FORM 10 - Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended June 30, 2001 Commission file number: 33-18888 ------------- -------- ORRSTOWN FINANCIAL SERVICES, INC. ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Commonwealth of Pennsylvania 23-2530374 - ---------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 77 East King Street P.O. Box 250, Shippensburg, Pennsylvania 17257 - ---------------------------------------- ----- (Address of principal executive offices) (ZIP CODE) Registrant's telephone number, including area code: (717) 532-6114 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filled by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 -------- -------- Class Outstanding at July 27, 2001 ----- ---------------------------- (Common Stock, no par value) 2,258,266
ORRSTOWN FINANCIAL SERVICES, INC. INDEX Page Part I - FINANCIAL INFORMATION Item 1. Financial statements (unaudited) Condensed consolidated balance sheets - June 30, 2001 and December 31, 2000 3 Condensed consolidated statements of income - Three months ended June 30, 2001 and 2000 4 Condensed consolidated statements of income - Six months ended June 30, 2001 and 2000 5 Condensed consolidated statements of comprehensive income - Three months & Six months ended June 30, 2001 and 2000 6 Condensed consolidated statements of cash flows - Six months ended June 30, 2001 and 2000 7 Notes to condensed consolidated financial statements 8-9 Item 2. Management's discussion and analysis of financial condition and results of operations 10-14 PART II - OTHER INFORMATION Other Information 15 Signatures 16 Exhibits 18
PART I - FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION Item 1. Financial Statements ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2001 December 31, (Unaudited) 2000* ------------- ------------ ASSETS (000 Omitted) Cash and due from banks $ 9,592 $ 11,021 Interest - bearing deposits with banks 670 172 Federal funds sold 3,543 3,049 Securities available for sale 63,742 69,919 Federal Home Loan Bank, Federal Reserve and Atlantic Central Bankers Bank Stock, at cost which approximates market value 1,703 2,134 Loans 239,565 209,181 Allowance for loan losses (2,803) (2,691) --------- --------- Net Loans 236,762 206,490 Bank premises and equipment, net 9,125 9,269 Accrued Interest receivable 1,770 2,016 Cash value-life insurance 5,754 5,636 Other assets 2,279 2,197 --------- --------- Total assets $ 334,940 $ 311,903 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest bearing $ 34,084 $ 31,716 Interest bearing 221,297 210,292 --------- --------- Total deposits 255,381 242,008 Federal funds purchased and other short term borrowed funds 18,185 18,426 Long term borrowed funds 29,200 21,515 Accrued interest payable 366 614 Other liabilities 2,723 2,666 --------- --------- Total liabilities 305,855 285,229 --------- --------- STOCKHOLDERS' EQUITY Common stock, no par value - $ .1041 stated value per share at June 30, 2001 and December 31, 2000, 10,000,000 shares authorized with 2,252,694 shares issued at June 30, 2001 and 2,240,744 issued at December 31, 2000 235 233 Additional paid - in capital 19,835 19,360 Retained earnings 8,358 6,619 Accumulated other comprehensive income 657 462 --------- --------- Total stockholders' equity 29,085 26,674 --------- --------- Total liabilities and stockholders' equity $ 334,940 $ 311,903 ========= ========= * Condensed from audited financial statements The accompanying notes are an integral part of these condensed financial statements. Page 3
ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three Months Ended June 30, 2001 and 2000 (UNAUDITED) 2001 2000 (Unaudited) (Unaudited) (000 Omitted) Interest Income Interest and fees on loans $ 4,822 $ 4,163 Interest on federal funds sold 149 12 Interest and dividends on investment securities 957 1,145 Interest income on deposits with banks 4 3 ----------- ----------- Total interest income 5,932 5,323 Interest Expense Interest on deposits 2,125 1,795 Interest on borrowed money 569 676 ----------- ----------- Total interest expense 2,694 2,471 ----------- ----------- Net interest income 3,238 2,852 Provision for loan losses 60 75 ----------- ----------- Net interest income after provision for loan losses 3,178 2,777 ----------- ----------- Other Income Service charges on deposits 500 287 Other service charges 316 149 Trust department income 312 277 Brokerage Income 62 106 Other income 80 80 Net gains on available for sale securities (2) (1) ----------- ----------- Total Other income 1,268 898 Other Expenses Salaries and employee benefits 1,213 1,141 Net occupancy and equipment expenses 427 355 Other operating expenses 1,015 700 ----------- ----------- Total other expense 2,655 2,196 Income before income tax 1,791 1,479 Income tax expenses 500 405 ----------- ----------- Net income $ 1,291 $ 1,074 =========== =========== Weighted average number of shares outstanding 2,251,025 2,226,313 Net income per share $ 0.57 $ 0.48 Cash dividends declared per share $ 0.15 $ 0.14 The accompanying notes are an integral part of these condensed financial statements. Page 4
ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF INCOME Six Months Ended June 30, 2001 and 2000 (UNAUDITED) 2001 2000 (Unaudited) (Unaudited) (000 Omitted) Interest Income Interest and fees on loans $ 9,470 $ 8,081 Interest on federal funds sold 187 61 Interest and dividends on investment securities 2,151 2,158 Interest income on deposits with banks 6 11 ----------- ----------- Total interest income 11,813 10,311 Interest Expense Interest on deposits 4,348 3,513 Interest on borrowed money 1,181 1,251 ----------- ----------- Total interest expense 5,529 4,764 ----------- ----------- Net interest income 6,284 5,547 Provision for loan losses 120 150 ----------- ----------- Net interest income after provision for loan losses 6,164 5,397 ----------- ----------- Other Income Service charges on deposits 912 557 Other service charges 454 264 Trust department income 608 530 Brokerage Income 130 185 Other income 164 166 Net gains on available for sale securities 31 (3) ----------- ----------- Total Other income 2,300 1,699 Other Expenses Salaries and employee benefits 2,498 2,317 Net occupancy and equipment expenses 839 710 Other operating expenses 1,776 1,306 ----------- ----------- Total other expense 5,112 4,333 Income before income tax 3,352 2,763 Income tax expenses 936 740 ----------- ----------- Net income $ 2,416 $ 2,023 =========== =========== Weighted average number of shares outstanding 2,248,088 2,226,313 Net income per share $ 1.07 $ 0.91 Cash dividends declared per share $ 0.30 $ 0.28 The accompanying notes are an integral part of these condensed financial statements. Page 5
ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended June 30, 2001 and 2000 (UNAUDITED) 2001 2000 (000 Omitted) Net Income $ 1,291 $ 1,074 Other comprehensive income, net of tax Unrealized gain (loss) on investment securities available for sale (494) 28 ------- ------- Comprehensive Income $ 797 $ 1,102 ======= ======= The accompanying notes are an integral part of these condensed financial statements. ***************************************************************************** ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six Months Ended June 30, 2001 and 2000 (UNAUDITED) 2001 2000 (000 Omitted) Net Income $ 2,416 $ 2,023 Other comprehensive income, net of tax Unrealized gain (loss) on investment securities available for sale 195 (111) ------- ------- Comprehensive Income $ 2,611 $ 1,912 ======= ======= The accompanying notes are an integral part of these condensed financial statements. Page 6
ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, 2001 and 2000 (UNAUDITED) <TABLE> <CAPTION> 2001 2000 (Unaudited) (Unaudited) (000 Omitted) <S> <C> <C> Cash flows from operating activities: Net income $ 2,416 $ 2,023 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 422 224 Provision for loan losses 120 150 Other, net (340) (478) -------- -------- Net cash provided by operating activities 2,618 1,919 Cash flows from investing activities: Net increase in interest bearing deposits with banks (498) 22 Purchase of available for sale securities (17,265) (10,737) Sales and maturities of available for sale securities 23,737 6,828 Net (increase) in loans (30,392) (12,093) Purchases of bank premises and equipment (247) (2,592) -------- -------- Net cash (used) by investing activities (24,665) (18,572) -------- -------- Cash flows from financing activities: Net increase in deposits 13,373 8,195 Cash dividends paid (675) (623) Dividend reinvestment plan purchases 476 391 Net decrease in short term purchased funds 7,472 11,244 Payments on long term debt (28) (6) -------- -------- Net cash provided by financing activities 20,618 19,201 -------- -------- Net increase (decrease) in cash and cash equivalents (1,429) 2,548 Cash and cash equivalents at beginning of period 11,021 8,585 -------- -------- Cash and cash equivalents at end of period $ 9,592 $ 11,133 ======== ======== Supplemental disclosure of cash flows information: Cash paid during the period for: Interest $ 5,764 $ 4,774 Income Taxes 930 666 Supplemental schedule of noncash investing and financing activities: Unrealized gain (loss) on investments available for sale (net of deferred taxes of $100 and $(58) at June 30, 2001 and 2000, respectively) 195 (111) </TABLE> The accompanying notes are an integral part of these condensed financial statements. Page 7
ORRSTOWN FINANCIAL SERVICES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2001 (UNAUDITED) Review of Interim Financial Statements The condensed consolidated financial statements as of and for the three and six months ended June 30, 2001 and 2000 have been reviewed by independent certified public accountants. Their report on their review is attached as Exhibit 99 to this 10-Q NOTE 1. Basis of Presentation The financial information presented at and for the three months ended and six months ended June 30, 2001 and 2000 is unaudited. Information presented at December 31, 2000 is condensed from audited year-end financial statements. However, unaudited information reflects all adjustments (consisting solely of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim period. NOTE 2. Principles of Consolidation The consolidated financial statements include the accounts of the corporation and its wholly-owned subsidiary, Orrstown Bank. All significant intercompany transactions and accounts have been eliminated. NOTE 3. Cash Flows For purposes of the statements of cash flows, the corporation has defined cash and cash equivalents as those amounts included in the balance sheet captions "cash and due from banks" and "federal funds sold". As permitted by Statement of Financial Accounting Standards No. 104, the corporation has elected to present the net increase or decrease in deposits in banks, loans and time deposits in the statement of cash flows. NOTE 4. Federal Income Taxes For financial reporting purposes the provision for loan losses charged to operating expense is based on management's judgment, whereas for federal income tax purposes, the amount allowable under present tax law is deducted. Additionally, certain expenses are charged to operating expense in the period the liability is incurred for financial reporting purposes, whereas for federal income tax purposes, these expenses are deducted when paid. As a result of these timing differences, deferred income taxes are provided in the financial statements. Income tax expense is less than the amount calculated using the statutory tax rate primarily as a result of tax exempt income earned from state and political subdivision obligations. NOTE 5. Other Commitments In the normal course of business, the bank makes various commitments and incurs certain contingent liabilities which are not reflected in the accompanying financial statements. These commitments include various guarantees and commitments to extend credit and the bank does not anticipate any losses as a result of these transactions. Page 8
NOTE 6. Common Stock/Subsequent Events During December 2001, the Board of Directors of Orrstown Financial Services, Inc. approved a 5% stock dividend payable September 15, 2001 to shareholders of record August 1, 2001. All presentation amounts will be adjusted to give recognition to this event during third quarter 2001. NOTE 7. Investment Securities Management determines the appropriate classification of securities at the time of purchase. If management has the intent and the corporation has the ability at the time of purchase to hold securities until maturity or on a long-term basis, they are classified as securities held to maturity and carried at amortized historical cost. Securities to be held for indefinite periods of time and not intended to be held to maturity or on a long-term basis are classified as available for sale and carried at fair value. Securities held for indefinite periods of time include securities that management intends to use as part of its asset and liability management strategy and that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and resultant prepayment risk changes. Realized gains and losses on dispositions are based on the net proceeds and the adjusted book value of the securities sold, using the specific identification method. Unrealized gains and losses on investment securities available for sale are based on the difference between book value and fair value of each security. These gains and losses are credited or charged to shareholders' equity, whereas realized gains and losses flow through the corporation's operations. Management has classified all investments securities as "available for sale". At June 30, 2001 fair value exceeded amortized cost by $995,000. This resulted in an increase in stockholders' equity of $657,000 after recognizing the tax effects of the unrealized gains. At December 31, 2000, fair value exceeded amortized cost by $700,000 resulting in an increase in stockholders' equity of $462,000 after recognizing the tax effects of the unrealized gains. Page 9
ORRSTOWN FINANCIAL SERVICES, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Summary ------- Orrstown Financial Services, Inc. recorded net income of $1,291,000 for the second quarter of 2001 compared to $1,074,000 for the same period in 2000, representing an increase of $217,000 or 20.2%. Net income per share was $.57 during 2001's second quarter up $.09 from the $.48 earned during 2000's second quarter. Net income for the first six months of 2001 was $2,416,000 compared to $2,023,000 for the same period in 2000, representing an increase of $393,000 or 19.4%. Net income per share for the first six months of 2001 was $1.07 up $.16 from the $0.91 per share realized during the six months ended June 30, 2000. The following statistics compare 2001's year to date performance to that of 2000: Second Quarter Six Months Year to Date 2001 2000 2001 2000 ---- ---- ---- ---- Return on average assets 1.58% 1.54% 1.53% 1.48% Return on average equity 17.82% 18.53% 17.21% 17.77% Average equity/Average assets 8.89% 8.30% 8.68% 8.32% A more detailed discussion of the elements having the greatest impact on net income follows. Net Interest Income ------------------- Second Quarter 2001 vs. Second Quarter 2000 Net interest income for the second quarter of 2001 was $3,238,000 representing a growth of $385,000, or 13.5%, over the $2,852,000 realized during 2000's second quarter. The growth in net interest income is driven by volume factors since spreads have been tightening. Six Months 2001 vs. Six Months 2000 Net interest income for the first six months of 2001 was $6,284,000 representing an increase of $737,000 or 13.3%, over the $5,547,000 generated during the first six months of 2000. Volume factors have generated the gains since rate factors tightened. Page 10
The table that follows states rates on a fully taxable equivalent basis,(F.T.E.)and demonstrates the aforementioned effects: <TABLE> <CAPTION> Second Quarter Six Months Year To Date -------------- ----------------------- 2001 2000 2001 2000 ---- ---- ---- ---- (in thousands) Avg. Balances Rates Avg. Balances Rates Avg. Balances Rates Avg. Balances Rates ------------- ----- ------------- ----- ------------- ----- ------------- ----- <S> <C> <C> <C> <C> <C> <C> <C> <C> Interest earning assets $ 303,890 7.95% $ 259,000 8.43% $ 295,419 8.17% $ 253,920 8.34% Interest bearing liabilities 264,343 4.09% 227,622 4.37% 258,326 4.31% 223,050 4.29% -------- ---- --------- ---- --------- ---- --------- ---- Free Funds $ 39,547 $ 31,378 $ 37,093 $ 30,870 ========= ========== ========== ========== Net interest income $ 3,237 $ 2,852 $ 6,284 $ 5,547 ========= ========== ========== ========== Net interest spread (F.T.E.) 3.90% 4.06% 3.86% 4.05% ====== ====== ====== ====== Free funds ratio 13.01% 12.12% 12.56% 12.16% ========= ========== ========== ========== Net interest margin (F.T.E.) 4.44% 4.60% 4.40% 4.60% ====== ====== ====== ====== </TABLE> Page 11
Other Income and Other Expenses - ------------------------------- Second Quarter 2001 vs. Second Quarter 2000 Other income increased $370,000, or 41.2%, from $898,000 during the second quarter of 2000 to $1,268,000 during the second quarter of 2001. Increases in service charge income were the most significant and helped offset the decline in brokerage income. Other expenses rose $459,000, or 20.9%, from $2,196,000 for second quarter 2000 to $2,655,000 for 2001's second quarter. Increases were across all categories and the percentage increase overall approximated the increase in the size of the company over those time periods. Credit life and disability operations through a joint venture added approximately $130,000 to both other income and other expense inflating the percentage increases somewhat. Six Months 2001 vs. Six Months 2000 Other income increased $601,000, or 35.4%, to $2,300,000 from $1,699,000 a year ago. Service charge increases were the primary source of growth. Trust income increased while brokerage income declined. Other expenses rose $779,000, or 18.0%, to $5,112,000 from $4,333,000 a year earlier with the aforementioned general growth in size; the opening of a tenth branch, which helped increase staff, and expanded operating systems and facilities all contributing to the increase. Credit life and disability operations through a joint venture added approximately $130,000 to both other income and other expense inflating the percentage increases somewhat. Income Tax Expense - ------------------ Income tax expense increased $95,000, or 23.5%, during 2001's second quarter versus second quarter 2000. Income tax expense rose $196,000, or 26.5% for the first six months of 2001 versus the same period a year ago. The growth in income tax expense is the byproduct of similar increases in pretax income since effective federal income tax rates has remained relatively stable, as shown below: Second Quarter Six Months Year to Date 2001 2000 2001 2000 ---- ---- ---- ---- Effective income tax rate 27.9% 27.4% 27.9% 26.8% The marginal federal income tax bracket is 34% for all periods presented. Page 12
PROVISION AND ALLOWANCE FOR LOAN LOSSES The provision for loan losses and the other changes in the allowance for loan losses are shown below (in thousands): Quarter Ended Six Months Ended June 30 June 30 ------------- ----------------- 2001 2000 2001 2000 ---- ---- ---- ---- Balance, beginning of period $ 2,747 $ 2,523 $ 2,691 $ 2,455 Recoveries 1 3 2 4 Provision for loan loss charged to income 60 75 120 150 --------- -------- -------- --------- Total 2,808 2,601 2,813 2,609 Losses 5 47 10 55 --------- -------- -------- --------- Balance, end of period $ 2,803 $ 2,554 $ 2,803 $ 2,554 ========= ======== ======== ========= In the opinion of management, the allowance, when taken as a whole, is adequate to absorb reasonably estimated loan losses inherent in the Bank's loan portfolio. The unallocated portion of the allowance for loan losses exceeds 45% at June 30, 2001. Loans 90 days or more past due (still accruing interest) and those on nonaccrual status were as follows at June 30 (in thousands): 90 Days or More Past Due Nonaccrual Status --------------- ----------------- 2001 2000 2001 2000 ---- ---- ---- ---- Real estate mortgage $ 1,129 $ 101 $ 0 $ 41 Installment loans 2 22 30 29 Commercial loans 41 312 30 45 Credit card 2 0 0 0 --------- -------- -------- --------- Total $ 1,174 $ 435 $ 60 $ 115 ========= ======== ======== ========= There were no restructured loans for any of the time periods set forth above. Any loans classified for regulatory purposes as loss, doubtful, substandard or special mention that have not been disclosed under Item III of Industry Guide 3 do not represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources. Page 13
CAPITAL RESOURCES AND BALANCE SHEET FLUCTUATIONS A comparison of Orrstown Financial Services' capital ratios to regulatory minimum requirements at June 30, 2001 is as follows: Orrstown Financial Regulatory Minimum Services Requirements Leverage ratio 8.59% 4% Risk based capital ratios: Tier I (core capital) 12.13% 4% Combined tier I and tier II(core capital plus allowance for loan losses) 13.35% 8% The growth experienced during 2001 has been supported by capital growth in the form of retained earnings and the popularity of the dividend reinvestment plan which has added $391,000 to equity. Equity represented 8.68% of assets at June 30, 2001 which is up slightly from 8.55% at December 31, 2000. All balance sheet fluctuations exceeding 5% have been created by either the growth that has been experienced during 2001 or single day fluctuations. Management is not aware of any current recommendations by regulatory authorities which, if implemented, would have a material effect on the corporation's liquidity, capital resources or operations. Page 14
PART II - OTHER INFORMATION
OTHER INFORMATION Item 1 - Legal Proceedings - -------------------------- None Item 2 - Changes in Securities - ------------------------------ None Item 3 - Defaults Upon Senior Securities - ---------------------------------------- Not applicable Item 4 - Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ The annual meeting of shareholders of Orrstown Financial Services, Inc. was held on May 1, 2001 and shareholders approved the one matter upon which they were asked to vote. The election of three directors to Class B for three year terms expiring in 2004. Item 5 - Other Information - -------------------------- None Item 6 - Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits: 27 - Financial data schedule 99 - Report of independent accountant's on interim financial statements (b) Reports on Form 8-K - None Page 15
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. /s/ Kenneth R. Shoemaker -------------------------- (Kenneth R. Shoemaker, President) (Duly Authorized Officer) Date August 10, 2001 /s/ Bradley S. Everly --------------- ------------------------------------------ (Bradley S. Everly, Senior Vice President) (Chief Financial Officer) /s/ Robert B. Russell ----------------------------------- (Robert B. Russell, Controller) (Chief Accounting Officer) Page 16
DATA FINANCIAL SCHEDULE FOR 10-Q AT JUNE 30, 2001 FISCAL-YEAR-END DEC-31-2001 PERIOD-END JUNE-30-2001 CASH 9,592 INT-BEARING-DEPOSITS 670 FED-FUNDS-SOLD 3,543 TRADING-ASSETS 0 INVESTMENTS-HELD-FOR-SALE 0 INVESTMENTS-CARRYING 63,742 INVESTMENTS-MARKET 63,742 LOANS 239,565 ALLOWANCE 2,803 TOTAL-ASSETS 334,940 DEPOSITS 255,381 SHORT-TERM 18,185 LIABILITIES-OTHER 3,089 LONG-TERM 29,200 COMMON 235 PREFERRED-MANDATORY 0 PREFERRED 0 OTHER-SE 28,850 TOTAL-LIABILITIES-AND-EQUITY 334,940 INTEREST-LOAN 9,470 INTEREST-INVEST 2,151 INTEREST-OTHER 193 INTEREST-TOTAL 11,813 INTEREST-DEPOSIT 4,348 INTEREST-EXPENSE 5,529 INTEREST-INCOME-NET 6,284 LOAN-LOSSES 120 SECURITIES-GAINS 31 EXPENSE-OTHER 5,112 INCOME-PRETAX 3,352 INCOME-PRE-EXTRAORDINARY 2,416 EXTRAORDINARY 0 CHANGES 0 NET-INCOME 2,416 EPS-PRIMARY 1.07 EPS-DILUTED 1.07 YIELD-ACTUAL 4.40 LOANS-NON 60 LOANS-PAST 1,174 LOANS-TROUBLED 0 LOANS-PROBLEM 0 ALLOWANCE-OPEN 2,691 CHARGE-OFFS 10 RECOVERIES 2 ALLOWANCE-CLOSE 2,803 ALLOWANCE-DOMESTIC 2,803 ALLOWANCE-FOREIGN 0 ALLOWANCE-UNALLOCATED 1,280 Page 17