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, 2005
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
Indicate by check mark whether the registrant is an accelerated filer as defined
in Rule 12b-2 of the Exchange Act. 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 3,202,856 shares
of common stock ($1.00 par) outstanding as of April 30, 2005.
Page 1
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Form 10-Q
Index
Part I- Financial Information Page
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5-6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Item 3 Quantitative and Qualitative Disclosures About Market Risks 11
Item 4 Controls and Procedures 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
Page 2
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I - Financial Information
Consolidated Balance Sheets
(unaudited)
March December
2005 2004
Assets
Cash and due from banks $ 29,187,591 $ 21,901,546
Federal funds sold 32,181,358 32,692,233
Interest-bearing deposits 2,192,289 2,161,496
Investment securities available for sale 6,181,148 5,921,287
Investment securities held to maturity
(approximate fair value of $143,678,665
and $155,107,698) 145,357,473 156,029,445
Loans, less allowance for loan losses
of $2,192,552 and $2,177,926 171,607,950 161,510,157
Premises and equipment 6,819,649 6,891,238
Accrued interest receivable 1,547,979 1,415,775
Computer software 300,263 322,209
Bank owned life insurance 4,252,618 4,214,806
Other assets 139,327 272,790
$ 399,767,645 $ 393,332,982
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 83,412,947 $ 78,542,414
Interest-bearing 241,687,979 241,229,944
325,100,926 319,772,358
Securities sold under agreements to
repurchase 4,923,490 5,933,466
Accrued interest payable 109,588 116,502
Note payable 157,250 162,161
Deferred income taxes 612,153 549,070
Other liabilities 748,568 101,857
331,651,975 326,635,414
Stockholders' equity
Common stock, par value $1 per share
Authorized 10,000,000 shares, issued and
outstanding 3,203,504 shares at March 31,
2005and 3,208,478 shares at December 31,
2004 3,203,504 3,208,478
Additional paid-in capital 16,012,915 16,187,005
Retained earnings 47,417,886 45,917,427
66,634,305 65,312,910
Accumulated other comprehensive income 1,481,365 1,384,658
68,115,670 66,697,568
$ 399,767,645 $ 393,332,982
See accompanying Notes to Consolidated Financial Statements
Page 3
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
For the three months ended March 31,
2005 2004
Interest and dividend revenue
Loans, including fees $ 2,883,229 $ 2,906,027
U.S. Treasury and government
agency securities 771,093 673,548
State and municipal securities 73,027 60,169
Federal funds sold 180,184 72,541
Interest-bearing deposits 12,162 12,070
Equity securities 21,456 18,767
Total interest and dividend revenue 3,941,151 3,743,122
Interest expense
Deposit interest 356,595 398,564
Borrowings 4,419 3,973
Total interest expense 361,014 402,537
Net interest income 3,580,137 3,340,585
Provision for loan losses - -
Net interest income after
provision for loan losses 3,580,137 3,340,585
Noninterest revenue
Service charges on deposit accounts 255,598 252,221
ATM and debit card revenue 76,172 65,691
Miscellaneous revenue 97,891 101,472
Total noninterest revenue 429,661 419,384
Noninterest expenses
Salaries 766,179 773,931
Employee benefits 183,027 203,230
Occupancy 163,897 144,833
Furniture and equipment 121,711 127,250
Other operating 447,525 432,941
Total noninterest expenses 1,682,339 1,682,185
Income before income taxes 2,327,459 2,077,784
Income taxes 827,000 735,000
Net income $ 1,500,459 $ 1,342,784
Earnings per common share $ 0.47 $ 0.42
See accompanying Notes to Consolidated Financial Statements
Page 4
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the three months ended
March 31,
2005 2004
Cash flows from operating activities
Interest received $ 3,766,288 $ 3,689,955
Fees and commissions received 466,133 350,871
Interest paid (367,928) (413,334)
Cash paid to suppliers and employees (1,561,650) (1,427,146)
Income taxes paid (78,920) (200,328)
2,223,923 2,000,018
Cash flows from investing activities
Purchase of investments available for sale (100,000) (50,000)
Proceeds from maturities of investments held
to maturity 22,520,000 29,060,009
Purchase of investments held to maturity (11,805,437) (15,432,757)
Loans made, net of principal collected (10,097,793) (797,944)
Purchases of and deposits on premises,
equipment,and computer software (69,346) (182,776)
447,424 12,596,532
Cash flows from financing activities
Net increase (decrease) in
Time deposits (4,709,437) (3,814,039)
Other deposits 10,038,004 (1,924,553)
Securities sold under agreements
to repurchase (1,009,976) 18,598
Payments on note payable (4,911) (4,626)
Common shares repurchased (179,064) (110,448)
Dividends paid - -
4,134,616 (5,835,068)
Net increase (decrease) in cash and
cash equivalents 6,805,963 8,761,482
Cash and cash equivalents at beginning
of period 54,623,503 50,158,779
Cash and cash equivalents at end of
period $ 61,429,466 $ 58,920,261
See accompanying Notes to Consolidated Financial Statements
Page 5
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the three months ended
March 31,
2005 2004
Reconciliation of net income to net cash
provided by operating activities
Net income $ 1,500,459 $ 1,342,784
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 162,880 157,861
Amortization of premiums and accretion of
discount, net (42,661) (1,762)
(Gain) loss on disposition of assets - 1,543
Decrease (increase) in
Accrued interest receivable (132,204) (51,404)
Cash surrender value of bank owned
life insurance (37,812) (40,390)
Other assets 133,463 138,408
Increase (decrease) in
Accrued interest payable (6,914) (10,797)
Accrued income taxes 748,080 534,672
Other liabilities (101,368) (70,897)
$ 2,223,923 $ 2,000,018
Composition of cash and cash equivalents
Cash and due from banks $ 29,187,591 $ 16,652,209
Federal funds sold 32,181,358 42,217,542
Interest-bearing deposits, except for
time deposits 60,517 50,510
$ 61,429,466 $ 58,920,261
See accompanying Notes to Consolidated Financial Statements
Page 6
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Financial Statements
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles in the
United States of America 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 of financial position and results of
operations have been made. These adjustments are of a normal recurring nature.
Results of operations for the three months ended March 31, 2005 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2005. For further information, refer to the audited consolidated
financial statements and related footnotes for the Registrant's year ended
December 31, 2004.
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, federal funds sold, and interest-bearing
deposits except for time deposits. Federal funds are purchased and sold for
one-day periods.
Per share data
Earnings per common share are determined by dividing net income by the
weighted average number of common shares outstanding, which was 3,207,262
and 3,227,366, for the quarters ended March 31, 2005 and 2004, respectively.
2. Comprehensive Income
Comprehensive income consists of:
Three months ended March 31,
2005 2004
Net income $ 1,500,459 $ 1,342,784
Unrealized gain (loss) on investment
securities available for sale, net
of income taxes 96,707 44,048
Comprehensive income $ 1,597,166 $ 1,386,832
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:
March 31, December 31,
2005 2004
Loan commitments $ 32,826,105 $ 28,570,617
Standby letters of credit $ 1,619,582 $ 1,535,210
Page 7
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Report contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and the
Securities Exchange Act of 1934. These statements appear in a number of places
in this Report and include all statements regarding the intent, belief or
current expectations of the Company, its directors, or its officers with respect
to, among other things: (i) the Company's financing plans; (ii) trends affecting
the Company's financial condition or results of operations; (iii) the Company's
growth strategy and operating strategy; and (iv) the declaration and payment of
dividends. Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors discussed herein and
those factors discussed in detail in the Company's filings with the Securities
and Exchange Commission.
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. (Company) was incorporated as a Maryland
corporation on October 31, 1995. The Company owns all of the stock of Calvin B.
Taylor Banking Company (Bank), a commercial bank that was established in 1890
and incorporated under the laws of the State of Maryland on December 17, 1907.
This 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 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 Bank.
Critical Accounting Policies
The Company's financial condition and results of operations are sensitive
to accounting measurements and estimates of inherently uncertain matters. When
applying accounting policies in areas that are subjective in nature, management
uses its best judgment to arrive at the carrying value of certain assets. One
of the most critical accounting policies applied is related to the valuation of
the loan portfolio. Management estimates the appropriate allowance for loan
losses, including the timing of loan charge-offs.
The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. It is one of the most difficult and subjective judgments.
The adequacy of the allowance for loan losses is evaluated periodically based on
a review of the loan portfolio, with a particular emphasis on non-accruing, past
due, and other loans that management believes require attention. The
determination of the reserve level relies on management's judgment about factors
affecting loan quality, current trends in delinquencies and charge-offs, and
anticipated changes in the composition and size of the portfolio. Management
also considers external factors such as changes in the interest rate
environment,the view of the Bank's regulators,economic conditions in the Bank's
service area and beyond, and legislation that affects the banking industry.
Page 8
Financial Condition
While total assets of the Company increased $6.4 million from December 31,
2004 to March 31, 2005, average total assets of the Company decreased $18.5
million from 4th quarter 2004 to 1st quarter 2005. Average deposits decreased
$17.8 million from 4th quarter 2004 to 1st quarter 2005. Historically, during
the first quarter of the year, the Bank 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 deposits from seasonal business customers, summer residents and
tourists. This seasonal influx peaks in the third quarter and begins to fall
off in the last quarter of each year.
During the first quarter of 2005, the Bank's gross loan portfolio has
increased $10.1 million. Funding for these loans was provided primarily by a
reduction in the Bank's investment portfolio. As loans earn at a higher rate
than investments, this shift has a positive impact on earnings.
Historically, the Company has low loan charge-offs. Based on a review of
the consolidated loan portfolio, the Company determined that an allowance
of 1.26% of gross loans was adequate as of March 31, 2005. At December 31,
2004,the allowance was 1.33% of gross loans. At March 31, 2005, loans
delinquent ninety days or more totaled $685,316 or .39% of the portfolio.
There were no non-accruing loans as of March 31, 2005 or December 31, 2004.
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
65.11% for the first quarter of 2005, compared to 64.27% for the first quarter
of 2004.
Results of Operations
Net income for the three months ended March 31, 2005, was $1,500,459 or
$.47 per share, compared to $1,342,784 or $.42 per share for the first quarter
of 2004. This represents an increase of $157,675.
Net interest income increased $239,552 in the first three months of 2005
compared to the first three months of 2004. This increase is attributable to
the rise of market rates that began in mid-2004. The Company's overnight
investment in federal funds sold has repriced with the market, while short-term
debt securities are repricing more slowly. The Company's Management has
implemented gradual increases to deposit rates. 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 two 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.
Page 9
No provision for loan losses was charged to expense during the first
quarters of 2005 or 2004. Net loan charge-offs (recoveries) were ($14,626)
during the first quarter of 2005 versus ($583) during the first quarter of 2004.
Other noninterest revenues exceeds last year by $10,277 primarily due to
increase usage of VISA debit cards.
Other noninterest expense variances include a decrease in salaries and
employee benefits of $27,955. Management has implemented a strategy to reduce
the number of year-round staff and employ more seasonal employees in the
summer when the local resorts bring increased activity to branches. The Bank
employed 93 full time equivalent employees as of March 31, 2005. The Bank hires
seasonal employees during the summer. The Company has no employees other than
those hired by the Bank.
Income taxes are $92,000 higher than last year, on a pre-tax income
increase of $249,675. This is consistent with the Company's effective tax rate
of approximately 35.5%.
Plans of Operation
The Bank offers a full range of deposit services including checking, NOW,
Money Market, and savings accounts, and time deposits including certificates of
deposit. The transaction accounts and time certificates are tailored to the
Bank's principal market areas at rates competitive to those offered in the
area. In addition, the Bank offers certain retirement account services, such as
Individual Retirements Accounts ("IRAs"). All deposits are insured by the
Federal Deposit Insurance Corporation (the "FDIC") up to the maximum amount
allowed by law (generally, $100,000 per depositor subject to aggregation rules).
The Bank solicits these accounts from individuals, businesses, associations and
organizations, and governmental authorities.
The Company, through the Bank, also offers a full range of short- to
medium-term commercial and personal loans. Commercial loans include both
secured and unsecured loans for working capital (including inventory and
receivables), business expansion (including acquisition of real estate and
improvements), and purchase of equipment and machinery. Consumer loans include
secured and unsecured loans for financing automobiles, home improvements,
education, and personal investments. The Company originates commercial and
residential mortgage loans and real estate construction and acquisition loans.
These lending activities are subject to a variety of lending limits imposed by
state and federal law. The Bank may not make any loans to any director or
executive officer (except for commercial loans to directors who are not officers
or employees) unless the Board of Directors of the Bank approves the loans.
The Board of Directors must review any such loans every six months.
Other bank services include cash management services, 24-hour ATM's, debit
cards, safe deposit boxes, travelers' checks, direct deposit of payroll and
social security, and automatic drafts. 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 $1,418,102 from December 31, 2004 to
March 31, 2005. 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 $179,064 used to purchase and retire 4,974 shares of
common stock. Stock repurchases were at a price of $36.00 dollars per share.
Page 10
Under the capital guidelines of the Federal Reserve Board and the FDIC, the
Company and 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 stockholders' equity less accumulated other comprehensive income.
In addition, the Company and the Bank must maintain a minimum Tier 1 leverage
ratio (Tier 1 capital to total assets) of at least 4%, 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 March 31, 2005 and
2004 were 40.25% and 40.68%, 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 March 31, 2005, the Company's interest rate sensitivity, as measured by
gap analysis, showed the Company was asset-sensitive with a one-year cumulative
gap of 7.94%, 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.
Page 11
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.
Page 12
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part II. Other Information
Item 1 Legal Proceedings
Not applicable
Item 2 Changes in Securities and Use of Proceeds
e) The following table presents information about the Company's
repurchase of its equity securities during the calendar quarter ended
on the date of this Form 10-Q.
(c ) Total number (d) Maximum Number
(a) Total (b) Average of Shares Purchased of Shares that may
Number Price Paid as Part of a Publicly yet be Purchased
Period of Shares per Share Announced Program Under the Program
January 306 $36.00 306 320,542
February 588 $36.00 588 319,954
March 4,080 $36.00 4,080 315,874
Totals 4,974 $36.00 4,974 n/a
The Company publicly announced on August 14, 2003, that it would repurchase
up to 10% of its outstanding equity stock at that time, which equated to a total
of 324,000 common shares available for repurchase. As of January 1, 2005, this
plan was renewed, by public announcement, making up to 10% of
the Company's outstanding equity stock at that time, which equates to a total of
320,848 common shares, available for repurchase in 2005. There is no expiration
date for this program. No other stock repurchase plan or program existed or
exists simultaneously, nor has any other plan or program expired during the
period covered by this table. Common shares repurchased under this plan are
retired.
Item 3 Defaults Upon Senior Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
There were no matters submitted to security holders for a vote during
the quarter ended March 31, 2005.
Item 5 Other information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits
2. Proxy Statement dated March 15, 2005, 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
March 31, 2005.
Page 13
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: May 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Page 14
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: May 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 15
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 March 31,
2005 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: May 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 16
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: May 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 17