Difficult. We are mostly into prayer. We've got to cut expenses, that is the big key. The reason we have to cut expenses is that we are under pressure because of the compaction of rates.

You really don't have that much spread between free money, savings accounts, and CDs. The good thing is is that we don't have that much volatility in interest rates.

The only thing to do is try to cut expanses. The big item is in personnel expense where you have the deadwood. It particularly comes home to roost when you are under pressure.

There is certainly increased pressure to cut costs. I think it is going to be a difficult year, primarily because the revenue stream we have been getting from refinancing mortgages is going to dry up. That revenue stream has been a powerhouse; 20% of earnings, I would imagine, for a lot of banks. That's a big number.

We pick a couple of areas and try to work them over. Last year we dropped nearly all of our maintenance contracts - the kind of things you would have on machinery - and we bought an insurance policy. When the bill comes in, we send it to the insurance company.

It's hard to know. We've done well with the refinancing market. That area will be down, but hopefully other areas will be better, like consumer lending.

I think competition is still the big thing. I don't think banks can sit back and not continue to watch the expenses if they are going to make same amount of money or more. I think margins are going to be squeezed.

I'm merging my two banks and my budgeting process is delayed two months. I'm budgeting for the same type of year in '94 as we had in '93. For us, '93 was a good year.

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