I. FORM 10-QSB
QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT
TO THE 1934 ACT REPORTING REQUIREMENTS
FORM 10-QSB
Board of Governors of the
Federal Reserve System
Washington, D. C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ________ to _____________
Commission file number Not Applicable
RESOURCE BANK
(Exact name of small business issuer as specified in its charter)
Virginia 54-1414459
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
3720 Virginia Beach Blvd., Va. Beach, VA.23452
(Address of principal executive offices)
(757) 463-2265
Issuer's telephone number
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or of 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
Common Stock, $3.00 Par Value -- 1,226,690 shares as of March 31, 1998
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
RESOURCE BANK
CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31 December 31
1998 1997
(Dollars in Thousands)
ASSETS
Cash and due from banks $3,969 $2,612
Interest bearing deposits with banks 13,005 9,679
Federal funds sold - 1,920
Funds advanced in settlement of mortgage loans 80,284 23,744
Securities available for sale 11,756 12,432
Securities held to maturity 2,227 2,742
Loans, net of unearned income:
Commercial 52,862 50,713
Real estate - construction 46,355 37,626
Commercial real estate 8,421 9,016
Residential real estate 45,528 49,416
Installment and consumer loans 5,387 3,819
-------- --------
TOTAL LOANS 158,553 150,590
Allowance for loan losses (2,709) (2,573)
--------- ---------
NET LOANS 155,844 148,017
Other real estate owned 178 684
Premises and equipment 3,265 3,237
Other assets 3,290 2,701
Accrued interest 1,530 1,562
--------- ---------
$275,348 $209,330
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing $16,804 $11,493
Interest bearing 194,935 158,015
--------- --------
TOTAL DEPOSITS 211,739 169,508
FHLB advances 43,320 20,950
Other liabilities 3,651 2,661
Accrued interest 696 609
--------- ---------
TOTAL LIABILITIES 259,406 193,728
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, par value $3.00 a share
Shares authorized: 3,333,333 1/3
Shares issued and outstanding:
1,226,690 3,680 3,680
Additional paid-in capital 10,622 10,769
Retained earnings 1,599 856
Accumulated other comprehensive income 41 297
--------- ---------
15,942 15,602
--------- ---------
$275,348 $209,330
========= =========
See notes to consolidated financial statements.
-1-
RESOURCE BANK
CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended
(UNAUDITED) March 31
1998 1997
Interest income: (Dollars in thousands, except per share data)
Interest and fees on loans $3,547 $1,831
Interest on investment securities 306 291
Interest on funds advanced 772 159
Interest on federal funds sold 6 25
------ -----
Total interest income 4,631 2,306
------ ------
Interest expense:
Interest on deposits 2,317 1,257
Interest on short-term borrowings 263 13
------ -----
Total interest expense 2,580 1,270
----- ------
Net interest income 2,051 1,036
Provision for loan losses 125 15
----- -------
Net interest income after
provision for loan losses 1,926 1,021
----- ------
Noninterest income:
Mortgage banking income 2,104 714
Service charges 158 69
Gain on sale of foreclosed property 2 -
----- ------
2,264 783
----- ------
Noninterest expense:
Salaries and employee benefits 1,861 812
Occupancy expenses 272 119
Depreciation and equipment maintenance 162 98
Professional fees 32 14
Outside computer services 149 43
FDIC insurance 10 2
Stationery and supplies 74 29
Marketing and business development 76 34
Provision for funds advanced 126 -
Other 286 97
------ ------
3,048 1,248
------ ------
Income before income taxes 1,142 556
Income tax expense 400 189
------ ------
Net income $742 $367
====== ======
Basic earnings per common share (Note B) $0.60 $0.38
===== =====
Diluted earnings per share (Note B) $0.53 $0.35
===== =====
See notes to consolidated financial statements.
-2-
RESOURCE BANK
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
Three Months Ended March 31, 1998
Accumulated
Additional Other
Common Stock Paid-in Retained Comprehensive
Shares Amount Capital Earnings Income Total
Balance, December 31, 1997 1,226,690 $3,680,070 $10,769,249 $856,122 $296,376 $15,601,817
Comprehensive income - - 742,393 (254,889) 487,504
Cash dividend declared
$ .12 per share - - (147,203) (147,203)
----------------------------------------------------------------------------------------
Balance, March 31, 1998 1,226,690 $3,680,070 $10,769,249 $1,451,312 $41,487 $15,942,118
========================================================================================
-3-
See notes to consolidated financial statements.
RESOURCE BANK
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended
March 31 March 31
Operating activities 1998 1997
(Dollars in thousands)
Net income $742 $367
Adjustments to reconcile to net cash
used by operating activities:
Provision for losses on loans and other real estate owned 125 15
Depreciation and amortization 65 50
Amortization of investment securities
premiums, net of discounts 9 4
Gain on sale of other real estate owned (2) -
Loss on premises and equipment - 2
Deferred loan origination fees, net of costs 77 (9)
Changes in:
Funds advanced in settlement of mortgage loans (56,540) 759
Interest receivable (42) 54
Interest payable 87 20
Other assets (387) (160)
Other liabilities 990 416
-------- -------
Net cash provided (used) by operating activities (54,876) 1,518
Investing activities:
Proceeds from sales and maturities of
available-for-sale securities 1,802 703
Purchases of available-for-sale securities (1,004) (14)
Loan originations, net of principal repayments (8,029) (344)
Purchases of premises, equipment and other assets (92) (69)
------- ------
Net cash (used) provided by investing activities (7,323) 276
Financing activities:
Cash dividends declared (147)
Proceeds (repayments) from FHLB advances 22,370 (7,237)
Net increase (decrease) in demand deposits,
NOW accounts and savings accounts 3,651 (1,108)
Net increase in certificates of deposit 38,580 6,729
------ -------
Net cash (provided) used by financing activities 64,454 (1,616)
Increase in cash and cash equivalents 2,255 178
Cash and cash equivalents at beginning of period 13,210 4,133
------- -------
Cash and cash equivalents at end of period $15,465 $4,311
======= =======
Supplemental schedules and disclosures of cash flow information:
Cash paid for:
Interest on deposits and other borrowings $2,493 $749
======= =======
Schedule of noncash investment activities:
Foreclosed real estate ($50) $163
======= =======
See notes to consolidated financial statements.
-4-
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
In addition to historical information, the following discussion contains forward
looking statements that are subject to risks and uncertainties that could cause
the Bank's actual results to differ materially from those anticipated. These
forward looking statements include, but are not limited to, the affect of
increasing interest rates on the Bank's profitability, and the adequacy of the
Bank's allowance for future loan losses. Several factors, including the local
and national economy, the demand for residential mortgage loans, the adequacy of
the Bank's Year 2000 compliance, and the Bank's ability to integrate the
operations of Eastern American Bank may adversely affect the Bank's ability to
achieve the expected results. Readers are cautioned not to place undue reliance
on these forward looking statements, which reflect management's analysis only as
of the date of this Report.
On December 1, 1997, the Bank acquired Eastern American Bank, FSB, ("Eastern
American") in a business combination accounted for under the purchase method of
accounting, whereby the purchase price has been allocated to the underlying
assets acquired and liabilities assumed based on their respective fair values at
the time of acquisition. In an exchange of common shares, the Bank acquired
$66,514,000 in assets (including cash of $12,539,000), $48,082,200 in net loans,
and assumed $52,844,000 in deposit liabilities. Accordingly, these acquired
assets and liabilities contributed to the growth in total assets and liabilities
of the Bank for the quarter ended March 31, 1998. The Bank's first quarter 1998
results includes results by operations from Eastern American Bank for the three
months ended March 1998.
Results of Operations and Financial Condition
The net income for the quarter ended March 31, 1998 totalled $742,400, an
increase of $375,700 over the first quarter of 1997. This constituted net basic
earnings per common share of $.60 for 1998, and $.38 for 1997. With the diluted
effect of common stock equivalents, earnings per common share were $.53 for
1998, and $.35 for 1997. The expanded levels of earning assets increased the
Bank's net interest income during the first quarter of 1998. This factor, along
with managed expense control, increased volume in the mortgage banking
operation, and expansion of the Bank's business loan portfolio, provided the
basis for increased earnings.
At March 31, 1998, 86.3% of total loans were due in one year or less. Floating
rate loans with maturities of one year or less represented 35.7% of total loans,
and the remainder of loans had fixed rates.
Average loans, net of unearned income, to average deposits were 83.4% and 79.0%
in 1998 and 1997, respectively.
Net Interest Income
Net interest income, before provision for loan losses, increased 98.0% to
$2,051,000 in during the first quarter 1998 over 1997. The 1998 increase in net
interest income was proportionate with the increase in average earning assets
and interest bearing liabilities during the first quarter of 1998. During the
first quarter of 1998, due to the increased banking activity precipitated by
lower interest rates and the acquisition of Eastern American, average loans
increased 90.1% to $153,700,000. During the first quarter of 1998, due to the
competitive pricing of the Bank's deposit products and the acquisition of
Eastern American, average deposits increased 79.9% to $184,150,000. As part of
its mortgage banking operations, funds were advanced on behalf of investor banks
in settlement of mortgage loans. During the first quarter average funds advanced
in settlement of such loans increased 341.7% to $37,623,000 in 1998 while
average securities decreased 17.5% to $13,853,000. The increase in these assets
were funded by Federal Home Loan Bank advances and the average life of the
assets were less than 30 days.
Allowance for Loan Losses
The ratio of net loans charged off to average loans was .0% in 1998 and in 1997.
The allowance for loan losses as a percentage of quarter end loans was 1.71% in
1998 and 1.30% in 1997. The level of non-performing loans at quarter end was
$2,556,000 and $303,000 in 1998 and 1997, or 1.61% and .37%, respectively, of
total loans. Management made a provision for loan losses of $125,000 during the
first quarter of 1998 and $15,000 during the same period of 1997. The majority
of the non-accrual loans were housed in Eastern American Bank at the time of
merger. The Bank has a plan in place to substantially reduce the level of
non-accruing loans during the first half of 1998 and these assets were marked to
market at the time of merger. The Bank anticipates increasing the quality of
assets at Eastern American Bank through the employment of experienced commercial
lending officers.
In establishing the allowance for loan losses, management considers a number of
factors, including loan asset quality, related collateral and economic
conditions prevailing during the loan's repayment. In its loan policies,
management has emphasized the borrower's ability to service the debt, the
borrower's general creditworthiness and the quality of collateral.
While the Bank believes it has sufficient allowance for its existing portfolio,
there can be no assurances that an additional allowance for losses on existing
loans may not be necessary in the future, particularly if the economy worsens.
Potential Problem Loans
At March 31, 1998, the Bank had $2,333,000 in non-accrual loans and $222,000 of
loans past due 90 days or more that were still accruing. In addition to loans on
either non-accrual status or loans past due 90 days or more and still accruing,
the Bank had identified $1,382,100 of loans that have been internally
classified. These loans require more than normal attention and are potentially
problem loans.
Noninterest Income and Noninterest Expenses
Noninterest income was $2,264,000 for the first quarter of 1998, an increase of
189.1% over 1997. This increase was primarily from income derived from mortgage
banking operations. The general decline in interest rates, which began in 1995
and continued through the first quarter 1998, was a factor in the increase of
mortgage banking income of 194.7% to $2,104,000. Because of the uncertainty of
future loan origination volume and the future level of interest rates, there can
be no assurance that the Bank will realize the same level of mortgage banking
income in future periods. The increase in other income during the first quarter
of 1998 over 1997 was primarily attributable to service charges on deposit
accounts which increased with the addition of Eastern American Bank. The Bank
realized a gain on sale of loans of $2,000 during 1998.
Total noninterest expense was $3,048,000 for the first quarter of 1998, a 144.2%
increase over the same period in 1997. All areas of noninterest expenses were
affected by the increased volume in the mortgage banking operations and the
merger with Eastern American. The largest component of noninterest expense,
salaries and employee benefits, increased 129.2% to $1,861,000 during the first
three months in 1998 over 1997. This category comprised 61.1% of the total
noninterest expense during the first quarter in 1998, and 65.1% in 1997.
Comparing the first quarter of 1998 over 1997, occupancy expense increased
128.6%, depreciation and equipment maintenance expense increased 65.3%, and
outside computer service increased 246.5%.
Funds are advanced in settlement of mortgage loans originated on behalf of
investor banks. Mortgage banking income is recognized when the related mortgage
is transferred to the investor bank. Based on the increased volume, market
conditions and the changes thereto that could prompt potential losses,
management made a provision for funds advanced of $126,000 during the first
quarter of 1998 and no such provision during the same period of 1997.
Deposit Insurance
The deposits of the Bank are insured by the Federal Deposit Insurance
Corporation ("FDIC") up to the limits set forth under applicable law. The
majority of the Bank's deposits are subject to the deposit assessments of the
Bank Insurance Funds ("BIF") of the FDIC. A portion of the deposits of the Bank
(those acquired as a result of the merger with Eastern American) are subject to
assessments imposed by the Savings Association Insurance Funds ("SAIF") of the
FDIC.
Effective January 1, 1997, the Federal Deposit Insurance Corporation ("FDIC")
equalized the assessment rates for BIF and SAIF insured deposits and the
semi-annual assessments for FDIC deposits have a range of .0% to .27% basis
points per $100 of insured deposits, depending on the Bank's capital position
and other supervisory factors. The Deposit Insurance Funds Act of 1996 (the
"Funds Act") was enacted September 30, 1996. This legislation requires that both
SAIF and BIF insured deposits pay a pro rata portion of the interest due on the
obligations issued by the Financing Corporation ("FICO"). The FDIC is currently
assessing BIF insured deposits and additional 1.244 basis points per $100 of
deposits and the SAIF insured deposits an additional 6.22 basis points per $100
of deposits. FDIC premiums increased 400.0% to $10,000 in the first three months
of 1998 over the $2,000 paid during the same period in 1997.
Income Taxes
During the first three months of 1998, the Bank made a provision for income
taxes of $400,000 and a provision of $189,000 for the same period in 1997.
Liquidity
The Bank's funding requirements are supplied from a range of traditional
sources, including various types of demand deposits, money market accounts,
certificates of deposit and short-term borrowings. Large certificates of deposit
accounted for 1.02% and .01% of total deposits at March 31, 1998 and 1997,
respectively. Federal Home Loan Bank ("FHLB") advances were also utilized as
funding sources by the Bank during the first quarter of 1998 and 1997. The Bank
had $43,320,000 in such advances outstanding at March 31, 1998 and none of these
advances outstanding at March 31, 1997. The Bank has a warehouse line of credit
collateralized by first mortgage loans amounting to $40,000.000 which expires
December 2, 1998. Also available is a variable rate line of credit on which the
Bank may borrow up to $23,500,000. This arrangement expires November 3, 1998,
and can be prepaid at anytime by the Bank. At March 31, 1998, the Bank had
outstanding $22,920,000 in warehouse advances and $20,400,000 outstanding in
other advances. At March 31, 1997, no such advances were outstanding. The Bank
has no reason to believe these arrangements will not be renewed.
Management seeks to ensure adequate liquidity to fund loans and meet the Bank's
financial requirements and opportunities. To provide liquidity for current,
ongoing and unanticipated needs, the Bank maintains short-term interest bearing
certificates of deposits, federal funds sold, and a portfolio of debt
securities. The Bank also structures and monitors the flow of funds from debt
securities and from maturing loans. As securities are generally purchased to
provide a source of liquidity, most are classified as securities
available-for-sale when purchased. Unrealized holding gains and losses for
available-for-sale securities are excluded from earnings and reported as a net
amount in a separate component of stockholders' equity until realized.
Securities are composed primarily of governmental or quasi-governmental
agencies. Net unrealized appreciation, net of tax effect, on securities
available-for-sale was $41,000 at March 31, 1998 and net unrealized depreciation
on securities available-for-sale of $125,000 at March 31, 1997. The Bank from
time to time also maintains short-term interest bearing certificates of deposit
with other financial institutions. These certificates of deposit amounted to
$1,000,000 at March 31, 1998 and 1997, respectively. There were no federal funds
sold to correspondent institutions at March 31, 1998 and $1,250,000 sold at
March 31, 1997.
Capital Resources and Adequacy
The Federal Reserve Board, the FDIC and the Office of Thrift Supervision have
issued substantially similar risk-based and leverage capital guidelines
applicable to banking organizations they supervise. Due to the Bank's
capitalization, it is classified as "well capitalized".
The Bank's capital-to-asset ratio decreased to 5.79% at March 31, 1998 as
compared to 7.76% at March 31, 1997, as a result of increased assets.
The capital adequacy standards are based on an established minimum for
Risk-Based Capital, Tier 1 Risk-Based Capital and the Tier 1 Leverage Ratio.
The following table summarizes the Bank's regulatory capital ratios at March 31,
1998.
Required Ratio Actual Ratio
Tier 1 risk-based 4.00% 7.60%
Total risk-based 8.00% 8.85%
Tier 1 leverage 4.00 to 5.00% 7.14%
The Bank is in full compliance with all relevant regulatory capital
requirements.
Net Overhead Ratio
To measure the real efficiency of the Bank, non-interest income should be
subtracted from non-interest expense and divided by the average assets. Since
the mortgage banking department's loan volume will exceed the Bank's assets on a
yearly basis, it masks the progress of the operating bank. Therefore, netting
the mortgage department's contribution reflects the real value of the Bank.
OPERATING EXPENSE INFORMATION
(Dollars in thousands)
March 31, 1998 March 31, 1997
Consolidated data:
Average assets $ 220,292 $ 112,885
Net non-interest expense 784 465
Net overhead ratio 1.42% 1.65%
Peer Group (2.5% - 3.5%) 3.00% 3.00%
Bank data:
Net non-interest expense $ 1,177 $ 502
Net overhead ratio 2.14% 1.78%
Peer Group (2.5% - 3.5%) 3.00% 3.00%
FTE Bank employees 73 33
FTE Mortgage department employees 74 42
Total FTE employees 147 75
Year 2000 Compliance
Many existing computer programs use only two digits to identify a year in the
date field. These programs were designed and developed without considering the
impact of the upcoming change in the century. If not corrected, many computer
applications could fail or create erroneous results by or at the Year 2000. The
Year 2000 issue affects virtually all companies and organization.
In July 1996, the Bank began the examination and resolution of the Year 2000
issue by appointing a project manager and advising the Board of Directors of the
potential impact on the Bank's ability to do business if the Year 2000 issue is
not resolved. The project manager prepared an action plan, risk analysis and
inventory of Year 2000 related issues in compliance with a directive issued by
the Federal Reserve. The project manager continues to add items to the
inventory. Estimated completion of user testing of all high and moderate risk
items is the first quarter of 1999, with a contingency plan for each item to be
in place. In late 1997, the Bank upgraded or replaced software and hardware in
conjunction with an internally financed change in data processors. The current
data processor is certified to be Year 2000 compliant and user testing will
begin during the third quarter of 1998.
The Board of Directors receives periodic updates, which include the status and
estimated completion dates of each item on the inventory. A failure to become
Year 2000 compliant could disrupt the Bank's operating results and financial
condition; therefore, progress is being closely monitored both internally by
management and the Board of Directors, and externally by the regulators.
RESOURCE BANK
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and with the instructions to Form 10-QSB. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. However, in
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the year ended December 31,
1998. For further information, refer to the financial statements and footnotes
thereto included in the Bank's annual report on Form 10-KSB for the year ended
December 31, 1997.
NOTE B -- EARNINGS PER COMMON SHARE
The Bank adopted Financial Accounting Standards Board (FASB) Statement No. 128,
Earnings Per Share, on December 31, 1997. This statement established standards
for computing and presenting earnings per share (EPS). This Statement supersedes
standards previously set in APB Opinion No. 15, Earnings Per Share. FASB No. 128
requires dual presentation of basic and diluted EPS on the face of the income
statement, and it requires a reconciliation of the numerator and denominator of
the basic EPS computation with the numerator and denominator of the diluted EPS
computation. This Statement is effective for financial statements issued for
periods ending after December 15, 1997. In accordance with the requirements of
this Statement, all prior periods EPS data have been restated to reflect the
change in reporting requirements.
Basic EPS excludes dilution and is computed by dividing income available to
common shareholders by the weighted-average number of shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised, converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. The weighted-average number of shares outstanding
for the three months ending March 31, 1998 and 1997 were 1,226,690 and 967,874,
respectively. The diluted number of shares for the three months ended March 31,
1998 and 1997 were 1,389,068 and 1,049,702, respectively.
NOTE C -- COMPREHENSIVE INCOME
Comprehensive income for the three months ended March 31, 1998 is as follows:
Net income $ 742,393
Other comprehensive
income, net of
taxes of $ 22,339 (254,889)
-------
Comprehensive income $ 487,504
=======
Other comprehensive income consists only of unrealized gains or losses on
available for sale securities as illustrated below:
Accumulated other
Comprehensive income
Beginning balance $ 296,376
Current period unrealized loss (254,889)
-------
Ending balance $ 41,487
=======
No reclassification adjustment was necessary as no realized gains or losses
were included in net income for the period.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Prior to the Bank's current management assuming office, the Bank had
accumulated a significant deficit. The Bank was prohibited from paying
dividends under Virginia banking law until it had restored any deficits
in its capital funds as originally paid in. Additionally, Federal
Reserve Board regulations limit the payment of dividends to net
profits, as defined, of the current year, plus retained net profits of
the previous tow years. Consequently, until 1996 dividends were
precluded under these regulations.
In each of January 1996 and April 1997, the Board of Directors approved
a one-time dividend of $.10, and $.25 per share, respectively,
contingent upon approval of the Board of Governors of the Federal
Reserve System and the Commonwealth of Virginia, State Corporation
Commission, Bureau of Financial Institutions. Subsequently, the
dividends were approved by the relevant regulatory authorities, subject
to certain provisions of Regulation H of the Federal Reserve System.
These provisions required the Bank to obtain approval of at least
two-thirds of the holders of its Common Stock. Accordingly, the
shareholders approved the $.10 at the 1996 Annual Meeting of
Shareholders and the $.25 dividend at the 1997 Annual Meeting of
Shareholders. As a result of the Bank's improved financial position,
such approvals are no longer required as long as the Bank continues to
achieve satisfactory earnings.
On December 1, 1997, Eastern American Bank FSB, ("Eastern American") a
federal savings bank, was merged into Resource Bank. Each share of
Eastern American Bank stock became .77 shares of Resource Bank Common
Stock.
On March 16, 1998, the Bank announced a quarterly dividend
of $.12 per share to be paid to shareholders of record on March 31,
1998.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Information called for in this section is incorporated by reference to
the Bank's Proxy Statement for the 1998 Annual Meeting.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
20.1 1997 Annual Report on Form 10-KSB. Filed March
30, 1998 and incorporated herein by reference.
23.1 Notice of 1998 Annual Meeting of Shareholders and
Proxy Statement. Filed April 29, 1998 and incorporated herein
by reference.
b. Reports on Form 8-K.
Resource Bank filed no reports on Form 8-K with the Board of Governors
of the Federal Reserve System during the quarter ended March 31, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RESOURCE BANK
/s/ Lawrence N. Smith 5/13/98
____________________________________ Date:_________
Lawrence N. Smith
President & Chief Executive Officer
/s/ Eleanor J. Whitehurst 5/13/98
_____________________________________ Date:_________
Eleanor J. Whitehurst
Senior Vice President & Chief Financial Officer