NORTH
CAROLINA
|
|
56-2259050
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
|
(I.R.S.
Employer
Identification
No.)
|
Large
accelerated filer
|
o
|
Accelerated
filer
|
x
|
Non-accelerated
filer
|
o
(Do not check if a smaller reporting company)
|
Smaller
reporting company
|
o
|
PART
I
|
FORM
10-K
|
PROXY
STATEMENT
|
ANNUAL
REPORT
|
Item
1 –
Business
|
3
|
||
Item
1A – Risk Factors
|
17
|
||
Item
1B – Unresolved Staff Comments
|
22
|
||
Item
2 – Properties
|
22
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||
Item
3 – Legal Proceedings
|
24
|
||
Item
4 – Submission of Matters to a Vote of
Security Holders
|
24
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||
PART
II
|
|||
Item
5 – Market for Registrant’s Common
Equity, Related Stockholder
Matters and Issuer Purchases
of Equity Securities
|
24
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||
Item
6 – Selected Financial Data
|
25
|
||
Item
7 – Management’s Discussion and Analysis
of Financial Condition and
Results of Operation
|
27
|
||
Item
7A – Quantitative and Qualitative Disclosures
About Market Risk
|
45
|
||
Item
8 – Financial Statements and Supplementary
Data
|
46
|
||
Item
9 – Changes in and Disagreements with
Accountants on Accounting
and Financial Disclosure
|
82
|
||
Item
9A – Controls and Procedures
|
82
|
||
Item
9B – Other Information
|
83
|
||
PART
III
|
|||
Item
10 – Directors and Executive Officers
and Corporate Governance
|
83
|
X
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|
Item
11 – Executive Compensation
|
83
|
X
|
|
Item
12 – Security Ownership of Certain Beneficial
Owners and Management
and Related Stockholder
Matters
|
83
|
X
|
|
Item
13 – Certain Relationships and Related
Transactions, and Director Independence
|
84
|
X
|
|
Item
14 – Principal Accounting Fees and Services
|
84
|
X
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|
PART
IV
|
|||
Item
15 – Exhibits, Financial Statement Schedules
|
84
|
At
December 31,
|
|||||||||||||||||||
|
2007
|
2006
|
2005
|
||||||||||||||||
|
Amount
|
%
of Total
Loans
|
Amount
|
%
of Total
Loans
|
Amount
|
%
of Total
Loans
|
|||||||||||||
|
(Dollars
in thousands)
|
||||||||||||||||||
Real
estate - commercial
|
$
|
350,961
|
51.85
|
%
|
$
|
304,823
|
55.36
|
%
|
$
|
174,039
|
52.92
|
%
|
|||||||
Real
estate - residential
|
18,257
|
2.70
|
%
|
20,224
|
3.67
|
%
|
14,914
|
4.54
|
%
|
||||||||||
Construction
loans
|
184,019
|
27.18
|
%
|
110,033
|
19.99
|
%
|
46,607
|
14.17
|
%
|
||||||||||
Commercial
and industrial loans
|
72,930
|
10.77
|
%
|
67,822
|
12.32
|
%
|
52,708
|
16.03
|
%
|
||||||||||
Home
equity loans and lines of credit
|
45,258
|
6.69
|
%
|
42,704
|
7.76
|
%
|
34,921
|
10.62
|
%
|
||||||||||
Loans
to individuals
|
5,489
|
0.81
|
%
|
4,977
|
0.90
|
%
|
5,670
|
1.72
|
%
|
||||||||||
Total
loans
|
676,914
|
100.00
|
%
|
550,583
|
100.00
|
%
|
328,859
|
100.00
|
%
|
||||||||||
Less:
Net deferred loan fees
|
(998
|
)
|
(764
|
)
|
(537
|
)
|
|||||||||||||
Total
loans, net
|
$
|
675,916
|
$
|
549,819
|
$
|
328,322
|
At
December 31,
|
|||||||||||||
|
2004
|
2003
|
|||||||||||
|
Amount
|
%
of Total
Loans
|
Amount
|
%
of Total
Loans
|
|||||||||
|
(Dollars
in thousands)
|
||||||||||||
Real
estate - commercial
|
$
|
121,825
|
47.24
|
%
|
$
|
101,316
|
46.66
|
%
|
|||||
Real
estate - residential
|
11,604
|
4.50
|
%
|
14,765
|
6.80
|
%
|
|||||||
Construction
loans
|
38,916
|
15.09
|
%
|
31,612
|
14.56
|
%
|
|||||||
Commercial
and industrial loans
|
48,757
|
18.90
|
%
|
38,237
|
17.61
|
%
|
|||||||
Home
equity loans and lines of credit
|
30,960
|
12.00
|
%
|
22,985
|
10.59
|
%
|
|||||||
Loans
to individuals
|
5,846
|
2.27
|
%
|
8,213
|
3.78
|
%
|
|||||||
Total
loans
|
257,908
|
100.00
|
%
|
217,128
|
100.00
|
%
|
|||||||
Less:
Net deferred loan fees
|
(447
|
)
|
(382
|
)
|
|||||||||
Total
loans, net
|
$
|
257,461
|
$
|
216,746
|
Within
1
Year
|
1-5
Years
|
After
5
Years
|
Total
|
||||||||||
(In
thousands)
|
|||||||||||||
Commercial
mortgage
|
$
|
89,698
|
$
|
240,770
|
$
|
20,493
|
$
|
350,961
|
|||||
Residential
mortgage
|
8,116
|
9,686
|
454
|
18,257
|
|||||||||
Construction
loans
|
131,449
|
40,504
|
12,067
|
184,019
|
|||||||||
Commercial
and industrial
|
52,547
|
19,319
|
1,064
|
72,390
|
|||||||||
Home
equity lines and loans
|
1,410
|
4,967
|
38,881
|
45,258
|
|||||||||
Individuals
|
3,494
|
1,993
|
2
|
5,489
|
|||||||||
Total
|
$
|
286,714
|
$
|
317,239
|
$
|
72,961
|
$
|
676,914
|
|||||
Fixed
rate loans
|
$
|
253,183
|
|||||||||||
Variable
rate loans
|
137,017
|
||||||||||||
$
|
390,200
|
For
the Year Ended December 31,
|
|
||||||||||||||||||
|
|
2007
|
|
2006
|
|
2005
|
|
||||||||||||
|
|
(Dollars
in thousands)
|
|||||||||||||||||
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
||||||||||||||
Non-interest
bearing deposits
|
$
|
70,660
|
-
|
$
|
56,376
|
-
|
$
|
42,641
|
-
|
||||||||||
Interest
bearing demand deposits
|
33,453
|
0.97
|
%
|
37,876
|
1.46
|
%
|
39,609
|
1.05
|
%
|
||||||||||
Money
market deposits
|
58,214
|
3.48
|
%
|
51,926
|
3.52
|
%
|
41,548
|
2.16
|
%
|
||||||||||
Savings
deposits
|
105,107
|
4.29
|
%
|
40,694
|
4.51
|
%
|
4,952
|
1.79
|
%
|
||||||||||
Time
deposits over $100,000
|
254,533
|
5.11
|
%
|
154,538
|
4.82
|
%
|
110,312
|
3.30
|
%
|
||||||||||
Time
deposits under $100,000
|
70,710
|
5.03
|
%
|
72,440
|
3.51
|
%
|
58,787
|
3.13
|
%
|
||||||||||
Total
interest bearing deposits
|
522,017
|
4.49
|
%
|
357,474
|
3.97
|
%
|
255,208
|
2.70
|
%
|
||||||||||
Total
average deposits
|
$
|
592,677
|
3.95
|
%
|
$
|
413,850
|
3.43
|
%
|
$
|
297,849
|
2.31
|
%
|
For the Year Ended December 31,
|
|||||||||||||
|
2004
|
2003
|
|||||||||||
|
(Dollars in thousands)
|
||||||||||||
Average
Balance |
Average
Rate |
Average
Balance |
Average
Rate |
||||||||||
Non-interest
bearing deposits
|
$
|
37,898
|
-
|
$
|
34,977
|
-
|
|||||||
Interest
bearing demand deposits
|
40,931
|
0.79
|
%
|
31,340
|
0.94
|
%
|
|||||||
Money
market deposits
|
31,537
|
1.29
|
%
|
22,589
|
1.37
|
%
|
|||||||
Savings
deposits
|
2,758
|
0.36
|
%
|
1,544
|
0.40
|
%
|
|||||||
Time
deposits over $100,000
|
85,961
|
2.57
|
%
|
41,644
|
3.15
|
%
|
|||||||
Time
deposits under $100,000
|
56,445
|
2.68
|
%
|
41,566
|
2.95
|
%
|
|||||||
Total
interest bearing deposits
|
217,632
|
2.04
|
%
|
138,683
|
2.21
|
%
|
|||||||
Total
average deposits
|
$
|
255,530
|
1.73
|
%
|
$
|
173,660
|
1.77
|
%
|
Remaining
maturity:
|
(in
thousands)
|
|||
Three
months or less
|
$
|
56,529
|
||
Over
three months through one year
|
111,366
|
|||
Over
one year through three years
|
102,274
|
|||
Over
three years through five years
|
6,480
|
|||
Total
|
$
|
276,649
|
-
|
publicly
available annual financial condition and management reports for certain
financial institutions, including audits by independent
accountants,
|
- |
the
establishment of uniform accounting standards by federal banking
agencies,
|
-
|
the
establishment of a “prompt corrective action” system of regulatory
supervision and intervention, based on capitalization levels, with
greater
scrutiny and restrictions placed on depository institutions with
lower
levels of capital,
|
-
|
additional
grounds for the appointment of a conservator or receiver, and
|
-
|
restrictions
or prohibitions on accepting brokered deposits, except for institutions
which significantly exceed minimum capital
requirements.
|
- |
making
or servicing loans;
|
- |
performing
certain data processing services;
|
- |
providing
discount brokerage services;
|
- |
acting
as fiduciary, investment or financial
advisor;
|
- |
leasing
personal or real property;
|
- |
making
investments in corporations or projects designed primarily to promote
community welfare; and
|
- |
acquiring
a savings and loan association.
|
- |
a
leverage capital requirement expressed as a percentage of adjusted
total
assets;
|
- |
a
risk-based requirement expressed as a percentage of total risk-weighted
assets; and
|
- |
a
Tier 1 leverage requirement expressed as a percentage of adjusted
total
assets.
|
·
|
difficulties
assimilating acquired operations and
personnel;
|
·
|
potential
disruptions of our ongoing
business;
|
·
|
the
diversion of resources and management
time;
|
·
|
the
possibility that uniform standards, controls, procedures and policies
may
not be maintained;
|
·
|
risks
associated with entering new markets in which we have little or no
experience;
|
·
|
the
potential impairment of relationships with employees or customers
as a
result of changes in management;
|
·
|
difficulties
in evaluating the historical or future financial performance of the
acquired business; and
|
·
|
brand
awareness issues related to the acquired assets or
customers.
|
|
•
|
an
ongoing review of the quality, mix, and size of our overall loan
portfolio;
|
|
•
|
our
historical loan loss experience;
|
|
•
|
evaluation
of economic conditions;
|
|
•
|
regular
reviews of loan delinquencies and loan portfolio quality; and
|
|
•
|
the
amount and quality of collateral, including guarantees, securing
the
loans.
|
-
other commercial banks
-
savings banks
-
thrifts
-
credit unions
-
consumer finance companies
|
-
securities brokerage firms
-
mortgage brokers
-
insurance companies
-
mutual funds
-
trust companies
|
Office
Locations
|
Year
Opened
|
Approximate
Square
Footage
|
Owned
or Leased
|
|||
Main
Office
1005
High House Road
Cary,
NC
|
2000
|
8,100
|
Leased
|
|||
Cary
Office
1155
Kildaire Farm Road
Cary,
NC
|
1998
|
2,960
|
Leased
|
|||
Apex
Office
303
South Salem Street
Apex,
NC
|
1999
|
3,500
|
Leased
|
|||
Clayton
Office
315
East Main Street
Clayton,
NC
|
2000
|
2,990
|
Leased
|
Holly
Springs Office
700
Holly Springs Road
Holly
Springs, NC
|
2003
|
3,500
|
Owned
|
|||
Pinehurst
Office
211-M
Central Park Avenue
Pinehurst,
NC
|
2003
|
2,850
|
Leased
|
|||
Southern
Pines Office
185
Morganton Road
Southern
Pines, NC
|
2003
|
3,500
|
Leased
|
|||
Sanford
Office
870
Spring Lane
Sanford,
NC
|
2004
|
3,500
|
Structure
owned with
ground
lease
|
|||
Former
Garner Office
945
Vandora Springs Road
Garner,
NC
|
2005
|
1,960
|
Leased
|
|||
Garner
Office
945
Vandora Springs Road
Garner,
NC
|
2007
|
3,500
|
Leased
|
|||
Raleigh
Loan Production Office
4601
Six Forks Road
Raleigh,
NC
|
2005
|
2,439
|
Leased
|
|||
Falls
of Neuse Office
6408
Falls of Neuse Road
Raleigh,
NC
|
2006
|
2,442
|
Owned
|
|||
Wilmington
Main Office
1508
Military Cutoff Road
Wilmington,
NC 28403
|
2006
|
6,634
|
Leased
|
|||
Knightdale
Office
7120
Knightdale Boulevard
Knightdale,
NC
|
2007
|
2,518
|
Owned
|
|||
Raw
land
Sanford,
NC
|
2007
|
1.37
acres
|
Owned
|
|||
Operations
Locations
|
Year
Opened
|
Approximate
Square
Footage
|
Owned
or Leased
|
|||
206
High House Road
Cary,
NC
|
2005
|
12,535
|
Leased
|
Low
(1)
|
High
(1)
|
||||||
January
1, 2006
to March 31, 2006
|
$
|
11.90
|
$
|
12.33
|
|||
April
1, 2006
to June 30, 2006
|
11.74
|
13.67
|
|||||
July
1, 2006
to September 30, 2006
|
11.64
|
13.00
|
|||||
October
1, 2006
to December 31, 2006
|
11.25
|
12.27
|
|||||
January
1, 2007
to March 31, 2007
|
11.77
|
12.95
|
|||||
April
1, 2007
to June 30, 2007
|
11.15
|
12.79
|
|||||
July
1, 2007
to September 30, 2007
|
9.25
|
11.70
|
|||||
October
1, 2007
to December 31, 2007
|
8.97
|
11.11
|
|||||
(1)
|
The
2006 prices quoted above have been adjusted to reflect the 10% stock
dividend distributed in 2007.
|
At
or for the Years Ended
December
31,
|
||||||||||||||||
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
||||||||
(Dollars
in thousands, except share and per share data)
|
||||||||||||||||
Summary
of Operations
|
||||||||||||||||
Interest
income
|
$
|
54,872
|
$
|
36,707
|
$
|
22,827
|
$
|
15,896
|
$
|
10,950
|
||||||
Interest
expense
|
28,217
|
17,257
|
8,872
|
5,466
|
3,749
|
|||||||||||
Net
interest income
|
26,655
|
19,450
|
13,955
|
10,430
|
7,201
|
|||||||||||
Provision
for loan losses
|
1,684
|
991
|
807
|
736
|
551
|
|||||||||||
Net
interest income after the provision
for
loan losses
|
24,971
|
18,459
|
13,148
|
9,694
|
6,650
|
|||||||||||
Non-interest
income
|
2,621
|
2,612
|
2,417
|
2,342
|
1,645
|
|||||||||||
Non-interest
expense
|
7,823
|
13,387
|
10,762
|
8,531
|
5,767
|
|||||||||||
Income
before income taxes
|
9,769
|
7,684
|
4,803
|
3,505
|
2,528
|
|||||||||||
Income
taxes
|
3,520
|
2,780
|
1,659
|
1,172
|
873
|
|||||||||||
Net
income
|
$
|
6,249
|
$
|
4,904
|
$
|
3,144
|
$
|
2,333
|
$
|
1,655
|
||||||
Per
Share and Shares Outstanding(1)
|
||||||||||||||||
Net
income, basic(2)
|
$
|
0.68
|
$
|
0.67
|
$
|
0.58
|
$
|
0.45
|
$
|
0.36
|
||||||
Net
income, diluted(2)
|
$
|
0.65
|
$
|
0.64
|
$
|
0.55
|
$
|
0.43
|
$
|
0.35
|
||||||
Book
value at end of period
|
$
|
9.75
|
$
|
9.13
|
$
|
6.52
|
$
|
5.16
|
$
|
4.73
|
||||||
Tangible
book value
|
$
|
6.42
|
$
|
5.67
|
$
|
5.93
|
$
|
4.43
|
$
|
3.99
|
||||||
Weighted
average shares outstanding:
|
||||||||||||||||
Basic
|
9,211,779
|
7,281,016
|
5,402,390
|
5,146,464
|
4,558,143
|
|||||||||||
Diluted
|
9,635,694
|
7,614,804
|
5,682,447
|
5,417,790
|
4,724,656
|
|||||||||||
Shares
outstanding at period end
|
9,404,579
|
9,091,649
|
6,358,388
|
5,188,931
|
5,105,175
|
|||||||||||
Balance
Sheet Data
|
||||||||||||||||
Total
assets
|
$
|
835,540
|
$
|
697,909
|
$
|
410,788
|
$
|
331,227
|
$
|
273,714
|
||||||
Total
investments(3)
|
90,758
|
85,578
|
57,752
|
54,935
|
38,383
|
|||||||||||
Total
loans, net
|
667,643
|
542,874
|
323,971
|
253,793
|
213,442
|
|||||||||||
Total
deposits
|
605,431
|
541,881
|
322,081
|
273,649
|
218,615
|
|||||||||||
Borrowings
|
135,003
|
69,699
|
45,212
|
29,555
|
29,003
|
|||||||||||
Stockholders’
equity
|
91,659
|
83,034
|
41,457
|
26,777
|
24,150
|
|||||||||||
Selected
Performance Ratios
|
||||||||||||||||
Return
on average assets
|
0.80
|
%
|
0.93
|
%
|
0.84
|
%
|
0.76
|
%
|
0.79
|
%
|
||||||
Return
on average stockholders’ equity
|
7.15
|
%
|
8.72
|
%
|
10.34
|
%
|
9.14
|
%
|
8.25
|
%
|
||||||
Net
interest spread(4)
|
3.08
|
%
|
3.29
|
%
|
3.51
|
%
|
3.26
|
%
|
3.09
|
%
|
||||||
Net
interest margin(5)
|
|
|
3.72
|
%
|
|
3.95
|
%
|
|
3.94
|
%
|
|
3.61
|
%
|
|
3.64
|
%
|
Non-interest
income as a percentage of total
revenue(6)
|
8.95
|
%
|
11.84
|
%
|
14.76
|
%
|
18.34
|
%
|
18.60
|
%
|
||||||
Non-interest
income as a percentage of average
assets
|
0.34
|
%
|
0.49
|
%
|
0.64
|
%
|
0.76
|
%
|
0.78
|
%
|
||||||
Non-interest
expense to average assets
|
2.29
|
%
|
2.53
|
%
|
2.86
|
%
|
2.76
|
%
|
2.75
|
%
|
||||||
Efficiency
ratio(7)
|
60.88
|
%
|
60.68
|
%
|
65.73
|
%
|
66.79
|
%
|
65.19
|
%
|
||||||
Average
stockholders’ equity to average
total assets
|
11.24
|
%
|
10.64
|
%
|
8.08
|
%
|
8.27
|
%
|
9.55
|
%
|
||||||
Asset
Quality Ratios
|
||||||||||||||||
Net
charge-offs to average loans outstanding
|
0.06
|
%
|
0.02
|
%
|
0.04
|
%
|
0.15
|
%
|
0.05
|
%
|
||||||
Allowance
for loan losses to period end loans
|
1.22
|
%
|
1.26
|
%
|
1.33
|
%
|
1.42
|
%
|
1.52
|
%
|
||||||
Allowance
for loan losses to non-performing
loans
|
303
|
%
|
5,145
|
%
|
16,960
|
%
|
73,360
|
%
|
2,078
|
%
|
||||||
Non-performing
loans to period end loans
|
0.40
|
%
|
0.02
|
%
|
0.01
|
%
|
0.00
|
%
|
0.07
|
%
|
||||||
Non-performing
assets to total assets(8)
|
0.36
|
%
|
0.03
|
%
|
0.01
|
%
|
0.09
|
%
|
0.06
|
%
|
At
or for the Years Ended
December
31,
|
||||||||||||||||
2007
|
2006
|
2005
|
2004
|
2003
|
||||||||||||
(Dollars
in thousands, except share and per share data)
|
||||||||||||||||
Capital
Ratios
|
||||||||||||||||
Total
risk-based capital ratio
|
10.51
|
%
|
11.03
|
%
|
13.68
|
%
|
11.61
|
%
|
12.95
|
%
|
||||||
Tier
1 risk-based capital ratio
|
9.37
|
%
|
9.88
|
%
|
12.51
|
%
|
10.38
|
%
|
11.70
|
%
|
||||||
Leverage
ratio
|
8.56
|
%
|
9.13
|
%
|
11.51
|
%
|
9.49
|
%
|
10.63
|
%
|
||||||
Equity
to assets ratio
|
10.97
|
%
|
11.90
|
%
|
10.09
|
%
|
8.08
|
%
|
8.82
|
%
|
||||||
Other
Data
|
||||||||||||||||
Number
of full-service banking offices
|
12
|
11
|
9
|
8
|
7
|
|||||||||||
Number
of full-time equivalent employees
|
126
|
122
|
90
|
78
|
64
|
(1) |
Adjusted
to reflect the 10 % stock dividend distributed in 2007 and stock
splits
effected in the form of 15%, 15%, 20% and 15% stock dividends in
each of
the years 2006, 2005, 2004 and 2003, respectively.
|
(2) |
Computed
based on the weighted average number of shares outstanding during
each
period.
|
(3) |
Consists
of interest-earning deposits, federal funds sold, investment securities
and FHLB stock.
|
(4) |
Net
interest spread is the difference between the average yield on
interest-earning assets and the average cost of interest-bearing
liabilities.
|
(5) |
Net
interest margin is net interest income divided by average interest-earning
assets.
|
(6) |
Total
revenue consists of net interest income and non-interest
income.
|
(7) |
Efficiency
ratio is non-interest expense divided by the sum of net interest
income
and non-interest income.
|
(8) |
Non-performing
assets consist of non-accrual loans, restructured loans, and
foreclosed
assets, where
applicable.
|
For
the Years Ended December 31,
|
||||||||||||||||||||||||||||
2007
|
2006
|
2005
|
||||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||
balance
|
Interest
|
rate
|
balance
|
Interest
|
rate
|
balance
|
Interest
|
rate
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||
Loan
portfolio
|
$
|
615,322
|
$
|
50,022
|
8.13
|
%
|
$
|
414,644
|
$
|
33,093
|
7.98
|
%
|
$
|
297,045
|
$
|
20,456
|
6.89
|
%
|
||||||||||
Investment
securities
|
92,629
|
4,454
|
4.81
|
%
|
71,151
|
3,303
|
4.64
|
%
|
55,285
|
2,323
|
4.20
|
%
|
||||||||||||||||
Federal
funds and other interest-earning assets
|
8,015
|
396
|
4.94
|
%
|
5,996
|
310
|
5.17
|
%
|
1,531
|
47
|
3.07
|
%
|
||||||||||||||||
Total
interest-earning assets
|
715,966
|
54,872
|
7.66
|
%
|
491,791
|
36,706
|
7.46
|
%
|
353,861
|
22,826
|
6.45
|
%
|
||||||||||||||||
Non-interest-earning
assets
|
61,425
|
36,654
|
22,465
|
|||||||||||||||||||||||||
Total
assets
|
$
|
777,391
|
$
|
528,445
|
$
|
376,326
|
||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||||||
Interest-bearing
NOW
|
$
|
33,453
|
324
|
0.97
|
%
|
$
|
37,876
|
553
|
1.46
|
%
|
$
|
39,609
|
416
|
1.05
|
%
|
|||||||||||||
Money
market and savings
|
163,321
|
6,536
|
4.00
|
%
|
92,620
|
3,664
|
3.96
|
%
|
46,500
|
985
|
2.12
|
%
|
||||||||||||||||
Time
deposits
|
325,243
|
16,569
|
5.09
|
%
|
226,978
|
9,990
|
4.40
|
%
|
169,099
|
5,483
|
3.24
|
%
|
||||||||||||||||
Short-term
borrowings
|
16,398
|
830
|
5.06
|
%
|
16,318
|
844
|
5.17
|
%
|
12,239
|
475
|
3.88
|
%
|
||||||||||||||||
Long-term
debt
|
77,670
|
3,958
|
5.10
|
%
|
39,906
|
2,206
|
5.53
|
%
|
34,626
|
1,513
|
4.37
|
%
|
||||||||||||||||
Total
interest-bearing liabilities
|
616,085
|
28,217
|
4.58
|
%
|
413,698
|
17,257
|
4.17
|
%
|
302,073
|
8,872
|
2.94
|
%
|
||||||||||||||||
Other
liabilities
|
73,899
|
58,542
|
43,843
|
|||||||||||||||||||||||||
Total
liabilities
|
689,984
|
472,240
|
345,916
|
|||||||||||||||||||||||||
Stockholders’
equity
|
87,407
|
56,205
|
30,410
|
|||||||||||||||||||||||||
Total
liabilities and stockholders’ equity
|
$
|
777,391
|
$
|
528,445
|
$
|
376,326
|
||||||||||||||||||||||
Net
interest income and interest rate spread
|
$
|
26,655
|
3.08
|
%
|
$
|
19,449
|
3.29
|
%
|
$
|
13,954
|
3.51
|
%
|
||||||||||||||||
Net
interest margin
|
3.72
|
%
|
3.95
|
%
|
3.94
|
%
|
||||||||||||||||||||||
116.21
|
%
|
118.88
|
%
|
117.14
|
%
|
|
Year
Ended
|
|
Year
Ended
|
|
|||||||||||||||
|
|
December
31, 2007 vs. 2006
|
|
December
31, 2006 vs. 2005
|
|
||||||||||||||
|
|
Increase
(Decrease) Due to
|
|
Increase
(Decrease) Due to
|
|
||||||||||||||
|
|
Volume
|
|
Rate
|
|
Total
|
|
Volume
|
|
Rate
|
|
Total
|
|
||||||
|
|
(Dollars
in thousands)
|
|||||||||||||||||
Interest
income:
|
|||||||||||||||||||
Loan
portfolio
|
$
|
16,303
|
$
|
626
|
$
|
16,929
|
$
|
9,017
|
$
|
3,620
|
$
|
12,637
|
|||||||
Investment
securities
|
1,029
|
122
|
1,151
|
718
|
262
|
980
|
|||||||||||||
Federal
funds and other interest-earning assets
|
99
|
(13
|
)
|
86
|
213
|
50
|
263
|
||||||||||||
Total
interest income
|
17,431
|
735
|
18,166
|
9,948
|
3,932
|
13,880
|
|||||||||||||
Interest
expense:
|
|||||||||||||||||||
Deposits:
|
|||||||||||||||||||
Interest-bearing
NOW
|
(59
|
)
|
(170
|
)
|
(229
|
)
|
(17
|
)
|
154
|
137
|
|||||||||
Money
market and savings
|
2,829
|
43
|
2,872
|
1,429
|
1,250
|
2,679
|
|||||||||||||
Time
deposits
|
4,824
|
1,755
|
6,579
|
2,205
|
2,302
|
4,507
|
|||||||||||||
Short-term
borrowings
|
4
|
(18
|
)
|
(14
|
)
|
184
|
185
|
369
|
|||||||||||
Long-term
debt
|
1,909
|
(157
|
)
|
1,752
|
253
|
440
|
693
|
||||||||||||
Total
interest expense
|
9,507
|
1,453
|
10,960
|
4,054
|
4,331
|
8,385
|
|||||||||||||
Net
interest income increase (decrease)
|
$
|
7,924
|
$
|
(718
|
)
|
$
|
7,206
|
$
|
5,894
|
$
|
(399
|
)
|
$
|
5,495
|
At
December 31,
|
|
|||||||||||||||
|
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
|||||
|
|
(Dollars
in thousands)
|
||||||||||||||
Nonaccrual
loans
|
$
|
2,726
|
$
|
135
|
$
|
26
|
$
|
5
|
$
|
159
|
||||||
Restructured
loans
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Total
nonperforming loans
|
2,726
|
135
|
26
|
5
|
159
|
|||||||||||
Real
estate owned
|
272
|
98
|
22
|
245
|
-
|
|||||||||||
Repossessed
assets
|
-
|
-
|
-
|
48
|
-
|
|||||||||||
Total
nonperforming assets
|
$
|
2,998
|
$
|
233
|
$
|
48
|
$
|
298
|
$
|
159
|
||||||
Accruing
loans past due 90 days or more
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
647
|
||||||
Allowance
for loan losses
|
8,273
|
6,945
|
4,351
|
3,668
|
3,304
|
|||||||||||
Nonperforming
loans to period end loans
|
0.40
|
%
|
0.02
|
%
|
0.01
|
%
|
0.00
|
%
|
0.07
|
%
|
||||||
Nonperforming
loans and loans past due 90 days or more to period end
loans
|
0.40
|
%
|
0.02
|
%
|
0.01
|
%
|
0.00
|
%
|
0.37
|
%
|
||||||
Allowance
for loan losses to period end loans
|
1.22
|
%
|
1.26
|
%
|
1.33
|
%
|
1.42
|
%
|
1.52
|
%
|
||||||
Allowance
for loan losses to nonperforming loans
|
303.45
|
%
|
5,144.96
|
%
|
16,960.60
|
%
|
73,360.00
|
%
|
2,077.99
|
%
|
||||||
Allowance
for loan losses to nonperforming loans and loans past due 90 days
or
more
|
303.45
|
%
|
5,144.96
|
%
|
16,960.60
|
%
|
73,360.00
|
%
|
409.93
|
%
|
||||||
Nonperforming
assets to total assets
|
0.36
|
%
|
0.03
|
%
|
0.01
|
%
|
0.09
|
%
|
0.06
|
%
|
||||||
Nonperforming
assets
and loans past
due 90 days or more to total assets
|
0.36
|
%
|
0.03
|
%
|
0.01
|
%
|
0.09
|
%
|
0.29
|
%
|
At
December 31,
|
|
||||||||||||||||||
|
|
2007
|
|
2006
|
|
2005
|
|
||||||||||||
|
|
Amount
|
|
%
of Total
Loans
(1)
|
|
Amount
|
|
%
of Total
Loans
(1)
|
|
Amount
|
|
%
of Total
Loans
(1)
|
|
||||||
|
|
(Dollars
in thousands)
|
|||||||||||||||||
Real
estate - commercial
|
$
|
3,771
|
51.85
|
%
|
$
|
3,920
|
55.36
|
%
|
$
|
1,876
|
52.92
|
%
|
|||||||
Real
estate - residential
|
130
|
2.70
|
%
|
121
|
3.67
|
%
|
90
|
4.54
|
%
|
||||||||||
Construction
loans
|
2,362
|
27.18
|
%
|
1,379
|
19.99
|
%
|
735
|
14.17
|
%
|
||||||||||
Commercial
and industrial loans
|
1,536
|
10.77
|
%
|
1,161
|
12.32
|
%
|
1,138
|
16.03
|
%
|
||||||||||
Home
equity loans and lines of credit
|
334
|
6.69
|
%
|
269
|
7.76
|
%
|
201
|
10.62
|
%
|
||||||||||
Loans
to individuals
|
140
|
0.81
|
%
|
95
|
0.90
|
%
|
311
|
1.72
|
%
|
||||||||||
Total
allowance
|
$
|
8,273
|
100.00
|
%
|
$
|
6,945
|
100.00
|
%
|
$
|
4,351
|
100.00
|
%
|
At
December 31,
|
|
||||||||||||
|
|
2004
|
|
2003
|
|
||||||||
|
|
Amount
|
|
%
of Total Loans (1)
|
|
Amount
|
|
%
of Total Loans (1)
|
|
||||
|
|
(Dollars
in thousands)
|
|||||||||||
Real
estate - commercial
|
$
|
1,290
|
47.24
|
%
|
$
|
1,330
|
46.66
|
%
|
|||||
Real
estate - residential
|
44
|
4.50
|
%
|
54
|
6.80
|
%
|
|||||||
Construction
loans
|
718
|
15.09
|
%
|
778
|
14.56
|
%
|
|||||||
Commercial
and industrial loans
|
1,105
|
18.90
|
%
|
841
|
17.61
|
%
|
|||||||
Home
equity loans and lines of credit
|
173
|
12.00
|
%
|
115
|
10.59
|
%
|
|||||||
Loans
to individuals
|
338
|
2.27
|
%
|
186
|
3.78
|
%
|
|||||||
Total
allowance
|
$
|
3,668
|
100.00
|
%
|
$
|
3,304
|
100.00
|
%
|
(1)
|
Represents
total of all outstanding loans in each category as a percent of total
loans outstanding.
|
At
or for the Year Ended December 31,
|
|
|||||||||||||||
|
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
|||||
|
|
(Dollars
in thousands)
|
||||||||||||||
Balance
at beginning of period
|
$
|
6,945
|
$
|
4,351
|
$
|
3,668
|
$
|
3,304
|
$
|
1,711
|
||||||
Charge-offs:
|
||||||||||||||||
Construction
loans
|
-
|
-
|
-
|
15
|
27
|
|||||||||||
Commercial
real estate
|
213
|
-
|
34
|
21
|
-
|
|||||||||||
Commercial
and industrial loans
|
89
|
14
|
140
|
345
|
59
|
|||||||||||
Residential
real estate
|
45
|
64
|
-
|
34
|
-
|
|||||||||||
Loans
to individuals
|
15
|
8
|
9
|
16
|
13
|
|||||||||||
Total
charge-offs
|
362
|
86
|
183
|
431
|
99
|
|||||||||||
Recoveries:
|
||||||||||||||||
Commercial
and industrial loans
|
5
|
1
|
22
|
57
|
4
|
|||||||||||
Construction
loans
|
-
|
-
|
27
|
-
|
-
|
|||||||||||
Loans
to individuals
|
1
|
1
|
10
|
2
|
8
|
|||||||||||
|
||||||||||||||||
Total
recoveries
|
6
|
2
|
59
|
59
|
12
|
|||||||||||
Net
charge-offs
|
356
|
84
|
124
|
372
|
87
|
|||||||||||
Allowance
acquired from Port City Capital Bank merger
|
-
|
1,687
|
-
|
-
|
-
|
|||||||||||
Allowance
acquired from Centennial Bank merger
|
-
|
-
|
-
|
-
|
1,129
|
|||||||||||
Provision
for loan losses
|
1,684
|
991
|
807
|
736
|
551
|
|||||||||||
Balance
at the end of the year
|
$
|
8,273
|
$
|
6,945
|
$
|
4,351
|
$
|
3,668
|
$
|
3,304
|
||||||
Total
loans outstanding at year-end
|
$
|
675,916
|
$
|
549,819
|
$
|
328,322
|
$
|
257,908
|
$
|
217,128
|
||||||
Average
loans outstanding for the year
|
$
|
615,322
|
$
|
414,644
|
$
|
297,045
|
$
|
240,346
|
$
|
160,134
|
||||||
Allowance
for loan losses to loans outstanding
|
1.22
|
%
|
1.26
|
%
|
1.33
|
%
|
1.42
|
%
|
1.52
|
%
|
||||||
Ratio
of net loan charge-offs to average loans outstanding
|
0.06
|
%
|
0.02
|
%
|
0.04
|
%
|
0.15
|
%
|
0.05
|
%
|
At
December 31, 2007
|
|
At
December 31, 2006
|
|
At
December 31, 2005
|
|
||||||||||||||
|
|
Amortized
cost
|
|
Fair
value
|
|
Amortized
cost
|
|
Fair
value
|
|
Amortized
cost
|
|
Fair
value
|
|
||||||
|
|
(In
thousands)
|
|||||||||||||||||
Securities
available for sale:
|
|||||||||||||||||||
U.S.
government securities and obligations of U.S. government
agencies
|
$
|
8,364
|
$
|
8,312
|
$
|
7,493
|
$
|
7,385
|
$
|
5,945
|
$
|
5,793
|
|||||||
Mortgage-backed
securities
|
56,986
|
57,234
|
54,949
|
54,274
|
35,042
|
34,147
|
|||||||||||||
Municipal
|
24,810
|
24,695
|
22,321
|
22,182
|
15,173
|
15,110
|
|||||||||||||
Other
|
536
|
517
|
779
|
882
|
500
|
500
|
|||||||||||||
Total
securities available for sale
|
$
|
90,696
|
$
|
90,758
|
$
|
85,542
|
$
|
84,723
|
$
|
56,660
|
$
|
55,550
|
Net
Interest Income at Risk
|
|||||||
(dollars
in thousands)
|
Estimated
Exposure to
|
||||||
Net
Interest Income
|
|||||||
Rate
change
|
2007
|
2006
|
|||||
+200
basis points shock
|
$
|
1,534
|
$
|
1,925
|
|||
-200
basis point shock
|
(2,175
|
)
|
(1,285
|
)
|
|||
+200
basis point ramp
|
1,448
|
1,320
|
|||||
-200
basis point ramp
|
(1,584
|
)
|
(741
|
)
|
Net
Economic Value of Equity
|
Estimated
Exposure to
|
||||||
Net
Economic Value of Equity
|
|||||||
(dollars
in thousands)
|
|||||||
Rate
Change
|
2007
|
2006
|
|||||
+100
basis point shock
|
$
|
(257
|
)
|
$
|
(1,949
|
)
|
|
-100
basis point shock
|
(1,180
|
)
|
473
|
||||
+200
basis point shock
|
(3,114
|
)
|
(4,219
|
)
|
|||
-200
basis point shock
|
(3,674
|
)
|
(973
|
)
|
Terms
to Repricing at December 31, 2007
|
||||||||||||||||
|
1
Year
or
Less
|
More
Than
1
Year to
3
Years
|
More
Than
3
Years to
5
Years
|
More
Than
5
Years
|
Total
|
|||||||||||
|
(Dollars
in thousands)
|
|||||||||||||||
INTEREST-EARNING
ASSETS:
|
||||||||||||||||
Loans
receivable:
|
||||||||||||||||
Commercial
mortgage loans
|
$
|
150,203
|
$
|
92,725
|
$
|
89,075
|
$
|
18,958
|
$
|
350,961
|
||||||
Residential
mortgage loans
|
9,403
|
6,449
|
2,167
|
238
|
18,257
|
|||||||||||
Construction
and development
|
159,684
|
8,186
|
5,721
|
10,428
|
184,019
|
|||||||||||
Commercial
and industrial loans
|
57,814
|
10,848
|
3,969
|
299
|
72,930
|
|||||||||||
Home
equity lines and loans
|
42,897
|
699
|
1,510
|
152
|
45,258
|
|||||||||||
Loans
to individuals
|
3,881
|
1,190
|
416
|
2
|
5,489
|
|||||||||||
Interest-earning
deposits with banks
|
212
|
-
|
-
|
-
|
212
|
|||||||||||
Fed
funds sold
|
97
|
-
|
-
|
-
|
97
|
|||||||||||
Investment
securities available for sale
|
21,932
|
24,786
|
16,538
|
27,502
|
90,758
|
|||||||||||
Federal
Home Loan Bank stock
|
6,791
|
-
|
-
|
-
|
6,791
|
|||||||||||
|
||||||||||||||||
Total
interest-earning assets
|
$
|
452,914
|
$
|
144,883
|
$
|
119,396
|
$
|
57,579
|
$
|
774,772
|
||||||
INTEREST-BEARING
LIABILITIES:
|
||||||||||||||||
Deposits:
|
||||||||||||||||
Money
market, NOW and savings
|
$
|
190,832
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
190,832
|
||||||
Time
|
221,412
|
114,805
|
9,014
|
-
|
345,231
|
|||||||||||
Short-term
borrowings
|
10,000
|
-
|
-
|
-
|
10,000
|
|||||||||||
Long-term
borrowings
|
55,000
|
36,000
|
10,000
|
12,000
|
113,000
|
|||||||||||
Total
interest-bearing liabilities
|
$
|
477,244
|
$
|
150,805
|
$
|
19,014
|
$
|
12,000
|
$
|
659,063
|
||||||
INTEREST
SENSITIVITY GAP PER PERIOD
|
$
|
(24,330
|
)
|
$
|
(5,922
|
)
|
$
|
100,382
|
$
|
45,579
|
$
|
115,709
|
||||
CUMULATIVE
INTEREST SENSITIVITY GAP
|
$
|
(24,330
|
)
|
$
|
(30,252
|
)
|
$
|
70,130
|
$
|
115,709
|
$
|
115,709
|
||||
CUMULATIVE
GAP AS A PERCENTAGE OF TOTAL INTEREST-EARNING ASSETS
|
(3.14
|
)%
|
(3.90
|
)%
|
9.05
|
%
|
14.93
|
%
|
14.93
|
%
|
||||||
CUMULATIVE
INTEREST-EARNING ASSETS AS A PERCENTAGE OF CUMULATIVE INTEREST-BEARING
LIABILITIES
|
94.90
|
%
|
95.18
|
%
|
110.84
|
%
|
117.56
|
%
|
117.56
|
%
|
|
|
Year
Ended December 31, 2007
|
|
Year
Ended December 31, 2006
|
|
||||||||||||||||||||
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
|
||||||||
Operating
Data:
|
|||||||||||||||||||||||||
Total
interest income
|
$
|
14,418
|
$
|
14,095
|
$
|
13,602
|
$
|
12,757
|
$
|
12,288
|
$
|
9,522
|
$
|
7,794
|
$
|
7,101
|
|||||||||
Total
interest expense
|
7,385
|
7,286
|
7,033
|
6,513
|
6,044
|
4,608
|
3,578
|
3,027
|
|||||||||||||||||
Net
interest income
|
7,033
|
6,809
|
6,569
|
6,244
|
6,244
|
4,914
|
4,216
|
4,074
|
|||||||||||||||||
Provision
for loan losses
|
337
|
666
|
322
|
359
|
374
|
182
|
164
|
270
|
|||||||||||||||||
Net
interest income after provision
|
6,696
|
6,143
|
6,247
|
5,885
|
5,870
|
4,732
|
4,052
|
3,804
|
|||||||||||||||||
Non-interest
income
|
655
|
690
|
647
|
629
|
701
|
695
|
619
|
596
|
|||||||||||||||||
Non-interest
expense
|
4,577
|
4,402
|
4,623
|
4,220
|
3,979
|
3,432
|
3,104
|
2,871
|
|||||||||||||||||
Income
before income taxes
|
2,774
|
2,431
|
2,271
|
2,294
|
2,592
|
1,995
|
1,567
|
1,529
|
|||||||||||||||||
Provision
for income taxes
|
1,002
|
868
|
823
|
828
|
949
|
721
|
564
|
547
|
|||||||||||||||||
Net
income
|
$
|
1,772
|
$
|
1,563
|
$
|
1,448
|
$
|
1,466
|
$
|
1,643
|
$
|
1,274
|
$
|
1,003
|
$
|
982
|
|||||||||
Securities
gains/(losses)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||
Per
Share Data:
|
|||||||||||||||||||||||||
Earnings
per share- basic
|
$
|
0.19
|
$
|
0.17
|
$
|
0.16
|
$
|
0.16
|
$
|
0.18
|
$
|
0.17
|
$
|
0.16
|
$
|
0.15
|
|||||||||
Earnings
per share - diluted
|
0.18
|
0.16
|
0.15
|
0.15
|
0.17
|
0.16
|
0.15
|
0.15
|
Page
No.
|
|
Reports
of Independent Registered Public Accounting Firm
|
48
|
Consolidated
Balance Sheets as of December 31, 2007 and 2006
|
51
|
Consolidated
Statements of Operations for the years ended December 31, 2007, 2006
and
2005
|
52
|
Consolidated
Statements of Changes in Stockholders’ Equity for the years ended December
31, 2007, 2006 and 2005
|
53
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006
and
2005
|
54
|
|
|
Notes
to Consolidated Financial Statements
|
55
|
ASSETS
|
2007
|
2006
|
|||||
Cash
and due from banks
|
$
|
12,047,600
|
$
|
14,295,053
|
|||
Interest-earning
deposits with banks
|
211,804
|
763,057
|
|||||
Federal
funds sold
|
97,000
|
92,000
|
|||||
Investment
securities available for sale, at fair value (Note C)
|
90,758,467
|
84,722,892
|
|||||
Loans
(Note D)
|
675,916,228
|
549,818,548
|
|||||
Allowance
for loan losses (Note D)
|
(8,273,000
|
)
|
(6,945,000
|
)
|
|||
NET
LOANS
|
667,643,228
|
542,873,548
|
|||||
Accrued
interest receivable
|
3,761,600
|
3,045,840
|
|||||
Federal
Home Loan Bank stock, at cost
|
6,790,700
|
3,582,800
|
|||||
Bank
premises and equipment (Note E)
|
8,094,521
|
5,907,664
|
|||||
Investment
in life insurance
|
9,122,697
|
5,683,493
|
|||||
Goodwill
|
30,233,049
|
30,225,549
|
|||||
Other
assets
|
6,779,390
|
6,717,324
|
|||||
TOTAL
ASSETS
|
$
|
835,540,056
|
$
|
697,909,220
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Deposits:
|
|||||||
Demand
|
$
|
69,367,630
|
$
|
70,420,392
|
|||
Savings
|
110,516,217
|
78,379,431
|
|||||
Money
market and NOW
|
80,316,251
|
97,343,128
|
|||||
Time
(Note F)
|
345,231,215
|
295,738,729
|
|||||
TOTAL
DEPOSITS
|
605,431,313
|
541,881,680
|
|||||
Short-term
borrowings (Note G)
|
13,755,000
|
24,451,000
|
|||||
Long-term
debt (Note G)
|
121,248,000
|
45,248,000
|
|||||
Accrued
expenses and other liabilities
|
3,446,931
|
3,294,562
|
|||||
TOTAL
LIABILITIES
|
743,881,244
|
614,875,242
|
|||||
Commitments
(Notes D, H and N)
|
|||||||
Stockholders’
Equity (Note P)
|
|||||||
Common
stock, $1 par value, 20,000,000 shares authorized; 9,404,579 shares
and
8,265,136 shares issued and outstanding at December 31, 2007 and
2006,
respectively
|
9,404,579
|
8,265,136
|
|||||
Additional
paid-in capital
|
73,596,427
|
62,659,201
|
|||||
Retained
earnings
|
8,619,617
|
12,610,588
|
|||||
Accumulated
other comprehensive income/(loss)
|
38,189
|
(500,947
|
)
|
||||
TOTAL
STOCKHOLDERS’ EQUITY
|
91,658,812
|
83,033,978
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
835,540,056
|
$
|
697,909,220
|
2007
|
2006
|
2005
|
||||||||
INTEREST
AND FEE INCOME
|
||||||||||
Loans
|
$
|
50,022,082
|
$
|
33,093,487
|
$
|
20,456,115
|
||||
Investment
securities available for sale
|
4,453,955
|
3,302,639
|
2,323,232
|
|||||||
Interest-earning
deposits with banks
|
38,161
|
23,837
|
15,298
|
|||||||
Federal
funds sold
|
357,878
|
286,473
|
31,948
|
|||||||
TOTAL
INTEREST AND FEE INCOME
|
54,872,076
|
36,706,436
|
22,826,593
|
|||||||
INTEREST
EXPENSE
|
||||||||||
Money
market, NOW and savings deposits
|
6,860,622
|
4,216,641
|
1,401,267
|
|||||||
Time
deposits
|
16,568,529
|
9,989,995
|
5,483,116
|
|||||||
Short-term
borrowings
|
830,302
|
843,995
|
474,665
|
|||||||
Long-term
debt
|
3,957,782
|
2,206,229
|
1,513,180
|
|||||||
|
||||||||||
TOTAL
INTEREST EXPENSE
|
28,217,235
|
17,256,860
|
8,872,228
|
|||||||
NET
INTEREST INCOME
|
26,654,841
|
19,449,576
|
13,954,365
|
|||||||
PROVISION
FOR LOAN LOSSES (Note D)
|
1,684,219
|
990,786
|
806,796
|
|||||||
NET
INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
24,970,622
|
18,458,790
|
13,147,569
|
|||||||
NON-INTEREST
INCOME
|
||||||||||
Mortgage
origination revenue
|
512,152
|
642,188
|
755,300
|
|||||||
Fees
on deposit accounts
|
1,360,301
|
1,287,476
|
1,044,771
|
|||||||
Earnings
on life insurance
|
379,927
|
228,573
|
226,156
|
|||||||
Gain
(loss) on sale of securities
|
-
|
-
|
(16,422
|
)
|
||||||
Gain
(loss) on sale or disposal of assets
|
(65,685
|
)
|
2,782
|
(13,000
|
)
|
|||||
Other
(Note J)
|
434,163
|
450,873
|
420,407
|
|||||||
TOTAL
NON-INTEREST INCOME
|
2,620,858
|
2,611,892
|
2,417,212
|
|||||||
NON-INTEREST
EXPENSE
|
||||||||||
Salaries
and employee benefits
|
9,875,748
|
7,307,183
|
5,904,586
|
|||||||
Occupancy
and equipment
|
2,295,675
|
2,018,079
|
1,728,366
|
|||||||
Data
processing
|
1,055,640
|
833,923
|
647,685
|
|||||||
Other
(Note J)
|
4,595,461
|
3,227,363
|
2,480,871
|
|||||||
TOTAL
NON-INTEREST EXPENSE
|
17,822,524
|
13,386,548
|
10,761,508
|
|||||||
INCOME
BEFORE INCOME TAXES
|
9,768,956
|
7,684,134
|
4,803,273
|
|||||||
INCOME
TAXES (Note I)
|
3,520,200
|
2,780,600
|
1,658,900
|
|||||||
NET
INCOME
|
$
|
6,248,756
|
$
|
4,903,534
|
$
|
3,144,373
|
||||
NET
INCOME PER COMMON SHARE
|
||||||||||
Basic
|
$
|
0.68
|
$
|
0.67
|
$
|
0.58
|
||||
Diluted
|
$
|
0.65
|
$
|
0.64
|
$
|
0.55
|
||||
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING
|
||||||||||
Basic
|
9,211,779
|
7,281,016
|
5,402,390
|
|||||||
Diluted
|
9,635,694
|
7,614,807
|
5,682,447
|
Common
stock
|
|
Additional
paid-in
|
|
Retained
|
|
Accumulated
other comprehensive
|
|
Total
|
|
||||||||||
|
|
Shares
|
|
Amount
|
|
capital
|
|
earnings
|
|
income
(loss)
|
|
equity
|
|||||||
Balance
at December 31, 2004
|
3,566,889
|
$
|
3,566,889
|
$
|
18,654,492
|
$
|
4,562,681
|
$
|
(6,648
|
)
|
$
|
26,777,414
|
|||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
-
|
-
|
-
|
3,144,373
|
-
|
3,144,373
|
|||||||||||||
Net
unrealized holding loss on available for sale securities
|
-
|
-
|
-
|
-
|
(675,145
|
)
|
(675,145
|
)
|
|||||||||||
Total
comprehensive income
|
2,469,228
|
||||||||||||||||||
Common
stock issued pursuant to:
|
|||||||||||||||||||
Stock
options exercised
|
75,539
|
75,539
|
317,373
|
-
|
-
|
392,912
|
|||||||||||||
Stock
option related tax benefits
|
-
|
-
|
199,800
|
-
|
-
|
199,800
|
|||||||||||||
Issuance
of new stock
|
848,000
|
848,000
|
10,769,858
|
-
|
-
|
11,617,858
|
|||||||||||||
Stock
split effected in the form of a fifteen percent stock dividend with
net
cash received for fractional shares
|
535,966
|
535,966
|
(535,964
|
)
|
-
|
-
|
2
|
||||||||||||
Balance
at December 31, 2005
|
5,026,394
|
5,026,394
|
29,405,559
|
7,707,054
|
(681,793
|
)
|
41,457,214
|
||||||||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
-
|
-
|
-
|
4,903,534
|
-
|
4,903,534
|
|||||||||||||
Net
unrealized holding gain on available for sale securities
|
-
|
-
|
-
|
-
|
180,846
|
180,846
|
|||||||||||||
Total
comprehensive income
|
5,084,380
|
||||||||||||||||||
Common
stock issued pursuant to:
|
|||||||||||||||||||
Stock
options exercised
|
44,029
|
44,029
|
211,768
|
-
|
-
|
255,797
|
|||||||||||||
Stock
option related tax benefits
|
-
|
-
|
45,401
|
-
|
-
|
45,401
|
|||||||||||||
Expense
recognized in connection with stock options and restricted
stock
|
-
|
-
|
202,246
|
-
|
-
|
202,246
|
|||||||||||||
Issuance
of restricted stock, net of deferred compensation
|
7,387
|
7,387
|
(7,387
|
)
|
-
|
-
|
-
|
||||||||||||
Shares
issued in connection with business combination
|
2,432,374
|
2,432,374
|
33,566,001
|
-
|
-
|
35,998,375
|
|||||||||||||
Stock
split effected in the form of a fifteen percent stock dividend with
net
cash paid for fractional shares
|
754,952
|
754,952
|
(764,387
|
)
|
-
|
-
|
(9,435
|
)
|
|||||||||||
Balance
at December 31, 2006
|
8,265,136
|
8,265,136
|
62,659,201
|
12,610,588
|
(500,947
|
)
|
83,033,978
|
||||||||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
-
|
-
|
-
|
6,248,756
|
-
|
6,248,756
|
|||||||||||||
Net
unrealized holding gain on available for sale
securities
|
-
|
-
|
-
|
-
|
539,136
|
539,136
|
|||||||||||||
Total
comprehensive income
|
6,787,892
|
||||||||||||||||||
Common
stock issued pursuant to:
|
|||||||||||||||||||
Stock
options exercised
|
292,790
|
292,790
|
920,948
|
-
|
-
|
1,213,738
|
|||||||||||||
Stock
option related tax benefits
|
-
|
-
|
451,950
|
-
|
-
|
451,950
|
|||||||||||||
Expense
recognized in connection with stock options and restricted
stock
|
-
|
-
|
178,940
|
-
|
-
|
178,940
|
|||||||||||||
Issuance
of restricted stock, net of deferred compensation
|
17,050
|
17,050
|
(17,050
|
)
|
-
|
-
|
-
|
||||||||||||
Forfeiture
of restricted stock
|
(3,406
|
)
|
(3,406
|
)
|
3,406
|
-
|
-
|
-
|
|||||||||||
Ten
percent stock dividend with net cash paid for fractional
shares
|
833,009
|
833,009
|
9,399,032
|
(10,239,727
|
)
|
-
|
(7,686
|
)
|
|||||||||||
Balance
at December 31, 2007
|
9,404,579
|
$
|
9,404,579
|
$
|
73,596,427
|
$
|
8,619,617
|
$
|
38,189
|
$
|
91,658,812
|
2007
|
2006
|
2005
|
||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||
Net
income
|
$
|
6,248,756
|
$
|
4,903,534
|
$
|
3,144,373
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Depreciation
|
694,559
|
698,754
|
613,388
|
|||||||
Provision
for loan losses
|
1,684,219
|
990,786
|
806,796
|
|||||||
Amortization
of core deposit intangible
|
133,349
|
58,384
|
20,901
|
|||||||
Accretion
of fair value discount on loans
|
(439,820
|
)
|
(109,955
|
)
|
-
|
|||||
Amortization
of fair value premium on deposits
|
406,277
|
102,846
|
-
|
|||||||
Deferred
income taxes
|
(502,749
|
)
|
(210,710
|
)
|
(11,549
|
)
|
||||
(Gain)
loss on disposition of assets
|
65,685
|
(2,782
|
)
|
13,000
|
||||||
Loss
on sale of securities
|
-
|
-
|
16,422
|
|||||||
Net
(accretion) amortization of premiums on securities
|
(98,609
|
)
|
(20,023
|
)
|
82,702
|
|||||
Net
increase in cash surrender value life insurance
|
(339,204
|
)
|
(200,180
|
)
|
(200,050
|
)
|
||||
Stock
based compensation
|
178,940
|
202,246
|
-
|
|||||||
Change
in assets and liabilities:
|
||||||||||
Increase
in accrued interest receivable
|
(715,760
|
)
|
(592,718
|
)
|
(549,457
|
)
|
||||
(Increase)
decrease in other assets
|
(303,339
|
)
|
(579,977
|
)
|
(116,897
|
)
|
||||
Increase
in accrued interest payable
|
444,620
|
136,282
|
309,284
|
|||||||
Increase
(decrease) in accrued expenses and other liabilities
|
(292,252
|
)
|
269,732
|
482,878
|
||||||
NET
CASH PROVIDED BY OPERATING ACTIVITIES
|
7,164,672
|
5,646,219
|
4,611,791
|
|||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||
Purchase
of investment securities available for sale
|
(14,360,641
|
)
|
(25,248,980
|
)
|
(13,524,336
|
)
|
||||
Proceeds
from maturities and repayments of investment securities available
for
sale
|
9,305,441
|
6,646,100
|
6,374,682
|
|||||||
Proceeds
from sale of securities available for sale
|
-
|
6,106,354
|
3,845,157
|
|||||||
Loan
originations and principal collections, net
|
(126,014,080
|
)
|
(93,267,698
|
)
|
(70,984,109
|
)
|
||||
Purchases
of premises and equipment
|
(2,947,101
|
)
|
(1,679,226
|
)
|
(2,440,261
|
)
|
||||
Proceeds
from disposals of premises and equipment
|
20,050
|
800
|
-
|
|||||||
Proceeds
from sales of foreclosed assets
|
247,996
|
127,450
|
297,978
|
|||||||
Purchases
of Federal Home Loan Bank stock
|
(3,207,900
|
)
|
(1,163,300
|
)
|
(686,200
|
)
|
||||
Investment
in life insurance
|
(3,100,000
|
)
|
-
|
-
|
||||||
Net
cash (paid)/acquired in business combination
|
(7,500
|
)
|
8,221,923
|
-
|
||||||
NET
CASH USED BY INVESTING ACTIVITIES
|
(140,063,735
|
)
|
(100,256,577
|
)
|
(77,117,089
|
)
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||
Net
increase in deposits accounts
|
63,143,356
|
75,510,351
|
48,431,967
|
|||||||
Net
increase (decrease) in short-term borrowings
|
(10,696,000
|
)
|
9,486,847
|
13,657,048
|
||||||
Net
increase in long-term debt
|
76,000,000
|
15,000,000
|
2,000,000
|
|||||||
Proceeds
from sale of common stock, net
|
-
|
-
|
11,617,858
|
|||||||
Proceeds
from stock options exercised
|
1,213,738
|
255,797
|
392,912
|
|||||||
Net
cash (paid)/received for fractional shares
|
(7,687
|
)
|
(9,435
|
)
|
2
|
|||||
Excess
tax benefits from stock options exercised
|
451,950
|
45,401
|
199,800
|
|||||||
NET
CASH PROVIDED BY FINANCING
ACTIVITIES
|
130,105,357
|
100,288,961
|
76,299,587
|
|||||||
NET
INCERASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(2,793,706
|
)
|
5,678,603
|
3,794,289
|
||||||
CASH
AND CASH EQUIVALENTS, BEGINNING
|
15,150,110
|
9,471,507
|
5,677,218
|
|||||||
CASH
AND CASH EQUIVALENTS, ENDING
|
$
|
12,356,404
|
$
|
15,150,110
|
$
|
9,471,507
|
2005
|
||||
(Dollars in thousands)
|
||||
Net
income:
|
||||
As
reported
|
$
|
3,144
|
||
Deduct:
Total stock-based employee compensation expense determined under
fair
value method for all awards, net of related tax effects
|
(135
|
)
|
||
Pro
forma
|
$
|
3,009
|
||
Basic
earnings per share:
|
||||
As
reported
|
$
|
.58
|
||
Pro
forma
|
$
|
.56
|
||
Diluted
earnings per share:
|
||||
As
reported
|
$
|
.55
|
||
Pro
forma
|
$
|
.53
|
2007
|
2006
|
2005
|
||||||||
Change
in unrealized holding gains (losses) on available for sale
securities
|
$
|
881,765
|
$
|
289,891
|
$
|
(1,115,858
|
)
|
|||
Realized
loss on sale of available for sale securities
|
-
|
-
|
16,422
|
|||||||
Tax
effect
|
(342,629
|
)
|
(109,045
|
)
|
424,291
|
|||||
Net
of tax amount
|
$
|
539,136
|
$
|
180,846
|
$
|
(675,145
|
)
|
December 31, 2007
|
|||||||||||||
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Fair
value
|
||||||||||
Securities
available for sale:
|
|||||||||||||
U.S.
government securities and obligations of U.S. government
agencies
|
$
|
8,363,741
|
$
|
18,464
|
$
|
69,981
|
$
|
8,312,224
|
|||||
Mortgage-backed
|
56,986,240
|
565,175
|
317,786
|
57,233,629
|
|||||||||
Municipals
|
24,810,061
|
136,974
|
251,986
|
24,695,049
|
|||||||||
Other
equity securities
|
536,278
|
-
|
18,713
|
517,565
|
|||||||||
$
|
90,696,320
|
$
|
720,613
|
$
|
658,466
|
$
|
90,758,467
|
December
31, 2006
|
|||||||||||||
Amortized
cost
|
Gross
unrealized
gains
|
Gross
unrealized
losses
|
Fair
value
|
||||||||||
Securities
available for sale:
|
|||||||||||||
U.S.
government securities and obligations of U.S. government
agencies
|
$
|
7,493,079
|
$
|
5,790
|
$
|
113,998
|
$
|
7,384,871
|
|||||
Mortgage-backed
|
54,949,049
|
154,157
|
828,909
|
54,274,297
|
|||||||||
Municipals
|
22,320,984
|
67,266
|
206,104
|
22,182,146
|
|||||||||
Other
equity securities
|
779,398
|
102,180
|
-
|
881,578
|
|||||||||
$
|
85,542,510
|
$
|
329,393
|
$
|
1,149,011
|
$
|
84,722,892
|
December 31, 2007
|
|||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
||||||||||||||
Securities
available for sale:
|
|||||||||||||||||||
U.S.
government securities and obligations of U.S. government
agencies
|
$
|
1,203,508
|
$
|
3,656
|
$
|
5,061,756
|
$
|
66,325
|
$
|
6,265,264
|
$
|
69,981
|
|||||||
Mortgage-backed
|
631,014
|
1,868
|
20,335,222
|
315,918
|
20,966,236
|
317,786
|
|||||||||||||
Municipals
|
11,201,733
|
206,927
|
4,175,358
|
45,059
|
15,377,091
|
251,986
|
|||||||||||||
Other
equity securities
|
517,565
|
18,713
|
-
|
-
|
517,565
|
18,713
|
|||||||||||||
Total
temporarily impaired securities
|
$
|
13,553,820
|
$
|
231,164
|
$
|
29,572,336
|
$
|
427,302
|
$
|
43,126,156
|
$
|
658,466
|
December 31, 2006
|
|||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
Fair
value
|
Unrealized
losses
|
||||||||||||||
Securities
available for sale:
|
|||||||||||||||||||
U.S.
government securities and obligations of U.S. government
agencies
|
$
|
-
|
$
|
-
|
$
|
5,350,947
|
$
|
113,998
|
$
|
5,350,947
|
$
|
113,998
|
|||||||
Mortgage-backed
|
6,823,616
|
32,598
|
27,048,461
|
796,311
|
33,872,077
|
828,909
|
|||||||||||||
Municipals
|
11,531,302
|
79,878
|
4,255,378
|
126,226
|
15,786,680
|
206,104
|
|||||||||||||
Total
temporarily impaired securities
|
$
|
18,354,918
|
$
|
112,476
|
$
|
36,654,786
|
$
|
1,036,535
|
$
|
55,009,704
|
$
|
1,149,011
|
Amortized
cost
|
Fair
value
|
||||||
Due
within one year
|
$
|
9,905,516
|
$
|
9,904,522
|
|||
Due
after one year through five years
|
41,876,983
|
41,942,467
|
|||||
Due
after five years through ten years
|
24,693,829
|
24,752,325
|
|||||
Due
after ten years
|
13,683,714
|
13,641,588
|
|||||
Other
equity securities
|
536,278
|
517,565
|
|||||
$
|
90,696,320
|
$
|
90,758,467
|
Repricing or Maturing
|
||||||||||||||||
Less than
one year
|
One
to
five
years
|
Five
to
ten
years
|
Over
ten
years
|
Total
|
||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Securities
available for sale:
|
||||||||||||||||
U.
S. government agencies
|
||||||||||||||||
Balance
|
$
|
1,485
|
$
|
4,594
|
$
|
2,233
|
$
|
-
|
$
|
8,312
|
||||||
Weighted
average yield
|
3.89
|
%
|
4.73
|
%
|
5.09
|
%
|
-
|
4.26
|
%
|
|||||||
Mortgage-backed
securities
|
||||||||||||||||
Balance
|
$
|
8,420
|
$
|
31,744
|
$
|
11,776
|
$
|
5,294
|
$
|
57,234
|
||||||
Weighted
average yield
|
4.81
|
%
|
4.99
|
%
|
5.21
|
%
|
5.40
|
%
|
5.05
|
%
|
||||||
Municipal
securities
|
||||||||||||||||
Balance
|
$
|
-
|
$
|
5,604
|
$
|
10,743
|
$
|
8,348
|
$
|
24,695
|
||||||
Weighted
average yield
|
-
|
5.48
|
%
|
6.29
|
%
|
6.48
|
%
|
6.17
|
%
|
|||||||
Other
|
||||||||||||||||
Balance
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
517
|
$
|
517
|
||||||
Weighted
average yield
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Total
|
||||||||||||||||
Balance
|
$
|
9,905
|
$
|
41,942
|
$
|
24,752
|
$
|
14,159
|
$
|
90,758
|
||||||
Weighted
average yield
|
4.67
|
%
|
5.03
|
%
|
5.67
|
%
|
5.84
|
%
|
5.29
|
%
|
2007
|
2006
|
||||||
Real
estate - commercial
|
$
|
350,961,251
|
$
|
304,822,939
|
|||
Real
estate - residential
|
18,256,566
|
20,223,856
|
|||||
Construction
loans
|
184,019,364
|
110,032,772
|
|||||
Commercial
and industrial loans
|
72,930,108
|
67,822,285
|
|||||
Home
equity loans and lines of credit
|
45,258,071
|
42,704,279
|
|||||
Loans
to individuals
|
5,488,818
|
4,976,566
|
|||||
Total
loans
|
676,914,178
|
550,582,697
|
|||||
Less:
|
|||||||
Deferred
loan fees
|
(997,948
|
)
|
(764,149
|
)
|
|||
Allowance
for loan losses
|
(8,273,000
|
)
|
(6,945,000
|
)
|
|||
Total
|
$
|
667,643,228
|
$
|
542,873,548
|
Loans
to directors and officers as a group at December 31, 2006
|
$
|
28,249,708
|
||
Net
disbursements during year ended December 31, 2007
|
2,119,703
|
|||
Loans
to directors and officers as a group at December 31, 2007
|
$
|
30,369,411
|
2007
|
2006
|
2005
|
||||||||
Balance
at beginning of year
|
$
|
6,945,000
|
$
|
4,351,000
|
$
|
3,668,000
|
||||
Provision
for loan losses
|
1,684,219
|
990,786
|
806,796
|
|||||||
Charge-offs
|
(362,363
|
)
|
(85,571
|
)
|
(182,973
|
)
|
||||
Recoveries
|
6,144
|
2,168
|
59,177
|
|||||||
Net
charge-offs
|
(356,219
|
)
|
(83,403
|
)
|
(123,796
|
)
|
||||
Allowance
recorded related to loans acquired in acquisition of Port City Capital
Bank
|
-
|
1,686,617
|
-
|
|||||||
Balance
at end of year
|
$
|
8,273,000
|
$
|
6,945,000
|
$
|
4,351,000
|
2007
|
2006
|
||||||
Land
|
$
|
2,997,306
|
$
|
2,102,283
|
|||
Buildings
and leasehold improvements
|
3,937,770
|
3,298,026
|
|||||
Furniture
and equipment
|
4,360,112
|
3,081,514
|
|||||
Less
accumulated depreciation
|
(3,200,667
|
)
|
(2,574,159
|
)
|
|||
Total
|
$
|
8,094,521
|
$
|
5,907,664
|
Less than
$100,000
|
$100,000
or
more
|
Total
|
||||||||
(In thousands)
|
||||||||||
Three
months or less
|
$
|
15,010
|
$
|
56,529
|
$
|
71,539
|
||||
Over
three months through one year
|
38,370
|
111,366
|
149,736
|
|||||||
Over
one year through three years
|
12,670
|
102,274
|
114,944
|
|||||||
Over
three years to five years
|
2,532
|
6,480
|
9,012
|
|||||||
Total
|
$
|
68,582
|
$
|
276,649
|
$
|
345,231
|
2007
|
2006
|
||||||
Short-term
borrowings:
|
|||||||
Federal
funds purchased
|
$
|
3,755,000
|
$
|
6,451,000
|
|||
Federal
Home Loan Bank advances maturing within one year
|
10,000,000
|
18,000,000
|
|||||
Total
short-term borrowings
|
$
|
13,755,000
|
$
|
24,451,000
|
|||
Long-term
debt:
|
|||||||
Federal
Home Loan Bank advances maturing beyond one year
|
$
|
113,000,000
|
$
|
37,000,000
|
|||
Junior
subordinated debentures
|
8,248,000
|
8,248,000
|
|||||
Total
long-term debt
|
$
|
121,248,000
|
$
|
45,248,000
|
For the Year Ended December 31,
|
|||||||
2007
|
2006
|
||||||
(Dollars in thousands)
|
|||||||
Short-term
borrowings:
|
|||||||
Federal
funds purchased:
|
|||||||
Balance
outstanding at end of year
|
$
|
3,755
|
$
|
6,451
|
|||
Maximum
amount outstanding at any month end during the year
|
6,652
|
7,603
|
|||||
Average
balance outstanding during the year
|
3,661
|
3,258
|
|||||
Weighted-average
interest rate during the year
|
5.40
|
%
|
5.33
|
%
|
|||
Weighted-average
interest rate at end of year
|
4.57
|
%
|
5.63
|
%
|
Maturity
|
Interest Rate
|
Rate Type
|
2007
|
2006
|
||||||||||
December
6, 2012
|
4.22
|
%
|
Fixed |
$
|
5,000,000
|
$
|
-
|
|||||||
July
16, 2012
|
3.84
|
%
|
Convertible |
5,000,000
|
5,000,000
|
|||||||||
April
12, 2010
|
4.58
|
%
|
Fixed |
7,000,000
|
-
|
|||||||||
May
18, 2007
|
5.44
|
%
|
Prime Based |
-
|
8,000,000
|
|||||||||
October
21, 2009
|
4.72
|
%
|
Fixed |
9,000,000
|
-
|
|||||||||
December
31, 2007
|
5.09
|
%
|
Convertible |
-
|
10,000,000
|
|||||||||
July
28, 2008
|
4.40
|
%
|
Prime Based |
10,000,000
|
10,000,000
|
|||||||||
August
21, 2009
|
4.71
|
%
|
Fixed |
10,000,000
|
-
|
|||||||||
September
10, 2009
|
4.62
|
%
|
Fixed |
10,000,000
|
-
|
|||||||||
March
9, 2012
|
4.29
|
%
|
Convertible |
10,000,000
|
-
|
|||||||||
March
25, 2019
|
4.36
|
%
|
Convertible |
10,000,000
|
10,000,000
|
|||||||||
January
28, 2019
|
4.43
|
%
|
Convertible |
12,000,000
|
12,000,000
|
|||||||||
August
29, 2012
|
4.00
|
%
|
Convertible |
15,000,000
|
-
|
|||||||||
May
18, 2012
|
4.49
|
%
|
Convertible |
20,000,000
|
-
|
|||||||||
$
|
123,000,000
|
$
|
55,000,000
|
2008
|
$
|
1,224,000
|
||
2009
|
1,234,000
|
|||
2010
|
2,062,000
|
|||
2011
|
1,993,000
|
|||
2012
|
1,886,000
|
|||
Thereafter
|
26,971,000
|
|||
Total
|
$
|
35,370,000
|
2007
|
2006
|
2005
|
||||||||
Current
tax provision:
|
||||||||||
Federal
|
$
|
3,246,706
|
$
|
2,422,394
|
$
|
1,366,832
|
||||
State
|
776,243
|
568,916
|
303,617
|
|||||||
4,022,949
|
2,991,310
|
1,670,449
|
||||||||
Deferred
tax provision (benefit):
|
||||||||||
Federal
|
(404,347
|
)
|
(153,224
|
)
|
(34,424
|
)
|
||||
State
|
(98,402
|
)
|
(57,486
|
)
|
22,875
|
|||||
(502,749
|
)
|
(210,710
|
)
|
(11,549
|
)
|
|||||
Provision
for income taxes
|
$
|
3,520,200
|
$
|
2,780,600
|
$
|
1,658,900
|
2007
|
2006
|
2005
|
||||||||
Tax
computed at statutory rate of 34%
|
$
|
3,321,445
|
$
|
2,612,868
|
$
|
1,633,113
|
||||
Effect
of state income taxes
|
447,375
|
337,544
|
235,976
|
|||||||
Non-taxable
income
|
(256,218
|
)
|
(217,265
|
)
|
(158,773
|
)
|
||||
Non-taxable
Bank Owned Life Insurance
|
(115,329
|
)
|
(77,169
|
)
|
(77,119
|
)
|
||||
Other
|
122,927
|
124,622
|
25,703
|
|||||||
$
|
3,520,200
|
$
|
2,780,600
|
$
|
1,658,900
|
2007
|
2006
|
||||||
Deferred
tax assets:
|
|||||||
Allowance
for loan losses
|
$
|
3,082,684
|
$
|
2,540,149
|
|||
Net
operating loss carryforwards
|
-
|
76,390
|
|||||
Premises
and equipment
|
158,062
|
147,092
|
|||||
Rent
abatement
|
7,759
|
11,807
|
|||||
Unrealized
(gain) loss on securities
|
-
|
318,671
|
|||||
Fair
value adjustments
|
250,521
|
305,377
|
|||||
Deferred
compensation
|
342,897
|
260,443
|
|||||
Other
|
115,268
|
86,833
|
|||||
Net
deferred tax assets
|
3,957,191
|
3,746,762
|
|||||
Deferred
tax liabilities:
|
|||||||
Intangible
assets
|
(421,391
|
)
|
(472,803
|
)
|
|||
Deferred
loan costs
|
(80,021
|
)
|
(30,062
|
)
|
|||
Unrealized
gain on securities
|
(23,958
|
)
|
-
|
||||
Prepaid
expenses
|
(135,117
|
)
|
(107,316
|
)
|
|||
Net
deferred tax liabilities
|
(660,487
|
)
|
(610,181
|
)
|
|||
|
|||||||
Net
deferred tax asset included in other assets
|
$
|
3,296,704
|
$
|
3,136,581
|
2007
|
2006
|
2005
|
||||||||
Distribution
from mortgage company
|
$
|
-
|
$
|
46,099
|
$
|
38,152
|
||||
Brokerage
referral fees
|
164,665
|
78,510
|
203,168
|
|||||||
Other
|
269,498
|
326,264
|
179,087
|
|||||||
Total
|
$
|
434,163
|
$
|
450,873
|
$
|
420,407
|
2007
|
2006
|
2005
|
||||||||
Postage,
printing and office supplies
|
$
|
550,724
|
$
|
472,542
|
$
|
411,673
|
||||
Advertising
and promotions
|
606,667
|
517,015
|
396,772
|
|||||||
Professional
fees and services
|
1,511,404
|
899,389
|
711,805
|
|||||||
Other
|
1,926,666
|
1,328,417
|
960,621
|
|||||||
Total
|
$
|
4,595,461
|
$
|
3,227,363
|
$
|
2,480,871
|
Actual
|
Minimum for capital
adequacy purposes
|
Minimum to be well
capitalized under prompt
corrective action provisions
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||
Crescent
State Bank
|
|||||||||||||||||||
As
of December 31, 2007:
|
|||||||||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
$
|
75,165
|
10.32
|
%
|
$
|
58,253
|
8.00
|
%
|
$
|
72,216
|
10.00
|
%
|
|||||||
Tier
I Capital (to Risk-Weighted Assets)
|
66,892
|
9.19
|
%
|
29,126
|
4.00
|
%
|
43,689
|
6.00
|
%
|
||||||||||
Tier
I Capital (to Average Assets)
|
66,892
|
8.39
|
%
|
31,913
|
4.00
|
%
|
39,877
|
5.00
|
%
|
||||||||||
As
of December 31, 2006:
|
|||||||||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
$
|
46,980
|
10.26
|
%
|
$
|
36,640
|
8.00
|
%
|
$
|
45,800
|
10.00
|
%
|
|||||||
Tier
I Capital (to Risk-Weighted Assets)
|
41,774
|
9.12
|
%
|
18,320
|
4.00
|
%
|
27,480
|
6.00
|
%
|
||||||||||
Tier
I Capital (to Average Assets)
|
41,774
|
8.47
|
%
|
19,717
|
4.00
|
%
|
24,646
|
5.00
|
%
|
||||||||||
Port
City Capital Bank
|
|||||||||||||||||||
As
of December 31, 2006:
|
|||||||||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
$
|
16,002
|
10.69
|
%
|
$
|
11,971
|
8.00
|
%
|
$
|
14,964
|
10.00
|
%
|
|||||||
Tier
I Capital (to Risk-Weighted Assets)
|
14,217
|
9.50
|
%
|
5,985
|
4.00
|
%
|
8,978
|
6.00
|
%
|
||||||||||
Tier
I Capital (to Average Assets)
|
14,217
|
8.64
|
%
|
6,585
|
4.00
|
%
|
8,232
|
5.00
|
%
|
2006
|
2005
|
||||||
Net
interest income
|
$
|
26,250,692
|
$
|
18,802,822
|
|||
Net
income
|
6,833,502
|
4,960,512
|
|||||
Net
income per share:
|
|||||||
Basic
|
$
|
0.68
|
$
|
0.62
|
|||
Diluted
|
0.65
|
0.59
|
Fair
value of common stock issued
|
$
|
31,669,470
|
||
Fair
value of common stock options issued
|
4,328,905
|
|||
Cash
paid for shares
|
3,550,620
|
|||
Transaction
costs paid in cash
|
617,005
|
|||
Total
purchase price
|
$
|
40,166,000
|
Cash
and cash equivalents
|
$
|
12,382,048
|
||
Investment
securities available for sale
|
16,366,192
|
|||
Stock
in FHLB of Atlanta
|
286,100
|
|||
Loans
receivable, net
|
126,715,970
|
|||
Premises
and equipment
|
84,775
|
|||
Deferred
tax asset
|
817,430
|
|||
Goodwill
|
26,632,751
|
|||
Core
deposit intangible
|
1,124,481
|
|||
Other
assets
|
794,477
|
|||
Deposits
|
(144,187,695
|
)
|
||
Other
liabilities
|
(850,529
|
)
|
||
Net
assets acquired
|
$
|
40,166,000
|
Financial
instruments whose contract amounts represent credit risk:
|
||||
Commitments
to extend credit
|
$
|
125,321
|
||
Undisbursed
equity lines of credit
|
45,242
|
|||
Financial
standby letters of credit
|
5,771
|
|||
Commitment
to invest in Small Business Investment Corporation
|
413
|
2007
|
2006
|
||||||||||||
Carrying
amount
|
Estimated
fair
value
|
Carrying
amount
|
Estimated
fair
value
|
||||||||||
Financial
assets:
|
|||||||||||||
Cash
and cash equivalents
|
$
|
12,356,404
|
$
|
12,356,404
|
$
|
15,150,110
|
$
|
15,150,110
|
|||||
Investment
securities
|
90,758,467
|
90,758,467
|
84,722,892
|
84,722,892
|
|||||||||
Federal
Home Loan Bank stock
|
6,790,700
|
6,790,700
|
3,582,800
|
3,582,800
|
|||||||||
Loans,
net
|
667,643,228
|
667,893,000
|
542,873,548
|
538,653,000
|
|||||||||
Investment
in life insurance
|
9,122,697
|
9,122,697
|
5,683,493
|
5,683,493
|
|||||||||
Accrued
interest receivable
|
3,761,600
|
3,761,600
|
3,045,840
|
3,045,840
|
|||||||||
Financial
liabilities:
|
|||||||||||||
Deposits
|
605,431,312
|
593,257,000
|
541,881,680
|
523,783,000
|
|||||||||
Short-term
borrowings
|
13,755,000
|
13,755,000
|
24,451,000
|
24,451,000
|
|||||||||
Long-term
borrowings
|
121,248,000
|
134,589,000
|
45,248,000
|
38,620,000
|
|||||||||
Accrued
interest payable
|
1,682,428
|
1,682,428
|
1,237,808
|
1,237,808
|
Outstanding Options
|
Exercisable Options
|
||||||||||||
Number
|
Weighted
Average
Option
Price
|
Number
|
Weighted
Average
Option
Price
|
||||||||||
Options
outstanding, beginning of year
|
1,057,370
|
$
|
4.90
|
1,031,499
|
$
|
4.75
|
|||||||
Granted/vested
|
24,050
|
11.16
|
22,383
|
11.16
|
|||||||||
Exercised
|
(322,900
|
)
|
4.54
|
(322,900
|
)
|
4.54
|
|||||||
Forfeited
|
(3,981
|
)
|
11.20
|
(2,049
|
)
|
11.70
|
|||||||
Options
outstanding, end of year
|
754,539
|
$
|
5.22
|
728,933
|
$
|
5.00
|
Range of Exercise Prices
|
Stock Options Outstanding
|
Stock Options Exercisable
|
|||||
$
3.93 - $ 6.13
|
657,375
|
657,375
|
|||||
$
6.14 - $ 8.33
|
21,444
|
21,444
|
|||||
$
8.34 - $ 10.53
|
13,093
|
13,093
|
|||||
$
10.54 - $ 12.72
|
62,627
|
37,021
|
|||||
754,539
|
728,933
|
2007
|
2006
|
2005
|
||||||||
Assumptions
in estimating option values:
|
||||||||||
Risk-free
interest rate
|
4.68
|
%
|
4.58
|
%
|
4.36
|
%
|
||||
Dividend
yield
|
0
|
%
|
0
|
%
|
0
|
%
|
||||
Volatility
|
31.63
|
%
|
34.24
|
%
|
36.50
|
%
|
||||
Expected
life
|
7
years
|
7
years
|
7
years
|
|||||||
The
weighted average grant date fair value of options
|
$
|
4.88
|
$
|
5.48
|
$
|
5.68
|
Shares
|
Weighted
average
grant date
fair value
|
||||||
Non-vested –
December 31, 2006
|
8,125
|
$
|
12.31
|
||||
Granted
|
17,050
|
12.62
|
|||||
Vested
|
-
|
-
|
|||||
Forfeited
|
3,406
|
12.33
|
|||||
Non-vested –
December 31, 2007
|
21,769
|
$
|
12.55
|
2007
|
2006
|
||||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
1,475,753
|
$
|
4,218,479
|
|||
Investment
in subsidiaries
|
98,514,864
|
87,188,534
|
|||||
Other
assets
|
96,046
|
73,694
|
|||||
TOTAL
ASSETS
|
$
|
100,086,663
|
$
|
91,480,707
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Liabilities:
|
|||||||
Accrued
interest payable
|
$
|
164,377
|
$
|
166,963
|
|||
Due
to former Centennial Shareholders
|
15,474
|
27,113
|
|||||
Accrued
expenses and other liabilities
|
-
|
4,653
|
|||||
Subordinated
debentures
|
8,248,000
|
8,248,000
|
|||||
TOTAL
LIABILITIES
|
8,427,851
|
8,446,729
|
|||||
Stockholders'
equity:
|
|||||||
Common
stock
|
9,404,579
|
8,265,136
|
|||||
Additional
paid-in capital
|
73,596,427
|
62,659,201
|
|||||
Retained
earnings
|
8,619,617
|
12,610,588
|
|||||
Accumulated
other comprehensive income/(loss)
|
38,189
|
(500,947
|
)
|
||||
TOTAL
STOCKHOLDERS’ EQUITY
|
91,658,812
|
83,033,978
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
100,086,663
|
$
|
91,480,707
|
2007
|
2006
|
2005
|
||||||||
Equity
in earnings of subsidiaries
|
$
|
6,688,256
|
$
|
4,988,649
|
$
|
3,397,675
|
||||
Interest
income
|
169,130
|
630,505
|
233,179
|
|||||||
Dividend
income
|
21,200
|
20,669
|
16,238
|
|||||||
Other
miscellaneous income
|
-
|
23,286
|
803
|
|||||||
Interest
expense
|
(738,485
|
)
|
(720,822
|
)
|
(573,438
|
)
|
||||
Other
operating expenses
|
(118,245
|
)
|
(81,853
|
)
|
(59,784
|
)
|
||||
Income
tax benefit (expense)
|
226,900
|
43,100
|
129,700
|
|||||||
Net
income
|
$
|
6,248,756
|
$
|
4,903,534
|
$
|
3,144,373
|
2007
|
2006
|
2005
|
||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
6,248,756
|
$
|
4,903,534
|
$
|
3,144,373
|
||||
Adjustments
to reconcile net income to net cash provided (used) by operating
activities:
|
||||||||||
Amortization
|
33,400
|
33,400
|
33,400
|
|||||||
Stock
based compensation
|
178,940
|
202,246
|
-
|
|||||||
Equity
in earnings of Crescent State Bank
|
(6,688,256
|
)
|
(4,194,284
|
)
|
(3,397,675
|
)
|
||||
Equity
in earnings of Port City Capital Bank
|
-
|
(794,365
|
)
|
-
|
||||||
Changes
in assets and liabilities:
|
||||||||||
Increase
in other assets
|
(55,752
|
)
|
5,068
|
(10,765
|
)
|
|||||
Increase
(decrease) in accrued interest payable
|
(2,586
|
)
|
24,112
|
40,983
|
||||||
Increase
(decrease) in accrued expenses and other liabilities
|
(16,292
|
)
|
(17,660
|
)
|
(76,467
|
)
|
||||
Net
cash provided (used) by operating activities
|
(301,790
|
)
|
162,051
|
(266,151
|
)
|
|||||
Cash
flows from investing activities:
|
||||||||||
Investment
in Subsidiaries
|
(4,098,938
|
)
|
(8,770,879
|
)
|
(1,750,000
|
)
|
||||
Cash
flows from financing activities:
|
||||||||||
Net
proceeds from issuance of common stock
|
-
|
-
|
11,617,858
|
|||||||
Proceeds
from exercise of stock options
|
1,213,738
|
255,797
|
392,912
|
|||||||
Excess
tax benefits from stock options exercised
|
451,950
|
45,401
|
199,800
|
|||||||
Cash
(paid) received in lieu of fractional shares
|
(7,686
|
)
|
(9,435
|
)
|
2
|
|||||
Net
cash provided by financing activities
|
1,658,002
|
291,763
|
12,210,572
|
|||||||
|
||||||||||
Net
increase (decrease) in cash and cash equivalents
|
(2,742,726
|
)
|
(8,317,065
|
)
|
10,194,421
|
|||||
Cash
and cash equivalents, beginning
|
4,218,479
|
12,535,544
|
2,341,123
|
|||||||
Cash
and cash equivalents, ending
|
$
|
1,475,753
|
$
|
4,218,479
|
$
|
12,535,544
|
2007
|
2006
|
2005
|
||||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||
Cash
paid during the year for:
|
||||||||||
Interest
|
$
|
27,772,615
|
$
|
17,120,578
|
$
|
8,562,944
|
||||
Income
taxes
|
$
|
3,928,000
|
$
|
2,655,001
|
$
|
1,330,000
|
||||
Supplemental
Disclosure of Noncash Investing and Financing Activities:
|
||||||||||
Transfer
of loans to foreclosed assets
|
$
|
479,814
|
$
|
199,900
|
$
|
48,300
|
||||
Increase
(decrease) in fair value of securities available for sale, net of
tax
|
$
|
539,136
|
$
|
180,846
|
$
|
(675,145
|
)
|
·
|
pertain
to the maintenance of records that, in reasonable detail, accurately
and
fairly reflect the transactions and dispositions of
assets;
|
·
|
provide
reasonable assurance that transactions are recorded as necessary
to permit
preparation of financial statements in accordance with accounting
principles generally accepted in the United States of
America;
|
·
|
provide
reasonable assurance that receipts and expenditures are being made
only in
accordance with management and director authorization;
and
|
·
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of assets that could
have a
material effect on the consolidated financial
statements.
|
Plan Category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants, and rights
(a)
|
Weighted-average exercise
price of outstanding
options, warrants, and
rights
(b)
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
|||||||
Equity
compensation plans approved by security holders
|
754,539
|
$
|
5.22
|
307,886
|
||||||
Equity
compensation plans not approved by security holders
|
None
|
None
|
None
|
|||||||
Total
|
754,539
|
$
|
5.22
|
307,886
|
·
|
Consolidated Balance Sheets as of December 31, 2007 and December 31, 2006 |
·
|
Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005 |
·
|
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2007, 2006 and 2005 |
·
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2007, 2006
and
2005
|
·
|
Notes
to Consolidated Financial
Statements
|
·
|
Report
of Independent Registered Public Accounting
Firm
|
·
|
1999
Incentive Stock Option Plan
|
|
·
|
1999
Nonqualified Stock Option Plan for Directors
|
|
·
|
Employment
Agreement between the Registrant and Michael G. Carlton
|
|
·
|
Employment
Agreement between the Registrant and Bruce W. Elder
|
|
·
|
Employment
Agreement between the Registrant and Thomas E. Holder,
Jr.
|
|
·
|
Employment
Agreement between the Registrant and Ray D. Vaughn
|
|
·
|
Employment
Agreement between the Registrant and W. Keith Betts
|
|
·
|
Salary
Continuation Agreement with Michael G. Carlton
|
|
·
|
Salary
Continuation Agreement with Bruce W. Elder
|
|
·
|
Salary
Continuation Agreement with Thomas E. Holder, Jr.
|
|
·
|
Salary
Continuation Agreement with Ray D. Vaughn
|
|
·
|
Salary
Continuation Agreement with W. Keith Betts
|
|
·
|
Endorsement
Split Dollar Agreement with Michael G. Carlton
|
|
·
|
Endorsement
Split Dollar Agreement with Bruce W. Elder
|
|
·
|
Endorsement
Split Dollar Agreement with Thomas E. Holder, Jr.
|
|
·
|
Endorsement
Split Dollar Agreement with Ray D. Vaughn
|
|
·
|
Endorsement
Split Dollar Agreement with W. Keith Betts
|
|
·
|
Crescent
State Bank Directors’ Compensation Plan
|
|
·
|
2006
Omnibus Stock Ownership and Long Term Incentive
Plan
|
CRESCENT
FINANCIAL CORPORATION
|
|||
Registrant
|
|||
By:
|
/s/
Michael G. Carlton
|
||
Michael
G. Carlton
|
|||
Date:
March 10, 2008
|
President
and Chief Executive Officer
|
/s/
Michael G. Carlton
Michael
G. Carlton, President and
Chief
Executive Officer, Director
|
March
7, 2008
|
/s/
Bruce W. Elder
Bruce
W. Elder, Vice President
(Principal
Accounting Officer)
|
March
7, 2008
|
/s/
Brent D. Barringer
Brent
D. Barringer, Director
|
March
7, 2008
|
/s/
William H. Cameron
William
H. Cameron, Director
|
March
7, 2008
|
/s/
Bruce I. Howell
Bruce
I. Howell, Director
|
March
7, 2008
|
/s/
James A. Lucas
James
A. Lucas, Director
|
March
7, 2008
|
/s/
Kenneth A. Lucas
Kenneth
A. Lucas, Director
|
March
7, 2008
|
/s/
Sheila Hale Ogle
Sheila Hale Ogle, Director |
March
7, 2008
|
/s/
Charles A. Paul
Charles
A. Paul, Director
|
March
7, 2008
|
/s/
Francis R. Quis, Jr.
Francis R. Quis, Jr., Director |
March
7, 2008
|
/s/
Jon S. Rufty
Jon S. Rufty, Director |
March
7, 2008
|
/s/
Jon T. Vincent
Jon T. Vincent, Director |
March
7, 2008
|
/s/
Stephen K. Zaytoun
Stephen
K. Zaytoun, Director
|
March
7, 2008
|
Exhibit Number
|
Exhibit
|
|||
3(i)
|
Articles
of Incorporation.
|
*
|
||
3(ii)
|
Bylaws
|
*
|
||
4
|
Form
of Stock Certificate
|
*
|
||
10(i)
|
1999
Incentive Stock Option Plan
|
**
|
||
10(ii)
|
1999
Nonqualified Stock Option Plan
|
**
|
||
10(iii)
|
Employment
Agreement Michael G. Carlton
|
Filed
Herewith
|
||
10(iv)
|
Employment
Agreement of Bruce W. Elder
|
Filed
Herewith
|
||
10(v)
|
Employment
Agreement of Thomas E. Holder, Jr.
|
Filed
Herewith
|
||
10(vi)
|
Amended
and Restated Trust Agreement of Crescent Financial Capital Trust
I
|
***
|
||
10(vii)
|
Indenture
|
***
|
||
10(viii)
|
Junior
Subordinated Debenture
|
***
|
||
10(ix)
|
Guarantee
Agreement
|
***
|
||
10(x)
|
Salary
Continuation Agreement with Michael G. Carlton
|
Filed
Herewith
|
||
10(xi)
|
Salary
Continuation Agreement with Bruce W. Elder
|
Filed
Herewith
|
||
10(xii)
|
Salary
Continuation Agreement with Thomas E. Holder, Jr.
|
Filed
Herewith
|
||
10(xiii)
|
Endorsement
Split Dollar Agreement with Michael G. Carlton
|
***
|
||
10(xiv)
|
Endorsement
Split Dollar Agreement with Bruce W. Elder
|
***
|
||
10(xv)
|
Endorsement
Split Dollar Agreement with Thomas E. Holder, Jr.
|
***
|
||
10(xvi)
|
Crescent
State Bank Directors’ Compensation Plan
|
****
|
||
10(xvii)
|
Salary
Continuation Agreement with Ray D. Vaughn
|
Filed
herewith
|
||
10(xviii)
|
Salary
Continuation Agreement with W. Keith Betts
|
Filed
herewith
|
||
10(xix)
|
Employment
Agreement with Ray D. Vaughn
|
Filed
herewith
|
||
10(xx)
|
Employment
Agreement of W. Keith Betts
|
Filed
herewith
|
||
10(xxi)
|
Endorsement
Split Dollar Agreement with Ray D. Vaughn.
|
Filed
Herewith
|
||
10(xxii)
|
Endorsement
Split Dollar Agreement with W. Keith Betts.
|
Filed
Herewith
|
||
21
|
Subsidiaries
|
Filed
herewith
|
23
|
Consent
of Dixon Hughes PLLC
|
Filed
herewith
|
||
31(i)
|
Certification
of Principal Executive Officer Pursuant to Section 302 of the Sarbanes
Oxley Act
|
Filed
herewith
|
||
31(ii)
|
Certification
of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes
Oxley Act
|
Filed
herewith
|
||
32(i)
|
Certification
of Principal Executive Officer Pursuant to Section 906 of the Sarbanes
Oxley Act
|
Filed
herewith
|
||
32(ii)
|
Certification
of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes
Oxley Act
|
Filed
herewith
|
||
99(i)
|
Registrant’s
Proxy Statement for the 2007 Annual Meeting of
Shareholders
|
*****
|