UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2003
Commission File No. 33-12756-B
COMMUNITY BANCORP, INC.
A Massachusetts Corporation
IRS Employer Identification No. 04-2841993
17 Pope Street, Hudson, Massachusetts 01749
Telephone - (978)568-8321
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
Common Stock
$2.50 par value
5,829,780 shares outstanding
as of March 31, 2003
PART I - FINANCIAL INFORMATION
COMMUNITY BANCORP, INC.
Item 1. CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share data) March 31, December 31,
2003 2002
-------- --------
ASSETS
Cash and cash equivalents $ 26,899 $ 22,308
Federal funds sold 19,816 19,557
Securities held to maturity, at amortized
cost (fair value $130,600 in 2003 and
$118,118 in 2002) 127,407 114,699
Securities available for sale, at fair value 52,241 64,765
Federal Home Loan Bank of Boston stock 1,547 1,442
Mortgage loans held for sale 1,087 2,531
Loans 213,615 201,389
Less allowance for loan losses 2,747 2,733
------- -------
Loans, net 210,868 198,656
------- -------
Bank premises and equipment, net 6,351 6,295
Other assets 5,704 5,522
------- -------
Total assets $451,920 $435,775
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest bearing $ 78,293 $ 83,445
Interest bearing 274,428 270,837
------- -------
Total deposits 352,721 354,282
------- -------
Securities sold under repurchase agreements 27,523 24,969
Federal Home Loan Bank of Boston advances 28,690 14,395
Other liabilities 3,684 3,223
------- -------
Total liabilities 412,618 396,869
------- -------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $2.50 par value, 100,000
shares authorized, none issued or outstanding -- --
Common stock, $2.50 par value, 12,000,000
shares authorized, 6,398,436 shares issued,
5,829,780 shares outstanding (5,829,630
shares outstanding at 12/31/2002) 15,996 15,996
Additional paid-in capital 362 360
Retained earnings 26,261 25,346
Treasury stock, at cost, 568,656 shares
(568,806 shares at 12/31/2002) (4,006) (4,007)
Accumulated other comprehensive income 689 1,211
------- -------
Total stockholders' equity 39,302 38,906
------- -------
Total liabilities and
stockholders' equity $451,920 $435,775
======= =======
The accompanying notes are an integral part of these unaudited, consolidated
financial statements
-2-
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
(Dollars in thousands, except share data) March 31,
-------------------
2003 2002
---- ----
Interest and dividend income:
Interest and fees on loans $ 3,376 $ 3,367
Interest and dividends on securities:
Taxable interest 1,708 1,819
Nontaxable interest 249 240
Dividends 90 91
Interest on federal funds sold 42 79
----- -----
Total interest and dividend income 5,465 5,596
Interest expense:
Interest on deposits 1,011 1,289
Interest on securities sold under
repurchase agreements 76 131
Interest on Federal Home Loan Bank of
Boston advances 181 61
----- -----
Total interest expense 1,268 1,481
----- -----
Net interest income 4,197 4,115
Provision for loan losses 45 45
----- -----
Net interest income after provision
for loan losses 4,152 4,070
----- -----
Noninterest income:
Merchant credit card assessments 376 416
Service charges 372 332
Other charges, commissions and fees 353 365
Gains on sales of loans, net 141 64
Gains on sales of securities, net 118 59
Other 27 27
----- -----
Total noninterest income 1,387 1,263
----- -----
Noninterest expense:
Salaries and employee benefits 1,801 1,713
Information technology and ATM network 314 296
Occupancy, net 270 259
Furniture and equipment 89 100
Credit card processing 325 339
Printing, stationery and supplies 71 61
Professional fees 149 119
Marketing and advertising 52 28
Other 359 348
Total noninterest expense 3,430 3,263
----- -----
Income before income tax expense 2,109 2,070
Income tax expense 709 712
----- -----
Net income $ 1,400 $ 1,358
===== =====
-3-
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)
(Unaudited)
Three months ended
March 31,
------------------
2003 2002
---- ----
Basic earnings per common share $ .24 $ .23
Diluted earnings per common share $ .24 $ .23
Dividends per share $ .08 $ .07
Basic weighted average number of shares 5,829,767 5,940,606
Diluted weighted average number of shares 5,865,404 5,956,950
The accompanying notes are an integral part of these unaudited, consolidated
financial statements.
-4-
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Three months ended March 31, 2002 and 2003
------------------------------------------
Accumulated
Additional Other
(Dollars in thousands, Common Paid-in Retained Treasury Comprehensive
except share data) Stock Capital Earnings Stock Income Total
----- ------- -------- ----- ------ -----
Balance at December 31, 2001 $15,996 $ 219 $21,609 $(2,297) $ 784 $36,311
------
Comprehensive income:
Net income -- -- 1,358 -- -- 1,358
Change in net unrealized gain/loss
on securities available for sale,
net of reclassification adjustment
and tax effects -- -- -- -- (375) (375)
------
Total comprehensive income -- -- -- -- -- 983
------
Cash dividends declared ($0.073 per
share) -- -- (434) -- -- (434)
------ ------ ------ ------ ------ ------
Balance at March 31, 2002 $15,996 $ 219 $22,533 $(2,297) $ 409 $36,860
====== ====== ====== ====== ====== ======
- ----------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2002 $15,996 $ 360 $25,346 $(4,007) $ 1,211 $38,906
------
Comprehensive income:
Net income -- -- 1,400 -- -- 1,400
Change in net unrealized gain/loss
on securities available for sale,
net of reclassification adjustment
and tax effects -- -- -- -- (522) (522)
------
Total comprehensive income -- -- -- -- -- 878
------
Cash dividends declared ($0.083 per
share) -- -- (485) -- -- (485)
------
Reissuance of 150 shares of treasury
stock -- 2 -- 1 -- 3
------ ------ ------ ------ ------ ------
Balance at March 31, 2003 $15,996 $ 362 $26,261 $(4,006) $ 689 $39,302
====== ====== ====== ====== ====== ======
The accompanying notes are an integral part of these unaudited consolidated financial statements.
-5-
COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
(Dollars in thousands) March 31,
-------------------
2003 2002
---- ----
Cash flows from operating activities:
Net income $ 1,400 $ 1,358
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 247 241
Gains on sales of securities (118) (59)
Amortization of securities premiums
and (discounts), net 221 99
Provision for loan losses 45 45
Deferred tax benefit -- (489)
Net change in:
Mortgage loans held for sale 1,444 802
Other assets, net (182) 339
Other liabilities, net 812 (774)
------ ------
Total adjustments 2,469 204
------ ------
Net cash provided by operating activities 3,869 1,562
------ ------
Cash flows from investing activities:
Net change in federal funds sold (259) (15,794)
Purchases of securities held to maturity (21,276) (999)
Purchases of securities available for sale
and Federal Home Loan Bank stock (104) (4,258)
Maturities, calls and principal repayments
of securities held to maturity 8,409 4,966
Proceeds from sales of securities available
for sale 7,113 59
Maturities and principal repayments of
securities available for sale 4,581 1,929
Net change in loans (12,258) 233
Purchases of premises and equipment,net (303) (218)
------ ------
Net cash used in investing activities (14,097) (14,082)
Cash flows from financing activities:
Net change in deposits (1,561) 16,784
Net change in securities sold under
repurchase agreements 2,554 (2,051)
Proceeds from Federal Home Loan Bank of
Boston advances 15,000 --
Payments on Federal Home Loan Bank of
Boston advances (705) --
Reissuance of treasury stock 3 --
Dividends paid (472) (421)
------ ------
Net cash provided by financing activities 14,819 14,312
------ ------
Net change in cash and cash equivalents 4,591 1,792
------ ------
Cash and cash equivalents at beginning of period 22,308 19,877
------ ------
Cash and cash equivalents at end of period $ 26,899 $ 21,669
====== ======
The accompanying notes are an integral part of these unaudited, consolidated
financial statements.
-6-
Supplemental cash flow information:
Three months ended
(Dollars in thousands) March 31,
-------------------
2003 2002
---- ----
Interest paid on deposits and borrowed funds $ 1,366 $ 1,514
Income taxes paid 205 206
-7-
COMMUNITY BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2003
_____________________________________________________________________________
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and notes required by accounting principles generally accepted for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for any interim
period are not necessarily indicative of results expected for the full year.
These unaudited consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto contained in the
Company's Annual Report to shareholders and Form 10-K for the year ended
December 31, 2002.
2. RECLASSIFICATIONS
-----------------
Certain amounts in the prior period's financial statements have been
reclassified to be consistent with the current period's presentation. The
reclassifications have no effect on net income.
3. STOCK OPTIONS
-------------
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation", ("SFAS No. 123") requires stock-based compensation to be
either recorded or disclosed at its fair value. As permitted by SFAS No. 123,
the Company has elected to account for stock-based compensation under
Accounting Principles Board Opinion No. 25. Had compensation cost for awards
made in 2003 and 2002 under the Company's stock option plans been determined
based on the fair value at the grant dates, consistent with the method set
forth under SFAS No. 123, the Company's pro forma net income and earnings per
share would have been adjusted to the pro forma amounts indicated below. Pro
forma compensation expense for options granted is reflected over the vesting
period. Therefore, future pro forma compensation expense may be greater as
additional options are granted. The table below is for the quarters ending
March 31, 2003 and March 31, 2002.
Three months ended
(In thousands, except per share data) March 31,
-------------------
2003 2002
---- ----
Net income: As reported $1,400 $1,358
Pro forma 1,367 1,335
Earnings per
share - basic: As reported 0.24 0.23
Pro forma 0.23 0.23
Earnings per
share - diluted: As reported 0.24 0.23
Pro forma 0.23 0.22
-8-
PART I - FINANCIAL INFORMATION
---------------------
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary
- -------
The Company recorded net income of $1,400,000 for the three months ended March
31, 2003, representing an increase of $42,000 or 3.1% over net income of
$1,358,000 reported for the same period in 2002. Basic earnings per share of
$0.24 for the current period represented an increase of $0.01 from basic
earnings per share of $0.23 reported for the three months ended March 31, 2002.
Diluted earnings per share of $0.24 for the current period represented an
increase of $0.01 from diluted earnings per share of $0.23 for the three months
ended March 31, 2002.
The improvement in net income resulted primarily from an increase in net
interest income and noninterest income, partially offset by an increase in
noninterest expense.
Deposits of $352.7 million at March 31, 2003 decreased by $1.6 million or 0.5%
from $354.3 million at December 31, 2002. The decrease in deposits occurred in
the noninterest-bearing categories, partially offset by an increase in
interest-bearing categories.
Loans of $213.6 million at March 31, 2003 increased by $12.2 million or 6.1%
from $201.4 million at December 31, 2002. This increase took place in the
commercial loan and 1-4 family real estate loan categories. Noncurrent loans
(nonaccrual loans and loans 90 days or more past due but still accruing)
totaled $491,000 and $245,000 at March 31, 2003 and December 31, 2002,
respectively.
Assets of $451.9 million at March 31, 2003 represented a $16.1 million or 3.7%
increase from $435.8 million at December 31, 2002.
Three Months Ended March 31, 2003 As Compared To
Three Months Ended March 31, 2002
---------------------------------
Interest and Dividend Income
- ----------------------------
Interest and dividend income for the three months ended March 31, 2003 was
$5,465,000 representing a decrease of $131,000 or 2.3% from $5,596,000 for the
three months ended March 31, 2002, primarily due to lower interest rates in
2003, partially offset by an increase in average loan and securities balances
in 2003. Interest expense was $1,268,000, representing a decrease of $213,000
or 14.4% from $1,481,000 for the three months ended March 31, 2002, primarily
due to lower interest rates in 2003, partially offset by higher average
interest bearing deposit and borrowing balances in 2003. Net interest income
for the three months ended March 31, 2003 was $4,197,000, representing an
increase of $82,000 or 2.0% from $4,115,000 for the three months ended March
31, 2002.
Noninterest Income and Expense
- ------------------------------
Noninterest income for the three months ended March 31, 2003 was $1,387,000
representing an increase of $124,000 or 9.8% from $1,263,000 for the three
months ended March 31, 2002. This increase was primarily the result of an
increase in service charges, gains on sales of loans and gains on sales of
-9-
securities, partially offset by a decrease in merchant credit card assessments.
The increases in the three income categories were primarily the result of the
low interest rate environment. Service charges increased due to the lower
earnings credit applied to business DDA balances, gains on sale of loans
increased due to increased residential mortgage originations, and the low
interest rate environment enabled the bank to sell securities available for
sale that matured within one year and invest the proceeds of those sales in
longer-term securities at higher yields. The decrease in merchant credit card
assessments resulted from lower merchant sales volumes attributable to the
weaker economic environment.
Noninterest expense for the three months ended March 31, 2003 of $3,430,000 was
up $167,000 or 5.1% from $3,263,000 for the corresponding period in 2002 as the
result of increases in salaries and benefits, and professional fees. The
increase in salaries and benefits occurred due to merit salary increases, minor
additions to staff and increases in employee benefit expense. Professional
fees increased primarily due to legal fees associated with the administration
of several employee benefit plans.
Provision for Loan Losses
- -------------------------
The provision for loan losses was $45,000 for the three months ended March 31,
2003 and 2002. Management believes the allowance for loan losses is adequate
and it will continue its on going assessment of the allowance and may adjust
the provision if necessary.
Income Taxes
- ------------
Income tax expense of $709,000 for the three months ended March 31, 2003
remained consistent with $712,000 of income tax expense recorded for the
corresponding period in 2002, as the company's effective tax rate was
approximately 34% for both periods.
Allowance for Loan Losses
- -------------------------
The allowance for loan losses is based on management's estimate of the amount
required to reflect the risks in the loan portfolio, based on circumstances and
conditions known or anticipated at each reporting date. The methodology for
assessing the appropriateness of the allowance consists of a review of the
following three key elements:
* The valuation allowance for loans specifically identified as impaired
* The formula allowance for the various loan portfolio classifications
* The imprecision allowance
The valuation allowance reflects specific estimates of potential losses on
individually impaired loans. When each impaired loan is evaluated, if the net
present value of the expected cash flows (or fair value of the collateral if
the loan is collateral-dependent) is lower than the recorded loan balance, the
difference represents the valuation allowance for that loan.
The formula allowance is a percentage-based estimate based on historical loss
experience and assigns required allowance allocations by loan classification
based on fixed percentages of all outstanding loan balances. The formula
allowance employs a risk-rating model that grades loans based on their general
characteristics of credit quality and relative risk. When a loan's credit
quality becomes suspect, it is placed on the Company's internal "watch list"
and its allowance allocation is increased. For the remainder of the loan
portfolio, appropriate allowance levels are estimated based on judgments
-10-
regarding the type of loan, economic conditions and trends, potential exposure
to loss and other factors. Losses are charged against the allowance when
management believes the collectibility of principal is doubtful.
In addition to the valuation allowance and the formula allowance, there is an
imprecision allowance that is determined based on the totals of the valuation
and formula allowances. The imprecision allowance reflects the measurement
imprecision inherent in determining the valuation allowance and the formula
allowance. Per the Company's internal policy, the imprecision allowance should
represent 15% - 25% of the valuation and formula allowances, depending on
management's evaluation of various conditions, the effects of which are not
directly measured in determining the valuation and formula allowances.
The evaluation of the inherent loss resulting from these conditions involves a
higher level of uncertainty because they are not identified with specific
problem credits or portfolio segments. The conditions evaluated in connection
with the imprecision allowance include the following:
* Levels of and trends in delinquencies and impaired loans
* Levels of and trends in charge-offs and recoveries
* Trends in loan volume and terms
* Effects of changes in credit concentrations
* Effects of and changes in risk selection and underwriting standards, and
other changes in lending policies, procedures and practices
* National and local economic conditions
* Trends and duration of the present business cycle
* Findings of internal and external credit review examiners
When an evaluation of these conditions signifies a change in the level of risk,
the Company adjusts the formula allowance. Periodic credit reviews enable
further adjustment to the formula allowance through the risk rating of loans
and the identification of loans requiring a valuation allowance. In addition,
the formula allowance model is designed to be self-correcting by taking into
consideration recent actual loss experience.
Securities
- ----------
The Company's securities portfolio consists of obligations of U.S. Government
sponsored agencies, mortgage-backed securities, obligations of various
municipalities, and corporate bonds. Those assets are used in part to secure
public deposits and as collateral for repurchase agreements. Total securities
were $181.2 million at March 31, 2003, representing an increase of $300,000 or
0.3% from $180.9 million at December 31, 2002. Securities classified as
available for sale were $52.2 million and $64.8 million at March 31, 2003 and
December 31, 2002, respectively. During the first quarter of 2003, the Company
sold $7.0 million in short-term available for sale bonds. The sales took place
in order to take advantage of current interest rate conditions and improve
investment earnings.
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of liquidity are customer deposits, amortization
and pay-offs of loan principal and maturities of securities. These sources
provide funds for loan originations, the purchase of securities and other
activities. Deposits are considered a relatively stable source of funds. At
March 31, 2003 and December 31, 2002, deposits were $352.7 million and $354.3
million, respectively.
As a nationally chartered member of the Federal Reserve System, the Bank has
-11-
the ability to borrow funds from the Federal Reserve Bank of Boston by pledging
certain of its securities as collateral. Also, the Bank is a member of the
Federal Home Loan Bank which provides additional borrowing opportunities.
Bank regulatory authorities have established a capital measurement tool called
"Tier 1" leverage capital. A 4.00% ratio of Tier 1 capital to assets now
constitutes the minimum capital standard for most banking organizations. At
March 31, 2003, the Company's Tier 1 leverage capital ratio was 8.54%.
Regulatory authorities have also implemented risk-based capital guidelines
requiring a minimum ratio of Tier 1 capital to risk weighted assets of 4.00%
and a minimum ratio of total capital to risk-weighted assets of 8.00%. At
March 31, 2003 the Company's Tier 1 and total risk-based capital ratios were
15.27% and 16.36%, respectively. The Bank is categorized as "well capitalized"
under the Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA).
Asset/Liability Management
- --------------------------
The Company has an asset/liability management committee which oversees all
asset/liability activities of the Company. The committee establishes general
guidelines each year and meets regularly to review the Company's operating
results and to make strategic changes when necessary.
It is the Company's general policy to reasonably match the rate sensitivity of
its assets and liabilities. A common benchmark of this sensitivity is the one
year gap position, which is a reflection of the difference between the speed
and magnitude of rate changes of interest rate sensitive liabilities as
compared with the Bank's ability to adjust the rates of it's interest rate
sensitive assets in response to such changes. The Company's negative one-year
cumulative gap position at March 31, 2003, representing the excess of repricing
liabilities versus repricing assets within a one year time frame, was 0.2%
expressed as a percentage of total assets.
Cautionary Statement Regarding Forward-Looking Information
- ----------------------------------------------------------
This Quarterly Report on Form 10-Q, including Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains, in
addition to historical information, "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. When used in this and
other Reports filed by the Company, the words "anticipate", "estimate",
"expect", "objective", and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are subject to a
variety of risks and uncertainties. In addition to any assumptions and other
factors referred to specifically in connection with such forward-looking
statements, risk factors that could cause the Company's actual results to
differ materially from those contemplated in any forward-looking statement
include, but are not limited to, changes in political and economic conditions,
interest rate fluctuations, competitive product and pricing pressures, adverse
changes in asset quality, increased inflation, and adverse legislative or
regulatory changes.
Item 4. CONTROLS AND PROCEDURES
-----------------------
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
Within the 90 day period prior to the filing of this report, an evaluation was
carried out under the supervision and with the participation of the Company's
management, including the Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"), of the effectiveness of our disclosure controls and
-12-
procedures. Based on that evaluation, the CEO and CFO have concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. Subsequent to the date of their
evaluation, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect the disclosure
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
-----------------
Item 5. OTHER INFORMATION
-----------------
On March 4, 2003, the Company's Board of Directors approved an amendment to the
"2001 Directors Plan". Under this amendment, the Company may grant up to
54,000 options. As originally approved on February 22, 2001, the Plan allowed
the Company to grant up to 30,000 options.
On March 4, 2003, the Company's Board of Directors granted stock options under
the "2001 Directors Plan" for the purchase of an aggregate of 18,000 shares of
the Company's common stock at a price of $13.50 per share, the fair market
value on the date of the grant. The options vest over a four year period.
On March 4, 2003 the Company's Board of Directors granted stock options under
the "2001 Incentive Stock Option Plan for Key Employees" for the purchase of an
aggregate of 84,317 shares of the Company's common stock at a price of $13.50
per share, the fair value on the date of the grant. The granted options fully
vest over a four year period.
There is no established public trading market for the Company's common stock.
Therefore, for purposes of the stock options granted on March 4, 2003 pursuant
to the "2001 Director's Plan" and the "2001 Incentive Stock Option Plan for Key
Employees", the fair value of the Company's stock on the date of grant was
determined to be equal to the most recent trade price as of that date.
On March 18, 2003, the Company's Board of Directors declared a first quarter
2003 cash dividend of $.083 per share of common stock to shareholders of record
at March 1, 2003, payable on April 15, 2003.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
99.1 Certification of Financial Statements by Chief Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Financial Statements by Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
The Company did not file a Form 8-K during the quarter ended
March 31, 2003.
-13-
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNITY BANCORP, INC.
Date: May 12, 2003 By: /s/ James A. Langway
--------------------
James A. Langway
President & Chief Executive Officer
Principal Executive Officer
Date: May 12, 2003 By: /s/ Donald R. Hughes, Jr.
-------------------------
Donald R. Hughes, Jr.
Treasurer and Clerk,
Principal Financial Officer and
Principal Accounting Officer
-14-
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James A. Langway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Community Bancorp,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
-15-
DATE: May 12, 2003 /s/ James A. Langway
--------------------
James A. Langway
President and Chief Executive Officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Donald R. Hughes, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Community Bancorp,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
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6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
DATE: May 12, 2003 /s/Donald R. Hughes, Jr.
------------------------
Donald R. Hughes, Jr.
Treasurer and Clerk and
Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT DESCRIPTION
------- -----------
99.1 Certification of Financial Statements by Chief Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Financial Statements by Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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