SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
---------- ----------
SEC File Number 000-23230
-------------------------
PHS Bancorp, Inc.
-----------------
(Exact Name of registrant as specified in its charter)
PENNSYLVANIA 23-2744266
- ------------ ----------
(State or other jurisdiction of Employer (IRS Employer
incorporation or organization) Identification Number)
744 Shenango Road
P.O. Box 1568
Beaver Falls, Pennsylvania 15010
(724) 846 - 7300
--------------------------------
(Address, including zip code, and
telephone number, including area
code of Principal Executive Offices)
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 requirement for the past 90 days. Yes [X] No [ ]
As of May 8, 2000 there were 2,613,738 shares outstanding of the issuer's class
of common stock.
<PAGE>
PHS BANCORP, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
Page
Number
------
Part I Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet (unaudited) as of March 31, 2000
and December 31, 1999 3
Consolidated Statement of Income (unaudited) for the Three
Months ended March 31, 2000 and 1999 4
Consolidated Statement of Changes in Stockholders' Equity
(unaudited) for the Three Months ended March 31, 2000 5
Consolidated Statement of Cash Flows (unaudited) for the
Three Months ended March 31, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 13
Part II Other Information 14
Signatures 15
2
<PAGE>
PHS BANCORP, INC.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------- --------------
<S> <C> <C>
ASSETS
Cash and amounts due from other institutions $ 1,759,938 $ 3,533,452
Interest - bearing deposits with other institutions 4,629,776 11,416,781
Investment securities:
Available for sale 28,569,433 27,594,897
Held to maturity (market value $ 18,198,331
and $15,268,634) 18,441,146 15,539,866
Mortgage - backed securities:
Available for sale 40,683,864 37,426,028
Held to maturity (market value $ 41,490,774
and $42,263,705) 43,255,445 44,141,386
Loans (net of allowance for loan losses of $1,396,163
and $1,359,900) 121,134,276 118,745,043
Accrued interest receivable 1,656,464 1,538,163
Premises and equipment 4,218,693 4,295,194
Federal Home Loan Bank stock 2,614,800 2,614,885
Other assets 1,732,555 1,794,646
-------------- --------------
TOTAL ASSETS $ 268,696,390 $ 268,640,341
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 194,808,977 $ 189,344,552
Advances from Federal Home Loan Bank 44,294,800 50,294,800
Other borrowings 109,063 120,039
Accrued interest payable and other liabilities 2,362,754 2,129,613
-------------- --------------
Total liabilities 241,575,594 241,889,004
-------------- --------------
Preferred stock, 2,000,000 shares authorized, none issue - -
Common stock, $.10 par value 8,000,000 shares authorized
2,760,000 shares issued 276,000 276,000
Additional paid in capital 10,523,665 10,541,960
Retained earnings - substantially restricted 19,793,037 19,496,887
Accumulated other comprehensive loss (714,255) (914,110)
Unallocated ESOP shares (65,460 and 67,860 shares) (1,029,198) (1,066,503)
Unallocated RSP shares (24,536 and 27,330 shares) (282,167) (314,295)
Treasury stock, at cost (146,262 and 124,000 shares) (1,446,286) (1,268,602)
-------------- --------------
Total stockholders' equity 27,120,796 26,751,337
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 268,696,390 $ 268,640,341
============== ==============
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
3
<PAGE>
PHS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
2000 1999
------------ --------------
<S> <C> <C>
INTEREST AND DIVIDEND INCOME
Loans $2,392,679 $2,062,438
Investment securities:
Taxable 512,899 458,833
Exempt from federal income tax 266,058 233,453
Mortgage - backed securities 1,442,976 1,364,007
Interest - bearing deposits with other institutions 46,010 59,784
---------- ----------
Total interest income 4,660,622 4,178,515
---------- ----------
INTEREST EXPENSE
Deposits 1,887,772 1,708,467
Advances from Federal Home Loan Bank 626,763 461,028
Other borrowings 1,398 25,812
---------- ----------
Total interest expense 2,515,933 2,195,307
---------- ----------
Net interest income 2,144,689 1,983,208
PROVISION FOR LOAN LOSSES 115,000 95,000
---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 2,029,689 1,888,208
---------- ----------
NONINTEREST INCOME
Service charges on deposit accounts 119,678 98,663
Investment securities gains, net -- --
Rental income, net 19,216 22,305
Other income 42,176 36,745
---------- ----------
Total noninterest income 181,070 157,713
---------- ----------
NONINTEREST EXPENSE
Compensation and employee benefits 808,678 821,603
Occupancy and equipment costs 286,080 297,375
Deposit insurance premium 9,698 26,573
Data processing costs 78,974 84,149
Other expenses 304,481 300,818
---------- ----------
Total noninterest expense 1,487,911 1,530,518
---------- ----------
Income before income taxes 722,848 515,403
Income taxes 192,100 129,747
---------- ----------
NET INCOME $ 530,748 $ 385,656
========== ==========
Earnings Per Share
Basic $ 0.21 $ 0.15
Diluted $ 0.21 $ 0.15
Weighted average number of shares outstanding
Basic 2,536,898 2,648,697
Diluted 2,536,898 2,655,168
</TABLE>
See accompanying notes to the unaudited consolidated financial statements
4
<PAGE>
PHS BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Accumulated
Additional Other Unallocated Unallocated Total Compre-
Common Paid in Retained Comprehensive ESOP RSP Treasury Stockholders' hensive
Stock Capital Earnings Income (Loss) Shares Shares Stock Equity Income
-------- ----------- ------------ ------------- ------------ ------------ ----------- -------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December
31, 1999 $276,000 $10,541,960 $19,496,887 $(914,110) $(1,066,503) $(314,295) $(1,268,602) $26,751,337
Net Income 530,748 530,748 $530,748
Other
comprehensive
income:
Unrealized gain
on available
for sale
securities,
net of tax
of $102,955 199,855 199,855 199,855
--------
Comprehensive
income $730,603
========
Cash dividends
paid (234,598) (234,598)
Treasury stock
purchased,
at cost (177,684) (177,684)
ESOP shares
earned (18,295) 37,305 19,010
RSP shares
earned 32,128 32,128
-------- ------------ ----------- ------------- ------------ ----------- ------------ -----------
Balance,
March
31, 2000 $276,000 $10,523,665 $19,793,037 $(714,255) $(1,029,198) $(282,167) $(1,446,286) $27,120,796
======== ============ =========== ============= ============ =========== ============ ===========
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
5
<PAGE>
PHS BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
2000 1999
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $530,748 $385,656
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 115,000 95,000
Depreciation, amortization and accretion 136,077 129,179
Amortization of discounts, premiums and
loan origination fees 242,869 147,826
Gains on sale of investment securities, net - -
Increase in loans held for sale - (21,934)
Increase in accrued interest receivable (118,301) (118,698)
Increase in accrued interest payable 58,025 86,057
Amortization of ESOP unearned compensation 19,010 30,168
Amortization of RSP unearned compensation 32,128 32,128
Other, net 21,804 85,134
------------ ------------
Net cash provided by operating activities 1,037,360 850,516
------------ ------------
INVESTING ACTIVITIES
Investment and mortgage-backed securities available for sale:
Proceeds from sales - -
Proceeds from maturities and principal repayments 2,875,685 3,897,001
Purchases (6,779,468) (6,445,406)
Investment and mortgage-backed securities held to maturity:
Proceeds from maturities and principal repayments 942,556 9,504,596
Purchases (2,963,389) (16,943,823)
Increase in loans receivable, net (2,749,175) (2,561,749)
Proceeds from sale of repossessed assets 94,321 56,390
Purchase of premises and equipment, net (59,576) (11,378)
Purchase of Federal Home Loan Bank Stock - (300,000)
------------ ------------
Net cash used for investing activities (8,639,046) (12,804,369)
------------ ------------
FINANCING ACTIVITIES
Net increase in deposits 5,464,425 2,325,580
Advances from Federal Home Loan Bank - 5,000,000
Repayment of short term Advances from Federal Home Loan Bank (6,000,000) -
Repayment of other borrowings (10,976) (24,428)
Common stock acquired by RSP - (506,502)
Cash dividends paid (234,598) (193,200)
Treasury stock purchased (177,684) -
------------ ------------
Net cash provided by (used for) financing activities (958,833) 6,601,450
------------ ------------
Decrease in cash and cash equivalents (8,560,519) (5,352,403)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,950,233 11,468,820
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $6,389,714 $6,116,417
============ ============
</TABLE>
See accompanying notes to the unaudited consolidated financial statements.
6
<PAGE>
PHS Bancorp, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements of PHS Bancorp, Inc. (the "Company)
include it's wholly-owned subsidiary, Peoples Home Savings Bank (the "Bank") and
the Bank's wholly-owned subsidiary, HOMECO (the "Subsidiary"). All significant
intercompany balances and transactions have been eliminated. The Company's
business is conducted principally through the Bank.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with instructions to Form 10-Q and, therefore, do not necessarily
include all information which would be included in audited financial statements.
The information furnished reflects all normal recurring adjustments which are,
in the opinion of management, necessary for the fair statement of the results of
the period. The results of operations for the interim periods are not
necessarily indicative of the results to be expected for the full year or any
other period. The unaudited consolidated financial statements should be read in
conjunction with Form 10-K for the year ended December 31, 1999.
NOTE 2 - EARNINGS PER SHARE
The Company provides dual presentation of basic and diluted earnings per share.
Basic earnings per share utilizes net income as reported as the numerator, and
the actual average shares outstanding as the denominator. Diluted earnings per
share includes any dilutive effects of options, warrants, and convertible
securities.
Shares outstanding do not include ESOP shares that were purchased and
unallocated in accordance with SOP 93-6, "Employers' Accounting for Stock
Ownership Plans."
7
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Private Securities Litigation Act of 1995 contains safe harbor provisions
regarding forward-looking statements. When used in this discussion, the words
"believes", "anticipates", "contemplates", "expects", and similar expressions
are intended to identify forward-looking statements. Such statements are subject
to certain risks and uncertainties which could cause actual results to differ
materially from those projected. Those risks and uncertainties include changes
in interest rates, risks associated with the effect of opening a new branch, the
ability to control costs and expenses, year 2000 issues, and general economic
conditions. The Company undertakes no obligation to publicly release the results
of any revisions to those forward looking statements which may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
Financial Condition
Total assets at March 31, 2000 of $268.7 million, remained relatively unchanged
from December 31, 1999, however, the components of total assets changed, as
follows. Increases in investment and mortgage-backed securities of $6.2 million
and loans receivable of $2.4 million were offset by a decreases in cash of $ 1.8
million and interest-bearing deposits of $6.8 million.
Loans receivable at March 31, 2000, of $121.1 million represented an increase of
2.0% from $118.7 million at December 31, 1999. The growth in the loan portfolio
was primarily attributable to increases in municipal loans.
Investment and mortgage-backed securities increased $6.2 million to $130.9
million at March 31, 2000, from $124.7 million at December 31, 1999. This
increase was the result of purchases of $9.7 million, maturities of $2.0
million, and principal repayments of $1.8 million.
Total deposits after interest credited at March 31, 2000 were $194.8 million, an
increase of $5.5 million or 2.9% from $189.3 million at December 31, 1999.
Advances from the Federal Home Loan Bank of Pittsburgh decreased $6.0 million to
$44.3 million at March 31, 2000 from $50.3 million at December 31, 1999. This
decrease was the result of the repayment of short term advances which were used
for year 2000 liquidity purposes at year end.
Stockholders' equity increased $370,000 for the three month period ended March
31, 2000. This increase was due to net income of $531,000 and decreases in
accumulated other comprehensive losses and unallocated ESOP and RSP shares of
$200,000, 37,000 and $32,000 respectively. These increases to stockholders'
equity were partially offset by an increase in treasury stock of $177,000 and
cash dividends paid of $235,000.
The decrease in other comprehensive accumulated loss resulted from the
fluctuation in market value of the Company's investment in securities and
mortgage-backed securities available for sale ("the available for sale
portfolio"). Because of interest rate volatility, accumulated other
comprehensive loss and shareholders' equity could materially fluctuate for each
interim period and year-end period. The decrease in market value of the
available for sale portfolio is considered temporary in nature and will not
affect the Company's net income unless the securities are sold. The Company
currently plans to hold these securities until maturity or until the market
values of these securities increase. Accordingly, the
8
<PAGE>
Company does not expect, though there is no assurance, that its investment in
these securities will affect net income in future periods.
9
<PAGE>
Results of Operations
Comparison of Operating Results for the Three Months Ended March 31, 2000 and
March 31, 1999.
General.
Net income for the three months ended March 31, 2000 increased by $145,000 to
$531,000, from $386,000 for the three months ended March 31, 1999. This increase
was primarily due to an increases in net interest income of $162,000 and
non-interest income of $23,000 coupled with a decrease in non-interest expense
of $43,000. These increases to net income were partially offset by increases in
loan loss and income tax provisions of $20,000 and $62,000, respectively.
Net Interest Income.
Reported net interest income increased $162,000 or 8.2% for the three months
ended March 31, 2000. Net interest income on a tax equivalent basis increased by
$179,000 or 8.5% in a period when both average interest earning assets and
average interest-bearing liabilities increased (increased $18.1 million and
$20.5 million, respectively). The Company's net interest rate spread increased 8
basis points (with 100 basis points being equal to 1%) to 3.22% for the three
months ended March 31, 2000. The increase in average earning assets of $18.1
million was primarily due to a $17.8 million increase in average loans.
Interest Income.
Interest income on a tax equivalent basis totaled $4.8 million for the three
months ended March 31, 2000, an increase of $500,000 or 11.6% over the total of
$4.3 million for the three months ended March 31, 1999. This increase was mainly
due to an increase in the Company's average interest-earning assets of $18.1
million for the three months ended March 31, 2000. Interest earned on loans
increased $331,000 or 16.1%, in 2000. The increase was due to a $17.1 million
increase in the average balance of loans, partially offset by an 11 basis point
decrease in the yield earned. Interest earned on investment and mortgage-backed
securities (including securities held for sale) increased $169,000 or 7.6%, in
2000. The increase was due to a $0.3 million increase in the average balance of
investment and mortgage-backed securities coupled with a 48 basis point increase
in the yield earned.
Interest Expense.
Interest expense increased $321,000 to $2.5 million for the three months ended
March 31, 2000. The increase in interest expense was due to a $20.5 million
increase in the average balance of interest-bearing liabilities primarily due to
increased deposits of $ 10.7 million and increased borrowings of $ 9.8 million
pursuant to the Bank's leverage strategy coupled with a 19 basis point increase
in the average cost of interest-bearing liabilities to 4.25%.
10
<PAGE>
Provision for Losses on Loans.
The provision for loan losses increased by $20,000 to $115,000 for the three
months ended March 31, 2000, from $95,000 for the three months ended March 31,
1999. See "Risk Elements". Management continually evaluates the adequacy of the
allowance for loan losses, which encompasses the overall risk characteristics of
the various portfolio segments, past experience with losses, the impact of
economic conditions on borrowers and other relevant factors which may come to
the attention of management. Although the Company maintains its allowance for
loan losses at a level that it considers adequate to provide for the inherent
risk of loss in its loan portfolio, there can be no assurance that future losses
will not exceed estimated amounts or that additional provisions for losses will
not be required in future periods.
Non-interest Income.
Total non-interest income increased $23,000 to $181,000 for the three months
ended March 31, 2000, from $158,000 for the three months ended March 31, 1999.
This increase was primarily due to increased service charges on deposit accounts
of $21,000, due to increases in fees which commenced in the third quarter of
1999 coupled with an increase in the number of transaction accounts.
Non-interest Expense.
Non-interest expense decreased $43,000 to $1,488,000 for the three months ended
March 31, 2000, from $1,531,000 for the three months ended March 31, 1999. This
decrease was primarily due to decreases in compensation and employee benefits of
$13,000, occupancy and equipment costs of $ 11,000 and deposit insurance
premiums of $17,000 for the three months ended March 31, 2000, due to the
Federal Deposit Insurance Corporation's assessment rate change in January 2000.
Income Tax Expense.
Income tax expense increased $62,000 to $192,000 for the three months ended
March 31, 2000, from $130,000 for the three months ended March 31, 1999.
Liquidity and Capital Requirements
Liquidity refers to the Company's ability to generate sufficient cash to meet
the funding needs of current loan demand, savings deposit withdrawals, and to
pay operating expenses. The Company has historically maintained a level of
liquid assets in excess of regulatory requirements. Maintaining a high level of
liquid assets tends to decrease earnings, as liquid assets tend to have a lower
yield than other assets with longer terms (e.g. loans). The Company adjusts
liquidity as appropriate to meet its asset/liability objectives.
The Company's primary sources of funds are deposits, amortization and prepayment
of loans and mortgage-backed securities, maturities of investment securities and
funds provided from operations. While scheduled loan and mortgage-backed
securities repayments are a relatively predictable source of funds, deposit
flows and loan and mortgage-backed securities prepayments are greatly influenced
by interest rates, economic conditions and competition. In addition, the Company
invests excess funds in overnight deposits, which provide liquidity to meet
lending requirements
The primary activity of the Company is originating loans and purchasing
investment and mortgage-backed securities. During the three month periods ended
March 31, 2000, and 1999, the Company originated loans in the amounts of $14.4
and $13.7 million, respectively. The Company also purchases investment and
mortgage-backed securities to invest excess liquidity and to supplement local
loan
11
<PAGE>
demand. During the three month periods ended March 31, 2000, and 1999, the
Company purchased investment and mortgage-backed securities in the amounts of
$9.7 and $23.4 million, respectively.
The Company has other sources of liquidity if a need for additional funds
arises, such as FHLB of Pittsburgh advances. At March 31, 2000 the Bank had
borrowed $44.3 million of it's $133.5 million maximum borrowing capacity with a
remaining borrowing capacity of approximately $89.2 million. Additional sources
of liquidity can be found in the Company's balance sheet, such as investment
securities and unencumbered mortgage-backed securities that are readily
marketable. Management believes that the Company has adequate resources to fund
all of its commitments.
At March 31, 2000, the Bank's Tier I risk-based and total risk-based capital
ratios were 21.6% and 22.7%, respectively. Current regulations require Tier I
risk-based capital of 6% and total risk - based capital of 10% risk-based assets
to be considered well capitalized. The Bank's leverage ratio was 10.1% at March
31, 2000. Current regulations require a leveraged ratio 5% to be considered well
capitalized.
12
<PAGE>
Risk Elements
Nonperforming Assets
The following schedule presents information concerning nonperforming assets
including nonaccrual loans, loans 90 days or more past due, and other real
estate owned at March 31, 2000 and December 31, 1999. A loan is classified as
nonaccrual when, in the opinion of management, there are serious doubts about
collectibility of interest and principal. At the time the accrual of interest is
discontinued, future income is recognized only when cash is received.
March 31, December 31
2000 1999
---- ----
(Dollars in Thousands)
Loans on nonaccrual basis $ 437 $ 424
Loans past due 90 days or more 76 73
----- -----
Total non-performing loans 513 497
----- -----
Real estate owned 13 0
----- -----
Total non-performing assets $ 526 $ 497
===== =====
Total non-performing loans to total loans 0.42% 0.42%
===== =====
Total non-performing loans to total assets 0.19% 0.19%
===== =====
Total non-peforming assets to total assets 0.20% 0.19%
===== =====
The allowance for loan losses was 265.4% of total non-performing assets at March
31, 2000 and 273.4% at December 31, 1999.
13
<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in rights of the Company's Security holders.
None.
Item 3. Defaults by the Company on its senior securities.
None.
Item 4. Results of Votes of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8 - K.
(a) The following exhibits are filed as part of this report.
3.1 Articles of Incorporation of PHS Bancorp, Inc. *
3.2 Bylaws of PHS Bancorp, Inc. *
10.1 Amended employment agreement between Peoples Home Savings Bank and
James P. Wetzel, Jr. *
10.2 1998 Restricted Stock Plan *
10.3 1998 Stock Option Plan *
27.0 Financial Data Schedule (in electronic filing only)
99.0 Review Report of S.R. Snodgrass , A.C.
(b) Reports on Form 8 - K.
None.
- ---------------------------
* Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended September 30, 1998 and filed with the Securities and
Exchange Commission on November 13, 1998.
** Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the Quarter Ended June 30, 1999 and filed with the Securities and Exchange
Commission on July 23, 1999.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 11, 2000
PHS Bancorp, Inc.
- -----------------
(Registrant)
By: /s/ James P. Wetzel, Jr.
-------------------------------------------
James P. Wetzel, Jr.
President and Chief Executive Officer
By: /s/ Richard E. Canonge
-------------------------------------------
Richard E. Canonge
Chief Financial Officer and Treasurer
15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,760
<INT-BEARING-DEPOSITS> 4,630
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 69,253
<INVESTMENTS-CARRYING> 61,697
<INVESTMENTS-MARKET> 59,689
<LOANS> 121,134
<ALLOWANCE> 1,396
<TOTAL-ASSETS> 268,696
<DEPOSITS> 194,809
<SHORT-TERM> 5,000
<LIABILITIES-OTHER> 2,363
<LONG-TERM> 39,404
0
0
<COMMON> 276
<OTHER-SE> 26,845
<TOTAL-LIABILITIES-AND-EQUITY> 268,696
<INTEREST-LOAN> 2,393
<INTEREST-INVEST> 2,222
<INTEREST-OTHER> 46
<INTEREST-TOTAL> 4,661
<INTEREST-DEPOSIT> 1,888
<INTEREST-EXPENSE> 2,516
<INTEREST-INCOME-NET> 2,145
<LOAN-LOSSES> 115
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 723
<INCOME-PRE-EXTRAORDINARY> 723
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 531
<EPS-BASIC> 0.21
<EPS-DILUTED> 0.21
<YIELD-ACTUAL> 3.55
<LOANS-NON> 437
<LOANS-PAST> 76
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,360
<CHARGE-OFFS> 84
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 1,396
<ALLOWANCE-DOMESTIC> 1,396
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
EXHIBIT 99
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
Board of Directors and Stockholders
PHS Bancorp, Inc.
We have reviewed the accompanying consolidated balance sheet of PHS Bancorp,
Inc. and subsidiary as of March 31, 2000, and the related consolidated
statements of income and cash flows for the three-month periods ended March 31,
2000 and 1999, and the consolidated statement of changes in stockholders' equity
for the three-month period ended March 31, 2000. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for the year then ended (not presented herein); and in our report
dated January 28, 2000 we expressed an unqualified opinion on those consolidated
financial statements.
/s/S.R. Snodgrass, A.C.
Wexford, PA
May 5, 2000
