US SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 September 30,
1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR TRANSITION PERIOD FROM _______ TO
________
Commission file number 0-25286
_______
CASCADE FINANCIAL CORPORATION
_____________________________
(Exact name of registrant as specified in its charter)
Delaware 91-1661954
________ __________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2828 Colby Avenue
Everett, Washington 98201
___________________ _____
(Address of principal executive offices) (Zip Code)
(206) 339-5500
______________
(Registrant's telephone number, including area code)
Indicate by a 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 twelve months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past ninety days. Yes X No
___ ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of September 30, 1996
_____ ____________________________________
Common Stock ($.01 par value) 2,050,581
PAGE
<PAGE>
CASCADE FINANCIAL CORPORATION
FORM 10-Q
for the Quarter Ended September 30, 1996
_______________
INDEX
_____
PART I -- Financial Information:
Item 1 -- Financial Statements:
-- Consolidated Balance Sheets ...................... 1
-- Consolidated Statements of Operations............. 2
-- Consolidated Statements of Cash Flows............. 3
-- Notes to Consolidated Financial Statements........ 5
Item 2 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations...... 5
PART II -- Other Information.............................. 10
PAGE
<PAGE>
PART I -- FINANCIAL INFORMATION
_______________________________
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, unaudited)
September 30, June 30,
ASSETS 1996 1996
______ ____ ____
Cash on hand and in banks $ 2,579 $ 3,627
Interest-earning deposits in other institutions 658 4,991
Securities available-for-sale 72,328 72,076
Loans available for sale, net 4,282 4,678
Mortgage-backed securities held to maturity
(market value of $9,401 and $9,437) 9,689 9,941
Loans, net 240,496 228,934
Real estate owned, net 721 747
Premises and equipment, at cost, net 6,125 6,087
Accrued interest receivable and other assets 3,503 3,350
__________ __________
TOTAL ASSETS $ 340,381 $ 334,431
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
____________________________________
Deposits $ 216,910 $ 218,063
Federal Home Loan Bank advances 75,159 68,542
Securities sold under agreements to repurchase 18,353 20,450
Advance payments by borrowers for taxes and
insurance 2,174 1,207
Principal and interest payable on loans serviced
for others 535 179
Accrued expenses and other liabilities 5,402 3,584
Deferred income tax 1,262 1,591
__________ __________
TOTAL LIABILITIES 319,795 313,616
Preferred stock, $.01 par value, 500,000 shares
authorized; no shares issued or outstanding -- --
Common stock, $.01 par value,
5,000,000 shares authorized;
2,050,581 and 2,045,894 shares issued and
outstanding 21 20
Additional paid-in capital 4,272 4,250
Retained earnings, substantially restricted 17,047 17,410
Unrealized loss on securities available-for-sale (754) (865)
__________ __________
TOTAL STOCKHOLDERS' EQUITY 20,586 20,815
__________ __________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 340,381 $ 334,431
========== ==========
See notes to consolidated financial statements
1
PAGE
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
September 30, September 30,
1996 1995
____ ____
Interest income:
Loans $ 5,031 $ 4,572
Mortgage-backed securities held-to-maturity 127 1,047
Securities available-for-sale 1,000 98
FHLB-stock-dividends 81 59
Interest-bearing deposits 35 33
________ ________
Total interest income 6,274 5,809
Interest expense:
Deposits 2,960 2,874
Borrowed funds 1,276 1,276
________ ________
Total interest expense 4,236 4,150
Net interest income 2,038 1,659
Provision for loan losses -- --
________ ________
Net interest income after provision for loan losses 2,038 1,659
Other income:
Gain (loss) on sale of loans 58 155
Service charges 188 106
Gain (loss) on sale of securities 1 --
Restitution recovery -- 150
Other 112 137
________ ________
Total other income 359 548
Other expenses:
Salaries and employee benefits 843 865
Occupancy 281 288
Federal deposit insurance premiums 121 124
Advertising 77 88
Data processing 72 69
Other 1,552 282
________ ________
Total other expenses 2,946 1,716
Income before income taxes (549) 491
Federal income taxes (187) 167
________ ________
Net income $ (362) $ 324
======== ========
Net income per common and common equivalent share,
primary (note 4) $(.18) $ .14
Net income per common and common equivalent share,
fully diluted NA $ .14
Weighted average common and common equivalent
shares outstanding, primary (note 4) 2,050,581 2,278,612
Weighted average common and common equivalent
shares outstanding, fully diluted NA 2,278,612
See notes to consolidated financial statements
2
PAGE
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, unaudited)
Three Months
Ended September 30,
1996 1995
____ ____
Cash flows from operating activities:
Net income $ (362) $ 324
________ _______
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization of premises and
equipment 128 135
Other -- (30)
Provision for losses (recovery)on:
Loans -- --
Amortization of mortgage servicing rights 53 21
Additions to mortgage servicing rights (55) (96)
Deferred loan fees, net of amortization 27 33
Origination of loans held-for-sale and mortgage-
backed securities held-for-trading (9,113) (13,465)
Proceeds from sale of loans held-for-sale and
mortgage-backed securities held-for-trading 9,517 14,854
Net loss (gain) on sales of:
Securities available-for-sale (1) --
Premises and equipment 1 (1)
Federal Home Loan Bank stock dividend received (81) (59)
Net change in accrued interest receivable and other
assets over principal and interest payable on
loans serviced for others and accrued expenses
and other liabilities 1,633 (999)
________ _______
Total adjustments 2,109 393
________ _______
Net cash provided by operating activities 1,747 717
Cash flows from investing activities:
Loans originated, net of principal repayments (11,594) (3,956)
Principal repayments on securities held-to maturity 252 2,965
Principal repayments on securities available-for-
sale 1,591 --
Purchases of securities available-for-sale (10,591) (2,086)
Proceeds from sales of securities available-for-
sale 9,000 --
Purchase of real estate owned -- (46)
Proceeds from sales of real estate owned 26 --
Purchases of premises and equipment (167) (62)
Proceeds from sales of premises and equipment,
and other assets (1) 1
________ _______
Net cash used in investing activities (11,484) (3,184)
Subtotal, carried forward (9,737) (2,467)
________ _______
3
PAGE
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, unaudited)
Three Months
Ended September 30,
1996 1995
____ ____
Subtotal, brought forward $(9,737) $(2,467)
________ ________
Cash flows from financing activities:
Proceeds from issuance of common stock 22 5
Net increase (decrease) in deposits (1,153) 5,773
Proceeds from Federal Home Loan Bank advances 46,250 18,883
Repayment of Federal Home Loan Bank advances (39,633) (23,500)
Net decrease in securities sold under agreements
to repurchase (2,097) (2,327)
Net decrease in advance payments by borrowers for
taxes and insurance 967 513
________ _______
Net cash provided by (used in) financing
activities 4,356 (653)
________ _______
Net decrease in cash and cash equivalents (5,381) (3,120)
Cash and cash equivalents at beginning of period 8,618 5,762
________ _______
Cash and cash equivalents at end of period $ 3,237 $ 2,642
======== =======
Supplemental disclosures of cash flow information-
cash paid during the period for:
Interest $ 4,243 $ 3,973
Federal income taxes 898 102
________ _______
Supplemental schedule of noncash investing
activities:
Mortgage loans securitized into Federal Home
Loan Mortgage Corporation participation
certificates $ -- $ --
See notes to consolidated financial statements.
4
PAGE
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(unaudited)
1. Presentation of Financial Information
The accompanying financial information is unaudited and has been prepared
from the books and records of Cascade Financial Corporation, (the
"Corporation"). The Corporation's sole subsidiary is Cascade Bank,
("Cascade"). In the opinion of management, the financial information
reflects all adjustments (consisting of normal recurring accruals) necessary
for a fair presentation of the financial condition, results of operations, and
cash flows in conformity with generally accepted accounting principles.
Certain information and footnote disclosures included in the Corporation's
financial statements for the year ended June 30, 1996, have been condensed or
omitted from this report. Accordingly, these statements should be read with
the financial statements and notes thereto included in the Corporation's
Annual Report on Form 10-K.
2. Commitments and Contingencies
In the normal course of business there are various commitments to fund
mortgage loans. Management does not anticipate any material loss as a result
of these commitments.
Periodically there have been various claims and lawsuits involving the
Corporation as a defendant, such as claims to enforce liens, condemnation
proceedings on properties in which the Corporation holds security interests,
claims involving the making and servicing of real property loans and other
issues incidental to the Corporation's business. In the opinion of management
no significant loss is expected from any of such pending lawsuits.
3. Financial Statement Reclassification
Certain amounts in the financial statements for fiscal 1996 have been
reclassified to conform with the financial statement classification for fiscal
1997.
4. Earnings per Share
Earnings per share and weighted average common and common equivalent
shares outstanding, primary, for the three months ended September 30, 1996
are based on the weighted average number of common shares outstanding during
the period, excluding any common stock equivalents as they would be
anti-dilutive. Earnings per share and weighted average common and common
equivalent shares outstanding, primary, for the three months ended September
30, 1995 includes common stock equivalents.
5
PAGE
<PAGE>
5. Changes in Accounting Methods
In 1995, Statement of Financial Account Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of", and SFAS No. 123, "Accounting for Stock-Based
Compensation", were issued. SFAS 121 establishes accounting standards for the
impairment of long-lived assets that either will be held and used in
operations or that will be disposed of. SFAS 123 requires expanded disclosures
of stock-based compensation arrangements with employees and encourages (but
does not require) application of the fair value recognition provision in the
statement. SFAS No. 123 does not alter the existing accounting rules for
employee stock-based programs. Companies may continue to follow rules
outlined in Accounting Principles Board Opinion 25 ("APB 25"), but they will
now be required to disclose the pro forma amounts of net income and earnings
per share that would have been reported had the company elected to follow the
fair value recognition provision of SFAS No. 123.
The adoption of the disclosure requirements of SFAS No. 123, and the
accounting methods of SFAS 121 will have no material impact on the results of
operations or financial condition of the Corporation.
6
<PAGE>
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
ASSET/LIABILITY MANAGEMENT
The Corporation like other financial institutions is subject to
fluctuations in interest rates because its interest-bearing liabilities
reprice on different terms than its interest-earning assets. During periods
of interest rate declines this position has a generally favorable impact on
net interest income, while increases in interest rates have a generally
adverse impact on net interest income.
The Corporation uses a simulation model to measure its interest rate risk
and the effects on net interest income resulting from changes in market
interest rates. Based on this model (which includes a number of significant
assumptions and estimates), a 200 basis point increase in interest rates would
reduce Cascade's net interest income by 7% over a four quarter horizon. The
Corporation manages interest rate risk by retaining in its portfolio permanent
and construction adjustable rate loans with repricing periods that generally
do not exceed five years. The Corporation also originates a limited amount
of multi-family loans in its local market area. Principally all new fifteen
and thirty year loans are sold. The Corporation extends the maturity of its
liabilities by offering deposit products to long-term, less rate sensitive
customers, and by periodically obtaining longer term FHLB-Seattle advances.
The Corporation also uses interest rate swap and interest rate cap agreements
to effectively extend the repricing of short-term deposit accounts or reduce
the cost of longer-term deposits.
The Corporation uses mandatory and optional forward commitments from
investment banking firms to mitigate the interest rate risk from its mortgage
banking operation.
CHANGES IN FINANCIAL CONDITION
Total assets increased slightly to $340.4 million at September 30, 1996,
compared with $334.4 million at June 30, 1996. Loans, net increased by $11.6
million offset by a decrease in interest-earning deposits by $4.3 million.
Deposits decreased by $1.2 million during the first quarter ended September
30, 1996. Total borrowings increased by $4.5 million to $93.5 million.
Asset Quality
Nonperforming assets totaled $1.7 million and $2.6 million at September
30, 1996 and September 30, 1995, respectively. Assets classified as
substandard have decreased from $7.8 million at September 30, 1995, to $2.5
million at September 30, 1996.
7
PAGE
<PAGE>
RESULTS OF OPERATIONS
Comparison of the Three Months Ended September 30, 1996 and 1995
General
The Corporation recorded a net loss for the three months ended September
30, 1996 of $362,000 compared with net income of $324,000 in 1995. The
principal reason for the loss in the current quarter was an after-tax $811,000
charge related to the recapitalization of the Savings Association Insurance
Fund (SAIF). Excluding this charge, net income for the three months ended
September 30, 1996, increased to $449,000 compared with the $324,000 in
September 1995, which included a one-time restitution recovery of $99,000 .
Net interest income increased by 23% or $379,000 offset by a decrease in other
income related to the restitution recovery.
Net Interest Income
Net interest income increased by $379,000 to $2.0 million for the three
months ended September 30, 1996 compared with the prior years' comparable
quarter. This increase was due to an increase in the net interest margin of
29 basis points to 2.50% and an increase in interest earning assets of $28.8
million. The increase in earning assets was principally in loans receivable
which is consistent with management's policy of increasing the Corporation's
asset size in a controlled manner. The increase in the net interest margin
for the recent period is a result of the higher margin loans the Corporation
is adding, an increase in yield of adjustable rate loans, and slightly lower
funding costs.
The Corporation is focusing on adding nonconforming one-to-four family
loans, multi-family, home equity loans and one-to-four family construction
loans to its portfolio. Nonconforming loans generally include loans where the
borrower has a debt level or other financial consideration that makes the loan
unsaleable to government agencies such as FHLMC and FNMA. Management believes
these products provide the best returns for the Corporation and can be
underwritten conservatively to ensure low delinquency, absent unforeseen
changes in local or national economic conditions. Additionally these loan
types are typically not effected as much as conforming loans to refinance
activity, which should lower the Corporation's overall origination and
servicing costs in the future.
Provision for Loan Losses
The Corporation's provision for loan losses was $0 for both the three
months ended September 30, 1996 and 1995, respectively. Management intends to
grow the nonconforming, construction and income property portfolios. These
loans typically have a higher credit risk. Management monitors these loans at
an increased level to maintain credit quality and adequate reserve levels. At
September 30, 1996 and June 30, 1996, the Corporation's loan loss allowance
totaled $2.9 million, and the loan loss allowance as a percent of net loans
outstanding was 1.20% and 1.14%, respectively. The allowance as a percent of
nonperforming assets was 171% and 112% at September 30, 1996, and 1995,
respectively.
8
PAGE
<PAGE>
Other Income
Other income decreased to $359,000 for the three months ended September
30, 1996, compared with $548,000 for the three months ended September 30,
1995. The principal reason for the decrease in other income was a $150,000
restitution recovery in 1995 that did not occur in 1996.
Other Expenses
Other expenses for the three months ended September 30, 1996, increased
to $2.9 million from $1.7 million in the prior year. The SAIF charge of $1.2
million accounted for the large increase in expenses for the current period.
Liquidity and Sources of Funds
The Corporation maintains liquidity balances in Federal funds balances and
short-term securities at levels in accordance with regulatory guidelines. The
Corporation held average liquid assets of $15.7 million in September 1996,
which was in excess of the required liquidity level of $14.5 million.
Loan commitments outstanding at September 30, 1996, were $10.5 million and
will be funded through sales of loans, existing liquidity balances,
FHLB-Seattle advances, and other borrowings.
At September 30, 1996, the Corporation had $75.2 million in outstanding
advances from the FHLB-Seattle. The Corporation's credit line with the
FHLB-Seattle is 30% of total assets or up to $102.1 million. The Corporation
also had $18.4 million of reverse repurchase agreements outstanding, a
decrease of $2.1 million from June 30, 1996.
Capital Resources
Cascade Bank is in full compliance with all capital requirements
established by the OTS at September 30, 1996. Cascade's regulatory capital,
capital requirements, and related excess capital amounts as of September 30,
1996 are presented in the following table:
Tangible capital Amount Percentage
________________ ______ __________
Tangible capital $21,189 6.21%
Less: Minimum requirement 5,115 1.50
_______ ____
Excess $16,074 4.71%
======= ====
Core capital Amount Percentage
____________ ______ __________
Core capital $21,189 6.21%
Less: Minimum requirement 10,229 3.00
_______ ____
Excess $10,960 3.21%
======= ====
Risk-based capital Amount Percentage
__________________ ______ __________
Risk-based capital $23,514 12.66%
Less: Minimum requirement(1) 14,858 8.00
_______ ____
Excess $ 8,656 4.66%
======= ====
(1) Based on risk-weighted assets.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") was signed into law on December 19, 1991. Among other things, the
FDICIA provides the OTS,
9
PAGE
<PAGE>
effective December 19, 1992, with broad powers to take "prompt corrective
action" to resolve problems of insured depository institutions. The actions
the OTS can take depend upon whether the institution in question is "well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized." The OTS has advised the
Corporation that at September 30, 1996, Cascade Bank, is a "well capitalized"
institution.
The OTS issued a final rule on August 31, 1993 that incorporates an
interest rate risk component into the OTS's risk-based capital rule. The rule
requires that an institution with an "above normal" level of interest rate
risk hold additional capital against interest rate risk exposure. This
additional capital for interest rate risk exposure would be in excess of the
8% risk-based capital requirement. Only institutions whose measured interest
rate risk exceeds the above normal level, has risk-based capital below 12%,
and assets exceed $300 million will be required to maintain an interest rate
risk component. The interest rate risk component will be computed quarterly.
The OTS has recently postponed the date the component will first be deducted
from an institution's total capital until an appeal process is developed for
the measurement of an institution's interest rate risk.
Management currently does not believe the final rule will materially
adversely increase Cascade's regulatory capital requirement nor materially
adversely effect the current business strategy when, or if it is implemented.
SAIF Premium Assessment
Cascade is a member of the SAIF. On September 30, 1996 the President of
the United States signed an omnibus appropriations bill which contained, among
other provisions, a requirement that member companies of SAIF pay a one-time
premium assessment to recapitalize the SAIF. The premium has been assessed at
65.7 basis points applied to March 31, 1995 deposit balances and is due by
November 30, 1996. In accordance generally accepted accounting principles,
the Corporation recorded the SAIF premium assessment as of September 30, 1996,
by charging to non-interest expense the amount of its assessment,
approximately $1.2 million, and recording a corresponding liability for that
amount. The corresponding tax deduction will be taken on the Corporation's
tax return for fiscal 1997.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
___________________________
The Corporation has certain litigation and negotiations in progress
resulting from activities arising from normal operations. In the opinion of
management, none of these matters is likely to have a materially adverse
effect on the Corporation's financial position.
Item 2. Changes in Securities.
_______________________________
Not applicable
10
PAGE
<PAGE>
Item 3. Defaults upon Senior Securities.
_________________________________________
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders.
_____________________________________________________________
Not applicable
Item 5. Other information.
___________________________
Not applicable
Item 6. Exhibits and Reports on Form 8-K.
__________________________________________
Not applicable
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASCADE FINANCIAL CORPORATION
November 7, 1996 /s/Russell E. Rosendal
______________________________
By: Russell E. Rosendal
Executive Vice President
(Chief Financial Officer)
<PAGE>
<PAGE>
Exhibit 27
Financial Data Schedule
This schedule contains financial information extracted from the consolidated
financial statements of Cascade Financial Corporation for the quarter ended
September 30, 1996 and is qualified in its entirety by reference to such
financial statements.
Financial Data
as of or for the
quarter ended
Item Number September 30, 1996 Item Description
($ in thousands)
9-03 (1) $ 2,579 Cash and due from Banks
9-03 (2) 658 Interest-bearing deposits
9-03 (3) -0- Federal funds sold - purchased
securities for resale
9-03 (4) -0- Trading account assets
9-03 (6) 72,328 Investment and mortgage backed
securities held for sale
9-03 (6) 9,689 Investment and mortgage backed
securities held to maturity -
carrying value
9-03 (6) 9,628 Investment and mortgage backed
securities held to maturity -
market value
9-03 (7) 240,496 Loans, net
9-03 (7)(2) 2,946 Allowance for losses
9-03 (11) 340,381 Total assets
9-03 (12) 216,910 Deposits
9-03 (13) 69,353 Short-term borrowings
9-03 (15) 9,373 Other liabilities
9-03 (16) 24,159 Long-term debt
9-03 (19) -0- Preferred stock - mandatory
redemption
9-03 (20) -0- Preferred stock - no mandatory
redemption
9-03 (21) 21 Common stocks
9-03 (22) 20,565 Other stockholders' equity
-1-
PAGE
<PAGE>
9-03 (23) 330,381 Total liabilities and
stockholders' equity
9-04 (1) 5,031 Interest and fees on loans
9-04 (2) 1,208 Interest and dividends on
investments
9-04 (4) 35 Other interest income
9-04 (5) 6,274 Total interest income
9-04 (6) 2,960 Interest on deposits
9-04 (9) 4,236 Total interest expense
9-04 (10) 2,038 Net interest income
9-04 (11) -0- Provision for loan losses
9-04 (13)(h) 1 Investment securities
gains/(losses)
9-04 (14) 2,946 Other expenses
9-04 (15) (539) Income/loss before income tax
9-04 (17) -0- Income/loss before extraordinary
items
9-04 (18) -0- Extraordinary items, less tax
9-04 (19) -0- Cumulative change in accounting
principles
9-04 (20) (362) Net income or loss
9-04 (21) (.18) Earnings per share - primary
9-04 (21) -0- Earnings per share - fully
diluted
I.B. 5 7.70 Net yield - interest earning
assets - actual
III.C.1. (a) 1,030 Loans on non-accrual
III.C.1. (b) -0- Accruing loans past due 90 days
or more
III.C.2. (c) -0- Troubled debt restructuring
III.C.2 303 Potential problem loans
IV.A.1 2,950 Allowance for loan loss -
beginning of period
IV.A.2 -0- Total chargeoffs
IV.A.3 -0- Total recoveries
IV.A.4 2,950 Allowance for loan loss - end of
period
IV.B.1 2,950 Loan loss allowance allocated to
domestic loans
IV.B.2 -0- Loan loss allowance allocated to
foreign loans
IV.B.3 2,646 Loan loss allowance -
unallocated
-2-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 2579
<INT-BEARING-DEPOSITS> 658
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 72328
<INVESTMENTS-CARRYING> 9628
<INVESTMENTS-MARKET> 9628
<LOANS> 240496
<ALLOWANCE> 2946
<TOTAL-ASSETS> 340381
<DEPOSITS> 216910
<SHORT-TERM> 69353
<LIABILITIES-OTHER> 9373
<LONG-TERM> 24159
0
0
<COMMON> 21
<OTHER-SE> 20565
<TOTAL-LIABILITIES-AND-EQUITY> 330381
<INTEREST-LOAN> 5031
<INTEREST-INVEST> 1208
<INTEREST-OTHER> 35
<INTEREST-TOTAL> 6274
<INTEREST-DEPOSIT> 2960
<INTEREST-EXPENSE> 4236
<INTEREST-INCOME-NET> 2038
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 2946
<INCOME-PRETAX> (539)
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (362)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
<YIELD-ACTUAL> 7.70
<LOANS-NON> 1030
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 303
<ALLOWANCE-OPEN> 2950
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 2950
<ALLOWANCE-DOMESTIC> 2950
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2646
</TABLE>
