Vermont
|
03-0284070
|
(State
of Incorporation)
|
(IRS
Employer Identification Number)
|
4811
US Route 5, Derby, Vermont
|
05829
|
(Address
of Principal Executive Offices)
|
(zip
code)
|
Registrant's
Telephone Number: (802)
334-7915
|
Large
accelerated filer ( )
|
Accelerated
filer ( )
|
Non-accelerated
filer ( X )
|
FORM
10-Q
|
|
Index
|
|
Page
|
|
PART
I FINANCIAL INFORMATION
|
|
Item
I Financial
Statements
|
4
|
11
|
|
24
|
|
Item
4 Controls and
Procedures
|
24
|
PART
II OTHER INFORMATION
|
|
Item
1 Legal
Proceedings
|
24
|
Item
1A Risk Factors
|
25
|
25
|
|
25
|
|
Item
6 Exhibits
|
25
|
27
|
COMMUNITY
BANCORP. AND SUBSIDIARY
|
||||||||||||
Consolidated
Balance Sheets
|
September
30
|
December
31
|
September
30
|
|||||||||
|
2007
|
2006
|
2006
|
|||||||||
|
(Unaudited)
|
|
(Unaudited)
|
|||||||||
Assets
|
||||||||||||
Cash
and due from banks
|
$ |
7,609,332
|
$ |
11,292,831
|
$ |
8,823,425
|
||||||
Federal
funds sold and overnight deposits
|
12,389,462
|
8,173,779
|
4,378,201
|
|||||||||
Total
cash and cash equivalents
|
19,998,794
|
19,466,610
|
13,201,626
|
|||||||||
Securities
held-to-maturity (fair value $29,472,000 at 09/30/07,
|
||||||||||||
$21,301,000
at 12/31/06, and $30,789,000 at 09/30/06)
|
29,431,718
|
21,069,866
|
30,778,188
|
|||||||||
Securities
available-for-sale
|
25,074,048
|
22,612,207
|
27,495,869
|
|||||||||
Restricted
equity securities, at cost
|
2,450,150
|
2,828,250
|
3,203,350
|
|||||||||
Loans
held-for-sale
|
982,576
|
566,300
|
1,240,998
|
|||||||||
Loans
|
255,926,578
|
268,729,726
|
265,415,470
|
|||||||||
Allowance
for loan losses
|
(2,321,409 | ) | (2,267,821 | ) | (2,279,307 | ) | ||||||
Unearned
net loan fees
|
(490,826 | ) | (632,105 | ) | (671,132 | ) | ||||||
Net
loans
|
253,114,343
|
265,829,800
|
262,465,031
|
|||||||||
Bank
premises and equipment, net
|
12,072,266
|
12,334,024
|
12,459,780
|
|||||||||
Accrued
interest receivable
|
1,755,545
|
1,667,135
|
1,737,816
|
|||||||||
Other
assets
|
5,928,109
|
5,440,350
|
5,751,305
|
|||||||||
Total
assets
|
$ |
350,807,549
|
$ |
351,814,542
|
$ |
358,333,963
|
||||||
Liabilities
and Shareholders' Equity
|
||||||||||||
Liabilities
|
||||||||||||
Deposits:
|
||||||||||||
Demand,
non-interest bearing
|
$ |
50,485,030
|
$ |
47,402,628
|
$ |
48,826,758
|
||||||
NOW
and money market accounts
|
77,204,394
|
81,402,928
|
71,803,791
|
|||||||||
Savings
|
39,505,522
|
38,471,441
|
40,633,051
|
|||||||||
Time
deposits, $100,000 and over
|
40,455,562
|
33,835,057
|
33,178,430
|
|||||||||
Other
time deposits
|
94,388,283
|
99,876,140
|
100,966,555
|
|||||||||
Total
deposits
|
302,038,791
|
300,988,194
|
295,408,585
|
|||||||||
Federal
funds purchased and other borrowed funds
|
40,000
|
40,000
|
15,040,000
|
|||||||||
Repurchase
agreements
|
14,212,876
|
17,083,946
|
14,561,094
|
|||||||||
Accrued
interest and other liabilities
|
2,653,456
|
2,971,591
|
3,303,333
|
|||||||||
Total
liabilities
|
318,945,123
|
321,083,731
|
328,313,012
|
|||||||||
Shareholders'
Equity
|
||||||||||||
Common
stock - $2.50 par value; 10,000,000 shares authorized at
|
||||||||||||
09/30/07 and 6,000,000 shares authorized at 12/31/06 and
09/30/06;
|
||||||||||||
and
4,592,735 shares issued at 09/30/07, 4,339,619 shares
|
||||||||||||
issued
at 12/31/06, and 4,324,606 shares issued at 09/30/06
|
11,481,838
|
10,849,048
|
10,811,516
|
|||||||||
Preferred
stock, 1,000,000 shares authorized, no shares
|
||||||||||||
issued
and outstanding
|
0
|
0
|
0
|
|||||||||
Additional
paid-in capital
|
24,818,896
|
22,006,492
|
21,854,354
|
|||||||||
Retained
earnings (accumulated deficit)
|
(1,749,560 | ) |
760,667
|
346,873
|
||||||||
Accumulated
other comprehensive loss
|
(65,971 | ) | (270,664 | ) | (377,060 | ) | ||||||
Less:
treasury stock, at cost; 210,101 shares at 09/30/07, and
|
||||||||||||
209,510
shares at 12/31/06 and 09/30/06
|
(2,622,777 | ) | (2,614,732 | ) | (2,614,732 | ) | ||||||
Total
shareholders' equity
|
31,862,426
|
30,730,811
|
30,020,951
|
|||||||||
Total
liabilities and shareholders' equity
|
$ |
350,807,549
|
$ |
351,814,542
|
$ |
358,333,963
|
||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
COMMUNITY
BANCORP. AND SUBSIDIARY
|
|
|||||||
Consolidated
Statements of Income
|
|
|||||||
(Unaudited)
|
|
|||||||
For
The Third Quarter Ended September 30,
|
2007
|
2006
|
||||||
|
|
|
||||||
Interest
income
|
|
|||||||
Interest
and fees on loans
|
$ |
4,778,687
|
$ |
4,661,390
|
||||
Interest
on debt securities
|
||||||||
Taxable
|
215,234
|
262,517
|
||||||
Tax-exempt
|
259,404
|
288,563
|
||||||
Dividends
|
37,329
|
45,980
|
||||||
Interest
on federal funds sold and overnight deposits
|
133,350
|
34,871
|
||||||
Total
interest income
|
5,424,004
|
5,293,321
|
||||||
|
||||||||
Interest
expense
|
||||||||
Interest
on deposits
|
1,957,858
|
1,716,957
|
||||||
Interest
on federal funds purchased and other borrowed funds
|
63,283
|
282,817
|
||||||
Interest
on repurchase agreements
|
79,004
|
79,019
|
||||||
Total
interest expense
|
2,100,145
|
2,078,793
|
||||||
|
||||||||
Net
interest income
|
3,323,859
|
3,214,528
|
||||||
Provision
for loan losses
|
47,500
|
37,500
|
||||||
Net
interest income after provision
|
3,276,359
|
3,177,028
|
||||||
|
||||||||
Non-interest
income
|
||||||||
Service
fees
|
350,054
|
352,661
|
||||||
Other
income
|
760,304
|
438,748
|
||||||
Total
non-interest income
|
1,110,358
|
791,409
|
||||||
|
||||||||
Non-interest
expense
|
||||||||
Salaries
and wages
|
1,168,792
|
1,158,325
|
||||||
Employee
benefits
|
477,144
|
424,615
|
||||||
Occupancy
expenses, net
|
539,202
|
550,917
|
||||||
Other
expenses
|
1,061,908
|
927,713
|
||||||
Total
non-interest expense
|
3,247,046
|
3,061,570
|
||||||
|
||||||||
Income
before income taxes
|
1,139,671
|
906,867
|
||||||
Applicable
income taxes
|
212,499
|
142,803
|
||||||
Net
Income
|
$ |
927,172
|
$ |
764,064
|
||||
|
||||||||
Earnings
per share
|
$ |
0.21
|
$ |
0.18
|
||||
|
||||||||
Weighted
average number of common shares
|
||||||||
used
in computing earnings per share
|
4,372,670
|
4,310,080
|
||||||
|
||||||||
Dividends
declared per share
|
$ |
0.17
|
$ |
0.16
|
||||
|
||||||||
Book
value per share on shares outstanding at September
30,
|
$ |
7.27
|
$ |
6.95
|
||||
|
||||||||
All
share and per share data for prior periods restated to reflect a
5% stock
dividend declared in June 2007.
|
||||||||
|
||||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
COMMUNITY
BANCORP. AND SUBSIDIARY
|
|
|||||||
Consolidated
Statements of Income
|
|
|||||||
For
the Nine Months Ended September 30,
|
2007
|
2006
|
||||||
|
|
|
||||||
Interest
income
|
|
|||||||
Interest
and fees on loans
|
$ |
14,406,502
|
$ |
13,520,265
|
||||
Interest
on debt securities
|
||||||||
Taxable
|
630,478
|
849,716
|
||||||
Tax-exempt
|
691,445
|
795,495
|
||||||
Dividends
|
126,370
|
130,399
|
||||||
Interest
on federal funds sold and overnight deposits
|
191,178
|
60,033
|
||||||
Total
interest income
|
16,045,973
|
15,355,908
|
||||||
|
||||||||
Interest
expense
|
||||||||
Interest
on deposits
|
5,774,457
|
4,700,719
|
||||||
Interest
on federal funds purchased and other borrowed funds
|
90,642
|
603,143
|
||||||
Interest
on repurchase agreements
|
240,688
|
239,327
|
||||||
Total
interest expense
|
6,105,787
|
5,543,189
|
||||||
|
||||||||
Net
interest income
|
9,940,186
|
9,812,719
|
||||||
Provision
for loan losses
|
122,500
|
112,500
|
||||||
Net
interest income after provision
|
9,817,686
|
9,700,219
|
||||||
|
||||||||
Non-interest
income
|
||||||||
Service
fees
|
1,031,526
|
989,006
|
||||||
Other
income
|
1,676,660
|
1,310,420
|
||||||
Total
non-interest income
|
2,708,186
|
2,299,426
|
||||||
|
||||||||
Non-interest
expense
|
||||||||
Salaries
and wages
|
3,421,779
|
3,490,338
|
||||||
Employee
benefits
|
1,349,547
|
1,263,179
|
||||||
Occupancy
expenses, net
|
1,776,935
|
1,679,889
|
||||||
Other
expenses
|
3,004,450
|
2,861,614
|
||||||
Total
non-interest expense
|
9,552,711
|
9,295,020
|
||||||
|
||||||||
Income
before income taxes
|
2,973,161
|
2,704,625
|
||||||
Applicable
income taxes
|
512,850
|
442,519
|
||||||
Net
Income
|
$ |
2,460,311
|
$ |
2,262,106
|
||||
|
||||||||
Earnings
per share
|
$ |
0.57
|
$ |
0.53
|
||||
|
||||||||
Weighted
average number of common shares
|
||||||||
used
in computing earnings per share
|
4,357,565
|
4,294,492
|
||||||
|
||||||||
Dividends
declared per share
|
$ |
0.50
|
$ |
0.48
|
||||
|
||||||||
Book
value per share on shares outstanding at September
30,
|
$ |
7.27
|
$ |
6.95
|
||||
|
||||||||
All
share and per share data for prior periods restated to reflect a
5% stock
dividend declared in June 2007.
|
||||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
|
(Unaudited)
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
For
the Nine Months Ended September 30,
|
2007
|
2006
|
||||||
Cash
Flow from Operating Activities:
|
||||||||
Net
Income
|
$ |
2,460,311
|
$ |
2,262,106
|
||||
Adjustments
to Reconcile Net Income to Net Cash Provided by Operating
Activities:
|
||||||||
Depreciation
and amortization
|
710,591
|
655,411
|
||||||
Provision
for loan losses
|
122,500
|
112,500
|
||||||
Deferred
income taxes
|
(34,470 | ) | (52,608 | ) | ||||
Net
gain on sale of loans
|
(226,492 | ) | (221,559 | ) | ||||
Loss
(gain) on sale or disposal of fixed assets
|
8,415
|
(818 | ) | |||||
Gain
on investment in Trust LLC
|
(104,337 | ) | (56,195 | ) | ||||
Amortization
of bond premium, net
|
8,301
|
72,282
|
||||||
Proceeds
from sales of loans held for sale
|
22,295,686
|
20,935,477
|
||||||
Originations
of loans held for sale
|
(22,485,470 | ) | (20,368,334 | ) | ||||
(Decrease)
increase in taxes payable
|
(202,680 | ) |
195,127
|
|||||
(Increase)
decrease in interest receivable
|
(88,410 | ) |
51,435
|
|||||
Increase
in mortgage servicing rights
|
(90,643 | ) | (108,351 | ) | ||||
Increase
in other assets
|
(366,050 | ) | (395,998 | ) | ||||
Amortization
of limited partnerships
|
292,530
|
254,268
|
||||||
Decrease
in unamortized loan fees
|
(141,279 | ) | (12,974 | ) | ||||
(Decrease)
increase in interest payable
|
(49,183 | ) |
142,972
|
|||||
Increase
in accrued expenses
|
88,396
|
107,263
|
||||||
Increase
in other liabilities
|
22,037
|
127,330
|
||||||
Net
cash provided by operating activities
|
2,219,753
|
3,699,334
|
||||||
Cash
Flows from Investing Activities:
|
||||||||
Investments
- held to maturity
|
||||||||
Maturities
and paydowns
|
17,709,462
|
29,304,142
|
||||||
Purchases
|
(26,071,314 | ) | (31,690,664 | ) | ||||
Investments
- available for sale
|
||||||||
Sales
and maturities
|
3,000,000
|
10,000,000
|
||||||
Purchases
|
(5,160,000 | ) | (1,000,000 | ) | ||||
Proceeds
from sale of restricted equity securities
|
378,100
|
48,800
|
||||||
Decrease
in limited partnership contributions payable
|
(236,094 | ) | (298,632 | ) | ||||
Investments
in limited partnership
|
(264,800 | ) | (2,993 | ) | ||||
Decrease
(increase) in loans, net
|
12,686,366
|
(14,864,071 | ) | |||||
Capital
expenditures, net
|
(457,248 | ) | (1,497,255 | ) | ||||
Recoveries
of loans charged off
|
47,870
|
49,176
|
||||||
Net
cash provided by (used in) investing
activities
|
1,632,342
|
(9,951,497 | ) | |||||
Cash
Flows from Financing Activities:
|
||||||||
Net
decrease in demand, NOW, money market and savings accounts
|
(82,051 | ) | (29,945,770 | ) | ||||
Net
increase in time deposits
|
1,132,648
|
31,041,944
|
||||||
Net
decrease in repurchase agreements
|
(2,871,070 | ) | (2,786,046 | ) | ||||
Net
decrease in short-term borrowings
|
0
|
(2,000,000 | ) | |||||
Advances
on long-term borrowings
|
0
|
20,000,000
|
||||||
Repayments
on long-term borrowings
|
0
|
(13,000,000 | ) | |||||
Payments
to acquire treasury stock
|
(8,045 | ) | (11 | ) | ||||
Dividends
paid
|
(1,491,393 | ) | (1,431,267 | ) | ||||
Net
cash (used in) provided by financing
activities
|
(3,319,911 | ) |
1,878,850
|
Net
increase (decrease) in cash and cash
equivalents
|
532,184
|
(4,373,313 | ) | |||||
Cash
and cash equivalents:
|
||||||||
Beginning
|
19,466,610
|
17,574,939
|
||||||
Ending
|
$ |
19,998,794
|
$ |
13,201,626
|
||||
Supplemental
Schedule of Cash Paid During the Period
|
||||||||
Interest
|
$ |
6,154,970
|
$ |
5,400,217
|
||||
Income
taxes
|
$ |
750,000
|
$ |
300,000
|
||||
Supplemental
Schedule of Noncash Investing and Financing
Activities:
|
||||||||
Change
in unrealized loss on securities available-for-sale
|
$ |
310,142
|
$ |
113,725
|
||||
Dividends
Paid
|
||||||||
Dividends
declared
|
$ |
2,149,218
|
$ |
2,081,216
|
||||
Increase
in dividends payable attributable to dividends declared
|
(42,872 | ) | (5,015 | ) | ||||
Dividends
reinvested
|
(614,953 | ) | (644,934 | ) | ||||
$ |
1,491,393
|
$ |
1,431,267
|
|||||
Stock
Dividends
|
$ |
2,821,320
|
$ |
0
|
For
the third quarter ended September 30,
|
2007
|
2006
|
||||||
Net
income
|
$ |
927,172
|
$ |
764,064
|
||||
Other
comprehensive income, net of tax:
|
||||||||
Unrealized
holding gain on available-for-sale
|
||||||||
securities
arising during the period
|
221,604
|
271,848
|
||||||
Tax
effect
|
(75,345 | ) | (92,428 | ) | ||||
Other
comprehensive income, net of tax
|
146,259
|
179,420
|
||||||
Total
comprehensive income
|
$ |
1,073,431
|
$ |
943,484
|
For
the nine months ended September 30,
|
2007
|
2006
|
||||||
Net
income
|
$ |
2,460,311
|
$ |
2,262,106
|
||||
Other
comprehensive income, net of tax:
|
||||||||
Unrealized
holding gains on available-for-sale
|
||||||||
securities
arising during the period
|
310,142
|
113,725
|
||||||
Tax
effect
|
(105,448 | ) | (38,667 | ) | ||||
Other
comprehensive income, net of tax
|
204,694
|
75,058
|
||||||
Total
comprehensive income
|
$ |
2,665,005
|
$ |
2,337,164
|
For
the third quarter ended September 30,
|
2007
|
2006
|
Return
on Average Assets
|
1.03%
|
.86%
|
Return
on Average Equity
|
11.66%
|
10.18%
|
For
the nine months ended September 30,
|
2007
|
2006
|
Return
on Average Assets
|
.93%
|
.86%
|
Return
on Average Equity
|
10.82%
|
10.28%
|
For
the nine months ended September 30,
|
2007
|
2006
|
||||||
Net
interest income as presented
|
$ |
9,940,186
|
$ |
9,812,719
|
||||
Effect
of tax-exempt income
|
356,199
|
409,799
|
||||||
Net
interest income, tax equivalent
|
$ |
10,296,385
|
$ |
10,222,518
|
For
the Nine Months Ended September 30,
|
||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||
Average
|
Income/
|
Rate/
|
Average
|
Income/
|
Rate/
|
|||||||||||||||||||
Balance
|
Expense
|
Yield
|
Balance
|
Expense
|
Yield
|
|||||||||||||||||||
EARNING
ASSETS
|
||||||||||||||||||||||||
Loans
(gross)
|
$ |
265,366,409
|
$ |
14,406,502
|
7.26 | % |
262,198,237
|
13,520,265
|
6.89 | % | ||||||||||||||
Taxable
Investment Securities
|
21,882,922
|
630,477
|
3.85 | % |
31,901,030
|
849,716
|
3.56 | % | ||||||||||||||||
Tax
Exempt Investment Securities
|
22,309,646
|
1,047,645
|
6.28 | % |
28,408,056
|
1,205,295
|
5.67 | % | ||||||||||||||||
Federal
Funds Sold
|
0
|
0
|
0.00 | % |
351,190
|
10,458
|
3.98 | % | ||||||||||||||||
Sweep
Accounts
|
4,948,974
|
191,178
|
5.16 | % |
1,377,695
|
49,575
|
4.81 | % | ||||||||||||||||
Other
Investments
|
2,370,985
|
126,370
|
7.13 | % |
3,227,293
|
130,399
|
5.40 | % | ||||||||||||||||
TOTAL
|
$ |
316,878,936
|
$ |
16,402,172
|
6.92 | % |
327,463,501
|
15,765,708
|
6.44 | % | ||||||||||||||
INTEREST
BEARING LIABILITIES
|
||||||||||||||||||||||||
Savings
Deposits
|
$ |
39,401,552
|
$ |
102,845
|
0.35 | % |
45,007,831
|
117,430
|
0.35 | % | ||||||||||||||
NOW
& Money Market Funds
|
71,331,482
|
1,367,627
|
2.56 | % |
78,572,070
|
1,195,144
|
2.03 | % | ||||||||||||||||
Time
Deposits
|
132,389,714
|
4,303,985
|
4.35 | % |
117,776,384
|
3,388,145
|
3.85 | % | ||||||||||||||||
Federal
Funds Purchased and
|
||||||||||||||||||||||||
Other
Borrowed Funds
|
2,223,615
|
90,642
|
5.45 | % |
15,559,247
|
603,144
|
5.18 | % | ||||||||||||||||
Repurchase
Agreements
|
14,489,925
|
240,688
|
2.22 | % |
15,753,227
|
239,327
|
2.03 | % | ||||||||||||||||
TOTAL
|
$ |
259,836,288
|
$ |
6,105,787
|
3.14 | % | $ |
272,668,759
|
$ |
5,543,190
|
2.72 | % | ||||||||||||
Net
Interest Income
|
$ |
10,296,385
|
$ |
10,222,518
|
||||||||||||||||||||
Net
Interest Spread(1)
|
3.78 | % | 3.72 | % | ||||||||||||||||||||
Interest
Margin(2)
|
4.34 | % | 4.17 | % |
(1) Net
interest spread is the difference between the yield on earning assets
and
the rate paid on interest bearing liabilities.
|
(2) Interest
margin is net interest income divided by average earning
assets.
|
Variance
|
Variance
|
|||||||||||
RATE
/ VOLUME
|
Due
to
|
Due
to
|
Total
|
|||||||||
Rate(1)
|
Volume(1)
|
Variance
|
||||||||||
INCOME
EARNING ASSETS
|
||||||||||||
Loans
(2)
|
722,970
|
163,267
|
886,237
|
|||||||||
Taxable
Investment Securities
|
(27,975 | ) | (191,264 | ) | (219,239 | ) | ||||||
Tax
Exempt Investment Securities
|
32,266
|
(189,916 | ) | (157,650 | ) | |||||||
Federal
Funds Sold
|
(10,458 | ) |
0
|
(10,458 | ) | |||||||
Sweep
Account
|
13,122
|
128,481
|
141,603
|
|||||||||
Other
Investments
|
26,247
|
(30,276 | ) | (4,029 | ) | |||||||
Total
Interest Earnings
|
756,172
|
(119,708 | ) |
636,464
|
||||||||
INTEREST
BEARING LIABILITIES
|
||||||||||||
Savings
Deposits
|
(4,855 | ) | (9,730 | ) | (14,585 | ) | ||||||
NOW
& Money Market Funds
|
264,401
|
(91,918 | ) |
172,483
|
||||||||
Time
Deposits
|
495,036
|
420,804
|
915,840
|
|||||||||
Other
Borrowed Funds
|
(152,093 | ) | (360,409 | ) | (512,502 | ) | ||||||
Repurchase
Agreements
|
15,268
|
(13,907 | ) |
1,361
|
||||||||
Total
Interest Expense
|
617,757
|
(55,160 | ) |
562,597
|
||||||||
Changes
in Net Interest Income
|
138,415
|
(64,548 | ) |
73,867
|
(1)
Items which have shown a year-to-year increase in volume have variances
allocated as follows:
|
Variance
due to rate = Change in rate x new volume
|
Variance
due to volume = Change in volume x old rate
|
Items
which have shown a year-to-year decrease in volume have variances
allocated as follows:
|
Variance
due to rate = Change in rate x old volume
|
Variances
due to volume = Change in volume x new rate
|
(2)
Loans are stated before deduction of unearned discount and allowances
for
loan losses. The
|
principal
balances of non-accrual loans is included in calculations of the
yield on
loans, while
|
the
interest on these non-performing assets is
excluded.
|
ASSETS
|
September
30, 2007
|
December
31, 2006
|
September
30, 2006
|
|||||||||||||||||||||
Loans
(gross)*
|
$ |
256,909,154
|
73.23 | % | $ |
269,296,026
|
76.54 | % | $ |
266,656,468
|
74.42 | % | ||||||||||||
Available
for Sale Securities
|
25,074,048
|
7.15 | % |
22,612,207
|
6.43 | % |
27,495,869
|
7.67 | % | |||||||||||||||
Held
to Maturity Securities
|
29,431,718
|
8.39 | % |
21,069,866
|
5.99 | % |
30,778,188
|
8.59 | % | |||||||||||||||
*includes
loans held for sale
|
||||||||||||||||||||||||
LIABILITIES
|
||||||||||||||||||||||||
Time
Deposits
|
$ |
134,843,845
|
38.44 | % | $ |
133,711,197
|
38.01 | % | $ |
134,144,985
|
37.44 | % | ||||||||||||
Savings
Deposits
|
39,505,522
|
11.26 | % |
38,471,441
|
10.94 | % |
40,633,051
|
11.34 | % | |||||||||||||||
Demand
Deposits
|
50,485,030
|
14.39 | % |
47,402,628
|
13.47 | % |
48,826,758
|
13.63 | % | |||||||||||||||
NOW
& Money Market Funds
|
77,204,394
|
22.01 | % |
81,402,928
|
23.14 | % |
71,803,791
|
20.04 | % |
September
30, 2007
|
December
31, 2006
|
|||||||||||||||
Total
Loans
|
%
of Total
|
Total
Loans
|
%
of Total
|
|||||||||||||
Real
Estate Loans
|
||||||||||||||||
Construction
& Land Development
|
$ |
10,686,649
|
4.16 | % | $ |
11,889,203
|
4.41 | % | ||||||||
Farm
Land
|
5,165,395
|
2.01 | % |
3,217,107
|
1.19 | % | ||||||||||
1-4
Family Residential
|
140,156,852
|
54.56 | % |
143,228,599
|
53.19 | % | ||||||||||
Home
Equity Lines
|
14,363,799
|
5.59 | % |
13,778,692
|
5.12 | % | ||||||||||
Commercial
Real Estate
|
50,701,048
|
19.74 | % |
54,236,037
|
20.14 | % | ||||||||||
Loans
to Finance Agricultural Production
|
431,244
|
0.17 | % |
224,257
|
0.08 | % | ||||||||||
Commercial
& Industrial
|
18,326,163
|
7.13 | % |
21,992,790
|
8.17 | % | ||||||||||
Consumer
Loans
|
16,938,743
|
6.59 | % |
20,588,227
|
7.65 | % | ||||||||||
All
Other Loans
|
139,261
|
0.05 | % |
141,114
|
0.05 | % | ||||||||||
Gross
Loans
|
256,909,154
|
100.00 | % |
269,296,026
|
100.00 | % | ||||||||||
Allowance
for Loan Losses
|
(2,321,409 | ) | -0.90 | % | (2,267,821 | ) | -0.84 | % | ||||||||
Unearned
Net Loan Fees
|
(490,826 | ) | -0.19 | % | (632,105 | ) | -0.24 | % | ||||||||
Net
Loans
|
$ |
254,096,919
|
98.91 | % | $ |
266,396,100
|
98.92 | % |
2007
|
2006
|
|||||||
Loans
Outstanding End of Period
|
$ |
256,909,154
|
$ |
266,656,468
|
||||
Average
Loans Outstanding During Period
|
$ |
265,366,409
|
$ |
262,198,237
|
||||
Loan
Loss Reserve, Beginning of Period
|
$ |
2,267,821
|
$ |
2,189,187
|
||||
Loans
Charged Off:
|
||||||||
Residential
Real Estate
|
0
|
5,490
|
||||||
Commercial
Real Estate
|
0
|
5,998
|
||||||
Commercial
Loans not Secured by Real Estate
|
0
|
13,266
|
||||||
Consumer
Loans
|
116,782
|
46,802
|
||||||
Total
Loans Charged Off
|
116,782
|
71,556
|
||||||
Recoveries:
|
||||||||
Residential
Real Estate
|
13,446
|
1,340
|
||||||
Commercial
Real Estate
|
12,459
|
0
|
||||||
Commercial
Loans not Secured by Real Estate
|
1,944
|
2,912
|
||||||
Consumer
Loans
|
20,021
|
44,924
|
||||||
Total
Recoveries
|
47,870
|
49,176
|
||||||
Net
Loans Charged Off
|
68,912
|
22,380
|
||||||
Provision
Charged to Income
|
122,500
|
112,500
|
||||||
Loan
Loss Reserve, End of Period
|
$ |
2,321,409
|
$ |
2,279,307
|
||||
Net
Charge Offs to Average Loans Outstanding
|
0.026 | % | 0.009 | % | ||||
Loan
Loss Reserve to Average Loans Outstanding
|
0.875 | % | 0.869 | % |
September
30, 2007
|
December
31, 2006
|
|||||||||||||||
Percent
|
Percent
|
|||||||||||||||
Balance
|
of
Total
|
Balance
|
of
Total
|
|||||||||||||
Non-Accruing
loans
|
$ |
662,060
|
62.82 | % | $ |
720,587
|
77.78 | % | ||||||||
Loans
past due 90 days or more and still accruing
|
391,806
|
37.18 | % |
205,801
|
22.22 | % | ||||||||||
Total
|
$ |
1,053,866
|
100.00 | % | $ |
926,388
|
100.00 | % |
Contract
or
|
||||
Notional
Amount
|
||||
Unused
portions of home equity lines of credit
|
12,343,114
|
|||
Other
commitments to extend credit
|
20,342,953
|
|||
Standby
letters of credit and commercial letters of credit
|
36,500
|
|||
Recourse
on sale of credit card portfolio
|
1,311,950
|
|||
MPF
credit enhancement obligation, net of liability recorded
|
1,257,055
|
Less
than
|
2-3
|
4-5
|
More
than
|
|||||||||||||||||
1
year
|
years
|
years
|
5
years
|
Total
|
||||||||||||||||
Operating
Leases
|
$ |
144,673
|
$ |
277,311
|
$ |
200,112
|
$ |
265,127
|
$ |
887,223
|
||||||||||
FHLB
Borrowings
|
30,000
|
0
|
0
|
10,000
|
40,000
|
|||||||||||||||
Total
|
$ |
174,673
|
$ |
277,311
|
$ |
200,112
|
$ |
275,127
|
$ |
927,223
|
Annual
|
Principal
|
||||||||
Purchase
Date
|
Rate
|
Maturity
Date
|
Balance
|
||||||
Long-term
Advances
|
|||||||||
November
16, 1992
|
7.57 | % |
November
16, 2007
|
$ |
30,000
|
||||
November
16, 1992
|
7.67 | % |
November
16, 2012
|
10,000
|
|||||
Total
Long-term Advances
|
$ |
40,000
|
Balance
at December 31, 2006 (book value $7.09 per share)
|
$ |
30,730,811
|
||
Net
income
|
2,460,311
|
|||
Issuance
of stock through the Dividend Reinvestment Plan
|
623,874
|
|||
Purchase
of treasury stock (fractional share redemption associated with the
5%
stock dividend)
|
(8,045 | ) | ||
Total
dividends declared
|
(2,149,218 | ) | ||
Unrealized
holding gain arising during the period on available-for-sale securities,
net of tax
|
204,693
|
|||
Balance
at September 30, 2007 (book value $7.27 per
share)
|
31,862,426
|
Minimum
To Be Well
|
||||||
Minimum
|
Capitalized
Under
|
|||||
For
Capital
|
Prompt
Corrective
|
|||||
Actual
|
Adequacy
Purposes:
|
Action
Provisions:
|
||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|
(Dollars
in Thousands)
|
||||||
As
of September 30, 2007:
|
||||||
Total
capital (to risk-weighted assets)
|
||||||
Consolidated
|
$34,249
|
14.89%
|
$18,398
|
8.0%
|
N/A
|
N/A
|
Bank
|
$34,341
|
14.96%
|
$18,361
|
8.0%
|
$22,951
|
10.0%
|
Tier
I capital (to risk-weighted assets)
|
||||||
Consolidated
|
$31,928
|
13.88%
|
$ 9,199
|
4.0%
|
N/A
|
N/A
|
Bank
|
$32,020
|
13.95%
|
$ 9,181
|
4.0%
|
$13,771
|
6.0%
|
Tier
I capital (to average assets)
|
||||||
Consolidated
|
$31,928
|
9.31%
|
$13,716
|
4.0%
|
N/A
|
N/A
|
Bank
|
$32,020
|
9.34%
|
$13,709
|
4.0%
|
$17,136
|
5.0%
|
Minimum
To Be Well
|
||||||
Minimum
|
Capitalized
Under
|
|||||
For
Capital
|
Prompt
Corrective
|
|||||
Actual
|
Adequacy
Purposes:
|
Action
Provisions:
|
||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|
(Dollars
in Thousands)
|
||||||
As
of December 31, 2006:
|
||||||
Total
capital (to risk-weighted assets)
|
||||||
Consolidated
|
$33,270
|
14.10%
|
$18,879
|
8.0%
|
N/A
|
N/A
|
Bank
|
$33,047
|
14.01%
|
$18,872
|
8.0%
|
$23,590
|
10.0%
|
Tier
I capital (to risk-weighted assets)
|
||||||
Consolidated
|
$31,002
|
13.14%
|
$ 9,439
|
4.0%
|
N/A
|
N/A
|
Bank
|
$30,779
|
13.05%
|
$ 9,436
|
4.0%
|
$14,154
|
6.0%
|
Tier
I capital (to average assets)
|
||||||
Consolidated
|
$31,002
|
8.59%
|
$14,434
|
4.0%
|
N/A
|
N/A
|
Bank
|
$30,779
|
8.53%
|
$14,430
|
4.0%
|
$18,038
|
5.0%
|
Maximum
|
||||||||||||||||
Number
of Shares
|
||||||||||||||||
Total
Number of
|
That
May Yet Be
|
|||||||||||||||
Total
Number
|
Average
|
Shares
Purchased
|
Purchased
Under
|
|||||||||||||
Of
Shares
|
Price
Paid
|
as
Part of Publicly
|
the
Plan at the
|
|||||||||||||
For
the period:
|
Purchased(1)(2)
|
Per
Share
|
Announced
Plan(3)
|
End
of the Period
|
||||||||||||
July
1 - July 31
|
0
|
$ |
0
|
0
|
226,110
|
|||||||||||
August
1 - August 31
|
117
|
$ |
13.75
|
0
|
226,110
|
|||||||||||
September
1 - September 30
|
0
|
$ |
0
|
0
|
226,110
|
|||||||||||
Total
|
117
|
$ |
13.75
|
0
|
226,110
|
DATED: November
13, 2007
|
/s/
Richard C.
White
|
|
Richard
C. White, Chairman &
|
||
Chief
Executive Officer
|
||
DATED: November
13, 2007
|
/s/
Stephen P.
Marsh
|
|
Stephen
P. Marsh, President &
|
||
Chief
Operating Officer
|
||
(Chief
Financial Officer)
|