the requirement applicable to the
Association. As a result of the prompt corrective action provisions of federal
law discussed below, however, a savings association must maintain a core capital
ratio of at least 4% to be considered adequately capitalized unless its
supervisory condition is such to allow it to maintain a 3% ratio.
Impact of Year 2000
A third-party hardware and software company provides the material data
processing of the Company. This hardware and software provider has advised the
Company that it expects to be Year 2000 compliant before the end of calendar
year 1998. However, if the hardware and software provider is unable to become
compliant with Year 2000 issues, the Company may experience significant data
13
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processing delays, mistakes or failures. These delays, mistakes or failures
could have a significant adverse impact on the financial condition and results
of operations of the Company.
During 1998, the Company, in the normal course of operations, installed new
hardware and software supplied by the third-party data processor. The Company is
conducting tests of the hardware and software for Year 2000 compliance. Based on
the results of these tests and its evaluation of other hardware and software
used by the Company, including other technological equipment used by the
Company, management does not anticipate incurring significant additional expense
to implement additional corrective actions.
Management believes that appropriate actions have been taken to evaluate
Year 2000 risks and to implement procedures necessary to address those risks.
Management has also developed a contingency plan that outlines courses of
actions that would be followed should the Company encounter computer processing
or general operational problems arising from the Year 2000 issue.
14
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STATEFED FINANCIAL CORPORATION
Part II - Other Information
As of September 30, 1998, management is not aware of any current
recommendations by regulatory authorities which, if they were to be implemented,
would have or are reasonably likely to have a material adverse effect on the
Company's liquidity, capital resources or operations.
Item 1- Legal Proceedings
Not applicable.
Item 2 - Changes in Securities
Not applicable.
Item 3 - Defaults upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to Vote of Security Holders
(a) The annual meeting of stockholders was held on October 21, 1998
(b) The matters approved by stockholders at the annual meeting and the
number of votes cast for, against, or withheld (as well as the number
of abstentions and broker non-votes) as to each matter are set forth
below.
Election of the following Directors to a three year term:
For Withheld Broker Non-Votes
--------- -------- ----------------
Craig A. Wood 1,329,326 5,466 00
Harry A. Winegar 1,329,326 5,466 00
Ratification of Vroman, McGowan, Hurst, Clark & Smith, PC as auditors for the
Company for the fiscal year ending June 30, 1999:
For 1,331,392
Against 2,400
Abstain 1,000
Broker Non-Votes 67,296
Accordingly, Directors Wood and Winegar were reelected to the Board and the
selection of Vroman, McGowan, Hurst, Clark & Smith, PC was ratified by the
shareholders.
Item 5 - Other Information
None
15
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Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Not applicable.
(b) The following is a description of the Form 8-K's filed during the
three months ended September 30, 1998:
1. On November 16, 1998, a current report on Form 8-K was filed
to announce first quarter earnings
16
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly cause this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STATEFED FINANCIAL CORPORATION
Registrant
Date: November 16, 1998 /s/__________________________________
John F. Golden
President and Chief Executive Officer
Date: November 16, 1998 /s/__________________________________
Andra K. Black
Executive Vice President and
Chief Financial Officer
17
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted from the
quarterly report on Form 10-QSB for the fiscal quarter ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-END> Sep-30-1998
<CASH> 9,162
<INT-BEARING-DEPOSITS> 1,479
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,680
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 68,888
<ALLOWANCE> 215
<TOTAL-ASSETS> 89,369
<DEPOSITS> 53,511
<SHORT-TERM> 284
<LIABILITIES-OTHER> 832
<LONG-TERM> 18,659
0
0
<COMMON> 9
<OTHER-SE> 16,074
<TOTAL-LIABILITIES-AND-EQUITY> 89,369
<INTEREST-LOAN> 1,484
<INTEREST-INVEST> 93
<INTEREST-OTHER> 129
<INTEREST-TOTAL> 1,706
<INTEREST-DEPOSIT> 744
<INTEREST-EXPENSE> 294
<INTEREST-INCOME-NET> 668
<LOAN-LOSSES> 9
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 493
<INCOME-PRETAX> 327
<INCOME-PRE-EXTRAORDINARY> 327
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
<YIELD-ACTUAL> 0
<LOANS-NON> 24
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 206
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 215
<ALLOWANCE-DOMESTIC> 215
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 215
</TABLE>
