x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT of
1934 FOR THE QUARTERLY PERIOD ENDED March
31, 2007.
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE TRANSITION PERIOD FROM
TO .
|
VIRGINIA
|
54-1284688
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
|
628
Main Street
|
||
Danville,
Virginia
|
24541
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Yes
|
x
|
No
|
¨
|
AMERICAN
NATIONAL BANKSHARES INC.
|
|||
Page
|
|||
Part
I
|
FINANCIAL
INFORMATION
|
||
Item
1
|
Financial
Statements (Unaudited)
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
Item
2
|
12
|
||
Item
3
|
19
|
||
Item
4
|
19
|
||
Part
II
|
OTHER
INFORMATION
|
||
Item
1
|
20
|
||
Item
1A
|
Risk
Factors
|
20
|
|
Item
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
20
|
|
|
|||
Item
3
|
Defaults
Upon Senior Securities
|
20
|
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
20
|
|
Item
5
|
Other
Information
|
20
|
|
Item
6
|
21
|
||
SIGNATURES
|
American
National Bankshares Inc. and Subsidiary
|
|||||||
(Dollars
in thousands, except share data)
|
|||||||
(Unaudited)
|
(Audited)
|
||||||
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
ASSETS
|
|||||||
Cash
and due from banks
|
$
|
22,844
|
$
|
24,375
|
|||
Interest
bearing deposits in other banks
|
22,817
|
1,749
|
|||||
Securities
available for sale, at fair value
|
138,533
|
148,748
|
|||||
Securities
held to maturity (fair value of $13,715 in 2007 and $14,131 in
2006)
|
13,475
|
13,873
|
|||||
Total
securities
|
152,008
|
162,621
|
|||||
Loans
held for sale
|
2,017
|
1,662
|
|||||
Loans,
net of unearned income
|
543,357
|
542,228
|
|||||
Less
allowance for loan losses
|
(7,590
|
)
|
(7,264
|
)
|
|||
Net
loans
|
535,767
|
534,964
|
|||||
Bank
premises and equipment at cost, less accumulated depreciation
of
|
|||||||
$15,022 in 2007 and $14,755 in 2006
|
12,759
|
12,438
|
|||||
Goodwill
|
22,468
|
22,468
|
|||||
Core
deposit intangibles, net
|
2,735
|
2,829
|
|||||
Accrued
interest receivable and other assets
|
14,129
|
14,614
|
|||||
Total
assets
|
$
|
787,544
|
$
|
777,720
|
|||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
Liabilities:
|
|||||||
Demand
deposits -- noninterest bearing
|
$
|
116,940
|
$
|
106,885
|
|||
Demand
deposits -- interest bearing
|
113,778
|
107,170
|
|||||
Money
market deposits
|
52,856
|
50,948
|
|||||
Savings
deposits
|
69,083
|
69,517
|
|||||
Time
deposits
|
253,377
|
274,008
|
|||||
Total
deposits
|
606,034
|
608,528
|
|||||
Repurchase
agreements
|
44,526
|
33,368
|
|||||
FHLB
borrowings
|
15,050
|
15,087
|
|||||
Trust
preferred capital notes
|
20,619
|
20,619
|
|||||
Accrued
interest payable and other liabilities
|
4,675
|
5,126
|
|||||
Total
liabilities
|
690,904
|
682,728
|
|||||
Shareholders'
equity:
|
|||||||
Preferred
stock, $5 par, 200,000 shares authorized, none
outstanding
|
-
|
-
|
|||||
Common
stock, $1 par, 10,000,000 shares authorized,
|
|||||||
6,156,823
shares outstanding at March 31, 2007 and
|
|||||||
6,161,865
shares outstanding at December 31, 2006
|
6,157
|
6,162
|
|||||
Capital
in excess of par value
|
26,456
|
26,414
|
|||||
Retained
earnings
|
65,726
|
64,584
|
|||||
Accumulated
other comprehensive income (loss), net
|
(1,699
|
)
|
(2,168
|
)
|
|||
Total
shareholders' equity
|
96,640
|
94,992
|
|||||
Total
liabilities and shareholders' equity
|
$
|
787,544
|
$
|
777,720
|
|||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
American
National Bankshares Inc. and Subsidiary
|
||||||||||
Consolidated
Statements of Income
|
||||||||||
(Dollars
in thousands, except share and per share data)
|
||||||||||
(Unaudited)
|
||||||||||
Three
Months Ended March
31,
|
||||||||||
2007
|
2006
|
|||||||||
Interest
Income:
|
||||||||||
Interest
and fees on loans
|
$
|
10,079
|
$
|
6,956
|
||||||
Interest
and dividends on securities:
|
||||||||||
Taxable
|
1,136
|
1,152
|
||||||||
Tax-exempt
|
423
|
451
|
||||||||
Dividends
|
89
|
57
|
||||||||
Other
interest income
|
171
|
232
|
||||||||
Total
interest income
|
11,898
|
8,848
|
||||||||
Interest
Expense:
|
||||||||||
Deposits
|
3,783
|
2,307
|
||||||||
Repurchase
agreements
|
426
|
309
|
||||||||
Other
borrowings
|
206
|
213
|
||||||||
Trust
preferred capital notes
|
343
|
-
|
||||||||
Total
interest expense
|
4,758
|
2,829
|
||||||||
Net
Interest Income
|
7,140
|
6,019
|
||||||||
Provision
for Loan Losses
|
303
|
126
|
||||||||
Net
Interest Income After Provision for Loan Losses
|
6,837
|
5,893
|
||||||||
Noninterest
Income:
|
||||||||||
Trust
fees
|
879
|
755
|
||||||||
Service
charges on deposit accounts
|
622
|
571
|
||||||||
Other
fees and commissions
|
289
|
309
|
||||||||
Mortgage
banking income
|
190
|
133
|
||||||||
Securities
gains, net
|
25
|
21
|
||||||||
Other
|
207
|
112
|
||||||||
Total
noninterest income
|
2,212
|
1,901
|
||||||||
Noninterest
Expense:
|
||||||||||
Salaries
|
2,390
|
1,984
|
||||||||
Pension
and other employee benefits
|
648
|
649
|
||||||||
Occupancy
and equipment
|
829
|
646
|
||||||||
Bank
franchise tax
|
168
|
140
|
||||||||
Core
deposit intangible amortization
|
94
|
39
|
||||||||
Other
|
1,041
|
925
|
||||||||
Total
noninterest expense
|
5,170
|
4,383
|
||||||||
Income
Before Income Tax Provision
|
3,879
|
3,411
|
||||||||
Income
Tax Provision
|
1,175
|
1,005
|
||||||||
Net
Income
|
$
|
2,704
|
$
|
2,406
|
||||||
Net
Income Per Common Share:
|
||||||||||
Basic
|
$
|
0.44
|
$
|
0.44
|
||||||
Diluted
|
$
|
0.44
|
$
|
0.44
|
||||||
Average
Common Shares Outstanding:
|
||||||||||
Basic
|
6,156,812
|
5,441,758
|
||||||||
Diluted
|
6,185,084
|
5,477,904
|
||||||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
American
National Bankshares Inc. and Subsidiary
|
|||||||||||||||||||
Three
Months Ended March 31, 2007 and 2006
(Unaudited)
|
|||||||||||||||||||
(Dollars
in thousands)
|
Accumulated
|
||||||||||||||||||
|
Common
Stock
|
Capital
in
|
Other
|
Total
|
|||||||||||||||
|
Excess
of
|
Retained
|
Comprehensive
|
Shareholders'
|
|||||||||||||||
|
Shares
|
Amount
|
Par
Value
|
Earnings
|
Income
(Loss)
|
|
Equity
|
||||||||||||
Balance,
December 31, 2005
|
5,441,758
|
$
|
5,442
|
$
|
9,588
|
$
|
59,109
|
$
|
(720
|
)
|
$
|
73,419
|
|||||||
Net
income
|
-
|
-
|
-
|
2,406
|
-
|
2,406
|
|||||||||||||
Change
in unrealized losses on securities
|
|||||||||||||||||||
available
for sale, net of tax of $(178)
|
-
|
-
|
-
|
-
|
(343
|
)
|
|||||||||||||
Less:
Reclassification adjustment for gains
|
|||||||||||||||||||
on
securities available for sale, net of
|
|||||||||||||||||||
tax
of $(7)
|
-
|
-
|
-
|
-
|
(14
|
)
|
|||||||||||||
Other
comprehensive income (loss)
|
(357
|
)
|
(357
|
)
|
|||||||||||||||
Total
comprehensive income
|
2,049
|
||||||||||||||||||
Stock
repurchased and retired
|
(13,900
|
)
|
(14
|
)
|
(24
|
)
|
(286
|
)
|
-
|
(324
|
)
|
||||||||
Stock
options exercised
|
3,580
|
3
|
46
|
-
|
-
|
49
|
|||||||||||||
Cash
dividends paid
|
-
|
-
|
-
|
(1,141
|
)
|
-
|
(1,141
|
)
|
|||||||||||
Balance,
March 31, 2006
|
5,431,438
|
$
|
5,431
|
$
|
9,610
|
$
|
60,088
|
$
|
(1,077
|
)
|
$
|
74,052
|
|||||||
Balance,
December 31, 2006
|
6,161,865
|
$
|
6,162
|
$
|
26,414
|
$
|
64,584
|
$
|
(2,168
|
)
|
94,992
|
||||||||
Net
income
|
-
|
-
|
-
|
2,704
|
-
|
2,704
|
|||||||||||||
Change
in unrealized gains on
|
|||||||||||||||||||
securities
available for sale, net of tax of $266
|
-
|
-
|
-
|
-
|
494
|
||||||||||||||
Less:
Reclassification
adjustment
for gains on
|
|||||||||||||||||||
securities
available for sale,
|
|||||||||||||||||||
net
of tax of $ (13)
|
-
|
-
|
-
|
-
|
(25)
|
||||||||||||||
Other
comprehensive
income
|
469
|
469
|
|||||||||||||||||
Total
comprehensive income
|
3,173
|
||||||||||||||||||
Stock
repurchased and retired
|
(11,600
|
)
|
(12
|
)
|
(50
|
)
|
(207
|
)
|
-
|
(269
|
)
|
||||||||
Stock
options exercised
|
6,558
|
7
|
92
|
-
|
-
|
99
|
|||||||||||||
Cash
dividends paid
|
-
|
-
|
-
|
(1,355
|
)
|
-
|
(1,355
|
)
|
|||||||||||
Balance,
March 31, 2007
|
6,156,823
|
$
|
6,157
|
$
|
26,456
|
$
|
65,726
|
$
|
(1,699
|
)
|
$
|
96,640
|
|||||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
American
National Bankshares Inc. and Subsidiary
|
||||||||||
Three
Months Ended March 31, 2007 and 2006
|
||||||||||
(in
thousands)
(Unaudited)
|
||||||||||
2007
|
2006
|
|||||||||
Cash
Flows from Operating Activities:
|
||||||||||
Net
income
|
$
|
2,704
|
$
|
2,406
|
||||||
Adjustments
to reconcile net income to net
|
||||||||||
cash
provided by operating activities:
|
||||||||||
Provision
for loan losses
|
303
|
126
|
||||||||
Depreciation
|
282
|
211
|
||||||||
Core
deposit intangible amortization
|
94
|
39
|
||||||||
Net
amortization (accretion) of bond premiums and discounts
|
(26
|
)
|
31
|
|||||||
Net
gain on sale or call of securities
|
(25
|
)
|
(21
|
)
|
||||||
Gain
on loans held for sale
|
(134
|
)
|
(77
|
)
|
||||||
Proceeds
from sales of loans held for sale
|
6,384
|
2,387
|
||||||||
Originations
of loans held for sale
|
(6,605
|
)
|
(2,469
|
)
|
||||||
Net
(gain) loss on foreclosed real estate
|
-
|
(3
|
)
|
|||||||
Gain
on sale of premises and equipment
|
(9
|
)
|
-
|
|||||||
Deferred
income tax expense (benefit)
|
(253
|
)
|
113
|
|||||||
Increase
in interest receivable
|
(135
|
)
|
(480
|
)
|
||||||
Decrease
in other assets
|
802
|
1,606
|
||||||||
(Decrease)
increase in interest payable
|
(53
|
)
|
68
|
|||||||
Decrease
in other liabilities
|
(581
|
)
|
(1,212
|
)
|
||||||
Net
cash provided by operating activities
|
2,748
|
2,725
|
||||||||
Cash
Flows from Investing Activities:
|
||||||||||
Proceeds
from sales of securities available for sale
|
215
|
165
|
||||||||
Proceeds
from maturities and calls of securities available for sale
|
13,522
|
14,473
|
||||||||
Proceeds
from maturities and calls of securities held to maturity
|
398
|
1,478
|
||||||||
Purchases
of securities available for sale
|
(2,748
|
)
|
(32,532
|
)
|
||||||
Net
(increase) decrease in loans
|
(1,106
|
)
|
5,651
|
|||||||
Proceeds
from sale of bank property and equipment
|
-
|
14
|
||||||||
Purchases
of bank property and equipment
|
(594
|
)
|
(190
|
)
|
||||||
Proceeds
from sales of foreclosed real estate
|
-
|
66
|
||||||||
Net
cash provided by (used in) investing activities
|
9,687
|
(10,875
|
)
|
|||||||
Cash
Flows from Financing Activities:
|
||||||||||
Net
increase in demand, money market,
|
||||||||||
and
savings deposits
|
18,137
|
13,859
|
||||||||
Net
decrease in time deposits
|
(20,631
|
)
|
(831
|
)
|
||||||
Net
increase in repurchase agreements
|
11,158
|
3,469
|
||||||||
Net
decrease in FHLB borrowings
|
(37
|
)
|
(38
|
)
|
||||||
Cash
dividends paid
|
(1,355
|
)
|
(1,141
|
)
|
||||||
Repurchase
of stock
|
(269
|
)
|
(324
|
)
|
||||||
Proceeds
from exercise of stock options
|
99
|
49
|
||||||||
Net
cash provided by financing activities
|
7,102
|
15,043
|
||||||||
Net
Increase in Cash and
Cash Equivalents
|
19,537
|
6,893
|
||||||||
Cash
and Cash Equivalents at Beginning of Period
|
26,124
|
27,354
|
||||||||
Cash
and Cash Equivalents at End of Period
|
$
|
45,661
|
$
|
34,247
|
||||||
Supplemental
Schedule of Cash and Cash Equivalents:
|
||||||||||
Cash:
|
||||||||||
Cash
and due from banks
|
$
|
22,844
|
$
|
17,986
|
||||||
Interest-bearing
deposits in other banks
|
22,817
|
16,261
|
||||||||
$
|
45,661
|
$
|
34,247
|
|||||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||||
Interest
paid
|
$
|
4,811
|
$
|
2,760
|
||||||
Income
taxes paid
|
-
|
11
|
||||||||
Transfer
of loans to other real estate owned
|
-
|
30
|
||||||||
Unrealized
gain (loss) on securities available for sale
|
722
|
(542
|
)
|
|||||||
The
accompanying notes are an integral part of the consolidated financial
statements.
|
March
31, 2007
|
|||||||||||||
(in
thousands)
|
Amortized
|
Unrealized
|
Unrealized
|
Estimated
|
|||||||||
|
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||
Securities
available for sale:
|
|||||||||||||
Federal
agencies
|
$
|
77,583
|
$
|
103
|
$
|
474
|
$
|
77,212
|
|||||
Mortgage-backed
|
19,147
|
122
|
304
|
18,965
|
|||||||||
State
and municipal
|
33,583
|
168
|
364
|
33,387
|
|||||||||
Corporate
|
2,487
|
1
|
48
|
2,440
|
|||||||||
Equity
securities:
|
|||||||||||||
FHLB
stock - restricted
|
2,130
|
-
|
-
|
2,130
|
|||||||||
Federal
Reserve stock - restricted
|
1,429
|
-
|
-
|
1,429
|
|||||||||
FNMA
and FHLMC preferred stock
|
2,453
|
436
|
-
|
2,889
|
|||||||||
Other
|
81
|
-
|
-
|
81
|
|||||||||
Total
securities available for sale
|
138,893
|
830
|
1,190
|
138,533
|
|||||||||
Securities
held to maturity:
|
|||||||||||||
Federal
agencies
|
1,000
|
-
|
7
|
993
|
|||||||||
Mortgage-backed
|
365
|
9
|
-
|
374
|
|||||||||
State
and municipal
|
12,110
|
264
|
26
|
12,348
|
|||||||||
Total
securities held to maturity
|
13,475
|
273
|
33
|
13,715
|
|||||||||
Total
securities
|
$
|
152,368
|
$
|
1,103
|
$
|
1,223
|
$
|
152,248
|
December
31, 2006
|
|||||||||||||
(in thousands) |
Amortized
|
Unrealized
|
Unrealized
|
Estimated
|
|||||||||
|
Cost
|
Gains
|
Losses
|
Fair
Value
|
|||||||||
Securities
available for sale:
|
|||||||||||||
Federal agencies
|
$
|
88,106
|
$
|
40
|
$
|
819
|
$
|
87,327
|
|||||
Mortgage-backed
|
19,225
|
104
|
353
|
18,976
|
|||||||||
State and municipal
|
33,608
|
168
|
423
|
33,353
|
|||||||||
Corporate
|
2,490
|
3
|
56
|
2,437
|
|||||||||
Equity
securities:
|
|||||||||||||
FHLB
stock - restricted
|
2,248
|
-
|
-
|
2,248
|
|||||||||
Federal
Reserve stock - restricted
|
1,429
|
-
|
-
|
1,429
|
|||||||||
FNMA
and FHLMC preferred stock
|
2,643
|
254
|
-
|
2,897
|
|||||||||
Other
|
81
|
-
|
-
|
81
|
|||||||||
Total
securities available for sale
|
149,830
|
569
|
1,651
|
148,748
|
|||||||||
Securities
held to maturity:
|
|||||||||||||
Federal agencies
|
1,001
|
-
|
12
|
989
|
|||||||||
Mortgage-backed
|
385
|
9
|
-
|
394
|
|||||||||
State and municipal
|
12,487
|
291
|
30
|
12,748
|
|||||||||
Total
securities held to maturity
|
13,873
|
300
|
42
|
14,131
|
|||||||||
Total
securities
|
$
|
163,703
|
$
|
869
|
$
|
1,693
|
$
|
162,879
|
Total
|
Less
than 12 months
|
12
Months or More
|
||||||||||||||||
(in
thousands)
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
||||||||||||
Federal
agencies
|
$
|
65,421
|
$
|
481
|
$
|
5,848
|
$
|
15
|
$
|
59,573
|
$
|
466
|
||||||
Mortgage-backed
|
10,389
|
304
|
175
|
2
|
10,214
|
302
|
||||||||||||
State
and municipal
|
24,747
|
390
|
399
|
-
|
24,348
|
390
|
||||||||||||
Corporate
|
1,437
|
48
|
-
|
-
|
1,437
|
48
|
||||||||||||
Total
|
$
|
101,994
|
$
|
1,223
|
$
|
6,422
|
$
|
17
|
$
|
95,572
|
$
|
1,206
|
Total
|
Less
than 12 Months
|
12
Months or More
|
|||||||||||||||||
(in
thousands)
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
Fair
Value
|
Unrealized
Loss
|
|||||||||||||
Federal
agencies
|
$
|
72,091
|
$
|
831
|
$
|
21,439
|
$
|
113
|
$
|
50,652
|
$
|
718
|
|||||||
Mortgage-backed
|
11,091
|
353
|
242
|
2
|
10,849
|
351
|
|||||||||||||
State
and municipal
|
25,310
|
453
|
3,784
|
51
|
21,526
|
402
|
|||||||||||||
Corporate
|
1,429
|
56
|
-
|
-
|
1,429
|
56
|
|||||||||||||
Total
|
$
|
109,921
|
$
|
1,693
|
$
|
25,465
|
$
|
166
|
$
|
84,456
|
$
|
1,527
|
(in
thousands)
|
March
31,
2007
|
December
31,
2006
|
|||||
Construction
and land development
|
$
|
70,586
|
$
|
69,404
|
|||
Commercial
real estate
|
196,339
|
186,639
|
|||||
Residential
real estate
|
129,827
|
131,126
|
|||||
Home
equity
|
48,004
|
52,531
|
|||||
Total
real estate
|
444,756
|
439,700
|
|||||
Commercial
and industrial
|
88,808
|
91,511
|
|||||
Consumer
|
9,793
|
11,017
|
|||||
Total
loans
|
$
|
543,357
|
$
|
542,228
|
March
31,
|
December
31,
|
||||||
(in
thousands)
|
2007
|
2006
|
|||||
Impaired
loans without a valuation allowance
|
$
|
1,219
|
$
|
472
|
|||
Impaired
loans with a valuation allowance
|
295
|
904
|
|||||
Total
impaired loans
|
$
|
1,514
|
$
|
1,376
|
|||
Allowance
provided for impaired loans,
|
|||||||
included
in the allowance for loan losses
|
$
|
312
|
$
|
241
|
|||
Nonaccrual
loans excluded from the impaired loan
disclosure
|
$
|
2,272
|
$
|
2,311
|
Three
Months
Ended
|
Three
Months
Ended
|
||||||
(in
thousands)
|
March
31, 2007
|
March
31, 2006
|
|||||
Average
balance in impaired loans
|
$
|
1,587
|
$
|
3,554
|
|||
Interest
income recognized on impaired loans
|
$
|
4
|
$
|
8
|
|||
Interest
income recognized on nonaccrual loans
|
$
|
-
|
$
|
24
|
|||
Interest
on nonaccrual loans had they been accruing
|
$
|
75
|
$
|
66
|
|||
Loans
past due 90 days and still accruing interest
|
$
|
-
|
$
|
-
|
(in
thousands)
|
Three
Months Ended
March
31,
|
Year
Ended
December
31,
|
Three
Months Ended
March
31,
|
|||||||
2007
|
2006
|
2006
|
||||||||
Allowance
for Loan Losses
|
||||||||||
Balance,
beginning of period
|
$
|
7,264
|
$
|
6,109
|
$
|
6,109
|
||||
Allowance
acquired in merger
|
-
|
1,598
|
-
|
|||||||
Provision
for loan losses
|
303
|
58
|
126
|
|||||||
Charge-offs
|
(49
|
)
|
(913
|
)
|
(151
|
)
|
||||
Recoveries
|
72
|
412
|
80
|
|||||||
Balance,
end of period
|
$
|
7,590
|
$
|
7,264
|
$
|
6,164
|
||||
Reserve
for unfunded lending commitments
|
||||||||||
Balance,
beginning of period
|
$
|
123
|
-
|
$
|
-
|
|||||
Provision
for unfunded commitments
|
8
|
123
|
-
|
|||||||
Balance,
end of period
|
$
|
131
|
$
|
123
|
$
|
-
|
||||
Balance as of January 1, 2007 | $ | 22,468 | ||
Goodwill
recorded during the period
|
-
|
|||
Impairment
losses
|
-
|
|||
Balance
as of March 31, 2007
|
$
|
22,468
|
|
Shares
|
Weighted
Average
Exercise
Price
|
Average
Remaining Contractual Life
(in
years)
|
|
Average
Intrinsic
Value
(in
thousands)
|
|
|||||||
Options
outstanding, January 1
|
201,849
|
$
|
20.36
|
||||||||||
Granted
|
-
|
-
|
|||||||||||
Exercised
|
(6,558
|
)
|
14.92
|
||||||||||
Forfeited
|
(120
|
)
|
14.00
|
||||||||||
Outstanding
at March 31
|
195,171
|
$
|
20.54
|
4.6
|
$ |
662
|
|||||||
Exercisable
March 31
|
195,171
|
20.54
|
4.6
|
662
|
Three
Months Ended
|
||||||||||||
March
31,
|
||||||||||||
2007
|
2006
|
|||||||||||
Per
|
Per
|
|||||||||||
|
Share
|
Share
|
||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||
Basic
earnings per share
|
6,156,812
|
$
|
.44
|
5,441,758
|
$
|
.44
|
||||||
Effect
of dilutive securities (stock options)
|
28,272
|
-
|
36,146
|
-
|
||||||||
Diluted
earnings per share
|
6,185,084
|
$
|
.44
|
5,477,904
|
$
|
.44
|
Components
of Net Periodic Benefit Cost
|
Three
Months Ended
|
|||||
(in
thousands)
|
March
31,
|
|||||
2007
|
2006
|
|||||
Service
cost
|
$
|
164
|
$
|
126
|
||
Interest
cost
|
105
|
88
|
||||
Expected
return on plan assets
|
(141
|
)
|
(110
|
)
|
||
Amortization
of prior service cost
|
(1
|
)
|
(6
|
)
|
||
Recognized
net actuarial loss
|
38
|
53
|
||||
Net
periodic benefit cost
|
$
|
165
|
$
|
151
|
|
Three
Months Ended March 31, 2007
|
|||||||||||||||
|
|
Trust
and
|
||||||||||||||
Community
|
Investment
|
Intersegment
|
||||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||
Interest
income
|
$
|
8,848
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
8,848
|
||||||
Interest
expense
|
2,829
|
-
|
-
|
-
|
2,829
|
|||||||||||
Non-interest
income - external customers
|
1,025
|
879
|
(3
|
)
|
-
|
1,901
|
||||||||||
Operating
income before income taxes
|
3,065
|
400
|
(54
|
)
|
-
|
3,411
|
||||||||||
Depreciation
and amortization
|
245
|
5
|
1
|
-
|
251
|
|||||||||||
Total
assets
|
638,266
|
-
|
1,185
|
639,451
|
||||||||||||
Capital
expenditures
|
190
|
-
|
-
|
-
|
190
|
|||||||||||
|
Three
Months Ended March 31, 2006
|
|||||||||||||||
|
|
|||||||||||||||
Trust
and
|
||||||||||||||||
|
Community
|
Investment
|
Intersegment
|
|||||||||||||
|
Banking
|
Services
|
Other
|
Eliminations
|
Total
|
|||||||||||
Interest
income
|
$
|
8,848
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
8,848
|
||||||
Interest
expense
|
2,829
|
-
|
-
|
-
|
2,829
|
|||||||||||
Non-interest
income - external customers
|
1,025
|
879
|
(3
|
)
|
-
|
1,901
|
||||||||||
Non-interest
income - internal customers
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Operating
income before income taxes
|
3,065
|
400
|
(54
|
)
|
-
|
3,411
|
||||||||||
Depreciation
and amortization
|
245
|
5
|
1
|
-
|
251
|
|||||||||||
Total
assets
|
638,266
|
-
|
1,185
|
639,451
|
||||||||||||
Capital
expenditures
|
190
|
-
|
-
|
-
|
190
|
· |
General
economic or business conditions, either nationally or in the market
areas
in which the Company does business, may be less favorable than expected,
resulting in such things as deterioration in credit quality, reduced
demand for credit, and reductions in depositors’ account
balances.
|
· |
Changes
in interest rates could increase or reduce
income.
|
· |
Competition
among financial institutions may increase and competitors may have
greater
financial resources and develop products and technology that enable
those
competitors to compete more successfully than the
Company.
|
· |
Businesses
that the Company is engaged in may be adversely affected by legislative
or
regulatory changes, including changes in accounting
standards.
|
· |
Adverse
changes may occur in the securities markets.
|
·
|
increase
the size of the loan portfolio without sacrificing credit quality
or
pricing,
|
·
|
grow
checking, savings and money market deposits,
|
·
|
increase
fee income, and
|
·
|
continue
to control costs.
|
Table
1 - Net Interest Income Analysis
|
|||||||||||||||||||
For
the Three Months Ended March 31, 2007 and 2006
|
|||||||||||||||||||
(in
thousands, except yields and rates)
|
|||||||||||||||||||
Average
Balance
|
Interest
Income/Expense
|
Average
Yield/Rate
|
|||||||||||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
||||||||||||||
Loans:
|
|||||||||||||||||||
Commercial
|
$
|
88,962
|
$
|
70,421
|
$
|
1,693
|
$
|
1,238
|
7.61
|
%
|
7.03
|
%
|
|||||||
Real
Estate
|
444,854
|
331,522
|
8,165
|
5,508
|
7.34
|
6.65
|
|||||||||||||
Consumer
|
10,346
|
10,221
|
242
|
229
|
9.36
|
8.96
|
|||||||||||||
Total
loans
|
544,162
|
412,164
|
10,100
|
6,975
|
7.42
|
6.77
|
|||||||||||||
Securities:
|
|||||||||||||||||||
Federal
agencies
|
82,257
|
90,141
|
857
|
807
|
4.17
|
3.58
|
|||||||||||||
Mortgage-backed
|
20,001
|
21,626
|
241
|
245
|
4.82
|
4.53
|
|||||||||||||
State
and municipal
|
45,963
|
47,419
|
634
|
673
|
5.52
|
5.68
|
|||||||||||||
Other
|
8,783
|
12,372
|
129
|
154
|
5.87
|
4.98
|
|||||||||||||
Total
securities
|
157,004
|
171,558
|
1,861
|
1,879
|
4.74
|
4.38
|
|||||||||||||
Deposits
in other banks
|
13,261
|
21,304
|
171
|
232
|
5.16
|
4.36
|
|||||||||||||
Total
interest earning assets
|
714,427
|
605,026
|
12,132
|
9,086
|
6.79
|
6.00
|
|||||||||||||
Nonearning
assets
|
64,431
|
26,908
|
|||||||||||||||||
Total
assets
|
$
|
778,858
|
$
|
631,934
|
|||||||||||||||
Deposits:
|
|||||||||||||||||||
Demand
|
$
|
110,115
|
$
|
97,050
|
$
|
424
|
$
|
303
|
1.54
|
%
|
1.25
|
%
|
|||||||
Money
market
|
52,140
|
41,414
|
349
|
221
|
2.68
|
2.13
|
|||||||||||||
Savings
|
68,927
|
78,256
|
235
|
187
|
1.36
|
0.96
|
|||||||||||||
Time
|
262,624
|
196,013
|
2,775
|
1,596
|
4.23
|