<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-25160
ALABAMA NATIONAL BANCORPORATION
-------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 63-1114426
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
1927 FIRST AVENUE NORTH, BIRMINGHAM, ALABAMA 35203-4009
-------------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (205) 583-3654
----------------
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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
------- ------
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 11, 1997
----- ---------------------------
Common Stock, $1.00 Par Value 6,525,418
<PAGE> 2
INDEX
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION PAGE
- ----------------------------- ----
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated statements of condition
March 31, 1997 and December 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated statements of income
Three month periods ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated statements of cash flows
Three month periods ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to the unaudited consolidated financial statements
March 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II. OTHER INFORMATION
- --------------------------
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
2
<PAGE> 3
Part I - Financial Information
Item 1 - Financial Statements (Unaudited)
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Condition (Unaudited)
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
-------------- -----------------
(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks ............................................... $ 30,277 $ 36,730
Interest-bearing deposits in other banks .............................. 100 200
Investment securities (estimated market values of $67,919 and $74,772) 68,672 74,745
Securities available for sale ......................................... 90,334 76,080
Trading securities .................................................... 3,399 1,936
Federal funds sold and securities purchased under resell agreements ... 52,385 46,249
Loans ................................................................. 617,208 612,897
Unearned income ....................................................... (1,076) (1,456)
--------- ---------
Loans, net of unearned income ......................................... 616,132 611,441
Allowance for loan losses ............................................. (9,459) (9,322)
--------- ---------
Net loans ............................................................. 606,673 602,119
Property, equipment and leasehold improvements, net ................... 21,503 20,891
Intangible assets ..................................................... 7,225 7,308
Other assets .......................................................... 24,432 21,454
Totals ................................................................ $ 905,000 $ 887,712
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing ................................................. $ 107,185 $ 110,962
Interest bearing .................................................... 608,095 563,719
Total deposits ........................................................ 715,280 674,681
Federal funds purchased and securities sold under repurchase agreements 81,810 91,871
Treasury, tax and loan account ........................................ 3,649 2,968
Short-term borrowings ................................................. 19,500 41,000
Accrued expenses and other liabilities ................................ 16,758 10,771
Capital lease obligations ............................................. 294 300
--------- ---------
Total liabilities ..................................................... 837,291 821,591
--------- ---------
Common stock, $1 par, authorized 10,000,000 shares;
issued 6,525,418 and 6,515,418 shares at March 31, 1997
and December 31, 1996, respectively ................................. 6,525 6,515
Additional paid-in capital ............................................ 48,872 48,782
Retained earnings ..................................................... 12,967 11,093
Unearned restricted stock ............................................. (177) (185)
Unrealized gain (loss) on securities available for sale, net of tax ... (478) (84)
--------- ---------
Total stockholders' equity ............................................ 67,709 66,121
--------- ---------
Totals ................................................................ $ 905,000 $ 887,712
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
3
<PAGE> 4
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the three months
ended March 31,
---------------
1997 1996
---- ----
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans ................................... $13,770 $12,986
Interest on securities ....................................... 2,436 2,370
Interest on deposits in other banks .......................... 2 113
Interest on trading securities ............................... 40 79
Interest on Federal funds sold and securities purchased
under resell agreements .................................... 559 645
------- -------
Total interest income ........................................... 16,807 16,193
------- -------
INTEREST EXPENSE
Interest on deposits ......................................... 6,695 6,427
Interest on Federal funds purchased and securities sold
under repurchase agreements ................................ 880 931
Interest on long and short-term borrowings ................... 442 488
------- -------
Total interest expense .......................................... 8,017 7,846
------- -------
Net interest income ............................................. 8,790 8,347
Provision for loan losses ....................................... 25 152
------- -------
Net interest income after provision for loan losses ............. 8,765 8,195
------- -------
NONINTEREST INCOME:
Securities gains ............................................. 4 31
Service charges on deposit accounts .......................... 982 902
Investment services .......................................... 1,954 2,345
Trust department income ...................................... 375 330
Other ........................................................ 731 541
------- -------
Total noninterest income ........................................ 4,046 4,149
------- -------
</TABLE>
4
<PAGE> 5
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Income (Unaudited) (Continued)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the three months
ended March 31,
----------------
1997 1996
------ -------
<S> <C> <C>
NONINTEREST EXPENSE:
Salaries and employee benefits .............................. 5,031 5,233
Occupancy and equipment expenses ............................ 1,099 1,110
Other ....................................................... 2,773 2,260
------ ------
Total noninterest expense ..................................... 8,903 8,603
------ ------
Income before provision for income taxes ....................... 3,908 3,741
Provision for income taxes ..................................... 1,293 1,381
------ ------
Net income ..................................................... $2,615 $2,360
------ ------
Net income per common share .................................... $ 0.39 $ 0.35
------ ------
Weighted average common and common equivalent shares outstanding 6,762 6,690
------ ------
</TABLE>
See accompanying notes to unaudited consolidated financial statements
5
<PAGE> 6
Alabama National BanCorporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the three months
ended March 31,
---------------
1997 1996
(In thousands)
<S> <C> <C>
NET CASH FLOWS PROVIDED BY (USED BY) OPERATING ACTIVITIES ............ $ 4,952 $ (189)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities ................................... -- (22,626)
Proceeds from maturities of investment securities .................... 6,068 2,733
Purchases of securities available for sale ........................... (16,632) (10,972)
Proceeds from sale of securities available for sale .................. -- 953
Proceeds from maturities of securities available for sale ............ 1,730 22,814
Net decrease in interest bearing deposits in other banks ............. 100 1,130
Net (increase) decrease in Federal funds sold and securities purcashed
under resell agreements ........................................... (6,136) 7,860
Net increase in loans ................................................ (4,579) (5,143)
Purchases of property, equipment and leasehold improvements .......... (1,028) (757)
Proceeds from sale of property, equipment and leasehold improvements . -- 27
Proceeds from sale of life insurance policy ......................... -- 250
Proceeds from sale of other real estate .............................. -- 13
-------- --------
Net cash used in investing activities ................................ (20,477) (3,718)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits .................................. 40,599 (15,204)
Increase (decrease) in Federal funds purchased and securities sold
under agreements to repurchase .................................... (9,380) 8,380
Net decrease in short and long-term borrowings and capital leases .... (21,506) (56)
Exercise of stock options ............................................ 100 --
Dividends on common stock ............................................ (741) (310)
-------- --------
Net cash provided by (used by) financing activities .................. 9,072 (7,190)
-------- --------
Decrease in cash and cash equivalents ................................ (6,453) (11,097)
Cash and cash equivalents, beginning of period ....................... 36,730 39,202
-------- --------
Cash and cash equivalents, end of period ............................. $ 30,277 $ 28,105
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest ............................................... $ 7,862 $ 7,510
======== ========
Cash paid for income taxes ........................................... $ 50 $ 736
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of collateral in satisfaction of loans ................... $ -- $ 6
======== ========
Adjustments to market value of other real estate owned ............... $ -- $ 16
======== ========
Adjustment to market value of securities available for sale, net
of deferred income taxes .......................................... $ (394) $ 346
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
6
<PAGE> 7
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Alabama
National Bancorporation (the "Company" or "ANB") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 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
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
March 31, 1997 are subject to year-end audit and are not necessarily indicative
of the results of operations to be expected for the year ending December 31,
1997. These interim financial statements should be read in conjunction with
the consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended December 31, 1996.
NOTE B - COMMITMENT AND CONTINGENCIES
The Company's subsidiary banks make loan commitments and incur contingent
liabilities in the normal course of business which are not reflected in the
consolidated statements of condition.
NOTE C - RECENTLY ISSUED PRONOUNCEMENTS
Accounting for the Impairment of Long-Lived Assets
In March 1995, the FASB issued SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS 121
establishes standards for the identification of long-lived assets, including
certain identifiable intangibles and goodwill that may need to be written down
because of an entity's inability to recover the assets' carrying value. The
Company adopted SFAS 121 effective January 1, 1996. The adoption of SFAS 121
did not have a material impact on the Company's accompanying unaudited
consolidated financial statements.
Accounting for Mortgage Servicing Rights
In May 1995, the FASB issued SFAS 122, "Accounting for Mortgage Servicing
Rights." The Company does not currently retain servicing rights related to a
significant portion of the mortgage loans it originates. The Company adopted
SFAS 122 effective January 1, 1996. The adoption of SFAS 122 did not have a
material impact on the Company's accompanying unaudited consolidated financial
statements.
Accounting for Stock-Based Compensation
In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
Compensation," which calls for a value based method. Beginning in 1996,
compensation cost for stock-based employee compensation arrangements is
measured at the grant date based on the value of the award and is recognized
over the service period. The adaption of SFAS 123 did not have a material
impact on the Company's accompanying unaudited consolidated financial
statements.
7
<PAGE> 8
ALABAMA NATIONAL BANCORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
In October 1996, the FASB issued SFAS 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," as amended
by SFAS 127, "Deferral of the Effective Date of Certain Provisions of SFAS
Statement No 125," which establishes standards in 1997 for accounting for
certain transfers of assets and extinguishments of liabilities. It requires
that an entity recognize the financial and servicing assets it controls and the
liabilities it has incurred, and derecognize financial assets when control has
been surrendered, and derecognize liabilities when extinguished. Certain
guidelines set forth in the statement must be met before an asset can be
considered transferred or a liability extinguished. This statement is applied
prospectively for transfers of financial assets and extinguishments of
liabilities occurring after December 31, 1996. The adoption of SFAS 125, as
amended by SFAS 127, did not have a material effect on the accompanying
unaudited consolidated financial statements of the Company.
Earnings Per Share
In February 1997, the FASB issued SFAS 128, "Earnings Per Share". SFAS 128
specifies the computation, presentation, and disclosure requirements for
earnings per share (EPS). Some of the changes made to the EPS computations
include: (a) eliminating the presentation of primary EPS and replacing it with
basic EPS, with the principal difference being that common stock equivalents
(CSEs) are not considered in computing basic EPS, (b) eliminating the modified
treasury stock method and the three percent materiality provision, and (c)
revising the contingent share provisions and the supplemental EPS data
requirements. SFAS 128 requires dual presentation of basic and diluted EPS on
the face of the income statement for all entities with complex capital
structures regardless of whether basic and diluted EPS are the same; it also
requires a reconciliation of the numerator and denominator used in computing
basic and diluted EPS. SFAS 128 is effective for financial statements issued
for periods ending after December 15, 1997, including interim periods. Earlier
application is not permitted. Under SFAS 128, the Company's basic and fully
diluted EPS would be $.40 and $.39, respectively for the Company's 1997 quarter
ended March 31, 1997.
NOTE D-MERGERS AND ACQUISITIONS
On September 30, 1996, the Company merged with FirstBanc Holding Company, Inc.
("FIRSTBANC"), a one bank holding company headquartered in Robertsdale,
Alabama. The Company acquired all of the outstanding common stock of FIRSTBANC
in exchange for 305,000 shares of the Company's common stock. The Company
recorded the FIRSTBANC merger as a pooling- of-interests and, accordingly,
financial statements for all periods have been restated to reflect the results
of operations of the companies on a combined basis from the earliest period
presented, except for dividends per share.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BASIS OF PRESENTATION
The following is a discussion and analysis of the consolidated financial
condition of the Company at March 31, 1997, and the results of its operations
for the three month periods ended March 31, 1997 and 1996. On September 30,
1996, the Company merged with FirstBanc Holding Company, Inc. ("FIRSTBANC"), a
one bank holding company headquartered in Robertsdale, Alabama. The Company
acquired all of the outstanding common stock of FIRSTBANC in exchange for
305,000 shares of the Company's common stock. The Company recorded the
FIRSTBANC merger as a pooling-of-interests and, accordingly, financial
statements for all periods have been restated to reflect the results of
operations of the companies on a combined basis from the earliest period
presented, except for dividends per share.
This information should be read in conjunction with the Company's unaudited
consolidated financial statements and related notes appearing elsewhere in this
report and Management's Discussion and Analysis of Financial Condition and
Results of Operations appearing in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
PERFORMANCE OVERVIEW
The Company's net income was $2,615,000 for the first quarter of 1997 (the
"1997 quarter") compared to $2,360,000 for the same period in 1996 (the "1996
quarter"), an increase of 10.8%. Net income per common share for the 1997
quarter was $.39 on 6,761,737 average common and common equivalent shares
outstanding compared to $.35 for the 1996 quarter on 6,689,544 average common
and common equivalent shares outstanding.
The return on average assets for the Company was 1.19% for the 1997 quarter
compared to 1.13% for the 1996 quarter. The return on average stockholders'
equity was 15.53% for the 1997 quarter compared to 16.00% for the 1996 quarter.
Book value per share at March 31, 1997, was $10.38, an increase of $.23 from
December 31, 1996. Tangible book value per share at March 31, 1997, was $9.27,
an increase of $.24 from year end 1996. The Company paid a $.115 per share
cash dividend on common shares in the 1997 quarter.
NET INCOME
The principal reason for the increase in net income for the 1997 quarter over
the 1996 quarter was growth in loans relative to all other earnings assets,
which increased interest income.
The largest component of the Company's net income is its net interest income,
which is the difference between the income earned on assets and the interest
paid on deposits and borrowing used to support such assets. Interest earning
assets increased by $38.7 million during the 1997 quarter, or 5.1%, compared to
the 1996 quarter, and average interest bearing liabilities increased $37.4
million during the 1997 quarter, or 5.7%, compared to the 1996 quarter.
Despite the small increase in net interest earning assets, average loans
increased by $65.5 million, or 12.0%, during the 1997 quarter, compared with
the 1996 quarter. As a result of the growth in loans among all earning
assets, the average taxable equivalent rates earned on assets were 8.42% for
the 1997 quarter compared to 8.51% for the 1996 quarter. The average rates
paid on interest-bearing liabilities were 4.62% for the 1997 quarter compared
to 4.78% for the 1996 quarter. The net interest margin for the 1997 quarter
was 4.37% compared to 4.36% for the 1996 quarter.
The following table depicts, on a taxable equivalent basis for the 1997 and
1996 quarters, certain information related to the Company's average balance
sheet and its average yields on assets and average costs of liabilities. Such
yields or costs are derived by dividing income or expense by the average daily
balance of the associated assets or liabilities.
9
<PAGE> 10
AVERAGE BALANCES, INCOME AND EXPENSES AND RATES
(Amounts in thousands, except yields and rates)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------------------------------------------
1997 1996
------------------------------------- ----------------------------------
Average Income/ Yield/ Average Income/ Yield/
ASSETS: Balance Expense Rate Balance Expense Rate
--------- --------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans (1) (3) ............................. $ 611,207 $ 13,770 9.01% $545,695 $12,986 9.52%
Securities:
Taxable ................................... 131,241 2,164 6.60 142,766 2,132 5.97
Tax exempt ................................ 19,518 412 8.44 18,030 361 8.01
Cash balances in other banks ............... 100 2 8.00 7,357 113 6.14
Funds sold ................................. 39,676 559 5.64 47,895 645 5.39
Trading account securities ................. 3,506 40 4.56 4,773 79 6.62
--------- --------- -------- -------
Total earning assets (2) ............... 805,248 16,947 8.42 766,516 16,316 8.51
--------- --------- -------- -------
Cash and due from banks ...................... 32,066 30,677
Premises and equipment ....................... 17,449 20,785
Other assets ................................. 34,980 29,370
Allowance for loan losses .................... (9,381) (8,900)
--------- --------
Total assets ........................... $ 880,362 $838,448
========= ========
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing transaction accounts ...... $ 82,767 550 2.66 $105,010 829 3.16
Savings deposits ........................... 184,081 1,665 3.62 179,128 1,600 3.57
Time deposits .............................. 328,065 4,480 5.46 272,447 3,998 5.87
Funds purchased ............................ 70,121 880 5.02 71,768 931 5.19
Other short-term borrowings ................ 28,665 435 6.07 27,470 471 6.86
Long-term debt ............................. 297 7 9.43 807 17 8.43
--------- --------- -------- -------
Total interest-bearing liabilities ..... 693,996 8,017 4.62 656,630 7,846 4.78
--------- ---- -------- ------- ----
Demand deposits .............................. 104,250 103,805
Accrued interest and other liabilities ....... 14,748 19,000
Stockholders' equity ......................... 67,368 59,013
--------- --------
Total liabilities and stockholders'
equity ............................... $ 880,362 $838,448
========= ========
Net interest spread .......................... 3.80% 3.73%
==== ====
Net interest income/margin on
a taxable equivalent basis ................. 8,930 4.44% 8,470 4.42%
==== ====
Tax equivalent adjustment (2) ................ 140 123
========= =======
Net interest income/margin ................... $ 8,790 4.37% $ 8,347 4.36%
========= ==== ======= ====
</TABLE>
__________________________
(1) Average loans include nonaccrual loans. All loans and deposits are
domestic.
(2) Tax equivalent adjustments are based on an assumed tax rate of 34%, and do
not give effect to the disallowance for Federal income tax purposes of
interest expense related to certain tax exempt assets.
(3) Fees in the amount of $401,000 and $393,000 are included in interest and
fees on loans for the three months ended March 31, 1997 and 1996,
respectively.
10
<PAGE> 11
The following table sets forth, on a taxable equivalent basis, the effect which
varying levels of earning assets and interest-bearing liabilities and the
applicable rates had on changes in net interest income from the 1997 quarter
compared to the 1996 quarter. For the purposes of this table, changes which
are not solely attributable to volume or rate are allocated to volume and rate
on a pro rata basis.
ANALYSIS OF CHANGES IN NET INTEREST INCOME
(Amounts in thousands)
<TABLE>
<CAPTION>
March 31,
-----------------------------
1997 Compared to 1996
Variance Due to
-----------------------------
Volume Yield/Rate Total
-----------------------------
<S> <C> <C> <C>
EARNING ASSETS:
Loans ................................ $ 4,391 $(3,607) $ 784
Securities:
Taxable ............................ (766) 798 32
Tax exempt ......................... 31 20 51
Cash balances in other banks ......... (295) 184 (111)
Funds sold ........................... (257) 171 (86)
Trading account securities ........... (18) (21) (39)
------- ------- -------
Total interest income ........... 3,086 (2,455) 631
INTEREST-BEARING LIABILITIES:
Interest-bearing transaction accounts (160) (119) (279)
Savings and money market deposits .... 43 22 65
Time deposits ........................ 2,024 1,542) 482
Funds purchased ...................... (21) 30) (51)
Other short-term borrowings .......... 109 145) (36)
Long-term debt ....................... (22) 12 (10)
------- ------- -------
Total interest expense .......... 1,973 (1,802) 171
------- ------- -------
Net interest income on a taxable
equivalent basis .............. $ 1,113 $ (653) 460
======= =======
Taxable equivalent adjustment ........ (17)
-------
Net interest income .................. $ 443
=======
</TABLE>
11
<PAGE> 12
Net revenue from earning assets during the 1997 quarter increased $443,000, or
5.3%, over the corresponding period in 1996, most of which resulted from the
growth of loans among all earning assets.
The provision for loan losses represents a charge to current earnings necessary
to maintain the allowance for loan losses at an appropriate level based on
management's analysis of the potential risk in the loan portfolio. The amount
of the provision is a function of the level of loans outstanding, the level of
non-performing loans, historical loan loss experience, the amount of loan
losses actually charged against the allowance during a given period and current
and anticipated economic conditions. The provision for loan losses was set at
$25,000 for the 1997 quarter, compared with $152,000 during the 1996 quarter.
Recoveries exceeded charge-offs by $112,000 for the 1997 quarter compared to
net charge-offs of $244,000 for the same period of 1996. The allowance for
loan losses as a percentage of outstanding loans, net of unearned income was
1.54% at March 31, 1997, compared to 1.52% at year-end 1996. However, because
of the inherent uncertainty of assumptions made during the assessment process,
there can be no assurance that loan losses in future periods will not exceed
the allowance for loan losses or that additional allocations to the allowance
will not be required. See Asset Quality.
Total noninterest income for the 1997 quarter was $4.0 million,
compared to $4.1 million for the same period in 1996, a decrease of 2.5%.
Investment services income of $2.0 million in the 1997 quarter decreased by
$391,000, or 16.7%, compared with the 1996 quarter, reflecting a decreased
demand for investment services. Other income increased during the 1997 quarter
by $190,000, or 35.1%, to $731,000 from $541,000 in the 1996 quarter resulting
from security settlement services provided on a contract basis for an
independent insurance company. The contractual arrangement with this company
will not be renewed after June 1997. Service charges increased in the 1997
quarter by $80,000, or 8.9%, to $982,000, resulting from an emphasis on service
fees began in mid 1996. Trust fees increased in the 1997 quarter by $45,000 or
13.6% over the 1996 quarter.
Total noninterest expense for the 1997 quarter was $8.9 million compared to
$8.6 million, a $300,000, or 3.5%, increase over the same period in 1996.
Salaries and employee benefits decreased $202,000 in the 1997 quarter when
compared to the 1996 quarter, consistent with decreased sales volume in the
investment services division. Occupancy and equipment expense decreased
$11,000 or 1.0% in the 1997 quarter compared to the 1996 quarter. Other
noninterest expense increased $513,000 or 22.7% in the 1997 quarter compared to
the 1996 quarter. The increase resulted primarily from $133,000 relating to
the repurchase of ANB stock options and $237,000 of direct expenses relating to
the securities settlement arrangement more fully discussed above.
Income tax expense decreased $88,000, or 6.37%, to $1.3 million for the 1997
quarter compared to the 1996 quarter. The decrease was the result of
utilization of low income housing credits and growth in tax free investment
securities. The effective tax rates for the 1997 and 1996 quarters were 33.1%
and 36.9%, respectively.
EARNING ASSETS
Loans comprised the largest single category of the Company's earning assets on
March 31, 1997. Loans, net of unearned income, were $616.1 million or 68.1% of
total assets at March 31, 1997 compared to $611.4 million or 68.9% at December
31, 1996, an increase of $4.7 million, or .8%.
Investment securities decreased $6.1 million in the 1997 quarter. There were
no purchases of investment securities and maturities and calls of investment
securities totaled $6.1 million during the 1997 quarter.
Securities available for sale increased $14.3 million in the 1997 quarter.
Purchases of available for sale securities totaled $16.6 million and maturities
and calls of available for sale securities totaled $1.7 million. There were no
sales of available for sale securities in the 1997 quarter, compared to $1.0
million in the 1996 quarter. Write down to estimated market value of available
for sale securities totaled $394,000, net of deferred income taxes, in the 1997
quarter compared with a write up of $346,000, net of deferred income taxes, in
the 1996 quarter.
12
<PAGE> 13
The trading account securities are securities owned by the Company prior to
delivery to the Company's customers. It is the policy of the Company to limit
positions in such securities to reduce its exposure to market and interest rate
changes . Federal funds sold and securities purchased under agreements to
resell totaled $52.3 million at March 31, 1997 compared to $46.2 at December
31, 1996, an increase of $6.1 million. Interest-bearing deposits in other
banks at March 31, 1997 were $100,000 compared to $200,000 at December 31,
1996.
DEPOSITS AND OTHER FUNDING SOURCES
Deposits increased $40.6 million from year-end 1996, or 6.0%, to $715.3 million
at March 31, 1997. Noninterest bearing demand deposits decreased $3.8 million
and interest-bearing deposits increased $44.4 million. Primarily all of the
growth in deposits related to consumer certificates of deposit.
Federal funds purchased and securities sold under agreements to repurchase
totaled $81.8 million at March 31, 1997, a decrease of $10.1 million from
December 31, 1996. Short-term borrowings and the Treasury tax and loan account
were $23.1 million at March 31, 1997, a decrease of $20.8 million over
December 31, 1996. The decrease in borrowed funds reflects the emphasis on
consumer deposits to fund asset growth.
The Company's only long-term debt at March 31, 1997 was capital lease
obligations which decreased $6,000 during the 1997 quarter.
ASSET QUALITY
Nonperforming loans are comprised of loans past due 90 days or more and still
accruing interest, loans accounted for on a nonaccrual basis and loans in which
the terms have been restructured to provide a reduction or deferral of interest
or principal because of a deterioration in the financial position of the
borrower. Accrual of interest is discontinued on a loan when management
believes, after considering economic and business conditions and collection
efforts, that the borrower's financial condition is such that the collection of
interest is doubtful. A delinquent loan is generally placed on nonaccrual
status when it becomes 90 days or more past due. When a loan is placed on
nonaccrual status, all interest which has been accrued on the loan but remains
unpaid is reversed and deducted from earnings as a reduction of reported
interest income. No additional interest is accrued on the loan balance until
the collection of both principal and interest becomes reasonably certain. When
a problem loan is finally resolved, there may ultimately be an actual write
down or charge-off of the principal balance of the loan which would necessitate
additional charges to earnings.
At March 31, 1997, nonperforming assets totaled $2.0 million, a decrease of
$190,000 from December 31, 1996. Nonperforming assets as a percentage of loans
plus other real estate was .32% at March 31, 1997 compared to .36% at December
31,1996.
13
<PAGE> 14
NONPERFORMING ASSETS
(Amounts in thousands, except percentages)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
<S> <C> <C>
Nonaccrual loans ................................ $ 945 $ 1,111
Restructured loans .............................. 516 605
Loans past due 90 days or more and still accruing - -
------- ---------
Total nonperforming loans .................... 1,461 1,716
Other real estate owned ......................... 533 468
------- ---------
Total nonperforming assets ................... $ 1,994 $ 2,184
======= =========
Allowance for loan losses to period-end loans ... 1.54% 1.52%
Allowance for loan losses to period-end
nonperforming loans .......................... 647.43 543.24
Allowance for loan losses to period-end
nonperforming assets ......................... 474.37 426.83
Net losses (recoveries) to average loans ........ (0.02)(1) (0.03)
Nonperforming assets to period-end loans
and other real estate owned .................. 0.32 0.36
Nonperforming loans to period-end loans ......... 0.24 0.28
</TABLE>
- --------------------
(1) Annualized
Net loan recoveries for the 1997 quarter totaled $112,000 or .02% (annualized)
of average loans for the period. The allowance for loan losses as a percentage
of total loans was 1.54% at March 31, 1997 compared to 1.54% on December 31,
1996.
14
<PAGE> 15
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PERCENTAGES)
<TABLE>
<S> <C>
Allowance for loan losses at
beginning of period .................. $ 9,322
Charge-offs:
Commercial, financial and agricultural 21
Real estate - mortgage ............... 48
Consumer ............................. 140
-------
Total charge-offs ............... 209
-------
Recoveries:
Commercial, financial and agricultural 204
Real estate - mortgage ............... 52
Consumer ............................. 65
-------
Total recoveries ................ 321
-------
Net charge-offs (recoveries) ... (112)
Provision for (benefit of) loan losses .... 25
-------
Allowance for loan losses at
period-end ........................... $ 9,459
=======
</TABLE>
The loan portfolio is periodically reviewed to evaluate the outstanding loans
and to measure both the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses and internal credit ratings. Based on this analysis,
management considers the allowance for loan losses at March 31, 1997 to be
adequate to cover possible loan losses in the portfolio as of that date.
However, because of the inherent uncertainty of assumptions made during the
evaluation process, there can be no assurance that loan losses in future
periods will not exceed the allowance for loan losses or that additional
allocations to the allowance will not be required.
15
<PAGE> 16
INTEREST RATE SENSITIVITY
The Company monitors and manages the pricing and maturity of its assets and
liabilities in order to diminish the potential adverse impact that changes in
interest rates could have on its net interest income. The principal monitoring
technique employed by the Company is the measurement of the interest
sensitivity "gap," which is the positive or negative dollar difference between
assets and liabilities that are subject to interest rate repricing within a
given period of time. Interest rate sensitivity can be managed by repricing
assets and liabilities, selling securities available for sale, replacing an
asset or liability at maturity or by adjusting the interest rate during the
life of an asset or liability. Managing the amount of assets and liabilities
repricing in this same time interval helps to hedge the risk and minimize the
impact of rising or falling interest rates on net interest income.
The Company evaluates interest sensitivity risk and then formulates guidelines
regarding asset generation and repricing, funding sources and pricing and
off-balance sheet commitments in order to decrease interest sensitivity risk.
The Company uses computer simulations to measure the net income effect of
various interest rate scenarios. The modeling reflects interest rate changes
and the related impact on net income over specified periods of time.
The following table illustrates the Company's interest rate sensitivity at
March 31, 1997, assuming relevant assets and liabilities are collected and
paid, respectively, based upon historical experience rather than their stated
maturities.
16
<PAGE> 17
INTEREST SENSITIVITY ANALYSIS
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
March 31, 1997
-------------------------------------------------------------------------------
After One After Three
Through Through
Within One Three Twelve Within One Greater Than
Month Months Months Year One Year Total
---------- --------- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Earning assets:
Loans (1) ............................ $ 264,969 $ 55,137 $ 94,641 $ 414,747 $ 200,440 $ 615,187
Securities (2) ....................... 11,702 4,684 5,883 22,269 136,630 158,899
Interest-bearing deposits in
other banks ........................ 100 - - 100 - 100
Funds sold ........................... 52,385 - - 52,385 - 52,385
--------- --------- --------- --------- --------- ---------
Total interest-earning assets ... $ 329,156 $ 59,821 $ 100,524 $ 489,501 $ 337,070 $ 826,571
LIABILITIES:
Interest-bearing liabilities:
Interest-bearing deposits:
Demand deposits .................. $ - $ - $ 87,702 $ 87,702 $ - $ 87,702
Savings deposits ................. 136,873 - - 136,873 43,223 180,096
Time deposits (3) ................ 54,360 62,287 171,230 287,877 52,420 340,297
Funds purchased ..................... 81,810 - - 81,810 - 81,810
Short-term borrowings (4) ........... 23,149 - - 23,149 - 23,149
Long-term debt ...................... 2 4 18 24 270 294
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities $ 296,194 $ 62,291 $ 258,950 $ 617,435 $ 95,913 $ 713,348
--------- --------- --------- --------- --------- ---------
Period gap .............................. $ 32,962 $ (2,470) $(158,426) $(127,934) $ 241,157
========= ========= ========= ========= =========
Cumulative gap .......................... $ 32,962 $ 30,492 $(127,934) $(127,934) $ 113,223 $ 113,223
========= ========= ========= ========= ========= =========
Ratio of cumulative gap to total
earning assets ........................ 3.99 3.69 (15.48) (15.48) 13.70
</TABLE>
(1) Excludes nonaccrual loans of $945,000.
(2) Excludes investment equity securities of $3,506,000.
(3) Excludes matured certificates which have not been redeemed by the customer
and on which no interest is accuring.
(4) Includes treasury, tax and loan account of $3,649,000.
The Company generally would benefit from increasing market rates of interest
when it has an asset-sensitive gap and generally would benefit from decreasing
market rates of interest when it is liability sensitive. The Company is
liability sensitive through the one year time frame. However, the Company's
gap analysis is not a precise indicator of its interest sensitivity position.
The analysis presents only a static view of the timing of maturities and
repricing opportunities, without taking into consideration that changes in
interest rates do not affect all assets and liabilities equally. For example,
rates paid on a substantial portion of core deposits may change contractually
within a relatively short time frame, but those rates are viewed by management
as significantly less interest-sensitive than market-based rates such as those
paid on non-core deposits. Accordingly, management believes that a
liability-sensitive gap position is not as indicative of the Company's true
interest sensitivity as it would be for an organization which depends to a
greater extent on purchased funds to support earning assets. Net interest
income may be affected by other significant factors in a given interest rate
environment, including changes in the volume and mix of earning assets and
interest-bearing liabilities.
17
<PAGE> 18
LIQUIDITY AND CAPITAL ADEQUACY
The Company's net loan to deposit ratio decreased to 84.8% at March 31, 1997,
compared to 89.2% at year end 1996. The Company's liquid assets as a
percentage of total deposits were 11.6% at March 31, 1997, compared to 9.4% at
year-end 1996. Management also analyzes the level of off-balance sheet assets
such as unfunded loan commitments and outstanding letters of credit as they
relate to the levels of cash, cash equivalents, liquid investments and
available funds lines in an attempt to minimize the possibility that a
potential shortfall will exist. Based on this analysis, management believes
that the Company has adequate liquidity to meet short-term operating
requirements. However, no assurances can be given in this regard.
The Company's stockholders' equity increased by $1.6 million to $67.7 million
at March 31, 1997 from December 31, 1996. This increase was attributable to:
<TABLE>
<S> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,615,000
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Increase in unrealized losses on securities available for sale, net
of deferred income tax benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (394,000)
Cash dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (741,000)
Decrease in unearned restricted stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
----------
Net increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,588,000
==========
</TABLE>
A strong capital position is vital to the continued profitability of the
Company because it promotes depositor and investor confidence and provides a
solid foundation for future growth of the organization. The capital of the
Company and its subsidiary banks (the "Banks") exceeded all prescribed
regulatory capital guidelines at March 31, 1997. Under the capital guidelines
of their regulators, the Company and the Banks are currently required to
maintain a minimum risk-based total capital ratio of 8%, with at least 4%
being Tier 1 capital. Tier 1 capital consists of common stockholders' equity,
qualifying perpetual preferred stock and minority interests in equity accounts
of consolidated subsidiaries, less goodwill. In addition, the Company and the
Banks must maintain a minimum Tier 1 leverage ratio (Tier 1 capital to total
assets) of at least 3%, but this minimum ratio is increased by 100 to 200 basis
points for other than the highest rated institutions. The following table sets
forth the risk-based and leverage ratios of the Company and each subsidiary
bank at March 31, 1997:
<TABLE>
<CAPTION>
Total Risk Tier 1 Risk Tier 1
Based Based Leverage
---------- ----------- --------
<S> <C> <C> <C>
Alabama National BanCorporation ....... 9.38% 10.63% 7.08%
National Bank of Commerce of Birmingham 10.21 11.46 7.81
Alabama Exchange Bank ................. 14.17 15.07 9.22
Bank of Dadeville ..................... 12.25 13.35 11.11
Citizens Bank of Talladega ............ 16.12 17.37 9.97
First Bank of Baldwin County .......... 13.71 14.86 9.17
First National Bank of Ashland ........ 12.91 12.52 8.57
Gulf Bank ............................. 10.94 12.05 9.60
Required minimums ..................... 4.00 8.00 4.00
</TABLE>
18
<PAGE> 19
Part II Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
10 First Amendment To Credit Agreement between the
Company and AmSouth Bank of Alabama.
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the three months ended March
31, 1997.
19
<PAGE> 20
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.
ALABAMA NATIONAL BANCORPORATION
DATE: May 11, 1997 /s/John H. Holcomb, III
------------- -----------------------
John H. Holcomb, III, its Chairman and
Chief Executive Officer
DATE: May 11, 1997 /s/James S. Parks, Jr.
------------- ----------------------
James S. Parks, Jr., its Senior Vice
President-Finance, Controller and Treasurer
(principal financial and accounting officer)
20
<PAGE> 1
EXHIBIT 10
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("this Amendment") dated as
of January 20, 1997 but executed on February 10, 1997 is entered into by
ALABAMA NATIONAL BANCORPORATION, a Delaware corporation (the "Borrower") and
AMSOUTH BANK OF ALABAMA, an Alabama banking corporation (the "Lender").
Recitals
A. The Borrower and the Lender have entered into a Credit
Agreement dated as of December 29, 1995 (the "Agreement").
B. The Borrower and the Lender now desire to amend the
definitions of "LIBOR-Based Rate", "Facility Termination Date" and "Maximum
Credit Amount" and to make the other changes set forth in this Amendment.
Agreement
NOW, THEREFORE, in consideration of the recitals and the mutual
obligations and covenants contained herein, the Borrower and the Lender hereby
agree as follows:
1. Capitalized terms used in this Amendment and not otherwise
defined herein have the respective meanings attributed thereto in the
Agreement.
2. The defined term "Facility Termination Date" set forth in
Article I of the Agreement is hereby amended to read, in its entirety, as
follows:
"Facility Termination Date" means January 19, 1998, as such
date may be extended from time to time pursuant to Section 2.5 or
accelerated pursuant to Section 7.2.
3. The defined term "LIBOR-Based Rate" set forth in Article I of
the Agreement is hereby amended to read, in its entirety, as follows:
"LIBOR-Based Rate" means a rate per annum equal to the LIBOR
Quote plus 100 basis points.
4. The defined term "Maximum Credit Amount" set forth in Article
I of the Agreement is hereby amended to read, in its entirety, as follows:
"Maximum Credit Amount" means $20,000,000.
<PAGE> 2
5. The reference in Section 2.1 of the Agreement to the figure
"$23,000,000" is hereby amended to read "$20,000,000".
6. Article VI of the Credit Agreement is hereby amended to add
thereto the following Section 6.19:
SECTION 6.19 Additional Subsidiaries. As security for the
Obligations, the Borrower will execute and deliver an amendment to the
Pledge Agreement promptly (but in no event more than 30 days) after
the acquisition by the Borrower of a Subsidiary. The Borrower further
agrees to execute and deliver to the Lender all shares of stock of
such Subsidiaries hereafter owned together with all stock certificates
and duly executed stock powers necessary to perfect the Lender's
security interest therein.
7. Exhibit D to the Credit Agreement shall be amended in its
entirety and replaced with Revised Exhibit D attached hereto and made a part
hereof.
8. Notwithstanding the execution of this Amendment, all of the
indebtedness evidenced by the Note shall remain in full force and effect, as
modified hereby, and all of the collateral described in the Agreement and the
Credit Documents shall remain subject to the liens, security interests and
assignments of the Agreement and the Credit Documents as security for the
indebtedness evidenced by the Note and all other indebtedness described
therein; and nothing contained in this Amendment shall be construed to
constitute a novation of the indebtedness evidenced by the Note or to release,
satisfy, discharge, terminate or otherwise affect or impair in any manner
whatsoever (a) the validity or enforceability of the indebtedness evidenced by
the Note; (b) the liens, security interests, assignments and conveyances
effected by the Agreement or the Credit Documents, or the priority thereof; (c)
the liability of any maker, endorser, surety, guarantor or other person that
may now or hereafter be liable under or on account of the Note or the Agreement
or the Credit Documents; or (d) any other security or instrument now or
hereafter held by the Lender as security for or as evidence of any of the
above-described indebtedness.
9. All references in the Credit Documents to "Credit Agreement"
shall refer to the Agreement as amended by this Amendment, and as the Agreement
may be further amended from time to time.
10. The Borrower certifies that the organizational documents of
the Borrower have not been amended since December 29, 1995.
11. The Borrower hereby represents and warrants to the Lender that
all representations and warranties contained in the Agreement are true and
correct as of the date hereof (except representations and warranties that are
expressly limited to an earlier date); and the Borrower hereby certifies that
no Event of Default nor any event that, upon notice or lapse of time or both,
would constitute an Event of Default, has occurred and is continuing.
2
<PAGE> 3
12. Except as hereby amended, the Agreement shall remain in full
force and effect as written. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which when
taken together shall constitute one and the same instrument. The covenants and
agreements contained in this Amendment shall apply to and inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns.
13. Nothing contained herein shall be construed as a waiver,
acknowledgment or consent to any breach of or Event of Default under the
Agreement and the Credit Documents not specifically mentioned herein, and the
consents granted herein are effective only in the specific instance and for the
purposes for which given.
14. This Amendment shall be governed by the laws of the State of
Alabama.
3
<PAGE> 4
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Amendment to be executed and delivered by their duly authorized corporate
officers as of the date set forth below their signature.
ALABAMA NATIONAL BANCORPORATION
By /s/ Victor E. Nichol, Jr.
-------------------------
Its: President
Dated: February 10, 1997
AMSOUTH BANK OF ALABAMA
By /s/ John M. Kettig
------------------
Its Senior Vice President
Dated: February 10, 1997
4
<PAGE> 5
REVISED
EXHIBIT D
SUBSIDIARIES STOCK INFORMATION
<TABLE>
<CAPTION>
AUTHORIZED VOTING AUTHORIZED
SUBSIDIARY COMMON STOCK PREFERRED STOCK
---------- ------------ ---------------
<S> <C> <C> <C>
1. National Bank of
Commerce of Birmingham 800,000 0
2. Alabama Exchange Bank 20,000 0
3. Bank of Dadeville 4,000 8
4. First National Bank of
Ashland 1,000 0
5. Gulf Bank 10,000 25
6. Citizens Bank of
Talladega 500,000 5,000
7. St. Clair Federal
Savings Bank 15,000,000 5,000,000(1)
8. First Bank of Baldwin
County 40,000 0
</TABLE>
__________________________________
(1) In 1996, St. Clair Federal Savings Bank was merged with and
into National Bank of Commerce of Birmingham. On February 10, 1997, the Lender
returned Certificates #287 and #288 to the Borrower for cancellation. No
additional shares of National Bank of Commerce of Birmingham stock were issued
in connection with such merger.
D-1
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 30,277
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 52,385
<TRADING-ASSETS> 3,399
<INVESTMENTS-HELD-FOR-SALE> 90,334
<INVESTMENTS-CARRYING> 68,672
<INVESTMENTS-MARKET> 67,919
<LOANS> 616,132
<ALLOWANCE> 9,459
<TOTAL-ASSETS> 905,000
<DEPOSITS> 715,280
<SHORT-TERM> 104,959
<LIABILITIES-OTHER> 16,758
<LONG-TERM> 294
0
0
<COMMON> 6,525
<OTHER-SE> 61,184
<TOTAL-LIABILITIES-AND-EQUITY> 905,000
<INTEREST-LOAN> 13,770
<INTEREST-INVEST> 2,436
<INTEREST-OTHER> 601
<INTEREST-TOTAL> 16,807
<INTEREST-DEPOSIT> 6,695
<INTEREST-EXPENSE> 8,017
<INTEREST-INCOME-NET> 8,790
<LOAN-LOSSES> 25
<SECURITIES-GAINS> 4
<EXPENSE-OTHER> 8,903
<INCOME-PRETAX> 3,908
<INCOME-PRE-EXTRAORDINARY> 2,615
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,615
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
<YIELD-ACTUAL> 8.42
<LOANS-NON> 945
<LOANS-PAST> 0
<LOANS-TROUBLED> 516
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 9,322
<CHARGE-OFFS> 209
<RECOVERIES> 321
<ALLOWANCE-CLOSE> 9,459
<ALLOWANCE-DOMESTIC> 9,459
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
