<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 25049
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-----------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------------ --------------------
Commission File Number 0-22734
-------
KS BANCORP, INC.
----------------
(Exact name of registrant as specified in its charter)
North Carolina 56-184270
-------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
207 West Second Street
P. O. Box 219
Kenly, North Carolina 27542
---------------------------
(Address of principal executive office) (Zip code)
(919)-284-4157
--------------
(Registrant's telephone number)
N/A
---
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check [X] whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and 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 [ ]
As of August 1, 1996 there were issued and outstanding 663,263 shares of the
Registrant's common stock, no par value.
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Pages
-----
<S> <C>
Item 1. Financial Statements
Consolidated statements of financial
condition at June 30, 1996
(Unaudited) and December 31, 1995 1-2
Consolidated statements of income for
the three months ended June 30, 1996
and June 30, 1995 (Unaudited) 3
Consolidated statements of income for
the six months ended June 30, 1996 and
June 30, 1995 (Unaudited) 4
Consolidated statements of cash flows
for the six months ended June 30, 1996
and June 30, 1995 (Unaudited) 5-6
Notes to consolidated financial
statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a
Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1996 1995
- ------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Cash and short-term cash investments:
Interest-bearing $ 3,448,064 $ 3,707,373
Noninterest-bearing 448,281 376,041
Investment securities:
Held to maturity, at cost 2,490,644 2,302,701
Available for sale, at fair value 6,057,101 7,093,610
FHLB stock and other nonmarketable
equity securities 752,200 752,200
Mortgage-backed securities, held to
maturity, at cost 1,556,153 1,876,157
Loans receivable, net 76,453,592 70,098,830
Accrued interest receivable:
Loans 448,557 388,214
Investment securities 96,430 109,713
Property and equipment, net 1,468,496 1,254,374
Real estate held for sale 214,647 214,647
Prepaid expenses and other assets 101,887 58,582
Refundable income taxes -- 41,783
---------------------------------------
TOTAL ASSETS $ 93,536,052 $ 88,274,225
=======================================
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
- -------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Liabilities:
Deposits $75,989,574 $70,737,836
Advances from Federal Home Loan Bank 3,000,000 3,000,000
Accounts payable and accrued expenses 147,619 126,738
Advance payments by borrowers for
taxes and insurance 71,834 51,576
Deferred income taxes 482,679 494,357
Income taxes payable 9,019 --
--------------------------
TOTAL LIABILITIES 79,700,725 74,410,507
--------------------------
Stockholders' equity:
Preferred stock, no par value,
authorized 5,000,000 shares;
none issued -- --
Common stock, no par value, authorized
20,000,000 shares; issued 663,263
shares in 1996 and 683,263 in 1995 -- --
Additional paid-in capital 5,142,190 5,495,371
Note receivable, ESOP (312,000) (312,000)
Unrealized gain on securities 338,940 360,795
available for sale, net of tax effect
Retained earnings, substantially
restricted 8,666,197 8,319,552
--------------------------
TOTAL STOCKHOLDERS' EQUITY 13,835,327 13,863,718
--------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $93,536,052 $88,274,225
==========================
</TABLE>
See Notes to Consolidated Financial Statements.
2
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C>
Interest and dividend income:
Loans $ 1,659,623 $ 1,485,292
Investment securities 142,297 171,902
Mortgage-backed securities 28,128 30,051
Interest-bearing deposits 24,413 14,781
-------------------------------
TOTAL INTEREST INCOME 1,854,461 1,702,026
Interest expense:
Deposits 931,061 817,391
Borrowings 48,966 25,864
-------------------------------
TOTAL INTEREST EXPENSE 980,027 843,255
-------------------------------
NET INTEREST INCOME 874,434 858,771
Provision for loan losses 2,000 5,000
-------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 872,434 853,771
Other income 32,360 23,700
-------------------------------
904,794 877,471
-------------------------------
Noninterest expense:
Compensation and employee benefits 253,757 227,931
Occupancy 18,098 24,284
Equipment maintenance and expense 15,473 14,025
Data processing and outside service fees 38,191 35,247
Insurance 43,320 43,407
Other 79,361 66,435
-------------------------------
448,200 411,329
-------------------------------
INCOME BEFORE INCOME TAXES 456,594 466,142
-------------------------------
Income taxes:
Current 153,797 143,897
Deferred 11,125 16,313
-------------------------------
164,922 160,210
-------------------------------
NET INCOME $ 291,672 $ 305,932
===============================
Primary earnings per share $ 0.42 $ 0.41
===============================
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C>
Interest and dividend income:
Loans $ 3,247,655 $ 2,891,328
Investment securities 291,603 329,910
Mortgage-backed securities 53,728 58,753
Interest-bearing deposits 47,804 29,850
-------------------------------
TOTAL INTEREST INCOME 3,640,790 3,309,841
Interest expense:
Deposits 1,834,179 1,536,268
Borrowings 93,785 45,274
-------------------------------
TOTAL INTEREST EXPENSE 1,927,964 1,581,542
-------------------------------
NET INTEREST INCOME 1,712,826 1,728,299
Provision for loan losses 42,000 7,000
-------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,670,826 1,721,299
Other income 66,970 39,792
-------------------------------
1,737,796 1,761,091
-------------------------------
Noninterest expense:
Compensation and employee benefits 508,388 443,618
Occupancy 39,013 39,781
Equipment maintenance and expense 30,576 29,255
Data processing and outside service fees 76,267 67,300
Insurance 87,283 86,815
Other 162,420 155,807
-------------------------------
903,947 822,576
-------------------------------
INCOME BEFORE INCOME TAXES 833,849 938,515
-------------------------------
Income taxes:
Current 291,696 301,437
Deferred 1,720 34,156
-------------------------------
293,416 335,593
-------------------------------
NET INCOME $ 540,433 $ 602,922
===============================
Primary earnings per share $ 0.78 $ 0.80
===============================
</TABLE>
4
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 540,433 $ 602,922
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 36,100 19,955
Deferred income taxes 1,720 34,156
Loss on sale of investment securities 7,169 17,401
Provision for loan losses 42,000 7,000
Gain on sale of REO - (7,929)
ESOP compensation expense credited
to paid-in capital 16,819 11,823
Changes in assets and liabilities:
(Increase) decrease in:
Accrued interest receivable (47,060) (4,298)
Prepaid expenses and other assets (43,305) (44,700)
Refundable income taxes 41,783 (7,425)
Increase (decrease) in:
Accrued expenses and other
liabilities 20,881 129,131x
Income taxes payable 9,019 -
-----------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 625,559 758,036
-----------------------------
Cash Flows From Investing Activities
Proceeds from maturities of investments 1,800,000 300,000
Proceeds from sale of investments
available for sale 497,500 1,233,126
Purchase of investments (1,482,154) (502,344)
Principal repayments of MBS's 308,440 56,086
Mortgage loans, net (6,396,762) (4,878,203)
Proceeds from sale of REO - 63,326
Purchase of property and equipment (247,860) (356,663)
-----------------------------
NET CASH USED IN INVESTING
ACTIVITIES (5,520,836) (4,084,672)
-----------------------------
</TABLE>
5
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Financing Activities
Net increase in deposits $ 5,251,738 $ 2,497,451
Advance from Federal Home Loan Bank - 2,000,000
Increase in advance payments by borrowers
for taxes and insurance 20,258 26,117
Cash dividends paid (193,788) (142,933)
Repurchase of common stock (370,000) (418,908)
------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,708,208 3,961,727
------------------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (187,069) 635,091
Cash and cash equivalents:
Beginning 4,083,414 2,638,510
------------------------------
Ending $ 3,896,345 $ 3,273,601
==============================
Supplemental Disclosures of Cash Flow
Information
Cash payments for:
Interest $ 1,929,576 $ 1,582,131
==============================
Income taxes $ 247,868 $ 302,195
==============================
Cash and cash equivalents:
Cash and short-term investments:
Interest-bearing $ 3,448,064 $ 2,885,423
Noninterest-bearing 448,281 388,178
------------------------------
$ 3,896,345 $ 3,273,601
==============================
</TABLE>
See Notes to Consolidated Financial Statements.
6
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- -----------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements (except for the
statement of financial condition at December 31, 1995, which is audited) have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (none of
which were other than normal recurring accruals) necessary for a fair
presentation of the financial position and results of operations for the periods
presented have been included. The results of operations for the three and six
month periods ended June 30, 1996 are not necessarily indicative of the results
of operations that may be expected for the year ended December 31, 1996.
The accounting policies followed are as set forth in Note 1 of the Notes to
Consolidated Financial Statements in the 1995 KS Bancorp, Inc. annual report.
NOTE 2. ALLOWANCE FOR LOAN LOSSES
The Bank's allowance for loan losses increased by the related provisions charged
to operations of $2,000 and $42,000 during the three and six month periods
ended June 30, 1996, and $5,000 and $7,000 during the three and six month
periods ended June 30, 1995, respectively. The Bank did not incur any loan
charge-offs or recoveries during these periods. The allowance at June 30, 1996
is $274,867. The Bank's ratio of nonperforming assets to total assets at June
30, 1996 and 1995 was .52% and .24%, respectively.
NOTE 3. EARNINGS PER SHARE
KS Bancorp's earnings per share for the three and six month periods ended June
30, 1996 were based upon the weighted average number of 635,963 and 641,018
shares assumed to be outstanding for the periods, respectively. Earnings per
share for the three and six month periods ended June 30, 1995 were based upon
the weighted average number of 743,094 and 753,442 shares assumed to be
outstanding for the periods, respectively. Stock options had a dilutive effect
on earnings per share in the three and six month periods ended June 30, 1996 and
June 30, 1995. Earnings per share has been calculated in accordance with
Statement of Position 93-6 "Employers' Accounting for Employee Stock Ownership
Plans."
7
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
The following discussion and analysis is intended to assist readers in
understanding the results of operations and changes in financial position for
the quarter and six months ended June 30, 1996 of KS Bancorp, Inc. (the
Corporation) and its wholly owned subsidiary, Kenly Savings Bank, SSB (the
Bank). This overview should be read in conjunction with the consolidated
financial statements and supplemental financial data contained herein and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Corporation's 1995 annual report on form 10-K.
OVERVIEW OF FIRST QUARTER RESULTS:
Continuing the trend begun during the quarter ended March 31, 1996, total assets
increased by $3.7 million during the three month period ended June 30, 1996
primarily as a result of an increase in savings of $3.5 million. Earnings for
the period totaled approximately $292,000 which also caused total assets to
increase during the quarter. The increase in savings and earnings for the
period provided funds for the Bank's increase in mortgage loan activity.
Mortgage loans increased by $3.0 million during the three month period ended
June 30, 1996, building on the $3.3 million increase during the previous
quarter. The increase resulted primarily from an increase in loan originations
during the quarter brought about by a continued strong loan demand in the Bank's
primary lending areas. The Bank originated these loans for its portfolio.
Investment securities and short-term interest-bearing deposits increased by
approximately $325,000 during the three months ended June 30, 1996 after
decreasing by approximately $1.4 million during the previous quarter. The
portfolio, which amounted to $12.7 million at June 30, 1996, contains available
for sale securities with unrealized gains of $565,000 and unrealized losses of
$18,000, for a net unrealized gain of $547,000.
During the quarter ended June 30, 1996, the Corporation began construction on a
new branch facility in Kenly, North Carolina. Retail banking operations which
are conducted in the main office facility in Kenly will be transferred over to
this new branch location once it is completed, currently expected to be later
this fall. In addition, at the beginning of the current quarter, the Goldsboro
branch was opened as a full-service branch. It had previousily operated as a
loan origination facility.
The Corporation's annualized return on assets for the three and six month
periods ended June 30, 1996 1.27% and 1.19%, respectively. For the same periods
in 1995, the annualized return on assets was 1.42% for each period. The
Corporation's annualized return on equity for the three and six month periods
ended June 30, 1996 of 8.50% and 7.85%, respectively, compared to 8.26% and
8.22% for the same periods in 1995.
During the first quarter of 1996, the Corporation repurchased 20,000 shares of
its stock for a purchase price of $370,000 in accordance with a stock repurchase
plan authorized by the Corporation's Board of Directors. No further repurchases
were made during the quarter ended June 30, 1996. At June 30, 1996, the
Corporation was authorized to repurchase approximately 3,500 additional shares
of stock. During
8
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
each of the quarters ended March 31, 1996 and June 30, 1996, the Corporation
paid cash dividends of $0.15, amounting to approximately $98,000 and $95,000,
respectively. At June 30, 1996, the Corporation and the Bank's capital was
significantly in excess of regulatory capital requirements.
Net income for the three and six month periods ended June 30, 1996 and 1995 was
$291,672 ($.42 per share) and $540,433 ($.78 per share), respectively. Net
income for the comparable periods in 1995 was $305,932 ($.41 per share) and
$602,922 ($.80 per share), respectively. Net interest income for the three
month period ended June 30, 1996 was approximately $16,000 higher than the
comparable period of 1995, while net interest income for the six month period
ended June 30, 1996 was approximately $15,000 lower than the comparable period.
The insignificant changes in net interest income resulted from a higher net
interest rate spread during the periods in 1996 as compared to the same periods
in 1995 but on a lower level of net interest earning assets (average interest-
earning assets less interest-bearing liabilities). The Bank's interest rate
spread increased primarily because a greater percentage of its interest earning
assets in 1996 were comprised of higher yielding loans as compared to the same
periods in 1995 In addition, the Bank's interest earning assets, which typically
respond slower than more rate sensitive deposits to overall market interest rate
fluctuations, continued to adjust upward as rates began to stabilize at higher
levels during the first two quarters of 1996 as compared with the same quarters
in 1995. The Bank's cost of funds was not significantly higher during the first
two quarters of 1996 as compared with the same periods in 1995.
Noninterest expense increased by approximately $37,000 during the three month
period ended June 30, 1996 versus the comparable period in 1995 extending the
first quarter difference of $44,000 to $81,000 for the six month period. The
primary reason for the increase was due to increased levels of compensation and
other expenses associated with the operations of the branch office in Goldsboro,
North Carolina. This office was opened during the quarter ended March 31, 1995
as a loan origination office, and continued to function in this manner
throughout 1995. During the quarter ended March 31, 1996, renovations were
completed on a new replacement facility in Goldsboro which was opened as a full
service branch office.
ASSET QUALITY:
Nonperforming assets, which consist of nonaccrual loans and real estate acquired
through foreclosure, amounted to approximately $487,000 and $212,000 at June 30,
1996 and 1995, respectively. The ratio of nonperforming assets to total assets
at June 30, 1996 and 1995 was .52% and .24%, respectively. Due to the slightly
higher ratio of nonperforming assets to total assets and an increased balance of
loans outstanding, the Bank added $40,000 to its allowance for loan losses
during the quarter ended March 31, 1996 compared to $2,000 during the quarter
ended March 31, 1995. Additions to the allowance during the three months ended
June 30, 1996 and 1995 were $2,000 and $5,000, respectively. The Bank did not
charge-off any loans during the first six months of 1996. The balance of the
Bank's allowance for loan losses amounted to approximately $275,000 at June 30,
1996 and is considered adequate by management to absorb existing losses, either
known or inherent in the portfolio.
9
<PAGE>
KS BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
LIQUIDITY:
The term "liquidity" generally refers to an organization's ability to generate
adequate amounts of funds to meet its needs for cash. More specifically for
financial institutions, liquidity ensures that adequate funds are available to
meet deposit withdrawals, fund loan and capital expenditure commitments,
maintain reserve requirements, pay operating expenses, and provide funds for
debt service and other institutional commitments. Funds are primarily provided
through financial resources from operating activities, expansion of the deposit
base, borrowings, through the sale or maturity of investments, or maintenance of
shorter term interest-bearing deposits.
The Bank is required by regulations to maintain liquid assets, essentially cash,
short-term interest bearing deposits, substantially all investments, and
mortgage-backed securities, of at least 10% of total assets. A substantial
portion of the Bank's investment portfolio is classified as available for sale,
and liquidation of such portfolio, if need be, would not have accounting
implications on the Corporation's equity under SFAS No. 115. The Bank exceeded
such requirements at June 30, 1996 and management believes that the Bank's
liquidity is adequate to fund all outstanding commitments and other anticipated
cash needs.
CAPITAL RESOURCES AND ADEQUACY:
KS Bancorp, Inc's stockholders' equity was $13,835,327, or 14.79% of total
assets at June 30, 1996. As a state chartered stock savings bank, the Bank is
required to meet three separate capital standards as established by the Federal
Deposit Insurance Corporation and an additional capital requirement established
by the State Administrator of the Savings Institutions Division. The Bank was
substantially in excess of all such capital requirements at June 30, 1996.
10
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not engaged in any legal proceedings at the present
time. From time to time, the Bank is a party to legal proceedings
within the normal course of business wherein it enforces its
security interest in loans made by it, and other matters of a like
kind.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Not applicable
(b) Not applicable
11
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
KS BANCORP, INC.
Dated August 1, 1996 By: /s/ Harold T. Keen
------------------------------- -----------------------------
Harold T. Keen
President and CEO
Dated August 1, 1996 By: /s/ Helen B. Pollock
------------------------------- -----------------------------
Helen B. Pollock
Treasurer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 448,281
<INT-BEARING-DEPOSITS> 3,448,064
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 4,046,797
<INVESTMENTS-MARKET> 4,041,191
<LOANS> 76,728,459
<ALLOWANCE> 274,867
<TOTAL-ASSETS> 93,536,052
<DEPOSITS> 75,989,574
<SHORT-TERM> 3,000,000
<LIABILITIES-OTHER> 711,151
<LONG-TERM> 0
0
0
<COMMON> 5,142,190
<OTHER-SE> 8,693,137
<TOTAL-LIABILITIES-AND-EQUITY> 93,536,052
<INTEREST-LOAN> 3,247,655
<INTEREST-INVEST> 345,331
<INTEREST-OTHER> 47,804
<INTEREST-TOTAL> 3,640,790
<INTEREST-DEPOSIT> 1,834,179
<INTEREST-EXPENSE> 1,927,964
<INTEREST-INCOME-NET> 1,712,826
<LOAN-LOSSES> 42,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 903,947
<INCOME-PRETAX> 833,849
<INCOME-PRE-EXTRAORDINARY> 833,849
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 540,433
<EPS-PRIMARY> .78
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.27
<LOANS-NON> 487,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 232,867
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 274,867
<ALLOWANCE-DOMESTIC> 274,867
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
