SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
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 0-11026
SOUTHWEST NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1409649
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
111 SOUTH MAIN STREET
GREENSBURG, PENNSYLVANIA 15601
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (724)834-2310
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. [X] Yes [ ] No.
Indicate the number of shares outstanding of each of the issuer's
common stock, as of the latest practicable date.
Class Outstanding at August 12, 1998
Common Stock, $2.50 Par Value 3,043,738
<PAGE>
<TABLE>
SOUTHWEST NATIONAL CORPORATION
FORM 10-Q INDEX
FOR QUARTER ENDED JUNE 30, 1998
<CAPTION>
PAGE
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Southwest National Corporation and Subsidiary
Consolidated Statement of Income 1
Consolidated Balance Sheet 2
Consolidated Statement of Changes in
Shareholders' Equity 3
Consolidated Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6-8
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 9
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
</TABLE>
<TABLE>
SOUTHWEST NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in thousands, except per share amounts)
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1998 1997 1998 1997
- - ---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
$10,581 $10,654 Interest and fees on loans $21,293 $20,899
Interest on money market investments:
1 1 Interest bearing deposits with banks 2 4
455 102 Federal funds sold 881 361
Interest and dividends on investment
securities:
U.S. Treasury securities and
obligations of U.S. government
1,814 1,812 agencies and corporations 3,267 3,577
Obligations of states and political
265 290 subdivisions 523 575
546 861 Collateralized mortgage obligations 1,213 1,768
849 42 Other securities 894 83
- - --------------- ---------------
14,511 13,762 Total interesst income 28,073 27,267
INTEREST EXPENSE
5,284 5,251 Interest on deposits 10,522 10,375
Interest on securities sold under
59 55 agreements to repurchase 107 167
Interest on Federal Home Loan Bank
727 38 advances 800 121
- - --------------- ---------------
6,070 5,344 Total interest expense 11,429 10,663
- - --------------- ---------------
8,441 8,418 Net interest income 16,644 16,604
675 645 Provision for possible loan losses 1,350 1,095
- - --------------- ---------------
Net interest income after
provision for possible loan
7,766 7,773 losses 15,294 15,509
NONINTEREST INCOME
448 441 Trust income 924 827
856 659 Service charges on deposit accounts 1,649 1,239
Other service charges, commissions
146 162 and fees 299 328
107 87 Other income 188 238
- - --------------- ---------------
1,557 1,349 Total noninterest income 3,060 2,632
NONINTEREST EXPENSE
2,851 2,781 Salaries and employee benefits 5,738 5,625
466 500 Net occupancy expense 925 984
Equipment expenses and data
905 898 processing fees 1,784 1,709
190 178 Pennsylvania shares tax 381 355
23 25 FDIC insurance expense 47 48
1,631 1,219 Other expenses 3,216 2,561
- - --------------- --------------
6,066 5,601 Total noninterest expense 12,091 11,282
- - --------------- --------------
3,257 3,521 Income before income taxes 6,263 6,859
953 1,057 Income taxes 1,795 2,055
- - --------------- --------------
$2,304 $2,464 NET INCOME $4,468 $4,804
=============== ===============
Per basic share (based on 3,055,875
average common shares in 1998 and
3,108,569 in 1997)
$ 0.75 $0.80 Net income $1.46 $1.55
0.35 0.32 Cash dividends 0.70 0.64
<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>
<PAGE> 1
<TABLE>
SOUTHWEST NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(Unaudited
(in thousands)
<CAPTION>
June 30, December 31, June 30,
1998 1997 1997
--------- ------------ --------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $25,594 $22,391 $24,205
Money market investments:
Int. bearing deposits with banks 57 55 59
Federal funds sold 31,400 27,000 11,200
-----------------------------------
Total money market investments: 31,457 27,055 11,259
Investment securities:
Securities available for sale 243,250 109,287 139,991
Securities held to maturity
(market values: $34,723;
$49,625 and $56,155) 34,824 49,817 56,572
-----------------------------------
Total investment securities 278,074 159,104 196,563
Loans, net of unearned income of
$3; $15 and $57 489,527 515,434 496,497
Less: reserve for possible
loan losses (6,064) (6,166) (5,851)
----------------------------------
Loans, net 483,463 509,268 490,646
Bank premises and equipment 9,157 8,953 8,487
Other assets 13,661 12,471 12,474
----------------------------------
Total assets $841,406 $739,242 $743,634
===================================
LIABILITIES
Deposits
Noninterest bearing demand $111,572 $109,139 $109,306
NOW accounts 33,759 33,176 32,612
Savings 233,199 233,960 247,942
Time 267,106 265,590 255,869
----------------------------------
Total deposits 645,636 641,865 645,729
Securities sold under agreements
to repurchase 5,796 4,531 7,613
Federal Home Loan Bank borrowings 100,000 5,000 5,000
Other liabilities 5,958 5,357 4,594
----------------------------------
Total liabilities 757,390 656,753 662,936
SHAREHOLDERS EQUITY
Common stock ($2.50 par value)
Authorized 5,000,000 shares
Issued 3,180,787 shares 7,952 7,952 7,952
Surplus 31,760 31,760 31,760
Retained earnings 49,424 47,093 44,948
Treasury stock of 137,049;
115,877 and 97,345 shares, at cost (5,902) (4,840) (4,026)
Accumulated other comprehensive
income 782 524 64
----------------------------------
Total shareholders' equity 84,016 82,489 80,698
----------------------------------
Total liabilities and
shareholders' equity $841,406 $739,242 $743,634
===================================
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE 2>
<TABLE>
SOUTHWEST NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(in thousands)
<CAPTION>
Accumulated other Total
Common Retained Treasury Comprehensive comprehensive Shareholders'
stock Surplus earnings stock Income Income equity
------ ------- -------- -------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1997 $7,952 $31,760 $42,132 ($1,800) $ --- $120 $80,164
Comprehensive income:
Net income -- -- 4,804 -- 4,804 -- 4,804
Other comprehensive
income, net of tax
Unrealized losses on
securities -- -- -- -- (56) (56) (56)
-------------
Total comprehensive
income -- -- -- -- $ 4,748
=============
Cash dividends -- -- (1,988) -- -- (1,988)
Purchase of treasury
stock -- -- -- (2,226) -- (2,226)
------------------------------------ ----------------------------------
Balance at June 30,
1997 $7,952 $31,760 $44,948 ($4,026) $64 $80,698
==================================== ==================================
Balance at January 1,
1998 $7,952 $31,760 $47,093 ($4,840) $-- $524 $82,489
Comprehensive income:
Net income -- -- 4,468 -- 4,468 -- 4,468
Other comprehensive
income, net of tax
Unrealized gains on
securities -- -- -- -- 258 258 258
-----------
Total comprehensive
income -- -- -- -- $4,726
===========
Cash dividends -- -- (2,137) -- -- (2,137)
Purchase of treasury
stock -- -- -- (1,062) -- (1,062)
---------------------------------- --------------------------------
Balance at June 30,
1998 $7,952 $31,760 $49,424 ($5,902) $782 $84,016
=================================== ================================
Disclosure of reclassification amount (1997):
Unrealized holding gains (losses) arising during the period ($58)
Less: reclassification adjustment for losses included in net income 2
-------
Unrealized loss on securities ($56)
=======
Disclosure of reclassification amount (1998):
Unrealized holding gains (losses) arising during the period $259
Less: reclassification adjustment for losses included in net income (1)
=======
Unrealized gain on securities $258
=======
<FN>
See accompanying notes to consolidated financial statements
</FN>
</TABLE>
<PAGE 3>
<TABLE>
SOUTHWEST NATIONAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
<CAPTION>
Six months
ended June 30,
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $4,468 $4,804
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation 657 639
Provision for loan losses 1,350 1,095
Increase (decrease) from net interest
receivable/payable 112 (516)
Decrease (increase) in prepaid assets 7 (718)
Net decrease from other operating activities (130) (353)
------- -------
Net cash from operating activities 6,464 4,951
Cash flows from investing activities:
Proceeds from sales and maturities of inv.
securities available for sale 30,989 21,490
Purchase of investment securities
available for sale (164,588) (26,385)
Proceeds from maturities of inv.
securities held to maturity 14,995 5,495
Investment in limited partnerships (633) 0
Net (increase) decrease in loans 24,403 (8,535)
Net property and equipment expenditures (861) (1,037)
------- -------
Net cash used for investing activities (95,695) (8,972)
Cash flows from financing activities:
Net increase (decrease) in deposits 3,771) (5,599)
Net increase in securities sold under agr. to
repurchase 1,265 802
Proceeds from Federal Home Loan Bank advances 100,000 5,000
Repayment of Federal Home Loan Bank advances (5,000) (11,907)
Dividends paid (2,138) (1,988)
Purchase of treasury stock (1,062) (2,226)
-------- -------
Net cash from (used for) financing activities 96,836 (15,918)
-------- -------
Net change in cash and cash equivalents $ 7,605 ($19,939)
========= =======
Cash and cash equivalents at beginning of period $49,446 $55,403
Cash and cash equivalents at end of period 57,051 35,464
------- -------
Net change in cash and cash equivalents $ 7,605 ($19,939)
======= =========
Cash paid during the period for:
Interest $7,144 $7,425
Income taxes 2,134 2,182
<FN>
<F1>Transfers from loans to other real estate owned and other repossessions
totaled $1.063 million and $1.058 million in 1998 and 1997, respectively.
<F2>The Corporation has defined cash and cash equivalents as cash and due from
banks, certain interest bearing deposits with banks, and federal funds sold
with an original maturity of less than three months.
<F3>See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE> 4
SOUTHWEST NATIONAL CORPORATION
AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Significant accounting policies have not changed since the last
reporting period, except for the reporting of comprehensive income
which is discussed in Note 3.
Basis of Presentation
The accompanying unaudited consolidated financial statements of
Southwest National Corporation (the Corporation) include the accounts
of the Corporation and its wholly-owned subsidiary, Southwest National
Bank of Pennsylvania (the Bank). All significant intercompany
accounts and transactions have been eliminated in the consolidated
financial statements. Certain items previously reported have been
reclassified to conform with the current year's classifications. In
the opinion of management, all normal recurring adjustments necessary
for fair presentation of the financial position and results of
operations for the periods have been included.
2. Investment Securities
Investment securities are classified as follows: debt securities
that the Corporation has the positive intent and ability to hold to
maturity are classified as securities held to maturity and reported at
amortized cost; debt and equity securities bought and held principally
for the purpose of selling them in the near term are classified as
trading securities and reported at fair value, with unrealized gains
and losses included in the current period earnings; or debt and equity
securities not classified as either securities held to maturity or
trading securities are classified as securities available for sale and
reported at fair value, with unrealized gains and losses reported as a
separate component of other comprehensive income. A $782,000, net of
tax, unrealized gain on securities classified as available for sale at
June 30, 1998, was recorded as accumulated other comprehensive income .
3. Adoption of New Accounting Standards
On January 1, 1998, the Corporation adopted Statement of
Accounting Standards (FAS) No. 130 "Reporting Comprehensive Income."
FAS No. 130 requires reporting of comprehensive income by its
components and in total in the financial statements. Comprehensive
income is defined as the change in equity of a business enterprise
during a period from transactions and other events and circumstances
from nonowner sources. It includes all changes in equity during a
period except those resulting from investments by owners and
distributions to owners. Comprehensive income for the Corporation
includes net income and unrealized gains and losses on securities
available for sale. The adoption of this statement did not have a
material effect on the Corporation's financial position or results of
operations.
<PAGE>5
Part I. FINANCIAL INFORMATION (continued)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
FIRST SIX MONTHS OF 1998 COMPARED TO FIRST SIX MONTHS OF 1997
Net income for the first six months of 1998 was $4,468,000, a
decline of $336,000 (7.0%), compared to the same period of 1997.
Basic earnings per share declined to $1.46 in 1998 from $1.55 in 1997,
a 5.8% decrease. Return on average assets slipped to 1.16% for the
current period compared to 1.33% achieved in the same period last year.
Return on average equity also dropped settling at 11.09% for
the first six months of 1998, down from the 12.47% reported for the
first six months of 1997.
The decline in earnings is attributable to a higher provision for
loan losses and increased noninterest expense partially offset by
higher noninterest income.
Net interest income on a fully taxable equivalent basis amounted
to $17,053,000 for the first half of 1998, basically unchanged from
last year. Excluding the taxable equivalent adjustment, interest
income also was flat amounting to $16,644,000 for the period compared
to $16,604,000 registered in 1997. Average earning assets rose to
$732,550,000 for the period up $24,219,000 (3.4%) compared to the same
period in 1997. The net interest margin contracted to 4.66% in 1998
compared to the 4.80% achieved in 1997. The decline in the margin is
due primarily to slightly lower yields on earning assets coupled with
higher funding costs.
The provision for loan losses increased $255,000 (23.3%) compared
to last year. This rise is primarily the result of higher consumer
loan charge-offs in the indirect auto portfolio.
Noninterest income jumped $428,000 (16.3%) amounting to
$3,060,000 for the first six months of 1998. Service charges on
deposit accounts climbed $410,000 (33.1%) period to period. This rise
is the direct result of adjustments made to the fee structure based on
a comprehensive review conducted by management in 1997. Trust income
rose $97,000 (11.7%) as other income declined $50,000 compared to last
year.
Noninterest expense climbed $809,000 (7.2%) to $12,091,000 for
the first six months of 1998. Salaries and employee benefits rose
only $113,000 (2.0%) as higher salary expense and a reduction in the
deferral of expenses due to a changing loan mix were partially offset
by lower benefit costs. Other expenses increased to $3,216,000 for
the period up $655,000 (25.6%). Increases in several categories
contributed to this rise and included: professional fees $294,000
(related to costs associated with the Bank's ongoing organizational
and strategic development initiatives); marketing up $59,000 and
subscriptions and services up $56,000. Also, impacting the period to
period change in this category was an adjustment of $185,000 regarding
the initial recording of the supplies inventory as an asset in 1997.
At June 30, 1998 assets totaled $841,406,000 up $97,772,000
(13.1%) compared to June 30, 1997. During the same period, loans
slipped $6,970,000 (1.4%), while investment securities rose
$81,511,000 (41.5%). This increase in investment securities is the
result of the Corporation's strategic repositioning of its earning
asset mix to overcome the lack of loan growth and assure income
stability. Deposits were flat period to period as Federal Home Loan
Bank (FHLB) borrowings rose $95,000,000.
Shareholders' equity at June 30, 1998 reached $84,016,000 up
$3,318,000 (4.1%) over June 30, 1997. The other comprehensive income
component of shareholders' equity includes an unrealized gain on
securities net of tax of $782,000 and $64,000 at June 30, 1998 and
June 30, 1997 respectively. Total capital as a percentage of risk-weighted
assets was 18.26% up from the 17.52% at June 30, 1997. The corporation's
leverage capital ratio declined to 10.43% at June 30, 1998.
The reserve for loan losses totaled $6,064,000 at June 30, 1998
up $213,000 (3.6%) from June 30, 1997. Nonperforming assets rose to
$3,019,000 at June 30, 1998 from $2,347,000 at June 30, 1997 due
primarily to a higher level of nonaccrual loans, up $560,000 in the
current period. Loans past due 90 days or more also rose totaling
$2,167,000 compared to $1,350,000 for the prior period. The ratio of
nonperforming loans to loans was 0.55% at June 30, 1998, up
<PAGE>6
from 0.43% at June 30, 1997. Net charge-offs increased to $1,452,000 from
$1,154,000 and is the result of increased consumer loan charge-offs in the
indirect automobile portfolio. Credit concerns peaked in the fourth
quarter of 1997, but the trend has generally been positive and improving
over the first six months of 1998.
The Bank has identified several internal sources available for
liquidity management. First and foremost is the Bank's core deposit
base, consisting of deposits from customers with long-standing
relationships with the Bank. Substantial internal funding can also be
derived from the Bank's investment portfolio. The portfolio provides
liquidity through the sale of available for sale securities and
cash flows derived from maturities. In addition to internal funding
sources, the Bank has numerous external funding sources. These
sources provide ample funding to meet short and long-term needs.
The Corporation is subject to a number of asserted and
unasserted potential claims encountered in the normal course of
business. In the opinion of management and legal counsel, the
resolution of these claims is not expected to have a material effect
on the Corporation's financial position, liquidity or results of
operations.
YEAR 2000 UPDATE
The Corporation is aware of the issues associated with the programming
code in existing computer systems as the millennium, "year 2000," approaches.
A team comprised of representatives from all areas of the organization has
conducted a comprehensive review of the Corporation's computer systems. All
systems that could be affected by year 2000 issues have been identified and
implementation plans have been developed to address those issues. The
Corporation relies on external processing vendors for all of its core data
processing requirements. These vendor's systems are scheduled to be renovated
or replaced during 1998 with testing to be completed by December 31, 1998. A
contingency plan is being developed to address potential failures by critical
suppliers and service providers to minimize vulnerability to those parties
failure to remediate their own year 2000 issues. This plan is targeted for
completion by September 30, 1998. Although the Corporation's estimates for
total year 2000 project costs and estimated times for completion are subject
to certain risks and uncertainties, as of June 30, 1998, the Corporation
estimates that expenditures for year 2000 issues will not have a material
impact on the Corporation's financial condition or results of operations.
SECOND QUARTER 1998 COMPARED TO SECOND QUARTER 1997
Net income for the second quarter of 1998 declined to $2,304,000,
a $160,000 (6.5%) decrease under the same period last year. Basic
earnings per share were $0.75 in 1998 compared to $0.80 in 1997, a
6.3% decrease. The decrease in earnings period-to-period primarily
resulted from higher noninterest expense up $465,000 (8.3%) partially
offset by improved noninterest income up $208,000 (15.4%).
Net interest income on a fully taxable equivalent basis remained
steady period to period reaching $8,652,000 in the second quarter of
1998. Excluding the taxable equivalent adjustment, net interest
income was also relatively unchanged period-to-period.
The net interest margin slipped 33 basis points to 4.56% for the
quarter compared to 4.89% in the second quarter of 1997. The decline
in the margin has resulted from decreased yields on earning assets
working in tandem with increased funding costs as loan and deposit
growth has been limited. Average earning assets rose to $759,082,000
for the period, an increase of $53,947,000 (7.7%) in comparison to the
same period last year which helped to maintain the level of net
interest income.
The provision for possible loan losses rose $30,000 compared to
the same period last year. Although the provision remains at higher
than historical levels, the trend of net charge-offs has continued to
improve since peaking in the fourth quarter of 1997.
Noninterest income grew sharply for this quarter reaching
$1,557,000 an increase of $208,000 (15.4%). Service charges on
deposit accounts rose $197,000 (29.9%) as the other categories
declined or remained relatively flat compared to the second quarter of
1997.
Noninterest expense increased $465,000 (8.3%) for the quarter.
Salaries and employee benefits rose only $70,000 (2.5%). The other
expenses category increased $412,000 (33.8%) compared to the same quarter
last year. Increased professional fees, up $140,000, combined with the
adjustment pertaining to the supplies inventory recorded in 1997,
$185,000 account for the majority of the year-to-year rise.
SECOND QUARTER 1998 COMPARED TO FIRST QUARTER 1998
Net income for the second quarter of 1998 was $2,304,000 compared
to $2,164,000 for the first quarter of the year, a $140,000 (6.5%)
rise. Basic earnings per share rose to $0.75 from $0.71. Higher net
interest income was the primary contributor to the improved quarter to
quarter results.
Net interest income calculated on a fully taxable equivalent
basis rose to $8,652,000, an increase of $251,000 (3.0%). Excluding
the taxable equivalent adjustment, net interest income rose to
$8,441,000, an increase of $238,000
<PAGE>7
(2.9%) over the first quarter of 1998. A higher level of average earning
assets, up $53,359,000 (7.6%), offset in part by the 21 basis point drop in
the net interest margin helped to power the increase in net interest income
from the first to the second quarter of 1998.
Noninterest income rose $54,000 (3.6%) period to period. Trust
income decreased $28,000 (6.3%) as service charges on deposits rose
$63,000 (7.9%).
Noninterest expense increased slightly to $6,066,000 a $41,000
(less than one percent) rise as all categories registered minimal
changes quarter to quarter.
BALANCE SHEET COMPARISON JUNE 30, 1998 to DECEMBER 31, 1997
Total assets rose to $841,406,000 at June 30, 1998, a
$102,164,000 (13.8%) rise from $739,242,000 at December 31, 1997.
Investment securities jumped $118,970,000 (74.8%) to $278,074,000 at
June 30, 1998 as loans fell $25,907,000 (5.0%) over the same period.
The primary source of funding supporting this asset growth was FHLB
borrowings which rose $95,000,000 as deposits increased only
slightly period to period. Shareholders' equity rose $1,527,000
(1.9%) over the period reaching $84,016,000 at June 30, 1998.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no material change in market risk since the end of
the most recent fiscal year. The Corporation continues to monitor
interest rate risk on a monthly basis using earnings simulation
modeling. Management continues to maintain a risk position well
within the policy guideline range.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a.)Exhibit 27: Financial Data Schedule
b.)Reports on Form 8-K
Form 8-K dated July 15, 1998 reporting the signing by the
Corporation of a definitive agreement to be acquired by
First Commonwealth Financial Corporation.
<PAGE>8
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.
Southwest National Corporation
---------------------------------------
(Registrant)
August 12, 1998 /s/ David S. Dahlmann
- - ----------------- ---------------------------------------
Date David S. Dahlmann
President and Chief Executive Officer
August 12, 1998 /s/ Donald A. Lawry
- - ----------------- ---------------------------------------
Date Donald A. Lawry
Secretary and Treasurer
(Chief Financial Officer)
<PAGE>9
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 25,594
<INT-BEARING-DEPOSITS> 57
<FED-FUNDS-SOLD> 31,400
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 243,250
<INVESTMENTS-CARRYING> 34,824
<INVESTMENTS-MARKET> 34,723
<LOANS> 489,527
<ALLOWANCE> 6,064
<TOTAL-ASSETS> 841,406
<DEPOSITS> 645,636
<SHORT-TERM> 5,796
<LIABILITIES-OTHER> 5,958
<LONG-TERM> 100,000
0
0
<COMMON> 7,952
<OTHER-SE> 76,064
<TOTAL-LIABILITIES-AND-EQUITY> 841,406
<INTEREST-LOAN> 21,293
<INTEREST-INVEST> 5,897
<INTEREST-OTHER> 883
<INTEREST-TOTAL> 28,073
<INTEREST-DEPOSIT> 10,522
<INTEREST-EXPENSE> 11,429
<INTEREST-INCOME-NET> 16,644
<LOAN-LOSSES> 1,350
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 12,091
<INCOME-PRETAX> 6,263
<INCOME-PRE-EXTRAORDINARY> 4,468
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,468
<EPS-PRIMARY> 1.46
<EPS-DILUTED> 1.46
<YIELD-ACTUAL> 7.78
<LOANS-NON> 2,682
<LOANS-PAST> 2,167
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,094
<CHARGE-OFFS> 925
<RECOVERIES> 220
<ALLOWANCE-CLOSE> 6,064
<ALLOWANCE-DOMESTIC> 6,064
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
