SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OT 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________
TO _______________.
Commission File No. 000-30001
DARLINGTON COUNTY BANCSHARES, INC.
(Exact Name of Registrant as Specified in the Charter)
Incorporated in the State of South Carolina
I.R.S. Employer Identification Number 57-0805621
202 Cashua Street, Darlington, S.C. 29532
(Address of Principal Executive Offices)
(843) 395-1956
(Registrant's Telephone Number, including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 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 filing requirements for the past 90 days.
[ X ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
COMMON STOCK - $.01 PAR VALUE; 158,000 SHARES OUTSTANDING ON APRIL 30, 2004
DARLINGTON COUNTY BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MARCH 31, DECEMBER 31,
(Dollars in thousands) 2004 2003
-------------- -------------
(UNAUDITED)
ASSETS Cash and cash equivalents:
Cash and due from banks $ 908 $ 1,378
Federal funds sold 3,818 1,368
-------------- -------------
Total cash and cash equivalents 4,726 2,746
-------------- -------------
Securities available-for-sale 10,854 11,065
Securities held-to-maturity 597 85
Nonmarketable equity securities 50 50
-------------- -------------
Total investment securities 11,501 11,200
-------------- -------------
Loans 20,034 20,543
Less allowance for loan losses 226 215
-------------- -------------
Loans, net 19,808 20,328
Premises and equipment, net 939 940
Accrued interest receivable 260 295
Other assets 145 134
-------------- -------------
Total assets $ 37,379 $ 35,643
============== =============
LIABILITIES
Deposits
Demand $ 5,841 $ 6,384
Savings and NOW 21,660 19,256
Other time deposits 5,811 5,928
-------------- -------------
Total deposits 33,312 31,568
Accrued interest payable 24 23
Other liabilities 134 79
-------------- -------------
Total Liabilities 33,470 31,670
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 1,000,000 shares authorized,
158,000 shares issued and outstanding at March 31, 2004
and December 31, 2003 2 2
Capital in excess of par value of stock 1,618 1,618
Retained earnings 2,290 2,355
Accumulated other comprehensive loss (1) (2)
-------------- -------------
Total stockholders' equity 3,909 3,973
-------------- -------------
Total liabilities and stockholders' equity $ 37,379 $ 35,643
============== =============
See notes to consolidated financial statements.
-2-
DARLINGTON COUNTY BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
(Dollars in thousands) 2004 2003
-------------- -------------
INTEREST INCOME:
Loans, including fees $ 347 $ 354
Investment securities:
Taxable 87 60
Nontaxable 4 7
Federal funds sold 8 11
-------------- -------------
Total interest income 446 432
-------------- -------------
INTEREST EXPENSE
Deposits 85 93
-------------- -------------
Total interest expense 85 93
-------------- -------------
NET INTEREST INCOME 361 339
Provision for loan losses 18 18
-------------- -------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 343 321
-------------- -------------
NONINTEREST INCOME
Service charges on deposit accounts 89 81
Other service charges, commissions and fees 9 5
-------------- -------------
Total noninterest income 98 86
-------------- -------------
NONINTEREST EXPENSES
Salaries and employee benefits 163 177
Data processing 26 36
Occupancy 20 19
Furniture and equipment 25 27
Other 68 63
-------------- -------------
Total noninterest expense 302 322
-------------- -------------
INCOME BEFORE INCOME TAXES 139 85
Provision for income taxes 46 28
-------------- -------------
NET INCOME $ 93 $ 57
============== =============
EARNINGS PER SHARE
Average shares outstanding 158,000 158,000
============== =============
Net income $ 0.59 $ 0.36
============== =============
Dividends paid $ 1.00 $ 1.00
============== =============
See notes to consolidated financial statements.
-3-
DARLINGTON COUNTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
(UNAUDITED)
(Dollars in thousands, except shares) ACCUMULATED
CAPITAL IN OTHER
EXCESS OF COMPREHENSIVE
COMMON STOCK PAR VALUE RETAINED INCOME
SHARES AMOUNT OF STOCK EARNINGS (LOSS) TOTAL
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, JANUARY 1, 2003 158,000 $ 2 $ 1,618 $ 2,259 $ 67 $ 3,946
Net income for period - - - 57 - 57
Other comprehensive income,
net of tax:
Unrealized loss on
securities available
for sale - - - - 5 5
-----------
Comprehensive income 62
Cash dividend ($1.00
per share - - - (158) - (158)
----------- ----------- ----------- ------------ ----------- -----------
BALANCE, MARCH 31, 2003 158,000 $ 2 $ 1,618 $ 2,158 $ 72 $ 3,850
=========== =========== =========== =========== =========== ===========
BALANCE, JANUARY 1, 2004 158,000 $ 2 $ 1,618 $ 2,355 $ (2) $ 3,973
Net income for period - - - 93 - 93
Other comprehensive income,
net of tax:
Unrealized gain on
securities available
for sale - - - - 1 1
-----------
Comprehensive income 94
Cash dividend ($1.00
per share - - - (158) - (158)
----------- ----------- ----------- ------------ ----------- -----------
BALANCE, MARCH 31, 2004 158,000 $ 2 $ 1,618 $ 2,290 $ (1) $ 3,909
=========== =========== =========== =========== =========== ===========
See notes to consolidated financial statements.
-4-
DARLINGTON COUNTY BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
(Dollars in thousands) 2004 2003
-------------- -------------
OPERATING ACTIVITIES
Net income $ 93 $ 57
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for loan losses 18 18
Accretion less amortization on investments (3) -
Depreciation 21 20
(Increase) decrease in other assets (8) 14
Increase (decrease) in other liabilities 56 (39)
-------------- -------------
Net cash provided by operating activities 177 70
-------------- -------------
INVESTING ACTIVITIES
Increase in federal funds sold (2,450) (1,989)
Proceeds from calls and maturities of investment
securities available for sale 2,831 1,587
Purchase of investment securities available for sale (2,584) (1,018)
Purchase of investment securities held to maturity (512) -
Net decrease in loans 502 130
Purchase of equipment (20) -
-------------- -------------
Net cash used for investing activities (2,233) (1,290)
-------------- -------------
FINANCING ACTIVITIES
Net increase in deposits 1,744 1,501
Cash dividends paid (158) (158)
-------------- -------------
Net cash provided by financing activities 1,586 1,343
-------------- -------------
Increase (decrease) in cash and cash equivalents (470) 123
CASH AND DUE FROM BANKS, BEGINNING OF PERIOD 1,378 1,144
-------------- -------------
CASH AND DUE FROM BANKS, END OF PERIOD $ 908 $ 1,267
============== =============
CASH PAID DURING THE PERIOD FOR
Interest $ 84 $ 95
============== =============
Income taxes $ - $ 69
============== =============
See notes to consolidated financial statements.
-5-
DARLINGTON COUNTY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B of
the Securities and Exchange Commission. Accordingly, they do not include all
information and footnotes required by generally accepted accounting principles
for complete financial statements. However, in the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included.
NOTE 2 - NET INCOME PER SHARE
Net income per share is computed on the basis of the weighted average number of
common shares outstanding in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings per Share". The Company does not have any
instruments which are dilutive; therefore, only basic net income per share of
common stock is presented.
-6-
DARLINGTON COUNTY BANCSHARES, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following is a discussion of our financial condition as of March 31, 2004
compared to December 31, 2003, and the results of operations for the three
months ended March 31, 2004 compared to the three months ended March 31, 2003.
These comments should be read in conjunction with our condensed financial
statements and accompanying notes appearing in this report and in conjunction
with the financial statements and related notes and disclosures in our Annual
Report on Form 10-KSB for the year ended December 31, 2003.
This report contains "forward-looking statements" relating to, without
limitation, future economic performance, plans and objectives of management for
future operations, and projections of revenues and other financial items that
are based on the beliefs of our management, as well as assumptions made by and
information currently available to our management. The words "expect,"
"estimate," "anticipate," and "believe," as well as similar expressions, are
intended to identify forward-looking statements. Our actual results may differ
materially from the results discussed in the forward-looking statements, and our
operating performance each quarter is subject to various risks and
uncertainties. The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with terms of the
safe harbor, we note that a variety of factors could cause our actual results
and experience to differ materially from the anticipated results or other
expectations expressed in our forward-looking statements. The risks and
uncertainties that may affect the operations, performances, development and
results of our business include, but are not limited to, the following: risks
from changes in economic and industry conditions; changes in interest rates;
risks inherent in making loans including repayment risks and value of
collateral; dependence on senior management; and recently-enacted or proposed
legislation. Statements contained in this filing regarding the demand for our
products and services, changing economic conditions, interest rates, consumer
spending and numerous other factors may be forward-looking statements and are
subject to uncertainties and risks. When relying on forward-looking statements
to make decisions with respect to us, investors and others are cautioned to
consider these and other risks and uncertainties.
Such forward-looking statements speak only as of the date on which such
statements are made. We undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such
statement is made to reflect the occurrence of unanticipated events. In
addition, certain statements in future filings by us with the Securities and
Exchange Commission, in press releases and in oral and written statements made
by or with the approval of us which are not statements of historical fact
constitute forward-looking statements.
RESULTS OF OPERATIONS
Net income for the first quarter of 2004 and 2003 was $93,000 and $57,000,
respectively. Net income per share for the first quarter of 2004 and 2003 was
$.59 and $.36 per share, respectively.
NET INTEREST INCOME
Net interest income is the difference between the interest earned on earning
assets and the interest paid for funds acquired to support those assets. Net
interest income, the principal source of the Company's earnings, was $361,000
and $339,000 for the three months ended March 31, 2004 and 2003, respectively.
Changes that affect net interest income are changes in the average rate earned
on interest-earning assets, changes in the average rate paid on interest-bearing
liabilities, and changes in the volume of interest-earning assets and
interest-bearing liabilities.
-7-
DARLINGTON COUNTY BANCSHARES, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
Average interest-earning assets for the first quarter of 2004 increased by
$5,572,945 or 19.12% over the same period in 2003, while average
interest-bearing liabilities increased by $4,387,464 or 19.55% comparing the
first quarter of 2004 with the first quarter of 2003.
AVERAGE BALANCES, INCOME AND EXPENSES, AND RATES
FOR THE THREE MONTHS ENDED MARCH 31,
2004 2003
----------------------------------------- -------------------------------------------
AVERAGE INCOME/ ANNUALIZED AVERAGE INCOME/ ANNUALIZED
BALANCE EXPENSE YIELD/RATE BALANCE EXPENSE YIELD/RATE
Federal funds sold $ 3,722,110 $ 8,000 0.85% $ 3,758,544 $ 11,000 1.17%
Investment securities 10,974,920 91,000 3.33% 6,361,498 67,000 4.22%
Loans 20,030,700 347,000 6.95% 19,034,743 354,000 7.46%
------------- ----------- ------------- -----------
Total earning assets $ 34,727,730 446,000 5.14% $ 29,154,785 432,000 5.94%
============= =============
Total interest bearing
liabilities $ 26,824,154 85,000 1.27% $ 22,436,690 93,000 1.66%
============= ----------- ------- ============= ----------- ---------
Net interest spread 3.87% 4.28%
Net interest income/margin $ 361,000 4.16% $ 339,000 4.66%
=========== =========== ==========
As reflected above, for the first three months of 2004, the average yield on
earning assets amounted to 5.14%, while the average cost of interest-bearing
liabilities was 1.27%. For the same period of 2003, the average yield on earning
assets was 5.94% and the average cost of interest-bearing liabilities was 1.66%.
The decrease in the yield on earning assets is attributable to a decrease in the
yields on all interest earning assets. The net interest margin is computed by
subtracting interest expense from interest income and dividing the resulting
figure by average interest-earning assets. The net interest margin for the
period ended March 31, 2004 was 4.16% and for 2003 was 4.66%. This slight
decrease was the result of a greater decrease in the rates earned on average
interest-earning assets than the rate on interest-bearing deposits.
The following table represents changes in our net interest income which are
primarily a result of changes in volume and rates of our interest-earning assets
and interest-bearing liabilities. The increase in net interest income is due to
a greater increase in the volume of earning assets than in the volume of
interest bearing liabilities partially offset by a decrease in rates on earning
assets that was slightly larger than the decrease in rates on interest bearing
liabilities.
ANALYSIS OF CHANGES IN NET INTEREST INCOME
FOR THE THREE MONTHS ENDED
MARCH 31, 2004 VERSUS MARCH 31, 2003
VOLUME RATE NET CHANGE
------------- -------------- -------------
Federal fund sold $ 39 $ (3,039) $ (3,000)
Investment securities 40,464 (16,464) 24,000
Loans 17,951 (24,951) (7,000)
------------- --------------- --------------
Total earning assets 58,454 (44,454) 14,000
Total interest on interest-bearing liabilities (4,645) (3,355) (8,000)
-------------- --------------- --------------
Net interest income $ 63,099 $ (41,099) $ 22,000
============= =============== =============
-8-
DARLINGTON COUNTY BANCSHARES, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
NONINTEREST INCOME
Noninterest income was $98,000 and $86,000 for the three months ended March 31,
2004 and 2003, respectively. Noninterest income increased slightly due to an
increase in other service charges, commission and fees and service charges on
deposit accounts.
NONINTEREST EXPENSES
Noninterest expenses for the three months ended March 31, 2004 and 2003 were
$302,000 and $322,000, respectively. Noninterest expenses decreased primarily
due to lower salaries and benefits. Salaries and benefits were lower primarily
as a result of the retirement of our former president at year end who was
replaced by the Company's executive vice president.
PROVISION FOR LOAN LOSSES
The allowance for loan losses was 1.13% of loans, net of unearned income, as of
March 31, 2004 compared to 1.04% as of December 31, 2003. The provision for loan
losses was $18,000 for the three months ended March 31, 2004 and 2003,
respectively. Management reviews the adequacy of the allowance on an ongoing
basis and believes it is adequate.
Risks are inherent in making all loans, including risks with respect to the
period of time over which loans may be repaid, risks resulting from changes in
economic and industry conditions, risks inherent in dealing with individual
borrowers, and, in the case of a collateralized loan, risks resulting from
uncertainties about the future value of the collateral. We maintain an allowance
for loan losses based on, among other things, historical experience, an
evaluation of economic conditions, and regular reviews of delinquencies and loan
portfolio quality. Our judgment about the adequacy of the allowance is based
upon a number of assumptions about future events, which we believe to be
reasonable, but which may not prove to be accurate. Thus, charge-offs in future
periods could exceed the allowance for loan losses, or substantial additional
increases in the allowance for loan losses could be required. Additions to the
allowance for loan losses would result in a decrease of our net income and,
possibly, our capital. Based on present information, we believe the allowance
for loan losses is adequate at March 31, 2004 to meet presently known and
inherent risks in the loan portfolio.
FINANCIAL CONDITION
LIQUIDITY
Liquidity is the ability to meet current and future obligations through
liquidation or maturity of existing assets or the acquisition of liabilities. We
manage both assets and liabilities to achieve appropriate levels of liquidity.
Cash and short-term investments are our primary sources of asset liquidity.
These funds provide a cushion against short-term fluctuations in cash flow from
both deposits and loans. The investment portfolio is the Bank's principal source
of secondary asset liquidity. However, the availability of this source of funds
is influenced by market conditions. Individual and commercial deposits are the
Bank's primary source of funds for credit activities. We believe that the our
liquidity sources are adequate to meet our operating needs.
OFF-BALANCE SHEET RISK
Through the operations of our Bank, we have made contractual commitments to
extend credit in the ordinary course of our business activities. These
commitments are legally binding agreements to lend money to our customers at
predetermined interest rates for a specified period of time. At March 31, 2004,
we had issued commitments to extend credit of $4,955,000 through various types
of lending agreements. We evaluate each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained, if deemed necessary by us
upon extension of credit, is based on our credit evaluation of the borrower.
Collateral varies but may include accounts receivable, inventory, property,
plant and equipment, commercial and residential real estate. We manage the
credit risk on these commitments by subjecting them to normal underwriting and
risk management processed.
-9-
DARLINGTON COUNTY BANCSHARES, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
INVESTMENT SECURITIES
Total investment securities increased $301,000 during the first three months of
2004. This increase was due to an increase in securities held-to-maturity of
$512,000, net of a decrease in securities available-for-sale of $211,000. A
portion of excess funds generated from deposit growth were invested in
securities held-to-maturity. As part of our asset-liability management, we
purchase municipal securities from time to time and classify them as
held-to-maturity. Accordingly, we purchased a $500,000 municipal security during
the first three months of 2004.
LOANS
Loans decreased slightly during the first three months of 2004. Net loans
decreased $520,000, or 2.56%, during the period. As shown below, the main
component of growth in the loan portfolio was commercial and industrial loans
which increased 5.67%, or $213,000 from December 31, 2003 to March 31, 2004.
However, decreases in real estate mortgage loans and agriculture loans more than
offset this increase. Balances within the major loans receivable categories as
of March 31, 2004 and December 31, 2003 are as follows:
MARCH 31, DECEMBER 31,
2004 2003
--------------- ---------------
Real estate - construction $ 1,127,000 $ 1,231,000
Real estate - mortgage 9,333,000 9,511,000
Commercial and industrial 3,968,000 3,755,000
Agriculture 695,000 931,000
Consumer and other 4,911,000 5,115,000
--------------- ---------------
$ 20,034,000 $ 20,543,000
=============== ===============
DEPOSITS
Total deposits increased $1,744,000 or 5.52% to $33,312,000 during the first
three months of 2004. The largest increase was in savings and NOW accounts which
increased $2,404,000 to $21,660,000 at March 31, 2004. Money market accounts are
included in this total and we believe we offer a higher interest rate on money
market accounts than do our competitors. Money market accounts are an important
source of our deposits and we anticipate continuing to offer competitive rates
on such deposits in the near future.
CRITICAL ACCOUNTING POLICIES
We have adopted various accounting policies which govern the application of
accounting principles generally accepted in the United States in the preparation
of our financial statements. Our significant accounting policies are described
in the notes to the consolidated financial statements at December 31, 2003 as
filed on our annual report on Form 10-KSB. Certain accounting policies involve
significant judgments and assumptions by us which have a material impact on the
carrying value of certain assets and liabilities. We consider these accounting
policies to be critical accounting policies. The judgments and assumptions we
use are based on the historical experience and other factors, which we believe
to be reasonable under the circumstances. Because of the nature of the judgments
and assumptions we make, actual results could differ from these judgments and
estimates which could have a major impact on our carrying values of assets and
liabilities and our results of operations.
We believe the allowance for loan losses is a critical accounting policy that
requires the most significant judgments and estimates used in preparation of our
consolidated financial statements. Refer to the portions of our 2003 Annual
Report on Form 10-KSB and this Form 10-QSB that address our allowance for loan
losses for a description of our processes and methodology for determining our
allowance for loan losses. There have been no significant changes in our
critical accounting policies since December 31, 2003.
-10-
DARLINGTON COUNTY BANCSHARES, INC.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION - continued
CAPITAL RESOURCES
The capital base decreased by $64,000 for the first three months of 2004. This
net change includes an increase to equity for net income of $93,000 and an
increase in unrealized gain on investment securities of $1,000 offset by cash
dividends of $158,000. Our equity to asset ratio was 10.46% on March 31, 2004,
as compared to 11.15% on December 31, 2003.
The Federal Deposit Insurance Corporation has issued guidelines for risk-based
capital requirements. As of March 31, 2004, the Bank exceeds the capital
requirement levels that are required to be maintained.
CAPITAL RATIOS (AMOUNTS IN THOUSANDS)
----------------------------------------------------------------------------------------
WELL CAPITALIZED ADEQUATELY CAPITALIZED
ACTUAL REQUIREMENT REQUIREMENT
--------------------------- -------------------------- --------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
----------- ------ ----------- ------ ----------- -------
Total capital (to risk
weighted assets) $ 4,135 17.23% $ 2,400 10.0% $ 1,920 8.0%
Tier 1 capital (to risk
weighted assets) $ 3,910 16.29% $ 1,440 6.0% $ 960 4.0%
Tier 1 capital (to
average assets) $ 3,910 10.54% $ 1,855 5.0% $ 1,484 4.0%
ASSET QUALITY
Nonperforming assets as a percentage of loans and foreclosed property totaled
..29% and .24% as of March 31, 2004 and December 31, 2003, respectively.
Nonperforming assets were $59,000 as of March 31, 2004 and $71,097 at December
31, 2003.
EFFECTS OF REGULATORY ACTION
We are not aware of any current recommendations by regulatory authorities, which
if they were to be implemented, would have a material effect on liquidity,
capital resources, or operations.
IMPACT OF INFLATION
Unlike most industrial companies, the assets and liabilities of financial
institutions such as the Bank are primarily monetary in nature. Therefore,
interest rates have a more significant impact on the Bank's performance than do
the effects of changes in the general rate of inflation and changes in prices.
In addition, interest rates do not necessarily move in the same magnitude as the
prices of goods and services. Management seeks to manage the relationships
between interest sensitive assets and liabilities in order to protect against
wide rate fluctuations, including those resulting from inflation.
RECENTLY ISSUED ACCOUNTING STANDARDS
Accounting pronouncements recently issued or proposed by the Financial
Accounting Standards Board are not expected to have a material effect on our
financial position.
ITEM 3. CONTROLS AND PROCEDURES
Our management, with the participation of our chief executive officer and our
chief financial officer, has evaluated the effectiveness of our disclosure
controls and procedures (as defined in 17 C.F.R. Sections 240.13a-15(e) and
240.15d-15(e)) as of March 31, 2004, and, based on such evaluation, our chief
executive officer and chief financial officer concluded that such controls and
procedures were effective as of March 31, 2004.
There were no significant changes in our internal controls over financial
reporting that occurred during the fiscal quarter ended March 31, 2004 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting.
-11-
DARLINGTON COUNTY BANCSHARES, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company or its
subsidiary is a party or of which any of their property is the subject.
ITEM 2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to security holders for a vote during the three
months ended March 31, 2004.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(b) Reports on 8-K - No reports on 8-K were filed during the quarter ended March
31, 2004.
-12-
DARLINGTON COUNTY BANCSHARES, INC.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
DARLINGTON COUNTY BANCSHARES, INC.
- ---------------------------------------------------
Name of Bank
By: /s/ Henry M. Funderburk Date: May 12, 2004
------------------------------------------- ---------------
Henry M. Funderburk, President and
Chief Executive Officer
By: /s/ Ellen Berry Date: May 12, 2004
------------------------------------------- ---------------
Ellen Berry
Vice President and Cashier (Controller)
Darlington County Bank
By: /s/ Charles A. Hardin Date: May 12, 2004
------------------------------------------- ---------------
Charles A. Hardin, Vice President
(Acting as Chief Financial Officer)
Darlington County Bank