Exhibit 99.1
May 3, 2005
Quarterly Report
First Quarter 2005
The earnings improvement registered during 2004 continued for the first
quarter of 2005. We are pleased to report net income of $1.33 million, up
by 16% from the same period last year. Earnings per share after dilution
rose to 49 cents compared with 41 cents last year.
Two different things contributed to this earnings gain. One was loan
demand. Our loan portfolio grew during the past year by 15%, or $45
million. This would normally be very favorable for our net interest
margin. However, competitive pressures continue to be very high, so our
net interest income rose only 4%. Good control of our expenses was a
second significant contributor to our bottom line. Expenses normally
rise, but this year they declined slightly from last year. Much of this
can be attributed to a series of profit enhancement initiatives started
last year.
Back office operations were merged into a single department during the
quarter, under the direction of Hugh Crombie and Martha Woodford. This is
expected to provide us with both improved service and operating
efficiencies over time.
As are all public companies, we have begun the expensive and time
consuming task of complying with new federal legislation known as
Sarbanes-Oxley. The goals of this legislation are to ensure that
financial controls are effective and the reports we issue are accurate.
While the required effort is great, we expect to have the work completed
on time.
We have a new Region Manager in Clark County. Nick Carter has rejoined
the bank in that role. We welcome him back and look forward to his help
in this market that is such an important one for our bank.
We continue to seek opportunities for new customer relationships. Both
our officers and directors are actively making referrals. As
shareholders, please feel free to refer business to the bank. In the end,
it should enhance the value of our company.
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
3/31/2005 3/31/2004 Change
<s> <c> <c> <c>
Assets
Cash & Due From Banks $ 8,802,128 $ 12,309,299 -28.5%
Securities 122,045,566 157,294,738 -22.4
Loans Held For Sale - 7,003,090 -100.0
Loans 359,422,221 313,512,254 14.6
Reserve for Loan Losses 4,327,459 3,937,194 9.9
Net Loans 355,094,762 309,575,060 14.7
Federal Funds Sold - 752,000 -100.0
Other Assets 32,446,207 33,723,536 -3.8
Total Assets $ 518,388,663 $ 520,657,723 -0.4%
Liabilities & Stockholders' Equity
Deposits
Demand $ 69,980,890 $ 64,063,207 9.2%
Savings & Interest Checking 124,305,129 145,274,542 -14.4
Certificates of Deposit 178,591,383 176,181,353 1.4
Total Deposits 372,877,402 385,519,102 -3.3
Repurchase Agreements 16,876,071 20,601,191 -18.1
Other Borrowed Funds 81,542,563 64,679,305 26.1
Other Liabilities 2,487,523 2,834,171 -12.2
Total Liabilities 473,783,559 473,633,769 0.0
Stockholders' Equity 44,605,104 47,023,954 -5.1
Total Liabilities & Stockholders' Equity $ 518,388,663 $ 520,657,723 -0.4%
CONSOLIDATED INCOME STATEMENT
Three Months Ending
Percentage
3/31/2005 3/31/2004 Change
<s> <c> <c> <c>
Interest Income $ 6,720,151 $ 6,266,788 7.2%
Interest Expense 2,498,600 2,195,703 13.8
Net Interest Income 4,221,551 4,071,085 3.7
Loan Loss Provision 249,900 255,000 -2.0
Net Interest Income After Provision 3,971,651 3,816,085 4.1
Other Income 1,553,857 1,562,464 -0.6
Other Expenses 3,819,353 3,824,133 -0.1
Income Before Taxes 1,706,155 1,554,416 9.8
Income Taxes 372,902 404,478 -7.8
Net Income $ 1,333,253 $ 1,149,938 15.9
Net Change in Unrealized Gain (loss)
on Securities (1,089,150) 371,994 392.8
Comprehensive Income $ 244,103 $ 1,521,932 -84.0%
Selected Ratios
Return on Average Assets 1.02% 0.89%
Return on Average Equity 11.8 9.6
Earnings Per Share $ 0.50 $ 0.41
Earnings Per Share - assuming dilution 0.49 0.41
Cash Dividends Per Share 0.23 0.21
Book Value Per Share 16.61 16.79
Market Price High Low Close
First Quarter '05 $31.00 $29.25 $30.50
Fourth Quarter '04 $32.50 $30.50 $30.50