Attached files
file | filename |
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EX-32.1 - EX-32.1 - Merchants & Marine Bancorp, Inc. | c17353exv32w1.htm |
EX-32.2 - EX-32.2 - Merchants & Marine Bancorp, Inc. | c17353exv32w2.htm |
EX-31.2 - EX-31.2 - Merchants & Marine Bancorp, Inc. | c17353exv31w2.htm |
EX-31.1 - EX-31.1 - Merchants & Marine Bancorp, Inc. | c17353exv31w1.htm |
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2011
OR
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 000-53198
Merchants & Marine Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Mississippi | 26-2498567 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3118 Pascagoula Street, Pascagoula, Mississippi | 39567 | |
(Address of principal executive offices) | (Zip Code) |
(228) 762-3311
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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.
þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
o Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company) þ | |||
(Do not check if a smaller reporting company) |
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
o Yes þ No
As of May 13, 2011, 1,330,338 shares of Common Stock were outstanding.
Table of Contents
Part I. Financial Information
Item 1. | Financial Statements |
MERCHANTS & MARINE BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | (Audited) | |||||||
March 31, 2011 | December 31, 2010 | |||||||
ASSETS |
||||||||
Cash and due from banks |
$ | 44,467,280 | 20,010,142 | |||||
Federal funds sold |
97,000 | 3,147,000 | ||||||
Securities: |
||||||||
Available-for-sale, at fair value |
178,873,975 | 116,333,500 | ||||||
Held-to-maturity, at amortized cost |
96,136,578 | 112,981,596 | ||||||
Non-marketable equity securities |
900,060 | 900,060 | ||||||
Loans, less allowance for loan losses of $3,268,217 and
$3,268,217, respectively |
215,348,812 | 216,470,346 | ||||||
Property and equipment, net of depreciation |
15,490,942 | 15,727,476 | ||||||
Other real estate owned |
2,799,723 | 2,275,723 | ||||||
Accrued income |
2,967,097 | 2,401,057 | ||||||
Other assets |
13,186,256 | 13,148,056 | ||||||
Total assets |
$ | 570,267,723 | 503,394,956 | |||||
LIABILITIES |
||||||||
Deposits: |
||||||||
Non-interest bearing demand |
$ | 166,424,470 | 79,614,176 | |||||
Interest bearing savings, demand and other time deposits |
327,784,665 | 348,586,934 | ||||||
Total deposits |
494,209,135 | 428,201,110 | ||||||
Federal funds purchased and securities sold under
agreements to repurchase |
14,253,773 | 13,729,528 | ||||||
Accrued expense and other liabilities |
9,092,322 | 9,113,767 | ||||||
Total liabilities |
517,555,230 | 451,044,405 | ||||||
STOCKHOLDERS EQUITY |
||||||||
Common stock $2.50 par value per share, 1,330,560 shares
authorized, 1,330,338 shares issued and outstanding |
3,325,845 | 3,325,845 | ||||||
Surplus |
14,500,000 | 14,500,000 | ||||||
Retained earnings |
39,803,111 | 39,013,928 | ||||||
Accumulated other comprehensive income (loss) |
(4,916,463 | ) | (4,489,222 | ) | ||||
Total stockholders equity |
52,712,493 | 52,350,551 | ||||||
Total liabilities and stockholders equity |
$ | 570,267,723 | 503,394,956 | |||||
See accompanying notes to condensed consolidated financial statements.
3
Table of Contents
MERCHANTS & MARINE BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Interest income |
||||||||
Interest and fees on loans |
$ | 3,336,172 | 3,483,863 | |||||
Interest on investment securities: |
||||||||
Taxable |
1,609,243 | 1,240,640 | ||||||
Exempt from federal and state income tax |
211,661 | 148,518 | ||||||
Interest on federal funds sold |
26,884 | 18,338 | ||||||
Other interest income |
186 | 95,945 | ||||||
Total interest income |
5,184,146 | 4,987,304 | ||||||
Interest expense |
||||||||
Interest on deposits |
903,769 | 994,429 | ||||||
Interest on federal funds purchased and securities
sold under agreements to repurchase |
6,003 | 7,151 | ||||||
Total interest expense |
909,772 | 1,001,580 | ||||||
Net interest income |
4,274,374 | 3,985,724 | ||||||
Provision for loan losses |
241,624 | 131,864 | ||||||
Net interest income after provision for loan losses |
4,032,750 | 3,853,860 | ||||||
Non-interest income |
||||||||
Service charges on deposit accounts |
1,095,616 | 1,003,492 | ||||||
Miscellaneous |
358,948 | 563,605 | ||||||
Total non-interest income |
1,454,564 | 1,567,097 | ||||||
Non-interest expense |
||||||||
Salaries and employee benefits |
1,679,440 | 2,120,075 | ||||||
Premises |
667,569 | 751,482 | ||||||
Services and fees expense |
416,784 | 508,912 | ||||||
Miscellaneous |
1,241,874 | 1,026,901 | ||||||
Total non-interest expense |
4,005,667 | 4,407,370 | ||||||
Income before income taxes |
1,481,647 | 1,013,587 | ||||||
Provision for income taxes |
359,879 | 245,770 | ||||||
Net income |
$ | 1,121,768 | 767,817 | |||||
Net income per common share |
$ | 0.84 | 0.58 | |||||
See accompanying notes to condensed consolidated financial statements.
4
Table of Contents
MERCHANTS & MARINE BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Net income |
$ | 1,121,768 | 767,817 | |||||
Other comprehensive income, net of tax: |
||||||||
Unrealized holding gain (loss) arising during period |
(427,241 | ) | (58,200 | ) | ||||
Comprehensive income |
$ | 694,527 | 709,617 | |||||
See accompanying notes to condensed consolidated financial statements.
5
Table of Contents
MERCHANTS & MARINE BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(UNAUDITED)
Accumulated | ||||||||||||||||||||
Common Stock | Other | |||||||||||||||||||
Shares | Retained | Comprehensive | ||||||||||||||||||
Issued | Amount | Surplus | Earnings | Income (Loss) | ||||||||||||||||
Balance December 31, 2010 |
1,330,338 | $ | 3,325,845 | 14,500,000 | 39,013,928 | (4,489,222 | ) | |||||||||||||
Net income |
| | | 1,121,768 | | |||||||||||||||
Cash dividends, $.25 per share |
| | | (332,585 | ) | | ||||||||||||||
Change in unrealized gain
(loss) on securities
available-for-sale, net of
taxes of $220,092 |
| | | | (427,241 | ) | ||||||||||||||
Balance, March 31, 2011 |
1,330,338 | $ | 3,325,845 | 14,500,000 | 39,803,111 | (4,916,463 | ) | |||||||||||||
See accompanying notes to condensed consolidated financial statements.
6
Table of Contents
MERCHANTS & MARINE BANCORP, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net income |
$ | 1,121,768 | 767,817 | |||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
314,741 | 359,870 | ||||||
Provision for loan losses |
241,624 | 131,864 | ||||||
Amortization of securities premium/discount |
60,364 | 9,719 | ||||||
Loss on sale of securities |
13,750 | | ||||||
(Increase) decrease in accrued income |
(566,040 | ) | 128,289 | |||||
Reinvested earnings on securities |
(838 | ) | | |||||
Decrease in interest payable |
(53,675 | ) | (66,381 | ) | ||||
Other, net |
613,224 | 567,643 | ||||||
Net cash provided by operating activities |
1,744,918 | 1,898,821 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Net decrease in federal funds sold and securities
purchased under agreements to resell |
3,050,000 | 13,900,000 | ||||||
Proceeds from sales and maturities of securities
available-for-sale |
15,486,250 | 16,000,000 | ||||||
Purchase of securities available-for-sale |
(78,679,050 | ) | (10,185,000 | ) | ||||
Proceeds from maturities of securities held to maturity |
17,055,000 | 25,583,333 | ||||||
Purchase of securities held-to-maturity |
(278,267 | ) | (40,109,393 | ) | ||||
Net (increase) decrease in loans |
355,910 | (6,279,193 | ) | |||||
Purchase of property and equipment |
(78,207 | ) | (42,696 | ) | ||||
Net cash used by investing activities |
(43,088,364 | ) | (1,132,949 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Net increase in deposits |
66,008,025 | 75,410,201 | ||||||
Net increase in federal funds purchased and securities
sold under agreements to repurchase |
524,245 | 2,027,771 | ||||||
Dividends paid |
(731,686 | ) | (731,686 | ) | ||||
Net cash provided by financing activities |
65,800,584 | 76,706,286 | ||||||
Net increase in cash and due from banks |
24,457,138 | 77,472,158 | ||||||
Cash and due from banks, beginning |
20,010,142 | 14,451,113 | ||||||
Cash and due from banks, ending |
$ | 44,467,280 | 91,923,271 | |||||
See accompanying notes to condensed consolidated financial statements.
7
Table of Contents
MERCHANTS & MARINE BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As of and for the Three Months Ended March 31, 2011
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
As of and for the Three Months Ended March 31, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements:
The accompanying unaudited condensed 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 and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for interim periods are not necessarily indicative of the results that may be
expected for the entire year. For further information, refer to the financial statements and notes
thereto of Merchants & Marine Bancorp, Inc.s 2010 Annual
Report on Form 10-K.
Certain reclassifications have been made to the 2010 consolidated financial statements to conform
to the 2011 presentation.
December 31, 2010 Balance Sheet Presentation.
The condensed consolidated balance sheet at December 31, 2010 has been taken from the audited
balance sheet at that date.
Use of Estimates.
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
2. FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of each class of
financial instruments for which it is practicable to estimate that value:
Cash and Federal Funds Sold:
For these short-term instruments, the carrying amount is a reasonable estimate of fair value.
Investment Securities:
Fair values for investment securities are based on quoted market price, where available. If quoted
market prices are not available, fair values are based on quoted market prices for similar
securities.
8
Table of Contents
2. FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)
Loans:
Fair value for loans is estimated by discounting the future cash flows using the current rates at
which similar loans would be made to borrowers with similar credit ratings and for the same
maturities.
Deposits:
The fair value of demand deposits, savings accounts and certain money market deposits is the amount
payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit
is estimated using the rates currently offered for deposits of similar remaining maturities.
The estimated fair values of the Companys financial instruments were as follows (in thousands):
March 31, 2011 | December 31, 2010 | |||||||||||||||
Carrying | Carrying | |||||||||||||||
Amount | Fair Value | Amount | Fair Value | |||||||||||||
Financial assets: |
||||||||||||||||
Cash and federal funds sold |
44,467 | 44,467 | 23,157 | 23,157 | ||||||||||||
Securities: |
||||||||||||||||
Available-for-sale |
178,874 | 178,874 | 116,334 | 116,334 | ||||||||||||
Held-to-maturity |
96,137 | 97,773 | 112,982 | 114,389 | ||||||||||||
Non-marketable |
900 | 900 | 900 | 900 | ||||||||||||
Loans, net of allowance |
215,349 | 214,629 | 216,470 | 216,162 | ||||||||||||
Financial liabilities: |
||||||||||||||||
Deposits |
494,209 | 492,998 | 428,201 | 428,195 | ||||||||||||
Federal funds purchased
and securities sold under
agreements to repurchase |
14,254 | 14,254 | 13,730 | 13,730 |
3. DEFINED BENEFIT PENSION PLAN
The Company has a non-contributory pension plan covering all employees who qualify under length of
service and other requirements. The plan calls for benefits to be paid to eligible employees at
retirement based primarily upon years of service and average earnings for the five consecutive plan
years, which produce the highest average. The following table presents information regarding the
plans net periodic benefit cost for the periods presented (in thousands):
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
Net periodic benefit cost (income): |
||||||||
Service cost |
$ | 95 | 101 | |||||
Interest cost |
150 | 151 | ||||||
Expected return on plan assets |
(181 | ) | (165 | ) | ||||
Amortization (gain) loss |
65 | 68 | ||||||
Net periodic pension expense |
$ | 129 | 155 | |||||
4. SUBSEQUENT EVENTS
The
Company has evaluated subsequent events through May 10, 2011, the date of issuance of the
condensed consolidated financial statements. No material subsequent events have occurred since
March 31, 2011 that required recognition or disclosure in the condensed consolidated financial
statements.
9
Table of Contents
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
Forward-looking Statements
This Quarterly Report contains certain forward-looking statements regarding, among other things,
the anticipated financial and operating results of Merchants & Marine Bancorp, Inc. (the
Company). Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no obligation to
publicly release any modification or revisions to these forward-looking statements to reflect
events or circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events. In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company cautions investors that future financial and operating
results may differ materially from those projected in forward-looking statements made by, or on
behalf of, the Company. The words expect, intend, should, may, could, believe,
suspect, anticipate, seek, plan, estimate and similar expressions are intended to
identify such forward-looking statements, but other statements not based on historical fact may
also be considered forward-looking. Such forward-looking statements involve known and unknown
risks, uncertainties, and other factors that may cause the actual results, performance, or
achievements of the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Risks and uncertainties that
could cause actual results to differ materially include, those described in the Companys Annual
Report on Form 10-K for the year ended December 31, 2010, and without limitation, (i) the Companys
ability to effectively execute its business plans; (ii) greater than anticipated deterioration or
lack of sustained growth in the national or local economies; (iii) rapid fluctuations or
unanticipated changes in interest rates; (iv) continuation of the historically low short-term
interest rate environment; (v) increased competition with other financial institutions in the
markets that the Company serves; (vi) continuing consolidation in the financial services industry;
(vii) losses, customer bankruptcy, claims and assessments; (viii) changes in state and federal
legislation, regulations or policies applicable to banks or other financial service providers,
including regulatory or legislative developments arising out of current unsettled conditions in the
economy, including implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act;
and (ix) changes in accounting policies or procedures as may be required by the Financial
Accounting Standards Board (FASB) or other regulatory agencies.
Formation of Holding Company
On April 24, 2008, the Company consummated its acquisition of 100% of the outstanding shares of
Merchants & Marine Bank (the Bank) common stock pursuant to the terms of an Agreement and Plan of
Share Exchange, dated as of February 5, 2008, by and between the Company and the Bank. In
connection with the Share Exchange, the holders of Bank common stock exchanged their shares of Bank
common stock for a like number of shares of Company common stock. Following consummation of the
Share Exchange, the Company is a bank holding company registered under the Bank Holding Company Act
of 1956, as amended and is subject to regulation by the Board of Governors of the Federal Reserve
Bank. The common stock of the Bank constitutes substantially all of the assets of the Company.
The Company has no other subsidiaries and the Bank accounts for substantially all of the Companys
assets, liabilities, income and expenses.
10
Table of Contents
Executive Summary
The Company is a one bank holding company which acquired 100% of the Banks common stock on
April 24, 2008 and is the successor issuer to the Bank pursuant to Rule 12g-3(a) of the Securities
Exchange Act of 1934, as amended. The Bank, a state-chartered institution since 1932, is a full
service,
federally insured bank serving Jackson and George Counties, Mississippi. The main office of the
Bank is located in Pascagoula. Branch offices are located in Moss Point, Gautier, Escatawpa, Ocean
Springs, Wade, Hurley, St. Martin, and Lucedale. The Bank offers commercial and individual
financial services consisting of business and personal checking accounts, certificates of deposit,
various forms of real estate, commercial and industrial and personal consumer financing. U.S.
Banker magazine has ranked the Bank as one of the Top 200 Community Banks in the nation and Bauer
Financial has given the Bank a 5-Star rating for the 70th consecutive quarter indicating
that Merchants & Marine Bank is one of the strongest banks in the nation. The Company is subject
to regulation, supervision, and examination by the Mississippi Department of Banking and Consumer
Finance, the Securities and Exchange Commission (the SEC), the Federal Reserve and the Federal
Deposit Insurance Corporation (the FDIC). At March 31, 2011, the Companys assets totaled $570
million and it employed 129 persons on a full-time equivalent basis.
Hurricane Katrina hit the Mississippi Gulf Coast on August 29, 2005. Katrinas wide spread
devastation will be felt for years to come. Some of the challenges still facing our service area
include insurance availability and settlements, housing, building code changes, flood elevation
revisions, population shifts and business and staffing needs.
Earnings Highlights
The Companys net income for the first quarter of 2011 was $1,122,000, a 46.1% increase, when
compared to $768,000 for the first quarter of 2010 and $768,000 for the first quarter of 2009. The
following discussions, tables and the accompanying financial statements presented outline the
change in earnings from the first quarters of 2011, 2010 and 2009. Return on average assets was
0.8%, 0.6% and 0.7%, for first quarters of 2011, 2010 and 2009, respectively. Return on average
equity was 8.6%, 6.0% and 6.3%, in the first quarters of 2011, 2010 and 2009, respectively.
Earnings per share were $0.84 in the first quarter of 2011, compared to $0.58 in the first quarters
of 2010 and 2009.
Earning Assets
A detailed comparison of the Companys average earning assets for the first quarters of 2011,
2010 and 2009 is presented in Table 1 of this report. The Companys earning assets include loans,
investments, Federal Reserve balances and federal funds sold. Average earning assets for the first
quarter of 2011 totaled $531,076,000 compared to $426,197,000 in 2010 and $398,505,000 in 2009.
Average net loans decreased by $7,550,000 in the first quarter of 2011, compared to an increase of
$9,113,000 for the first quarter of 2010 and a decrease of $245,000 in first quarter of 2009.
Average securities increased by $82,878,000 and $13,416,000 in the first quarters of 2011 and 2010,
respectively, compared to a decrease of $5,560,000 for the first quarter of 2009. Average federal
funds sold decreased by $6,199,000 or 84.7% and $27,921,000 or 79.2% in the first quarters 2011 and
2010, respectively, compared to a decrease of $7,580,000 or 17.7%, in the first quarter of 2009.
Other earning assets consist of balances maintained in a Federal Reserve excess balance account.
The average balance for the first quarter of 2011 totaled $53,734,000 compared to $33,084,000 for
the first quarter of 2010.
Net Interest Income
The major source of the Companys income comes from gathering funds from deposit sources and
investing them in loans and securities. Net interest income is the revenue generated from earning
assets less the cost of interest paid on deposits and other interest bearing liabilities.
Balancing interest rate, credit, liquidity and capital risks, while managing its assets and
liabilities to maximize income growth is the Companys primary long-term objective.
11
Table of Contents
A banks net interest margin is a prime indicator of its profitability. The net interest margin
reflects the spread between interest earning asset yields and interest bearing liability costs and
the percentage of interest earning assets funded by interest bearing liabilities. The net margin,
on a tax equivalent basis, was 3.0%, 3.3% and 3.5% in the first quarters of 2011, 2010 and 2009,
respectively. The decreases in 2011 and 2010 are attributable to the decrease in rates of return on
interest earning assets. Tax equivalent net interest income increased in the first quarter of 2011
and 2010 by 9.9% and 0.8% and decreased in 2009 by 7.9%.
Average net loans increased by 3.6% and 4.5% in the first quarters of 2011 and 2010, compared to a
decrease of 0.1% in the first quarter of 2009. Loan interest income decreased by 4.2%, in the first
quarter of 2011, compared to an increase of 0.4% in the first quarter of 2010 and a decrease of
10.9% in the same period of 2009. Loan yields fell by 49, 27 and 82 basis points in the first
quarters of 2011, 2010 and 2009, respectively. Yields on average taxable securities, in the first
quarters of 2011, 2010 and 2009, equaled 2.8%, 3.2% and 4.4%, respectively. Interest earned on
average taxable securities increased by 29.5% in the first quarter of 2011 compared to declines of
24.4% and 16.2% in the first quarters of 2010 and 2009, due to higher volumes. Income on average
tax-exempt securities increased 42.0% and 82.9% in the first quarters of 2011 and 2010 due to
increased volumes. Yields and income on average tax-exempt securities remained relatively unchanged
in the first quarter of 2011 compared to the same period in 2010 and 2009. The average volume of
all securities in the first quarters of 2011 and 2010, increased by 47.8% and 8.4%, respectively,
compared to a decrease in 2009 of 3.4%. Total securities income increased by 30.8% in 2011
compared to a decrease of 19.3% in 2010 as a result of higher volumes. The average balance of
federal funds sold decreased in the first quarters of 2011, 2010 and 2009 by 84.7%, 79.2% and
17.7%. Income from federal funds sold decreased by 75.0%, 88.9% and 130.5% in the first quarters of
2011, 2010 and 2009, respectively. This decrease is a result of lower volumes and yields.
Total average interest bearing liabilities increased by 18.1% and 22.4%, in the first quarters of
2011 and 2010 compared to a decrease of 5.7% in the first quarter of 2009. Rates paid on these
funds decreased 26, 70 and 78 basis points in the first quarter of 2011, 2010 and 2009,
respectively. The decrease in rates paid on these funds resulted in a decrease in interest expense
of $94,000, $349,000 and $710,000 for the first quarters of 2011, 2010 and 2009. Interest bearing
checking, money market fund, and savings average balances increased by 22.3% and 41.7% for the
first quarters of 2011 and 2010 and decreased by 11.8% in the first quarter of 2009. The increases
in 2011 and 2010 were a result of gaining public fund customers and the decrease in 2009 was
primarily a result of losing a public fund depository customer that was subject to bid. Average
time deposit balances increased by 6.2% in the first quarter of 2011 and decreased by 4.0% in the
first quarter of 2010, compared to an increase of 11.9% in the first quarter of 2009. The average
rate paid on these funds was 1.5%, 2.0% and 3.2% for the first quarters of 2011, 2010 and 2009.
Interest expense on time deposits decreased by 19.8%, 39.7% and 15.6% in the first quarters of
2011, 2010 and 2009, because of lower rates paid. Average federal funds purchased and securities
sold under agreements to repurchase in the first quarter of 2011 increased by 36.5% and decreased
by 18.6% and 32.2% in the first quarters of 2010 and 2009. Interest rates paid on these funds
decreased by 10, 4 and 250 basis points for the first quarters of 2011, 2010 and 2009. Table 1 and
2 provide more information on the Companys net interest income and rate and volume variances.
Interest Rate Sensitivity
Managing the interest rate risk of the Company is an integral part of its financial success. The
process of interest rate risk management includes the monitoring of each component of the balance
sheet and its sensitivity to interest rate changes. Management monitors the day-to-day exposure to
changes in interest rates in response to loan and deposit flows and makes adjustments accordingly.
12
Table of Contents
The Company uses an earnings forecast model that simulates multiple interest rate scenarios and the
effects on the Banks net margin, in addition to using traditional gap tables. The model analyzes
the earnings risk by revealing the probability of reaching future income levels based on balance
sheet changes caused by interest rate fluctuations. The model and traditional gap analysis
indicate the Company is liability sensitive, which means that in a rising rate environment, the
Companys net interest margin will decrease. See Table 14 for a detailed analysis of the Companys
interest rate sensitivity.
The Companys operations are not ordinarily impacted by inflationary factors. However, because the
Companys assets are largely monetary in nature its operations are subject to changes in interest
rates.
Loans
One of the largest components of the Companys earning assets is its loan portfolio. Loans are the
highest yielding asset category and also contain the largest amount of risk. Meeting the credit
needs of Jackson and George Counties, with special emphasis on consumer and small business loans,
continues to be the primary goal of the Company.
Average loans, net of unearned income, as a percentage of average earning assets, was 41.4%, 54.0%
and 45.7%, for the first quarters of 2011, 2010 and 2009, respectively. The average loan to
deposit ratio was 43.6%, 52.2% and 54.3% at the end of the first quarters of 2011, 2010 and 2009,
respectively. Average net loans increased by 3.6% and 4.5% in the first quarters of 2011 and 2010
and decreased by 0.1% in the first quarter of 2009. Loan interest income decreased by 4.2% at
first quarter-end 2011 and increased by 0.4% at first quarter-end 2010 compared to a decrease of
10.9% in the same period of 2009.
Loan growth in the real estate portfolio resulted in an increase in loans secured by real estate
from $136,680,000 at first quarter-end 2009 to $149,492,000 at first quarter-end 2010 to
$162,297,000 at first quarter-end 2011. Commercial and industrial loans totaled $24,467,000,
$26,386,000 and $27,648,000 at first quarter-end 2011, 2010, and 2009, respectively. Consumer
loans totaled $27,822,000 at first quarter-end 2011 and $33,939,000 at first quarter-end 2010,
compared to $35,527,000 at first quarter-end 2009. Other loans at first quarter-end 2011 decreased
slightly when compared to the same period in 2010.
Allowance for Loan Losses
Historical losses, trends and managements opinion of the adequacy of the allowance for loan losses
determine the allocations made to the loan loss reserve. Management considers the following
factors in determining the adequacy of the allowance: (1) periodic reviews of individual credits,
(2) gross and net charge-offs, (3) loan portfolio growth, (4) historical levels of the allowance to
total loans, (5) the value of collateral securing loans, (6) the level of past due and non-accruing
loans, and (7) current and future economic conditions and their potential impact on the loan
portfolio.
The allowance to total loans was 1.5% at first quarter-end 2011 and 1.4% at first quarter-end 2010,
compared to 1.5% at first quarter-end 2009.
The Company immediately charges off any loan when it is determined to be uncollectible. However,
experience shows that certain losses exist in the portfolio and have not been identified. The
allowance is allocated to absorb losses on all loans and is not restricted to any one group of
loans. The Companys management has determined that the balance of the allowance for loan losses
is adequate to cover potential future losses. If economic conditions deteriorate beyond
managements current expectations, an increase to the provision for loan losses may be necessary.
See Tables 8 and 9 for a detailed analysis of the Companys allowance for loan losses.
13
Table of Contents
Critical Accounting Policies
The accounting principles the Company follows and our methods of applying these principles conform
to accounting principles generally accepted in the United States and general practices within the
banking industry. In connection with the application of those principles to the determination of
the Companys ALL, the Company has made judgments and estimates, which have significantly impacted
our financial position and results of operations.
The Companys management assesses the adequacy of the ALL prior to the end of each calendar
quarter. This assessment includes procedures to estimate the ALL and test the adequacy and
appropriateness of the resulting balance. The ALL consists of two portions: (1) an allocated
amount representative of specifically identified credit exposure and exposures readily predictable
by historical or comparative experience; and (2) an unallocated amount representative of inherent
loss, which is not readily identifiable. Even though the ALL is composed of two components, the
entire allowance is available to absorb any credit losses.
The Company establishes the allocated amount separately for two different risk groups: (1) unique
loans (commercial loans, including those loans considered impaired); and (2) homogenous loans
(generally consumer loans). The allocation for unique loans is done primarily on risk rating grades
assigned to each of these loans as a result of our loan management and review processes. Each
risk-rating grade is assigned an estimated loss ratio, which is determined based on the experience
of management, discussions with banking regulators, historical and current economic conditions and
our independent loan review process. Management estimates losses on impaired loans based on
estimated cash flows at the loans original effective interest rate or the underlying collateral
value. Estimated loss ratios are also assigned to our consumer portfolio. However, the estimated
loss ratios for these homogenous loans are based on the historical loss rates of the category of
consumer credit (e.g., automobile, residential mortgage, home equity) and not on the results of
individual loan reviews.
The unallocated amount is particularly subjective and does not lend itself to exact mathematical
calculation. The Company uses the unallocated amount to absorb inherent losses which may exist as
of the balance sheet date for such matters as changes in the local or national economy, the depth
or experience in the lending staff, any concentrations of credit in any particular industry group
and new banking laws or regulations. After assessing applicable factors, management evaluates the
aggregate unallocated amount based on its experience.
The resulting ALL balance is then tested by comparing the balance in the allowance account to
historical trends and peer information. Management then evaluates the result of the procedures
performed, including the testing results, and concludes on the appropriateness of the balance of
the ALL in its entirety. The Companys independent loan reviewer and the audit committee of our
board of directors review the assessment prior to the filing of quarterly financial information.
In assessing the adequacy of the ALL, the Company also relies on an ongoing loan review process.
This process is undertaken to ascertain whether there are loans in the portfolio whose credit
quality has weakened over time and to assist in the overall evaluation of the risk characteristics
of the entire loan portfolio. The loan review process includes the judgment of management, the
input from our independent loan reviewer, who is not an employee of the Company, and reviews that
may have been conducted by bank regulatory agencies as part of their usual examination process.
Management estimates losses on impaired loans based on estimated cash flows, or the fair market
value of the underlying loan collateral.
14
Table of Contents
Management believes the reserve is adequate at this time, based on a review of the portfolio and
discussions with regulatory officials. If economic conditions deteriorate beyond managements
current expectations for the ALL, an increase to the provision for loan losses may be necessary.
The Company does not use derivatives and therefore no allowance for such instruments is made on the
Companys financial statements.
Asset Quality
Non-performing assets include non-accruing loans that are 90 days or more past due and other real
estate acquired through foreclosure or property purchased by the Company for future bank expansion.
Total non-performing assets totaled $8,219,000, $4,425,000 and $2,115,000, at first quarter-end
2011, 2010, and 2009, respectively. Non-performing assets, as a percentage of total loans, were
3.8% at the first quarter-end 2011, 2.0% at the first quarter-end 2010 and 1.0% at first
quarter-end 2009. Non-accrual loans and accruing loans over 90 days past due totaled $5,419,000 or
2.5% of total loans, $2,278,000 or 1.0% of total loans and $1,879,000, or 0.9% of total loans, at
first quarter-end 2011, 2010, and 2009, respectively. Other real estate totaled $2,800,000 or 1.3%
of total loans, $2,147,000 or 1.0% of total loans and $236,000 or 0.1% of total loans at first
quarter-end 2011, 2010 and 2009. The increase in non-performing assets is a result of declining
economic conditions which include high unemployment, declines in real estate value, and other
factors. See Table 10 for additional information concerning the Companys non-performing assets.
Securities Available for Sale and Investment Securities
The Companys securities portfolio is another large component of the Companys earning assets and
had book values totaling $275,910,000, $186,796,000 and $148,528,000, for the first quarter-end
2011, 2010 and 2009, respectively. The large increase in securities in 2011 and 2010 is a result of
increases in deposits resulting from gaining additional public fund customers.
The securities portfolio is divided into two classifications: available-for-sale and
held-to-maturity. The available for sale portion contains all securities which management believes
could be subject to sale prior to their stated maturity. This category allows Company management
to meet liquidity needs, as well as affording the Company the opportunity to take advantage of
market shifts or anticipated changes in interest rates, yield curve changes, and inter-market
spread relationships. This portion of the portfolio is also used to help manage the Companys
interest rate and credit risks in the overall balance sheet. In accordance with Accounting
Standards Codification 320 Investment in debt and Equity Securities, securities in the
available-for-sale category are accounted for at fair market value with unrealized gains or losses
excluded from earnings and reported as separate component of stockholders equity until realized.
Unrealized gains net of taxes of $(2,345,000), $157,000 and $4,000 were included in stockholders
equity at first quarter-end 2011, 2010, and 2009, respectively. The held-to-maturity portion of
the portfolio contains debt securities which the Company intends to hold until their contractual
maturity date. These securities provide the Company with a long term, relatively stable source of
income with minimal credit risk. The securities in this category are carried at their amortized
costs. A portion of the Companys investment portfolio is pledged as collateral against public
deposits, treasury tax and loan on securities sold under agreements to repurchase.
15
Table of Contents
Yields on average taxable securities in the first quarters of 2011 and 2010 equaled 2.8% and 3.2%,
compared to 4.4% in the first quarter of 2009. Interest earned on average taxable securities
increased by 29.5% in the first quarter of 2011, compared to a decline of 24.4% and 16.2% in the
first quarters of 2010
and 2009. The increase in 2011 is due to higher volumes, and the decreases in 2010 and 2009 are due
to lower yields. Income increased on average tax-exempt securities by 42.0% and 82.9% in the first
quarters of 2011 and 2010 due to higher volumes. Yields and income on average tax-exempt securities
remained relatively unchanged in the first quarter of 2009 compared to the same period of 2008. The
average volume of all securities increased by 47.8% and income increased by 30.9% in the first
quarter of 2011, compared to an increase of 8.4% in volume and a decrease of 19.3% in income in the
first quarter of 2010, compared to a decrease of 3.4% in volume and 15.9% in income in the first
quarter of 2009, as a result of lower volumes and lower rates earned in 2009. The average balance
of federal funds sold decreased in the first quarters of 2011, 2010 and 2009 by 84.8%, 79.2% and
17.7%, respectively. Income from these funds decreased by 75.0%, 88.9% and 130.5% in the first
quarters of 2011, 2010 and 2009, as a result of the decrease volumes and the 285 basis points drop
in rates earned in 2009. The decrease in volumes in the first quarters of 2011 and 2010 are a
result of excess funds being placed in a Federal Reserve Excess Balance account shown as other
interest earning assets in Table 1.
See Tables 4 and 5 for more information about the Companys securities portfolio composition yields
and maturity distributions.
Deposits
The Companys primary funding source for loans and investments is its deposit base. Deposits
consist of checking, savings and certificates of deposit. The Companys ability to maintain a
strong deposit base is of utmost importance in the growth and profitability of the institution.
Managing the deposit mix and pricing is designed to be flexible, so that changes in interest rate
movements and liquidity needs do not conflict or have an adverse effect on the Companys balance
sheet. The Company relies on local consumer, retail, corporate and governmental agencies for its
deposit base. Average total deposits increased by 23.9% and 8.9% at first quarter-end 2011 and
2010 and decreased by 4.2% at first quarter-end 2009, respectively. See Tables 11 and 12 for more
information about the Companys deposits and maturity distribution.
Liquidity
Liquidity for a financial institution can be expressed in terms of maintaining sufficient funds
available to meet both expected and unanticipated obligations in a cost-effective manner. The
Company closely monitors its liquidity position to ensure it has ample funds available to meet its
obligations. The Company relies on maturing loans and investments, federal funds, excess funds and
its core deposit base to fund its day-to-day liquidity needs. By monitoring asset and liability
maturities and the levels of cash on hand, the Company is able to meet expected demands for cash.
The Company also has access to federal fund lines at correspondent banks and to an inventory of
readily marketable government securities.
Average federal funds purchased and securities sold under agreement to repurchase represents 2.9%,
2.6% and 3.5% of total average deposits for the years 2011, 2010 and 2009, respectively. See Table
13 for more information concerning the Companys short-term borrowings.
Off Balance Sheet Arrangements
As of March 31, 2011, the Company had unfunded loan commitments outstanding of $19,029,000 and
outstanding standby letters of credit of $830,000. Because these commitments generally have fixed
expiration dates and many will expire without being drawn upon, the total commitment level does not
necessarily represent future cash requirements. If needed to fund these outstanding commitments,
the Company has the ability to liquidate federal funds sold or securities available-for-sale or on
a short-term
basis to borrow and purchase federal funds from other financial institutions. The Company
historically has been a net seller of federal funds and a detailed statement of cash flows can be
found in the accompanying notes to the financial statements.
16
Table of Contents
Contractual Obligations
The Company has certain contractual obligations that arise from its normal course of business.
Each category of deposit represents an obligation to pay. While certain categories of deposits,
(e.g., certificates of deposit) have a contracted expiration date, checking accounts and savings
are subject to immediate withdrawal. Table 15 details the Companys deposit and contractual
obligations.
The Company also enters into agreements to extend loans and issues stand by letters of credit.
These contractual obligations are detailed in Table 15.
The Company also has a defined benefit plan for substantially all of its employees, as well as
former employees, who have retired from the Company; consequently, the Company is contractually
obligated to pay these benefits to its retired employees. As of December 31, 2010, the plan was
underfunded by $2,457,000, compared to an underfunded amount of $1,907,000 at year-end 2009. The
underfunded status is the result of the poor market conditions in 2008 and the resulting effect on
the performance of the plans investment assets. Management is monitoring the funded status of its
defined benefit plan closely and has begun to contribute additional funding to the plan during
2011. See Notes to Financial Statements Note 3.
Risk-Based Capital/Stockholders Equity
The Company has always placed a great emphasis on maintaining its strong capital base. The
Companys management and Board of Directors continually evaluate business decisions that may have
an impact on the level of stockholders equity. It is their goal that the Company maintains a
well-capitalized equity position. Based on the capital levels defined by banking regulators as
part of the provisions of the Federal Deposit Insurance Corporation Improvement Act of 1991, a
well-capitalized institution is one that has at least a 10% total risk-based capital ratio, a 6%
Tier 1 risk-based capital ratio and a 5% leverage ratio. The Companys solid capital base is
reflected in its regulatory capital ratios. The risk-based capital ratio was 20.7% at quarter-end
2011, 20.8% at quarter-end 2010 and 21.4% at quarter-end 2009. Tier 1 risk-based was 19.5% at
quarter-end 2011, 19.7% at quarter-end 2010 and 20.1% at quarter-end 2009. The leverage ratio at
quarter-end 2011, 2010 and 2009 was 9.7%, 11.0% and 11.5%, respectively.
The Companys capital ratios surpass the minimum requirements of 8.0% for the total risk-based
capital ratio, 4.0% for Tier 1 risk-based capital ratio and 4.0% for the leverage ratio.
Stockholders equity to total assets at first quarter-end 2011, 2010 and 2009 was 9.3%, 9.7% and
10.9%, respectively.
Non-Interest Income
Non-interest income includes service charges on deposit accounts, safe-deposit box rent, check
cashing fees, commissions, charges and other fees. Service charges on deposit accounts income
increased by 9.2% in the first quarter of 2011, 6.2% in the first quarter of 2010 and decreased by
12.2% in the first quarter of 2009. These fees are generated from customer accounts and are
affected by the number of accounts, and the balances of accounts subject to service charges. The
Company updated its pricing structure during the first quarter of 2011 and this change is reflected
in the increase in service charge
income. Miscellaneous income for the first quarter of 2011 decreased 36.4% compared to an increase
of 14.5% at first quarter of 2010 and decreased by 21.0% for the first quarter of 2009. The
decrease in 2011 is due to a gain recognized on real estate owned in the first quarter of 2010 of
$116,000.
17
Table of Contents
With deposit related costs constantly increasing, the Company continues to analyze means to
increase non-interest income and continues to seek new sources for additional fee income.
Non-Interest Expense
The Companys goal is to enhance customer service through efficient and effective delivery of its
products and services. Enhancing operational resources, while containing overhead expenses is a
top priority of the Company. While interest expense is one of the largest expenses of the Company,
employees salaries, equipment and building expenses, legal fees, FDIC insurance, and other
expenses combined make up the largest category of the Companys expenses. Proper management of
these costs is extremely important to the profitability of the Company.
Salaries and employee benefits expense decreased in the first quarter of 2011 by 20.8% and
increased in the first quarters of 2010 and 2009 by 3.3% and 11.4%, respectively. The decrease in
2011 is due to a reduction in the number of full time equivalent employees, a lower defined benefit
pension expense, and the number of payrolls recognized during 2011 verses 2010. The increase in
2009 is attributed to increases in employee raises and an increase in the defined benefit pension
plan expense. Premise expense decreased by 11.2% in the first quarter of 2011 and increased by 2.9%
and 15.5%, in the first quarters 2010 and 2009, respectively. The decrease in 2011 is attributed
to a reduction in property taxes on the main branch and depreciation expense overall. The large
increase in 2009 is attributable to the depreciation of several of the Companys branches that have
been remodeled. Miscellaneous expenses increased by 21.0% and 7.9% in the first quarters of 2011
and 2010 and decreased by 14.9% when comparing the first quarter of 2009 to the same period in
2008. The increase in 2011 is due to merchant fees absorbed on behalf of a public fund deposit
customer. The increase in the first quarter of 2010 is primarily due to an increase in FDIC
insurance assessments. The FDIC began increasing deposit premiums in 2009 in order to replenish its
reserve funds.
Income Taxes
Income tax expense totaled $360,000, $246,000 and $336,000 for the first quarter-ended 2011, 2010
and 2009, respectively.
18
Table of Contents
TABLE 1
COMPARATIVE AVERAGE BALANCES YIELDS AND RATES
(Dollars in Thousands)
COMPARATIVE AVERAGE BALANCES YIELDS AND RATES
(Dollars in Thousands)
The following table shows the major categories of interest-earning assets and interest-bearing
liabilities with their corresponding average daily balances, related interest income or expense and
the resulting yield or rate for the first quarter ended March 31, 2011, 2010 and 2009:
2011 | 2010 | 2009 | ||||||||||||||||||||||||||||||||||
Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||||||
Assets | Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||||||||||||||
Loans, net of unearned
income |
$ | 219,836 | $ | 3,336 | 6.07 | % | $ | 212,286 | $ | 3,484 | 6.56 | % | $ | 203,173 | $ | 3,469 | 6.83 | % | ||||||||||||||||||
Securities held to maturity: |
||||||||||||||||||||||||||||||||||||
Taxable |
82,148 | 507 | 2.47 | % | 125,344 | 1,061 | 3.39 | % | 103,744 | 1,252 | 4.83 | % | ||||||||||||||||||||||||
Exempt from Federal
income tax |
27,097 | 213 | 3.14 | % | 19,267 | 150 | 3.11 | % | 9,465 | 82 | 3.47 | % | ||||||||||||||||||||||||
Securities available
for sale: |
||||||||||||||||||||||||||||||||||||
Taxable |
147,144 | 1,101 | 2.99 | % | 28,900 | 181 | 2.51 | % | 46,886 | 391 | 3.34 | % | ||||||||||||||||||||||||
Other interest earning assets |
53,734 | 27 | 0.20 | % | 33,084 | 16 | 0.19 | % | | | 0.00 | % | ||||||||||||||||||||||||
Federal funds sold
and securities purchased under agreements to resell |
1,117 | | 0.00 | % | 7,316 | 2 | 0.11 | % | 35,237 | 18 | 0.20 | % | ||||||||||||||||||||||||
Total interest-earning
assets |
$ | 531,076 | $ | 5,184 | 3.90 | % | $ | 426,197 | $ | 4,894 | 4.59 | % | $ | 398,505 | $ | 5,212 | 5.23 | % | ||||||||||||||||||
Non interest-earning assets: |
||||||||||||||||||||||||||||||||||||
Cash and due from
banks |
17,011 | 18,496 | 18,069 | |||||||||||||||||||||||||||||||||
Bank premises and
equipment |
15,632 | 16,659 | 17,765 | |||||||||||||||||||||||||||||||||
Other assets |
15,931 | 15,198 | 13,742 | |||||||||||||||||||||||||||||||||
Allowance for possible
loan losses |
(3,093 | ) | ||||||||||||||||||||||||||||||||||
Total assets |
$ | 579,650 | $ | 476,550 | $ | 444,988 | ||||||||||||||||||||||||||||||
19
Table of Contents
TABLE 2
TAXABLE EQUIVALENT RATE/VOLUME VARIANCE ANALYSIS
(Dollars In Thousands)
TAXABLE EQUIVALENT RATE/VOLUME VARIANCE ANALYSIS
(Dollars In Thousands)
The following table sets forth, for the periods indicated, a summary of the changes in interest
income and interest expense resulting from changes in volume and changes in rates:
Quarter ended March 31, | ||||||||||||||||||||||||
2011 Compared to 2010 | 2010 Compared to 2009 | |||||||||||||||||||||||
Increase (Decrease) Due To | Increase (Decrease) Due To | |||||||||||||||||||||||
Volume | Rate | Net | Volume | Rate | Net | |||||||||||||||||||
Interest income on: |
||||||||||||||||||||||||
Loans |
$ | 7,550 | (148 | ) | $ | 7,402 | $ | 9,113 | $ | (27 | ) | $ | 9,086 | |||||||||||
Investment securities: |
||||||||||||||||||||||||
Taxable |
(43,196 | ) | (554 | ) | (43,750 | ) | 21,600 | (144 | ) | 21,456 | ||||||||||||||
Exempt from Federal
income tax |
7,830 | 63 | 7,893 | 9,802 | (36 | ) | 9,766 | |||||||||||||||||
Securities available for sale: |
||||||||||||||||||||||||
Taxable |
118,244 | 920 | 119,164 | (17,986 | ) | (83 | ) | (18,069 | ) | |||||||||||||||
Other interest earning assets |
20,650 | 11 | 20,661 | 33,084 | 16 | 33,100 | ||||||||||||||||||
Federal funds sold and
securities purchased
under agreements to
resell |
(6,199 | ) | (2 | ) | (6,201 | ) | (27,921 | ) | (9 | ) | (27,930 | ) | ||||||||||||
Total |
$ | 104,879 | $ | 290 | $ | 105,169 | $ | 27,692 | $ | (283 | ) | $ | 27,409 | |||||||||||
Interest expense on: |
||||||||||||||||||||||||
Int DDAs & Savings deposits |
$ | 56,214 | $ | 12 | $ | 56,226 | $ | 74,112 | $ | (30 | ) | $ | 74,082 | |||||||||||
Time deposits |
6,680 | (105 | ) | 6,575 | (4,487 | ) | (117 | ) | (4,604 | ) | ||||||||||||||
Federal funds purchased,
and securities sold
under agreements to
repurchase |
3,925 | (1 | ) | 3,924 | (2,454 | ) | (4 | ) | (2,458 | ) | ||||||||||||||
Total |
$ | 66,819 | $ | (94 | ) | $ | 66,725 | $ | 67,171 | $ | (151 | ) | $ | 67,020 | ||||||||||
Changes in net interest
income-tax equivalent |
$ | 38,060 | $ | 384 | $ | 38,444 | $ | (39,479 | ) | $ | (132 | ) | $ | (39,611 | ) | |||||||||
The increase (decrease) due to changes in average balances reflected in the above table was
calculated by applying the preceding years rate to the current years change in the average
balance. The increase (decrease) due to changes in average rates was calculated by applying the
current years change in the average rates to the current years average balance. Using this method
of calculating increases (decreases), any increase or decrease due to both changes in average
balances and rates is reflected in the changes attributable to average rate changes.
20
Table of Contents
TABLE 3
SECURITIES AVAILABLE FOR SALE AND PORTFOLIO SECURITIES
(Dollars in Thousands)
SECURITIES AVAILABLE FOR SALE AND PORTFOLIO SECURITIES
(Dollars in Thousands)
The available for sale classification of securities, established January 1, 1994 includes all
portfolio securities which management believes are subject to sale prior to their contractual
maturities and are stated at the lower of amortized cost or aggregate market value. Investment
securities include all portfolio securities that the Company intends to hold to maturity and are
carried at amortized cost. The carrying amounts of securities available for sale and portfolio
securities are presented as of the dates indicated.
March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Securities available for sale |
||||||||||||
U. S. Treasury and other U. S. Government agencies |
$ | 178,749 | $ | 27,268 | $ | 56,245 | ||||||
Obligations of states and political subdivisions |
| | | |||||||||
Mortgage-backed securities |
| | | |||||||||
Other securities |
125 | 153 | 72 | |||||||||
Total securities available for sale |
$ | 178,874 | $ | 27,421 | $ | 56,317 | ||||||
Investment securities |
||||||||||||
U. S. Treasury and other U. S. Government agencies |
$ | 66,610 | $ | 136,205 | $ | 82,009 | ||||||
Obligations of states and political subdivisions |
29,526 | 22,270 | 9,602 | |||||||||
Mortgage-backed securities |
| | | |||||||||
Other securities |
900 | 900 | 600 | |||||||||
Total investment securities |
97,036 | 159,375 | 92,211 | |||||||||
Total securities available for sale and investment securities |
$ | 275,910 | $ | 186,796 | $ | 148,528 | ||||||
TABLE 4
MATURITY DISTRIBUTION AND YIELDS OF SECURITIES AVAILABLE FOR SALE AND INVESTMENT SECURITIES
(Dollars in Thousands)
MATURITY DISTRIBUTION AND YIELDS OF SECURITIES AVAILABLE FOR SALE AND INVESTMENT SECURITIES
(Dollars in Thousands)
The following table shows the maturities and weighted average yields of the Companys securities
available for sale and investment securities at March 31, 2011:
Maturing | ||||||||||||||||||||||||||||||||||||
After | After 5 Yrs | |||||||||||||||||||||||||||||||||||
Within | 1 Yr But | But Within | After 10 Yrs. | |||||||||||||||||||||||||||||||||
1 Year | Within 5 Yrs | 10 Yrs | Carrying | |||||||||||||||||||||||||||||||||
Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | ||||||||||||||||||||||||||||
Securities
available for sale |
||||||||||||||||||||||||||||||||||||
U.S. Treasury
and other U.S.
Government
agencies |
$ | | 0.00 | % | $ | 10,010 | 1.38 | % | $ | 168,739 | 3.05 | % | $ | | 0.00 | % | $ | 178,749 | ||||||||||||||||||
Other securities |
125 | 0.00 | % | | 0.00 | % | | 0.00 | % | | 0.00 | % | 125 | |||||||||||||||||||||||
Total securities
available
for sale |
$ | 125 | 0.00 | % | $ | 10,010 | 1.38 | % | $ | 168,739 | 3.05 | % | $ | | 0.00 | % | $ | 178,874 | ||||||||||||||||||
Investment securities |
||||||||||||||||||||||||||||||||||||
U.S. Treasury
and other U.S.
Government
agencies |
$ | 2,000 | 3.05 | % | $ | 42,506 | 2.31 | % | $ | 22,104 | 2.30 | % | $ | | 0.00 | % | $ | 66,610 | ||||||||||||||||||
Obligations of states
and political
subdivisions |
1,036 | 4.66 | % | 14,124 | 4.08 | % | 10,341 | 4.24 | % | 4,025 | 5.92 | % | 29,526 | |||||||||||||||||||||||
Other securities |
900 | 0.00 | % | | 0.00 | % | | 0.00 | % | | 0.00 | % | 900 | |||||||||||||||||||||||
Total investment
securities |
$ | 3,936 | 3.50 | % | $ | 56,630 | 2.87 | % | $ | 32,445 | 2.99 | % | $ | 4,025 | 5.92 | % | $ | 97,036 | ||||||||||||||||||
Total securities
available for sale
and investment
securities |
$ | 4,061 | 3.50 | % | $ | 66,640 | 2.78 | % | $ | 201,184 | 3.04 | % | $ | 4,025 | 5.92 | % | $ | 275,910 | ||||||||||||||||||
At March 31, 2011, the Company held investment securities issued by the State of Mississippi
with an aggregate carrying amount of $27.9 million and a market value of $28.6 million. The yield
on obligations of states and and political subdivisions has been calculated on a fully tax
equivalent basis.
21
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TABLE 5
SECURITIES ANALYSIS
SECURITIES ANALYSIS
SECURITIES AVAILABLE-FOR-SALE | SECURITIES HELD-TO-MATURITY | ||||||||||||||||||||||||||||||||
MARCH 31, 2011 | MARCH 31, 2011 | ||||||||||||||||||||||||||||||||
GROSS | GROSS | GROSS | GROSS | ||||||||||||||||||||||||||||||
UNREALIZED | UNREALIZED | UNREALIZED | UNREALIZED | ||||||||||||||||||||||||||||||
AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | ||||||||||||||||||||||||||
U S GOVERNMENT AND
AGENCY SECURITIES |
$ | 182,355 | $ | 99 | $ | (3,705 | ) | $ | 178,749 | $ | 66,610 | $ | 971 | $ | | $ | 67,581 | ||||||||||||||||
STATE AND MUNICIPAL
SECURITIES |
| | | | 29,526 | 793 | (128 | ) | 30,191 | ||||||||||||||||||||||||
OTHER SECURITIES |
72 | 53 | | 125 | 900 | | | 900 | |||||||||||||||||||||||||
TOTAL |
$ | 182,427 | $ | 152 | $ | (3,705 | ) | $ | 178,874 | $ | 97,036 | $ | 1,764 | $ | (128 | ) | $ | 98,672 | |||||||||||||||
SECURITIES AVAILABLE-FOR-SALE | SECURITIES HELD-TO-MATURITY | ||||||||||||||||||||||||||||||||
MARCH 31, 2010 | MARCH 31, 2010 | ||||||||||||||||||||||||||||||||
GROSS | GROSS | GROSS | GROSS | ||||||||||||||||||||||||||||||
UNREALIZED | UNREALIZED | UNREALIZED | UNREALIZED | ||||||||||||||||||||||||||||||
AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | ||||||||||||||||||||||||||
U S GOVERNMENT AND
AGENCY SECURITIES |
$ | 27,111 | $ | 194 | $ | (37 | ) | $ | 27,268 | $ | 136,205 | $ | 684 | $ | (511 | ) | $ | 136,378 | |||||||||||||||
STATE AND MUNICIPAL
SECURITIES |
| | | | 22,270 | 581 | (98 | ) | 22,753 | ||||||||||||||||||||||||
OTHER SECURITIES |
72 | 81 | | 153 | 900 | | | 900 | |||||||||||||||||||||||||
TOTAL |
$ | 27,183 | $ | 275 | $ | (37 | ) | $ | 27,421 | $ | 159,375 | $ | 1,265 | $ | (609 | ) | $ | 160,031 | |||||||||||||||
SECURITIES AVAILABLE-FOR-SALE | SECURITIES HELD-TO-MATURITY | ||||||||||||||||||||||||||||||||
MARCH 31, 2009 | MARCH 31, 2009 | ||||||||||||||||||||||||||||||||
GROSS | GROSS | GROSS | GROSS | ||||||||||||||||||||||||||||||
UNREALIZED | UNREALIZED | UNREALIZED | UNREALIZED | ||||||||||||||||||||||||||||||
AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | AMORTIZED COST | GAINS | LOSSES | FAIR VALUE | ||||||||||||||||||||||||||
U S GOVERNMENT AND
AGENCY SECURITIES |
$ | 56,239 | $ | 200 | $ | (215 | ) | $ | 56,224 | $ | 82,009 | $ | 1,552 | $ | | $ | 83,561 | ||||||||||||||||
STATE AND MUNICIPAL
SECURITIES |
| | | | 9,602 | 276 | (20 | ) | 9,858 | ||||||||||||||||||||||||
OTHER SECURITIES |
72 | 22 | | $ | 94 | 600 | | | 600 | ||||||||||||||||||||||||
TOTAL |
$ | 56,311 | $ | 222 | $ | (215 | ) | $ | 56,318 | $ | 92,211 | $ | 1,828 | $ | (20 | ) | $ | 94,019 | |||||||||||||||
22
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TABLE 6
LOAN PORTFOLIO
(Dollars in Thousands)
LOAN PORTFOLIO
(Dollars in Thousands)
Loans outstanding at the end of the first quarter indicated are shown in the following table
classified by type of loans:
2011 | 2010 | 2009 | ||||||||||
Commercial & Industrial |
$ | 24,467 | $ | 26,386 | $ | 27,648 | ||||||
Real Estate |
162,297 | 149,492 | 136,680 | |||||||||
Consumer Loans |
27,822 | 33,939 | 35,527 | |||||||||
Other Loans |
4,014 | 6,629 | 5,486 | |||||||||
Total Loans |
$ | 218,600 | $ | 216,446 | $ | 205,341 | ||||||
TABLE 7
LOAN MATURITIES & INTEREST RATE SENSITIVITY
(Dollars in Thousands)
LOAN MATURITIES & INTEREST RATE SENSITIVITY
(Dollars in Thousands)
The following table shows the amount of loans outstanding as of March 31, 2011 (excluding
those in non-accrual status ) based on the scheduled repayments of principal:
Remaining Maturity Fixed Rate |
||||
3 months or less |
$ | 24,134 | ||
Over 3 months through 12 months |
31,394 | |||
Over 1 year through 5 years |
148,340 | |||
Over 5 years |
6,015 | |||
Over 1 year but variable rate |
3,298 | |||
Total Loans |
$ | 213,181 | ||
23
Table of Contents
TABLE 8
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)
The following table outlines the activity for the allowance for loan losses for the past three
years:
Quarter ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Beginning Balance |
$ | 3,268 | $ | 3,100 | $ | 3,100 | ||||||
Charge Offs: |
||||||||||||
Commercial & Industrial |
| 43 | 9 | |||||||||
Real Estate |
195 | 30 | 16 | |||||||||
Consumer |
157 | 230 | 117 | |||||||||
Other |
| | | |||||||||
Total Charge Offs |
352 | 303 | 142 | |||||||||
Recoveries: |
||||||||||||
Commercial & Industrial |
| 17 | 5 | |||||||||
Real Estate |
2 | 17 | | |||||||||
Consumer |
108 | 137 | 63 | |||||||||
Other |
||||||||||||
Total Recoveries |
110 | 171 | 68 | |||||||||
Net Charge Offs |
242 | 132 | 74 | |||||||||
Provision for Possible Losses |
242 | 132 | 74 | |||||||||
Ending Balance |
$ | 3,268 | $ | 3,100 | $ | 3,100 | ||||||
Total Loans Outstanding |
$ | 218,600 | $ | 216,446 | $ | 205,341 | ||||||
Average daily loans |
$ | 219,836 | $ | 212,286 | $ | 203,173 | ||||||
2011 | 2010 | 2009 | ||||||||||
Percentages: |
||||||||||||
Allowance for loan losses to end of quarter total loans |
1.49 | % | 1.43 | % | 1.51 | % | ||||||
Allowance for loan losses to average loans |
1.49 | % | 1.46 | % | 1.53 | % | ||||||
Allowance for loan losses to nonperforming assets |
39.76 | % | 70.06 | % | 146.57 | % | ||||||
Net charge offs to average loans |
0.110 | % | 0.062 | % | 0.036 | % |
24
Table of Contents
TABLE 9
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)
The following table represents the allocation of the allowance for loan losses by loan categories
and is based on an analysis of individual credits, historical losses, and other factors. This
allocation is for analytical purposes only as the aggregate allowance is available to absorb losses
on any and all loans.
March 31, | ||||||||||||||||||||||||
2011 | 2010 | 2009 | ||||||||||||||||||||||
% Gross | Loan Loss | % Gross | Loan Loss | % Gross | Loan Loss | |||||||||||||||||||
Loans | Allowance | Loans | Allowance | Loans | Allowance | |||||||||||||||||||
Outstanding | Allocation | Outstanding | Allocation | Outstanding | Allocation | |||||||||||||||||||
Commercial & Industrial |
1.80 | $ | 59 | 7.06 | $ | 219 | 7.68 | $ | 238 | |||||||||||||||
Real Estate |
81.66 | 2,669 | 61.81 | 1,916 | 28.90 | 896 | ||||||||||||||||||
Consumer |
12.29 | 402 | 22.52 | 698 | 23.23 | 720 | ||||||||||||||||||
Other |
4.25 | 139 | 8.61 | 267 | 24.39 | 756 | ||||||||||||||||||
Unallocated |
| | | | 15.81 | 490 | ||||||||||||||||||
100 | % | $ | 3,268 | 100 | % | $ | 3,100 | 100 | % | $ | 3,100 | |||||||||||||
TABLE 10
NONPERFORMING ASSETS
(Dollars in Thousands)
NONPERFORMING ASSETS
(Dollars in Thousands)
This table summarizes the amount of nonperforming assets at the end of the first quarter of the
years indicated.
2011 | 2010 | 2009 | ||||||||||
Non-accrual Loans & Accruing Loans Past Due 90 Days or more |
$ | 5,419 | $ | 2,278 | $ | 1,879 | ||||||
Other Real Estate |
2,800 | 2,147 | 236 | |||||||||
$ | 8,219 | $ | 4,425 | $ | 2,115 | |||||||
Nonperforming Assets as % of Total Loans |
3.76 | % | 2.04 | % | 1.03 | % | ||||||
Non-accrual Loans & Loans Past Due 90 Days or More
as % of Total Loans |
2.48 | % | 1.05 | % | 0.92 | % |
25
Table of Contents
TABLE 11
AVERAGE DEPOSITS
(Dollars in Thousands)
AVERAGE DEPOSITS
(Dollars in Thousands)
The daily average amounts of deposits for the periods indicated are summarized in the following
table:
Quarter ended March 31, | ||||||||||||
2011 | 2010 | 2009 | ||||||||||
Non-interest bearing deposits |
$ | 82,365 | $ | 47,993 | $ | 84,525 | ||||||
Interest-bearing deposits |
308,209 | 251,995 | 177,883 | |||||||||
Interest-bearing time deposits |
113,708 | 107,028 | 111,515 | |||||||||
Total |
$ | 504,282 | $ | 407,016 | $ | 373,923 | ||||||
TABLE 12
TIME DEPOSITS OF $100,000 OR MORE, MATURITY DISTRIBUTION
(Dollars in Thousands)
TIME DEPOSITS OF $100,000 OR MORE, MATURITY DISTRIBUTION
(Dollars in Thousands)
Maturities of time certificates of deposits $100,000 or more outstanding at March 31, 2011 are
summarized in the following table:
Time remaining until maturity
|
||||
3 months or less |
$ | 16,382 | ||
Over 3 through 12 months |
43,375 | |||
Over 12 months |
9,101 | |||
Total |
$ | 68,858 | ||
26
Table of Contents
TABLE 13
SHORT-TERM BORROWINGS
(Dollars in Thousands)
SHORT-TERM BORROWINGS
(Dollars in Thousands)
The following table presents a summary of the Companys short-term borrowings at March 31, for each
of the last three years and the corresponding interest rates:
Daily | Average | Maximum | ||||||||||||||
March | Average | Interest | Month-End | |||||||||||||
Balance | Balance | Rate* | Balance | |||||||||||||
2011 |
||||||||||||||||
Federal funds purchased and
securities sold under
agreements to repurchase |
$ | 14,254 | $ | 14,670 | 0.16 | % | $ | 14,254 | ||||||||
2010 |
||||||||||||||||
Federal funds purchased and
securities sold under
agreements to repurchase |
$ | 10,641 | $ | 10,745 | 0.26 | % | $ | 10,641 | ||||||||
2009 |
||||||||||||||||
Federal funds purchased and
securities sold under
agreements to repurchase |
$ | 15,665 | $ | 13,199 | 0.30 | % | $ | 15,665 |
* | on daily average balance |
27
Table of Contents
TABLE 14
INTEREST SENSITIVITY
(Dollars in Thousands)
INTEREST SENSITIVITY
(Dollars in Thousands)
The following table reflects the interest sensitivity of the Company over various periods as of
March 31, 2011, based on contractual maturities as of that date:
0-3 | 4-12 | 1-5 | Over 5 | |||||||||||||||||
Months | Months | Years | Years | Total | ||||||||||||||||
Assets |
||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||
Loans, net of unearned income |
$ | 26,286 | $ | 31,461 | $ | 151,570 | $ | 6,015 | $ | 215,332 | ||||||||||
Investment securities |
1,232 | 2,704 | 56,630 | 36,470 | 97,036 | |||||||||||||||
Securities available for sale |
125 | | 10,010 | 168,739 | 178,874 | |||||||||||||||
Other interest earning assets |
35,589 | | | | 35,589 | |||||||||||||||
Federal funds sold and securities
purchased under agreements to
resell |
97 | | | | 97 | |||||||||||||||
Total interest-earning assets |
63,329 | 34,165 | 218,210 | 211,224 | 526,928 | |||||||||||||||
Non-interest-earning assets |
50,303 | 50,303 | ||||||||||||||||||
Total assets |
$ | 63,329 | $ | 34,165 | $ | 218,210 | $ | 261,527 | $ | 577,231 | ||||||||||
Liabilities and stockholders equity |
||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||
Int DDAs, MMF, Savings deposits |
$ | 27,540 | $ | 88,741 | $ | 189,722 | $ | | $ | 306,003 | ||||||||||
Time deposits |
25,092 | 70,162 | 17,640 | | 112,894 | |||||||||||||||
Federal funds purchased, and securities
sold under agreements to repurchase |
14,254 | | | | 14,254 | |||||||||||||||
Total interest-bearing liabilities |
66,886 | 158,903 | 207,362 | | 433,151 | |||||||||||||||
Non-interest-bearing deposits |
12,902 | 37,947 | 25,045 | | 75,894 | |||||||||||||||
Other liabilities |
| | | 16,122 | 16,122 | |||||||||||||||
Stockholders equity |
| | | 52,064 | 52,064 | |||||||||||||||
Total liabilities and
stockholders equity |
$ | 79,788 | $ | 196,850 | $ | 232,407 | $ | 68,186 | $ | 577,231 | ||||||||||
Interest sensitive gap |
$ | (16,459 | ) | $ | (162,685 | ) | $ | (14,197 | ) | $ | 193,341 | |||||||||
Cumulative interest sensitive gap |
$ | (16,459 | ) | $ | (179,144 | ) | $ | (193,341 | ) | $ | 0 | |||||||||
Cumulative interest sensitive gap
as a percent of total assets |
-2.85 | % | -31.04 | % | -33.49 | % | 0.00 | % |
28
Table of Contents
TABLE 15
CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES, AND OFF-BALANCE SHEET ARRANGEMENTS
(Dollars In Thousands)
CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES, AND OFF-BALANCE SHEET ARRANGEMENTS
(Dollars In Thousands)
The following table presents, as of March 31, 2011, significant fixed and determinable contractual
obligations to third parties by payment date:
PAYMENTS DUE IN | ||||||||||||||||||||
ONE YEAR OR | ONE TO | THREE TO | OVER FIVE | |||||||||||||||||
LESS | THREE YEARS | FIVE YEARS | YEARS | TOTAL | ||||||||||||||||
Deposits without a
stated maturity |
$ | 175,673 | $ | 106,931 | $ | 99,293 | $ | | $ | 381,897 | ||||||||||
Consumer certificates
of deposit |
95,254 | 13,088 | 4,552 | | 112,894 | |||||||||||||||
Federal funds borrowed
& repurchase agreements |
14,254 | | | | 14,254 | |||||||||||||||
Operating leases |
| |||||||||||||||||||
Purchase obligations |
| | | | |
COMMITMENTS
The following table details the amounts and expected maturities of significant commitments as of
March 31, 2011:
ONE YEAR OR | ONE TO | THREE TO | OVER FIVE | |||||||||||||||||
LESS | THREE YEARS | FIVE YEARS | YEARS | TOTAL | ||||||||||||||||
Commitments to extend
credit: |
||||||||||||||||||||
Commercial |
$ | 10,214 | $ | 126 | $ | 2 | $ | | $ | 10,342 | ||||||||||
Residential real estate |
3,241 | | 3,241 | |||||||||||||||||
Revolving home equity
and credit card lines |
247 | 683 | 134 | | 1,064 | |||||||||||||||
Other |
4,382 | | 4,382 | |||||||||||||||||
Standby letters of credit |
830 | | 830 |
29
Table of Contents
Item 4. | Controls and Procedures |
Evaluation of disclosure controls and procedures The Company maintains disclosure
controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act that
are designed to ensure that information required to be disclosed by it in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules and forms and that
such information is accumulated and communicated to the Companys management, including its
principal executive officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure. The Company carried out an evaluation, under the
supervision and with the participation of its management, including its principal executive
officer and principal financial officer, of the effectiveness of the design and operation of the
Companys disclosure controls and procedures as of the end of the period covered by this report.
Based on the evaluation of these disclosure controls and procedures, the Companys principal
executive officer and principal financial officer concluded that the Companys disclosure
controls and procedures were effective to timely alert them to material information relating to
the Company and its consolidated subsidiaries to be included in the Companys Exchange Act
reports.
Changes in Internal Controls There were no changes in the Companys internal control
over financial reporting for the quarter ended March 31, 2011 that have materially affected, or
are reasonably likely to materially affect, the Companys internal control over financial
reporting.
30
Table of Contents
Part II. Other Information
Item 1. | Legal Proceedings |
None
Item 1A. | Risk Factors |
There were no material changes to the Companys risk factors as previously disclosed in Part I,
Item 1A of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2010.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None
Item 3. | Defaults Upon Senior Securities |
None
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
None
Item 6. | Exhibits |
31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002. |
|||
31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. |
|||
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. |
|||
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. |
31
Table of Contents
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.
MERCHANTS & MARINE BANCORP, INC. |
||||
Date: May 16, 2011 | By: | /s/ Royce Cumbest | ||
Royce Cumbest, Chairman of the Board | ||||
President and Chief Executive Officer | ||||
Date: May 16, 2011 | By: | /s/ Elise Bourgeois | ||
Elise Bourgeois, Senior Vice President, | ||||
Cashier and Chief Financial Officer |
32