United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTER ENDED MARCH 31, 2005
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-32985
WACCAMAW BANKSHARES, INC
(Name of Small Business Issuer in its Charter)
| NORTH CAROLINA | 52-2329563 | |
| (State or other Jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
110 N. Powell Boulevard Whiteville, N.C. 28472
(address of Principal Executive Office)
(910) 641-0044
(Issuer’s telephone number, including area code)
Not Applicable
(former name, former address and former fiscal year, if changed since last report)
Check whether the registrant (1) has filed all reports required to be filed by Section 13 of 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports,) and (2) has been subject to such to filing requirements for the past 90 days. As of May 12, 2005 there were 4,533,775 shares of the issuer’s common stock, no par value, outstanding. YES x NO ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x
As of May 12, 2005 there were 4,533,775 shares of the issuer’s common stock, no par value, outstanding.
Index
| Page Number | ||||
| Part I. Financial Information | ||||
Item 1. | Financial Statements | |||
Consolidated Balance Sheets March 31, 2005, (Unaudited) and December 31, 2004 | 1 | |||
| Consolidated Statements of Income, Three Months Ended March 31, 2005 and March 31, 2004 (Unaudited) | 2 | |||
| Consolidated Statements of Cash Flows, Three Months Ended March 31, 2005 and March 31, 2004 (Unaudited) | 3 | |||
| 4-5 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 6-8 | ||
Item 3. | 9 | |||
Item 4. | 9 | |||
| Part II. Other Information | 10 | |||
| Signatures | 11 | |||
Consolidated Balance Sheets
March 31, 2005 and December 31, 2004
(Unaudited) 2005 | December 31, 2004 | |||||
Assets | ||||||
Cash and due from banks | $ | 5,223,801 | $ | 3,751,318 | ||
Interest-bearing deposits with banks | 1,032,900 | 974,469 | ||||
Federal funds sold | 17,162,000 | 4,529,000 | ||||
Investment securities, available for sale | 29,240,000 | 28,599,527 | ||||
Restricted equity securities | 1,735,206 | 1,632,605 | ||||
Loans, net of allowance for loan losses of $2,912,144 in 2005, and $2,791,008 in 2004 | 222,166,129 | 206,666,022 | ||||
Other real estate owned | 442,809 | 82,475 | ||||
Property and equipment, net | 3,273,234 | 3,301,220 | ||||
Intangible assets, net | 1,048,122 | 1,104,916 | ||||
Accrued income | 1,168,793 | 1,137,359 | ||||
Bank owned life insurance | 5,063,462 | 5,030,074 | ||||
Other assets | 1,954,430 | 1,603,456 | ||||
Total assets | $ | 289,510,886 | $ | 258,412,441 | ||
Liabilities and Stockholders’ Equity | ||||||
Liabilities | ||||||
Demand deposits | $ | 21,611,570 | $ | 19,065,902 | ||
Interest-bearing deposits | 213,934,160 | 188,575,792 | ||||
Total deposits | 235,545,730 | 207,641,694 | ||||
Securities sold under agreements to repurchase | 5,394,000 | 3,268,000 | ||||
Long-term debt | 18,500,000 | 18,500,000 | ||||
Guaranteed preferred beneficial interest in the company’s junior subordinated debentures | 8,248,000 | 8,248,000 | ||||
Accrued interest payable | 731,075 | 546,324 | ||||
Other liabilities | 684,927 | 309,866 | ||||
Total liabilities | 269,103,732 | 238,513,884 | ||||
Commitments and contingencies | — | — | ||||
Stockholders’ equity | ||||||
Preferred stock, no par value; 1,000,000 shares authorized; none outstanding | ||||||
Common stock, no par value; 5,000,000 shares authorized; 4,532,646 shares issued in 2005 and 4,530,402 shares issued in 2004 | 13,149,378 | 13,142,612 | ||||
Retained earnings | 7,185,167 | 6,529,502 | ||||
Accumulated other comprehensive income | 72,609 | 226,443 | ||||
Total stockholders’ equity | 20,407,154 | 19,898,557 | ||||
Total liabilities and stockholders’ equity | $ | 289,510,886 | $ | 258,412,441 | ||
1
Consolidated Statements of Income
Three-months ended March 31, 2005 and Three-months ended March 31, 2004 (Unaudited)
Three-Months Ended March 31, | ||||||
| 2005 | 2004 | |||||
Interest income | ||||||
Loans and fees on loans | $ | 3,371,555 | $ | 2,199,681 | ||
Money market investments | 65,088 | 5,339 | ||||
Investment securities, taxable | 298,990 | 266,708 | ||||
Investment securities, nontaxable | 22,990 | 31,586 | ||||
Total interest income | 3,758,623 | 2,503,314 | ||||
Interest expense | ||||||
Deposits | 1,201,095 | 624,687 | ||||
Federal funds purchased and securities sold under agreements to repurchase | 14,540 | 8,961 | ||||
Other borrowed funds | 257,701 | 149,705 | ||||
Total interest expense | 1,473,336 | 783,353 | ||||
Net interest income | 2,285,287 | 1,719,961 | ||||
Provision for loan losses | 225,000 | 150,000 | ||||
Net interest income after provision for loan losses | 2,060,287 | 1,569,961 | ||||
Noninterest income | ||||||
Service charges on deposit accounts | 259,257 | 221,944 | ||||
Mortgage origination income | 51,824 | 51,489 | ||||
Other operating income | 169,881 | 213,917 | ||||
Income from mortgage banking investee | — | 35,097 | ||||
Earnings on bank owned life insurance | 52,849 | 56,790 | ||||
Net realized gains on sale or maturity of investment securities | — | 871 | ||||
Total noninterest income | 533,811 | 580,108 | ||||
Noninterest expense | ||||||
Salaries and employee benefits | 847,902 | 699,818 | ||||
Occupancy and equipment | 192,020 | 155,676 | ||||
Data processing | 148,537 | 89,243 | ||||
Amortization expense of intangible assets | 63,178 | 56,795 | ||||
Other expense | 317,508 | 287,670 | ||||
Total noninterest expense | 1,569,145 | 1,289,202 | ||||
Income (loss) before income taxes | 1,024,953 | 860,867 | ||||
Income Tax Expense | 369,288 | 295,098 | ||||
Net income | $ | 655,665 | $ | 565,769 | ||
Basic earnings income per share | $ | .14 | $ | .13 | ||
Diluted earnings income per share | $ | .14 | $ | .12 | ||
Weighted average shares outstanding | 4,531,865 | 4,491,396 | ||||
Diluted average shares outstanding | 4,774,317 | 4,708,569 | ||||
2
Consolidated Statements of Cash Flows
Three-months ended March 31, 2005 and Three-months ended March 31, 2004 (Unaudited)
Three-Months Ended March 31, | ||||||||
| 2005 | 2004 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 655,665 | $ | 565,769 | ||||
Adjustments to reconcile net income to net cash used by operations: | ||||||||
Depreciation and amortization | 127,038 | 118,717 | ||||||
Provision for loan losses | 225,000 | 150,000 | ||||||
Accretion of discount on securities, net of amortization of premiums | 27,826 | 12,608 | ||||||
Gain on sale of investment securities | — | (871 | ) | |||||
Changes in assets and liabilities: | ||||||||
Accrued income | (31,434 | ) | (17,601 | ) | ||||
Other assets | (305,114 | ) | (234,978 | ) | ||||
Accrued interest payable | 184,751 | (177,136 | ) | |||||
Other liabilities | 375,061 | (220,275 | ) | |||||
Net cash provided (used) by operating activities | 1,258,793 | 196,233 | ||||||
Cash flows from investing activities | ||||||||
Net (increase) decrease in federal funds sold | (12,633,000 | ) | 7,767,000 | |||||
Purchases of investment securities | (2,842,194 | ) | (5,502,656 | ) | ||||
Maturities of investment securities | 1,838,212 | 1,410,424 | ||||||
Net increase in loans | (16,085,441 | ) | (12,447,365 | ) | ||||
Sales of investment securities | — | 2,493 | ||||||
Purchases of property and equipment | (42,258 | ) | (25,965 | ) | ||||
Net cash used in investing activities | (29,764,681 | ) | (8,796,069 | ) | ||||
Cash flows from financing activities | ||||||||
Net increase in noninterest-bearing deposits | 2,545,668 | (77,322 | ) | |||||
Net increase in interest-bearing deposits | 25,358,368 | (4,384,819 | ) | |||||
Net increase in securities sold under agreements to repurchase | 2,126,000 | 1,752,000 | ||||||
Proceeds from long-term debt | — | 5,000,000 | ||||||
Net increase (decrease) in federal funds purchased | — | 3,000,000 | ||||||
Proceeds from exercise of stock options | 6,766 | 75,592 | ||||||
Proceeds from issuance of common stock | — | 127,100 | ||||||
Net cash provided by financing activities | 30,036,802 | 5,492,551 | ||||||
Increase (decrease) in cash and cash equivalents | 1,530,914 | (3,107,285 | ) | |||||
Cash and cash equivalents, beginning | 4,725,787 | 5,363,317 | ||||||
Cash and cash equivalents, ending | $ | 6,256,701 | $ | 2,256,032 | ||||
Supplemental disclosure of cash flow information | ||||||||
Interest paid | $ | 1,288,586 | $ | 960,489 | ||||
Taxes paid | $ | 23,030 | $ | 293,361 | ||||
Supplemental disclosure of noncash activities | ||||||||
Other real estate acquired in settlement of loans | $ | 360,334 | $ | — | ||||
3
Notes to Consolidated Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited financial statements were prepared in accordance with instructions for Form 10-Q and therefore, do not include all disclosures required by generally accepted accounting principles for a complete presentation of financial statements. In the opinion of the management, the financial statements contain all adjustments necessary to present fairly the financial condition of Waccamaw Bankshares, Inc. and its subsidiary, Waccamaw Bank (the “Bank”) as of March 31, 2005 and December 31, 2004, and its cash flows for the three month periods ended March 31, 2005 and 2004. The results of operations for the three month periods ended March 31, 2005 and 2004 are not necessarily indicative of the results expected for the full year. These consolidated financial statements should be read in conjunction with the Company’s 10-KSB for the year ended December 31, 2004.
Waccamaw Bankshares, Inc. is located in Whiteville, North Carolina. The accounting and policies of the Company and Bank follow generally accepted accounting principles and practices within the financial services industry.
Presentation of Cash Flows
For purposes of reporting cash flows, cash and due from banks includes cash and amounts due from depository institutions (including cash items in process of collection) which are considered to be cash equivalents. Overnight interest bearing deposits, and federal funds sold are shown separately. Cash flows from demand deposits, NOW accounts and savings accounts are reported net since their original maturities are less than three months. Loans and time deposits are reported net per FASB statement no. 104. Federal funds purchased are shown separately.
Investment Securities
Investments classified as available for sale can be held for indefinite periods of time and include those securities that management may employ as part of asset/liability strategy or that may be sold in response to changes in interest rates, prepayments, regulatory capital requirements or similar factors. These securities are carried at fair value and are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Investment securities classified as held to maturity are those debt securities that the Bank has the ability and intent to hold to maturity. Accordingly, these securities are carried at cost adjusted for amortization of premiums and accretion of discount, computed by the interest-method over their contractual lives. At March 31, 2005 and December 31, 2004, the Bank had no investments classified as held to maturity.
Loans
Loans are stated at the amount of unpaid principal, reduced by unearned fees and an allowance for loan losses.
The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. The allowance is increased by provisions charged to operating expense and reduced by net charge-offs. The Bank makes continuous credit reviews of the loan portfolio and considers economic conditions, historical loan loss experience, review of specific problem loans and other factors in determining the adequacy of the allowance balance.
Interest on all loans is accrued daily on the outstanding balance. Accrual of interest is discontinued on a loan when management believes, after considering collection efforts and other factors, that the borrower’s financial condition is such that collection of interest is doubtful.
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Waccamaw Bankshares, Inc.
Notes to Consolidated Financial Statements
Note 2. Earnings Per Share
Earnings per share for the three months ended March 31, 2005 and 2004 were calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted earnings per share for the three months ended March 31, 2005 and 2004 were calculated by dividing net income by the weighted average number of dilutive shares outstanding.
Note 3. Balance Sheets
The balance sheet at December 31, 2004 has been taken from the audited financial statements at that date.
The Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing need of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, credit risk in excess of the amount recognized in the balance sheets.
The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as for on-balance-sheet instruments. A summary of the Bank’s commitments at March 31, 2005 and December 31, 2004 is as follows:
| March 31, 2005 | December 31, 2004 | |||||
Commitment to extend credit | $ | 48,324,000 | $ | 47,127,000 | ||
Standby letters of credit | 309,000 | 371,000 | ||||
Note 4. Subsequent Events
On April 21, 2005, the stockholders of the Company approved an amendment to the Articles of Incorporation to increase the number of authorized shares of common stock from 5,000,000 to 25,000,000. Also on April 21, 2005, the stockholders of the Company approved amendments to the1998 Incentive Stock Option Plan and the1998 Nonstatutory Stock Option Plan to increase the number of options available for grant under each plan by 138,136 shares. Related amounts reflect the additions.
5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
This discussion, analysis and related financial information are presented to explain the significant factors which affected Waccamaw Bankshares, Inc. financial condition and results of operations for the three months ending March 31, 2005 and 2004. This discussion should be read in conjunction with the financial statements and related notes included in this report.
Waccamaw Bank is a North Carolina state chartered bank, and is located in Whiteville, North Carolina. The Bank began operations on September 2, 1997. Waccamaw Bankshares, Inc. acquired all outstanding shares of Waccamaw Bank on July 1, 2001.
Highlights
Net income for the quarter ended March 31, 2005 was $655,665 or $.14 per average share outstanding compared to a $565,769 net profit or $.13 per share outstanding for the quarter ended March 31, 2004.
On March 31, 2005, Waccamaw Bankshares, Inc. assets totaled $289,510,886 compared to $258,412,441 on December 31, 2004. Net loans were $222,166,129 compared to $206,666,022 on December 31, 2004. Total deposits on March 31, 2005 were $235,545,730 compared to $207,641,694 at the end of 2004. Stockholders’ equity after adjustments for unrealized losses on securities available for sale as required by FASB 115 increased by $508,600 resulting in a March 31, 2005 book value of $4.50 per share, up from $4.39 on December 31, 2004.
Financial Condition, Liquidity and Capital Resources
Investments
The Bank maintains a portfolio of securities as part of its asset/liability and liquidity management programs which emphasize effective yields and maturities to match its needs. The composition of the investment portfolio is examined periodically and appropriate realignments are initiated to meet liquidity and interest rate sensitivity needs for the Bank.
Held to maturity securities are bonds, notes and debentures for which the Bank has the positive intent and ability to hold to maturity and which are reported at cost, adjusted by premiums and discounts that are recognized in interest income using the interest method over the period to maturity or to call dates. The Bank had no “Held to Maturity” securities at March 31, 2005 or December 31, 2004.
Available-for-sale securities are reported at fair value and consist of bonds, notes, debentures and certain equity securities not classified as trading securities or as held-to-maturity securities.
Unrealized holding gains and losses, net of tax, on available-for-sale securities are reported as a net amount in a separate component of stockholders’ equity. Realized gains and losses on the sale of available-for-sale securities are determined using the specific-identification method. Premiums and discounts are recognized in interest income using the interest method over the period to maturity or to call dates.
Declines in the fair value of individual held-to-maturity and available-for-sale securities below cost that are other than temporary are reflected as write-downs of the individual securities to fair value. Related write-downs are included in earnings as realized losses.
Investments in available-for-sale securities of $29,240,000 consisted of corporate securities, municipal securities, U.S. Government agencies and mortgage-backed securities (MBS) at March 31, 2005.
6
Federal Funds Sold
Federal funds sold consist of short-term loans to other financial institutions. These loans are made to various financial institutions and were $17,162,000 and $4,529,000 on March 31, 2005 and December 31, 2004, respectively. No single loan exceeds Waccamaw Bank’s legal lending limit.
Loans
Net loans outstanding on March 31, 2005, were $222,166,129 compared to $206,666,022 on December 31, 2004. The Bank maintains a loan portfolio dominated by real estate and commercial loans diversified among various industries. The $15,500,107 increase in loans was due to stronger real estate and commercial demand due to local economies improving in the areas covered by Waccamaw Bank. This resulted in increased construction and development during the first three months of 2005.
Deposits
Deposits on March 31, 2005, were $235,545,730 compared to $207,641,694 on December 31, 2004. Interest-bearing accounts represented 90.82% at March 31, 2005 and 90.82% at December 31, 2004.
Liabilities
Securities sold under agreements to repurchase on March 31, 2005, were $5,394,000 compared to $3,268,000 on December 31, 2004. The $2,126,000 increase was due to increases in local town municipalities and school district funding. Long-term debt on March 31, 2005 and December 31, 2004 was $18,500,000 as all long-term debt is funded by the Federal Home Loan Bank of Atlanta.
Stockholders’ Equity
Waccamaw Bankshares, Inc. maintains a strong capital position which exceeds all capital adequacy requirements of Federal regulatory authorities. Total stockholders’ equity at March 31, 2005 was $20,407,154 compared to $19,898,557 at December 31, 2004. This $508,600 increase was partly due to operating profits of $655,665 during the first quarter of 2005. The Bank also exceeds all capital requirements under the leverage guidelines.
For the three months ended March 31, 2005, the operating profit of the Bank was $655,665 compared to a $565,769 profit for the three months ended March 31, 2004.
There have been no cash dividends declared during 2005. On September 30, 2004, a 2 for 1 stock split was paid to stockholders of record as of September 15, 2004. On May 14, 2004 a 6 for 5 stock split was paid to shareholders of record as of April 30, 2004. As a result, all share and per share data have been adjusted to reflect the split.
Asset Quality
The provision for possible loan losses charged to operations was $225,000 in the first quarter 2005 and $150,000 in the first quarter of 2004. The reserve for loan losses on March 31, 2005, was $2,912,144 or 1.29% of period end loans. The increase in the loan loss provision was due to stronger loan growth at the end of 2004 and the first three months of 2005.
The level of reserve is established based upon management’s evaluation of portfolio composition, current and projected national and local economic conditions and results of independent reviews of the loan portfolio by internal and external examination. Management recognizes the inherent risk associated with commercial and consumer lending, including whether or not a borrower’s actual results of operations will correspond to those projected by the borrower when the loan was funded; economic factors such as the number of housing starts and fluctuations in interest rates, etc.; depression of collateral values; and completion of projects within the original cost and time estimates. As a result, management continues to actively monitor the Bank’s asset quality and lending policies. Management believes that its loan portfolio is diversified so that a downturn in a particular market or industry will not have a significant impact on the loan portfolio or the Bank’s financial condition.
Management believes that its provision and reserve offer an adequate allowance for future loan losses and provide a sound reserve for the loan portfolio.
7
At March 31, 2005 the Bank had $1,722,590 loans in nonaccrual status as compared to $2,167,903 at March 31, 2004. There were no repossessed assets at March 31, 2005 and $78,059 at March 31, 2004.
Results of Operations
Net income was $655,665, or $0.14 per common share, for the three months ended March 31, 2005 as compared to $565,769, or $0.13 per common share, for the three months ended March 31, 2004. The improvement in net income can be attributed to net interest income increasing from $1,719,961 for the quarter ended March 31, 2004 to $2,285,287 for the quarter ended March 31, 2005. The decrease in non interest income of approximately $47,000 for the quarter ended March 31, 2005 was attributable to income from a mortgage banking investee that was sold by the Company during 2004, and commissions on bank owned life insurance in the first quarter of 2004 that did not occur in the first quarter of 2005. The increase in non interest expense of approximately $280,000 for the quarter ended March 31, 2005 was attributable to increases in personnel expense of approximately $148,000 and data processing expense of approximately $59,000.
Interest Sensitivity and Liquidity
One of the principal duties of the Bank’s Asset/Liability Management Committee is management of interest rate risk. The Bank utilizes quarterly asset/liability reports prepared by a regional correspondent bank to project the impact on net interest income that might occur with hypothetical interest rate changes. The committee monitors and manages asset and liability strategies and pricing.
Another function of the Asset/Liability Committee is maintaining adequate liquidity and planning for future liquidity needs. Having adequate liquidity means the ability to meet current needs, including deposit withdrawals and commitments, in an orderly manner without sacrificing earnings. The Bank funds its investing activities, including making loans and purchasing investments, by attracting deposits and utilizing short-term borrowings when necessary.
At March 31, 2005, the liquidity position of the Bank was strong, with short-term liquid assets of $36,287,000 or 12.53% of total assets.
Stock-based Compensation
The Company accounts for its stock-based compensation plans using the accounting prescribed by Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees.The Company is not required to adopt the fair value based recognition provisions prescribed under SFAS No. 123,Accounting for Stock Based Compensation, but complies with the disclosure requirements set forth in the Statement (as amended by SFAS No. 148), which include disclosing pro forma net income as if the fair value based method of accounting had been applied.
Stock Option Plans
The Company has adopted both the1998 Incentive Stock Option Plan (Incentive Plan) and the1998 Nonstatutory Stock Option Plan (Nonstatutory Plan). Under each plan up to 458,257 shares may be issued for a total of 916,514 shares (adjusted for stock dividends). Options granted under both plans expire no more than 10 years from date of grant. Option exercise price, under both plans shall be set by the Board of Directors at the date of grant, but shall not be less than 100% of fair market value of the related stock at the date of the grant. Under both plans, vesting is determined by the specific option agreements. Information related to pro forma net income for the periods presented is as follows:
| March 31, | ||||||
| 2005 | 2004 | |||||
Compensation cost recognized in income for all stock-based compensation awards | $ | — | $ | — | ||
Pro forma net income, based on SFAS No. 123 | $ | 644,485 | $ | 552,921 | ||
Pro forma earnings per common share, based on SFAS No. 123 | $ | .14 | $ | .12 | ||
Pro forma earnings per fully dilutive common share, based on SFAS No. 123 | $ | .13 | $ | .12 | ||
8
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company’s profitability is dependent to a large extent upon its net interest income, which is the difference between its interest income on interest-bearing assets, such as loans and investments, and its interest expense on interest-bearing liabilities, such as deposits and borrowings. The Company’s primary market risk is interest rate risk, which is the result of differing maturities or repricing intervals of interest-earning assets and interest-bearing liabilities with the goals of minimizing interest rate fluctuations in its net interest income.
The Company’s Asset/Liability Committee (“ALCO”) meets on a monthly basis in order to assess interest rate risk, liquidity, capital and overall balance sheet management through rate shock analysis measuring various interest rate scenarios over the future 12 months. Through ALCO, the Company is able to determine fluctuations to net interest income from changes in the Prime Rate of up to 300 basis points up or down during a 12-month period. ALCO also reviews policies and procedures related to funds management and interest rate risk based on local, national and global economic conditions along with funding strategies and balance sheet management to minimize the potential impact of earnings and liquidity from interest rate movements.
Additional information regarding interest rate risk is included in the Company’s Annual Report of Form 10-KSB for the year ended December 31, 2004. The Company has not had any material changes in the overall interest rate risk since December 31, 2004.
Item 4. Controls and Procedures
Based on their evaluation, as of the end of the period covered by the report, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rule 13a-14c and 15d-14c under the Securities Exchange Act of 1934, as amended) are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Chief Financial Officer of the Company, as appropriate to allow timely decisions regarding required disclosure. There have not been any changes in the company’s internal control over financial reporting that occurred during the company’s last quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
9
| Item 1. | Legal Proceedings | |||
| No significant changes in legal proceedings occurred during the quarter. | ||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||
| Not Applicable | ||||
| Item 3. | Defaults Upon Senior Securities | |||
| Not Applicable | ||||
| Item 4. | Submission of Matters to a Vote of Security Holders | |||
| Not Applicable | ||||
| Item 5. | Other Information | |||
| Not Applicable | ||||
| Item 6. | Exhibits | |||
| 31.1 | Section 302 Certification – CEO | |||
| 31.2 | Section 302 Certification – CFO | |||
| 32 | Section 906 Certification | |||
10
Pursuant to the requirements of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Waccamaw Bankshares, Inc. | ||||
| Date: May 11, 2005 | By: | /s/ David A. Godwin | ||
| David A. Godwin | ||||
| Chief Financial Officer | ||||
| (Principle Financial Officer) | ||||
11
