UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission File Number 1-13842
Texarkana First Financial Corporation .
(Exact name of registrant as specified in its charter)
Texas 71-0771419 .
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3rd & Olive Streets
Texarkana, Arkansas 71854 .
(Address of principal executive office) (Zip Code)
(870) 773-1103 .
(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 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: As of
January 31, 1998, there were issued and outstanding 1,759,605 shares
of the Registrant's Common Stock, par value $0.01 per share.
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Statements of Financial Condition
As of December 31, 1997 (unaudited) and September 30, 1997. 1
Consolidated Statements of Income for the three months
ended December 31, 1997 (unaudited) and 1996 (unaudited)... 2
Consolidated Statements of Cash Flows for the three months
ended December 31, 1997 (unaudited) and 1996 (unaudited)... 3
Notes to Unaudited Consolidated Financial Statements....... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 8
Part II. Other Information
Item 1.Legal Proceedings........................................... 11
Item 2.Changes in Securities....................................... 11
Item 3.Defaults Upon Senior Securities............................. 11
Item 4.Submission of Matters to a Vote of Security Holders......... 11
Item 5.Other Information........................................... 11
Item 6.Exhibits and Reports on Form 8-K............................ 11
Signatures.................................................. 12
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands)
Unaudited
December 31, September 30
1997 1997
ASSETS
Cash and cash equivalents
Cash & due from banks......................... $ 2,188 $ 1,147
Interest bearing deposits in other banks...... 1,697 3,331
Federal funds sold............................ 2,875 1,575
________ ________
Total cash and cash equivalents............. 6,760 6,053
Investment securities available-for-sale........ 19,700 18,767
Mortgage-backed securities held-to-maturity..... 1,222 1,293
Federal Home Loan Bank stock.................... 1,133 1,116
Loans receivable, net of unearned income........ 148,224 148,471
Allowance for loan losses....................... (1,124) (1,124)
Accrued interest receivable..................... 1,257 1,176
Foreclosed real estate, net..................... 133 127
Premises and equipment, net..................... 2,455 2,382
Other assets.................................... 499 449
________ ________
Total assets.................................. $180,259 $178,710
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits........................................ $143,828 $143,207
Advances from borrowers for taxes & insurance... 922 1,920
Borrowed funds.................................. 6,472 4,989
Accrued federal income tax...................... 687 302
Accrued state income tax........................ 278 216
Accrued expenses and other liabilities.......... 756 696
________ ________
Total liabilities............................. 152,943 151,330
________ ________
Commitments and contingencies................... -- --
________ ________
Common stock, $0.01 par value;
15,000,000 shares authorized;
1,983,750 shares issued....................... 20 20
Additional paid-in capital...................... 13,538 13,485
Common stock acquired by stock benefit plans.... (2,164) (2,208)
Treasury stock, at cost, 223,945 shares and
196,745 shares September 30, 1997............. (3,802) (3,103)
Retained earnings-substantially restricted...... 19,632 19,105
Net unrealized gain (loss) on investment
securities available for sale, net of tax..... 92 81
________ ________
Total stockholders' equity.................. 27,316 27,380
________ ________
Total liabilities and stockholders' equity.. $180,259 $178,710
======== ========
The accompanying notes are an integral part of this statement.
Page 1
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
December 31,
1997 1996
Interest income:
Loans:
First mortgage loans.......................... $ 2,834 $ 2,604
Consumer and other loans...................... 330 287
Investments - taxable............................ 301 314
Mortgage-backed and related securities........... 129 28
_______ _______
Total interest income......................... 3,594 3,233
_______ _______
Interest expense:
Deposits......................................... 1,837 1,694
Borrowed funds................................... 86 6
_______ _______
Total interest expense........................ 1,923 1,700
_______ _______
Net interest income........................... 1,671 1,533
Provision for loan losses........................ -- --
_______ _______
Net interest income after provision........... 1,671 1,533
_______ _______
Noninterest income:
Gain on sale of repossessed assets, net.......... 2 --
Loan origination and commitment fees............. 86 68
Investment securities gain (loss), net........... -- --
Other............................................ 168 106
_______ _______
Total noninterest income...................... 256 174
_______ _______
Noninterest expense:
Compensation and benefits........................ 511 475
Occupancy and equipment.......................... 54 42
SAIF deposit insurance premium................... 22 74
Provision and loss on foreclosed real estate.... -- --
Other............................................ 144 134
_______ _______
Total noninterest expense..................... 731 725
_______ _______
Income before income taxes.......................... 1,196 982
Income tax expense.................................. 440 363
_______ _______
Net income.......................................... $ 756 $ 619
======= =======
Earnings per common share - basic................ $ 0.459 $ 0.359
Earnings per common share - fully diluted........ $ 0.439 $ 0.355
Weighted average shares - basic................ 1,646,292 1,724,150
Weighted average shares - fully diluted........ 1,721,608 1,742,675
Dividends per common share...................... $ 0.1400 $ 0.1125
The accompanying notes are an integral part of this statement.
Page 2
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
December 31,
1997 1996
Cash Flows From Operating Activities:
Interest and dividends received..................... $ 3,495 $ 3,308
Miscellaneous income received....................... 256 174
Interest paid....................................... (719) (539)
Cash paid to suppliers and employees................ (527) (1,217)
Cash from loans sold................................ 2,877 821
Cash paid for loans originated to sell.............. (2,160) (821)
Income taxes paid................................... 8 (1)
________ ________
Net Cash Provided By Operating Activities......... 3,230 1,725
________ ________
Cash Flows From Investing Activities:
Proceeds from call and maturity of
investment securities............................. 4,376 1,500
Proceeds from sale of securities
available for sale................................ - - 2,420
Purchases of investment securities
available for sale................................ (2,750) (1,500)
Purchases of mortgage-backed securities............. (2,841) - -
Principal collected on mortgage-backed securities... 347 96
Purchase of fixed assets............................ (98) (196)
Net (increase) in loans............................. (567) (311)
Cash paid for REO held for resale................... (3) - -
Proceeds from sale of REO and other REO recoveries.. 72 13
________ ________
Net Cash Provided (Used) By Investing Activities.. (1,464) 2,022
________ ________
Cash Flows From Financing Activities:
Net increase (decrease) in savings,
demand deposits, and certificates of deposit...... (600) 1,054
Net increase (decrease) in escrow funds............. (999) (1,112)
Net increase (decrease) in funds borrowed........... 1,483 (2,815)
Purchase of treasury stock.......................... (701) (708)
Stock options exercised............................. 8 - -
Cash dividends paid on common stock................. (250) (212)
________ ________
Net Cash (Used) By Financing Activities........... (1,059) (3,793)
________ ________
Net Increase(Decrease) In Cash and Cash Equivalents 707 (46)
________ ________
Cash and Cash Equivalents, beginning of period........ 6,053 8,860
________ ________
Cash and Cash Equivalents, end of period.............. $ 6,760 $ 8,814
======== ========
The accompanying notes are an integral part of this statement.
Page 3
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
SUPPLEMENTAL INFORMATION CONCERNING CASH FLOWS
Three Months Ended
December 31,
1997 1996
Reconciliation of net income to cash provided
by operating activities:
Net income............................................ $ 756 $ 619
________ ________
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation........................................ 26 23
Amortization of discounts and premiums.............. 6 (23)
Amortization of deferred loan fees.................. (5) (3)
Amortization of common stock acquired
by benefit plans.................................. 150 145
(Gain) loss on sales of real estate owned........... (2) - -
Interest expense credited to saving accounts........ 1,221 1,108
Dividend and interest income added to investments... (29) (29)
Loan fees deferred.................................. 11 6
Changes in assets and liabilities:
(Increase) decrease in interest receivable.......... (82) 123
Increase (decrease) in accrued interest payable..... (17) 53
Increase (decrease) in income tax payable........... 448 362
Net increase (decrease) in other
receivables and payables.......................... 747 (659)
________ ________
Total adjustments................................. 2,474 1,106
________ ________
Net cash provided by operations....................... $ 3,230 $ 1,725
======== ========
Supplemental schedule of noncash investing
and financing activities:
FHLB stock dividends not redeemed................. $ 17 $ 16
Acquisition of real estate in settlement of loans. 70 - -
Loans made to finance sale of REO................. 76 - -
Additional common stock acquired by ESOP
with cash from ESOP fund........................ - - 395
Net unrealized gain (loss) on investment
securities available for sale................... 20 82
Page 4
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
Notes to Unaudited Consolidated Financial Statements
Basis of Presentation
Texarkana First Financial Corporation (the "Company") was incorporated
in March 1995 under Texas law for the purpose of acquiring all of the
capital stock issued by First Federal Savings and Loan Association of
Texarkana (the "Association") in connection with the Association's
conversion from a federally chartered mutual savings and loan
association to a stock savings and loan association (the "Conversion").
The Conversion was consummated on July 7, 1995 and, as a result, the
Company became a unitary savings and loan holding company for the
Association. Prior to the Conversion, the Company had no material
assets or liabilities and engaged in no business activity. Subsequent
to the acquisition of the Association, the Company has engaged in no
significant activity other than holding the stock of the Association and
engaging in certain passive investment activities.
The accompanying unaudited consolidated financial statements of the
Company have been prepared in accordance with instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair statement of
results for the interim periods.
The results of operations for the three months ended December 31, 1997
are not necessarily indicative of the results to be expected for the
year ending September 30, 1998. Although net income was consistent for
the first three months, earnings for the full fiscal year will be
impacted by the repurchase of Company stock and various economic
conditions. The unaudited consolidated financial statements and notes
thereto should be read in conjunction with the audited financial
statements and notes thereto for the year ended September 30, 1997,
contained in the Company's annual report to stockholders.
Earnings Per Share
Basic earnings per share is computed on the basis of the weighted-
average number of shares of common stock outstanding. Stock options
outstanding are included in the calculation of fully diluted earnings
per share. Shares acquired by the ESOP are accounted for in accordance
with Statement of Position 93-6 and are not included in the weighted-
average shares outstanding until the shares are committed to be released
for allocation to ESOP participants.
Page 5
<PAGE>
Borrowed Funds
Borrowed funds consist primarily of short-term, fixed rate advances from
the Federal Home Loan Bank ("FHLB"). At December 31, 1997, the balance
was $6.5 million, at 5.61% maturing January 5, 1998. At September 30,
1997, the balance was $5.0 million, at 5.54% maturing October 24, 1997.
Recent Legislation
The deposits of the Association are currently insured by the Savings
Association Insurance Fund ("SAIF"). The previously underfunded status
of the SAIF resulted in the introduction of federal legislation intended
to, among other things, recapitalize the SAIF and address the resulting
premium disparity between the SAIF and the Bank Insurance Fund ("BIF"),
the federal deposit insurance fund that covers commercial bank deposits.
In September 1996, the Omnibus Appropriations Act was signed into law.
This legislation authorized a one time charge of SAIF-insured
institutions in the amount of .657 dollars for every one hundred dollars
of assessable deposits. Additional provisions of the Act include new
BIF and SAIF premiums and the merger of BIF and SAIF. The new BIF and
SAIF premiums will include a premium for repayment of the Financing
Corporation ("FICO") bonds plus any regular insurance assessment,
currently nothing for the lowest risk category institutions. Until full
pro-rata FICO sharing is in effect, the FICO premiums for BIF and SAIF
will be 1.3 and 6.4 basis points, respectively, beginning January 1,
1997. Full pro-rata FICO sharing is to begin no later than January 1,
2000. BIF and SAIF are to be merged on January 1, 1999, provided the
bank and savings association charters are merged by that date.
Recent Accounting Developments
In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights", amending FASB Statement No. 65, "Accounting for
Certain Mortgage Banking Activities", to require that a mortgage banking
enterprise recognize as separate assets rights to service mortgage loans
for others, however those servicing rights are acquired. Mortgage
servicing rights are to be amortized in proportion to and over the
period of estimated net servicing income and are to be evaluated for
impairment based on their fair value. This Statement applies
prospectively in fiscal years beginning after December 15, 1995, to
transactions in which a mortgage banking enterprise sells or securitizes
mortgage loans with servicing rights retained. The Company adopted SFAS
No. 122 effective October 1, 1996, with no material impact on the
Company's financial condition or results of operations.
Page 6
<PAGE>
FASB has issued final standards on earnings per share ("EPS") under two
new pronouncements, Statement of Financial Accounting Standards No. 128
and SFAS 129 which include standards for computing and presenting EPS
and for disclosing information about an entity's capital structure. The
standards for EPS apply to entities with publicly held common stock or
potential common stock, while the standards for disclosure about capital
structure apply to all entities. The standards eliminate the
presentation of primary EPS and require presentation of basic EPS, the
principal difference being that common stock equivalents will not be
considered in the computation of basic EPS. The standards also require
dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and require a
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS
computation. Basic EPS would include no dilution and would be computed
by dividing income available to common stockholders by the weighted-
average number of common shares outstanding for the period. Diluted EPS
would reflect the potential dilution that could occur if the potential
common shares were exercised or converted into common stock or resulted
in the issuance of common stock that then shared in the earnings of the
entity. SFAS 128 and SFAS 129 are effective for periods ending after
December 15, 1997 and earlier application is not permitted. The
standards require restatement of all prior-period EPS data presented.
Page 7
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition
At December 31, 1997, the Company's assets amounted to $180.3 million as
compared to $178.7 million at September 30, 1997. The $1.5 million
(.9%) increase was primarily due to increases of $.9 million (4.2%) in
investments and $.7 million (11.7%) in cash and cash equivalents,
partially offset by a decrease of $.2 million (.2%) in loans, net of
unearned income. Liabilities increased $1.6 million (1.1%) to $152.9
million at December 31, 1997 compared to $151.3 million at September 30,
1997 primarily due to increases of $1.5 million (29.7%) in borrowed
funds and $.6 million (.4%) in deposits, partially offset by a $1.0
million (52.0%) decrease in borrowers' escrow balances (property tax
payments are made in the first two quarters of the fiscal year).
The increase in investments and the increase in borrowed funds was the
result of using short-term advances from the FHLB to purchase GNMA
adjustable rate mortgage-backed securities. The decrease in loans, net
of unearned income, was the result of $2.9 million of loans sold during
the quarter ended December 31, 1997.
Stockholders' equity amounted to $27.3 million (15.2% of total assets)
at December 31, 1997 compared to $27.4 million (15.3% of total assets)
at September 30, 1997. The retained earnings balance reflects the
$756,000 net income from operations, less the $229,000 in dividends
declared. The treasury stock balance reflects the net increase of
27,200 shares of common stock.
Asset quality remains strong with a ratio of nonperforming assets to
total assets of .17% and .23% as of December 31, 1997 and September 30,
1997, respectively, and a ratio of nonperforming loans and debt
restructurings to total loans of .11% and .19%, respectively.
Comparison of Results of Operations for the Three Month Periods Ended
December 31, 1997 and 1996
General. For the three months ended December 31, 1997, net income was
$756,000 compared to $619,000 for the same period ended December 31,
1996. The increase of $137,000 (22.1%) in net income was due to an
increase of $138,000 in net interest income and a decrease of $76,000 in
net noninterest expense, which were partially offset by an increase of
$77,000 in income tax expense.
For the three months ended December 31, 1997 and December 31, 1996,
return on average assets (ROA) was 1.67% and 1.50%, respectively, return
on average equity (ROE) was 10.88% and 9.30%, respectively, and the
operating efficiency ratio was 37.9% and 42.5%, respectively.
Page 8
<PAGE>
Net Interest Income. For the three months ended December 31, 1997, net
interest income increased $138,000 (9.0%) compared to the same period in
1996. The increase was due to an increase of $361,000 (11.2%) in
interest income, partially offset by an increase of $223,000 (13.1%) in
interest expense. For the first quarter of fiscal 1998 compared to the
first quarter of fiscal 1997, the net interest margin was 3.78% and
3.79%, respectively, and the net interest spread was 2.99% and 2.99%,
respectively.
Interest Income. For the three months ended December 31, 1997, interest
income increased $361,000 (11.2%) compared to the same period in 1996.
The increase was the result of higher average balances and rates.
Average earning assets increased to $175.6 million from $160.3 million
and the average yield increased to 8.12% from 8.00%.
Interest Expense. For the three months ended December 31, 1997,
interest expense increased $223,000 (13.1%) compared to the same period
in 1996. The increase was the result of higher average balances and
rates. Average interest bearing liabilities increased to $148.6 million
from $134.5 million and the average rate increased to 5.13% from 5.01%
Provision for Loan Losses. No provisions were made for loan losses
during the three months ended December 31, 1997. No provision for loan
losses has been recorded for the last eleven successive quarters due to
the consistently favorable ratio of nonperforming loans to total loans
of .11% at December 31, 1997, .19% at September 30, 1997 and .15% at
September 30, 1996.
At December 31, 1997 and September 30, 1997, the balance of the
allowance for loan losses was $1.1 million and $1.1 million,
respectively, and the ratio of the allowance for loan losses to
nonperforming loans was 681.21% and 401.43%, respectively. Management
believes that the current allowance for loan losses is adequate based
upon prior loss experience, the volume and type of lending conducted by
the Association, industry standards, past due loans and the current
economic conditions in the market area.
Noninterest Income. For the three months ended December 31, 1997,
noninterest income increased $82,000 (47.1%) compared to the same period
in 1996. The increase was primarily due to increases of $66,000 in net
gain on sale of loans and $18,000 in loan origination fees. The
increases were the result of increases in the number and amount of
mortgage loans originated and sold.
Noninterest Expense. For the three months ended December 31, 1997,
noninterest expense increased $6,000 (.8%) compared to the same period
in 1996. The increase was primarily due to increases of $36,000 in
compensation and benefits, $12,000 in occupancy and equipment and
$10,000 in other expense, all of which were partially offset by a
decrease of $52,000 in SAIF deposit insurance premiums.
Page 9
<PAGE>
Liquidity and Capital Resources
The Company's assets consist primarily of cash and cash equivalents and
the shares of the Association's common stock. The Company has no
significant liabilities. The Association's deposit retention and growth
has remained steady. With a ratio of loans to deposits of 103.1% at
December 31, 1997 and 103.7% at September 30, 1997, liquidity remains
adequate for current operating needs. At December 31, 1997, the
Association's liquidity ratio was 10.8% compared to the required
regulatory minimum of 4.0%.
The Company's and the Association's regulatory capital remains well in
excess of all applicable regulatory requirements. At December 31, 1997,
the Company's tangible, core and risk-based capital ratios were 15.11%,
15.11% and 25.68%, respectively, and the Association's tangible, core
and risk-based capital ratios were 15.12%, 15.12% and 25.65%,
respectively, compared to regulatory requirements of 1.5%, 3.0% and
8.0%, respectively.
Page 10
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
Part II
Item 1. Legal Proceedings
Neither the Company nor the Association is involved in any
pending legal proceedings other than non-material legal
proceedings occurring in the ordinary course of business.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on
January 27, 1998. The Information required herein is
incorporated by reference from the Notice of Annual Meeting of
Stockholders and Proxy Statement dated and filed December 22,
1997. Stockholders elected all directors which were proposed
for nomination and ratified the appointment of Wilf & Henderson,
P.C. as the Company's independent auditors. Voting results are
contained in the Report of Inspector of Election for the Annual
Meeting of Stockholders (Exhibit 99).
Item 5. Other Information
On August 1, 1997, the Company announced a plan to repurchase up
to 89,515 shares (5%) of the Company's outstanding common stock
and 31,300 shares have been repurchased as of January 27, 1998.
The repurchased shares will be held as treasury stock and will
be available for general corporate purposes.
On December 23, 1997, the Company declared a quarterly dividend
in the amount of $.14 per share, payable January 23, 1998 to
stockholders of record on January 9, 1998.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 11 - Earnings Per Share Computation
Exhibit 99 - Report of Inspector of Election
No reports on Form 8-K were filed during the period.
Page 11
<PAGE>
TEXARKANA FIRST FINANCIAL CORPORATION
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.
TEXARKANA FIRST FINANCIAL CORPORATION
/s/ James W. McKinney
Date: February 09, 1998 By: _____________________
James W. McKinney
Chairman and CEO
/s/ James L. Sangalli
Date: February 09, 1998 By: _____________________
James L. Sangalli
Chief Financial Officer
Page 12
<PAGE>
Form 10-Q
Exhibit 11
EARNINGS PER SHARE COMPUTATION
Three Months Ended
December 31,
______________________
1997 1996
__________ __________
Net Income $ 756,271 $ 618,805
========= =========
Weighted average shares:
Common shares outstanding 1,646,292 1,724,150
Common stock equivalents due to
assumed exercise of stock options 75,316 18,525
_________ _________
Common and common equivalent shares 1,721,608 1,742,675
========= =========
Earnings per common share - Basic $.459 $.359
Earnings per common share - Fully diluted .439 .355
E 1
<PAGE>
Form 10-Q
Exhibit 99
REPORT OF INSPECTOR OF ELECTION
I, Larry H. Henderson, CPA , the duly appointed representative of
Texarkana First Financial Corporation , the Inspector of Election of
Texarkana First Financial Corporation (the "Company"), do hereby certify
as follows:
That an Annual Meeting of Stockholders of the Company was held at the
main office of First Federal Savings and Loan Association located at
Third and Olive Streets, Texarkana, Arkansas 71854 on Tuesday, January
27, 1998 at 3:00 p.m., Central Time, pursuant to due notice.
That before entering into the discharge of my duty, I was sworn, and the
oath so taken by me is hereto attached.
That I inspected the signed proxies used at the Annual Meeting and found
the same to be in proper form.
That there were 1,759,805 shares of common stock of the Company which
could be voted at the Annual Meeting, and that 1,599,285 shares were
represented at such meeting by the holders thereof or by proxy, which
constituted a quorum.
1. That I did receive the votes of the stockholders by ballot and by
proxy with respect to the election of directors of the Company, as set
forth below:
FOR WITHHOLD NOT VOTED
a. Josh R. Morriss, Jr. 1,594,996 4,289 160,520
b. John E. Harrison 1,594,875 4,410 160,520
That each of the nominees received a plurity of the total votes eligible
to be cast at the Annual Meeting and that each of the nominees has been
elected as a director by the stockholders of the Company.
2. That I did receive the votes of the stockholders by ballot and by
proxy to ratify the appointment of Wilf & Henderson, P.C. as the
Company's independent auditors for the fiscal year ending September 30,
1998, as set forth below:
FOR AGAINST ABSTAIN NOT VOTED
1,590,735 1,300 7,250 160,520
That said proposal received a majority of the total votes eligible to be
cast at the Annual Meeting and that this matter has been adopted by the
stockholders of the Company.
IN WITNESS WHEREOF, I have made this certificate and have hereunto set
my hand this 27th day of January, 1998.
/s/ Larry H. Henderson
By:_______________________
Larry H. Henderson, CPA
INSPECTOR OF ELECTION
E 2
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<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 2,188
<INT-BEARING-DEPOSITS> 1,697
<FED-FUNDS-SOLD> 2,875
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,700
<INVESTMENTS-CARRYING> 1,222
<INVESTMENTS-MARKET> 1,246
<LOANS> 148,224
<ALLOWANCE> 1,124
<TOTAL-ASSETS> 180,259
<DEPOSITS> 143,828
<SHORT-TERM> 6,472
<LIABILITIES-OTHER> 2,643
<LONG-TERM> 0
0
0
<COMMON> 20
<OTHER-SE> 27,296
<TOTAL-LIABILITIES-AND-EQUITY> 180,259
<INTEREST-LOAN> 3,164
<INTEREST-INVEST> 430
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<INTEREST-TOTAL> 3,594
<INTEREST-DEPOSIT> 1,837
<INTEREST-EXPENSE> 1,923
<INTEREST-INCOME-NET> 1,671
<LOAN-LOSSES> 0
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<EPS-DILUTED> .439
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</TABLE>
