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 September 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 incorporation (I.R.S. Employer 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 November 1, 2001 ----- ------------------------------- (Common Stock, no par value) 2,377,340
ORRSTOWN FINANCIAL SERVICES, INC. INDEX Page Part I - FINANCIAL INFORMATION Item 1. Financial statements ( unaudited ) Condensed consolidated balance sheets - September 30, 2001 and December 31, 2000 3 Condensed consolidated statements of income - Three months ended September 30, 2001 and 2000 4 Condensed consolidated statements of income - Nine months ended September 30, 2001 and 2000 5 Condensed consolidated statements of comprehensive income - Three months & Nine months ended September 30, 2001 and 2000 6 Condensed consolidated statements of cash flows - Nine months ended September 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 16 Signatures 17 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) <TABLE> <CAPTION> September 30, 2001 December 31, 2000* (Unaudited) ASSETS (000 Omitted) <S> <C> <C> Cash and due from banks $ 9,128 $ 11,021 Interest - bearing deposits with banks 739 172 Federal funds sold 26,817 3,049 Securities available for sale 66,714 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 247,889 209,181 Allowance for loan losses (2,900) (2,691) --------- --------- Net Loans 244,989 206,490 Bank premises and equipment, net 8,995 9,269 Accrued Interest receivable 1,773 2,016 Cash value-life insurance 5,813 5,636 Other assets 2,273 2,197 --------- --------- Total assets $ 368,944 $ 311,903 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest bearing $ 33,590 $ 31,716 Interest bearing 236,016 210,292 --------- --------- Total deposits 269,606 242,008 Federal funds purchased and other short term borrowed funds 35,804 18,426 Long term borrowed funds 29,200 21,515 Accrued interest payable 399 614 Other liabilities 2,878 2,666 --------- --------- Total liabilities 337,887 285,229 --------- --------- STOCKHOLDERS' EQUITY Common stock, no par value - $ .1041 stated value per share at September 30, 2001 and December 31, 2000, 10,000,000 shares authorized with 2,370,713 shares issued at September 30, 2001 and 2,240,744 issued at December 31, 2000 247 233 Additional paid - in capital 24,787 19,360 Retained earnings 4,644 6,619 Accumulated other comprehensive income 1,379 462 --------- --------- Total stockholders' equity 31,057 26,674 --------- --------- Total liabilities and stockholders' equity $ 368,944 $ 311,903 ========== ========= </TABLE> * 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 September 30, 2001 and 2000 (UNAUDITED) <TABLE> <CAPTION> 2001 2000 (Unaudited) (Unaudited) (000 Omitted) <S> <C> <C> Interest Income Interest and fees on loans $ 5,047 $ 4,352 Interest on federal funds sold 129 131 Interest and dividends on investment securities 1,026 1,091 Interest income on deposits with banks 6 3 ----------- ----------- Total interest income 6,207 5,577 Interest Expense Interest on deposits 2,096 2,025 Interest on borrowed money 585 690 ----------- ----------- Total interest expense 2,681 2,715 ----------- ----------- Net interest income 3,526 2,862 Provision for loan losses 170 75 ----------- ----------- Net interest income after provision for loan losses 3,356 2,787 ----------- ----------- Other Income Service charges on deposits 478 291 Other service charges 54 146 Trust department income 310 263 Brokerage Income 75 86 Other income 85 80 Net gains on available for sale securities (9) 36 ----------- ----------- Total Other income 992 902 Other Expenses Salaries and employee benefits 1,351 1,220 Net occupancy and equipment expenses 416 423 Other operating expenses 696 677 ----------- ----------- Total other expense 2,464 2,320 Income before income tax 1,884 1,369 Income tax expenses 501 342 ----------- ----------- Net income $ 1,383 $ 1,027 =========== =========== Weighted average number of shares outstanding 2,369,508 2,232,240 Net income per share $ 0.58 $ 0.44 Cash dividends declared per share $ 0.15 $ 0.13 </TABLE> 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 Nine Months Ended September 30, 2001 and 2000 (UNAUDITED) <TABLE> <CAPTION> 2001 2000 (Unaudited) (Unaudited) (000 Omitted) <S> <C> <C> Interest Income Interest and fees on loans $ 14,517 $ 12,433 Interest on federal funds sold 316 192 Interest and dividends on investment securities 3,177 3,249 Interest income on deposits with banks 12 14 ---------- ---------- Total interest income 18,020 15,888 Interest Expense Interest on deposits 6,444 5,538 Interest on borrowed money 1,766 1,941 ---------- ---------- Total interest expense 8,210 7,479 ---------- ---------- Net interest income 9,810 8,409 Provision for loan losses 290 225 ---------- ---------- Net interest income after provision for loan losses 9,520 8,184 ---------- ---------- Other Income Service charges on deposits 1,390 848 Other service charges 508 410 Trust department income 918 793 Brokerage Income 205 271 Other income 249 246 Net gains on available for sale securities 22 33 ---------- ---------- Total Other income 3,292 2,601 Other Expenses Salaries and employee benefits 3,849 3,537 Net occupancy and equipment expenses 1,255 1,133 Other operating expenses 2,472 1,983 ---------- ---------- Total other expense 7,576 6,653 Income before income tax 5,236 4,132 Income tax expenses 1,437 1,082 ---------- ---------- Net income $ 3,799 $ 3,050 ========== ========== Weighted average number of shares outstanding 2,363,530 2,226,209 Net income per share $ 1.61 $ 1.30 Cash dividends declared per share $ 0.44 $ 0.40 </TABLE> 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 September 30, 2001 and 2000 (UNAUDITED) 2001 2000 (000 Omitted) Net Income $ 1,383 $ 1,027 Other comprehensive income, net of tax Unrealized gain (loss) on investment securities available for sale 722 463 --------- -------- Comprehensive Income $ 2,105 $ 1,490 ========= ========= The accompanying notes are integral part of these condensed financial statements. ******************************************************************************* ORRSTOWN FINANCIAL SERVICES, INC. AND ITS WHOLLY - OWNED SUBSIDIARY, ORRSTOWN BANK CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Nine Months Ended September 30, 2001 and 2000 (UNAUDITED) 2001 2000 (000 Omitted) Net Income $ 3,799 $ 3,050 Other comprehensive income, net of tax Unrealized gain (loss) on investment securities available for sale 917 352 --------- --------- Comprehensive Income $ 4,716 $ 3,402 ========= ========= The accompanying notes are 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 Nine Months Ended September 30, 2001 and 2000 (UNAUDITED) <TABLE> <CAPTION> 2001 2000 (Unaudited) (Unaudited) (000 Omitted) <S> <C> <C> Cash flows from operating activities: Net income $ 3,799 $ 3,050 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 569 516 Provision for loan losses 290 225 Other, net (485) 986 -------- -------- Net cash provided by operating activities 4,173 4,777 Cash flows from investing activities: Net increase in interest bearing deposits with banks (567) (135) Purchase of available for sale securities (29,374) (15,520) Sale of Federal Home Loan Bank Stock 431 (625) Sales and maturities of available for sale securities 33,968 9,740 Net (increase) in loans (38,789) (17,046) Purchases of bank premises and equipment (295) (2,961) -------- -------- Net cash (used) by investing activities (34,626) (26,547) -------- -------- Cash flows from financing activities: Net increase in deposits 27,598 26,217 Cash dividends paid (1,031) (935) Proceeds from sale of stock 718 595 Cash paid in lieu of fractional shares (20) 0 Net increase in short term purchased funds 17,378 5,884 Proceeds in long term debt 8,000 0 Payments on long term debt (316) (6) -------- -------- Net cash provided by financing activities 52,328 31,755 -------- -------- Net increase (decrease) in cash and cash equivalents 21,875 9,985 Cash and cash equivalents at beginning of period 14,070 8,585 -------- -------- Cash and cash equivalents at end of period $ 35,945 $ 18,570 ======== ======== Supplemental disclosure of cash flows information: Cash paid during the period for: Interest $ 8,412 $ 7,403 Income Taxes 1,500 1,166 Supplemental schedule of noncash investing and financing activities: Unrealized gain (loss) on investments available for sale (net of deferred taxes of $470 and $181 at September 30, 2001 and 2000, respectively) 917 352 </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 September 30, 2001 (UNAUDITED) Review of Interim Financial Statements The condensed consolidated financial statements as of and for the three and nine months ended September 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 nine months ended September 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. Changes in Common Stock During July 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 per share amounts have been adjusted to give retroactive recognition to the 5% stock dividend paid September 15, 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 September 30, 2001 fair value exceeded amortized cost by $2,089,000. This resulted in an increase in stockholders' equity of $1,379,000 after recognizing the tax effects of the unrealized losses. At December 31, 2000, fair value exceeded amortized cost by $700,000 resulting in a 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 $1,383,000 for the third quarter of 2001 compared to $ 1,027,000 for the same period in 2000, representing an increase of $356,000 or 34.7%. Net income per share was $ .58 during 2001's third quarter up $ .14 from the $ .44 earned during 2000's third quarter. Net income for the first nine months of 2001 was $3,799,000 compared to $3,050,000 for the same period in 2000, representing an increase of $749,000 or 24.6%. Net income per share for the first nine months of 2001 was $1.61 up $0.31 from the $1.30 per share realized during the nine months ended September 30, 2000. The following statistics compare 2001's year to date performance to that of 2000: Third Quarter Nine Months Year to Date 2001 2000 2001 2000 ---- ---- ---- ---- Return on average assets 1.57% 1.40% 1.54% 1.45% Return on average equity 18.34% 16.85% 17.60% 17.45% Average equity/Average assets 8.54% 8.32% 8.75% 8.32% A more detailed discussion of the elements having the greatest impact on net income follows. Net Interest Income ------------------- Third Quarter 2001 vs. Third Quarter 2000 Net interest income for the third quarter of 2001 was $ 3,356,000 representing a growth of $ 569,000, or 20.4%, over the $ 2,787,000 realized during 2000's third quarter. The growth in net interest income is driven by volume factors since spreads have tightened during 2001. Nine Months 2001 vs. Nine Months 2000 Net interest income for the first nine months of 2001 was $9,520,000 representing an increase of $1,336,000 or 16.3%, over the $ 8,184,000 generated during the first nine months of 2000. Volume factors, particularly the growth in core deposits and continued commercial loan demand, have generated the gains since rate factors have tightened. Growth in the Carlisle, Mechanicsburg, and Chambersburg markets has been extremely good in both core deposits and commercial loans. Page 10
The table that follows states rates on a fully taxable equivalent basis, (F.T.E.) and demonstrates the aforementioned effects: <TABLE> <CAPTION> Third Quarter Nine 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 $ 325,863 7.71% $ 267,557 8.54% $ 305,679 8.01% $ 258,499 8.45% Interest bearing liabilities 281,561 3.78% 236,040 4.56% 266,156 4.12% 227,412 4.39% --------- ---- ---------- ---- ---------- ----- --------- ---- Free Funds $ 44,302 $ 31,517 $ 39,523 $ 31,087 ========= ========== ========== ========= Net interest income $ 3,527 $ 2,862 $ 9,809 $ 8,409 ========= ========== ========== ========= Net interest spread (F.T.E.) 3.93% 3.98% 3.89% 4.06% ==== ==== ===== ==== Free funds ratio 13.60% 11.78% 12.93% 12.03% ========= ========== ===== ========= Net interest margin (F.T.E.) 4.45% 4.53% 4.42% 4.60% ==== ==== ===== ==== </TABLE> Page 11
Other Income and Other Expenses ------------------------------- Third Quarter 2001 vs. Third Quarter 2000 Other income increased $90,000, or 9.9%, from $902,000 during the third quarter of 2000 to $992,000 during the third quarter of 2001. Securities gains declined by $45,000, from $36,000 during third quarter 2000 to $(9,000). Increases in service charge income were the most significant with an increase of $187,000, or 64.3%, from $291,000 in the third quarter of 2000 to $478,000 in 2001. Service charge increases were across all categories with loan fees and the bounce protection program generating the largest increases. Other expenses rose $144,000, or 6.2%, from $2,320,000 for third quarter 2000 to $2,464,000 for 2001's third quarter. Increases were across all categories with the largest component being a 10.7% increase in salaries and benefits. The addition of a new branch in Greencastle, Pennsylvania in March and overall asset growth of 18.3% since December 31, 2000 have necessitated staff additions. Nine Months 2001 vs. Nine Months 2000 Other income increased $691,000, or 26.6%, to $3,292,000 from $2,601,000 a year ago. Service charge increases were the primary source of growth. Trust income increased while brokerage income declined. Other expenses rose $923,000, or 13.9%, to $7,576,000 from $6,653,000 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. Income Tax Expense ------------------ Income tax expense increased $159,000, or 46.5%, during 2001's third quarter versus third quarter 2000. Income tax expense rose $355,000, or 32.8% for the first nine 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: Third Quarter Nine Months Year to Date 2001 2000 2001 2000 ---- ---- ---- ---- Effective income tax rate 26.6% 25.0% 27.4% 26.2% 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 Nine Months Ended September 30 September 30 ------------ ------------ 2001 2000 2001 2000 Balance, beginning of period $ 2,803 $ 2,554 $ 2,691 $ 2,455 Recoveries 1 0 3 4 Provision for loan loss charged to income 170 75 290 225 --------- -------- -------- --------- Total 2,974 2,629 2,984 2,684 Losses 74 69 84 124 --------- -------- --------- --------- Balance, end of period $ 2,900 $ 2,560 $ 2,900 $ 2,560 ========= ======== ======== ========= In the opinion of management, the allowance , when taken as a whole, is adequate to absorb reasonably estimated loa n losses inherent in the Bank's loan portfolio. The unallocated portion of the allowance for loan losses exceeds 50% at September 30, 2001. Loans 90 days or more past due (still accruing interest) and those on nonaccrual status were as follows at September 30 (in thousands): 90 Days or More Past Due Nonaccrual Status ----------------- ------------------ 2001 2000 2001 2000 Real estate mortgage $ 504 $ 168 $ 0 $ 0 Installment loans 71 15 9 16 Commercial loans 52 781 30 0 Credit card 5 5 0 0 --------- -------- -------- --------- Total $ 632 $ 969 $ 39 $ 16 ========= ======== ======== ========= 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 September 30, 2001 is as follows: Orrstown Financial Regulatory Minimum Services Requirements Leverage ratio 8.37% 4% Risk based capital ratios: Tier I (core capital) 11.96% 4% Combined tier I and tier II (core capital plus allowance for loan losses) 13.15% 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 $718,000 to equity. Equity represented 8.42% of assets at September 30, 2001 which is down 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: Exhibit Number Referred to Item 601 of Regulation S-K: Description of Exhibit: Exhibit 27 Financial Data Schedule Exhibit 99 Report of Independent Accountant's on Interim Financial Statements (b) Reports on Form 8-K - None Page 16
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) /s/ Bradley S. Everly ------------------------------------------ Date November 8, 2001 (Bradley S. Everly, Senior Vice President) ---------------- (Chief Financial Officer) /s/ Robert B. Russell ------------------------------------------ (Robert B. Russell, Controller) (Chief Accounting Officer) Page 17
DATA FINANCIAL SCHEDULE FOR 10-Q AT SEPTEMBER 30, 2001 FISCAL YEAR END DEC-31-2001 PERIOD END SEPT-30-2001 CASH 9,128 INT-BEARING-DEPOSITS 739 FED-FUNDS-SOLD 26,817 TRADING-ASSETS 0 INVESTMENTS-HELD-FOR-SALE 0 INVESTMENTS-CARRYING 66,714 INVESTMENTS-MARKET 66,714 LOANS 247,889 ALLOWANCE 2,900 TOTAL-ASSETS 368,944 DEPOSITS 269,606 SHORT-TERM 35,804 LIABILITIES-OTHER 3,277 LONG-TERM 29,200 COMMON 247 PREFERRED-MANDATORY 0 PREFERRED 0 OTHER-SE 30,810 TOTAL-LIABILITIES-AND-EQUITY 368,944 INTEREST-LOAN 14,517 INTEREST-INVEST 3,177 INTEREST-OTHER 328 INTEREST-TOTAL 18,020 INTEREST-DEPOSIT 6,444 INTEREST-EXPENSE 8,210 INTEREST-INCOME-NET 9,810 LOAN-LOSSES 290 SECURITIES-GAINS 22 EXPENSE-OTHER 7,576 INCOME-PRETAX 5,236 INCOME-PRE-EXTRAORDINARY 3,799 EXTRAORDINARY 0 CHANGES 0 NET-INCOME 3,799 EPS-PRIMARY 1.61 EPS-DILUTED 1.61 YIELD-ACTUAL 4.42 LOANS-NON 39 LOANS-PAST 632 LOANS-TROUBLED 0 LOANS-PROBLEM 0 ALLOWANCE-OPEN 2,691 CHARGE-OFFS 84 RECOVERIES 3 ALLOWANCE-CLOSE 2,900 ALLOWANCE-DOMESTIC 2,900 ALLOWANCE-FOREIGN 0 ALLOWANCE-UNALLOCATED 1,489