SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2006.
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-25929
THOMASVILLE BANCSHARES, INC.
----------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2175800
---------------------- ---------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
301 North Broad Street, Thomasville, Georgia 31792
-----------------------------------------------------------
(Address of Principal Executive Offices)
(229) 226-3300
-------------------------------
(Issuer's Telephone Number)
Not Applicable
-------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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.
Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares
outstanding of each of the issuer's classes of common equity as of the latest
practicable date.
Common stock, $1.00 par value per share 2,940,935 shares issued and
outstanding as of May 12, 2006.
Transitional small business disclosure format (check one):
Yes No X
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2006 2005
ASSETS (Unaudited) (Unaudited)
- ------ ----------- -----------
Cash and due from banks $ 7,620,394 $ 9,660,989
Federal funds sold 3,969,928 17,921,281
------------ ------------
Total cash and cash equivalents $ 11,590,322 $ 27,582,270
------------ ------------
Investment securities:
Securities available-for-sale,
at market value $ 15,243,972 $ 12,301,618
Loans, net 228,743,342 224,358,330
Property & equipment, net 5,588,468 5,630,095
Goodwill 3,372,259 3,372,259
Other assets 3,656,537 3,221,246
------------ ------------
Total Assets $268,194,900 $276,465,818
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits
Non-interest bearing deposits $ 36,056,103 $ 32,666,624
Interest bearing deposits 193,447,699 205,210,749
------------ ------------
Total deposits $229,503,802 $237,877,373
Borrowings 9,716,667 11,067,263
Junior subordinated debentures 4,000,000 4,000,000
Other liabilities 1,496,226 1,044,164
------------ ------------
Total Liabilities $244,716,695 $253,988,800
------------ ------------
Commitments and contingencies
Shareholders' Equity:
Common stock, $1.00 par value, 10
million shares authorized, 2,940,935
(2006) and 2,940,507 (2005)
shares issued & outstanding $ 2,940,935 $ 2,940,507
Paid-in-capital 8,205,046 8,160,931
Retained earnings 12,540,837 11,553,880
Accumulated other
comprehensive (loss) (208,613) (178,300)
------------ ------------
Total Shareholders' Equity $ 23,478,205 $ 22,477,018
------------ ------------
Total Liabilities and
Shareholders' Equity $268,194,900 $276,465,818
============ ============
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the three months
ended March 31,
---------------------------
2006 2005
---- ----
Interest income $4,474,943 $3,391,186
Interest expense 1,825,044 1,093,986
---------- ----------
Net interest income $2,649,899 $2,297,200
Provision for possible loan losses 105,000 105,000
---------- ----------
Net interest income after provision
for possible loan losses $2,544,899 $2,192,200
---------- ----------
Other income
Service charges on deposit accounts $ 178,512 $ 151,780
Fees, money management 251,000 255,000
Trust services 209,959 165,622
Other income and fees 167,902 105,614
---------- ----------
Total other income $ 807,373 $ 678,016
---------- ----------
Operating expenses
Salaries and benefits $ 999,297 $ 864,402
Advertising and public relations 77,908 88,582
Depreciation 72,924 97,847
Regulatory fees and assessments 26,944 26,810
Other operating expenses 534,535 540,024
---------- ----------
Total operating expenses $1,711,608 $1,617,665
---------- ----------
Net income before taxes $1,640,664 $1,252,551
Income taxes 653,707 447,250
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Net income $ 986,957 $ 805,301
========== ==========
Basic income per share $ .34 $ .27
========== ==========
Diluted income per share $ .33 $ .26
========== ==========
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
-----------------------------
2006 2005
---- ----
Cash flows from operating activities: $ 1,168,910 $ 945,005
------------ -----------
Cash flows from investing activities:
Purchase of fixed assets $ (31,297) $ (87,059)
(Increase) in loans (4,490,012) (822,451)
Purchase of securities, AFS (2,959,926) - -
Maturities, calls, paydowns, AFS - - 5,249,561
------------ -----------
Net cash provided by/
(used in) investing activities $ (7,481,235) $ 4,340,051
------------ -----------
Cash flows from financing activities:
(Decrease) in borrowings
and federal funds purchased $ (1,350,596) $(1,030,844)
(Decrease) in deposits (8,373,571) 3,410,650
401K plan stock funding 8,644 2,907
Options, restricted stock 35,900 36,300
------------ -----------
Net cash provided by financing activities $ (9,679,623) $ 2,419,013
------------ -----------
Net increase/(decrease) in cash
and cash equivalents $(15,991,948) $ 7,704,069
Cash and cash equivalents,
beginning of period 27,582,270 6,626,106
------------ -----------
Cash and cash equivalents,
end of period $ 11,590,322 $14,330,175
============ ===========
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2005 AND 2006
Accumulated
Common Stock Other
-------------------- Paid in Retained Comprehensive
Shares Par Value Capital Earnings Income Total
------ --------- ------- -------- ------ -----
Balance, Dec. 31, 2004 2,937,625 $ 2,937,625 $ 7,872,245 $ 8,739,226 $ (27,556) $19,521,540
--------- ---------- ---------- ---------- -------- ----------
Comprehensive Income:
- --------------------
Net income, three-month
period ended Mar. 31, 2005 - - - - - - 805,301 - - 805,301
Net unrealized (loss) on
securities, three-month
period ended Mar. 31, 2005 - - - - - - - - (97,957) (97,957)
--------- ---------- ---------- ---------- -------- ----------
Total comprehensive income - - - - - - 805,301 (97,957) 707,344
Sale of 207 shares
to employee 401K plan 207 207 2,700 - - - - 2,907
Stock options, restricted
stock (2,740 options) - - - - 36,300 - - - - 36,300
--------- ---------- ---------- ---------- -------- ----------
Balance, Mar. 31, 2005 2,937,832 $ 2,937,832 $ 7,911,245 $ 9,544,527 $(125,513) $20,268,091
========= ========== ========== ========== ======== ==========
- -----------------------------------------------------
Balance, Dec. 31, 2005 2,940,507 $ 2,940,507 $ 8,160,931 $11,553,880 $(178,300) $22,477,018
--------- ---------- ---------- ---------- -------- ----------
Comprehensive Income:
- --------------------
Net income, three-month
period ended Mar. 31, 2006 - - - - - - 986,957 - - 986,957
Net unrealized (loss) on
securities, three-month
period ended Mar. 31, 2006 - - - - - - - - (30,313) (30,313)
--------- ---------- ---------- ---------- -------- ----------
Total comprehensive income - - - - - - 986,957 (30,313) 956,644
Sale of 428 shares
to employee 401K plan 428 428 8,216 - - - - 8,644
Stock options, restricted
stock (1,678.171 options) - - - - 35,900 - - - - 35,900
--------- ---------- ---------- ---------- -------- ----------
Balance, Mar. 31, 2006 2,940,935 $ 2,940,935 $ 8,205,046 $12,540,837 $(208,613) $23,478,205
========= ========== ========== ========== ======== ==========
Refer to notes to the consolidated financial statements.
THOMASVILLE BANCSHARES, INC.
THOMASVILLE, GEORGIA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2006
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three-
month period ended March 31, 2006 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2006. These statements
should be read in conjunction with the consolidated financial statements and
footnotes thereto included in Form 10-KSB for the year ended December 31, 2005.
NOTE 2 - SUMMARY OF ORGANIZATION
Thomasville Bancshares, Inc., Thomasville, Georgia (the "Company"), was
organized in January 1995 for a then proposed de novo bank, Thomasville
National Bank, (the "Bank"). The Bank commenced operations in October 1995.
The Bank is primarily engaged in the business of obtaining deposits and
providing commercial, consumer and real estate loans to the general public. The
Bank also offers trust services. The Bank operates from two banking offices,
both in Thomasville, Georgia. The Bank's depositors are each insured up to
$100,000 by the Federal Deposit Insurance Corporation, subject to certain
limitations imposed by the FDIC. In addition to the Bank, the Company has two
other subsidiaries, TNB Financial Services, Inc. ("TNBFS"), through which the
Company provides investment advisory services, and Thomasville Capital Trust I
("TCTI"), which issued $4.0 million in trust preferred securities to unrelated
investors in 2005.
NOTE 3 - INVESTMENT SECURITIES
Information pertaining to securities with gross unrealized losses at
March 31, 2006, aggregated by investment category and further segregated by
the length of time (less than or over twelve months) that the securities have
been in a continuous loss position follows:
Less than Over
Twelve Months Twelve Months Total
------------------ ------------------ ------------------
Fair Unrealized Fair Unrealized Fair Unrealized
Description Value Loss Value Loss Value Loss
- ----------- ----- ---- ----- ---- ----- ----
U.S. Agency and
Government
Corporations $3,443,830 $(20,771) $9,845,583 $(295,310) $13,289,413 $(316,081)
========= ======= ========= ======== ========== ========
At March 31, 2006, unrealized losses in the securities portfolio amounted
to $316,081, representing 2.07% of the total portfolio. All of the unrealized
losses relate to U.S. Agency securities and securities of U.S. government
corporations. These unrealized losses were caused by fluctuations in market
interest rates, rather than concerns over the credit quality of the issuers.
The Company believes that the U.S. Agencies and government corporations will
continue to honor their interest payments on time as well as the full debt at
maturity. Because the unrealized losses are due to fluctuations in the interest
rate, and no credit worthiness factors exist, the Company believes that the
investments are not considered other-than-temporarily impaired.
NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS
SFAS NO. 154, "ACCOUNTING CHANGES AND ERROR CORRECTIONS, A REPLACEMENT OF
APB OPINION NO. 20 AND FASB STATEMENT NO. 3." SFAS 154 establishes, unless
impracticable, retrospective application as the required method for reporting
a change in accounting principle in the absence of explicit transition
requirements specific to a newly adopted accounting principle. Previously,
most changes in accounting principle were recognized by including the
cumulative effect of changing to the new accounting principle in net income of
the period of the change. Under SFAS 154, retrospective application requires
(i) the cumulative effect of the change to the new accounting principle on
periods prior to those presented to be reflected in the carrying amounts of
assets and liabilities as of the beginning of the first period presented, (ii)
an offsetting adjustment, if any, to be made to the opening balance of retained
earnings (or other appropriate components of equity) for that period, and (iii)
financial statements for each individual prior period presented to be adjusted
to reflect the direct period-specific effects of applying the new accounting
principle. Special retroactive application rules apply in situations where it
is impracticable to determine either the period-specific effects or the
cumulative effect of the change. Indirect effects of a change in accounting
principle are required to be reported in the period in which the accounting
change is made. SFAS 154 carries forward the guidance in APB Opinion 20
"Accounting Changes," requiring justification of a change in accounting
principle on the basis of preferability. SFAS 154 also carries forward without
change the guidance contained in APB Opinion 20, for reporting the correction
of an error in previously issued financial statements and for a change in an
accounting estimate. SFAS 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
The Company does not expect SFAS 154 will significantly impact its financial
statements upon its adoption on January 1, 2006.
SFAS NO. 123, "SHARE-BASED PAYMENT (REVISED 2004)." SFAS 123R
establishes standards for the accounting for transactions in which an entity
(i) exchanges its equity instruments for goods or services, or (ii) incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
the equity instruments. SFAS 123R eliminates the ability to account for stock-
based compensation using APB 25 and requires that such transactions be
recognized as compensation cost in the income statement based on their fair
values on the measurement date, which is generally the date of the grant. SFAS
123R was to be effective for the Company on July 1, 2005; however, the required
implementation date was delayed until January 1, 2006. The Company will
transition to fair-value based accounting for stock-based compensation using a
modified version of prospective application ("modified prospective
application"). Under modified prospective application, as it is applicable to
the Company, SFAS 123R applies to new awards and to awards modified,
repurchased, or cancelled after January 1, 2006. Additionally, compensation
cost for the portion of awards for which the requisite service has not been
rendered (generally referring to non-vested awards) that are outstanding as of
January 1, 2006 must be recognized as the remaining requisite service is
rendered during the period of and/or the periods after the adoption of SFAS
123R. The attribution of compensation cost for those earlier awards will be
based on the same method and on the same grant-date fair values previously
determined for the pro forma disclosures required for companies that did not
adopt the fair value accounting method for stock-based employee compensation.
Adoption of SFAS 123R did not have a material impact on the Company's earnings
or capital accounts.
FASB STAFF POSITION (FSP) NO. 115-1, "THE MEANING OF OTHER-THAN-TEMPORARY
IMPAIRMENT AND ITS APPLICATION TO CERTAIN INVESTMENTS." FSP 115-1 provides
guidance for determining when an investment is considered impaired, whether
impairment is other-than-temporary, and measurement of an impairment loss. An
investment is considered impaired if the fair value of the investment is less
than its cost. If, after consideration of all available evidence to evaluate
the realizable value of its investment, impairment is determined to be other-
than-temporary, then an impairment loss should be recognized equal to the
difference between the investment's cost and its fair value. FSP 115-1
nullifies certain provisions of Emerging Issues Task Force (EITF) Issue No. 03-
1, "The Meaning of Other-Than-Temporary Impairment and It's Application to
Certain Investments," while retaining the disclosure requirements of EITF 03-1
which were adopted in 2003. FSP 115-1 is effective for reporting periods
beginning after December 15, 2005. Adoption of FSP 115-1 did not have a
material impact on the Company's earnings or capital accounts.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
- ------- ----------------------------------------------------------
Thomasville Bancshares, Inc., a Georgia corporation (the "Company"), was
formed in March 1995 to organize and act as the holding company for Thomasville
National Bank (the "Bank"), a national banking association. The Bank opened for
business in October 1995, and presently operates two branches in Thomasville,
Georgia. The Bank is a full service commercial bank, with trust powers, and
offers a full range of interest-bearing and non-interest-bearing accounts,
including commercial and retail checking accounts, money market accounts,
individual retirement and Keogh accounts, regular interest-bearing statement
savings accounts, certificates of deposit, commercial loans, real estate loans,
home equity loans and consumer/installment loans. In addition, the Bank
provides such consumer services as U.S. Savings Bonds, travelers checks,
cashiers checks, safe deposit boxes, bank by mail services, internet banking,
direct deposit and automatic teller services.
In September 2001, the Bank formed an operating subsidiary, TNB Financial
Services, Inc., a Georgia corporation with trust powers. On March 31, 2004,
TNB Financial Services was liquidated, with all of its operations being
transferred to TNB Trust Services, a division of the Bank.
In July 2002, the Company acquired all of the issued and outstanding
capital stock of Joseph Parker & Company, Inc. ("JPC"), a Georgia corporation
and federally registered investment advisory firm located in Thomasville,
Georgia. In July 2004, JPC's name was changed to TNB Financial Services, Inc.
("TNBFS").
The Company's results of operations are largely dependent on interest
income, which is the difference between the interest earned on loans and
securities and interest paid on deposits and borrowings. The results of
operations are also affected by the level of income/fees from loans, deposits,
borrowings, as well as operating expenses, the provision for loan losses, the
impact of federal and state income taxes, and the relative levels of interest
rates and economic activity.
CRITICAL ACCOUNTING POLICIES
Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, and could potentially result in
materially different results under different assumptions and conditions. The
Company believes that the most critical accounting policies impacting its
financial condition, and which involve the most complex or subjective
decisions or assessments, are as follows:
Allowance for Loan Losses. Arriving at an appropriate level of allowance
for loan losses involves a high degree of judgment. The Company's allowance for
loan losses provides for probable losses based upon evaluations of known and
inherent risks in the loan portfolio. Management uses historical information
to assess the adequacy of the allowance for loan losses as well as the
prevailing business environment. The allowance is increased by provisions for
loan losses and by recoveries of loans previously charged-off and reduced by
loans charged-off.
Income Taxes. The Company estimates income tax expense based on the amount
it expects to owe various tax authorities. Taxes are discussed in more detail
in Note 13 of the consolidated financial statements in the Company's Form 10-KSB
for the year ended December 31, 2005. Accrued taxes represent the net estimated
amount due to or to be received from taxing authorities. In estimating accrued
taxes, management assesses the relative merits and risks of the appropriate tax
treatment of transactions, taking into account statutory, judicial and
regulatory guidance in the context of its tax position. Although the Company
uses available information to record accrued income taxes, underlying estimates
and assumptions can change over time as a result of unanticipated events or
circumstances such as changes in tax laws influencing the Company's overall tax
position.
Valuation of Goodwill/Intangible Assets and Analysis for Impairment. The
Company utilized the purchase method to reflect its acquisition of JPC.
Accordingly, the Company was required to record assets acquired and liabilities
assumed at their fair value which is an estimate determined by the use of
internal or other valuation techniques. These valuation estimates result in
goodwill and other intangible assets. Goodwill is subject to ongoing periodic
reviews and is evaluated using various fair value techniques including multiples
of price/equity and price/earnings ratios.
Additional information regarding these critical accounting policies is set
forth in the notes to the Company's financial statements included in the
Company's Form 10-KSB for the year ended December 31, 2005.
FINANCIAL CONDITION
Total consolidated assets decreased by $8.3 million, to $268.2 million,
during the three-month period ended March 31, 2006. Cash and cash equivalents
decreased by $16.0 million, to $11.6 million; investment securities increased
by $2.9 million, to $15.2 million; loans increased by $4.4 million, to $228.7
million; and other assets increased by $0.4 million, to $12.6 million. Deposits
decreased by $8.4 million, to $229.5 million; borrowings decreased by $1.4
million, to $13.7 million; other liabilities increased by $0.5 million, to $1.5
million; and the capital accounts increased by $1.0 million, to $23.5 million.
Liquidity and Capital Resources
Liquidity is the Company's ability to meet all deposit withdrawals
immediately, while also providing for the credit needs of customers. The
March 31, 2006 financial statements evidence a satisfactory liquidity
position as total cash and cash equivalents amounted to $11.6 million,
representing 4.3% of total assets. Investment securities, which amounted
to $15.2 million, or 5.7% of total assets, provide a secondary source of
liquidity because they can be converted into cash in a timely manner. The
Company's management closely monitors and maintains appropriate levels of
interest earning assets and interest bearing liabilities so that maturities
of assets are such that adequate funds are provided to meet customer
withdrawals and loan demand. The Company is not aware of any trends, demands,
commitments, events or uncertainties that will result in or are reasonably
likely to result in the Company's liquidity increasing or decreasing in any
material way.
The Bank maintains an adequate level of capitalization as measured by the
following capital ratios and the respective minimum capital requirements
established by the Bank's primary regulator, the Office of the Comptroller of
the Currency ("OCC").
Bank's Minimum required
March 31, 2006 by regulator
-------------- ----------------
Leverage ratio 8.8% 4.0%
Risk weighted ratio 12.7% 8.0%
Off-Balance Sheet Arrangements
In the ordinary course of business, the Bank may enter into off-balance
sheet financial instruments which are not reflected in the financial statements.
These instruments include commitments to extend credit and standby letters of
credit. Such financial instruments are recorded in the financial statements
when funds are disbursed or the instruments become payable.
Following is an analysis of significant off-balance sheet financial
instruments at March 31, 2006 and December 31, 2005.
At At
March 31, December 31,
2006 2005
---- ----
(In thousands)
Commitments to extend credit $ 44,818 $ 45,400
Standby letters of credit 7,256 5,695
------- -------
$ 52,074 $ 51,095
======= =======
RESULTS OF OPERATIONS
For the three-month periods ended March 31, 2006 and 2005, net income
amounted to $986,957 and $805,301, respectively. On a per share basis, basic
and diluted income for the three-month period ended March 31, 2006 amounted
to $.34 and $.33, respectively. For the three-month period ended March 31,
2005, basic and diluted income per share amounted to $.27 and $.26,
respectively. The factors primarily affecting the Company's results of
operations for the first quarter of 2006 as compared to the first quarter of
2005 are discussed below:
a. Interest income, the most significant revenue item, increased from
$3,391,186 for the three-month period ended March 31, 2005 to $4,474,943
for the three-month period ended March 31, 2006, representing an annual
growth rate of 31.9%. The increase was primarily due to the increase in
average earning assets and to higher yields. Average earning assets grew
from $226.5 million at March 31, 2005 to $251.4 million at March 31, 2006,
an increase of $24.9 million, or 11.0%.
b. The yield on earning assets increased from 5.99% for the three-month period
ended March 31, 2005 to 7.12% for the three-month period ended March 31,
2006. The cost of funds also increased, from 1.98% as of March 31, 2005 to
3.39% as of March 31, 2006.
c. Net interest income, representing the difference between interest received
on interest-earning assets and interest paid on interest-bearing
liabilities, increased from $2,297,200 for the three-month period ended
March 31, 2005 to $2,649,899 for the three-month period ended March 31,
2006, a net increase of $352,699, or 15.4%. Net yield on earning assets
increased from 4.06% for the three-month period ended March 31, 2005 to
4.22% for the three-month period ended March 31, 2006.
The following presents, in a tabular form, the main components of
interest-earning assets and interest-bearing liabilities for the three-month
period ended March 31, 2006.
(Dollars in 000's)
Interest Interest
Earning Assets/ Average Income/ Yield/
Bearing Liabilities Balance Cost Cost
------------------- ------- -------- ------
Federal funds sold $ 5,923 $ 68 4.59%
Securities 14,911 167 4.48%
Loans 230,536 4,240 7.36%
--------- -------- ----
Total $ 251,370 $ 4,475 7.12%
========= -------- ----
Deposits and borrowings $ 215,169 $ 1,825 3.39%
========= -------- ----
Net interest income $ 2,650
========
Net yield on earning assets 4.22%
====
d. Other income increased from $678,016 for the three-month period ended
March 31, 2005 to $807,373 for the three-month period ended March 31, 2006.
This increase is primarily due to fees charged on deposit accounts and for
trust services. As a percentage of average total assets, other income
increased from 1.12% for the three-month period ended March 31, 2005 to
1.18% for the three-month period ended March 31, 2006.
e. Total operating expenses increased from $1,617,665 for the three-month
period ended March 31, 2005 to $1,711,608 for the three-month period ended
March 31, 2006. As a percent of average total assets, total operating
expenses declined from 2.65% for the three-month periods ended March 31,
2005 to 2.51% for the three-month period ended March 31, 2006.
Allowance for Loan Losses
- -------------------------
At December 31, 2005, the allowance for loan losses amounted to
$2,712,746; at March 31, 2006, the allowance amounted to $2,822,467. The
allowance for loan losses, as a percent of gross loans, increased from 1.19%
to 1.22% during the three-month period ended March 31, 2006. Management
considers the allowance for loan losses to be adequate and sufficient to absorb
anticipated future losses; however, there can be no assurance that charge-offs
in future periods will not exceed the allowance for loan losses or that
additional provisions to the allowance will not be required.
ITEM 3. CONTROLS AND PROCEDURES
- ------- -----------------------
Management has developed and implemented a policy and procedures for
reviewing disclosure controls and procedures and internal controls over
financial reporting on a quarterly basis. Management, including the Chief
Executive Officer (the Company's principal executive and financial officer),
evaluated the effectiveness of the design and operation of disclosure controls
and procedures as of March 31, 2006 and, based on that evaluation, the
Company's Chief Executive Officer concluded that these disclosure controls and
procedures are effective. Disclosure controls and procedures are the Company's
controls and other procedures that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the Securities Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files under the
Securities Exchange Act is accumulated and communicated to management, including
the principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.
There were no changes in the Company's internal control over financial
reporting during the Company's last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS
- ------- --------
The following exhibits are filed with this report:
Exhibit
Number Description
------- -----------
3.1 Articles of Incorporation of the Company (incorporated
herein by referenced to the Company's Registration Statement
on Form SB-2 under the Securities Act of 1933, Registration
Number 33-91536)
3.2 Bylaws of the Company (incorporated herein by referenced to
the Company's Registration Statement on Form SB-2 under the
Securities Act of 1933, Registration Number 33-91536)
31.1 Certification Pursuant to Rule 13a-14(a), As Adopted
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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THOMASVILLE BANCSHARES, INC.
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(Registrant)
Date: May 12, 2006 BY: /s/ Stephen H. Cheney
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Stephen H. Cheney
President and Chief Executive Officer
(Principal Executive, Financial and Accounting
Officer)