US SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED December 31, 1996
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 12 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:
Common Stock, $.01 par value - 2,052,929 shares as of December 31, 1996
<PAGE>
PART I - FINANCIAL INFORMATION
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
----------- --------
1996 1996
----------- --------
<S> <C> <C>
ASSETS
Cash on hand and in banks $ 3,517 $ 3,627
Interest-earning deposits in other institutions 371 4,991
Securities available-for-sale 57,638 72,076
Loans available for sale, net 4,804 4,678
Mortgage-backed securities held to maturity
(market value of $10,754 and $9,437) 9,225 9,941
Loans, net 261,896 228,934
Real estate owned, net 639 747
Premises and equipment, at cost, net 6,149 6,087
Accrued interest receivable and other assets 3,811 3,350
-------- --------
TOTAL ASSETS $348,050 $334,431
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $225,306 $218,063
Federal Home Loan Bank advances 72,159 68,542
Securities sold under agreements to repurchase 21,981 20,450
Advance payments by borrowers for taxes
and insurance 1,438 1,207
Principal and interest payable on loans serviced
for others 170 179
Accrued expenses and other liabilities 4,421 3,584
Deferred income tax 1,352 1,591
------- -------
TOTAL LIABILITIES 326,827 313,616
Preferred stock, $.01 par value, 500,000 shares
authorized; no shares issued or outstanding 0 0
Common stock, $.01 par value, 5,000,000 shares
authorized; 2,052,929 and 2,045,894 shares
issued and outstanding 20 20
Additional paid-in capital 4,278 4,250
Retained earnings, substantially restricted 17,504 17,410
Unrealized loss on securities
available-for-sale (579) (865)
------- -------
TOTAL STOCKHOLDERS' EQUITY 21,223 20,815
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $348,050 $334,431
======= =======
</TABLE>
See notes to consolidated financial statements
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Interest income:
Loans $ 5,282 $ 4,712 $ 10,313 $ 9,283
Mortgage-backed securities
held-to-maturity 149 999 275 2,047
Securities available-for-sale 1,018 110 2,055 208
FHLB stock dividends 82 62 163 120
Interest-bearing deposits 12 39 11 73
------- ------- ------- -------
Total interest income 6,543 5,922 12,817 11,731
Interest expense:
Deposits 2,944 2,921 5,904 5,795
Borrowed funds 1,412 1,187 2,688 2,464
------- ------- ------- -------
Total interest expense 4,356 4,108 8,592 8,259
Net interest income 2,187 1,814 4,225 3,472
Provision for loan losses 0 0 0 0
------- ------- ------- -------
Net interest income after
provision for loan losses 2,187 1,814 4,225 3,472
Other income:
Gain on sale of loans 22 88 80 243
Service charges 225 110 412 216
Loss on sale of securities
available-for-sale (16) 0 (15) 0
Gain on sale of real estate
owned 3 0 3 0
Restitution recovery 0 0 0 150
Other 100 129 213 267
------- ------- ------- -------
Total other income 334 327 693 876
Other expenses:
Salaries and employee
benefits 923 768 1,765 1,633
Occupancy 298 294 579 582
Federal deposit insurance
premiums 96 127 1,441 251
Advertising 76 57 153 101
Data processing 84 66 156 135
Other 353 299 682 625
------- ------- ------- -------
Total other expenses 1,830 1,611 4,776 3,327
Income before income taxes 691 530 142 1,021
Federal income taxes 235 180 48 347
------- ------- ------- -------
Net income $ 456 $ 350 $ 94 $ 674
======= ======= ======= =======
Net income per common and
common equivalent share,
primary $ .20 $ .15 $ .04 $ .30
Net income per common and
common equivalent share,
fully diluted $ .20 $ .15 $ .04 $ .30
Weighted average common and
common equivalent shares
outstanding, primary 2,294,933 2,272,623 2,296,976 2,274,128
Weighted average common and
common equivalent shares
outstanding, fully diluted 2,299,712 2,272,623 2,299,366 2,275,617
</TABLE>
See notes to consolidated financial statements
<PAGE>
CASCADE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, unaudited)
<TABLE>
<CAPTION>
Six Months Ended December 31,
1996 1995
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 94 $ 674
-------- --------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization of
premises and equipment 255 270
Other 0 (13)
Amortization of retained
servicing rights 87 61
Additions to mortgage servicing
rights (88) (215)
Deferred loan fees, net of amortization 193 39
Origination of loans held-for-sale and
mortgage-backed securities held for
trading (16,284) (25,920)
Proceeds from sale of loans held-
for-sale and mortgage-backed
securities held for trading 22,139 26,120
Net loss (gain) on sales of:
Securities available-for-sale 15 0
Premises and equipment 1 (4)
Federal Home Loan Bank stock dividend
received (163) (120)
Net change in accrued interest receiv-
able and other assets over principal
and interest payable on loans serviced
for others and accrued expenses and
other liabilities (13) (1,993)
------- -------
Total adjustments 6,142 (1,775)
------- -------
Net cash provided by (used in)
operating activities 6,236 (1,101)
Cash flows from investing activities:
Loans originated, net of principal
repayments (33,169) (9,114)
Principal repayments on securities
held-to maturity 716 8,456
Principal repyaments on securities
avaialable-for-sale 3,770 0
Purchases of securities available-
for-sale (10,797) (6,990)
Proceeds from sales of securities
available-for-sale 16,075 0
Purchase of real estate owned 0 (46)
Proceeds from sales of real estate owned 108 0
Purchases of premises and equipment (318) (89)
Proceeds from sales of premises and
equipment, and other assets (1) 4
------- -------
Net cash used in investing activities (23,616) (7,779)
Cash flows from financing activities:
Proceeds from issuance of common stock 28 69
Net increase in deposits 7,243 2,010
Proceeds from Federal Home Loan Bank
advances 75,150 42,383
Repayment of Federal Home Loan Bank
advances (71,533) (36,500)
Net increase (decrease) in securities
sold under agreements to repurchase 1,531 (3,538)
Net decrease in advance payments by
borrowers for taxes and insurance 231 70
------- --------
Net cash provided by financing
activities 12,650 4,494
------- -------
Net decrease in cash and cash equivalents (4,730) (4,386)
Cash and cash equivalents at beginning
of period 8,618 5,762
------- -------
Cash and cash equivalents at end of period $ 3,888 $ 1,376
======== =======
</TABLE>
<TABLE>
<S> <C> <C>
Supplemental disclosures of cash flow
information cash paid during the period
for:
Interest $ 8,627 $ 8,553
Federal income taxes 46 219
Supplemental schedule of noncash
investing activities:
Mortgage-backed securities reclassified
from held to maturity to available
for sale $ 0 $50,577
Mortgage loans securitized into Federal
Home Loan Mortgage Corporation
participation certificates 0 0
</TABLE>
See notes to consolidated financial statements
<PAGE>
CASCADE FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
(unaudited)
Note 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" or "The Bank"). 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.
Note 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 against the
Corporation or the Bank, such as claims to enforce liens, condemnation
proceedings on properties in which the Bank holds security interests, claims
involving the making and servicing of real property loans and other issues
incidental to the Corporaton's and the Bank's business. In the opinion of
management no significant loss is expected from any of such pending lawsuits.
Note 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.
Note 4. 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 are not expected to have a material impact on
the results of operations or financial condition of the Corporation.
<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
PLAN OF MERGER
On February 6, 1997, Cascade Financial Corporation and Cascade Bank
entered into an Agreement and Plan of Merger with Amfirst Bancorporation,
the holding company for American First National Bank, pursuant to which
Amfirst will be merged into Cascade. In the transaction, Amfirst shareholders
will receive approximately two shares of Cascade common stock for each share
of Amfirst common stock. The transaction is subject to the approval of
federal banking regulators and the shareholders of Cascade and Amfirst. At
December 31, 1996, American First had four offices located in Snohomish County
and assets of $71 million. It is anticipated that the merger will completed
during June 1997 and will be treated as a pooling-of-interests.
ASSET/LIABILITY MANAGEMENT
Cascade, 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.
Cascade 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 general interest
rates would reduce Cascade's annual net interest income by 7%. Cascade
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. Cascade also originates a limited amount of multi-
family loans in its local market area. Principally all new fifteen and
thirty year loans are sold. Cascade 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. Cascade 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.
Cascade 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 to $348.1 million at December 31, 1996, compared
with $334.4 million at June 30, 1996. Loans, net increased by $33.0 million.
The loan growth was funded by a decrease in interest-earning deposits of
$4.6 million and a decrease of $14.4 million in securities available for
sale. Increases in deposits and borrowings also helped to fund the increase
in loans. Deposits increased $7.2 million during the six months ended
December 31, 1996. Total borrowings increased by $5.1 million to $94.1
million.
<PAGE>
Asset Quality
Nonperforming assets totaled $373,000 and $1.4 million at June 30, 1996
and December 31, 1996, respectively. Assets classified as substandard
increased from $2.5 million at June 30, 1996, to $3.6 million at December
31, 1996.
RESULTS OF OPERATIONS
Comparison of the Three and Six Months Ended December 31, 1996 and 1995.
General
Total net income for the three months ended December 31, 1996 increased
to $456,000 compared with $350,000 in 1995. Net interest income increased
$373,000 for the quarter ended December 31, 1996 and other expenses increased
$219,000 over the prior year. Net income for the six months ended
December 31, 1996, decreased to $94,000 from $674,000 in 1995. The principal
reason for the decrease in the six months earnings was an $811,000 charge,
after tax, related to the recapitalization of the Savings Association
Insurance Fund (SAIF). Excluding this charge, net income for the six months
ended December 31, 1996 increased to $905,000 compared with the $674,000
earned in the six month period ended December 31, 1995.
Net Interest Income
Net interest income increased $373,000 compared to the quarter ended
December 31, 1995 to $2.2 million for the three months ended December 31,
1996. Net interest income increased by $752,000 for the six months ended
December 31, 1996 compared to 1995. Increased interest margins of 17 basis
points for the most recent quarter and 23 basis points for the six months
ended December 31, 1996 coupled with an increase of $32 million in interest
earning assets over the prior December's numbers were responsible for the
increase. The increase in earning assets was primarily in loans which is
consistent with management's policy of increasing Cascade'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 Cascade is adding, an increase
in yield of adjustable rate loans, and slightly lower funding costs.
Cascade is focusing on adding nonconforming one-to-four family loans,
multi-family loans, home equity lines of credit 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 Cascade and
can be underwritten conservatively to ensure low delinquency, absent unfore-
seen changes in local or national economic conditions. Additionally, these
loan types are typically not effected as much by refinance activity as
conforming loans. This should help to lower Cascade's overall origination
and servicing costs in the future.
Provision for Loan Losses
Cascade's provision for loan losses was $0 for both the six months ended
December 31, 1996 and 1995. 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 December 31, 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 1.04% and 1.29%, respectively. The provision for loan losses reflects
management's quarterly evaluation of the adequacy of the allowance for
losses on loans. In determining adequacy, management considers changes in
the size and composition of the loan portfolio, acutal loan loss experience,
current and anticipated economic conditions and other factors. The Bank has
not had to add to it's provision in recent years because substandard assets
have decreased from a high of $39.0 million at September 30, 1991 to $3.6
million at December 31, 1996. Nonperforming loans increased $979,000 to
$1.4 million at December 31, 1996 as compared to the period ending June 30,
1996. Substandard loans increased $1.1 million to $3.6 million during the
same period.
<PAGE>
Other Income
Other income increased $7,000 to $334,000 for the three months ended
December 31, 1996 as compared with the three months ended December 31, 1995.
For the six months ended December 31, 1996 other income decreased $182,000
to $693,000 as compared to the six months ended December 31, 1995. The
principal reason for the decrease in other income was a $150,000 restitution
recovery in 1995 that did not occur in 1996. Gain on sale of loans decreased
$66,000 and $163,000 for the three and six month periods ending December 31,
1996 as compared to the same periods in 1995. The reduction occurred as a
result of the Bank's emphasis on portfolio lending which resulted in a $9.6
million decrease in the origination of salable products. Service charges
increased $115,000 to $225,000 and $196,000 to $412,000 for the three and six
month periods ending December 31, 1996 as compared to the same periods in
1995. Service charges generated from increases in net loan and servicing
portfolio's accounted for most of the change.
Other Expenses
Other expenses increased to $1.8 million for the three months ended
December 31, 1996 compared with $1.6 million for the three months ended
December 31, 1995. Increases in salaries and employee benefits of $155,000
coupled with smaller increases in advertising and data processing costs
accounted for this increase. For the six month period ending December 31,
1996 other expenses totaled $4.8 million, a $1.5 million increase over the
December 31, 1995 total of $3.3 million. Federal deposit insurance premiums
increased $1.2 million, before taxes, as a result of the SAIF conversion
charge. Increases to salaries and employee benefits coupled with increased
advertising costs, both related to development of new products and services
were responsible for increase in these areas.
Liquidity and Sources of Funds
Cascade maintains liquidity balances in Federal Home Loan Bank deposits
and short-term securities at levels in accordance with regulatory guide-
lines. The Corporation held average liquid assets of $19.0 million in
December 1996, which was in excess of the required liquidity level of $15.1
million.
Loan commitments outstanding at December 31, 1996, were $14.6 million
and will be funded through sales of loans, existing liquidity balances, FHLB-
Seattle advances, and other borrowings.
At December 31, 1996, the Corporation had $72.2 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 $104.4 million. The Corporation
also had $22.0 million of reverse repurchase agreements outstanding, an
increase of $1.5 million from June 30, 1996.
<PAGE>
Capital Resources
Cascade Bank is in full compliance with all capital requirements
established by the OTS at December 31, 1996. Cascade's regulatory capital,
capital requirements, and related excess capital amounts as of December 31,
1996 are presented in the following table:
Tangible capital Amount Percentage
---------------- ---------- --------------
Tangible capital $21,667 6.22%
Less: Minimum requirement 5,227 1.50
------- ----
Excess $16,440 4.72%
Core capital Amount Percentage
------------ ---------- --------------
Core capital $21,667 6.22%
Less: Minimum requirement 10,455 3.00
------ ----
Excess $11,212 3.22%
Risk-based capital Amount Percentage
------------------ ---------- --------------
Risk-based capital $24,210 11.90%
Less: Minimum requirement(1) 16,272 8.00
------ -----
Excess $ 7,938 3.90%
(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, 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 under-
capitalized." 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 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 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
was paid on November 30, 1996. In accordance with generally accepted
accounting principles, the Bank recorded the SAIF premium assessment as of
September 30, 1996, by charging to non-interest expense the amount of its
$1.2 million assessment. The corresponding tax deduction will be taken on
the Corporation's tax return for fiscal 1997.
<PAGE>
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
The Corporation and the Bank have 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
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
Registrant
February 11, 1997 /s/ Russell E. Rosendal
-----------------------
By: Russell E. Rosendal
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1997
<PERIOD-END> DEC-31-1996 DEC-31-1996
<CASH> 3,517 3,517
<INT-BEARING-DEPOSITS> 371 371
<FED-FUNDS-SOLD> 0 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 57,638 57,638
<INVESTMENTS-CARRYING> 9,225 9,225
<INVESTMENTS-MARKET> 10,754 10,754
<LOANS> 266,700 266,700
<ALLOWANCE> 2,946 2,946
<TOTAL-ASSETS> 348,050 348,050
<DEPOSITS> 225,306 225,306
<SHORT-TERM> 74,981 74,981
<LIABILITIES-OTHER> 7,381 7,381
<LONG-TERM> 19,159 19,159
0 0
0 0
<COMMON> 20 20
<OTHER-SE> 21,203 21,203
<TOTAL-LIABILITIES-AND-EQUITY> 348,050 348,050
<INTEREST-LOAN> 5,282 10,313
<INTEREST-INVEST> 1,249 2,493
<INTEREST-OTHER> 12 11
<INTEREST-TOTAL> 6,543 12,817
<INTEREST-DEPOSIT> 2,944 5,904
<INTEREST-EXPENSE> 4,356 8,592
<INTEREST-INCOME-NET> 2,187 4,225
<LOAN-LOSSES> 0 0
<SECURITIES-GAINS> (16) (15)
<EXPENSE-OTHER> 353 1,906
<INCOME-PRETAX> 691 142
<INCOME-PRE-EXTRAORDINARY> 691 142
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 456 94
<EPS-PRIMARY> .20 .04
<EPS-DILUTED> .20 .04
<YIELD-ACTUAL> 7.92 7.69
<LOANS-NON> 1,352 1,352
<LOANS-PAST> 0 0
<LOANS-TROUBLED> 1,852 1,852
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 2,946 2,946
<CHARGE-OFFS> 0 0
<RECOVERIES> 0 0
<ALLOWANCE-CLOSE> 2,946 2,946
<ALLOWANCE-DOMESTIC> 2,946 2,946
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 2,588 2,588
</TABLE>
