x |
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o |
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE TRANSITION PERIOD FROM _________ TO
___________
|
NORTH
CAROLINA
|
56-2259050
|
|
(IRS
Employer Identification Number)
|
||
or
organization)
|
Item
1 -
|
Financial
Statements (Unaudited)
|
Page
No.
|
|
Consolidated
Balance Sheets June 30, 2007 (unaudited) and December 31,
2006
|
3
|
||
|
|||
Consolidated
Statements of Operations Three and Six Month Periods Ended June
30, 2007
and 2006 (unaudited)
|
4
|
||
Consolidated
Statements of Cash Flows Six Months Ended June 30, 2007 and 2006
(unaudited)
|
5
|
||
Notes
to Consolidated Financial Statements
|
6
-
8
|
||
Item
2-
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
9
-
24
|
|
Item
3 -
|
Quantitative
and Qualitative Disclosures about Market Risk
|
25
|
|
Item
4T
|
-
Controls and Procedures
|
25
|
|
Part
II.
|
Other
Information
|
||
Item
1 -
|
Legal
Proceedings
|
26
|
|
Item
1a
|
-
Risk Factors
|
26
|
|
Item
2 -
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
26
|
|
Item
3 -
|
Defaults
Upon Senior Debt
|
26
|
|
Item
4 -
|
Submission
of Matters to a Vote of Security Holders
|
26
|
|
Item
5 -
|
Other
Information
|
26
|
|
Item
6 -
|
Exhibits
|
26
|
June
30, 2007
|
|
December
31,
|
|||||
(Unaudited)
|
|
2006*
|
|||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
14,349,753
|
$
|
14,295,053
|
|||
Interest-earning
deposits with banks
|
1,021,369
|
763,057
|
|||||
Federal
funds sold
|
16,664,000
|
92,000
|
|||||
Investment
securities available for sale at fair value
|
88,240,014
|
84,722,892
|
|||||
Loans
|
608,318,522
|
549,818,548
|
|||||
Allowance
for loan losses
|
(7,536,000
|
)
|
(6,945,000
|
)
|
|||
NET
LOANS
|
600,782,522
|
542,873,548
|
|||||
Accrued
interest receivable
|
3,421,909
|
3,045,840
|
|||||
Federal
Home Loan Bank stock
|
4,270,700
|
3,582,800
|
|||||
Bank
premises and equipment
|
6,922,720
|
5,907,664
|
|||||
Investment
in life insurance
|
8,947,179
|
5,683,493
|
|||||
Goodwill
|
30,233,049
|
30,225,549
|
|||||
Other
assets
|
7,368,741
|
6,717,324
|
|||||
TOTAL
ASSETS
|
$
|
782,221,956
|
$
|
697,909,220
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
LIABILITIES
|
|||||||
Deposits
|
|||||||
Demand
|
$
|
81,180,972
|
$
|
70,420,392
|
|||
Savings
|
101,429,072
|
78,379,431
|
|||||
Money
market and NOW
|
97,146,661
|
97,343,128
|
|||||
Time
|
338,056,699
|
295,738,729
|
|||||
TOTAL
DEPOSITS
|
617,813,404
|
541,881,680
|
|||||
Short-term
borrowings
|
-
|
24,451,000
|
|||||
Long-term
borrowings
|
75,248,000
|
45,248,000
|
|||||
Accrued
expenses and other liabilities
|
3,117,771
|
3,294,562
|
|||||
TOTAL
LIABILITIES
|
696,179,175
|
614,875,242
|
|||||
STOCKHOLDERS’
EQUITY
|
|||||||
Preferred
stock, no par value, 5,000,000 shares authorized, none
outstanding;
|
-
|
-
|
|||||
Common
stock, $1 par value, 20,000,000 shares authorized; 9,187,468 shares
outstanding June 30, 2007; 8,265,136 shares outstanding December
31,
2006
|
9,187,468
|
8,265,136
|
|||||
Additional
paid-in capital
|
72,553,975
|
62,659,201
|
|||||
Retained
earnings
|
5,284,737
|
12,610,588
|
|||||
Accumulated
other comprehensive loss (Note D)
|
(983,399
|
)
|
(500,947
|
)
|
|||
TOTAL
STOCKHOLDERS’ EQUITY
|
86,042,781
|
83,033,978
|
|||||
COMMITMENTS
(Note B)
|
|||||||
STOCKHOLDERS’
EQUITY
|
$
|
782,221,956
|
$
|
697,909,220
|
Three-month
Periods
|
|
Six-month
Periods
|
|
||||||||||
|
|
Ended
June 30,
|
|
Ended
June 30,
|
|
||||||||
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||
INTEREST
INCOME
|
|||||||||||||
Loans
|
$
|
12,330,915
|
$
|
7,018,938
|
$
|
23,906,309
|
$
|
13,452,263
|
|||||
Investment
securities available for sale
|
1,095,955
|
724,415
|
2,156,411
|
1,387,627
|
|||||||||
Federal
funds sold and interest-bearing deposits
|
175,058
|
51,218
|
296,453
|
55,846
|
|||||||||
TOTAL
INTEREST INCOME
|
13,601,928
|
7,794,571
|
26,359,173
|
14,895,736
|
|||||||||
INTEREST
EXPENSE
|
|||||||||||||
Deposits
|
5,964,960
|
2,830,884
|
11,525,960
|
5,222,138
|
|||||||||
Short-term
borrowings
|
208,871
|
212,964
|
499,006
|
445,444
|
|||||||||
Long-term
borrowings
|
858,664
|
534,236
|
1,520,599
|
937,268
|
|||||||||
TOTAL
INTEREST EXPENSE
|
7,032,495
|
3,578,084
|
13,545,565
|
6,604,850
|
|||||||||
NET
INTEREST INCOME
|
6,569,433
|
4,216,487
|
12,813,608
|
8,290,886
|
|||||||||
PROVISION
FOR LOAN LOSSES
|
322,449
|
164,341
|
681,596
|
434,641
|
|||||||||
NET
INTEREST INCOME AFTER
|
|||||||||||||
PROVISION
FOR LOAN LOSSES
|
6,246,984
|
4,052,146
|
12,132,012
|
7,856,245
|
|||||||||
NON-INTEREST
INCOME
|
|||||||||||||
Mortgage
loan origination revenue
|
135,494
|
165,047
|
250,501
|
310,467
|
|||||||||
Fees
on deposit accounts
|
321,990
|
307,876
|
669,644
|
625,543
|
|||||||||
Earnings
on life insurance
|
99,910
|
56,916
|
183,379
|
113,261
|
|||||||||
Gain
(loss) on sale or disposal of assets
|
-
|
-
|
(941
|
)
|
(127
|
)
|
|||||||
Other
|
89,919
|
89,626
|
173,610
|
165,998
|
|||||||||
TOTAL
NON-INTEREST INCOME
|
647,313
|
619,466
|
1,276,193
|
1,215,142
|
|||||||||
NON-INTEREST
EXPENSE
|
|||||||||||||
Salaries
and employee benefits
|
2,535,287
|
1,669,940
|
4,939,586
|
3,239,049
|
|||||||||
Occupancy
and equipment
|
563,949
|
489,213
|
1,111,886
|
958,531
|
|||||||||
Data
processing
|
256,530
|
185,653
|
517,255
|
368,445
|
|||||||||
Other
|
1,267,364
|
759,239
|
2,274,801
|
1,408,847
|
|||||||||
TOTAL
NON-INTEREST EXPENSE
|
4,623,130
|
3,104,045
|
8,843,528
|
5,974,872
|
|||||||||
INCOME
BEFORE INCOME TAXES
|
2,271,167
|
1,567,567
|
4,564,677
|
3,096,515
|
|||||||||
INCOME
TAXES
|
822,900
|
564,100
|
1,650,800
|
1,110,600
|
|||||||||
NET
INCOME
|
$
|
1,448,267
|
$
|
1,003,467
|
$
|
2,913,877
|
$
|
1,985,915
|
|||||
NET
INCOME PER COMMON SHARE
|
|||||||||||||
Basic
|
$
|
.16
|
$
|
.16
|
$
|
.32
|
$
|
.31
|
|||||
Diluted
|
$
|
.15
|
$
|
.15
|
$
|
.30
|
$
|
.30
|
|||||
WEIGHTED
AVERAGE COMMON
|
|||||||||||||
SHARES
OUTSTANDING (Note C)
|
|||||||||||||
Basic
|
9,140,356
|
6,372,323
|
9,117,004
|
6,368,607
|
|||||||||
Diluted
|
9,626,134
|
6,628,300
|
9,620,185
|
6,620,671
|
2007
|
|
2006
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
income
|
$
|
2,913,877
|
$
|
1,985,915
|
|||
Adjustments
to reconcile net income to net cash used by operating
activities
|
|||||||
Depreciation
|
352,486
|
343,277
|
|||||
Provision
for loan losses
|
681,596
|
434,641
|
|||||
Deferred
income taxes
|
(308,000
|
)
|
(114,150
|
)
|
|||
Loss
on sale or disposal of assets
|
941
|
127
|
|||||
Net
amortization (accretion) on securities
|
(46,262
|
)
|
17,321
|
||||
Increase
in cash value of life insurance
|
(163,686
|
)
|
(99,516
|
)
|
|||
Stock
based compensation
|
84,988
|
71,536
|
|||||
Change
in assets and liabilities
|
|||||||
(Increase)
in accrued interest receivable
|
(376,069
|
)
|
(378,073
|
)
|
|||
(Increase)
in other assets
|
(45,162
|
)
|
(784,041
|
)
|
|||
Increase
in accrued interest payable
|
301,737
|
253,111
|
|||||
(Decrease)
in other liabilities
|
(478,528
|
)
|
(389,294
|
)
|
|||
TOTAL
ADJUSTMENTS
|
4,041
|
|
(645,061
|
)
|
|||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
2,917,918
|
1,340,854
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Purchases
of securities available for sale
|
(9,456,156
|
)
|
(12,820,461
|
)
|
|||
Principal
repayments of securities available for sale
|
5,204,588
|
2,858,032
|
|||||
Purchase
of Federal Home Loan Bank stock
|
(687,900
|
)
|
(938,300
|
)
|
|||
Net
increase in loans
|
(58,590,570
|
)
|
(36,865,677
|
)
|
|||
Investment
in life insurance
|
(3,100,000
|
)
|
-
|
||||
Net
cash provided in business combination
|
(7,500
|
)
|
-
|
||||
Purchases
of bank premises and equipment
|
(1,368,482
|
)
|
(566,344
|
)
|
|||
NET
CASH USED BY INVESTING ACTIVITIES
|
(68,006,020
|
)
|
(48,332,750
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Net
increase in deposits:
|
|||||||
Non-interest
bearing demand
|
10,760,580
|
5,349,153
|
|||||
Savings
|
23,049,641
|
24,299,432
|
|||||
Money
market and NOW
|
(196,467
|
)
|
(2,352,784
|
)
|
|||
Time
deposits
|
42,317,970
|
20,252,768
|
|||||
Net
increase (decrease) in short-term borrowings
|
(24,451,000
|
)
|
1,035,847
|
||||
Net
increase in long-term borrowings
|
30,000,000
|
10,000,000
|
|||||
Proceeds
from the issuance of stock
|
364,677
|
133,372
|
|||||
Cash
paid in lieu of fractional shares
|
(7,687
|
)
|
(9,477
|
)
|
|||
Excess
tax benefits from stock options exercised
|
135,400
|
20,100
|
|||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
81,973,114
|
58,728,411
|
|||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
16,885,012
|
11,736,515
|
|||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
15,150,110
|
9,471,507
|
|||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
32,035,122
|
$
|
21,208,022
|
Undisbursed
lines of credit
|
$
|
180,517,000
|
||
Stand-by
letters of credit
|
5,572,000
|
|||
investment
in Small Business Investment Corporation
|
413,000
|
Three
months ended
|
Six
months ended
|
||||||||||||
|
June
30,
|
June
30,
|
|||||||||||
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Weighted
average number of shares
|
|||||||||||||
used
in computing basic net income
|
|||||||||||||
per
share
|
9,140,356
|
6,372,323
|
9,117,004
|
6,368,607
|
|||||||||
Effect
of dilutive stock options
|
485,778
|
255,977
|
503,181
|
252,064
|
|||||||||
Weighted
average number of shares
|
|||||||||||||
per
share
|
9,626,134
|
6,628,300
|
9,620,185
|
6,620,671
|
For
the Three Months Ended June 30,
|
|
||||||||||||||||||
2007
|
2006
|
||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
||||||||||||||||
Balance
|
Interest
|
Yield/Cost
|
Balance
|
Interest
|
Yield/Cost
|
||||||||||||||
Interest-earnings
assets
|
|||||||||||||||||||
Loan
portfolio
|
$
|
599,535
|
$
|
12,331
|
8.25
|
%
|
$
|
360,136
|
$
|
7,019
|
7.82
|
%
|
|||||||
Investment
securities
|
91,207
|
1,096
|
4.81
|
%
|
63,466
|
724
|
4.56
|
%
|
|||||||||||
Fed
funds and other interest-earning assets
|
14,913
|
175
|
4.71
|
%
|
4,161
|
51
|
4.92
|
%
|
|||||||||||
Total
interest-earning assets
|
705,655
|
13,602
|
7.73
|
%
|
427,763
|
7,794
|
7.31
|
%
|
|||||||||||
Noninterest-bearing
assets
|
61,520
|
27,051
|
|||||||||||||||||
Total
Assets
|
$
|
767,175
|
$
|
454,814
|
|||||||||||||||
Interest-bearing
liabilities
|
|||||||||||||||||||
Interest-bearing
NOW
|
$
|
34,532
|
99
|
1.15
|
%
|
$
|
37,883
|
160
|
1.69
|
%
|
|||||||||
Money
market and savings
|
156,615
|
1,646
|
4.22
|
%
|
64,835
|
574
|
3.55
|
%
|
|||||||||||
Time
deposits
|
332,000
|
4,220
|
5.10
|
%
|
201,944
|
2,097
|
4.17
|
%
|
|||||||||||
Short-term
borrowings
|
17,886
|
209
|
4.69
|
%
|
16,694
|
213
|
5.12
|
%
|
|||||||||||
Long-term
debt
|
64,918
|
859
|
5.23
|
%
|
40,248
|
534
|
5.25
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
605,951
|
7,033
|
4.66
|
%
|
361,604
|
3,578
|
3.97
|
%
|
|||||||||||
Non-interest
bearing deposits
|
71,849
|
48,397
|
|||||||||||||||||
Other
liabilities
|
3,063
|
1,685
|
|||||||||||||||||
Total
Liabilities
|
680,863
|
411,686
|
|||||||||||||||||
Stockholders'
Equity
|
86,312
|
43,128
|
|||||||||||||||||
Total
Liabilities & Stockholders' Equity
|
$
|
767,175
|
$
|
454,814
|
|||||||||||||||
Net
interest income
|
$
|
6,569
|
$
|
4,216
|
|||||||||||||||
Interest
rate spread
|
3.08
|
%
|
3.34
|
%
|
|||||||||||||||
Net
interest-margin
|
3.73
|
%
|
3.95
|
%
|
|||||||||||||||
Percentage
of average interest-earning assets
|
|||||||||||||||||||
to
average interest-bearing liabilities
|
116.45
|
%
|
118.30
|
%
|
For
the Six Months Ended June 30,
|
|
||||||||||||||||||
|
|
2007
|
|
2006
|
|
||||||||||||||
|
|
Average
|
|
|
|
Average
|
|
Average
|
|
|
|
Average
|
|
||||||
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|
Balance
|
|
Interest
|
|
Yield/Cost
|
|||||||
Interest-earnings
assets
|
|||||||||||||||||||
Loan
portfolio
|
$
|
582,774
|
$
|
23,906
|
8.27
|
%
|
$
|
352,022
|
$
|
13,452
|
7.71
|
%
|
|||||||
Investment
securities
|
90,060
|
2,156
|
4.79
|
%
|
61,603
|
1,388
|
4.51
|
%
|
|||||||||||
Fed
funds and other interest-earning assets
|
12,196
|
297
|
4.91
|
%
|
2,297
|
56
|
4.92
|
%
|
|||||||||||
Total
earning assets
|
685,030
|
26,359
|
7.76
|
%
|
415,922
|
14,896
|
7.22
|
%
|
|||||||||||
Noninterest-bearing
assets
|
60,993
|
25,815
|
|||||||||||||||||
Total
Assets
|
$
|
746,023
|
$
|
441,737
|
|||||||||||||||
Interest-bearing
liabilities
|
|||||||||||||||||||
Interest-bearing
NOW
|
$
|
34,608
|
197
|
1.15
|
%
|
$
|
38,318
|
307
|
1.62
|
%
|
|||||||||
Money
market and savings
|
153,730
|
3,223
|
4.23
|
%
|
60,730
|
1,000
|
3.32
|
%
|
|||||||||||
Time
deposits
|
322,801
|
8,106
|
5.06
|
%
|
197,142
|
3,915
|
4.00
|
%
|
|||||||||||
Short-term
borrowings
|
19,841
|
499
|
5.07
|
%
|
18,411
|
445
|
4.87
|
%
|
|||||||||||
Long-term
debt
|
56,408
|
1,520
|
5.36
|
%
|
35,718
|
938
|
5.22
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
587,388
|
13,545
|
4.65
|
%
|
350,319
|
6,605
|
3.80
|
%
|
|||||||||||
Non
interest-bearing deposits
|
70,258
|
46,964
|
|||||||||||||||||
Other
liabilities
|
3,093
|
1,653
|
|||||||||||||||||
Total
Liabilities
|
660,739
|
398,936
|
|||||||||||||||||
Stockholders'
Equity
|
85,284
|
42,801
|
|||||||||||||||||
Total
Liabilities & Stockholders' Equity
|
$
|
746,023
|
$
|
441,737
|
|||||||||||||||
Net
interest income
|
$
|
12,814
|
$
|
8,291
|
|||||||||||||||
Interest
rate spread
|
3.11
|
%
|
3.42
|
%
|
|||||||||||||||
Net
margin
|
3.77
|
%
|
4.02
|
%
|
|||||||||||||||
Percentage
of average interest-earning
|
|||||||||||||||||||
assets
to average interest bearing
|
|||||||||||||||||||
liabilities
|
116.62
|
%
|
118.73
|
%
|
Three
Months Ended June 30,
|
|
|||||||||
|
|
2007
vs. 2006
|
|
|||||||
|
|
(in
Thousands)
|
|
|||||||
|
|
Increase
(Decrease) Due to
|
|
|||||||
|
|
Volume
|
|
Rate
|
|
Total
|
||||
Interest
Income
|
||||||||||
Loan
portfolio
|
4,795
|
517
|
5,312
|
|||||||
Investment
Securities
|
324
|
48
|
372
|
|||||||
Fed
funds and other interest-earning assets
|
129
|
(5
|
)
|
124
|
||||||
Total
interest-earning assets
|
5,248
|
560
|
5,808
|
|||||||
Interest
Expense
|
||||||||||
Interest-bearing
NOW
|
(12
|
)
|
(49
|
)
|
(61
|
)
|
||||
Money
market and savings
|
889
|
183
|
1,072
|
|||||||
Time
deposits
|
1,502
|
622
|
2,124
|
|||||||
Short-term
borrowings
|
15
|
(19
|
)
|
(4
|
)
|
|||||
Long-term
debt
|
324
|
0
|
324
|
|||||||
Total
interest-bearing liabilities
|
2,718
|
737
|
3,455
|
|||||||
Net
interest income
|
2,530
|
(177
|
)
|
2,353
|
Six
Months Ended June 30,
|
||||||||||
2007
vs. 2006
|
||||||||||
(in
Thousands)
|
||||||||||
Increase
(Decrease) Due to
|
||||||||||
Volume
|
Rate
|
Total
|
||||||||
Interest
Income
|
||||||||||
Loan
portfolio
|
9,142
|
1,312
|
10,454
|
|||||||
Investment
Securities
|
658
|
110
|
768
|
|||||||
Fed
funds and other interest-earning assets
|
241
|
0
|
241
|
|||||||
Total
interest-earning assets
|
10,041
|
1,422
|
11,463
|
|||||||
Interest
Expense
|
||||||||||
Interest-bearing
NOW
|
(26
|
)
|
(85
|
)
|
(111
|
)
|
||||
Money
market and savings
|
1,741
|
482
|
2,223
|
|||||||
Time
deposits
|
2,825
|
1,366
|
4,191
|
|||||||
Short-term
borrowings
|
36
|
19
|
55
|
|||||||
Long-term
debt
|
547
|
35
|
582
|
|||||||
Total
interest-bearing liabilities
|
5,123
|
1,817
|
6,940
|
|||||||
Net
interest income
|
4,918
|
(395
|
)
|
4,523
|
At
June 30,
|
At
December 31,
|
||||||||||||
2007
|
2006
|
2006
|
2005
|
||||||||||
(Dollars
in thousands)
|
|||||||||||||
Nonaccrual
loans
|
$
|
599
|
$
|
263
|
$
|
135
|
$
|
26
|
|||||
Restructured
loans
|
-
|
-
|
-
|
-
|
|||||||||
Total
nonperforming loans
|
599
|
263
|
135
|
26
|
|||||||||
Real
estate owned
|
98
|
22
|
98
|
22
|
|||||||||
Repossessed
assets
|
14
|
-
|
-
|
-
|
|||||||||
Total
nonperforming assets
|
$
|
711
|
$
|
285
|
$
|
233
|
$
|
48
|
|||||
Accruing
loans past due
|
|||||||||||||
90
days or more
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
Allowance
for loan losses
|
7,536
|
4,772
|
6,945
|
4,351
|
|||||||||
Nonperforming
loans to
|
|||||||||||||
period
end loans
|
0.10
|
%
|
0.07
|
%
|
0.02
|
%
|
0.01
|
%
|
|||||
Allowance
for loan losses
|
|||||||||||||
to
period end loans
|
1.24
|
%
|
1.31
|
%
|
1.26
|
%
|
1.33
|
%
|
|||||
Allowance
for loan losses
|
|||||||||||||
to
nonperforming loans
|
1,059
|
%
|
1,818
|
%
|
5,145
|
%
|
16,961
|
%
|
|||||
Nonperforming
assets
|
|||||||||||||
to
total assets
|
0.09
|
%
|
0.06
|
%
|
0.03
|
%
|
0.01
|
%
|
|||||
Nonperforming
assets and loans
|
|||||||||||||
past
due 90 days or more to
|
|||||||||||||
total
assets
|
0.09
|
%
|
0.06
|
%
|
0.03
|
%
|
0.01
|
%
|
Allocation
of Allowance for Loan Losses
|
||||||||||||||
At
June 30,
|
At
December 31,
|
|||||||||||||
2007
|
2006
|
|||||||||||||
|
Amount
|
%
of Total
Loans
(1)
|
|
Amount
|
%
of Total
Loans
(1)
|
|
||||||||
(Dollars
in thousands)
|
||||||||||||||
Residential
real estate loans
|
$
|
122
|
2.87
|
%
|
$
|
121
|
3.67
|
%
|
||||||
Home
equity loans and lines
|
319
|
7.29
|
%
|
269
|
7.76
|
%
|
||||||||
Commercial
mortgage loans
|
3,534
|
53.76
|
%
|
3,920
|
55.36
|
%
|
||||||||
Construction
loans
|
1,750
|
23.73
|
%
|
1,379
|
19.99
|
%
|
||||||||
Commercial
and industrial loans
|
1,653
|
11.33
|
%
|
1,161
|
12.32
|
%
|
||||||||
Loans
to individuals
|
158
|
1.02
|
%
|
95
|
0.90
|
%
|
||||||||
Total
allowance
|
$
|
7,536
|
100.00
|
%
|
$
|
6,945
|
100.00
|
%
|
||||||
(1)
Represents total of all outstanding loans in each category as a percent
of
total loans outstanding
|
Changes
in Allowance for Loan Losses
|
|||||||
For
the Six-Month Periods Ended June 30,
|
|||||||
2007
|
2006
|
||||||
(Dollars
in thousands)
|
|||||||
Balance
at the beginning of the year
|
$
|
6,945
|
$
|
4,351
|
|||
Charge-offs:
|
|||||||
Commercial
and industrial loans
|
88
|
14
|
|||||
Loans
to individuals
|
4
|
-
|
|||||
Total
charge-offs
|
92
|
14
|
|||||
Recoveries
|
1
|
-
|
|||||
Net
charge-offs (recoveries)
|
91
|
14
|
|||||
Provision
for loan losses
|
682
|
435
|
|||||
Balance
at the end of the year
|
$
|
7,536
|
$
|
4,772
|
|||
Total
loans outstanding at period-end
|
$
|
608,319
|
$
|
365,174
|
|||
Average
loans outstanding for the period
|
$
|
582,774
|
$
|
352,022
|
|||
Allowance
for loan losses to total loans outstanding
|
1.24
|
% |
1.31
|
%
|
|||
Ratio
of net charge-offs to average loans outstanding
|
0.02
|
%
|
0.00
|
%
|
Part II. |
OTHER
INFORMATION
|
Item 1. |
Legal
Proceedings.
|
None.
|
Item 1a. | Risk Factors. |
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
None. |
Item 3. |
Defaults
Upon Senior Debt.
|
None. |
Item 4. |
Submission
of Matters to a Vote of Security
Holders
|
1. |
Election
of Directors
|
Nominee
|
Term
|
For
|
Against
|
Withheld
|
|||||||||
Sheila
Hale Ogle
|
Three
Years
|
6,448,548
|
-
|
116,453
|
|||||||||
Jon
S. Rufty
|
Three
Years
|
6,429,258
|
-
|
135,743
|
|||||||||
Jon
T. Vincent
|
Three
Years
|
6,449,789
|
-
|
115,212
|
|||||||||
Stephen
K. Zaytoun
|
Three
Years
|
6,430,551
|
-
|
134,450
|
|||||||||
Brent
D. Barringer
|
Two
Years
|
6,448,294
|
-
|
116,707
|
|||||||||
Charles
A. Paul, III
|
Two
Years
|
6,449,789
|
-
|
115,212
|
|||||||||
William
H. Cameron
|
One
Year
|
6,449,789
|
-
|
115,212
|
2. |
Ratification
of Appointment of Independent Public
Accountants
|
Item 5. | Other Information. |
None. |
Item 6. | Exhibits |
(a) Exhibits. |
31.1 Certification of Principal Executive Officer pursuant to Rule 13a - 14(a) |
31.2 Certification of Principal Financial Officer pursuant to Rule 13a - 14(a) |
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
CRESCENT
FINANCIAL CORPORATION
|
||
|
|
|
Date: August 8, 2007 | By: | /s/ Michael G. Carlton |
Michael G. Carlton |
||
President and Chief Executive Officer |
Date: August 8, 2007 | By: | /s/ Bruce W. Elder |
Bruce W. Elder |
||
Principal Financial Officer |