| • | Assets grew by 2.4%, from $249.5 million at December 31, 2009, to $255.4 million at December 31, 2010. The growth was a direct result of deposits that increased by 2.5% to $230.2 million at December 31, 2010. | ||
| • | Loans declined by $19.5 million, or 12.9%, in 2010 while short term investments and bonds grew by $24.9 million. The decline in loans was the result of loan pay downs, foreclosures and charge-offs. In addition, many mortgage customers took advantage of the lower mortgage rates to refinance longer term mortgages, which the bank then sells on the secondary market. As reported in the past, new loan opportunities have been very limited and it is anticipated this will continue through 2011. | ||
| • | Nonperforming assets continued to be a major focus in 2010. Resolution of the nonperforming assets will continue to keep our attention into 2011. Nonperforming assets consist of nonaccrual loans, loans over 90 days delinquent, foreclosed properties and other repossessed assets. Nonperforming assets, at $9.5 million, were 3.7% of total assets at year end 2010. A decrease of approximately $1.6 million from the $11.1 million at December 31, 2009. | ||
| • | The allocation for loan loss during 2010 was $1.1 million, compared to $1.7 million in 2009 and $1.8 million in 2008. Provision expenses in 2011 are expected to continue at much lower levels as it is believed the current level of reserve is adequate to meet anticipated future loan losses. | ||
| • | The net interest margin for 2010 declined to 3.56%, compared to 3.69% for 2009. The decline resulted from lower yields on new loans and securities, as well as the high level of nonperforming assets. Continued pressure on the net interest margin is anticipated during 2011 as higher-yielding loans liquidate and are replaced with lower-yielding agency and treasury securities. | ||
| • | Core earnings for 2010, excluding life insurance proceeds of $189,000, were $624,000 compared to core earnings of $316,000 for 2009 when adjusted to exclude a $1.8 million gain on the sale of securities. | ||
| • | Shareholder equity at year-end 2010 was $20.8 million, compared to $20.3 million at year-end 2009. |
| December 31, | ||||||||
| 2010 | 2009 | |||||||
ASSETS | ||||||||
| Cash and due from banks | $ | 3,648 | $ | 4,055 | ||||
| Interest-bearing deposits with other financial institutions | 18,905 | 13,192 | ||||||
| Total cash and cash equivalents | 22,553 | 17,247 | ||||||
| Time deposits with other financial institutions | 9,626 | 8,669 | ||||||
| Securities available for sale | 66,588 | 45,473 | ||||||
| Securities held to maturity (market value of $8,907 in 2010 and $10,837 in 2009) | 8,442 | 10,302 | ||||||
| Other securities | 999 | 1,008 | ||||||
| Total investment securities | 76,029 | 56,783 | ||||||
| Loans | 131,516 | 151,034 | ||||||
| Less allowance for loan losses | (1,712 | ) | (2,863 | ) | ||||
| Loans, Net | 129,804 | 148,171 | ||||||
| Premises and equipment, net | 5,499 | 5,921 | ||||||
| Other assets | 11,910 | 12,711 | ||||||
| Total assets | $ | 255,421 | $ | 249,502 | ||||
LIABILITIES | ||||||||
| Deposits | ||||||||
| Noninterest-bearing demand | $ | 42,106 | $ | 40,016 | ||||
| Interest-bearing deposits | 188,060 | 184,542 | ||||||
| Total deposits | 230,166 | 224,558 | ||||||
| Other liabilities | 4,422 | 4,624 | ||||||
| Total liabilities | 234,588 | 229,182 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
| Common Stock | 3,030 | 3,034 | ||||||
| Surplus | 19,498 | 19,509 | ||||||
| Retained Earnings and Accumulated other Comprehensive Loss | (1,695 | ) | (2,223 | ) | ||||
| Total shareholders’ equity | 20,833 | 20,320 | ||||||
| Total liabilities and shareholders’ equity | $ | 255,421 | $ | 249,502 | ||||
| INTEREST INCOME | 2010 | 2009 | 2008 | |||||||||
| Interest and fees on loans | $ | 8,630 | $ | 10,097 | $ | 11,653 | ||||||
| Interest on securities: | ||||||||||||
| Taxable | 939 | 1,295 | 1,718 | |||||||||
| Tax exempt | 524 | 541 | 553 | |||||||||
| Other interest income | 244 | 235 | 433 | |||||||||
| Total interest income | 10,337 | 12,168 | 14,357 | |||||||||
INTEREST EXPENSE ON DEPOSITS | 2,092 | 3,500 | 4,871 | |||||||||
NET INTEREST INCOME | 8,245 | 8,668 | 9,486 | |||||||||
| Provision for loan losses | 1,125 | 1,725 | 1,831 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 7,120 | 6,943 | 7,655 | |||||||||
NON-INTEREST INCOME | ||||||||||||
| Service charges and fees | 1,067 | 1,118 | 1,200 | |||||||||
| Net realized gains from sale of loans | 411 | 429 | 128 | |||||||||
| Loan servicing fees, net of amortization | 32 | (31 | ) | 117 | ||||||||
| Gain on the sale of othr real estate owned | 12 | 3 | 304 | |||||||||
| Other income | 395 | 353 | 283 | |||||||||
| Total noninterest income | 1,917 | 1,872 | 2,032 | |||||||||
NONINTEREST EXPENSE | ||||||||||||
| Salaries and benefits | 3,981 | 4,130 | 4,398 | |||||||||
| Deferred compensation | 241 | 321 | 344 | |||||||||
| Occupancy | 976 | 1,053 | 1,098 | |||||||||
| Securities impairment write-down | 0 | (1,762 | ) | 7,107 | ||||||||
| FDIC insurance premiums | 540 | 623 | 149 | |||||||||
| ORE losses and carrying costs | 897 | 739 | 605 | |||||||||
| Other expenses | 1,597 | 1,832 | 1,729 | |||||||||
| Total noninterest expense | 8,232 | 6,936 | 15,430 | |||||||||
INCOME BEFORE INCOME TAXES | 805 | 1,879 | (5,743 | ) | ||||||||
| Income tax expense | (8 | ) | (236 | ) | (518 | ) | ||||||
NET INCOME | $ | 813 | $ | 2,115 | ($5,225 | ) | ||||||
BASIC NET INCOME PER SHARE | $ | 0.67 | $ | 1.74 | ($4.31 | ) | ||||||
