U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the quarterly period ended June 30, 1999
or
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ___________________ to ______________________
Commission file number 000-23713
GULF WEST BANKS, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-3276590
- ---------------------------- -------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
425 22ND AVENUE, NORTH
ST. PETERSBURG, FLORIDA 33704
----------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(727) 894-5696
--------------------------------------------------
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
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 quarterly 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 issuer's classes of
common stock, as of the latest practicable date:
COMMON STOCK, PAR VALUE $1 PER SHARE 6,668,160 SHARES
- ------------------------------------ ----------------------------
(CLASS) OUTSTANDING AT JUNE 30, 1999
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
----
Condensed Consolidated Balance Sheets -
June 30, 1999 (unaudited) and December 31, 1998..........................2
Condensed Consolidated Statements of Earnings -
Three and Six months ended June 30, 1999 and 1998 (unaudited)............3
Condensed Consolidated Statement of Stockholders' Equity -
Six Months Ended June 30, 1999 (unaudited)...............................4
Condensed Consolidated Statements of Cash Flows -
Six Months ended June 30, 1999 and 1998 (unaudited)......................5
Notes to Condensed Consolidated Financial Statements (unaudited)...........6
Review By Independent Certified Public Accountants.........................8
Report on Review by Independent Certified Public Accountants...............9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS..............................................10-16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........17
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS...................................................17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................17
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K....................................18
SIGNATURES..................................................................19
EXHIBIT INDEX...............................................................20
1
<PAGE>
<TABLE>
<CAPTION>
GULF WEST BANKS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
AT
-------------------------
JUNE 30, DECEMBER 31,
ASSETS 1999 1998
---------- ------------
(UNAUDITED)
<S> <C> <C>
Cash and due from banks $ 13,280 16,045
Federal funds sold and securities purchased under
agreements to resell 19,701 11,654
--------- ---------
Total cash and cash equivalents 32,981 27,699
Securities available for sale 86,384 69,087
Loans receivable, net of allowance for losses of $2,613 and $2,436 259,254 208,608
Premises and equipment, net 10,528 9,978
Cash surrender value of bank owned life insurance 12,322 12,020
Accrued interest receivable 1,979 1,646
Deferred tax asset 659 118
Goodwill, net 1,595 1,643
Foreclosed real estate, net 236 309
Other assets 1,031 1,066
--------- ---------
Total $ 406,969 332,174
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing deposits 52,329 45,943
Savings, NOW and money-market deposits 121,696 112,515
Time deposits 169,293 127,914
--------- ---------
Total deposits 343,318 286,372
Other borrowings 32,917 15,438
Other liabilities 1,376 1,400
--------- ---------
Total liabilities 377,611 303,210
--------- ---------
Stockholders' equity:
Class A preferred stock, $5 par value, authorized
1,000,000 shares, none issued or outstanding -- --
Common stock, $1 par value; 25,000,000 shares
authorized, 6,668,160 and 6,643,717 issued and outstanding 6,668 6,644
Additional paid-in capital 21,495 21,397
Retained earnings 1,958 537
Accumulated other comprehensive (loss) income (763) 386
--------- ---------
Total stockholders' equity 29,358 28,964
--------- ---------
Total $ 406,969 332,174
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
GULF WEST BANKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- ------------------------
1999 1998 1999 1998
------------ ----------- ------------ --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable $ 5,485 3,767 10,400 7,498
Interest on securities 1,053 1,199 1,965 2,495
Other interest-earning assets 87 242 263 410
---------- ---------- ---------- ----------
Total interest income 6,625 5,208 12,628 10,403
---------- ---------- ---------- ----------
Interest expense:
Deposits 2,798 2,118 5,438 4,136
Other borrowings 200 155 375 411
---------- ---------- ---------- ----------
Total interest expense 2,998 2,273 5,813 4,547
---------- ---------- ---------- ----------
Net interest income 3,627 2,935 6,815 5,856
Provision for loan losses 98 110 354 260
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses 3,529 2,825 6,461 5,596
---------- ---------- ---------- ----------
Noninterest income:
Service charges on deposit accounts 350 274 661 533
Leasing fees and commissions 228 162 392 296
Income from fiduciary activities -- 39 -- 105
Income earned on bank owned life insurance 152 22 302 100
Other 180 141 299 317
---------- ---------- ---------- ----------
Total noninterest income 910 638 1,654 1,351
---------- ---------- ---------- ----------
Noninterest expense:
Salaries and employee benefits 1,710 1,360 3,264 2,742
Occupancy expense 613 519 1,156 1,003
Data processing 207 136 406 286
Advertising 89 71 171 143
Stationery and supplies 113 119 198 202
Other 447 361 898 715
---------- ---------- ---------- ----------
Total noninterest expense 3,179 2,566 6,093 5,091
---------- ---------- ---------- ----------
Earnings before income taxes 1,260 897 2,022 1,856
Income taxes 392 311 601 655
---------- ---------- ---------- ----------
Net earnings $ 868 586 1,421 1,201
========== ========== ========== ==========
Basic earnings per share $ .13 .09 .21 .18
========== ========== ========== ==========
Weighted-average number of
shares outstanding for basic 6,662,928 6,609,598 6,659,588 6,577,618
========== ========== ========== ==========
Diluted earnings per share $ .13 .09 .21 .18
========== ========== ========== ==========
Weighted-average number of
shares outstanding for diluted 6,827,533 6,839,523 6,829,438 6,757,292
========== ========== ========== ==========
Dividends per share $ -- -- -- --
========== ========== ========== ==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMMON STOCK COMPRE-
----------------------- ADDITIONAL HENSIVE TOTAL
NUMBER OF PAID-IN RETAINED (LOSS) STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME EQUITY
------------ --------- ---------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 6,643,717 $ 6,644 21,397 537 386 28,964
--------- --------- ---------
Comprehensive income:
Net earnings (unaudited) -- -- -- 1,421 -- 1,421
Net change in unrealized
gain on securities
available for sale,
net of tax of $690
(unaudited) -- -- -- -- (1,149) (1,149)
--------- --------- ---------
Comprehensive income (unaudited) -- -- -- 1,421 (1,149) 272
Shares issued under stock
option plan (unaudited) 13,613 13 56 -- -- 69
Shares sold to employees
(unaudited) 10,830 11 42 -- -- 53
--------- --------- --------- --------- --------- ---------
Balance at June 30, 1999
(unaudited) 6,668,160 $ 6,668 21,495 1,958 (763) 29,358
========= ========= ========= ========= ========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1999 1998
---- ----
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,421 1,201
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation 517 442
Provision for loan losses 354 260
Net amortization of fees, premiums and discounts 144 41
Deferred income tax credit 149 (33)
Income from mortgage banking activity (4) (32)
Proceeds from sales of loans held for sale 304 2,903
Originations of loans held for sale (300) (2,156)
Stock issued for compensation -- 50
(Increase) decrease in accrued interest receivable (333) 128
Increase in goodwill and other assets (219) (792)
Decrease in other liabilities (24) (180)
-------- --------
Net cash provided by operating activities 2,009 1,832
-------- --------
Cash flows from investing activities:
Purchase of securities available for sale (23,401) (23,133)
Proceeds from maturity of securities available for sale 14,782 12,306
Principal repayments on securities available for sale 7,330 7,762
Proceeds from sale of FRB stock -- 180
Proceeds from sale of FHLB stock -- 228
Purchase of premises and equipment, net (1,067) (485)
Net increase in loans (68,918) (8,133)
Purchase of Citizens National Bank & Trust, net cash acquired -- 9,323
-------- --------
Net cash used in investing activities (71,274) (1,952)
-------- --------
Cash flows from financing activities:
Net increase in time deposits 41,379 3,335
Net increase in noninterest-bearing, savings, NOW and money-market
deposit accounts 15,567 15,197
Net increase (decrease) of other borrowings 17,479 (8,268)
Issuance of common stock 122 793
-------- --------
Net cash provided by financing activities 74,547 11,057
-------- --------
Net increase in cash and cash equivalents 5,282 10,937
Cash and cash equivalents at beginning of period 27,699 17,949
-------- --------
Cash and cash equivalents at end of period $ 32,981 28,886
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 5,696 4,372
======== ========
Income taxes $ 628 918
======== ========
Noncash transactions:
Acquisition of Citizens National Bank and Trust:
Fair value of assets acquired $ -- 77,744
======== ========
Liabilities assumed $ -- 67,019
======== ========
Common stock issued $ -- 10,725
======== ========
Loans transferred to available for sale securities $ 18,032 --
======== ========
Accumulated other comprehensive income, net change in
unrealized gain on securities available for sale, net
of tax $ (1,149) 26
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL. In the opinion of the management, the accompanying condensed
consolidated financial statements of Gulf West Banks, Inc. and
Subsidiaries (the "Company") contain all adjustments (consisting
principally of normal recurring accruals) necessary to present fairly the
financial position at June 30, 1999, and the results of operations for the
three-month and six-month periods ended June 30, 1999 and 1998 and the
cash flows for the six-month periods ended June 30, 1999 and 1998. The
results of operations for the three and six months ended June 30, 1999 are
not necessarily indicative of the results to be expected for the full
year.
2. LOAN IMPAIRMENT AND LOSSES. The Company had no impaired loans at June
30, 1999 or at June 30, 1998.
The activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
1999 1998 1999 1998
---- ---- ---- -----
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at beginning of period $ 2,522 2,206 2,436 1,564
Provision for loan losses 98 110 354 260
Charge-offs, net of recoveries (7) (55) (177) (91)
Purchased via acquisition of Citizens -- -- -- 528
------- ------- ------- -------
Balance at end of period $ 2,613 2,261 2,613 2,261
======= ======= ======= =======
</TABLE>
(continued)
6
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
3. EARNINGS PER SHARE ("EPS"). The following is a reconciliation of the
numerators and denominators of the basic and diluted earnings per share
computations. For the three and six months ended June 30, 1999 options to
purchase 2,200 shares of common stock at $11.82 a share issued in 1998,
and for the three months ended June 30, 1999, options to purchase 186,000
shares of common stock of $8.38 a share issued in 1999 were not included
in the computation of diluted Earnings Per Share because the options
exercise price was not less than the average market price of the common
shares. These options expire on June 17, 2008 and April 15, 2009,
respectively (dollars in thousands, except per share amounts). All per
share amounts reflect the 10% stock dividend declared January 15, 1998 and
the 10% stock dividend declared on November 19, 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-------------------------------------------------------------
1999 1998
-------------------------------------------------------------
WEIGHTED- PER WEIGHTED- PER
AVERAGE SHARE AVERAGE SHARE
EARNINGS SHARES AMOUNT EARNINGS SHARES AMOUNT
-------- --------- ------ -------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS:
Net earnings available to
common stockholders $ 868 6,662,928 $.13 $ 586 6,609,598 $.09
==== ====
Effect of dilutive securities-
Incremental shares from assumed
exercise of options -- 164,605 -- 229,925
------- --------- ------- ---------
Diluted EPS:
Net earnings available to
common stockholders
and assumed conversions $ 868 6,827,533 $.13 $ 586 6,839,523 $.09
======= ========= ==== ======= ========= ====
SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------
1999 1998
-------------------------------------------------------------
WEIGHTED- PER WEIGHTED- PER
AVERAGE SHARE AVERAGE SHARE
EARNINGS SHARES AMOUNT EARNINGS SHARES AMOUNT
-------- --------- ------ -------- --------- -------
Basic EPS:
Net earnings available to
common stockholders $ 1,421 6,659,588 $.21 $ 1,201 6,577,618 $.18
==== ====
Effect of dilutive securities-
Incremental shares from assumed
exercise of options -- 169,850 -- 179,674
------- --------- ------- ---------
Diluted EPS:
Net earnings available to
common stockholders
and assumed conversions $ 1,421 6,829,438 $.21 $ 1,201 6,757,292 $.18
======= ========= ==== ======= ========= ====
</TABLE>
7
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hacker, Johnson, Cohen & Grieb PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of June 30,
1999, and for the three-month and six-month periods ended June 30, 1999 and 1998
presented in this document, in accordance with standards established by the
American Institute of Certified Public Accountants.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
8
<PAGE>
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Gulf West Banks, Inc.
St. Petersburg, Florida:
We have reviewed the condensed consolidated balance sheet of Gulf West
Banks, Inc. and Subsidiaries (the "Company") as of June 30, 1999, and the
related condensed consolidated statements of earnings for the three-month and
six-month periods ended June 30, 1999 and 1998, the condensed consolidated
statements of cash flows for the six-month periods ended June 30, 1999 and 1998
and the condensed consolidated statement of stockholders' equity for the
six-month period ended June 30, 1999. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1998, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for the year then ended (not presented herein); and in our report dated January
15, 1999 we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1998, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ HACKER, JOHNSON, COHEN & GRIEB PA
- -------------------------------------
Hacker, Johnson, Cohen & Grieb PA
Tampa, Florida
July 13, 1999
9
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Gulf West Banks, Inc. ("Gulf West" or the "Company") is a one-bank holding
company registered under the Bank Holding Company Act of 1956, as amended, and
was incorporated under the laws of the State of Florida effective October 24,
1994. Gulf West's principal assets are all of the issued and outstanding shares
of capital stock of Mercantile Bank, a Florida state banking corporation which
is located in St. Petersburg, Florida ("Mercantile"), and all of the issued and
outstanding shares of Mercantile Bank Leasing, Inc. ("MBL"), a Florida
corporation located in Tampa, Florida, which is engaged in equipment leasing.
Through its subsidiaries, Mercantile and MBL, the Company provides a wide range
of personal and commercial banking services to customers located in the Florida
counties of Pinellas, Hillsborough, and Pasco. The Company targets niche markets
that are underserved by the larger regional banks. These markets include small
to mid-size businesses and professional offices as well as individuals who
expect a higher level of personalized attention.
The Company has local directorship and management actively involved in its
market areas and committed to the economic growth and development of those
markets. Local management allows the Company to provide faster, more responsive
and flexible decision making which management believes is important to its
targeted customer base.
During the first half of 1999 the Company was presented with a unique
opportunity to purchase participation interests in approximately $50 million of
seasoned commercial real estate mortgage loans from another financial
institution. These loan participations were funded primarily through the
generation of new deposit accounts. This transaction contributed significantly
to the extraordinary asset growth for the period. Management does not anticipate
a comparable growth rate for the last half of 1999.
ACQUISITION
On January 16, 1998, Gulf West acquired Citizens National Bank and Trust
Company, Port Richey, Florida ("Citizens"). The Company exchanged 1.95 million
shares of its common stock for all the outstanding shares of Citizens. Citizens
operated one banking office in Pasco County, Florida. The Company accounted for
this transaction using the purchase method of accounting. The results for the
first quarter of 1998 include the results of Citizens for that period. The
excess purchase price over fair market value of the underlying net assets of
$1.9 million was allocated to goodwill.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1999, the Company's primary sources of
funds consisted of deposit inflows, loan principal repayments, and proceeds from
the maturity and principal repayment of securities available for sale. The
Company used its capital resources principally to fund existing and continuing
loan commitments, to purchase loan participations and to purchase securities. At
June 30, 1999, the Company had commitments to originate loans totaling $12.1
million. Management believes the Company has adequate resources to fund all its
commitments and that substantially all of its existing commitments will be
funded in 1999. Management also believes that, if so desired, it can adjust the
rates on time deposits to retain deposits in a changing interest-rate
environment.
10
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
As a Florida-chartered commercial bank, Mercantile is required to maintain a
liquidity reserve of at least 15% of its total transaction accounts and 8% of
its total nontransaction accounts less those deposits of certain public funds.
The liquidity reserve may consist of cash on hand, cash on demand with other
correspondent banks and other investments and short-term marketable securities
as defined, such as federal funds sold and United States securities or
securities guaranteed by the United States. As of June 30, 1999, Mercantile had
liquidity of approximately $91 million, or approximately 27% of total deposits.
Management believes Mercantile was in compliance with all minimum capital
requirements which it was subject to at June 30, 1999.
The following ratios and rates are presented for the dates and periods
indicated:
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED
JUNE 30, DECEMBER 31, JUNE 30,
1999 1998 1998
--------- ------------ ---------
<S> <C> <C> <C>
Average equity as a percentage
of average assets 7.81% 9.15% 9.45%
Equity to total assets at end of period 7.21% 8.72% 9.27%
Return on average assets (1) 0.76% 0.84% 0.86%
Return on average equity (1) 9.67% 9.22% 9.05%
Noninterest expenses to average assets (1) 3.24% 3.39% 3.62%
Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period 0.35% 0.43% 0.17%
</TABLE>
- ----------
(1) Annualized for the six months ended June 30, 1999 and 1998.
(continued)
11
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest income; (iv) interest-rate spread; (v) net
interest margin.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE BALANCE DIVIDENDS RATE
-------- --------- ----------- --------- ---------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $267,689 5,485 8.20% $166,027 3,767 9.08%
Securities 71,265 1,053 5.91 77,602 1,199 6.18
Other interest-earning assets (2) 7,296 87 4.77 17,745 242 5.46
-------- -------- -------- --------
Total interest-earning assets 346,250 6,625 7.65 261,374 5,208 7.97
-------- --------
Noninterest-earning assets 47,295 22,990
-------- --------
Total assets $393,545 $284,364
======== ========
Interest-bearing liabilities:
Savings, NOW accounts and
money-market deposits 122,224 691 2.26 90,543 649 2.87
Time deposits 166,775 2,107 5.05 108,145 1,469 5.43
Borrowings 18,042 200 4.43 11,476 155 5.40
-------- -------- -------- --------
Total interest-bearing liabilities 307,041 2,998 3.91 210,164 2,273 4.33
-------- -------- -------- --------
Noninterest-bearing liabilities 56,957 47,240
Stockholders' equity 29,547 26,960
-------- --------
Total liabilities and stockholders' equity $393,545 $284,364
======== ========
Net interest income $ 3,627 $ 2,935
======== ========
Interest-rate spread (3) 3.74% 3.64%
==== ====
Net interest margin (4) 4.19% 4.49%
==== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.13 1.24
======== ========
<FN>
- -----------------
(1) Includes loans on nonaccrual status.
(2) Includes federal funds sold and securities purchased under agreements to
resell.
(3) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
</FN>
</TABLE>
12
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest income; (iv) interest-rate spread; (v) net
interest margin.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
---------------------------------------------------------------------
1999 1998
--------------------------------- --------------------------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE AND YIELD/ AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE BALANCE DIVIDENDS RATE
-------- --------- ---------- -------- ---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (1) $ 253,729 10,400 8.20% $ 163,537 7,498 9.17%
Securities 67,504 1,965 5.82 79,492 2,495 6.28
Other interest-earning assets (2) 11,233 263 4.68 15,149 410 5.41
--------- ------ --------- ------
Total interest-earning assets 332,466 12,628 7.60 258,178 10,403 8.06
------ ------
Noninterest-earning assets 43,668 22,736
--------- -------
Total assets $ 376,134 $ 280,914
========= =========
Interest-bearing liabilities:
Savings, NOW accounts and
money-market deposits 118,504 1,343 2.27 88,114 1,262 2.86
Time deposits 160,729 4,095 5.10 106,613 2,874 5.39
Borrowings 17,338 375 4.33 14,954 411 5.50
--------- ------- -------- -------
Total interest-bearing liabilities 296,571 5,813 3.92 209,681 4,547 4.34
------- -------
Noninterest-bearing liabilities 50,179 44,696
Stockholders' equity 29,384 26,537
--------- -------
Total liabilities and stockholders' equity $ 376,134 $ 280,914
========= =========
Net interest income $ 6,815 $ 5,856
========= ========
Interest-rate spread (3) 3.68% 3.72%
==== ====
Net interest margin (4) 4.10% 4.54%
==== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.12 1.23
==== ====
<FN>
- --------------
(1) Includes loans on nonaccrual status.
(2) Includes federal funds sold and securities purchased under agreements to
resell.
(3) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
</FN>
</TABLE>
13
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
COMPARISON OF THREE-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998
GENERAL. Net earnings for the three-months ended June 30, 1999 were $868,000
or $.13 per basic and diluted share compared to $586,000 or $.09 per basic
and diluted share for 1998. The increase in earnings was primarily due to
increases in net interest income and noninterest income partially offset
by an increase in noninterest expenses.
INTEREST INCOME AND EXPENSE. Interest income increased by $1.4 million to
$6.6 million for the three-month period ended June 30, 1999 from $5.2
million for the three months ended June 30, 1998. Interest on loans
increased $1.7 million to $5.5 million due to an increase in the average
loan portfolio balance in 1999 partially offset by a decrease in the
weighted-average yield earned in 1999. Interest on securities decreased
$.1 to $1.1 million for the three months ended June 30, 1999 due to a
decrease in the average securities portfolio in 1999 and a decrease in the
average yield earned in 1999. Interest on other interest-earning assets
decreased from $242,000 for the three months ended June 30, 1998 to
$87,000 for the three months ended June 30, 1999 due to a decrease in the
average balance of other interest-earning assets in 1999 and a decrease in
the weighted-average yield earned in 1999.
Interest expense on deposits increased $.7 million to $2.8 million for the
three months ended June 30, 1999 from $2.1 million in 1998. The increase
is due to an increase in the average deposits in 1999 partially offset by
a decrease in the weighted-average rate paid on deposits in 1999.
PROVISION FOR LOAN LOSSES. The provision for loan losses is charged against
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type of
lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Company's market areas, and other factors related to the
collectibility of the Company's loan portfolio. The provision for loan
losses was $98,000 for the three-month period ended June 30, 1999 compared
to $110,000 for the same period in 1998. The allowance for loan losses is
$2.6 million at June 30, 1999. While management believes that its
allowance for loan losses is adequate as of June 30, 1999, future
adjustments to the Company's allowance for loan losses may be necessary if
economic conditions differ substantially from the assumptions used in
making the initial determination.
NONINTEREST INCOME. Noninterest income increased to $910,000 in 1999 from
$638,000 for the three months ended June 30, 1998. Service charges on
deposits increased in 1999 due to the growth in deposit accounts. Income
from bank owned life insurance policies increased in 1999 primarily
because of an additional investment in life insurance.
NONINTEREST EXPENSE. Total noninterest expense increased to $3.2 million for
the three months ended June 30, 1999 from $2.6 million for the comparable
period ended June 30, 1998. Increases resulted primarily from increases in
employee compensation, occupancy expense and data processing expense due
to the addition of new banking offices and the expansion of the operations
center.
INCOME TAXES. The income tax provision for the three months ended June 30,
1999 was $392,000 or 31.1% of earnings before income taxes compared to
$311,000 or 34.7% for the three months ended June 30, 1998.
14
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
COMPARISON OF SIX-MONTH PERIODS ENDED JUNE 30, 1999 AND 1998
GENERAL. Net earnings for the six-months ended June 30, 1999 were $1.4
million or $.21 per basic and diluted share compared to $1.2 million or
$.18 per basic and diluted share for 1998. The increase in earnings was
primarily due to an increase in net interest income and noninterest income
partially offset by an increase in noninterest expenses.
INTEREST INCOME AND EXPENSE. Interest income increased by $2.2 million to
$12.6 million for the six-month period ended June 30, 1999 from $10.4
million for the six months ended June 30, 1998. Interest on loans
increased $2.9 million to $10.4 million due to an increase in the average
loan portfolio balance in 1999 partly offset by a decrease in the
weighted-average yield earned in 1999. Interest on securities decreased
$.5 million to $2.0 million for the six months ended June 30, 1999 due to
a decrease in the average securities portfolio in 1999 and a decrease in
the average yield earned in 1999. Interest on other interest-earning
assets decreased from $410,000 for the six months ended June 30, 1998 to
$263,000 for the six months ended June 30, 1999 due to a decrease in the
average balance of other interest-earning assets in 1999 and a decrease in
the weighted-average yield earned in 1999.
Interest expense on deposits increased $1.3 million to $5.4 million for
the six months ended June 30, 1999 from $4.1 million in 1998. The increase
is due to an increase in the average deposits in 1999 partially offset by
a decrease in the weighted-average rate paid on deposits in 1999.
PROVISION FOR LOAN LOSSES. The provision for loan losses is charged against
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type of
lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Company's market areas, and other factors related to the
collectibility of the Company's loan portfolio. The provision for loan
losses was $354,000 for the six-month period ended June 30, 1999 compared
to $260,000 for the same period in 1998. The allowance for loan losses is
$2.6 million at June 30, 1999. While management believes that its
allowance for loan losses is adequate as of June 30, 1999, future
adjustments to the Company's allowance for loan losses may be necessary if
economic conditions differ substantially from the assumptions used in
making the initial determination.
NONINTEREST INCOME. Noninterest income increased to $1.7 million in 1999 from
$1.4 million for the six months ended June 30, 1998. Service charges on
deposits increased in 1999 due to the growth in deposit accounts. Income
from bank owned life insurance policies increased in 1999 primarily
because of an additional investment in life insurance.
NONINTEREST EXPENSE. Total noninterest expense increased to $6.1 million for
the six months ended June 30, 1999 from $5.1 million for the comparable
period ended June 30, 1998. Increases resulted primarily from increases in
employee compensation, occupancy expense and data processing expense due
to the addition of new banking offices and the expansion of the operations
center.
INCOME TAXES. The income tax provision for the six months ended June 30, 1999
was $601,000 or 29.7% of earnings before income taxes compared to $655,000
or 35.3% for the period ended June 30, 1998.
15
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
YEAR 2000 ISSUES
The Company is acutely aware of the many areas affected by the Year 2000
computer issue, as addressed by the Federal Financial Institutions Examination
Council ("FFIEC") in its interagency statement which provided an outline for
institutions to effectively manage the Year 2000 challenges. A Year 2000 plan
has been approved by the Board of Directors which includes multiple phases,
tasks to be completed, and target dates for completion. Issues addressed therein
include awareness, assessment, renovation, validation, implementation, testing,
and contingency planning. In addition, the Board of Directors has engaged a
consulting firm to provide an independent review and evaluation of the Company's
Year 2000 readiness.
The Company formed a Year 2000 committee that is charged with the oversight of
completing the Year 2000 project on a timely basis. The Company has completed
its awareness, assessment, renovation, validation, implementation, and testing
phases; the results of which reflect the Company's internal systems to be Year
2000 ready. Its customer relations training having been achieved, the Company is
actively involved in its contingency planning training program. Since it
routinely upgrades and purchases technologically advanced software and hardware
on a continual basis, the Company has determined that the cost of making
modifications to correct any Year 2000 issues will not materially affect
reported operating results.
The Company's vendors and suppliers have been contacted for written confirmation
of their product readiness for Year 2000 compliance. Negative or deficient
responses are analyzed and periodically reviewed to prescribe timely actions
within the Company's contingency planning. The Company's main service provider
has completed testing of its mission critical application software and
interconnected systems. Test results, which have been documented and validated,
are deemed to be Year 2000 compliant. FFIEC guidance on testing Year 2000
compliance of service providers states that proxy tests are acceptable
compliance tests. In proxy testing, the service provider tests with a
representative sample of financial institutions that use a particular service,
with the results of such testing shared with all similarly situated clients of
the service provider. The Company has authorized the acceptance of proxy testing
since the proxy tests have been conducted with financial institutions that are
similar in type and complexity to its own, using the same version of the Year
2000 ready software and the same hardware and operating systems.
The Company also recognizes the importance of determining that its borrowers are
facing the Year 2000 problem in a timely manner to avoid deterioration of the
loan portfolio solely due to this issue. All material relationships have been
identified and questionnaires have been completed to assess the inherent risks.
Deposit customers have received statement stuffers, informational material, and
direct mail in this regard. The Company is working on a one-on-one basis with
any borrower who has been identified as having high Year 2000 risk exposure.
Accordingly, management does not believe that the Company will incur material
costs associated with the Year 2000 issue. Yet, there can be no assurances that
all hardware and software that the Company will use will be Year 2000 compliant.
Management cannot predict the amount of financial difficulties it may incur due
to customers and vendors inability to perform according to their agreements with
the Company or the effects that other third parties may cause as a result of
this issue. Therefore, there can be no assurance that the failure or delay of
others to address the issue or that the costs involved in such process will not
have a material adverse effect on the Company=s business, financial condition,
and results of operations.
The Company's contingency plans relative to Year 2000 issues have been
finalized; this plan covers actions considering a "worst case scenario,"
although such dire predictions are not anticipated. Based on testing results (as
noted above), the Company's mission critical systems have been deemed to be Year
2000 compliant; therefore a contingency plan has not been developed with respect
to those systems. With regard to nonmission critical internal systems, the
Company has replaced those systems that tested as being noncompliant.
Alternatively, some systems could be handled manually on an interim basis. The
Company is evaluating termination of those relationships with outside service
providers that have been deemed to provide noncompliant systems. It is
anticipated that the Company's deposit customers will have increased demands for
cash in the latter part of 1999 and correspondingly the Company will maintain
higher liquidity levels.
16
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from interest rate risk inherent in
its lending and deposit taking activities. The Company has little or no risk
related to trading accounts, commodities or foreign exchange.
Management actively monitors and manages its interest rate risk exposure. The
primary objective in managing interest-rate risk is to limit, within established
guidelines, the adverse impact of changes in interest rates on the Company's net
interest income and capital, while adjusting the Company's asset-liability
structure to obtain the maximum yield-cost spread on that structure. Management
relies primarily on its asset-liability structure to control interest rate risk.
However, a sudden and substantial increase in interest rates could adversely
impact the Company's earnings, to the extent that the interest rates borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. There have been no significant changes in the Company's
market risk exposure since December 31, 1998.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Gulf West and Mercantile are parties to various legal proceedings in the
ordinary course of business. Management does not believe that there is any
pending or threatened proceeding against Gulf West or Mercantile which, if
determined adversely, would have a material adverse effect on the business,
results of operations, or financial position of Gulf West or Mercantile.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders (the "Annual Meeting") of Gulf West Banks,
Inc., was held on April 15, 1999, to consider the election of three directors
with terms expiring at the 2002 Annual Meeting. The shareholders also voted upon
the adoption of an Employee Stock Purchase Plan and an amendment to the
Company's Articles of Incorporation to increase the maximum authorized shares of
its common stock from 10,000,000 shares to 25,000,000 shares.
At the Annual Meeting, 5,813,221 shares were present in person or by proxy.
Listed below are the directors that were elected at the Annual Meeting with a
summary of the votes cast for each nominee:
FOR AGAINST ABSTAIN
--------- ------- -------
Algis Koncius 5,797,820 15,401 --
Louis P. Ortiz, CPA 5,798,040 15,181 --
P.N. Risser III 5,797,820 15,401 --
In addition to the foregoing, the following individuals are directors of Gulf
West whose terms continued after the Annual Meeting:
Gordon W. Campbell Pandurang V. Kamat, MD
John Wm. Galbraith (Director Emeritus) John Cooper Petagna
Henry W. Hanff, MD Ross E. Roeder
Thomas M. Harris
17
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION, CONTINUED
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS, CONTINUED
The shareholder vote on the two other matters considered at the meeting was as
follows:
FOR AGAINST ABSTAIN
--------- ------- -------
Adoption of Employee Stock Purchase Plan 5,710,928 79,116 23,167
Amendment to Articles of Incorporation 5,775,485 20,977 16,759
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
2* Amended and Restated Agreement and Plan of Merger by and
among Citizens National Bank and Trust Company, Inc.,
Gulf West Banks, Inc. and Mercantile Bank
3.1* Articles of Incorporation of Gulf West Banks, Inc.
3.2 Articles of Amendment to Articles of Incorporation of
Gulf West Banks, Inc.
3.3* Bylaws of Gulf West Banks, Inc.
10.1* Form of Registration Rights Agreement with Gordon W.
Campbell and John Wm. Galbraith
10.2* Salary Continuation Agreements with Gordon W. Campbell,
Barry K. Miller, and Robert A. Blakley
10.3* Employment Contract with Gordon W. Campbell
10.4* Stock Option Plan
10.5*** Agreement to transfer fiduciary accounts to SunTrust
Bank, Nature Coast
11** Statement regarding computation of per share earnings
27 Financial Data Schedule (for SEC use only)
* incorporated by reference to the exhibits included in Amendment No. 2 to
Gulf West's Form S-4 Registration Statement, as filed with the Securities and
Exchange Commission on December 4, 1997 (Registration No. 333-373307).
** contained in Note 3 to the condensed consolidated financial statements
set forth in this Form 10-Q.
*** incorporated by reference to the exhibits included in Gulf West's Form
10-Q for the quarter ended March 31, 1998, as filed with the Securities and
Exchange Commission on May 8, 1998.
(b) No reports on Form 8-K were filed by the Company during the quarter ended
June 30, 1999.
18
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
SIGNATURES
Under 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.
GULF WEST BANKS, INC.
(Registrant)
Date: JULY 23, 1999 By: /s/ GORDON W. CAMPBELL
-------------- ---------------------------------
Gordon W. Campbell, Chairman of
the Board and President (Chief
Executive Officer)
Date: JULY 23, 1999 By: /s/ BARRY K. MILLER
-------------- ---------------------------------
Barry K. Miller, Secretary
(Chief Financial Officer)
19
<PAGE>
GULF WEST BANKS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT
- -------------- -----------------------
2* Amended and Restated Agreement and Plan of Merger by and
among Citizens National Bank and Trust Company, Inc.,
Gulf West Banks, Inc. and Mercantile Bank
3.1* Articles of Incorporation of Gulf West Banks, Inc.
3.2 Articles of Amendment to Articles of Incorporation of
Gulf West Banks, Inc.
3.3* Bylaws of Gulf West Banks, Inc.
10.1* Form of Registration Rights Agreement with Gordon W.
Campbell and John Wm. Galbraith
10.2* Salary Continuation Agreements with Gordon W. Campbell,
Barry K. Miller, and Robert A. Blakley
10.3* Employment Contract with Gordon W. Campbell
10.4* Stock Option Plan
10.5*** Agreement to transfer fiduciary accounts to SunTrust
Bank, Nature Coast
11** Statement regarding computation of per share earnings
27 Financial Data Schedule (for SEC use only)
- -------------
* incorporated by reference to the exhibits included in Amendment No. 2 to
Gulf West's Form S-4 Registration Statement, as filed with the Securities and
Exchange Commission on December 4, 1997 (Registration No. 333-37307).
** contained in Note 3 to the condensed consolidated financial statements
set forth in this Form 10-Q.
*** incorporated by reference to the exhibits included in Gulf West's Form
10-Q for the quarter ended March 31, 1998, as filed with the Securities and
Exchange Commission in May 8, 1998.
20
Exhibit 3.2
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
GULF WEST BANKS, INC.
WHEREAS, the Articles of Incorporation of GULF WEST BANKS, INC. were
filed with and approved by the Secretary of State of Florida on the 24th day of
October, 1994; and as amended on the 29th day of March, 1995; and
WHEREAS, it is the intention of all of the directors of GULF WEST
BANKS, INC. that the Articles of Incorporation be amended in accordance with the
amendment set forth herein; and
WHEREAS, the proposed Amendment to the Articles of Incorporation of
GULF WEST BANKS, INC. hereinafter set forth was approved by all of the directors
of GULF WEST BANKS, INC. on the 18th day of February, 1999; and
WHEREAS, the proposed amendment was approved by the shareholders on
April 15, 1999 and the number of votes cast for the amendment was sufficient for
approval;and
WHEREAS, the approval of the Secretary of State of Florida of the
proposed Amendment hereinafter set forth is hereby requested.
NOW, THEREFORE, the Articles of Incorporation of GULF WEST BANKS, INC.
are hereby amended by deleting in its entirety the present Article I and by
substituting therefor the following, to-wit:
"ARTICLE V
CAPITAL STOCK
1. COMMON STOCK. The total number of shares of capital stock which the
Corporation has authority to issue is 25,000,000 shares of common stock at $1.00
par value per share. The shares may be issued by the Corporation without the
approval of stockholders except as otherwise provided in these Articles or the
rules of a national securities exchange, if applicable. The consideration for
the issuance of the shares shall be paid to or received by the Corporation in
full before their issuance and shall not be less than the par value per share.
Before the Corporation issues shares, the Board of Directors must determine that
the consideration received or to be received for the shares is adequate. The
consideration for the issuance of the shares may consist of tangible or
intangible property or benefit to the Corporation including but not limited to
cash, promissory notes, services performed, promises to perform services
evidenced by a written contract or other securities or contract rights or
obligations of the Corporation or any combination of the foregoing. In the
absence of actual fraud in the transaction, the judgment of the Board of
Directors as to the value of such consideration shall be conclusive. Upon
receipt of such consideration such shares shall be deemed to be fully paid and
nonassessable. Each holder of shares of common stock shall be entitled to one
vote for each share held by such holders.
<PAGE>
Exhibit 3.2
Each share of common stock shall have the same relative powers,
preferences and rights as, and shall be identical in all respects with, all the
other shares of common stock of the Corporation."
IN WITNESS WHEREOF, this Amendment to the Articles of Incorporation is
hereby executed on behalf of GULF WEST BANKS, INC. this 19th day of April, 1999.
GULF WEST BANKS, INC.
By:/s/ GORDON W. CAMPBELL
-------------------------
Gordon W. Campbell, President
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 13,280
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 19,701
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 86,384
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 261,867
<ALLOWANCE> 2,613
<TOTAL-ASSETS> 406,969
<DEPOSITS> 343,318
<SHORT-TERM> 32,917
<LIABILITIES-OTHER> 1,376
<LONG-TERM> 0
0
0
<COMMON> 6,668
<OTHER-SE> 22,690
<TOTAL-LIABILITIES-AND-EQUITY> 406,969
<INTEREST-LOAN> 10,400
<INTEREST-INVEST> 1,965
<INTEREST-OTHER> 263
<INTEREST-TOTAL> 12,628
<INTEREST-DEPOSIT> 5,438
<INTEREST-EXPENSE> 5,813
<INTEREST-INCOME-NET> 6,815
<LOAN-LOSSES> 354
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 6,093<F1>
<INCOME-PRETAX> 2,022
<INCOME-PRE-EXTRAORDINARY> 2,022
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,421
<EPS-BASIC> .21
<EPS-DILUTED> .21
<YIELD-ACTUAL> 4.10
<LOANS-NON> 1,178
<LOANS-PAST> 0<F2>
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,436
<CHARGE-OFFS> 197
<RECOVERIES> 20
<ALLOWANCE-CLOSE> 2,613
<ALLOWANCE-DOMESTIC> 2,613
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Other expense includes: salaries and employee benefits of $3,264, occupancy of
$1,156, data processing of $406, advertising of $171, stationary and supplies
of $198 and other expenses which totaled $898.
<F2>Items are only disclosed on an annual basis in the Company's Form 10-K, and
are, therefore, not included in this Financial Data Schedule.
</FN>
</TABLE>
