[ ]
|
Preliminary
Proxy Statement
|
[ ]
|
Confidential,
for Use of the Commission
|
||||
[X]
|
Definitive
Proxy Statement
|
Only
(as permitted by Rule 14a-6(e)(2))
|
|||||
[ ]
|
Definitive
Additional Materials
|
||||||
[ ]
|
Soliciting
Material Pursuant to
|
||||||
§240.14a-12
|
Payment
of Filing Fee (Check the appropriate box):
|
|||
[X]
|
No
fee required.
|
||
[ ]
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
||
(1)
|
Title
of each class of securities to which transaction
applies:
|
||
(2)
|
Aggregate
number of securities to which transaction applies:
|
||
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
|
||
(4)
|
Proposed
maximum aggregate value of transaction:
|
||
(5)
|
Total
fee paid:
|
||
[ ]
|
Fee
paid previously with preliminary materials:
|
||
[ ]
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
|
||
(1)
|
Amount
Previously Paid:
|
||
(2)
|
Form,
Schedule or Registration Statement No.:
|
||
(3)
|
Filing
Party:
|
||
(4)
|
Date
Filed:
|
PEOPLES BANCORP | ||
OF NORTH CAROLINA, INC. | ||
Notice of 2008 Annual Meeting, | ||
Proxy Statement and | ||
Annual Report |
Table of Contents |
Page
|
|
NOTICE
OF 2008 ANNUAL MEETING OF SHAREHOLDERS
.....................................................................................................................................................................................................
|
ii
|
PROXY
STATEMENT
..........................................................................................................................................................................................................................................................................
|
1
|
Security
Ownership Of Certain Beneficial Owners and Management
.......................................................................................................................................................................................
|
4
|
Section
16(a) Beneficial Ownership Reporting Compliance
.........................................................................................................................................................................................................
|
7
|
Proposal
1 - Election of Directors
...................................................................................................................................................................................................................................................
|
7
|
Our
Board of Directors and Its Committees
..............................................................................................................................................................................................................................
|
9
|
Report of the Compensation
Committee
....................................................................................................................................................................................................................................
|
10
|
Report of Audit Committee
..........................................................................................................................................................................................................................................................
|
10
|
Compensation Discussion and
Analysis
......................................................................................................................................................................................................................................
|
11
|
Compensation Committee Members
..........................................................................................................................................................................................................................................
|
11
|
Objectives of Our Compensation
Program
.................................................................................................................................................................................................................................
|
12
|
Compensation Decision Process
.................................................................................................................................................................................................................................................
|
12
|
Elements of Compensation
...........................................................................................................................................................................................................................................................
|
12
|
Compensation Committee Interlocks
and Insider Participation
..............................................................................................................................................................................................
|
15
|
Executive Compensation and
Benefits
...........................................................................................................................................................................................................................................
|
15
|
Director Compensation
.................................................................................................................................................................................................................................................................
|
15
|
Executive Officers
.........................................................................................................................................................................................................................................................................
|
17
|
Management Compensation
........................................................................................................................................................................................................................................................
|
17
|
Employment Agreements
...........................................................................................................................................................................................................................................................
|
20
|
Equity Compensation Plan
Information
...................................................................................................................................................................................................................................
|
20
|
Omnibus Stock Ownership and Long
Term Incentive Plan
..................................................................................................................................................................................................
|
21
|
Federal Income Tax Consequences
..........................................................................................................................................................................................................................................
|
24
|
Incentive Compensation Plans
....................................................................................................................................................................................................................................................
|
25
|
Deferred Compensation Plan
.......................................................................................................................................................................................................................................................
|
28
|
Supplemental Retirement Plan
.....................................................................................................................................................................................................................................................
|
29
|
Discretionary Bonuses and Service
Awards
............................................................................................................................................................................................................................
|
29
|
Profit Sharing Plan and 401(k)
Plan
.............................................................................................................................................................................................................................................
|
29
|
Indebtedness of and Transactions
with Management and Directors
...................................................................................................................................................................................
|
30
|
Performance Graph
.............................................................................................................................................................................................................................................................................
|
31
|
Proposal 2 - Approval to Amend
the Company’s Articles of Incorporation
........................................................................................................................................................................
|
32
|
Proposal 3 - Ratification of
Selection of Independent Auditor
..................................................................................................................................................................................................
|
33
|
Audit Fees
...................................................................................................................................................................................................................................................................................
|
33
|
Audit Related Fees
........................................................................................................................................................................................................................................................................
|
33
|
Tax Fees
..........................................................................................................................................................................................................................................................................................
|
33
|
All Other Fees
.............................................................................................................................................................................................................................................................................
|
33
|
Date for Receipt of Shareholder
Proposals
....................................................................................................................................................................................................................................
|
34
|
Other Matters
.....................................................................................................................................................................................................................................................................................
|
34
|
Miscellaneous
....................................................................................................................................................................................................................................................................................
|
34
|
Appendix
A – Annual Report to Shareholders
|
|
Appendix
B – Amendment to Articles of Incorporation
|
PEOPLES BANCORP OF NORTH CAROLINA, INC. | ||
Post Office Box 467 | ||
518 West C Street | ||
Newton, North Carolina 28658-0467 | ||
(828) 464-5620 | ||
NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS | ||
To Be Held on May 1, 2008 |
Place: | Catawba Country Club | ||
1154 Country Club Road | |||
Newton, North Carolina | |||
Date: | May 1, 2008 | ||
Time: | 11:00 a.m., Eastern Time |
·
|
To
elect two persons who will serve as members of the Board of Directors
until the 2011 Annual Meeting of Shareholders or until their successors
are duly elected and qualified;
|
·
|
To
amend the Company’s Articles of Incorporation to provide that directors be
elected annually;
|
·
|
To
ratify the appointment of Porter Keadle Moore, LLP (“PKM”) as the
Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2008; and
|
·
|
To
consider and act on any other matters that may properly come before the
Annual Meeting or any adjournment.
|
When is the Annual Meeting? | May 1, 2008 at 11 a.m., Eastern Time |
Where will the Annual Meeting be held? | At the Catawba Country Club, 1154 Country Club Road, Newton, North Carolina |
What items will be voted on at the | ||
Annual Meeting? | 1. | ELECTION OF DIRECTORS. To elect two directors to serve until the 2011 Annual Meeting of Shareholders; |
2. | AMENDMENT OF THE ARTICLES OF INCORPORATION. To amend the Company's Articles of Incorporation to | |
provide that directors be elected annually; | ||
3. | RATIFICATION OF REGISTERED PUBLIC ACCOUNTING FIRM. To ratify the appointment of PKM as the Company's | |
independent registered public accounting firm for fiscal year 2008; and | ||
4. | OTHER BUSINESS. To consider any other business as may properly come before the Annual Meeting or any | |
adjournment. |
Who can
vote?
|
Only
holders of record of our common stock at the close of business on March
10, 2008 (the “Record Date”) will be entitled to notice of and to vote at
the Annual Meeting and any adjournment of the Annual
Meeting. On the Record Date, there were 5,602,329 shares of our
common stock outstanding and entitled to vote and 700 shareholders of
record.
|
How do I vote by
proxy?
|
You
may vote your shares by marking, signing and dating the enclosed proxy
card and returning it in the enclosed postage-paid envelope. If
you return your signed proxy card before the Annual Meeting, the proxies
will vote your shares as you direct. The Board of Directors has appointed
proxies to represent shareholders who cannot attend the Annual Meeting in
person.
|
How
do I change or revoke my proxy?
|
You
can change or revoke your proxy at any time before it is voted at the
Annual Meeting in any of three ways: (1) by delivering a written notice of
revocation to the Secretary of the Company; (2) by delivering another
properly signed proxy card to the Secretary of the Company with a more
recent date than your first proxy card; or (3) by attending the Annual
Meeting and voting in person. You should deliver your written
notice or superseding proxy to the Secretary of the Company at our
principal executive offices listed
above.
|
How many votes can I
cast?
|
You
are entitled to one vote for each share held as of the Record Date on each
nominee for election and each other matter presented for a vote at the
Annual Meeting. You may not vote your shares cumulatively in
the election of directors.
|
How many votes are required to
approve
the
proposals?
|
If
a quorum is present at the Annual Meeting, each director nominee will be
elected by a plurality of the votes cast in person or by
proxy. If you withhold your vote on a nominee, your shares will
not be counted as having voted for that
nominee.
|
|
The
proposal to approve amendments to the Company’s Articles of Incorporation
will be approved by the affirmative vote of the holders of a majority of
the shares present, or represented by proxy, at the Annual
Meeting.
|
|
The
proposal to ratify the appointment of the Company’s independent registered
public accounting firm for 2008 will be approved if the votes cast in
favor exceed the votes cast in
opposition.
|
|
Any
other matters properly coming before the Annual Meeting for a vote will
require the affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting and entitled to
vote on that matter.
|
|
Abstentions
and broker non-votes are not treated as votes cast on any proposal,
therefore, neither will have an effect on the vote for the election of any
director, amendment to the Company’s Articles of Incorporation, or the
ratification of our independent registered public accounting
firm.
|
What constitutes a "quorum" for
the Annual
Meeting?
|
A
majority of the outstanding shares of our common stock entitled to vote at
the Annual Meeting, present in person or represented by proxy, constitutes
a quorum (a quorum is necessary to conduct business at the Annual
Meeting). Your shares will be considered part of the quorum if
you have voted by proxy. Abstentions, broker non-votes and
votes withheld from any director nominee count as shares present at the
Annual Meeting for purposes of determining a
quorum.
|
Who
pays for the solicitation of proxies?
|
We
will pay the cost of preparing, printing and mailing materials in
connection with this solicitation of proxies. In addition to
solicitation by mail, our officers, directors and regular employees, as
well as those of the Bank, may make solicitations personally, by telephone
or otherwise without additional compensation for doing so. We
reserve the right to engage a proxy solicitation firm to assist in the
solicitation of proxies for the Annual Meeting. We will, upon
request, reimburse brokerage firms, banks and others for their reasonable
out-of-pocket expenses in forwarding proxy materials to beneficial owners
of stock or otherwise in connection with this solicitation of
proxies.
|
When are proposals for the
2009
Annual Meeting
due?
|
To
be considered either for inclusion in the proxy materials solicited by the
Board of Directors for the 2009 Annual Meeting, proposals must be received
by the Secretary of the Company at our principal executive offices at 518
West C Street, Newton, North Carolina 28658 (or at P.O. Box 467, Newton,
North Carolina 28658-0467) no later than December 6, 2008. To
be included in the proxy materials, a proposal must comply with our
Bylaws, Rule 14a-8 and all other applicable provisions of Regulation 14A
under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
|
Name
and Address of
Beneficial
Owner
|
Amount
and Nature of
Beneficial
Ownership1
|
Percent
of Class2
|
Christine
S. Abernethy
P.O.
Box 820
Newton,
NC 28658
|
646,843
3
|
11.55%
|
Tontine
Partners, LP
55
Railroad Avenue, 3rd
Floor
Greenwich,
CT 06830-6378
|
519,408
|
9.27%
|
|
1
|
Unless
otherwise noted, all shares are owned directly of record by the named
individuals, by their spouses and minor children, or by other entities
controlled by the named individuals. Voting and investment
power is not shared unless otherwise
indicated.
|
|
2
|
Based
upon a total of 5,602,329 shares of common stock outstanding as of the
Record Date.
|
|
3
|
Carolina
Glove Company, Inc. owns 107,604 shares of common stock. These
shares are included in the calculation of Ms. Abernethy’s total beneficial
ownership interest. Ms. Abernethy owns approximately 50% of the
stock of Carolina Glove Company, Inc. The business is operated
by a family committee. Ms. Abernethy has no active day-to-day
participation in the business affairs of Carolina Glove Company,
Inc.
|
Amount
and
|
||
Nature
of
|
Percentage
|
|
Beneficial
|
of
|
|
Name and
Address
|
Ownership1
|
Class2
|
James
S. Abernethy
|
171,414
3
|
2.99%
|
Post
Office Box 327
|
||
Newton,
NC 28658
|
||
Robert
C. Abernethy
|
181,267
4
|
3.16%
|
Post
Office Box 366
|
||
Newton,
NC 28658
|
||
Joseph
F. Beaman, Jr.
|
32,869
5
|
*
|
Post
Office Box 467
|
||
Newton,
NC 28658
|
||
William
D. Cable, Sr.
|
29,897
6
|
*
|
Post
Office Box 467
|
||
Newton,
NC 28658
|
||
Douglas
S. Howard
|
10,403
7
|
*
|
P.O.
Box 587
|
||
Denver,
NC 28037
|
||
A.
Joseph Lampron
|
19,965
8
|
*
|
Post
Office Box 467
|
||
Newton,
NC 28658
|
||
John
W. Lineberger, Jr.
|
2,503
|
*
|
P.O.
Box 481
|
||
Lincolnton,
NC 28092
|
||
Gary
E. Matthews
|
13,519
|
*
|
210
First Avenue South
|
||
Conover,
NC 28613
|
||
Billy
L. Price, Jr., M.D.
|
2,099
|
*
|
540
11th
Ave. Place NW
|
||
Hickory,
NC 28601
|
||
Larry
E. Robinson
|
47,113
9
|
*
|
Post
Office Box 723
|
||
Newton,
NC 28658
|
||
Lance
A. Sellers
|
27,402
10
|
*
|
Post
Office Box 467
|
||
Newton,
NC 28658
|
||
William
Gregory Terry
|
8,720
11
|
*
|
P.O.
Box 395
|
||
Conover,
NC 28613
|
||
Dan
Ray Timmerman, Sr.
|
58,072
12
|
1.01%
|
Post
Office Box 1148
|
||
Conover,
NC 28613
|
||
Tony
W. Wolfe
|
43,503
13
|
*
|
Post
Office Box 467
|
||
Newton,
NC 28658
|
||
Benjamin
I. Zachary
|
75,632
14
|
1.32%
|
Post
Office Box 277
|
||
Taylorsville,
NC 28681
|
||
All
current directors and nominees and executive officers as a group (15
people)
|
660,340
15,
16
|
11.53%
|
1
|
Unless
otherwise noted, all shares are owned directly of record by the named
individuals, by their spouses and minor children, or by other entities
controlled by the named individuals. Voting and investment
power is not shared unless otherwise
indicated.
|
2
|
Based
upon a total of 5,602,329 shares of common stock outstanding as of the
Record Date and 126,748 stock options exercisable within 60 days with
respect to the designated
recipient(s).
|
3
|
Includes
64,038 shares of common stock owned by Alexander Railroad
Company. Mr. J. Abernethy is Vice President, Secretary and
Chairman of the Board of Directors of Alexander Railroad
Company.
|
4
|
Includes
5,096 shares of common stock owned by Mr. R. Abernethy’s spouse, for which
Mr. R. Abernethy disclaims beneficial
ownership.
|
5
|
Includes
26,764 shares of common stock in which Mr. Beaman has the right to acquire
beneficial interest within 60 days by the exercise of stock options
granted under the Omnibus Stock Ownership and Long Term Incentive
Plan.
|
6
|
Includes
21,017 shares of common stock in which Mr. Cable has the right to acquire
beneficial interest within 60 days by the exercise of stock options
granted under the Omnibus Stock Ownership and Long Term Incentive
Plan.
|
7
|
Includes
1,650 shares of common stock owned by Mr. Howard’s mother over which Mr.
Howard holds a power of attorney. Includes 825 shares of common
stock owned by Howard Ventures, Inc. Mr. Howard is Vice
President of Howard Ventures, Inc.
|
8
|
Includes
18,400 shares of common stock in which Mr. Lampron has the right to
acquire beneficial interest within 60 days by the exercise of stock
options granted under the Omnibus Stock Ownership and Long Term Incentive
Plan.
|
9
|
Includes
6,835 shares of common stock owned by Mr. Robinson’s spouse, for which Mr.
Robinson disclaims beneficial
ownership.
|
10
|
Includes
21,455 shares of common stock in which Mr. Sellers has the right to
acquire beneficial interest within 60 days by the exercise of stock
options granted under the Omnibus Stock Ownership and Long Term Incentive
Plan.
|
11
|
Includes
1,650 shares of common stock owned by Drum Funeral Home,
LLC. Mr. Terry is Executive Vice President of Drum Funeral
Home, LLC.
|
12
|
Includes
2,722 shares of common stock owned by Timmerman Manufacturing,
Inc. Mr. Timmerman is President and a Director of Timmerman
Manufacturing, Inc.
|
13
|
Includes
39,112 shares of common stock in which Mr. Wolfe has the right to acquire
beneficial interest within 60 days by the exercise of stock options
granted under the Omnibus Stock Ownership and Long Term Incentive
Plan.
|
14
|
Includes
64,038 shares of common stock owned by Alexander Railroad
Company. Mr. Zachary is President, Treasurer, General Manager
and a Director of Alexander Railroad
Company.
|
15
|
The
64,038 shares owned by Alexander Railroad Company and attributed to Mr. J.
Abernethy and Mr. Zachary are only included once in calculating this
total.
|
16
|
Includes
126,748 shares of common stock in which the executive officers, as a
group, have the right to acquire beneficial interest within 60 days by the
exercise of stock options granted under the Omnibus Stock Ownership and
Long Term Incentive Plan.
|
Name
|
Age
on
December 31,
2007
|
Principal
Occupation
During Last Five
Years
|
Director
Since
|
Term
Expires
|
Douglas
S. Howard
|
48
|
Vice
President, Howard Ventures, Inc.; Secretary/Treasurer, Denver Equipment of
Charlotte, Inc.
|
2004
|
2011
|
Billy
L. Price, Jr., M.D.
|
51
|
Practicing
Internist and Partner in Catawba Valley Internal Medicine, P.A.; Clinical
Appointment, Wake Forest University School of Medicine, Department of
Internal Mrdicine
|
2004
|
2011
|
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ALL OF THE
NOMINEES NAMED ABOVE FOR ELECTION AS DIRECTORS.
|
Name
|
Age
on
December 31,
2007
|
Principal
Occupation
During Last Five
Years
|
Director
Since
|
Term
Expires
|
Robert
C. Abernethy
|
57
|
President,
Secretary and Treasurer, Carolina Glove Company, Inc. (glove
manufacturer); Secretary and Assistant Treasurer, Midstate Contractors,
Inc. (paving company)
|
1976
|
2009
|
James
S. Abernethy
|
53
|
Vice
President, Carolina Glove Company, Inc. (glove manufacturer); President
and Assistant Secretary, Midstate Contractors, Inc.(paving company); Vice
President, Secretary and Chairman of the Board of Directors, Alexander
Railroad Company
|
1992
|
2009
|
Larry
E. Robinson
|
62
|
President
and Chief Executive Officer,
The
Blue Ridge Distributing Company, Inc. (beer and wine distributor); Partner
and Vice President, United Beverages of North Carolina, LLC (beer
distributor)
|
1993
|
2009
|
William
Gregory Terry
|
40
|
Executive
Vice President, Drum & Willis-Reynolds Funeral Homes and
Crematory
|
2004
|
2009
|
John
W. Lineberger, Jr.
|
57
|
President,
Lincoln Bonded Warehouse Company (commercial warehousing
facility)
|
2004
|
2010
|
Gary
E. Matthews
|
52
|
President
and Director, Matthews Construction Company, Inc.
|
2001
|
2010
|
Dan
Ray Timmerman, Sr.
|
60
|
President/CEO,
Timmerman Manufacturing, Inc. (wrought iron furniture, railings and gates
manufacturer)
|
1995
|
2010
|
Benjamin
I. Zachary
|
51
|
President,
Treasurer, General Manager and Director of Alexander Railroad
Company
|
1995
|
2010
|
Robert
C. Abernethy
|
John
W. Lineberger, Jr.
|
||
Larry
E. Robinson
|
James
S. Abernethy
|
||
William
G. Terry
|
Dan
Ray Timmerman, Sr.
|
Robert
C. Abernethy
|
Douglas
S. Howard
|
||
Benjamin
I. Zachary
|
Dan
R. Timmerman, Sr.
|
||
Gary
E. Matthews
|
Dr.
Billy L. Price, Jr.
|
·
|
Financial
institutions in North Carolina, South Carolina and Georgia, using a
regression analysis to compare to a $900 million
bank,
|
·
|
United
States financial institutions with average assets of $500 million to $1.9
billion,
|
·
|
United
States community banks with average assets of $700 to $1.0
billion.
|
·
|
Tony
W. Wolfe, President and Chief Executive
Officer
|
·
|
A.
Joseph Lampron, Executive Vice President and Chief Financial
Officer
|
·
|
Lance
A. Sellers, Executive Vice President and Chief Credit
Officer
|
·
|
William
D. Cable, Sr., Executive Vice President and Chief Operating
Officer
|
·
|
Joseph
F. Beaman, Jr., Executive Vice President, Chief Administrative Officer and
Corporate Secretary
|
Wolfe
|
Lampron
|
Sellers
|
Cable
|
Beaman
|
|
Minimum
Level of Performance
|
$106,026
|
$44,239
|
$56,789
|
$44,239
|
$37,586
|
Target
Level of Performance
|
$125,905
|
$52,533
|
$67,436
|
$52,533
|
$44,633
|
Superior
Level of Performance
|
$132,532
|
$55,298
|
$70,986
|
$55,298
|
$46,982
|
·
|
country
club memberships and dues;
|
·
|
expenses
for spouses to attend conferences;
and
|
·
|
personal
use of Company-provided cell
phones.
|
Name
|
Fees
Earned
or
Paid
in
Cash
($)
|
Stock
Awards
($)
1
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings2
|
All
Other Compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
|||||||
James
S. Abernethy3
|
$30,600
|
$16,319
|
0
|
0
|
$1,457
|
0
|
$48,376
|
Robert
C. Abernethy
|
$39,750
|
$15,044
|
0
|
0
|
$2,409
|
0
|
$57,203
|
Douglas
S. Howard
|
$29,250
|
$17,104
|
0
|
0
|
$1,316
|
0
|
$47,670
|
John
W. Lineberger, Jr.
|
$30,300
|
$17,104
|
0
|
0
|
$3,813
|
0
|
$51,217
|
Gary
E. Matthews
|
$25,550
|
$15,043
|
0
|
0
|
$1,292
|
0
|
$41,885
|
Billy
L. Price, Jr., M.D.
|
$25,300
|
$17,104
|
0
|
0
|
$1,838
|
0
|
$44,242
|
Larry
E. Robinson
|
$30,050
|
$15,044
|
0
|
0
|
$4,914
|
0
|
$50,008
|
William
Gregory Terry
|
$29,550
|
$17,104
|
0
|
0
|
$474
|
0
|
$47,128
|
Dan
Ray Timmerman, Sr.
|
$36,650
|
$15,044
|
0
|
0
|
$4,318
|
0
|
$56,012
|
Benjamin
I. Zachary
|
$26,550
|
$15,044
|
0
|
0
|
$1,320
|
0
|
$42,914
|
Name
|
Age
on
December
31,
2007
|
Positions
and Occupations
During Last Five
Years
|
Employed
by the
Company
or the
Bank
Since
|
Tony
W. Wolfe
|
61
|
President
and Chief Executive Officer of the Company and the Bank
|
1990
|
Joseph
F. Beaman, Jr.
|
58
|
Executive
Vice President and Corporate Secretary of the Company; Executive Vice
President, Chief Administrative Officer and Secretary of the
Bank
|
1977
|
William
D. Cable, Sr.
|
39
|
Executive
Vice President and Assistant Corporate Treasurer of the Company; Executive
Vice President and Chief Operating Officer of the Bank; Prior to 2002,
Bank Senior Vice President - Information Services.
|
1995
|
Lance
A. Sellers
|
45
|
Executive
Vice President and Assistant Corporate Secretary of the Company; Executive
Vice President and Chief Credit Officer of the Bank.
|
1998
|
A.
Joseph Lampron
|
53
|
Executive
Vice President, Chief Financial Officer and Corporate Treasurer of the
Company; Executive Vice President and Chief Financial Officer of the
Bank.
|
2001
|
Summary Compensation
Table
|
|||||||||||
Change in | |||||||||||
Pension Value | |||||||||||
and Nonqualified | |||||||||||
Non-Equity | Deferred | ||||||||||
Stock | Option | Incentive Plan | Compensation | All Other | |||||||
Year | Salary | Bonus | Awards | Awards |
Compensation
|
Earnings | Compensation(1) | Total | |||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g) |
(h)
|
(i)
|
(j)
|
||
Tony
W. Wolfe
|
2007
|
$243,269
|
$0
|
$0
|
$0
|
$111,526
|
$123,811
|
$23,374
|
2 |
$501,980
|
|
President
and Chief
|
2006
|
$227,255
|
$0
|
$0
|
$0
|
$97,043
|
$108,610
|
$21,072
|
$453,980
|
||
Executive
Officer
|
2005
|
$215,994
|
$0
|
$0
|
$0
|
$68,019
|
$93,551
|
$19,046
|
$396,610
|
||
A.
Joseph Lampron, Jr.
|
2007
|
$136,253
|
$0
|
$0
|
$0
|
$49,271
|
$13,454
|
$11,343
|
3 |
$210,321
|
|
Executive
Vice President,
|
2006
|
$128,069
|
$0
|
$325
|
7 |
$0
|
$52,908
|
$11,684
|
$12,007
|
$204,993
|
|
Chief
Financial Officer
|
2005
|
$122,758
|
$0
|
$0
|
$0
|
$40,210
|
$10,121
|
$9,696
|
$182,785
|
||
Joseph
F. Beaman, Jr.
|
2007
|
$119,269
|
$0
|
$5,000
|
8 |
$0
|
$43,257
|
$17,037
|
$12,024
|
4 |
$196,587
|
Executive
Vice President,
|
2006
|
$114,899
|
$0
|
$0
|
$0
|
$50,792
|
$14,789
|
$12,520
|
$193,000
|
||
Chief
Administrative Officer
|
2005
|
$113,004
|
$0
|
$0
|
$0
|
$28,549
|
$12,792
|
$10,573
|
$164,918
|
||
and
Corporate Secretary
|
|||||||||||
Lance
A. Sellers
|
2007
|
$173,198
|
$0
|
$0
|
$0
|
$66,762
|
$10,555
|
$14,693
|
5
|
$265,208
|
|
Executive
Vice President,
|
2006
|
$163,836
|
$0
|
$0
|
$0
|
$61,432
|
$9,208
|
$13,542
|
$248,018
|
||
Chief
Credit Officer
|
2005
|
$156,919
|
$0
|
$0
|
$0
|
$47,985
|
$7,986
|
$12,106
|
$224,996
|
||
William
D. Cable, Sr.
|
2007
|
$139,751
|
$0
|
$0
|
$0
|
$52,008
|
$3,303
|
$11,701
|
6 |
$206,763
|
|
Executive
Vice President,
|
2006
|
$132,231
|
$0
|
$0
|
$0
|
$52,908
|
$2,878
|
$10,609
|
$198,626
|
||
Chief
Operating Officer
|
2005
|
$127,211
|
$0
|
$0
|
$0
|
$40,210
|
$2,495
|
$10,214
|
$180,130
|
|
1 Perquisites
for the fiscal year did not exceed $10,000 as reported for the named
employee.
|
|
2 For Mr. Wolfe,
includes for 2007:$11,212 under the 401(k) plan, $3,469 premium paid for
group term life insurance in excess of $50,000 and $1,812 paid for the
Split Dollar Death Benefit; for 2006: $10,764 under the 401(k) plan,
$3,247 premium paid for group term life insurance in excess of $50,000 and
$1,719 paid for the Split Dollar Death Benefit; for 2005: $10,000 under
the 401(k) plan, $1,992 premium paid for group term life insurance in
excess of $50,000 and $1,668 paid for the Split Dollar Death
Benefit.
|
|
3 For Mr.
Lampron, includes for 2007: $7,347 under the 401(k) plan, $618 premium for
the group term life insurance in excess of $50,000 and $329 paid for the
Split Dollar Death Benefit; for 2006: $7,738 under the 401(k) plan, $574
premium for the group term life insurance in excess of $50,000 and $311
paid for the Split Dollar Death Benefit; 2005: $6,109 under the 401(k)
plan, $541 premium for the group term life insurance in excess of $50,000
and $296 paid for the Split Dollar Death
Benefit.
|
|
4 For Mr.
Beaman, includes for 2007: $6,084 under the 401(k) plan, $980 premium for
the group term life insurance in excess of $50,000 and $339 paid for the
Split Dollar Death Benefit; for 2006: $7,236 under the 401(k) plan, $939
premium for the group term life insurance in excess of $50,000 and $325
paid for the Split Dollar Death Benefit; 2005: $5,711 under the 401(k)
plan, $918 premium for the group term life insurance in excess of $50,000
and $308 paid for the Split Dollar Death
Benefit.
|
|
5 For Mr.
Sellers, includes for 2007: $8,643 under the 401(k) plan, $536 premium for
the group term life insurance in excess of $50,000 and $308 paid for the
Split Dollar Death Benefit; for 2006: $8,216 under the 401(k) plan, $336
premium for the group term life insurance in excess of $50,000 and $151
paid for the Split Dollar Death Benefit; 2005:$7,869 under the 401(k)
plan, $319 premium for the group term life insurance in excess of $50,000
and $138 paid for the Split Dollar Death
Benefit.
|
|
6 For Mr. Cable,
includes for 2007: $7,327 under the 401(k) plan, $251 premium paid for
group term life insurance in excess of $50,000 and $104 paid for the Split
Dollar Death Benefit; for 2006: $6,627 under the 401(k) plan and a $233
premium paid for group term life insurance in excess of $50,000 and $76
paid for the Split Dollar Death Benefit; 2005: $6,343 under the 401(k)
plan and a $222 premium paid for group term life insurance in excess of
$50,000 and $73 paid for the Split Dollar Death
Benefit.
|
|
7 Mr. Lampron
completed five years of service with the Bank in 2006. He
received a service award of eight shares of the Company’s common stock and
cash for a total value on the grant date of
$325.
|
|
8 Mr. Beaman
completed thirty years of service with the Bank in 2007. He
received a service award of 241 shares of the Company’s common stock and
cash for a total value on the grant date of
$5,000.
|
Plan
Category
|
Number
of securities to be
issued
upon exercise of
outstanding
options,
warrants
and rights
|
Weighted-average
exercise
price of
outstanding
options,
warrants
and rights
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation plans
(excluding
securities
reflected
in
column
(a))
|
(a)
|
(b)
|
(c)
|
|
Equity
compensation
plans
approved by
security
holders
|
195,7251,2
|
$8.383
|
636,6874
|
Equity
compensation
plans
not approved by
security
holders
|
0
|
$0
|
0
|
Total
|
195,7251,2
|
$8.383
|
636,6874
|
|
1
|
Includes
192,725 stock options issued under the 1999 Omnibus Plan, which are fully
vested as of December 31, 2007. Of the outstanding stock
options, options to purchase a total of 18,350 shares of the common stock
were granted on September 28, 1999; 20,984 options were granted on
September 25, 2000; 64,399 options were granted on October 30, 2001; 7,510
options were granted on December 18, 2001; 75,431 options were granted on
December 17,2002; 3,630 options were granted on May 6, 2004; and 2,421
options were granted on December 16,
2004.
|
|
2
|
Includes
3,000 shares of restricted stock granted on September 20, 2007 under the
1999 Omnibus Plan. These restricted
stock grants cliff vest three years after
issuance.
|
|
3
|
The
exercise prices for the grants of stock options under the 1999 Omnibus
Plan on September 28, 1999; September 25, 2000; October 30, 2001; December
18, 2001; December 17, 2002; May 6, 2004 and December 16, 2004 are: $9.02
(as adjusted due to a 10% stock dividend granted on April 24, 2000);
$6.99; $8.78; $8.10; $7.77; $10.31; and $10.57,
respectively. All prices and shares have been adjusted for the
10% stock dividends paid March 16, 2005 and June 16, 2006 and the
three-for-two stock split paid June 15, 2007. The exercise
price for the grants of restricted stock is
$17.40.
|
|
4
|
The
number of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a)) reflects
390,000 additional shares approved May 3, 2007, which have been restated
to 585,000 additional shares to reflect the three-for-two stock split paid
June 15, 2007.
|
Name | Grant Date |
Estimated
Future Payouts Under Non-
Equity Incentive Plan Awards
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
All
Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
All
Other
Option
Awards:
Number
of
Securities
Under-
lying
Options
(#)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date
Fair Value
of Stock and
Option'Awards
|
||||
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
(k)
|
(l)
|
Tony
W. Wolfe
|
01/01/2007 | $106,026 | $125,905 | $132,532 | |||||||
A.
Joseph Lampron
|
01/01/2007 | $44,239 | $52,533 | $55,298 | |||||||
Joseph
F. Beaman, Jr.
|
01/01/2007 | $37,586 | $44,633 | $46,982 | |||||||
Lance
A. Sellers
|
01/01/2007 | $56,789 | $67,436 | $70,986 | |||||||
William
D. Cable, Sr.
|
01/01/2007 | $44,239 | $52,533 | $55,298 |
Option
Awards
|
Stock
Awards
|
||||||||
Name
|
Number
of
Securities
Underlying Unexercised
Options
(#)
Exercisable1
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number
of
Shares
or Units
of
Stock That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan Awards:
Number
of Unearned
Shares,
Units
or
Other Rights That Have Not Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of Unearned Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Tony
W. Wolfe
|
12,989
|
$9.02
|
09/28/2009
|
||||||
17,048
|
$8.78
|
10/30/2011
|
|||||||
9,075
|
$7.77
|
12/17/2012
|
|||||||
A.
Joseph Lampron
|
7,510
|
$8.10
|
12/18/2011
|
||||||
10,890
|
$7.77
|
12/17/2012
|
|||||||
Joseph
F. Beaman, Jr.
|
10,463
|
$6.99
|
10/25/2010
|
||||||
9,041
|
$8.78
|
10/30/2011
|
|||||||
7,260
|
$7.77
|
12/17/2012
|
|||||||
Lance
A. Sellers
|
2,379
|
$9.02
|
09/28/2009
|
||||||
8,750
|
$8.78
|
10/30/2011
|
|||||||
12,705
|
$7.77
|
12/17/2012
|
|||||||
William
D. Cable, Sr.
|
4,456
|
$6.99
|
10/25/2010
|
||||||
6,387
|
$8.78
|
10/30/2011
|
|||||||
10,890
|
$7.77
|
12/17/2012
|
Option
Awards
|
Stock
Awards
|
|||
Name
|
Number
of Shares
Acquired
on
Exercise
(#)
|
Value
Realized on
Exercise
($)
|
Number
of Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Tony
W. Wolfe
|
0
|
$0
|
||
A.
Joseph Lampron
|
0
|
$0
|
||
Joseph
F. Beaman, Jr.1
|
3,897
|
$63,404
|
241
|
5,000
|
Lance
A. Sellers
|
2,500
|
$43,175
|
||
William
D. Cable, Sr.
|
0
|
$0
|
1
|
Mr.
Beaman completed 30 years of service with the Bank in 2007. He
received a service award of 241 shares of the Company’s common stock and
cash for a total value on the grant date of
$5,000.
|
Name
|
Executive
Contributions
in
Last FY ($)
|
Registrant
Contributions
in
Last FY ($)
|
Aggregate
Earnings
in
Last
FY ($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at Last
FYE
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
Tony
W. Wolfe
|
$9,731
|
$0
|
|||
A.
Joseph Lampron
|
$4,135
|
$0
|
|||
Joseph
F. Beaman, Jr.
|
$1,214
|
$0
|
|||
Lance
A. Sellers
|
$0
|
$0
|
|||
William
D. Cable, Sr.
|
$15,446
|
$0
|
Name
|
Plan
Name
|
Number
of
Years
Credited
Service
(#)
|
Present
Value of
Accumulated
Benefit
($)
|
Payments
During
Last
Fiscal Year
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Tony
W. Wolfe
|
SERP
|
5
|
$544,235
|
0
|
A.
Joseph Lampron
|
SERP
|
5
|
$66,249
|
0
|
Joseph
F. Beaman, Jr.
|
SERP
|
5
|
$76,519
|
0
|
Lance
A. Sellers
|
SERP
|
5
|
$59,151
|
0
|
William
D. Cable, Sr.
|
SERP
|
5
|
$20,688
|
0
|
SELECTED
FINANCIAL DATA
|
||||||||||||||||||||
Dollars
in Thousands Except Per Share Amounts
|
||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||
Summary
of Operations
|
||||||||||||||||||||
Interest
income
|
$ | 61,732 | 55,393 | 41,913 | 35,095 | 33,799 | ||||||||||||||
Interest
expense
|
27,585 | 23,110 | 15,429 | 12,335 | 12,749 | |||||||||||||||
Net
interest income
|
34,147 | 32,283 | 26,484 | 22,760 | 21,050 | |||||||||||||||
Provision
for loan losses
|
2,038 | 2,513 | 3,110 | 3,256 | 6,744 | |||||||||||||||
Net
interest income after provision for loan losses
|
32,109 | 29,770 | 23,374 | 19,504 | 14,306 | |||||||||||||||
Non-interest
income
|
8,816 | 7,554 | 6,668 | 6,000 | 5,825 | |||||||||||||||
Non-interest
expense
|
25,993 | 22,983 | 20,330 | 18,840 | 17,072 | |||||||||||||||
Income
before taxes
|
14,932 | 14,341 | 9,712 | 6,664 | 3,059 | |||||||||||||||
Income
taxes
|
5,340 | 5,170 | 3,381 | 2,233 | 1,055 | |||||||||||||||
Net
income
|
$ | 9,592 | 9,171 | 6,331 | 4,431 | 2,004 | ||||||||||||||
Selected
Year-End Balances
|
||||||||||||||||||||
Assets
|
$ | 907,262 | 818,948 | 730,280 | 686,348 | 674,032 | ||||||||||||||
Available
for sale securities
|
120,968 | 117,581 | 115,158 | 105,598 | 79,460 | |||||||||||||||
Loans,
net
|
713,174 | 643,078 | 559,239 | 527,419 | 542,404 | |||||||||||||||
Mortgage
loans held for sale
|
- | - | 2,248 | 3,783 | 587 | |||||||||||||||
Interest-earning
assets
|
853,878 | 780,082 | 692,835 | 653,111 | 639,934 | |||||||||||||||
Deposits
|
693,639 | 633,820 | 582,854 | 556,522 | 549,802 | |||||||||||||||
Interest-bearing
liabilities
|
718,870 | 650,364 | 576,681 | 553,135 | 550,357 | |||||||||||||||
Shareholders'
equity
|
$ | 70,102 | 62,835 | 54,353 | 50,938 | 48,554 | ||||||||||||||
Shares
outstanding*
|
5,624,234 | 5,745,951 | 5,677,328 | 5,689,763 | 5,690,392 | |||||||||||||||
Selected
Average Balances
|
||||||||||||||||||||
Assets
|
$ | 846,836 | 772,585 | 706,843 | 684,385 | 661,077 | ||||||||||||||
Available
for sale securities
|
120,296 | 118,137 | 108,690 | 93,770 | 72,072 | |||||||||||||||
Loans
|
665,379 | 604,427 | 550,545 | 547,753 | 539,559 | |||||||||||||||
Interest-earning
assets
|
801,094 | 732,244 | 668,614 | 650,528 | 626,197 | |||||||||||||||
Deposits
|
659,174 | 605,407 | 570,997 | 558,142 | 533,703 | |||||||||||||||
Interest-bearing
liabilities
|
665,727 | 613,686 | 563,210 | 553,880 | 540,676 | |||||||||||||||
Shareholders'
equity
|
$ | 70,586 | 62,465 | 55,989 | 51,978 | 49,971 | ||||||||||||||
Shares
outstanding*
|
5,700,860 | 5,701,829 | 5,692,290 | 5,707,975 | 5,687,642 | |||||||||||||||
Profitability
Ratios
|
||||||||||||||||||||
Return
on average total assets
|
1.13 | % | 1.19 | % | 0.90 | % | 0.65 | % | 0.30 | % | ||||||||||
Return
on average shareholders' equity
|
13.59 | % | 14.68 | % | 11.31 | % | 8.52 | % | 4.01 | % | ||||||||||
Dividend
payout ratio
|
24.30 | % | 20.78 | % | 22.34 | % | 28.37 | % | 62.56 | % | ||||||||||
Liquidity
and Capital Ratios (averages)
|
||||||||||||||||||||
Loan
to deposit
|
100.94 | % | 99.84 | % | 96.42 | % | 98.14 | % | 101.10 | % | ||||||||||
Shareholders'
equity to total assets
|
8.34 | % | 8.09 | % | 7.92 | % | 7.59 | % | 7.56 | % | ||||||||||
Per
share of common stock*
|
||||||||||||||||||||
Basic
net income
|
$ | 1.68 | 1.61 | 1.11 | 0.77 | 0.35 | ||||||||||||||
Diluted
net income
|
$ | 1.65 | 1.58 | 1.09 | 0.77 | 0.35 | ||||||||||||||
Cash
dividends
|
$ | 0.41 | 0.33 | 0.25 | 0.22 | 0.22 | ||||||||||||||
Book
value
|
$ | 12.46 | 10.94 | 9.57 | 8.95 | 8.53 | ||||||||||||||
*Shares
outstanding and per share computations have been retroactively restated to
reflect a 10% stock dividend during first quarter 2005, a 10% stock
dividend during second quarter 2006 and a 3-for-2 stock split during
second quarter 2007.
|
Table
1- Average Balance Table
|
||||||||||||||||||||||||||||||
December
31, 2007
|
December
31, 2006
|
December
31, 2005
|
||||||||||||||||||||||||||||
(Dollars
in Thousands)
|
Average
Balance
|
Interest
|
Yield
/
Rate
|
Average
Balance
|
Interest
|
Yield
/
Rate
|
Average
Balance
|
Interest
|
Yield
/
Rate
|
|||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||
Loans
|
$ | 665,379 | 55,109 | 8.28 | % | 604,427 | 49,665 | 8.22 | % | 550,545 | 37,234 | 6.76 | % | |||||||||||||||||
Interest
rate swap agreements
|
- | (406 | ) | -0.06 | % | - | (698 | ) | -0.12 | % | - | (575 | ) | -0.14 | % | |||||||||||||||
Loan
fees
|
- | 698 | 0.10 | % | - | 701 | 0.12 | % | - | 464 | 0.80 | % | ||||||||||||||||||
Total
loans
|
665,379 | 55,401 | 8.33 | % | 604,427 | 49,668 | 8.22 | % | 550,545 | 37,123 | 6.74 | % | ||||||||||||||||||
Investments
- taxable
|
20,305 | 868 | 4.27 | % | 29,784 | 1,306 | 4.38 | % | 37,487 | 1,595 | 4.25 | % | ||||||||||||||||||
Investments
- nontaxable*
|
99,991 | 5,470 | 5.47 | % | 88,353 | 4,642 | 5.25 | % | 71,202 | 3,472 | 4.88 | % | ||||||||||||||||||
Federal
funds sold
|
7,378 | 383 | 5.19 | % | 1,766 | 85 | 4.81 | % | 2,272 | 73 | 3.21 | % | ||||||||||||||||||
Other
|
8,041 | 444 | 5.52 | % | 7,914 | 424 | 5.36 | % | 7,108 | 269 | 3.61 | % | ||||||||||||||||||
Total
interest-earning assets
|
801,094 | 62,566 | 7.81 | % | 732,244 | 56,125 | 7.66 | % | 668,614 | 42,532 | 6.36 | % | ||||||||||||||||||
Cash
and due from banks
|
20,081 | 17,022 | 15,149 | |||||||||||||||||||||||||||
Other
assets
|
34,287 | 31,218 | 30,891 | |||||||||||||||||||||||||||
Allowance
for loan losses
|
(8,626 | ) | (7,899 | ) | (7,811 | ) | ||||||||||||||||||||||||
Total
assets
|
$ | 846,836 | 772,585 | 706,843 | ||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||
NOW
accounts
|
$ | 79,550 | 1,127 | 1.42 | % | 87,329 | 1,214 | 1.39 | % | 110,852 | 1,468 | 1.32 | % | |||||||||||||||||
Regular
savings accounts
|
18,685 | 54 | 0.29 | % | 19,768 | 57 | 0.29 | % | 21,205 | 65 | 0.31 | % | ||||||||||||||||||
Money
market accounts
|
87,916 | 2,918 | 3.32 | % | 66,035 | 1,789 | 2.71 | % | 56,858 | 1,112 | 1.96 | % | ||||||||||||||||||
Time
deposits
|
361,859 | 17,430 | 4.82 | % | 335,092 | 14,189 | 4.23 | % | 292,807 | 8,923 | 3.05 | % | ||||||||||||||||||
FHLB
borrowings
|
80,058 | 3,759 | 4.70 | % | 74,082 | 3,588 | 4.84 | % | 65,934 | 2,889 | 4.38 | % | ||||||||||||||||||
Demand
notes payable to U.S. Treasury
|
814 | 39 | 4.79 | % | 722 | 34 | 4.71 | % | 702 | 21 | 3.02 | % | ||||||||||||||||||
Trust
preferred securities
|
20,619 | 1,476 | 7.16 | % | 24,878 | 1,963 | 7.89 | % | 14,433 | 938 | 6.50 | % | ||||||||||||||||||
Other
|
16,226 | 782 | 4.82 | % | 5,780 | 276 | 4.78 | % | 419 | 13 | 3.00 | % | ||||||||||||||||||
Total
interest-bearing liabilities
|
665,727 | 27,585 | 4.14 | % | 613,686 | 23,110 | 3.77 | % | 563,210 | 15,429 | 2.74 | % | ||||||||||||||||||
Demand
deposits
|
111,164 | 97,183 | 89,275 | |||||||||||||||||||||||||||
Other
liabilities
|
3,022 | 3,044 | 1,275 | |||||||||||||||||||||||||||
Shareholders'
equity
|
70,586 | 62,465 | 55,989 | |||||||||||||||||||||||||||
Total
liabilities and shareholder's equity
|
$ | 850,499 | 776,378 | 709,749 | ||||||||||||||||||||||||||
Net
interest spread
|
$ | 34,981 | 3.67 | % | 33,015 | 3.89 | % | 27,103 | 3.62 | % | ||||||||||||||||||||
Net
yield on interest-earning assets
|
4.37 | % | 4.51 | % | 4.05 | % | ||||||||||||||||||||||||
Taxable
equivalent adjustment
|
||||||||||||||||||||||||||||||
Investment
securities
|
$ | 834 | 731 | 619 | ||||||||||||||||||||||||||
Net
interest income
|
$ | 34,147 | 32,284 | 26,484 | ||||||||||||||||||||||||||
*Includes
U.S. government agency securities that are non-taxable for state income
tax purposes of $74.9 million in 2007, $65.9 million in 2006 and $50.7
million in 2005. An effective tax rate of 6.90% was used to calculate
the tax equivalent yield on these securities.
|
Table
2 - Rate/Volume Analysis-Tax Equivalent Basis
|
||||||||
December
31, 2007
|
December
31, 2006
|
|||||||
(Dollars
in Thousands)
|
Changes
in
average
volume
|
Changes
in
average
rates
|
Total
increase
(decrease)
|
Changes
in
average
volume
|
Changes
in
average
rates
|
Total
increase
(decrease)
|
||
Interest
income:
|
Loans:
net of unearned income
|
$ | 5,042 | 691 | 5,733 | $ | 4,030 | 8,515 | 12,545 | ||||||||||||||||
Investments
- taxable
|
(411 | ) | (27 | ) | (438 | ) | (333 | ) | 44 | (289 | ) | |||||||||||||
Investments
- nontaxable
|
624 | 204 | 828 | 869 | 301 | 1,170 | ||||||||||||||||||
Federal
funds sold
|
281 | 17 | 298 | (20 | ) | 32 | 12 | |||||||||||||||||
Other
|
7 | 13 | 20 | 37 | 118 | 155 | ||||||||||||||||||
Total
interest income
|
5,543 | 898 | 6,441 | 4,583 | 9,010 | 13,593 | ||||||||||||||||||
Interest
expense:
|
||||||||||||||||||||||||
NOW
accounts
|
(109 | ) | 22 | (87 | ) | (320 | ) | 66 | (254 | ) | ||||||||||||||
Regular
savings accounts
|
(3 | ) | 0 | (3 | ) | (4 | ) | (4 | ) | (8 | ) | |||||||||||||
Money
market accounts
|
660 | 469 | 1,129 | 214 | 463 | 677 | ||||||||||||||||||
Time
deposits
|
1,211 | 2,030 | 3,241 | 1,540 | 3,726 | 5,266 | ||||||||||||||||||
FHLB
borrowings
|
285 | (114 | ) | 171 | 375 | 324 | 699 | |||||||||||||||||
Demand
notes payable to
|
||||||||||||||||||||||||
U.S.
Treasury
|
4 | 1 | 5 | 1 | 12 | 13 | ||||||||||||||||||
Trust
Preferred Securities
|
(320 | ) | (167 | ) | (487 | ) | 752 | 273 | 1,025 | |||||||||||||||
Other
|
501 | 5 | 506 | 208 | 55 | 263 | ||||||||||||||||||
Total
interest expense
|
2,229 | 2,246 | 4,475 | 2,766 | 4,915 | 7,681 | ||||||||||||||||||
Net
interest income
|
$ | 3,314 | (1,348 | ) | 1,966 | $ | 1,817 | 4,095 | 5,912 |
Table
3 - Non-Interest Income
|
||||||||||||
(Dollars
in Thousands)
|
2007
|
2006
|
2005
|
|||||||||
Service
charges
|
$ | 4,279 | 3,930 | 3,780 | ||||||||
Other
service charges and fees
|
1,938 | 1,540 | 1,142 | |||||||||
Gain
(loss) on sale of securities
|
(562 | ) | (592 | ) | (730 | ) | ||||||
Mortgage
banking income
|
560 | 289 | 469 | |||||||||
Insurance
and brokerage commissions
|
521 | 389 | 387 | |||||||||
Loss
on foreclosed and repossessed assets
|
(118 | ) | (108 | ) | (38 | ) | ||||||
Miscellaneous
|
2,198 | 2,106 | 1,658 | |||||||||
Total
non-interest income
|
$ | 8,816 | 7,554 | 6,668 |
Table
4 - Non-Interest Expense
|
|||||||||||
(Dollars
in Thousands)
|
2007
|
2006
|
2005
|
||||||||
Salaries
and wages
|
$ | 10,276 | 9,368 | 7,162 | |||||||
Employee
benefits
|
3,612 | 2,417 | 3,702 | ||||||||
Total
personnel expense
|
13,888 | 11,785 | 10,864 | ||||||||
Occupancy
expense
|
4,751 | 4,180 | 3,949 | ||||||||
Office
supplies
|
554 | 436 | 314 | ||||||||
FDIC
deposit insurance
|
140 | 75 | 76 | ||||||||
Professional
services
|
400 | 239 | 389 | ||||||||
Postage
|
320 | 307 | 264 | ||||||||
Telephone
|
405 | 338 | 403 | ||||||||
Director
fees and expense
|
499 | 423 | 334 | ||||||||
Advertising
|
988 | 772 | 656 | ||||||||
Consulting
fees
|
460 | 575 | 233 | ||||||||
Taxes
and licenses
|
272 | 293 | 218 | ||||||||
Other
operating expense
|
3,316 | 3,560 | 2,630 | ||||||||
Total
non-interest expense
|
$ | 25,993 | 22,983 | 20,330 |
Table
5 - Interest Sensitivity Analysis
|
|||||||||||||||||||||||
(Dollars
in Thousands)
|
Immediate
|
1-3
months
|
4-12
months
|
Total
Within
One
Year
|
Over
One
Year
& Non-sensitive
|
Total
|
|||||||||||||||||
Interest-earning
assets:
|
|||||||||||||||||||||||
Loans
|
$ | 481,495 | 4,941 | 13,170 | 499,606 | 222,671 | 722,277 | ||||||||||||||||
Mortgage
loans available for sale
|
- | - | - | - | - | - | |||||||||||||||||
Investment
securities
|
- | 8,881 | - | 8,881 | 112,087 | 120,968 | |||||||||||||||||
Federal
funds sold
|
2,152 | - | - | 2,152 | - | 2,152 | |||||||||||||||||
Interest-bearing
deposit accounts
|
1,539 | - | - | 1,539 | - | 1,539 | |||||||||||||||||
Other
interest-earning assets
|
- | - | - | - | 6,942 | 6,942 | |||||||||||||||||
Total
interest-earning assets
|
485,186 | 13,822 | 13,170 | 512,178 | 341,700 | 853,878 | |||||||||||||||||
Interest-bearing
liabilities:
|
|||||||||||||||||||||||
NOW,
savings, and money market deposits
|
196,960 | - | - | 196,960 | - | 196,960 | |||||||||||||||||
Time
deposits
|
69,515 | 101,204 | 192,517 | 363,236 | 21,372 | 384,608 | |||||||||||||||||
Other
short term borrowings
|
1,600 | - | - | 1,600 | - | 1,600 | |||||||||||||||||
FHLB
borrowings
|
10,500 | 5,000 | - | 15,500 | 72,000 | 87,500 | |||||||||||||||||
Securities
sold under agreement to repurchase
|
27,583 | - | - | 27,583 | - | 27,583 | |||||||||||||||||
Trust
preferred securities
|
- | 20,619 | - | 20,619 | - | 20,619 | |||||||||||||||||
Total
interest-bearing liabilities
|
306,158 | 126,823 | 192,517 | 625,498 | 93,372 | 718,870 | |||||||||||||||||
Interest-sensitive
gap
|
$ | 179,028 | (113,001 | ) | (179,347 | ) | (113,320 | ) | 248,328 | 135,008 | |||||||||||||
Cumulative
interest-sensitive gap
|
$ | 179,028 | 66,027 | (113,320 | ) | (113,320 | ) | 135,008 | |||||||||||||||
Interest-earning
assets as a percentage of
|
|||||||||||||||||||||||
interest-bearing liabilities | 158.48 | % | 10.90 | % | 6.84 | % | 81.88 | % | 365.96 | % |
Table
6 - Summary of Investment Portfolio
|
||||||||||||
(Dollars
in Thousands)
|
2007
|
2006
|
2005
|
|||||||||
Obligations
of United States government
|
||||||||||||
agencies
and corporations
|
$ | 76,992 | 72,744 | 60,243 | ||||||||
Obligations
of states and political subdivisions
|
25,905 | 24,366 | 21,609 | |||||||||
Mortgage-backed
securities
|
16,271 | 19,220 | 31,004 | |||||||||
Trust
preferred securities
|
250 | 750 | 1,750 | |||||||||
Equity
securities
|
1,550 | 501 | 552 | |||||||||
Total
securities
|
$ | 120,968 | 117,581 | 115,158 |
Table
7 - Maturity Distribution and Weighted Average Yield on
Investments
|
||||||||||||||||||||||||||||||
After
One Year
|
After
5 Years
|
|||||||||||||||||||||||||||||
One
Year or Less
|
Through
5 Years
|
Through
10 Years
|
After
10 Years
|
Totals
|
||||||||||||||||||||||||||
(Dollars
in Thousands)
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
||||||||||||||||||||
Book
value:
|
||||||||||||||||||||||||||||||
United
States Government agencies
|
$ | 4,999 | 4.52% | 45,249 | 4.93% | 22,228 | 5.47% | 2,679 | 6.08% | 75,155 | 5.11% | |||||||||||||||||||
States
and political subdivisions
|
2,320 | 6.23% | 11,173 | 4.76% | 7,052 | 6.13% | 5,311 | 6.58% | 25,856 | 5.64% | ||||||||||||||||||||
Mortgage
backed securities
|
- | - | 673 | 4.55% | 3,591 | 4.46% | 12,206 | 4.71% | 16,470 | 4.65% | ||||||||||||||||||||
Trust
preferred securities
|
- | - | - | - | - | - | 250 | 8.11% | 250 | 8.11% | ||||||||||||||||||||
Equity
securities
|
- | - | - | - | - | - | 1,693 | 0.92% | 1,693 | 0.92% | ||||||||||||||||||||
Total
securities
|
$ | 7,319 | 5.06% | 57,095 | 4.90% | 32,871 | 5.50% | 22,139 | 5.07% | 119,424 | 5.10% |
Table
8 - Loan Portfolio
|
||||||||||||||||||||||||||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||||||||||||||||||||||||||
(Dollars
in Thousands)
|
Amount
|
%
of Loans
|
Amount
|
%
of Loans
|
Amount
|
%
of Loans
|
Amount
|
%
of Loans
|
Amount
|
%
of Loans
|
||||||||||||||||||||||||||||||
Breakdown
of loan receivables:
|
||||||||||||||||||||||||||||||||||||||||
Commercial
|
$ | 82,190 | 11.38 | % | 85,064 | 13.06 | % | 79,902 | 14.10 | % | 79,189 | 14.79 | % | 90,558 | 16.41 | % | ||||||||||||||||||||||||
Real
estate - mortgage
|
417,709 | 57.83 | % | 364,595 | 55.97 | % | 330,227 | 58.28 | % | 312,988 | 58.45 | % | 332,730 | 60.26 | % | |||||||||||||||||||||||||
Real
estate - construction
|
209,644 | 29.03 | % | 187,960 | 28.86 | % | 141,420 | 24.96 | % | 127,042 | 23.73 | % | 110,392 | 19.99 | % | |||||||||||||||||||||||||
Consumer
|
12,734 | 1.76 | % | 13,762 | 2.11 | % | 15,115 | 2.66 | % | 16,249 | 3.03 | % | 18,446 | 3.34 | % | |||||||||||||||||||||||||
Total
loans
|
$ | 722,277 | 100.00 | % | 651,381 | 100.00 | % | 566,664 | 100.00 | % | 535,468 | 100.00 | % | 552,126 | 100.00 | % | ||||||||||||||||||||||||
Less:
Allowance for loan losses
|
9,103 | 8,303 | 7,425 | 8,049 | 9,722 | |||||||||||||||||||||||||||||||||||
Net
loans
|
$ | 713,174 | 643,078 | 559,239 | 527,419 | 542,404 |
Table
9 - Maturity and Repricing Data for Loans
|
|||||||||||||||
(Dollars
in Thousands)
|
Within
one
year
or less
|
After
one year through five years
|
After
five
years
|
Total
loans
|
|||||||||||
Commercial
|
$ | 65,308 | 14,835 | 2,047 | 82,190 | ||||||||||
Real
estate - mortgage
|
233,365 | 138,492 | 45,852 | 417,709 | |||||||||||
Real
estate - construction
|
195,626 | 12,402 | 1,616 | 209,644 | |||||||||||
Consumer
|
5,307 | 6,544 | 883 | 12,734 | |||||||||||
Total
loans
|
$ | 499,606 | 172,273 | 50,398 | 722,277 | ||||||||||
Total
fixed rate loans
|
$ | 18,484 | 113,733 | 50,398 | 182,615 | ||||||||||
Total
floating rate loans
|
481,122 | 58,540 | - | 539,662 | |||||||||||
Total
loans
|
$ | 499,606 | 172,273 | 50,398 | 722,277 |
·
|
the
Bank’s loan loss experience;
|
·
|
the
amount of past due and non-performing
loans;
|
·
|
specific
known risks;
|
·
|
the
status and amount of other past due and non-performing
assets;
|
·
|
underlying
estimated values of collateral securing
loans;
|
·
|
current
and anticipated economic conditions;
and
|
·
|
other
factors which management believes affect the allowance for potential
credit losses.
|
Table
10 - Loan Risk Grade Analysis
|
|||
Percentage
of Loans
|
|||
By
Risk Grade*
|
|||
Risk
Grade
|
2007
|
2006
|
|
Risk
1 (Excellent Quality)
|
11.06%
|
12.03%
|
|
Risk
2 (High Quality)
|
14.06%
|
14.89%
|
|
Risk
3 (Good Quality)
|
62.53%
|
60.31%
|
|
Risk
4 (Management Attention)
|
9.51%
|
10.46%
|
|
Risk
5 (Watch)
|
1.57%
|
0.41%
|
|
Risk
6 (Substandard)
|
0.13%
|
0.70%
|
|
Risk
7 (Low Substandard)
|
0.03%
|
0.02%
|
|
Risk
8 (Doubtful)
|
0.00%
|
0.00%
|
|
Risk
9 (Loss)
|
0.00%
|
0.00%
|
|
*
Excludes non-accrual loans
|
Table
11 - Analysis of Allowance for Loan Losses
|
||||||||||||||||||||
(Dollars
in Thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||
Reserve
for loan losses at beginning
|
$ | 8,303 | 7,425 | 8,049 | 9,722 | 7,248 | ||||||||||||||
Loans
charged off:
|
||||||||||||||||||||
Commercial
|
414 | 505 | 293 | 1,004 | 1,179 | |||||||||||||||
Real
estate - mortgage
|
471 | 568 | 2,141 | 3,842 | 2,422 | |||||||||||||||
Real
estate - construction
|
252 | 250 | 1,250 | 4 | 251 | |||||||||||||||
Consumer
|
489 | 636 | 516 | 535 | 630 | |||||||||||||||
Total
loans charged off
|
1,626 | 1,959 | 4,200 | 5,385 | 4,482 | |||||||||||||||
Recoveries
of losses previously charged off:
|
||||||||||||||||||||
Commercial
|
86 | 64 | 144 | 162 | 36 | |||||||||||||||
Real
estate - mortgage
|
21 | 108 | 162 | 144 | 18 | |||||||||||||||
Real
estate - construction
|
102 | 2 | - | - | 1 | |||||||||||||||
Consumer
|
179 | 150 | 160 | 150 | 157 | |||||||||||||||
Total
recoveries
|
388 | 324 | 466 | 456 | 212 | |||||||||||||||
Net
loans charged off
|
1,238 | 1,635 | 3,734 | 4,929 | 4,270 | |||||||||||||||
Provision
for loan losses
|
2,038 | 2,513 | 3,110 | 3,256 | 6,744 | |||||||||||||||
Reserve
for loan losses at end of year
|
$ | 9,103 | 8,303 | 7,425 | 8,049 | 9,722 | ||||||||||||||
Loans
charged off net of recoveries, as
|
||||||||||||||||||||
a
percent of average loans outstanding
|
0.19 | % | 0.27 | % | 0.68 | % | 0.90 | % | 0.79 | % |
Table
12 - Non-performing Assets
|
||||||||||||||||||||
(Dollars
in Thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||||||
Non-accrual
loans
|
$ | 7,987 | 7,560 | 3,492 | 5,097 | 4,343 | ||||||||||||||
Loans
90 days or more past due and still accruing
|
- | 78 | 946 | 245 | 271 | |||||||||||||||
Total
non-performing loans
|
7,987 | 7,638 | 4,438 | 5,342 | 4,614 | |||||||||||||||
All
other real estate owned
|
483 | 344 | 531 | 682 | 1,447 | |||||||||||||||
All
other repossessed assets
|
- | - | - | - | 206 | |||||||||||||||
Total
non-performing assets
|
$ | 8,470 | 7,982 | 4,969 | 6,024 | 6,267 | ||||||||||||||
As
a percent of total loans at year end
|
||||||||||||||||||||
Non-accrual
loans
|
1.11 | % | 1.16 | % | 0.62 | % | 0.95 | % | 0.79 | % | ||||||||||
Loans
90 days or more past due and still accruing
|
0.00 | % | 0.01 | % | 0.17 | % | 0.05 | % | 0.05 | % | ||||||||||
Total
non-performing assets
|
1.17 | % | 1.23 | % | 0.88 | % | 1.12 | % | 1.14 | % |
Table
13 - Maturities of Time Deposits over $100,000
|
||||
(Dollars
in Thousands)
|
2007
|
|||
Three
months or less
|
$ | 84,001 | ||
Over
three months through six months
|
70,734 | |||
Over
six months through twelve months
|
35,917 | |||
Over
twelve months
|
12,848 | |||
Total
|
$ | 203,500 |
Table
14 - Contractual Obligations and Other Commitments
|
||||||||||||||||||||
(Dollars
in Thousands)
|
Within
One
Year
|
One
to
Three
Years
|
Three
to
Five
Years
|
Five
Years
or
More
|
Total
|
|||||||||||||||
Contractual
Cash Obligations
|
||||||||||||||||||||
Long-term
borrowings*
|
$ | - | 7,000 | 5,000 | 65,000 | 77,000 | ||||||||||||||
Junior
subordinated debentures
|
- | - | - | 20,619 | 20,619 | |||||||||||||||
Operating
lease obligations
|
897 | 1,381 | 863 | 2,149 | 5,290 | |||||||||||||||
Total
|
$ | 897 | 8,381 | 5,863 | 87,768 | 102,909 | ||||||||||||||
Other
Commitments
|
||||||||||||||||||||
Commitments
to extend credit
|
$ | 62,838 | 40,706 | 5,160 | 81,950 | 190,654 | ||||||||||||||
Standby
letters of credit
|
||||||||||||||||||||
and
financial guarantees written
|
3,792 | 102 | - | - | 3,894 | |||||||||||||||
Total
|
$ | 66,630 | 40,808 | 5,160 | 81,950 | 194,548 | ||||||||||||||
*Excludes
$10.5 million adjustable rate credit due to the FHLB, which matured in
February 2008.
|
Table
15 - Equity Ratios
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Return
on average assets
|
1.13 | % | 1.19 | % | 0.90 | % | ||||||
Return
on average equity
|
13.59 | % | 14.68 | % | 11.31 | % | ||||||
Dividend
payout ratio
|
24.30 | % | 20.78 | % | 22.34 | % | ||||||
Average
equity to average assets
|
8.34 | % | 8.09 | % | 7.92 | % |
Table
16 - Quarterly Financial Data
|
||||||||||||||||||||||||||||||||
2007
|
2006
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands, except
per
share amounts)
|
First
|
Second
|
Third
|
Fourth
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||||||||||||||
Total
interest income
|
$ | 15,200 | 15,446 | 15,625 | 15,461 | 12,484 | 13,559 | 14,390 | 14,961 | |||||||||||||||||||||||
Total
interest expense
|
6,607 | 6,735 | 7,038 | 7,205 | 4,863 | 5,429 | 6,243 | 6,575 | ||||||||||||||||||||||||
Net
interest income
|
8,593 | 8,711 | 8,587 | 8,256 | 7,621 | 8,130 | 8,147 | 8,386 | ||||||||||||||||||||||||
Provision
for loan losses
|
323 | 634 | 296 | 785 | 759 | 413 | 686 | 655 | ||||||||||||||||||||||||
Other
income
|
2,122 | 2,139 | 2,007 | 2,548 | 1,929 | 2,017 | 2,043 | 1,564 | ||||||||||||||||||||||||
Other
expense
|
6,021 | 6,180 | 6,214 | 7,578 | 5,307 | 5,548 | 5,787 | 6,341 | ||||||||||||||||||||||||
Income
before income taxes
|
4,371 | 4,036 | 4,084 | 2,441 | 3,484 | 4,186 | 3,717 | 2,954 | ||||||||||||||||||||||||
Income
taxes
|
1,584 | 1,446 | 1,471 | 839 | 1,249 | 1,525 | 1,344 | 1,052 | ||||||||||||||||||||||||
Net
earnings
|
$ | 2,787 | 2,590 | 2,613 | 1,602 | 2,235 | 2,661 | 2,373 | 1,902 | |||||||||||||||||||||||
Basic
earnings per share
|
$ | 0.49 | 0.45 | 0.46 | 0.28 | 0.39 | 0.47 | 0.42 | 0.33 | |||||||||||||||||||||||
Diluted
earnings per share
|
$ | 0.48 | 0.44 | 0.45 | 0.28 | 0.38 | 0.46 | 0.41 | 0.33 |
Table
17 - Market Risk Table
|
||||||||||||||||||||||
(Dollars
In Thousands)
|
Principal/Notional
Amount Maturing in Year Ended December 31,
|
|||||||||||||||||||||
Loans
Receivable
|
2008
|
2009
|
2010
|
2011
&
2012
|
Thereafter
|
Total
|
Fair
Value
|
|||||||||||||||
Fixed
rate
|
$ | 34,493 | 26,881 | 27,894 | 54,865 | 38,483 | 182,615 | 183,130 | ||||||||||||||
Average
interest rate
|
7.41 | % | 7.53 | % | 7.39 | % | 7.65 | % | 7.64 | % | ||||||||||||
Variable
rate
|
$ | 206,001 | 75,033 | 51,738 | 54,833 | 152,058 | 539,662 | 539,662 | ||||||||||||||
Average
interest rate
|
7.70 | % | 7.64 | % | 7.67 | % | 7.77 | % | 7.94 | % | ||||||||||||
- | 722,277 | 722,792 | ||||||||||||||||||||
Investment
Securities
|
. | |||||||||||||||||||||
Interest
bearing cash
|
$ | - | - | - | - | 1,539 | 1,539 | 1,539 | ||||||||||||||
Average
interest rate
|
- | - | - | - | 4.60 | % | ||||||||||||||||
Federal
funds sold
|
$ | 2,152 | - | - | - | - | 2,152 | 2,152 | ||||||||||||||
Average
interest rate
|
4.10 | % | - | - | - | - | ||||||||||||||||
Securities
available for sale
|
$ | 24,240 | 28,056 | 17,799 | 38,646 | 12,226 | 120,968 | 120,968 | ||||||||||||||
Average
interest rate
|
4.91 | % | 4.96 | % | 4.61 | % | 4.27 | % | 3.64 | % | ||||||||||||
Nonmarketable
equity securities
|
$ | - | - | - | - | 6,434 | 6,434 | 6,434 | ||||||||||||||
Average
interest rate
|
- | - | - | - | 5.74 | % | ||||||||||||||||
Debt
Obligations
|
||||||||||||||||||||||
Deposits
|
$ | 372,596 | 27,540 | 11,245 | 1,130 | 281,128 | 693,639 | 694,059 | ||||||||||||||
Average
interest rate
|
4.02 | % | 4.12 | % | 4.20 | % | 3.88 | % | 1.58 | % | ||||||||||||
Advances
from FHLB
|
$ | 10,500 | 20,000 | 52,000 | 5,000 | - | 87,500 | 90,233 | ||||||||||||||
Average
interest rate
|
4.40 | % | 4.41 | % | 4.71 | % | 4.21 | % | - | |||||||||||||
Demand
notes payable to U.S. Treasury
|
$ | 1,600 | - | - | - | - | 1,600 | 1,600 | ||||||||||||||
Average
interest rate
|
3.27 | % | - | - | - | - | ||||||||||||||||
Securities
sold under agreement to repurchase
|
$ | 27,583 | - | - | - | - | 27,583 | 27,583 | ||||||||||||||
Average
interest rate
|
4.15 | % | - | - | - | - | ||||||||||||||||
Junior
subordinated debentures
|
$ | - | - | - | - | 20,619 | 20,619 | 20,619 | ||||||||||||||
Average
interest rate
|
- | - | - | - | 6.62 | % | ||||||||||||||||
Derivative
Instruments (notional amount)
|
||||||||||||||||||||||
Interest
rate floor contracts
|
$ | 70,000 | 115,000 | - | - | - | 185,000 | 1,907 | ||||||||||||||
Average
interest rate
|
6.63 | % | 7.58 | % | - | - | - |
Table
18 - Interest Rate Risk
|
|||||
(Dollars
in thousands)
|
|||||
Estimated
Resulting Theoretical Net
Interest
Income
|
|||||
Hypothetical
rate change (ramp over 12 months)
|
Amount
|
%
Change
|
|||
+2% | $ | 39,311 | 6.29% | ||
+1% | $ | 38,037 | 2.85% | ||
0% | $ | 36,983 | 0.00% | ||
-1% | $ | 36,349 | -1.72% | ||
-2% | $ | 35,711 | -3.44% | ||
Estimated
Resulting Theoretical
Market
Value of Equity
|
|||||
Hypothetical
rate change (immediate shock)
|
Amount
|
%
Change
|
|||
+2% | $ | 68,006 | -7.82% | ||
+1% | $ | 70,737 | -4.11% | ||
0% | $ | 73,772 | 0.00% | ||
-1% | $ | 77,197 | 4.64% | ||
-2% | $ | 81,030 | 9.84% |
Table
19 - Market and Dividend Data
|
||||||||||
Cash
Dividend
|
||||||||||
2007
|
Low
Bid
|
High
Bid
|
Per
Share
|
|||||||
First
Quarter
|
$ | 17.37 | 19.26 | 0.08 | ||||||
Second
Quarter
|
$ | 17.89 | 21.15 | 0.09 | ||||||
Third
Quarter
|
$ | 17.13 | 20.03 | 0.12 | ||||||
Fourth
Quarter
|
$ | 14.75 | 18.00 | 0.12 | ||||||
Cash
Dividend
|
||||||||||
2006
|
Low
Bid
|
High
Bid
|
Per
Share
|
|||||||
First
Quarter
|
$ | 13.37 | 16.37 | 0.07 | ||||||
Second
Quarter
|
$ | 15.77 | 19.47 | 0.07 | ||||||
Third
Quarter
|
$ | 16.18 | 19.47 | 0.07 | ||||||
Fourth
Quarter
|
$ | 17.97 | 20.09 | 0.12 |
PEOPLES
BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
|
Consolidated
Financial Statements
|
|
December
31, 2007, 2006 and 2005
|
|
INDEX
|
|
PAGE(S)
|
|
Management's
Report on Internal Control Over Financial Reporting
|
A-28
|
Report
of Independent Registered Public Accounting Firm on the Consolidated
Financial Statements
|
|
and Internal Control Over Financial Reporting | A-29 - A-30 |
Financial
Statements
|
|
Consolidated
Balance Sheets at December 31, 2007 and December 31, 2006
|
A-31
|
Consolidated
Statements of Earnings for the years ended December 31, 2007, 2006 and
2005
|
A-32
|
Consolidated
Statements of Changes in Shareholders' Equity for the years ended December
31, 2007, 2006 and 2005
|
A-33
|
Consolidated
Statements of Comprehensive Income for the years ended December 31, 2007,
2006 and 2005
|
A-34
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006 and
2005
|
A-35
- A-36
|
Notes
to Consolidated Financial Statements
|
A-37
- A-56
|
/s/
Tony W. Wolfe
|
/s/
A. Joseph Lampron
|
||
Tony
W. Wolfe
|
A.
Joseph Lampron
|
||
Chief
Executive Officer
|
Chief
Financial Officer
|
||
March
12, 2008
|
March
12, 2008
|
PEOPLES
BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||||
Consolidated
Balance Sheets
|
||||||||
December
31, 2007 and 2006
|
||||||||
Assets
|
2007
|
2006
|
||||||
Cash
and due from banks, including reserve requirements
|
$ | 26,108,437 | 17,389,046 | |||||
of
$7,439,000 and $6,243,000
|
||||||||
Interest bearing deposits | 1,539,190 | 1,471,272 | ||||||
Federal
funds sold
|
2,152,000 | 2,640,000 | ||||||
Cash
and cash equivalents
|
29,799,627 | 21,500,318 | ||||||
Investment
securities available for sale
|
120,968,358 | 117,581,000 | ||||||
Other
investments
|
6,433,947 | 7,295,449 | ||||||
Total
securities
|
127,402,305 | 124,876,449 | ||||||
Loans
|
722,276,948 | 651,381,129 | ||||||
Less
allowance for loan losses
|
(9,103,058 | ) | (8,303,432 | ) | ||||
Net
loans
|
713,173,890 | 643,077,697 | ||||||
Premises
and equipment, net
|
18,234,393 | 12,816,385 | ||||||
Cash
surrender value of life insurance
|
6,776,379 | 6,532,406 | ||||||
Accrued
interest receivable and other assets
|
11,875,202 | 10,144,283 | ||||||
Total
assets
|
$ | 907,261,796 | 818,947,538 | |||||
Liabilities and
Shareholders' Equity
|
||||||||
Deposits:
|
||||||||
Non-interest
bearing demand
|
$ | 112,071,090 | 101,393,142 | |||||
NOW,
MMDA & savings
|
196,959,895 | 174,577,641 | ||||||
Time,
$100,000 or more
|
203,499,504 | 194,176,291 | ||||||
Other
time
|
181,108,214 | 163,673,215 | ||||||
Total
deposits
|
693,638,703 | 633,820,289 | ||||||
Demand
notes payable to U.S. Treasury
|
1,600,000 | 1,600,000 | ||||||
Securities
sold under agreement to repurchase
|
27,583,263 | 6,417,803 | ||||||
FHLB
borrowings
|
87,500,000 | 89,300,000 | ||||||
Junior
subordinated debentures
|
20,619,000 | 20,619,000 | ||||||
Accrued
interest payable and other liabilities
|
6,219,248 | 4,355,073 | ||||||
Total
liabilities
|
837,160,214 | 756,112,165 | ||||||
Shareholders'
equity:
|
||||||||
Preferred
stock, no par value; authorized
|
||||||||
5,000,000
shares; no shares issued
|
||||||||
and
outstanding
|
- | - | ||||||
Common
stock, no par value; authorized
|
||||||||
20,000,000
shares; issued and
|
||||||||
outstanding
5,624,234 shares in 2007
|
||||||||
and
3,830,634 shares in 2006
|
48,651,895 | 51,122,147 | ||||||
Retained
earnings
|
19,741,876 | 12,484,463 | ||||||
Accumulated
other comprehensive income (loss)
|
1,707,811 | (771,237 | ) | |||||
Total
shareholders' equity
|
70,101,582 | 62,835,373 | ||||||
Total
liabilities and shareholders' equity
|
$ | 907,261,796 | 818,947,538 | |||||
See
accompanying notes to consolidated financial statements.
|
PEOPLES
BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||||||||
Consolidated
Statements of Earnings
|
||||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Interest
income:
|
||||||||||||
Interest
and fees on loans
|
$ | 55,400,514 | 49,667,700 | 37,123,327 | ||||||||
Interest
on federal funds sold
|
383,492 | 85,307 | 72,578 | |||||||||
Interest
on investment securities:
|
||||||||||||
U.S.
Government agencies
|
4,571,571 | 4,321,346 | 3,584,755 | |||||||||
States
and political subdivisions
|
887,584 | 798,185 | 735,892 | |||||||||
Other
|
488,465 | 521,077 | 396,020 | |||||||||
Total
interest income
|
61,731,626 | 55,393,615 | 41,912,572 | |||||||||
Interest
expense:
|
||||||||||||
NOW,
MMDA & savings deposits
|
4,098,892 | 3,060,201 | 2,644,413 | |||||||||
Time
deposits
|
17,430,012 | 14,188,623 | 8,923,488 | |||||||||
FHLB
borrowings
|
3,758,996 | 3,588,169 | 2,888,785 | |||||||||
Junior
subordinated debentures
|
1,475,701 | 1,962,692 | 938,145 | |||||||||
Other
|
821,331 | 310,188 | 33,790 | |||||||||
Total
interest expense
|
27,584,932 | 23,109,873 | 15,428,621 | |||||||||
Net
interest income
|
34,146,694 | 32,283,742 | 26,483,951 | |||||||||
Provision
for loan losses
|
2,038,000 | 2,513,282 | 3,110,000 | |||||||||
Net interest income after provision for loan losses
|
32,108,694 | 29,770,460 | 23,373,951 | |||||||||
Other
income:
|
||||||||||||
Service
charges
|
4,278,238 | 3,929,956 | 3,779,933 | |||||||||
Other
service charges and fees
|
1,938,137 | 1,539,367 | 1,141,879 | |||||||||
Loss
on sale and writedown of securities
|
(561,832 | ) | (591,856 | ) | (729,727 | ) | ||||||
Mortgage
banking income
|
560,291 | 289,293 | 469,109 | |||||||||
Insurance
and brokerage commissions
|
521,095 | 388,559 | 386,662 | |||||||||
Loss
on sale of repossessed assets
|
(117,880 | ) | (107,712 | ) | (37,811 | ) | ||||||
Miscellaneous
|
2,197,645 | 2,106,188 | 1,658,189 | |||||||||
Total
other income
|
8,815,694 | 7,553,795 | 6,668,234 | |||||||||
Other
expense:
|
||||||||||||
Salaries
and employee benefits
|
13,887,841 | 11,785,094 | 10,863,779 | |||||||||
Occupancy
|
4,750,634 | 4,180,058 | 3,948,694 | |||||||||
Other
|
7,354,401 | 7,017,986 | 5,517,832 | |||||||||
Total
other expenses
|
25,992,876 | 22,983,138 | 20,330,305 | |||||||||
Earnings
before income taxes
|
14,931,512 | 14,341,117 | 9,711,880 | |||||||||
Income
taxes
|
5,339,541 | 5,170,300 | 3,380,900 | |||||||||
Net
earnings
|
$ | 9,591,971 | 9,170,817 | 6,330,980 | ||||||||
Basic
earnings per share
|
$ | 1.68 | 1.61 | 1.11 | ||||||||
Diluted
earnings per share
|
$ | 1.65 | 1.58 | 1.09 | ||||||||
Cash
dividends declared per share
|
$ | 0.41 | 0.33 | 0.25 | ||||||||
See
accompanying notes to consolidated financial statements.
|
PEOPLES
BANCORP OF NORTH CAROLINA, INC.
|
||||||||||||||||||||
Consolidated
Statements of Changes in Shareholders' Equity
|
||||||||||||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
||||||||||||||||||||
Accumulated
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Common
Stock
|
Retained
|
Comprehensive
|
||||||||||||||||||
Shares
|
Amount
|
Earnings
|
Income
(Loss)
|
Total
|
||||||||||||||||
Balance,
December 31, 2004
|
3,135,074 | $ | 35,040,390 | 16,018,206 | (120,744 | ) | 50,937,852 | |||||||||||||
10%
stock dividend
|
313,546 | 6,274,087 | (6,274,087 | ) | - | - | ||||||||||||||
Cash
paid in lieu of fractional shares
|
- | - | (4,700 | ) | - | (4,700 | ) | |||||||||||||
Cash
dividends declared
|
- | - | (1,414,239 | ) | - | (1,414,239 | ) | |||||||||||||
Repurchase
and retirement of common
|
||||||||||||||||||||
stock
|
(15,000 | ) | (314,750 | ) | - | - | (314,750 | ) | ||||||||||||
Exercise
of stock options
|
7,185 | 96,773 | - | - | 96,773 | |||||||||||||||
Net
earnings
|
- | - | 6,330,980 | - | 6,330,980 | |||||||||||||||
Change
in accumulated other
|
||||||||||||||||||||
comprehensive
income (loss), net of tax
|
- | - | - | (1,278,922 | ) | (1,278,922 | ) | |||||||||||||
Balance,
December 31, 2005
|
3,440,805 | 41,096,500 | 14,656,160 | (1,399,666 | ) | 54,352,994 | ||||||||||||||
10%
stock dividend
|
343,850 | 9,430,532 | (9,430,532 | ) | - | - | ||||||||||||||
Cash
paid in lieu of fractional shares
|
- | - | (6,426 | ) | - | (6,426 | ) | |||||||||||||
Cash
dividends declared
|
- | - | (1,905,556 | ) | - | (1,905,556 | ) | |||||||||||||
Repurchase
and retirement of common
|
||||||||||||||||||||
stock
|
(19,250 | ) | (425,000 | ) | - | - | (425,000 | ) | ||||||||||||
Exercise
of stock options
|
65,229 | 771,325 | - | - | 771,325 | |||||||||||||||
Stock
option tax benefit
|
- | 243,100 | - | - | 243,100 | |||||||||||||||
Stock
option compensation expense
|
- | 5,690 | - | - | 5,690 | |||||||||||||||
Net
earnings
|
- | - | 9,170,817 | - | 9,170,817 | |||||||||||||||
Change
in accumulated other
|
||||||||||||||||||||
comprehensive
income (loss), net of tax
|
- | - | - | 628,429 | 628,429 | |||||||||||||||
Balance,
December 31, 2006
|
3,830,634 | $ | 51,122,147 | 12,484,463 | (771,237 | ) | 62,835,373 | |||||||||||||
3
for 2 stock split
|
1,915,147 | - | - | - | - | |||||||||||||||
Cash
paid in lieu of fractional shares
|
- | - | (3,355 | ) | - | (3,355 | ) | |||||||||||||
Cash
dividends declared
|
- | - | (2,331,203 | ) | - | (2,331,203 | ) | |||||||||||||
Repurchase
and retirement of common
|
||||||||||||||||||||
stock
|
(150,497 | ) | (2,810,907 | ) | - | - | (2,810,907 | ) | ||||||||||||
Exercise
of stock options
|
28,950 | 239,182 | - | - | 239,182 | |||||||||||||||
Stock
option tax benefit
|
- | 91,815 | - | - | 91,815 | |||||||||||||||
Stock
option compensation expense
|
- | 9,658 | - | - | 9,658 | |||||||||||||||
Net
earnings
|
- | - | 9,591,971 | - | 9,591,971 | |||||||||||||||
Change
in accumulated other
|
||||||||||||||||||||
comprehensive
income (loss), net of tax
|
- | - | - | 2,479,048 | 2,479,048 | |||||||||||||||
Balance,
December 31, 2007
|
5,624,234 | $ | 48,651,895 | 19,741,876 | 1,707,811 | 70,101,582 | ||||||||||||||
See
accompanying notes to consolidated financial statements.
|
PEOPLES
BANCORP OF NORTH CAROLINA, INC. AND SUBSIDIARIES
|
||||||||||||
Consolidated
Statements of Comprehensive Income
|
||||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Net
earnings
|
$ | 9,591,971 | 9,170,817 | 6,330,980 | ||||||||
Other
comprehensive income (loss):
|
||||||||||||
Unrealized
holding gains (losses) on securities
|
||||||||||||
available
for sale
|
1,964,861 | 197,569 | (3,045,565 | ) | ||||||||
Reclassification
adjustment for losses on
|
||||||||||||
sales
of securities available for sale included
|
||||||||||||
in
net earnings
|
561,832 | 591,856 | 729,727 | |||||||||
Unrealized
holding gains (losses) on derivative
|
||||||||||||
financial
instruments qualifying as cash flow
|
||||||||||||
hedges
|
1,244,910 | (345,049 | ) | (283,493 | ) | |||||||
Reclassification
adjustment for losses (gains) on
|
||||||||||||
derivative
financial instruments qualifying as
|
||||||||||||
cash
flow hedges included in net earnings
|
- | 386,285 | 483,715 | |||||||||
Total
other comprehensive income (loss),
|
||||||||||||
before
income taxes
|
3,771,603 | 830,661 | (2,115,616 | ) | ||||||||
Income
tax expense (benefit) related to other
|
||||||||||||
comprehensive
income:
|
||||||||||||
Unrealized
holding gains (losses) on securities
|
||||||||||||
available
for sale
|
765,313 | 76,953 | (1,186,248 | ) | ||||||||
Reclassification
adjustment for losses on
|
||||||||||||
sales
of securities available for sale included
|
||||||||||||
in
net earnings
|
218,834 | 230,528 | 284,229 | |||||||||
Unrealized
holding gains (losses) on derivative
|
||||||||||||
financial
instruments qualifying as cash flow
|
||||||||||||
hedges
|
308,408 | (255,707 | ) | (123,082 | ) | |||||||
Reclassification
adjustment for losses (gains) on
|
||||||||||||
derivative
financial instruments qualifying as
|
||||||||||||
cash
flow hedges included in net earnings
|
- | 150,458 | 188,407 | |||||||||
Total
income tax expense (benefit) related to
|
||||||||||||
other
comprehensive income
|
1,292,555 | 202,232 | (836,694 | ) | ||||||||
Total
other comprehensive income (loss),
|
||||||||||||
net
of tax
|
2,479,048 | 628,429 | (1,278,922 | ) | ||||||||
Total
comprehensive income
|
$ | 12,071,019 | 9,799,246 | 5,052,058 | ||||||||
See
accompanying notes to consolidated financial statements.
|
PEOPLES
BANCORP OF NORTH CAROLINA, INC.
|
||||||||||||
Consolidated
Statements of Cash Flows
|
||||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
earnings
|
$ | 9,591,971 | 9,170,817 | 6,330,980 | ||||||||
Adjustments
to reconcile net earnings to
|
||||||||||||
net
cash provided by operating activities:
|
||||||||||||
Depreciation,
amortization and accretion
|
1,553,251 | 1,616,558 | 1,643,459 | |||||||||
Provision
for loan losses
|
2,038,000 | 2,513,282 | 3,110,000 | |||||||||
Deferred
income taxes
|
(479,806 | ) | (615,626 | ) | 332,806 | |||||||
Loss
on sale and writedown of investment securities
|
561,832 | 591,856 | 729,727 | |||||||||
Recognition
of gain on sale of
|
||||||||||||
derivative
instruments
|
- | 386,285 | 483,715 | |||||||||
Amortization
of deferred gain on sale of premises
|
(10,337 | ) | (20,896 | ) | (21,984 | ) | ||||||
Loss
(gain) on sale of repossessed assets
|
83,294 | (2,288 | ) | (2,189 | ) | |||||||
Writedown
of other real estate and repossessions
|
34,586 | 110,000 | 40,000 | |||||||||
Amortization
of deferred issuance costs on
|
||||||||||||
trust
preferred securities
|
- | 461,298 | 17,742 | |||||||||
Stock
option compensation expense
|
9,658 | 5,690 | - | |||||||||
Change
in:
|
||||||||||||
Mortgage
loans held for sale
|
- | 2,247,900 | 1,535,275 | |||||||||
Cash
surrender value of life insurance
|
(243,973 | ) | (220,649 | ) | (277,569 | ) | ||||||
Other
assets
|
(1,013,866 | ) | (1,206,937 | ) | 444,944 | |||||||
Other
liabilities
|
2,403,990 | (230,144 | ) | 651,204 | ||||||||
Net
cash provided by operating activities
|
14,528,600 | 14,807,146 | 15,018,110 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchases
of investment securities available for sale
|
(15,858,155 | ) | (30,579,262 | ) | (49,431,813 | ) | ||||||
Proceeds
from calls and maturities of investment securities
|
||||||||||||
available
for sale
|
7,470,991 | 8,562,058 | 9,655,995 | |||||||||
Proceeds
from sales of investment securities available
|
||||||||||||
for
sale
|
8,362,525 | 19,871,979 | 27,768,392 | |||||||||
Purchases
of other investments
|
(8,356,900 | ) | (12,748,200 | ) | (5,367,790 | ) | ||||||
Proceeds
from sale of other investments
|
8,424,000 | 11,263,500 | 4,239,000 | |||||||||
Net
change in loans
|
(72,815,928 | ) | (86,825,349 | ) | (35,062,738 | ) | ||||||
Purchases
of premises and equipment
|
(7,672,018 | ) | (1,624,299 | ) | (1,373,019 | ) | ||||||
Proceeds
from sale of premises and equipment
|
55,630 | - | 1,750 | |||||||||
Proceeds
from sale of repossessed assets
|
425,158 | 825,115 | 246,218 | |||||||||
Purchases
of derivative financial instruments
|
(634,000 | ) | (961,500 | ) | (364,000 | ) | ||||||
Payment
on settlement of derivative
|
||||||||||||
financial
instruments
|
- | - | (870,000 | ) | ||||||||
Net
cash used by investing activities
|
(80,598,697 | ) | (92,215,958 | ) | (50,558,005 | ) | ||||||
Cash
flows from financing activities:
|
||||||||||||
Net
change in deposits
|
59,818,414 | 50,966,628 | 26,331,588 | |||||||||
Net
change in demand notes payable to U.S. Treasury
|
- | 126,307 | 289,301 | |||||||||
Net
change in securities sold under agreement to repurchase
|
21,165,460 | 5,436,753 | 981,050 | |||||||||
Proceeds
from FHLB borrowings
|
275,300,000 | 700,800,000 | 162,300,000 | |||||||||
Repayments
of FHLB borrowings
|
(277,100,000 | ) | (683,100,000 | ) | (149,700,000 | ) | ||||||
Proceeds
from issuance of trust preferred securities
|
- | 20,619,000 | - | |||||||||
Repayments
of trust preferred securities
|
- | (14,433,000 | ) | - | ||||||||
Proceeds
from exercise of stock options
|
330,997 | 1,014,425 | 96,773 | |||||||||
Common
stock repurchased
|
(2,810,907 | ) | (425,000 | ) | (314,750 | ) | ||||||
Cash
paid in lieu of fractional shares
|
(3,355 | ) | (6,426 | ) | (4,700 | ) | ||||||
Cash
dividends paid
|
(2,331,203 | ) | (1,905,556 | ) | (1,414,239 | ) | ||||||
Net
cash provided by financing activities
|
74,369,406 | 79,093,131 | 38,565,023 | |||||||||
Net
change in cash and cash equivalent
|
8,299,309 | 1,684,319 | 3,025,128 | |||||||||
Cash
and cash equivalents at beginning of period
|
21,500,318 | 19,815,999 | 16,790,871 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 29,799,627 | 21,500,318 | 19,815,999 |
PEOPLES
BANCORP OF NORTH CAROLINA, INC.
|
||||||||||||
Consolidated
Statements of Cash Flows, continued
|
||||||||||||
For
the Years ended December 31, 2007, 2006 and 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Supplemental
disclosures of cash flow information:
|
||||||||||||
Cash
paid during the year for:
|
||||||||||||
Interest
|
$ | 27,420,245 | 23,171,572 | 15,189,559 | ||||||||
Income
taxes
|
$ | 5,689,500 | 6,398,100 | 2,245,000 | ||||||||
Noncash
investing and financing activities:
|
||||||||||||
Change
in unrealized gain (loss) on investment securities
|
||||||||||||
available
for sale, net
|
$ | 1,542,546 | 481,944 | (1,413,819 | ) | |||||||
Change
in unrealized gain on derivative financial
|
||||||||||||
instruments,
net
|
$ | 936,502 | 146,485 | 134,897 | ||||||||
Transfer
of loans to other real estate and repossessions
|
$ | 681,735 | 746,004 | 133,210 | ||||||||
Financed
portion of sale of other real estate
|
$ | - | 273,000 | - | ||||||||
Reclassification
of an investment from other assets
|
||||||||||||
to
securities available for sale
|
$ | 499,995 | - | - | ||||||||
Reclassification
of a security from other investments
|
||||||||||||
to
securities available for sale
|
$ | 600,000 | - | 715,000 | ||||||||
Transfer
of retained earnings to common stock for
|
||||||||||||
issuance
of stock dividend
|
$ | - | 9,430,532 | 6,274,087 | ||||||||
Deferred
gain rolled into cost basis of
|
||||||||||||
acquired
building
|
$ | 539,815 | - | - | ||||||||
See
accompanying notes to consolidated financial statements.
|
(1)
|
Summary
of Significant Accounting Policies
|
·
|
the
Bank’s loan loss experience;
|
·
|
the
amount of past due and non-performing
loans;
|
·
|
specific
known risks;
|
·
|
the
status and amount of other past due and non-performing
assets;
|
·
|
underlying
estimated values of collateral securing
loans;
|
·
|
current
and anticipated economic conditions;
and
|
·
|
other
factors which management believes affect the allowance for potential
credit losses.
|
Buildings and improvements | 10 - 50 years | |
Furniture and equipment | 3 - 10 years |
Stock
Option Activity
|
|||||||||||
For
the years ended December 31, 2007, 2006 and 2005
|
|||||||||||
Shares
|
Weighted
Average
Option
Price
Per Share
|
Weighted
Average
Remaining
Contractual
Term (in
years)
|
Aggregate
Intrinsic
Value
|
||||||||
Outstanding,
December 31, 2004
|
333,978 | $ | 8.11 | ||||||||
Granted
during the period
|
- | $ | - | ||||||||
Forfeited
during the period
|
(1,970 | ) | $ | 7.77 | |||||||
Exercised
during the period
|
(12,316 | ) | $ | 7.86 | |||||||
Outstanding,
December 31, 2005
|
319,692 | $ | 8.13 | ||||||||
Granted
during the period
|
- | $ | - | ||||||||
Forfeited
during the period
|
(164 | ) | $ | 7.38 | |||||||
Exercised
during the period
|
(97,854 | ) | $ | 7.87 | |||||||
Outstanding,
December 31, 2006
|
221,674 | $ | 8.24 | ||||||||
Granted
during the period
|
- | $ | - | ||||||||
Forfeited
during the period
|
- | $ | - | ||||||||
Exercised
during the period
|
(28,949 | ) | $ | 8.26 | |||||||
Outstanding,
December 31, 2007
|
192,725 | $ | 8.24 |
4.05
|
$ 1,303,460
|
||||||
Exercisable,
December 31, 2007
|
192,725 | $ | 8.24 |
4.05
|
$ 1,303,460
|
2005
|
|||||
Net
earnings
|
As
reported
|
$ | 6,330,980 | ||
Effect
of grants
|
(143,747 | ) | |||
Effect
of forfeitures
|
5,253 | ||||
Proforma
|
$ | 6,192,486 | |||
Basic
earnings per share
|
As
reported
|
$ | 1.11 | ||
Proforma
|
$ | 1.09 | |||
Diluted
earnings per share
|
As
reported
|
$ | 1.09 | ||
Proforma
|
$ | 1.07 |
Common
|
Per
Share
|
||||||||||
For the year ended December 31, 2007: |
Net
Earnings
|
Shares
|
Amount
|
||||||||
Basic
earnings per share
|
$ | 9,591,971 | 5,700,860 | $ | 1.68 | ||||||
Effect
of dilutive securities:
|
|||||||||||
Stock
options
|
- | 109,455 | |||||||||
Diluted
earnings per share
|
$ | 9,591,971 | 5,810,315 | $ | 1.65 | ||||||
For the year ended December 31, 2006: |
Common
|
Per Share | |||||||||
Net
Earnings
|
Shares
|
Amount | |||||||||
Basic
earnings per share
|
$ | 9,170,817 | 5,701,829 | $ | 1.61 | ||||||
Effect
of dilutive securities:
|
|||||||||||
Stock
options
|
- | 100,495 | |||||||||
Diluted
earnings per share
|
$ | 9,170,817 | 5,802,324 | $ | 1.58 | ||||||
For the year ended December 31, 2005: |
Common
|
Per Share | |||||||||
Net
Earnings
|
Shares
|
Amount | |||||||||
Basic
earnings per share
|
$ | 6,330,980 | 5,692,290 | $ | 1.11 | ||||||
Effect
of dilutive securities:
|
|||||||||||
Stock
options
|
- | 100,084 | |||||||||
Diluted
earnings per share
|
$ | 6,330,980 | 5,792,374 | $ | 1.09 |
(2)
|
Investment Securities
|
December 31, 2007 | |||||||||||||||
Gross
|
Gross
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Estimated Fair | ||||||||||||
Cost
|
Gains
|
Losses
|
Value | ||||||||||||
Mortgage-backed
securities
|
$ | 16,469,053 | 6,423 | 204,509 | 16,270,967 | ||||||||||
U.S.
government agencies
|
75,155,693 | 1,839,143 | 3,035 | 76,991,801 | |||||||||||
State
and political subdivisions
|
25,856,311 | 250,483 | 201,406 | 25,905,388 | |||||||||||
Trust
preferred securities
|
250,000 | - | - | 250,000 | |||||||||||
Equity
securities
|
1,692,799 | 246,000 | 388,597 | 1,550,202 | |||||||||||
Total
|
$ | 119,423,856 | 2,342,049 | 797,547 | 120,968,358 |
December
31, 2006
|
|||||||||||||||
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair Value
|
||||||||||||
Mortgage-backed
securities
|
$ | 19,666,345 | - | 446,751 | 19,219,594 | ||||||||||
U.S.
government agencies
|
72,838,407 | 171,828 | 265,821 | 72,744,414 | |||||||||||
State
and political subdivisions
|
24,493,444 | 242,204 | 369,178 | 24,366,470 | |||||||||||
Trust
preferred securities
|
750,000 | - | - | 750,000 | |||||||||||
Equity
securities
|
814,995 | - | 314,473 | 500,522 | |||||||||||
Total
|
$ | 118,563,191 | 414,032 | 1,396,223 | 117,581,000 |
December 31, 2007 | |||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
||||||||
Mortgage-backed
securities
|
$ | 24,591 | 104 | 14,320,043 | 204,405 | 14,344,634 | 204,509 | ||||||
U.S.
government agencies
|
- | - | 689,775 | 3,035 | 689,775 | 3,035 | |||||||
State
and political subdivisions
|
2,059,746 | 33,781 | 11,188,720 | 167,625 | 13,248,466 | 201,406 | |||||||
Equity
securities
|
425,620 | 88,134 | 278,581 | 300,463 | 704,201 | 388,597 | |||||||
Total
|
$ | 2,509,957 | 122,019 | 26,477,119 | 675,528 | 28,987,076 | 797,547 |
December 31, 2006 | |||||||||||||
Less than 12 Months | 12 Months or More | Total | |||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
|||||||||||
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
Fair
Value
|
Losses
|
||||||||
Mortgage-backed
securities
|
$ | - | - | 19,202,188 | 446,751 | 19,202,188 | 446,751 | ||||||
U.S.
government agencies
|
23,069,770 | 13,361 | 21,510,425 | 252,460 | 44,580,195 | 265,821 | |||||||
State
and political subdivisions
|
1,445,462 | 35,988 | 11,589,682 | 333,190 | 13,035,144 | 369,178 | |||||||
Equity
securities
|
- | - | 500,522 | 314,473 | 500,522 | 314,473 | |||||||
Total
|
$ | 24,515,232 | 49,349 | 52,802,817 | 1,346,874 | 77,318,049 | 1,396,223 |
Amortized
|
Estimated Fair | ||||||
Cost
|
Value | ||||||
Due
within one year
|
$ | 7,319,434 | 7,331,682 | ||||
Due
from one to five years
|
56,422,798 | 57,569,880 | |||||
Due
from five to ten years
|
29,280,174 | 29,899,813 | |||||
Due
after ten years
|
8,239,598 | 8,345,814 | |||||
Mortgage-backed
securities
|
16,469,053 | 16,270,967 | |||||
Equity
securities
|
1,692,799 | 1,550,202 | |||||
Total
|
$ | 119,423,856 | 120,968,358 |
(3)
|
Loans
|
2007
|
2006
|
||||||
Commercial
|
$ | 82,190,391 | 85,064,322 | ||||
Real
estate - mortgage
|
417,708,750 | 364,595,188 | |||||
Real
estate - construction
|
209,643,836 | 187,959,880 | |||||
Consumer
|
12,733,971 | 13,761,739 | |||||
Total
loans
|
722,276,948 | 651,381,129 | |||||
Less
allowance for loan losses
|
9,103,058 | 8,303,432 | |||||
Total
net loans
|
$ | 713,173,890 | 643,077,697 |
2007
|
2006
|
2005
|
||||||||||
Balance
at beginning of year
|
$ | 8,303,432 | 7,424,782 | 8,048,627 | ||||||||
Amounts
charged off
|
(1,626,458 | ) | (1,958,551 | ) | (4,199,650 | ) | ||||||
Recoveries
on amounts previously charged off
|
388,084 | 323,919 | 465,805 | |||||||||
Provision
for loan losses
|
2,038,000 | 2,513,282 | 3,110,000 | |||||||||
Balance
at end of year
|
$ | 9,103,058 | 8,303,432 | 7,424,782 |
(4)
|
Premises and Equipment
|
2007
|
2006
|
||||||
Land
|
$ | 3,572,241 | 2,349,041 | ||||
Buildings
and improvements
|
14,700,078 | 10,618,896 | |||||
Furniture
and equipment
|
15,496,630 | 13,992,524 | |||||
Total
premises and equipment
|
33,768,949 | 26,960,461 | |||||
Less
accumulated depreciation
|
15,534,556 | 14,144,076 | |||||
Total
net premises and equipment
|
$ | 18,234,393 | 12,816,385 |
(5)
|
Time Deposits
|
2008
|
$ | 363,236,019 | |
2009
|
17,088,127 | ||
2010
|
3,153,109 | ||
2011
|
200,648 | ||
2012
and thereafter
|
929,815 | ||
Total
|
$ | 384,607,718 |
(6)
|
Federal Home Loan Bank Advances
|
Maturity
Date
|
Call
Date
|
Rate
|
Rate
Type
|
Amount
|
||||||
February
4, 2008
|
N/A | 4.400% |
Daily
Rate
|
$ | 10,500,000 | |||||
March
30, 2010
|
September
30, 2000 and every
|
|||||||||
three
months thereafter
|
5.880% |
Convertible
|
5,000,000 | |||||||
May
24, 2010
|
May
24, 2001 and every three
|
|||||||||
months
thereafter
|
6.490% |
Convertible
|
2,000,000 | |||||||
June
24, 2015
|
June
24, 2010
|
3.710% |
Convertible
|
5,000,000 | ||||||
March
25, 2019
|
March
25, 2009
|
4.360% |
Convertible
|
5,000,000 | ||||||
March
31, 2016
|
March
31, 2009 and every three
|
|||||||||
months
thereafter
|
4.620% |
Convertible
|
5,000,000 | |||||||
October
5, 2016
|
October
5, 2009
|
4.450% |
Convertible
|
5,000,000 | ||||||
December
12, 2011
|
December
12, 2007 and every
|
4.210% |
Convertible
|
5,000,000 | ||||||
three
months thereafter
|
||||||||||
January
30, 2017
|
October
30, 2008 and every
|
4.500% |
Convertible
|
5,000,000 | ||||||
three
months thereafter
|
||||||||||
June
8, 2017
|
December
8, 2008 and every
|
4.713% |
Convertible
|
15,000,000 | ||||||
three
months thereafter
|
||||||||||
June
9, 2014
|
February
11, 2008 and every
|
4.685% |
Convertible
|
15,000,000 | ||||||
month
thereafter
|
||||||||||
July
11, 2017
|
January
11, 2008 and every
|
4.440% |
Convertible
|
5,000,000 | ||||||
three
months thereafter
|
||||||||||
July
24, 2017
|
April
24, 2008 and every
|
4.420% |
Convertible
|
5,000,000 | ||||||
month
thereafter
|
||||||||||
$ | 87,500,000 |
(7)
|
Junior Subordinated Debentures
|
(8)
|
Income Taxes
|
2007
|
2006
|
2005
|
|||||||||
Current
|
$ | 5,819,347 | 5,785,926 | 3,048,094 | |||||||
Deferred
|
(479,806 | ) | (615,626 | ) | 332,806 | ||||||
Total
|
$ | 5,339,541 | 5,170,300 | 3,380,900 |
2007
|
2006
|
2005
|
||||||||||
Pre-tax
income at statutory rates (34%)
|
$ | 5,076,714 | 4,875,980 | 3,302,039 | ||||||||
Differences:
|
||||||||||||
Tax
exempt interest income
|
(307,169 | ) | (280,826 | ) | (263,555 | ) | ||||||
Nondeductible
interest and other expense
|
55,871 | 45,872 | 30,511 | |||||||||
Cash
surrender value of life insurance
|
(82,951 | ) | (75,021 | ) | (73,973 | ) | ||||||
State
taxes, net of federal benefits
|
559,905 | 576,444 | 363,264 | |||||||||
Other,
net
|
37,170 | 27,851 | 22,614 | |||||||||
Total
|
$ | 5,339,541 | 5,170,300 | 3,380,900 |
2007
|
2006
|
||||||
Deferred tax assets: | |||||||
Allowance
for loan losses
|
$ | 3,531,076 | 3,201,305 | ||||
Amortizable
intangible assets
|
76,398 | 108,472 | |||||
Accrued
retirement expense
|
819,246 | 664,581 | |||||
Income
from non-accrual loans
|
50,219 | 72,475 | |||||
Deferred
gain on sale of premises
|
- | 212,820 | |||||
Unrealized
loss on cash flow hedges
|
20,525 | 328,933 | |||||
Unrealized
loss on available for sale securities
|
- | 382,564 | |||||
Premises
and equipment
|
9,757 | - | |||||
Total
gross deferred tax assets
|
4,507,221 | 4,971,150 | |||||
Deferred
tax liabilities:
|
|||||||
Deferred
loan fees
|
1,346,322 | 1,310,178 | |||||
Premises
and equipment
|
- | 291,107 | |||||
Deferred
income from servicing rights
|
- | - | |||||
Unrealized
gain on available for sale securities
|
601,583 | - | |||||
Other
|
12,482 | 10,283 | |||||
Total
gross deferred tax liabilities
|
1,960,387 | 1,611,568 | |||||
Net
deferred tax asset
|
$ | 2,546,834 | 3,359,582 |
Beginning
balance
|
$ | 7,274,778 | |
New
loans
|
1,153,336 | ||
Repayments
|
2,812,215 | ||
Ending
balance
|
$ | 5,615,899 |
(10)
|
Commitments and Contingencies
|
Year
|
|||
2008
|
$ | 897,192 | |
2009
|
753,827 | ||
2010
|
626,965 | ||
2011
|
563,901 | ||
2012
|
298,771 | ||
Thereafter
|
2,149,222 | ||
Total
minimum obligation
|
$ | 5,289,878 |
Contractual Amount | |||||||
2007 |
2006
|
||||||
Financial instruments whose contract amount represent credit risk: | |||||||
Commitments
to extend credit
|
$ | 190,653,583 | 157,358,229 | ||||
Standby
letters of credit and financial guarantees written
|
$ | 3,894,259 | 4,573,544 |
(11)
|
Derivative Financial Instruments and Hedging
Transactions
|
(12)
|
Employee and Director Benefit
Programs
|
2007
|
2006
|
|||||||
Accumulated
postretirement benefit obligation
|
$ | 170,302 | 196,002 | |||||
Unrecognized
gain (loss)
|
(21,576 | ) | (38,327 | ) | ||||
Net
liability recognized
|
$ | 148,726 | 157,675 |
2007
|
2006
|
2005
|
|||||||||||||||||
Shares
|
Weighted
Average
Price
of
Book
Value Shares
|
Shares
|
Weighted
Average
Price
of
Book
Value Shares
|
Shares
|
Weighted
Average
Price
of
Book
Value Shares
|
||||||||||||||
Outstanding,
beginning of period
|
97,377 | $ | 7.38 | 97,377 | $ | 7.38 | 116,850 | $ | 7.20 | ||||||||||
Exercised
during the period
|
- | $ | - | - | $ | - | (19,473 | ) | $ | 6.31 | |||||||||
Outstanding,
end of period
|
97,377 | $ | 7.38 | 97,377 | $ | 7.38 | 97,377 | $ | 7.38 | ||||||||||
Number
of shares exercisable
|
81,791 | $ | 7.89 | 73,998 | $ | 6.98 | 66,208 | $ | 6.79 |
(13)
|
Regulatory Matters
|
Actual
|
For
Capital
Adequacy
Purposes
|
To
Be Well
Capitalized
Under
Prompt
Corrective
Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
As
of December 31, 2007:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 97,410 | 12.16 | % | 64,071 | 8.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 87,393 | 10.93 | % | 63,940 | 8.00 | % | 79,926 | 10.00 | % | ||||||||||||||
Tier
1 Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 88,307 | 11.03 | % | 32,035 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 78,290 | 9.80 | % | 31,970 | 4.00 | % | 47,955 | 6.00 | % | ||||||||||||||
Tier
1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 88,307 | 10.43 | % | 33,873 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 78,290 | 9.26 | % | 33,827 | 4.00 | % | 42,284 | 5.00 | % | ||||||||||||||
As
of December 31, 2006:
|
||||||||||||||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 91,718 | 12.86 | % | 57,056 | 8.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 80,857 | 11.37 | % | 56,875 | 8.00 | % | 71,094 | 10.00 | % | ||||||||||||||
Tier
1 Capital (to Risk-Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 83,415 | 11.70 | % | 28,528 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 72,554 | 10.21 | % | 28,438 | 4.00 | % | 42,656 | 6.00 | % | ||||||||||||||
Tier
1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 83,415 | 10.80 | % | 30,903 | 4.00 | % | N/A | N/A | |||||||||||||||
Bank
|
$ | 72,554 | 9.41 | % | 30,857 | 4.00 | % | 38,571 | 5.00 | % |
(14)
|
Shareholders’ Equity
|
(15)
|
Other Operating Expense
|
2007 | 2006 | 2005 | |||||||||
Advertising
|
$ | 988,116 | 772,917 | 656,184 |
(16)
|
Fair Value of Financial Instruments
|
2007 | 2006 | ||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||
(dollars in thousands) | |||||||||||||||
Assets:
|
|||||||||||||||
Cash
and cash equivalents
|
$ | 29,800 | 29,800 | 21,500 | 21,500 | ||||||||||
Investment
securities available for sale
|
$ | 120,968 | 120,968 | 117,581 | 117,581 | ||||||||||
Other
investments
|
$ | 6,434 | 6,434 | 7,295 | 7,295 | ||||||||||
Loans,
net
|
$ | 713,174 | 713,689 | 643,078 | 641,414 | ||||||||||
Cash
surrender value of life insurance
|
$ | 6,776 | 6,776 | 6,532 | 6,532 | ||||||||||
Derivative
instruments
|
$ | 1,907 | 1,907 | 481 | 481 | ||||||||||
Liabilities:
|
|||||||||||||||
Deposits
and demand notes payable
|
$ | 695,239 | 695,659 | 635,420 | 635,371 | ||||||||||
FHLB
advances
|
$ | 87,500 | 90,223 | 89,300 | 88,819 | ||||||||||
Junior
subordinated debentures
|
$ | 20,619 | 20,619 | 20,619 | 20,619 |
Balance
Sheets
|
|||||||
December
31, 2007 and 2006
|
|||||||
Assets
|
2007
|
2006
|
|||||
Cash
|
$ | 725,416 | 1,646,880 | ||||
Interest-bearing
time deposit
|
8,000,000 | 8,000,000 | |||||
Investment
in subsidiaries
|
80,703,540 | 72,593,671 | |||||
Investment
securities available for sale
|
1,374,581 | 750,521 | |||||
Other
investments
|
- | 600,000 | |||||
Other
assets
|
251,724 | 293,049 | |||||
Total
assets
|
$ | 91,055,261 | 83,884,121 | ||||
|
|||||||
Liabilities
and Shareholders' Equity
|
|||||||
Accrued
expenses
|
$ | 334,679 | 429,748 | ||||
Junior
subordinated debentures
|
20,619,000 | 20,619,000 | |||||
Shareholders'
equity
|
70,101,582 | 62,835,373 | |||||
Total
liabilities and shareholders' equity
|
$ | 91,055,261 | 83,884,121 |
Statements
of Earnings
|
|||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
|||||||||||
Revenues:
|
2007
|
2006
|
2005
|
||||||||
Dividends
from subsidiaries
|
$ | 4,811,203 | 3,855,556 | 2,346,897 | |||||||
Interest
and dividend income
|
463,866 | 672,922 | 111,777 | ||||||||
Loss
on sale of securities
|
(235,950 | ) | - | - | |||||||
Total
revenues
|
5,039,119 | 4,528,478 | 2,458,674 | ||||||||
Expenses:
|
|||||||||||
Interest
|
1,475,701 | 1,962,692 | 938,145 | ||||||||
Other
operating expenses
|
266,146 | 786,014 | 289,691 | ||||||||
Total
expenses
|
1,741,847 | 2,748,706 | 1,227,836 | ||||||||
Earnings
before income tax benefit and equity in
|
|||||||||||
undistributed
earnings of subsidiaries
|
3,297,272 | 1,779,772 | 1,230,838 | ||||||||
Income
tax benefit
|
514,800 | 705,800 | 379,500 | ||||||||
Earnings
before undistributed earnings in subsidiaries
|
3,812,072 | 2,485,572 | 1,610,338 | ||||||||
Equity
in undistributed earnings in subsidiaries
|
5,779,899 | 6,685,245 | 4,720,642 | ||||||||
Net
earnings
|
$ | 9,591,971 | 9,170,817 | 6,330,980 |
Statements
of Cash Flows
|
||||||||||||
For
the Years Ended December 31, 2007, 2006 and 2005
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
earnings
|
$ | 9,591,971 | 9,170,817 | 6,330,980 | ||||||||
Adjustments
to reconcile net earnings to net
|
||||||||||||
cash
provided by operating activities:
|
||||||||||||
Amortization
|
- | 461,298 | 17,742 | |||||||||
Book
value shares accrual
|
158,678 | 128,444 | 21,818 | |||||||||
Equity
in undistributed earnings of subsidiaries
|
(5,779,899 | ) | (6,685,245 | ) | (4,720,642 | ) | ||||||
Deferred
income tax benefit
|
(61,551 | ) | (49,520 | ) | (8,412 | ) | ||||||
Loss
on sale of investment securities
|
235,950 | - | - | |||||||||
Change
in:
|
||||||||||||
Accrued
income
|
1,603 | (1,421 | ) | 17,930 | ||||||||
Accrued
expense
|
(253,748 | ) | 25,975 | (21,063 | ) | |||||||
Net
cash provided by operating activities
|
3,893,004 | 3,050,348 | 1,638,353 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Net
change in interest-bearing time deposit
|
- | (6,000,000 | ) | - | ||||||||
Purchases
of other investments
|
- | (600,000 | ) | - | ||||||||
Purchase
of equity in PEBK Capital Trust II
|
- | (619,000 | ) | - | ||||||||
Proceeds
from liquidation of PEBK Capital Trust I
|
- | 433,000 | - | |||||||||
Net
cash used by investing activities
|
- | (6,786,000 | ) | - | ||||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from issuance of trust preferred securities
|
- | 20,619,000 | - | |||||||||
Repayments
of trust preferred securities
|
- | (14,433,000 | ) | - | ||||||||
Cash
dividends paid
|
(2,331,203 | ) | (1,905,556 | ) | (1,414,239 | ) | ||||||
Cash
paid in lieu of fractional shares
|
(3,355 | ) | (6,426 | ) | (4,700 | ) | ||||||
Common
stock repurchased
|
(2,810,907 | ) | (425,000 | ) | (314,750 | ) | ||||||
Proceeds
from exercise of stock options
|
330,997 | 1,014,425 | 96,773 | |||||||||
Net
cash provided (used) by financing activities
|
(4,814,468 | ) | 4,863,443 | (1,636,916 | ) | |||||||
Net
change in cash
|
(921,464 | ) | 1,127,791 | 1,437 | ||||||||
Cash
at beginning of year
|
1,646,880 | 519,089 | 517,652 | |||||||||
Cash
at end of year
|
$ | 725,416 | 1,646,880 | 519,089 |
x | PLEASE MARK VOTES | REVOCABLE PROXY | ||
AS IN THIS EXAMPLE |
PEOPLES
BANCORP OF NORTH CAROLINA, INC.
|
For | With- | For All | |||||
hold | Except | ||||||
o | o | o | |||||
1.
|
The approval of the
election of the following named directors:
|
For | Against | Abstain | |||||
2. | To approve the amendment to the Company's Articles of Incorporation. | o | o | o | |||
3. | The ratification and approval of the appointment of Porter Keadle Moore, LLP as | o | o | o | |||
the Company's independent registered public accounting firm for the fiscal year ending December 31, 2008. |
|
Please
be sure to sign and date this Proxy in the box below.
|
Date
|
|
...................................................................................................................................................................................................................................................................................................................................... |
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS |
The above signed hereby acknowledges receipt of the Notice of Meeting and Proxy Statement each dated March 31, 2008, relating to the Meeting and hereby revokes any proxy |
or proxies heretofore given. |
Each properly executed proxy will be voted in accordance with the specifications made above and in the discretion of the proxy committee of the Company on any other matter |
that may come before the Meeting. Where no choice is specified, this proxy will be voted (i) FOR all listed nominees to serve as directors, (ii) FOR the approval of the amendment |
to the Company's Articles of Incorporation, (iii) FOR the ratification and approval of the appointment of Porter Keadle Moore, LLP as the Company's independent registered public |
accounting firm for the fiscal year ending December 31, 2008. |
PLEASE ACT PROMPTLY |
SIGN, DATE & MAIL YOUR PROXY CARD TODAY |