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 SEPTEMBER 30, 2003
Commission File Number: 000-50047
CALVIN B. TAYLOR BANKSHARES, INC.
I.R.S. Employer Identification No.: 52-1948274
State of incorporation: Maryland
Address of principal executive offices: 24 North Main
Street, Berlin, Maryland 21811
Issuer's telephone number: (410) 641-1700
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Exchange Act 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
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: The registrant had 3,228,160 shares of
common stock ($1.00 par) outstanding as of October 31, 2003.
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Form 10-Q
Index
Part I - Financial Information Page
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4-5
Consolidated Statements of Cash Flows 6
Notes to Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operation 8-11
Item 3 Quantitative and Qualitative Disclosures About
Market Risks 11
Item 4 Controls and Procedures 11-12
Part II - Other Information
Item 1 Legal Proceedings 13
Item 2 Changes in Securities and Use of Proceeds 13
Item 3 Defaults Upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security
Holders 13
Item 5 Other Information 13
Item 6 Exhibits and Reports on Form 8-K 13-16
Signatures 17
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Part I - Financial Information
Consolidated Balance Sheets
(unaudited)
September December
2003 2002
Assets
Cash and due from banks $ 21,315,902 $ 21,051,412
Federal funds sold 69,446,001 54,821,617
Interest-bearing deposits 1,807,183 1,432,205
Investment securities available for sale 9,160,989 8,390,550
Investment securities held to maturity
(approximate fair value of $141,188,658
and $115,470,092) 140,643,424 114,181,749
Loans, less allowance for loan losses
of $2,185,520 and $2,181,135 163,816,310 161,824,677
Premises and equipment 6,931,050 5,745,842
Accrued interest income 1,354,725 1,405,587
Bank owned life insurance 4,015,368 -
Other assets 475,156 389,307
$418,966,108 $369,242,946
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 88,608,881 $ 73,289,541
Interest-bearing 259,866,056 228,205,925
348,474,937 301,495,466
Securities sold under agreements
to repurchase 5,463,827 4,029,100
Pending purchases of investment securities 131,655 2,990,830
Accrued interest payable 165,430 243,468
Note payable 185,644 198,912
Accrued income taxes 55,816 106,514
Other liabilities 277,767 163,370
354,755,076 309,227,660
Stockholders' equity
Common stock, par value $1 per share
authorized 10,000,000 shares, issued
and outstanding 3,240,000 shares at
December 31, 2002, 3,228,260 shares
at September 30, 2003 3,228,260 3,240,000
Additional paid in capital 16,879,375 17,290,000
Retained earnings 43,019,687 38,788,018
63,127,322 59,318,018
Net unrealized gain on securities
available for sale 1,083,710 697,268
64,211,032 60,015,286
$418,966,108 $369,242,946
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)
(unaudited)
September December
2003 2002
For the three months ended
September 30
2003 2002
Interest and dividend revenue
Loans, including fees $ 3,042,068 $ 3,314,206
U.S. Treasury and Agency securities 667,572 875,517
State and municipal securities 57,325 50,190
Federal funds sold 154,312 297,203
Deposits with banks 10,924 10,996
Equity securities 2,333 5,143
Total interest and dividend revenue 3,934,534 4,553,255
Interest expense
Deposit interest 468,017 983,556
Other 5,762 12,065
Total interest expense 473,779 995,621
Net interest income 3,460,755 3,557,635
Provision for loan losses - -
Net interest income after
provision for loan losses 3,460,755 3,557,635
Other operating revenue
Service charges on deposit accounts 242,606 251,430
Miscellaneous revenue 142,521 130,279
Total other operating revenue 385,127 381,709
Other expenses
Salaries and employee benefits 870,982 844,671
Occupancy 138,445 115,349
Furniture and equipment 148,602 143,871
Other operating 440,728 471,355
Total other expenses 1,598,757 1,575,246
Income before income taxes 2,247,125 2,364,097
Income taxes 818,000 872,100
Net income $ 1,429,125 $ 1,491,997
Basic earnings per share $ 0.44 $ 0.46
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)
For the nine months ended
September 30
2003 2002
Interest and dividend revenue
Loans, including fees $ 9,179,266 $ 9,954,324
U.S. Treasury and Agency securities 2,128,927 2,677,533
State and municipal securities 162,310 173,349
Federal funds sold 419,616 686,935
Deposits with banks 31,808 31,935
Equity securities 30,571 27,249
Total interest and dividend revenue 11,952,498 13,551,325
Interest expense
Deposit interest 1,679,547 3,170,983
Other 16,886 31,483
Total interest expense 1,696,433 3,202,466
Net interest income 10,256,065 10,348,859
Provision for loan losses - -
Net interest income after
provision for loan losses 10,256,065 10,348,859
Other operating revenue
Service charges on deposit accounts 768,256 723,877
Miscellaneous revenue 405,892 362,833
Total other operating revenue 1,174,148 1,086,710
Other expenses
Salaries and employee benefits 2,701,111 2,567,502
Occupancy 389,151 339,675
Furniture and equipment 412,407 420,676
Other operating 1,315,874 1,403,329
Total other expenses 4,818,543 4,731,182
Income before income taxes 6,611,670 6,704,387
Income taxes 2,380,000 2,392,300
Net income $ 4,231,670 $ 4,312,087
Basic earnings per share $ 1.31 $ 1.33
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and
Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
2003 2002
Cash flows from operating activities
Interest received $ 11,941,280 $ 13,838,534
Fees and commissions received 1,158,902 979,903
Interest paid (1,774,472) (3,405,454)
Cash paid to suppliers and employees (4,515,229) (4,311,990)
Income taxes paid (2,430,698) (2,235,847)
4,379,783 4,865,146
Cash flows from investing activities
Proceeds from maturities of investment
securities 86,215,000 67,142,815
Purchase of investment securities held
to maturity (115,658,517) (95,108,703)
Certificates of deposit purchased, net
of redemptions (374,978) (200,205)
Purchases of premises, equipment, and
intangibles (1,659,344) (497,903)
Loans made, net of principal collected (1,991,634) 2,794,505
Purchases of bank owned life insurance (4,000,000) -
(37,469,473) (25,869,491)
Cash flows from financing activities
Net change in time deposits 1,522,793 (5,765,467)
Net change in other deposits 45,456,679 49,813,468
Net change in repurchase agreements 1,434,727 1,088,151
Payment on note payable (13,269) (12,498)
Purchase and retirement of common stock (422,366) -
Dividend paid - (1,944,000)
47,978,564 43,179,654
Net increase (decrease) in cash 14,888,874 22,175,309
Cash and equivalents at beginning of
period 75,873,029 72,786,922
Cash and equivalents at end of period $ 90,761,903 $ 94,962,231
Reconciliation of net income to net cash
provided from operating activities
Net income $ 4,231,670 $ 4,312,087
Adjustments
Depreciation and amortization 472,945 469,571
Deferred income tax - -
Provision for loan losses - -
Security discount accretion,
net of premium amortization (62,082) (98,721)
Increase in cash value of bank owned
life insurance (15,368) -
(Gain) loss on disposition of assets 2,140 5,183
Decrease (increase) in accrued interest
receivable and other assets (35,934) 353,157
Increase (decrease) in accrued interest
payable and other liabilities (213,588) (176,131)
$ 4,379,783 $ 4,865,146
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Notes to Financial Statements
1. Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments considered necessary for a fair presentation have been
made. These adjustments are of a normal recurring nature. Results of
operations for the nine months ended September 30, 2003 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2003. For further information, refer to the audited
consolidated financial statements and related footnotes for the
Registrant's fiscal period ended December 31, 2002.
Consolidation has resulted in the elimination of all significant
intercompany accounts and transactions.
Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks and overnight investments in federal
funds sold.
Per share data
Earnings per common share are determined by dividing net income by the
weighted average of shares outstanding. The weighted average of common
shares outstanding is 3,235,776 and 3,240,000 shares, for the nine months
ending September 30, 2003 and 2002, respectively, and 3,235,110 and 3,240,000
shares, for the quarter ending September 30, 2003 and 2002, respectively.
2. Comprehensive Income
Comprehensive income consists of:
For the nine months ended
September 30
2003 2002
Net income $ 4,231,670 $ 4,312,087
Unrealized gain (loss) on investment
securities available for sale,
net of income taxes 386,443 200,086
Comprehensive income $ 4,618,113 $ 4,512,173
3. Loan commitments
Loan commitments are agreements to lend to customers as long as there
is no violation of any conditions of the contracts. Outstanding loan
commitments and letters of credit consist of:
September 30, December 31,
2003 2002
Loan commitments $ 24,224,769 $ 22,253,644
Standby letters of credit $ 2,525,518 $ 1,733,677
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Part I. Financial Information
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion contains certain forward-looking statements
within the meaning of and made pursuant to the safe harbor provisions of
the Private Litigation Securities Reform Act of 1995.
The following discussion of the financial condition and results of
operations of the Registrant (the Company) should be read in conjunction
with the Company's financial statements and related notes and other
statistical information included elsewhere herein.
General
Calvin B. Taylor Bankshares, Inc. (the "Company") was incorporated as
a Maryland corporation on October 31, 1995. The Company owns all of the
stock of Calvin B. Taylor Banking Company (the "Maryland Bank"), a commercial
bank that was established in 1890 and incorporated under the laws of the
State of Maryland on December 17, 1907. The Bank operates nine banking
offices in Worcester County, Maryland and one banking office in Ocean View,
Delaware. The Bank's administrative office is located in Berlin, Maryland.
The Maryland Bank is engaged in a general commercial and retail banking
business serving individuals, businesses, and governmental units in Worcester
County, Maryland, Ocean View, Delaware, and neighboring counties.
The Company currently engages in no business other than owning and
managing the Maryland Bank.
Financial Condition
Total assets of the Company increased $49.7 million from December 31,
2002 to September 30, 2003. Combined deposits and customer repurchase
agreements increased $48.4 million during the same period. During the first
quarter of the year, the Bank typically experiences a decline in deposits
since business customers are using their deposits to meet cash flow needs.
Generally, this situation reverses late in the second quarter of the year as
the Bank receives loan repayments from seasonal business customers, and
deposits from summer residents and tourists. During first the nine months
of 2002 and 2003, this traditional pattern has not applied. Management
believes that adverse conditions in the stock markets have contributed to
unusually large increases in deposits throughout the first halves of this
year and last year.
During the first nine months of 2003, the Bank's gross loan portfolio
has increased $2.0 million. Funding for these loans was provided by growth
in deposits. This increase in loans does not negatively impact the Company's
ability to meet liquidity demands.
The allowance for loan losses represents a reserve for potential losses
in the loan portfolio. The adequacy of the allowance for loan losses is
evaluated periodically based on a review of all significant loans, with a
particular emphasis on non-accruing, past due, and other loans that
management believes require attention. The determination of the reserve
level rests upon management's judgment about factors affecting loan quality
and anticipated changes in the composition and size of the portfolio, as
well as assumptions about the economy. Historically, the Company has
low loan charge-offs. The Bank's target level for its allowance as a
percentage of gross loans ranges from approximately 1.00% to 1.35%. Based
on a review of the consolidated loan portfolio, the Company determined that
an allowance of 1.32% of gross loans was adequate as of September 30, 2003
as compared to 1.33% of gross loans at December 31, 2002. At September 30,
2003, there were no non-accruing loans. Loans delinquent ninety days or
more totaled $279,875 or .17% of the portfolio.
Liquidity
The Company's major sources of liquidity are loan repayments, maturities
of short-term investments including federal funds sold, and increases in
core deposits. Throughout the first quarter of the year, when the Bank
typically experiences a decline in deposits, federal funds sold and
investment securities are primary sources of liquidity. During the second
quarter of the year, additional sources of liquidity become more readily
available as business borrowers start repaying loans, and the Bank receives
seasonal deposits. Throughout the second and third quarters the Bank
maintains a high liquidity level. Funds from seasonal deposits are generally
invested in short-term U.S. Treasury Bills and overnight federal funds.
Average liquid assets (cash and amounts due from banks, interest bearing
deposits in other banks, federal funds sold, and investment securities)
compared to average deposits were 67.47% for the third quarter of 2003
compared to 63.94% for the third quarter of 2002. This increase in liquidity
is primarily due to the rapid growth in deposits, which has not been
accompanied by a corresponding increase in demand for loans.
Results of Operations
Net income for the three months ended September 30, 2003, was $1,429,125
or $.44 per share, compared to $1,491,997 or $.46 per share for the third
quarter of 2002. This represents a decrease of $62,872 or 4.21% from the
prior year. Year to date net income decreased $80,417 per share from
$4,312,087 or $1.33 per share in 2002 to $4,231,670 or $1.31 per share in
2003. Significant reasons for the year to date decrease in net income are
lower net interest income and higher non-interest expenses, offset in part
by increased other operating revenue.
Net interest income decreased $92,794 in the first nine months of 2003
as compared to the first nine months of 2002. Net interest income decreased
$96,879 in the three months ended September 30, 2003 as compared to the three
months ended September 30, 2002. This decrease, both year-to-date and for
the most recent quarter, is attributable to declining yields on earning
assets, particularly the Bank's investment security portfolio and federal
funds sold. The Company's net interest income is one of the most important
factors in evaluating its financial performance. Management uses interest
sensitivity analysis to determine the effect of rate changes. Net interest
income is projected over a one-year period to determine the effect of an
increase or decrease in the prime rate of 100 basis points. If prime were
to decrease one hundred basis points, and all assets and liabilities maturing
within that period were fully adjusted for the rate change, the Company
would experience a decrease of less than four percent in net interest income.
The sensitivity analysis does not consider the likelihood of these rate
changes nor whether management's reaction to this rate change would be to
reprice its loans or deposits.
No provision for loan losses was made in the first three quarters of
2003 or 2002. Net charge-offs/(recoveries) were ($2,255) during the third
quarter of 2003, and ($4,385) for the year-to-date. Net charge-offs/
(recoveries) during the third quarter of 2002, and the year-to-date, were
($2,839) and $25,456, respectively.
Other operating revenue, including service charges on deposit accounts,
increased $3.4 thousand from third quarter 2002 to third quarter 2003. For
the year to date, other operating revenue has increased $87.4 thousand from
2002 to 2003. Revenue increases are primarily due to deposit services
charges assessed against a larger deposit base and fee increases placed in
effect in May 2002. Additionally, the Bank purchased Bank Owned Life
Insurance policies at a cost of $4.0 million in August 2003. An increase
in cash surrender value of $15.4 thousand on these policies is included in
other operating revenue.
Personnel expenses are higher for the nine months ended September 30,
2003 compared to the same period in 2002 due to general increases in salaries
as well as increased health care costs. The bank, which hires seasonal
employees during the summer, employed 97 full time equivalent employees as
of September 30, 2003. The Company has no employees other than those hired
by the bank.
The Company's occupancy expense increased $23.1 thousand from first
three quarters of 2002 to 2003, and $49.5 thousand for the comparative
years-to-date. Notable factors contributing to this increase are increased
landscaping and grounds maintenance costs incurred to improve the appearance
of Bank properties and costs related to the ongoing construction project at
the Berlin, Maryland office.
Other expense variances also include quarterly and year-to-date
decreases of $30.6 thousand and $87.5 thousand, respectively, in other
operating expenses. Examination assessments are down $23.7 thousand due to
the elimination of $28.3 thousand in fees assessed by the Delaware Bank
Commissioner in 2002. Legal fees are down $35.4 thousand due to the
attorneys' fees for the merger of the Delaware and Maryland subsidiary banks
in September 2002.
Third quarter income taxes are $54.1 thousand less than last year, on a
pre-tax income decrease of $117.0 thousand. Year-to date income taxes are
$12.3 thousand less than last year, on a pre-tax income decrease of $92.7
thousand. This is partially due to an increase in the Company's effective
tax rate resulting from tax-favored income becoming a smaller percentage of
total revenues.
Plans of Operation
The Bank conducts general commercial banking businesses in its service
area of Worcester County, Maryland and Sussex County, Delaware, while
emphasizing the banking needs of individuals and small- to medium-sized
businesses and professional concerns. The Bank offers a full range of
federally insured deposit services that are typically available in most
banks and savings and loan associations, including checking accounts, NOW
accounts, savings accounts and time deposits of various types ranging from
daily money market accounts to longer-term certificates of deposit.
The Company, through the Bank, offers a full range of short- to medium-
term commercial and personal loans, and originates mortgage loans, including
real estate construction and acquisition loans. The Bank has the intent and
the ability to hold loans that it originates in its portfolio.
Other bank services include cash management services, 24-hour ATM's,
credit cards, debit cards, safe deposit boxes, travelers' checks, direct
deposit of payroll and social security checks, and automatic drafts for
various accounts. The Bank offers bank-by-phone and Internet banking
services, including electronic bill-payment, to both commercial and
retail customers.
Capital Resources and Adequacy
Total stockholders' equity increased $4,195,746 from December 31, 2002
to September 30, 2003. This increase is attributable to the comprehensive
income recorded during the period, as detailed in Note 2 of the Notes to
Financial Statements, reduced by $422,367 used to purchase and retire
11,740 shares of common stock. Stock repurchases were at prices of $35.75
to $36.00 dollars per share.
Under the capital guidelines of the Federal Reserve Board and the FDIC,
the Company and the Bank are currently required to maintain a minimum
risk-based total capital ratio of 8%, with at least 4% being Tier 1 capital.
Tier 1 capital consists of common shareholders' equity, qualifying perpetual
preferred stock, and minority interests in equity accounts of consolidated
subsidiaries, less certain intangibles. In addition, the Company and the
Bank must maintain a minimum Tier 1 leverage ratio (Tier 1 capital to total
assets) of at least 3%, but this minimum ratio is increased by 100 to 200
basis points for other than the highest-rated institutions.
Tier one risk-based capital ratios of the Company as of September 30,
2003 and 2002 were 36.75% and 38.57%, respectively. Both are substantially
in excess of regulatory minimum requirements.
Website Access to SEC Reports
The Bank maintains an Internet website at www.taylorbank.com. The
Company's periodic SEC reports, including annual reports on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, are
accessible through this website. Access to these filings is free of charge.
The reports are available as soon as practicable after they are filed
electronically with the SEC.
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
The Company's principal market risk exposure relates to interest rates
on interest-earning assets and interest-bearing liabilities. Unlike most
industrial companies, the assets and liabilities of financial institutions
such as the Company and the Bank are primarily monetary in nature.
Therefore, interest rates have a more significant effect on the Company's
performance than do the effects of changes in the general rate of inflation
and change in prices. In addition, interest rates do not necessarily move
in the same direction or in the same magnitude as the prices of goods and
services. As discussed previously, management monitors and seeks to manage
the relationships between interest sensitive assets and liabilities in order
to protect against wide interest rate fluctuations, including those resulting
from inflation.
At September 30, 2003, the Company's interest rate sensitivity, as
measured by gap analysis, showed the Company was asset-sensitive with a
one-year cumulative gap of 11.26%, as a percentage of interest-earning
assets. Generally asset-sensitivity indicates that assets reprice more
quickly than liabilities and in a rising rate environment net interest
income typically increases. Conversely, if interest rates decrease, net
interest income would decline. The Bank has classified its demand mortgage
and commercial loans as immediately repriceable. Unlike loans tied to
prime, these rates do not necessarily change as prime changes since the
decision to call the loans and change the rates rests with management.
Item 4. Controls and procedures
Within the ninety days prior to the date of this report, the Company's
management performed an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures and its
internal controls and procedures for financial reporting. Disclosure
Controls are procedures that are designed to ensure that information
required to be disclosed in the Company's publicly filed reports is
reported in a timely manner. As part of these controls, Management reviews
information gathered through systems developed for that purpose to determine
the nature of required disclosure.
Internal controls are procedures designed to provide management with
reasonable assurance that assets are safeguarded, and that transactions are
properly authorized, executed, and recorded to permit the preparation of
financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal controls, errors
or irregularities may occur and not be detected. The projection of an
evaluation of controls to future periods is subject to the risk that
procedures may become inadequate due to changes in conditions including the
degree of compliance with procedures.
The Chief Executive Officer and the Treasurer of the Company have
concluded, based on the evaluation of disclosure controls and internal
controls that the financial information and disclosures included in periodic
SEC filings and the Company's financial statements are fairly presented in
conformity with generally accepted accounting principles.
Changes in Internal Controls
There were no significant changes in the company's internal controls
or in other factors that could significantly affect internal controls,
including corrective actions with regard to significant deficiencies and
material weaknesses.
Calvin B. Taylor Bankshares, Inc. and Subsidiaries
Part II. Other Information
Item 1 Legal Proceedings
Not applicable
Item 2 Changes in Securities and Use of Proceeds
Not applicable
Item 3 Defaults Upon Senior Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
The Company held its annual meeting on May 7, 2003,
during which the items detailed in the proxy statement dated March 18,
2003, were approved. This includes the reelection of the Board of Directors.
Item 5 Other information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits
2. Proxy Statement dated March 18, 2003, is
incorporated by reference.
31. Certifications of Principal Executive Officer and
Principal Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 are presented on
pages 14 and 15, respectively.
32. Certification of Principal Executive Officer and
Principal Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 is presented on
page 16.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter
ended September 30, 2003.
Exhibit 31
Certification of Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Reese F. Cropper, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Calvin B.
Taylor Bankshares, 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 we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiary,
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 the
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 the 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 the
quarterly report whether or not 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.
Calvin B. Taylor Bankshares, Inc.
Date: November 6, 2003 By:/s/Reese F. Cropper, Jr.
Reese F. Cropper, Jr.,
Chairman & Chief Executive Officer
(Principal Executive Officer)
Exhibit 31
Certification of Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jennifer G. Hawkins, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Calvin B.
Taylor Bankshares, 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 we have:
a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiary,
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 the
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 the 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 the
quarterly report whether or not 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.
Calvin B. Taylor Bankshares, Inc.
Date: November 6, 2003 By:/s/Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Exhibit 32
Certification of Principal Executive Officer
and Principal Financial Officer
Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
We, the undersigned, certify that to the best of our
knowledge, based upon a review of the Quarterly Report on
Form 10-Q for the period ended June 30, 2003 of the
Registrant (the "Report"):
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended; and
(2) The information contained in the Report fairly
presents, in all material respects, the financial
condition and results of operations of the Registrant.
Calvin B. Taylor Bankshares, Inc.
Date: November 6, 2003 By: /s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.,
Chairman & Chief Executive Officer
(Principal Executive Officer)
Date: November 6, 2003 By: /s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Calvin B. Taylor Bankshares, Inc.
Date: November 6, 2003 By: /s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.,
Chairman & Chief Executive Officer
Date: November 6, 2003 By: /s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer