91-1815009
|
||
(IRS
Employer Identification No.)
|
||
Incorporation
or Organization)
|
Large
accelerated filer o
|
Accelerated
filer x
|
||
Non-accelerated
filer o
|
Smaller
reporting company o
|
Page
|
|||
PART
I
|
|||
Forward
Looking Information
|
3
|
||
Item
1.
|
Business
|
4
|
|
Item
1A.
|
Risk
Factors
|
10
|
|
Item
1B.
|
Unresolved
Staff Comments
|
13
|
|
Item
2.
|
Properties
|
13
|
|
Item
3.
|
Legal
Proceedings
|
14
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
14
|
|
PART
II
|
|||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
15
|
|
Item
6.
|
Selected
Financial Data
|
17
|
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
|
Item
8.
|
Financial
Statements and Supplementary Data
|
38
|
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
38
|
|
Item
9A.
|
Controls
and Procedures
|
38
|
|
Item
9B.
|
Other
Information
|
40
|
|
PART
III
|
|||
Item
10.
|
Directors,
Executive Officers and Corporate Governance
|
40
|
|
Item
11.
|
Executive
Compensation
|
40
|
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
40
|
|
Item
13.
|
Certain
Relationships and Related Transactions and Director
Independence
|
41
|
|
Item
14.
|
Principal
Accountant Fees and Services
|
41
|
|
PART
IV
|
|||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
41
|
|
SIGNATURES
|
42
|
2007
|
2006
|
||||||||||||||||||
Shares
Traded
|
|
High
|
|
Low
|
|
Shares
Traded
|
|
High
|
|
Low
|
|||||||||
First
Quarter
|
112,200
|
$
|
17.25
|
$
|
16.10
|
233,500
|
$
|
16.00
|
$
|
14.55
|
|||||||||
Second
Quarter
|
188,100
|
$
|
17.10
|
$
|
15.25
|
117,400
|
$
|
15.30
|
$
|
14.55
|
|||||||||
Third
Quarter
|
48,600
|
$
|
16.20
|
$
|
14.50
|
138,000
|
$
|
18.25
|
$
|
14.60
|
|||||||||
Fourth
Quarter
|
128,800
|
$
|
15.25
|
$
|
12.05
|
58,900
|
$
|
18.25
|
$
|
16.40
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid Per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced
Plan
|
|||||||
October
1, 2007 - October 31, 2007
|
—
|
$
|
—
|
—
|
||||||
November
1, 2007 - November 30, 2007
|
9,500
|
12.70
|
—
|
|||||||
December
1, 2007 - December 31, 2007
|
7,400
|
13.50
|
—
|
|||||||
Total
|
16,900
|
—
|
COMPARISON
OF FIVE YEAR CUMULATIVE TOTAL
RETURN*
|
Period
Ending
|
|||||||||||||||||||
Index
|
12/31/02
|
12/31/03
|
12/31/04
|
12/31/05
|
12/31/06
|
12/31/07
|
|||||||||||||
Pacific
Financial Corporation
|
$
|
100.00
|
$
|
93.05
|
$
|
95.36
|
$
|
122.79
|
$
|
130.83
|
$
|
104.95
|
|||||||
S&P
500
|
100.00
|
128.69
|
140.27
|
147.16
|
170.40
|
179.76
|
|||||||||||||
NASDAQ
Bank Index
|
100.00
|
133.04
|
145.97
|
143.15
|
162.94
|
130.50
|
As
of and For the Year ended December 31,
|
||||||||||||||||
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
||||||||
($
in thousands, except per share data)
|
||||||||||||||||
Operations
Data
|
||||||||||||||||
Net
interest income
|
$
|
24,503
|
$
|
23,867
|
$
|
22,284
|
$
|
19,520
|
$
|
12,541
|
||||||
Provision
for credit losses
|
482
|
625
|
1,100
|
970
|
—
|
|||||||||||
Non-interest
income
|
4,475
|
4,176
|
4,081
|
3,162
|
1,846
|
|||||||||||
Non-interest
expense
|
20,379
|
18,118
|
16,566
|
13,555
|
7,945
|
|||||||||||
Provision
for income taxes
|
2,086
|
2,749
|
2,653
|
2,450
|
1,863
|
|||||||||||
Net
income
|
6,031
|
6,551
|
6,046
|
5,707
|
4,579
|
|||||||||||
Net
income per share:
|
||||||||||||||||
Basic
|
.92
|
1.01
|
.94
|
.93
|
(1)
|
.91
|
(1)
|
|||||||||
Diluted
|
.90
|
.99
|
.92
|
.91
|
(1)
|
.90
|
(1)
|
|||||||||
Dividends
declared
|
4,955
|
4,893
|
4,719
|
4,624
|
3,530
|
|||||||||||
Dividends
declared per share
|
.75
|
.75
|
.73
|
.72
|
(1)
|
.
70
|
(1)
|
|||||||||
Dividends
paid ratio
|
82
|
%
|
75
|
%
|
78
|
%
|
81
|
%
|
77
|
%
|
||||||
Performance
Ratios
|
||||||||||||||||
Interest
rate spread
|
4.92
|
%
|
5.13
|
%
|
5.34
|
%
|
5.37
|
%
|
4.89
|
%
|
||||||
Net
interest margin (2)
|
4.82
|
%
|
5.04
|
%
|
5.25
|
%
|
5.25
|
%
|
4.75
|
%
|
||||||
Efficiency
ratio (3)
|
70.33
|
%
|
64.61
|
%
|
62.83
|
%
|
59.76
|
%
|
55.22
|
%
|
||||||
Return
on average assets
|
1.08
|
%
|
1.26
|
%
|
1.31
|
%
|
1.41
|
%
|
1.61
|
%
|
||||||
Return
on average equity
|
11.46
|
%
|
13.16
|
%
|
12.70
|
%
|
14.21
|
%
|
17.10
|
%
|
||||||
Balance
Sheet Data
|
||||||||||||||||
Total
assets
|
$
|
565,587
|
$
|
562,384
|
$
|
489,409
|
$
|
441,791
|
$
|
306,715
|
||||||
Loans,
net
|
433,904
|
420,768
|
393,574
|
341,671
|
197,500
|
|||||||||||
Total
deposits
|
467,336
|
466,841
|
399,726
|
363,501
|
260,800
|
|||||||||||
Other
borrowings
|
37,446
|
36,809
|
35,790
|
25,233
|
14,500
|
|||||||||||
Shareholders’
equity
|
50,699
|
48,984
|
46,600
|
45,303
|
25,650
|
|||||||||||
Book
value per share (4)
|
7.67
|
7.51
|
7.21
|
7.06
|
(1)
|
5.09
|
(1)
|
|||||||||
Equity
to assets ratio
|
8.96
|
%
|
8.71
|
%
|
9.52
|
%
|
10.25
|
%
|
8.36
|
%
|
||||||
Asset
Quality Ratios
|
||||||||||||||||
Nonperforming
loans to total loans
|
1.41
|
%
|
1.76
|
%
|
1.67
|
%
|
.15
|
%
|
.27
|
%
|
||||||
Allowance
for loan losses to total loans
|
1.14
|
%
|
.95
|
%
|
1.33
|
%
|
1.23
|
%
|
1.12
|
%
|
||||||
Allowance
for loan losses to nonperforming loans
|
143.92
|
%
|
54.98
|
%
|
79.64
|
%
|
832.22
|
%
|
411.40
|
%
|
||||||
Nonperforming
assets to total assets
|
.62
|
%
|
1.30
|
%
|
1.36
|
%
|
.12
|
%
|
.18
|
%
|
(1) |
Retroactively
adjusted for a two-for-one stock split effective April 4,
2005.
|
(2) |
Net
interest income divided by average earning
assets.
|
(3) |
Non-interest
expense divided by the sum of net interest income and non-interest
income.
|
(4) |
Shareholder
equity divided by shares
outstanding.
|
·
|
Net
interest income increased by 2.7% or $636,000 to $24,503,000 as compared
to 2006. The increase was primarily due to growth in earning assets
which
was partially offset by margin compression. Growth in earning assets
was
mainly driven by loan production and was funded from federal funds
sold
and interest bearing deposits.
|
·
|
The
net interest margin for 2007 declined to 4.82% compared to 5.04%
in 2006.
The decrease in the net interest margin was mainly attributable to
rate
reductions in the Federal Funds rate by the Federal Open Market Committee
(FOMC) in the third and fourth quarters of 2007 of a combined 100
basis
points which caused an immediate reduction in the variable rate loan
portfolio and a delayed reduction of the Bank’s costs of its portfolio of
time deposits. To a lesser extent, a change in the loan portfolio
mix
contributed to the margin compression, as the majority of the loan
growth
in 2007 came from government guaranteed loans which generally have
a lower
yield than real estate or commercial loans. In addition, the slight
decrease in demand deposits and increase in savings and interest-bearing
demand deposits contributed to the decrease in net interest
margin.
|
·
|
The
loan loss provision decreased $143,000, or 22.9%, to $482,000 for
2007 due
primarily to flat growth in the non-government guaranteed loan portfolio
and a large single recovery of a credit during 2007 in the amount
of
$619,000. Management’s assessment of the credit risk inherent in the
portfolio is based on a migration, quantitative and qualitative analysis,
other historical factors and
trends.
|
·
|
In
2007, return on average assets and return on average equity decreased
to
1.08% and 11.46%, respectively, compared to 1.26% and 13.16% in 2006
as a
result of the aforementioned net interest margin
compression.
|
·
|
Total
assets at December 31, 2007 increased by $3,203,000, or 0.6%, to
$565,587,000 compared to $562,384,000 at the end of 2006. Net loans
(including loans held for sale) grew $15,930,000, or 3.7%, to $451,066,000
compared to $435,136,000 at December 31, 2006. The growth in loans
was
comprised primarily of net increases in government guaranteed
loans.
|
·
|
The
Company purchased an additional $5,000,000 in bank owned life insurance
during the fourth quarter of 2007.
|
·
|
Non-accrual
loans decreased $3,856,000, or 52.5%, to $3,479,000 at December 31,
2007.
This improvement is mainly attributable to the resolution of a single
large problem loan at December 31, 2006 to a borrower in the forest
products industry. We believe the ratio of nonperforming assets to
total
assets of 0.62% at December 31, 2007 reflects the Company’s conservative
underwriting policies and continued efforts to monitor and address
potential credit issues early and
effectively.
|
(dollars
in thousands)
|
2007
|
|
Increase
(Decrease) Amount
|
|
%
|
|
2006
|
|
Increase
(Decrease) Amount
|
|
%
|
|
2005
|
|||||||||
Interest
income
|
$
|
40,136
|
$
|
3,692
|
10.1
|
$
|
36,444
|
$
|
6,813
|
23.0
|
$
|
29,631
|
||||||||||
Interest
expense
|
15,633
|
3,056
|
24.3
|
12,577
|
5,230
|
71.2
|
7,347
|
|||||||||||||||
Net
interest income
|
24,503
|
636
|
2.7
|
23,867
|
1,583
|
7.1
|
22,284
|
|||||||||||||||
Provision
for credit losses
|
482
|
(143
|
)
|
(22.9
|
)
|
625
|
(475
|
)
|
(43.2
|
)
|
1,100
|
|||||||||||
Net
interest income after provision for credit losses
|
24,021
|
779
|
3.4
|
23,242
|
2,058
|
9.7
|
21,184
|
|||||||||||||||
Other
operating income
|
4,475
|
299
|
7.2
|
4,176
|
95
|
2.3
|
4,081
|
|||||||||||||||
Other
operating expense
|
20,379
|
2,261
|
12.5
|
18,118
|
1,552
|
9.4
|
16,566
|
|||||||||||||||
Income
before income taxes
|
8,117
|
(1,183
|
)
|
(12.7
|
)
|
9,300
|
601
|
6.9
|
8,699
|
|||||||||||||
Income
taxes
|
2,086
|
(663
|
)
|
(24.1
|
)
|
2,749
|
96
|
3.6
|
2,653
|
|||||||||||||
Net
income
|
$
|
6,031
|
$
|
(520
|
)
|
(7.9
|
)
|
$
|
6,551
|
$
|
505
|
8.4
|
$
|
6,046
|
Year
Ended December 31,
|
||||||||||||||||||||||||||||
2007
|
|
2006
|
|
2005
|
||||||||||||||||||||||||
(dollars
in thousands)
|
|
Average
Balance
|
|
Interest
Income (Expense)
|
|
Avg
Rate
|
|
Average
Balance
|
|
Interest
Income (Expense)
|
|
Avg
Rate
|
|
Average
Balance
|
|
Interest
Income (Expense)
|
|
Avg
Rate
|
||||||||||
Assets
|
||||||||||||||||||||||||||||
Earning
assets:
|
||||||||||||||||||||||||||||
Loans
(1)
|
$
|
453,940
|
$
|
37,823
|
8.33
|
%
|
$
|
415,695
|
$
|
34,002
|
8.18
|
%
|
$
|
371,609
|
$
|
27,652
|
7.44
|
%
|
||||||||||
Investment
securities:
|
||||||||||||||||||||||||||||
Taxable
|
26,522
|
1,336
|
5.04
|
%
|
22,395
|
1,021
|
4.56
|
%
|
23,231
|
1,004
|
4.32
|
%
|
||||||||||||||||
Tax-Exempt
(1)
|
17,514
|
1,074
|
6.13
|
%
|
16,120
|
983
|
6.10
|
%
|
16,313
|
1,018
|
6.24
|
%
|
||||||||||||||||
Total
investment securities
|
44,036
|
2,410
|
5.47
|
%
|
38,515
|
2,004
|
5.20
|
%
|
39,544
|
2,022
|
5.11
|
%
|
||||||||||||||||
Federal
Home Loan Bank Stock
|
1,858
|
7
|
0.38
|
%
|
1,858
|
—
|
—
|
%
|
1,855
|
—
|
—
|
%
|
||||||||||||||||
Federal
funds sold and deposits
in banks
|
8,499
|
426
|
5.01
|
%
|
17,631
|
909
|
5.16
|
%
|
11,282
|
344
|
3.05
|
%
|
||||||||||||||||
Total
earning assets/interest income
|
$
|
508,333
|
$
|
40,666
|
8.00
|
%
|
$
|
473,699
|
$
|
36,915
|
7.79
|
%
|
$
|
424,290
|
$
|
30,018
|
7.07
|
%
|
||||||||||
Cash
and due from banks
|
12,236
|
12,150
|
10,009
|
|||||||||||||||||||||||||
Bank
premises and equipment (net)
|
13,249
|
11,103
|
8,180
|
|||||||||||||||||||||||||
Other
assets
|
30,013
|
26,904
|
24,876
|
|||||||||||||||||||||||||
Allowance
for credit losses
|
(4,618
|
)
|
(5,114
|
)
|
(4,818
|
)
|
||||||||||||||||||||||
Total
assets
|
$
|
559,213
|
$
|
518,742
|
$
|
462,537
|
||||||||||||||||||||||
Liabilities
and Shareholders’ Equity
|
||||||||||||||||||||||||||||
Interest
bearing liabilities:
|
||||||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||||||
Savings
and interest-bearing demand
|
$
|
194,356
|
$
|
(4,947
|
)
|
2.55
|
%
|
$
|
195,921
|
$
|
(4,650
|
)
|
2.37
|
%
|
$
|
195,040
|
$
|
(3,089
|
)
|
1.58
|
%
|
|||||||
Time
|
177,362
|
(8,513
|
)
|
4.80
|
%
|
148,055
|
(6,196
|
)
|
4.18
|
%
|
112,345
|
(3,323
|
)
|
2.96
|
%
|
|||||||||||||
Total
deposits
|
371,718
|
(13,460
|
)
|
3.62
|
%
|
343,976
|
(10,846
|
)
|
3.15
|
%
|
307,385
|
(6,412
|
)
|
2.09
|
%
|
|||||||||||||
Short-term
borrowings
|
5,961
|
(329
|
)
|
5.52
|
%
|
1,388
|
(75
|
)
|
5.40
|
%
|
69
|
(4
|
)
|
5.80
|
%
|
|||||||||||||
Long-term
borrowings
|
21,286
|
(820
|
)
|
3.85
|
%
|
23,092
|
(868
|
)
|
3.76
|
%
|
22,982
|
(768
|
)
|
3.34
|
%
|
|||||||||||||
Secured
borrowings
|
1,517
|
(110
|
)
|
7.25
|
%
|
1,981
|
(141
|
)
|
7.12
|
%
|
2,942
|
(163
|
)
|
5.54
|
%
|
|||||||||||||
Junior
subordinated debentures
|
13,403
|
(914
|
)
|
6.82
|
%
|
9,539
|
(647
|
)
|
6.78
|
%
|
152
|
—
|
—
|
|||||||||||||||
Total
borrowings
|
42,167
|
(2,173
|
)
|
5.15
|
%
|
36,000
|
(1,731
|
)
|
4.81
|
%
|
26,145
|
(935
|
)
|
3.58
|
%
|
|||||||||||||
Total
interest-bearing liabilities/Interest
expense
|
$
|
413,885
|
$
|
(15,633
|
)
|
3.78
|
%
|
$
|
379,976
|
$
|
(12,577
|
)
|
3.31
|
%
|
$
|
333,530
|
$
|
(7,347
|
)
|
2.20
|
%
|
|||||||
Demand
deposits
|
87,467
|
84,846
|
78,787
|
|||||||||||||||||||||||||
Other
liabilities
|
5,227
|
4,133
|
2,600
|
|||||||||||||||||||||||||
Shareholders’
equity
|
52,634
|
49,787
|
47,620
|
|||||||||||||||||||||||||
Total
liabilities and shareholders’equity
|
$
|
559,213
|
$
|
518,742
|
$
|
462,537
|
||||||||||||||||||||||
Net
interest income (1)
|
$
|
25,033
|
$
|
24,338
|
$
|
22,671
|
||||||||||||||||||||||
Net
interest income as a percentage of average earning
assets
|
||||||||||||||||||||||||||||
Interest
income
|
8.00
|
%
|
7.79
|
%
|
7.07
|
%
|
||||||||||||||||||||||
Interest
expense
|
3.08
|
%
|
2.66
|
%
|
1.73
|
%
|
||||||||||||||||||||||
Net
interest income
|
4.92
|
%
|
5.13
|
%
|
5.34
|
%
|
||||||||||||||||||||||
Net
interest margin (2)
|
4.82
|
%
|
5.04
|
%
|
5.25
|
%
|
||||||||||||||||||||||
Tax
equivalent adjustment (1)
|
$
|
530
|
$
|
471
|
$
|
387
|
(1) |
Interest
earned on tax-exempt loans and securities has been computed on a
34% tax
equivalent basis.
|
(2) |
Net
interest income divided by average interest earning
assets.
|
2007
compared to 2006
|
2006
compared to 2005
|
||||||||||||||||||
|
Increase
(decrease) due to
|
Increase
(decrease) due to
|
|||||||||||||||||
(dollars
in thousands)
|
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
|||||||||||||
Interest
earned on:
|
|||||||||||||||||||
Loans
|
$
|
3,177
|
$
|
644
|
$
|
3,821
|
$
|
3,458
|
$
|
2,892
|
$
|
6,350
|
|||||||
Securities:
|
|||||||||||||||||||
Taxable
|
201
|
114
|
315
|
(37
|
)
|
54
|
17
|
||||||||||||
Tax-exempt
|
85
|
6
|
91
|
(12
|
)
|
(23
|
)
|
(35
|
)
|
||||||||||
Total
securities
|
286
|
120
|
406
|
(49
|
)
|
31
|
(18
|
)
|
|||||||||||
Federal
Home Loan Bank Stock
|
—
|
7
|
7
|
—
|
—
|
—
|
|||||||||||||
Fed
funds sold and interest
|
|||||||||||||||||||
bearing
deposits in other banks
|
(458
|
)
|
(25
|
)
|
(483
|
)
|
254
|
311
|
565
|
||||||||||
Total
interest earning assets
|
3,005
|
746
|
3,751
|
3,663
|
3,234
|
6,897
|
|||||||||||||
Interest
paid on:
|
|||||||||||||||||||
Savings
and interest bearing
|
|||||||||||||||||||
demand
deposits
|
37
|
(334
|
)
|
(297
|
)
|
(14
|
)
|
(1,547
|
)
|
(1,561
|
)
|
||||||||
Time
deposits
|
(1,330
|
)
|
(987
|
)
|
(2,317
|
)
|
(1,246
|
)
|
(1,627
|
)
|
(2,873
|
)
|
|||||||
Total
borrowings
|
(312
|
)
|
(130
|
)
|
(442
|
)
|
(416
|
)
|
(380
|
)
|
(7,96
|
)
|
|||||||
Total
interest bearing liabilities
|
(1,605
|
)
|
(1,451
|
)
|
(3,056
|
)
|
(1,676
|
)
|
(3,554
|
)
|
(5,230
|
)
|
|||||||
Change
in net interest income
|
$
|
1,400
|
$
|
(705
|
)
|
$
|
695
|
$
|
1,987
|
$
|
(320
|
)
|
$
|
1,667
|
|
Increase
|
|
|
Increase
|
|
|
||||||||||||||||
|
|
(Decrease)
|
|
|
(Decrease)
|
|
|
|||||||||||||||
(dollars
in thousands)
|
2007
|
Amount
|
%
|
2006
|
Amount
|
%
|
2008
|
|||||||||||||||
Service
charges on
|
||||||||||||||||||||||
deposit
accounts
|
$
|
1,494
|
$
|
42
|
2.9
|
%
|
$
|
1,452
|
$
|
(18
|
)
|
(1.2
|
%)
|
$
|
1,470
|
|||||||
Income
from and gains on sale of
|
||||||||||||||||||||||
foreclosed
real estate
|
—
|
(5
|
)
|
(100.0
|
%)
|
5
|
5
|
—
|
—
|
|||||||||||||
Net
gains from sales of loans
|
1,984
|
89
|
4.7
|
%
|
1,895
|
86
|
4.8
|
%
|
1,809
|
|||||||||||||
Net
gain on sale of securities
|
(20
|
)
|
(20
|
)
|
(100.0
|
%)
|
—
|
(2
|
)
|
(100.0
|
%)
|
2
|
||||||||||
Earnings
on bank owned life insurance
|
397
|
43
|
12.1
|
%
|
354
|
(39
|
)
|
(9.9
|
%)
|
393
|
||||||||||||
Other
operating income
|
620
|
150
|
31.9
|
%
|
470
|
63
|
15.5
|
%
|
407
|
|||||||||||||
Total
non-interest income
|
$
|
4,475
|
$
|
299
|
7.2
|
%
|
$
|
4,176
|
$
|
95
|
2.3
|
%
|
$
|
4,081
|
|
Increase
|
|
|
Increase
|
|
|
||||||||||||||||
|
|
(Decrease)
|
|
|
(Decrease)
|
|
||||||||||||||||
(dollars
in thousands)
|
|
2007
|
|
Amount
|
|
%
|
|
2006
|
|
Amount
|
|
%
|
2005
|
|||||||||
Salaries
and employee benefits
|
$
|
12,280
|
$
|
1,671
|
15.8
|
%
|
$
|
10,609
|
$
|
536
|
5.3
|
%
|
$
|
10,073
|
||||||||
Occupancy
and equipment
|
2,528
|
110
|
4.5
|
%
|
2,418
|
381
|
18.7
|
%
|
2,037
|
|||||||||||||
Marketing
and advertising
|
560
|
75
|
15.5
|
%
|
485
|
(10
|
)
|
(2.0
|
%)
|
495
|
||||||||||||
State
taxes
|
436
|
61
|
16.3
|
%
|
375
|
27
|
7.8
|
%
|
348
|
|||||||||||||
Data
processing
|
393
|
(29
|
)
|
(6.9
|
%)
|
422
|
(57
|
)
|
(11.9
|
%)
|
479
|
|||||||||||
Other
expense
|
4,182
|
373
|
9.8
|
%
|
3,809
|
675
|
21.5
|
%
|
3,134
|
|||||||||||||
Total
non-interest expense
|
$
|
20,379
|
$
|
2,261
|
12.5
|
%
|
$
|
18,118
|
$
|
1,552
|
9.4
|
%
|
$
|
16,566
|
(dollars
in thousands)
|
2007
|
|
2006
|
|
2005
|
|||||
Obligations
of states and political subdivisions
|
$
|
3,562
|
$
|
5,155
|
$
|
5,315
|
||||
Mortgage-backed
securities
|
767
|
949
|
1,189
|
|||||||
Total
|
$
|
4,329
|
$
|
6,104
|
$
|
6,504
|
(dollars
in thousands)
|
2007
|
|
2006
|
|
2005
|
|||||
U.S.
Agency securities
|
$
|
3,818
|
$
|
8,311
|
$
|
4,370
|
||||
Obligations
of states and political subdivisions
|
16,136
|
13,619
|
12,172
|
|||||||
Mortgage-backed
securities
|
18,540
|
10,232
|
8,257
|
|||||||
Corporate
bonds
|
1,512
|
1,512
|
2,024
|
|||||||
Mutual
funds
|
2,906
|
2,934
|
2,925
|
|||||||
Total
|
$
|
42,912
|
$
|
36,608
|
$
|
29,748
|
(dollars
in thousands)
|
Due
in one year or less
|
Due
after one through five years
|
Due
after five through ten years
|
Due
after ten years
|
Total
|
|||||||||||
Mortgage-backed
securities
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
767
|
$
|
767
|
||||||
Weighted
average yield
|
—
|
—
|
—
|
5.42
|
%
|
|||||||||||
Obligations
of states and political subdivisions
|
646
|
784
|
1,128
|
1,004
|
3,562
|
|||||||||||
Weighted
average yield
|
3.87
|
%
|
7.03
|
%
|
6.11
|
%
|
6.93
|
%
|
||||||||
Total
|
$
|
646
|
$
|
784
|
$
|
1,128
|
$
|
1,771
|
$
|
4,329
|
(dollars
in thousands)
|
Due
in one year or less
|
|
Due
after one through five years
|
|
Due
after five through ten years
|
|
Due
after ten years
|
|
Total
|
|||||||
U.S.
Agency securities
|
$
|
999
|
$
|
2,084
|
$
|
—
|
$
|
735
|
$
|
3,818
|
||||||
Weighted
average yield
|
5.23
|
%
|
4.53
|
%
|
—
|
5.81
|
%
|
|||||||||
Mortgage-backed
securities
|
—
|
239
|
1,598
|
16,703
|
18,540
|
|||||||||||
Weighted
average yield
|
—
|
4.37
|
%
|
4.75
|
%
|
5.10
|
%
|
|||||||||
Obligations
of states and political subdivisions
|
501
|
5,577
|
3,564
|
6,494
|
16,136
|
|||||||||||
Weighted
average yield
|
6.64
|
%
|
5.48
|
%
|
5.35
|
%
|
5.74
|
%
|
||||||||
Other
securities
|
3,399
|
1,019
|
—
|
—
|
4,418
|
|||||||||||
Weighted
average yield
|
4.50
|
%
|
4.21
|
%
|
—
|
—
|
||||||||||
Total
|
$
|
4,899
|
$
|
8,919
|
$
|
5,162
|
$
|
23,932
|
$
|
42,912
|
(dollars
in thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
Commercial
|
$
|
128,145
|
$
|
132,843
|
$
|
124,536
|
$
|
111,050
|
$
|
64,344
|
||||||
Real
estate construction
|
93,249
|
87,063
|
87,621
|
49,347
|
11,894
|
|||||||||||
Real
estate mortgage
|
224,714
|
209,206
|
185,503
|
176,011
|
117,940
|
|||||||||||
Installment
|
7,283
|
8,668
|
9,945
|
9,653
|
4,625
|
|||||||||||
Credit
cards and overdrafts
|
3,363
|
1,990
|
1,863
|
1,979
|
935
|
|||||||||||
Less
unearned income
|
(681
|
)
|
(601
|
)
|
(487
|
)
|
(281
|
)
|
—
|
|||||||
Total
|
$
|
456,073
|
$
|
439,169
|
$
|
408,981
|
$
|
347,759
|
$
|
199,738
|
Due
after
|
|||||||||||||
Due
in one
|
one
through
|
Due
after
|
|||||||||||
(dollars
in thousands)
|
year
or less
|
five
years
|
five
years
|
Total
|
|||||||||
Commercial
|
$
|
58,773
|
$
|
35,185
|
$
|
34,187
|
$
|
128,145
|
|||||
Real
estate construction
|
75,823
|
13,050
|
4,376
|
93,249
|
|||||||||
Total
|
$
|
134,596
|
$
|
48,235
|
$
|
38,563
|
$
|
221,394
|
|||||
Total
loans maturing after one year with
|
|||||||||||||
Predetermined
interest rates (fixed)
|
$
|
26,969
|
$
|
45,620
|
$
|
72,589
|
|||||||
Floating
or adjustable rates (variable)
|
86,159
|
4,183
|
90,342
|
||||||||||
Total
|
$
|
113,128
|
$
|
49,803
|
$
|
162,931
|
(dollars
in thousands)
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
||||||
Non-accrual
loans
|
$
|
3,479
|
$
|
7,335
|
$
|
6,650
|
$
|
470
|
$
|
465
|
||||||
Accruing
loans past due 90 days
or more
|
2,932
|
376
|
82
|
—
|
—
|
|||||||||||
Restructured
loans
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Foreclosed
real estate
|
—
|
—
|
37
|
40
|
98
|
(dollars
in thousands)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
Balance
at beginning of year
|
$
|
4,033
|
$
|
5,296
|
$
|
4,236
|
$
|
2,238
|
$
|
2,473
|
||||||
Charge-offs:
|
||||||||||||||||
Commercial
|
—
|
1,925
|
41
|
235
|
17
|
|||||||||||
Real
estate loans
|
40
|
—
|
—
|
18
|
239
|
|||||||||||
Credit
card
|
18
|
16
|
7
|
11
|
6
|
|||||||||||
Installment
|
93
|
4
|
17
|
11
|
3
|
|||||||||||
Total
charge-offs
|
151
|
1,945
|
65
|
275
|
265
|
|||||||||||
Recoveries:
|
||||||||||||||||
Commercial
|
619
|
—
|
3
|
7
|
5
|
|||||||||||
Real
estate loans
|
21
|
51
|
19
|
123
|
23
|
|||||||||||
Credit
card
|
2
|
5
|
1
|
1
|
1
|
|||||||||||
Installment
|
1
|
1
|
2
|
—
|
1
|
|||||||||||
Total
recoveries
|
643
|
57
|
25
|
131
|
30
|
|||||||||||
Net
charge-offs (recoveries)
|
(492
|
)
|
1,888
|
40
|
144
|
235
|
||||||||||
Provision
for credit losses
|
482
|
625
|
1,100
|
970
|
—
|
|||||||||||
BNW
Bancorp, Inc. acquisition
|
—
|
—
|
—
|
1,172
|
—
|
|||||||||||
Balance
at end of year
|
$
|
5,007
|
$
|
4,033
|
$
|
5,296
|
$
|
4,236
|
$
|
2,238
|
||||||
Ratio
of net charge-offs (recoveries)
|
||||||||||||||||
to
average loans outstanding
|
(.11
|
%)
|
.45
|
%
|
.01
|
%
|
.05
|
%
|
.12
|
%
|
(dollars
in thousands)
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|||||||
Total
impaired loans
|
$
|
6,431
|
$
|
7,379
|
$
|
6,650
|
$
|
7,934
|
$
|
588
|
||||||
Total
impaired loans with valuation
allowance
|
3,052
|
51
|
4,917
|
7,464
|
123
|
|||||||||||
Valuation
allowance related to impaired
loans
|
72
|
17
|
924
|
200
|
23
|
|
%
of
|
|
%
of
|
|
%
of
|
|
%
of
|
|
%
of
|
||||||||||||||||||||||
|
2007
|
Total
|
2006
|
Total
|
2005
|
Total
|
2004
|
Total
|
2003
|
Total
|
|||||||||||||||||||||
(dollars
in thousands)
|
Reserve
|
Loans
|
Reserve
|
Loans
|
Reserve
|
Loans
|
Reserve
|
Loans
|
Reserve
|
Loans
|
|||||||||||||||||||||
Commercial
loans
|
$
|
1,780
|
36
|
%
|
$
|
1,705
|
42
|
%
|
$
|
1,589
|
32
|
%
|
$
|
1,680
|
32
|
%
|
$
|
764
|
32
|
%
|
|||||||||||
Real
estate loans
|
3,016
|
60
|
%
|
2,167
|
54
|
%
|
3,548
|
65
|
%
|
2,432
|
65
|
%
|
1,399
|
65
|
%
|
||||||||||||||||
Consumer
loans
|
211
|
4
|
%
|
161
|
4
|
%
|
159
|
3
|
%
|
124
|
3
|
%
|
75
|
3
|
%
|
||||||||||||||||
Total
allowance
|
$
|
5,007
|
100
|
%
|
$
|
4,033
|
100
|
%
|
$
|
5,296
|
100
|
%
|
$
|
4,236
|
100
|
%
|
$
|
2,238
|
100
|
%
|
|||||||||||
Ratio
of allowance for credit losses to loans outstanding at end of
year
|
1.14
|
%
|
.95
|
%
|
1.33
|
%
|
1.23
|
%
|
1.12
|
%
|
(dollars
in thousands)
|
2007
|
Rate
|
2006
|
Rate
|
2005
|
Rate
|
|||||||||||||
Non-interest
bearing demand deposits
|
$
|
87,467
|
0.00
|
%
|
$
|
84,846
|
0.00
|
%
|
$
|
79,866
|
0.00
|
%
|
|||||||
Interest
bearing demand deposits
|
42,803
|
0.48
|
%
|
48,140
|
0.57
|
%
|
56,615
|
0.58
|
%
|
||||||||||
Savings
deposits
|
151,553
|
3.13
|
%
|
147,781
|
2.96
|
%
|
138,425
|
1.99
|
%
|
||||||||||
Time
deposits
|
177,362
|
4.80
|
%
|
148,055
|
4.18
|
%
|
112,345
|
2.96
|
%
|
||||||||||
Total
|
$
|
459,185
|
2.93
|
%
|
$
|
428,822
|
2.53
|
%
|
$
|
387,251
|
1.66
|
%
|
(dollars
in thousands)
|
Under
$100,000
|
Over
$100,000
|
Total
|
|||||||
3
months or less
|
$
|
24,322
|
$
|
40,247
|
$
|
64,569
|
||||
Over
3 through 6 months
|
27,275
|
33,100
|
60,375
|
|||||||
Over
6 through 12 months
|
13,500
|
10,449
|
23,949
|
|||||||
Over
12 months
|
11,041
|
15,744
|
26,785
|
|||||||
Total
|
$
|
76,138
|
$
|
99,540
|
$
|
175,678
|
(dollars
in thousands)
|
2007
|
2006
|
2005
|
|||||||
Amount
outstanding at end of period
|
$
|
10,125
|
$
|
—
|
$
|
3,985
|
||||
Weighted
average interest rate thereon
|
4.26
|
%
|
—
|
%
|
5.13
|
%
|
||||
Maximum
month-end balance during the year
|
18,695
|
$
|
6,500
|
3,985
|
||||||
Average
balance during the year
|
5,961
|
1,388
|
69
|
|||||||
Average
interest rate during the year
|
5.52
|
%
|
5.40
|
%
|
5.80
|
%
|
Payments
due by Period
|
||||||||||||||||
Contractual
obligations
|
Less
than
1
year
|
1
- 3 years
|
3
- 5 years
|
More
than
5
years
|
Total
|
|||||||||||
Federal
Home Loan Bank borrowings
|
$
|
—
|
$
|
12,500
|
$
|
—
|
$
|
—
|
$
|
12,500
|
||||||
Operating
leases
|
268
|
309
|
103
|
—
|
680
|
|||||||||||
Secured
borrowings
|
—
|
350
|
1,068
|
—
|
1,418
|
|||||||||||
Junior
subordinated debentures
|
—
|
—
|
—
|
13,403
|
13,403
|
|||||||||||
Total
long-term obligations
|
$
|
268
|
$
|
13,159
|
$
|
1,171
|
$
|
13,403
|
$
|
28,001
|
2007
|
2006
|
||||||
$
|
108,095
|
$
|
100,792
|
||||
Standby
letters of credit
|
3,489
|
2,650
|
Year
ended December 31,
|
2007
|
2006
|
2005
|
2004
|
2003
|
|||||||||||
Return
on average assets
|
1.08
|
%
|
1.26
|
%
|
1.31
|
%
|
1.41
|
%
|
1.61
|
%
|
||||||
Return
on average equity
|
11.46
|
%
|
13.16
|
%
|
12.70
|
%
|
14.21
|
%
|
17.10
|
%
|
||||||
Average
equity to average assets ratio
|
9.41
|
%
|
9.60
|
%
|
10.30
|
%
|
9.91
|
%
|
9.44
|
%
|
||||||
Dividend
payout ratio
|
82
|
%
|
75
|
%
|
78
|
%
|
81
|
%
|
77
|
%
|
Actual
|
Capital
Adequacy
|
||||||||||||
(dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||
December
31, 2007
|
|||||||||||||
Tier
1 capital (to average assets)
|
|||||||||||||
Consolidated
|
$
|
50,825
|
9.28
|
%
|
$
|
21,906
|
4.00
|
%
|
|||||
Bank
|
50,210
|
9.19
|
%
|
21,860
|
4.00
|
%
|
|||||||
Tier
1 capital (to risk-weighted assets)
|
|||||||||||||
Consolidated
|
50,825
|
11.37
|
%
|
17,887
|
4.00
|
%
|
|||||||
Bank
|
50,210
|
11.26
|
%
|
17,840
|
4.00
|
%
|
|||||||
Total
capital (to risk-weighted assets)
|
|||||||||||||
Consolidated
|
55,832
|
12.49
|
%
|
35,774
|
8.00
|
%
|
|||||||
Bank
|
55,217
|
12.38
|
%
|
35,679
|
8.00
|
%
|
|||||||
December
31, 2006
|
|||||||||||||
Tier
1 capital (to average assets)
|
|||||||||||||
Consolidated
|
$
|
49,042
|
9.27
|
%
|
$
|
21,173
|
4.00
|
%
|
|||||
Bank
|
48,162
|
9.11
|
%
|
21,147
|
4.00
|
%
|
|||||||
Tier
1 capital (to risk-weighted assets)
|
|||||||||||||
Consolidated
|
49,042
|
11.03
|
%
|
17,784
|
4.00
|
%
|
|||||||
Bank
|
48,162
|
10.91
|
%
|
17,662
|
4.00
|
%
|
|||||||
Total
capital (to risk-weighted assets)
|
|||||||||||||
Consolidated
|
53,075
|
11.94
|
%
|
35,567
|
8.00
|
%
|
|||||||
Bank
|
52,195
|
11.82
|
%
|
35,324
|
8.00
|
%
|
|
|
Due
after
|
|
|
|
|
|
||||||
|
|
Due
in one
|
|
one
through
|
|
Due
after
|
|
|
|
||||
(dollars
in thousands)
|
|
year
or less
|
|
five
years
|
|
five
years
|
|
Total
|
|||||
Interest
earning assets
|
|||||||||||||
Loans,
including loans held for sale
|
$
|
293,816
|
$
|
113,137
|
$
|
49,120
|
$
|
456,073
|
|||||
Investment
securities
|
5,545
|
9,703
|
31,993
|
47,241
|
|||||||||
Fed
Funds sold and interest bearing
|
|||||||||||||
balances
with banks
|
253
|
—
|
—
|
253
|
|||||||||
Federal
Home Loan Bank stock
|
—
|
—
|
1,858
|
1,858
|
|||||||||
Total
interest earning assets
|
$
|
299,614
|
$
|
122,840
|
$
|
82,971
|
$
|
505,425
|
|||||
Interest
bearing liabilities
|
|||||||||||||
Interest
bearing demand deposits
|
$
|
44,305
|
$
|
—
|
$
|
—
|
$
|
44,305
|
|||||
Savings
deposits
|
160,470
|
—
|
—
|
160,470
|
|||||||||
Time
deposits
|
148,893
|
26,785
|
—
|
175,678
|
|||||||||
Short
term borrowings
|
10,125
|
—
|
—
|
10,125
|
|||||||||
Long
term borrowings
|
—
|
12,500
|
—
|
12,500
|
|||||||||
Secured
borrowings
|
—
|
1,418
|
—
|
1,418
|
|||||||||
Junior
subordinated debentures
|
8,248
|
5,155
|
—
|
13,403
|
|||||||||
Total
interest bearing liabilities
|
$
|
372,041
|
$
|
45,858
|
$
|
—
|
$
|
417,899
|
|||||
Net
interest rate sensitivity GAP
|
$
|
(72,427
|
)
|
$
|
76,982
|
$
|
82,971
|
$
|
87,526
|
||||
Cumulative
interest rate sensitivity GAP
|
4,555
|
87,526
|
87,526
|
||||||||||
Cumulative
interest rate sensitivity GAP
|
|||||||||||||
as
a % of earning assets
|
.9
|
%
|
17.3
|
%
|
17.3
|
%
|
Expected
Maturity
|
|||||||||||||||||||||||||
Year
ended December 31, 2007
|
|
There-
|
Fair
|
||||||||||||||||||||||
(dollars
in thousands)
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
after
|
|
Total
|
|
Value
|
||||||||||
Financial
Assets
|
|||||||||||||||||||||||||
Cash
and cash equivalents
|
|||||||||||||||||||||||||
Non-interest
bearing
|
$
|
15,044
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
15,044
|
$
|
15,044
|
|||||||||
Interest
bearing deposits in banks
|
253
|
—
|
—
|
—
|
—
|
—
|
253
|
253
|
|||||||||||||||||
Weighted
average interest rate
|
3.65
|
%
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Securities
available for sale
|
|||||||||||||||||||||||||
Fixed
rate
|
4,899
|
3,912
|
1,227
|
2,296
|
1,484
|
21,328
|
35,146
|
35,146
|
|||||||||||||||||
Weighted
average interest rate
|
4.87
|
%
|
4.99
|
%
|
5.47
|
%
|
4.93
|
%
|
5.24
|
%
|
5.26
|
%
|
|||||||||||||
Variable
rate
|
—
|
—
|
—
|
—
|
—
|
7,766
|
7,766
|
7,766
|
|||||||||||||||||
Weighted
average interest rate
|
—
|
—
|
—
|
—
|
—
|
5.31
|
%
|
||||||||||||||||||
Securities
held to maturity
|
|||||||||||||||||||||||||
Fixed
rate
|
646
|
34
|
750
|
—
|
—
|
2,899
|
4,329
|
4,368
|
|||||||||||||||||
Weighted
average interest rate
|
3.87
|
%
|
9.29
|
%
|
6.93
|
%
|
—
|
—
|
6.22
|
%
|
|||||||||||||||
Loans
receivable
|
|||||||||||||||||||||||||
Fixed
rate
|
41,388
|
6,936
|
5,973
|
6,356
|
7,704
|
45,620
|
113,977
|
109,431 | |||||||||||||||||
Weighted
average interest rate
|
7.52
|
%
|
7.38
|
%
|
7.48
|
%
|
7.50
|
%
|
7.77
|
%
|
7.09
|
%
|
|||||||||||||
Adjustable
rate
|
251,754
|
28,773
|
38,225
|
5,955
|
13,206
|
4,183
|
342,096
|
342,096
|
|||||||||||||||||
Weighted
average interest rate
|
7.95
|
%
|
8.12
|
%
|
8.38
|
%
|
8.47
|
%
|
8.21
|
%
|
7.53
|
%
|
|||||||||||||
Federal
Home Loan Bank stock
|
—
|
—
|
—
|
—
|
—
|
1,858
|
1,858
|
1,858
|
|||||||||||||||||
Weighted
average interest rate
|
—
|
—
|
—
|
—
|
—
|
.40
|
%
|
||||||||||||||||||
Financial
Liabilities
|
|||||||||||||||||||||||||
Non-interest
bearing deposits
|
$
|
13,032
|
$
|
11,078
|
$
|
9,416
|
$
|
8,004
|
$
|
6,803
|
$
|
38,550
|
$
|
86,883
|
$
|
86,883
|
|||||||||
Interest
bearing checking accounts
|
11,076
|
8,307
|
6,230
|
4,673
|
3,505
|
10,514
|
44,305
|
44,305
|
|||||||||||||||||
Weighted
average interest rate
|
.40
|
%
|
.40
|
%
|
.40
|
%
|
.40
|
%
|
.40
|
%
|
.40
|
%
|
|||||||||||||
Money
Market accounts
|
26,315
|
19,736
|
14,802
|
11,102
|
8,326
|
24,979
|
105,260
|
105,260
|
|||||||||||||||||
Weighted
average interest rate
|
3.18
|
%
|
3.18
|
%
|
3.18
|
%
|
3.18
|
%
|
3.18
|
%
|
3.18
|
%
|
|||||||||||||
Savings
accounts
|
11,042
|
8,834
|
7,067
|
5,653
|
4,523
|
18,091
|
55,210
|
55,210
|
|||||||||||||||||
Weighted
average interest rate
|
2.32
|
%
|
2.32
|
%
|
2.32
|
%
|
2.32
|
%
|
2.32
|
%
|
2.32
|
%
|
|||||||||||||
Certificates
of deposit
|
|||||||||||||||||||||||||
Fixed
rate
|
146,985
|
6,974
|
4,045
|
6,778
|
8,583
|
—
|
173,365
|
174,355
|
|||||||||||||||||
Weighted
average interest rate
|
4.78
|
%
|
4.15
|
%
|
4.43
|
%
|
5.11
|
%
|
4.93
|
%
|
—
|
||||||||||||||
Variable
rate
|
1,909
|
404
|
—
|
—
|
—
|
—
|
2,313
|
2,313
|
|||||||||||||||||
Weighted
average interest rate
|
3.81
|
%
|
3.88
|
%
|
—
|
—
|
—
|
—
|
|||||||||||||||||
Short
Term borrowings
|
10,125
|
—
|
—
|
—
|
—
|
—
|
10,125
|
10,093
|
|||||||||||||||||
Weighted
average interest rate
|
4.26
|
%
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Long
Term Borrowings
|
|||||||||||||||||||||||||
Fixed
rate
|
—
|
11,000
|
1,500
|
—
|
—
|
—
|
12,500
|
12,436
|
|||||||||||||||||
Weighted
average interest rate
|
—
|
3.84
|
%
|
4.12
|
%
|
—
|
—
|
—
|
|||||||||||||||||
Secured
borrowings
|
—
|
351
|
—
|
175
|
892
|
—
|
1,418
|
1,418
|
|||||||||||||||||
Weighted
average interest rate
|
—
|
6.81
|
%
|
—
|
6.66
|
%
|
7.56
|
%
|
—
|
||||||||||||||||
Junior
subordinated debentures
|
—
|
—
|
—
|
—
|
—
|
13,403
|
13,403
|
13,275
|
|||||||||||||||||
Weighted
average interest rate
|
—
|
—
|
—
|
—
|
—
|
6.67
|
%
|
Plan
Category
|
(a)
Number
of securities
to
be issued upon
exercise
of
outstanding
options,
warrants
and rights
|
|
(b)
Weighted-average
exercise
price
of
outstanding
options,
warrants
and
rights
|
|
(c)
Number
remaining
available
for future
issuance
under equity
compensation
plans
(excluding
securities
reflected
in column (a)
|
|||||
Equity
compensation plans approved
|
||||||||||
by
security holders:
|
621,797
|
(1)
|
$
|
13.87
|
279,250
|
|||||
Equity
compensation plans not approved
|
||||||||||
by
security holders:
|
—
|
—
|
—
|
|||||||
Total
|
621,797
|
(1)
|
279,250
|
(a) |
(1)
The following financial statements are filed
below:
|
(a) |
(2)
Schedules: None
|
(a) |
(3)
Exhibits: See Exhibit Index immediately following the signature
page.
|
2007
|
2006
|
||||||
Assets
|
|||||||
Cash
and due from banks
|
$
|
15,044
|
$
|
14,964
|
|||
Interest
bearing deposits in banks
|
253
|
5,479
|
|||||
Federal
funds sold
|
—
|
20,345
|
|||||
Securities
available for sale, at fair value (amortized cost of $43,323
and
$37,090)
|
42,912
|
36,608
|
|||||
Securities
held to maturity (fair value of $4,368 and $6,101)
|
4,329
|
6,104
|
|||||
Federal
Home Loan Bank stock, at cost
|
1,858
|
1,858
|
|||||
Loans
held for sale
|
17,162
|
14,368
|
|||||
Loans
|
438,911
|
424,801
|
|||||
Allowance
for credit losses
|
5,007
|
4,033
|
|||||
Loans
- net
|
433,904
|
420,768
|
|||||
Premises
and equipment
|
15,427
|
11,537
|
|||||
Accrued
interest receivable
|
3,165
|
3,006
|
|||||
Cash
surrender value of life insurance
|
15,111
|
9,714
|
|||||
Goodwill
|
11,282
|
11,282
|
|||||
Other
intangible assets
|
1,728
|
1,871
|
|||||
Other
assets
|
3,412
|
4,480
|
|||||
Total
assets
|
$
|
565,587
|
$
|
562,384
|
|||
Liabilities
and Shareholders’ Equity
|
|||||||
Liabilities
|
|||||||
Deposits:
|
|||||||
Demand,
non-interest bearing
|
$
|
86,883
|
$
|
91,657
|
|||
Savings
and interest-bearing demand
|
204,775
|
199,505
|
|||||
Time,
interest-bearing
|
175,678
|
175,679
|
|||||
Total
deposits
|
467,336
|
466,841
|
|||||
Accrued
interest payable
|
1,399
|
1,415
|
|||||
Secured
borrowings
|
1,418
|
1,906
|
|||||
Short-term
borrowings
|
10,125
|
—
|
|||||
Long-term
borrowings
|
12,500
|
21,500
|
|||||
Junior
subordinated debentures
|
13,403
|
13,403
|
|||||
Other
liabilities
|
8,707
|
8,335
|
|||||
Total
liabilities
|
514,888
|
513,400
|
|||||
Commitments
and Contingencies (See note 12)
|
—
|
—
|
|||||
Shareholders’
Equity
|
|||||||
Common
stock (par value $1); authorized: 25,000,000 shares; issued and
outstanding: 2007 - 6,606,545 shares; 2006 - 6,524,407
shares
|
6,607
|
6,524
|
|||||
Additional
paid-in capital
|
27,163
|
26,047
|
|||||
Retained
earnings
|
17,807
|
16,731
|
|||||
Accumulated
other comprehensive loss
|
(878
|
)
|
(318
|
)
|
|||
Total
shareholders’ equity
|
50,699
|
48,984
|
|||||
|
|||||||
Total
liabilities and shareholders’ equity
|
$
|
565,587
|
$
|
562,384
|
2007
|
2006
|
2005
|
||||||||
Interest
and Dividend Income
|
||||||||||
Loans
|
$
|
37,658
|
$
|
33,883
|
$
|
27,611
|
||||
Federal
funds sold and deposits in banks
|
426
|
909
|
344
|
|||||||
Securities
available for sale:
|
||||||||||
Taxable
|
1,290
|
946
|
933
|
|||||||
Tax-exempt
|
528
|
434
|
446
|
|||||||
Securities
held to maturity:
|
||||||||||
Taxable
|
46
|
57
|
71
|
|||||||
Tax-exempt
|
181
|
215
|
226
|
|||||||
Federal
Home Loan Bank stock dividends
|
7
|
—
|
—
|
|||||||
Total
interest and dividend income
|
40,136
|
36,444
|
29,631
|
|||||||
Interest
Expense
|
||||||||||
Deposits
|
13,460
|
10,846
|
6,412
|
|||||||
Short-term
borrowings
|
329
|
75
|
4
|
|||||||
Long-term
borrowings
|
820
|
868
|
768
|
|||||||
Secured
borrowings
|
110
|
141
|
163
|
|||||||
Junior
subordinated debentures
|
914
|
647
|
—
|
|||||||
Total
interest expense
|
15,633
|
12,577
|
7,347
|
|||||||
Net
interest income
|
24,503
|
23,867
|
22,284
|
|||||||
Provision
for Credit Losses
|
482
|
625
|
1,100
|
|||||||
Net
interest income after provision for credit losses
|
24,021
|
23,242
|
21,184
|
|||||||
Non-Interest
Income
|
||||||||||
Service
charges on deposit accounts
|
1,494
|
1,452
|
1,470
|
|||||||
Income
from and gains on sale of foreclosed real estate
|
—
|
5
|
—
|
|||||||
Net
gains from sales of loans
|
1,984
|
1,895
|
1,809
|
|||||||
Net
gain (loss) on sales of securities available for sale
|
(20
|
)
|
—
|
2
|
||||||
Earnings
on bank owned life insurance
|
397
|
354
|
393
|
|||||||
Other
operating income
|
620
|
470
|
407
|
|||||||
Total
non-interest income
|
4,475
|
4,176
|
4,081
|
|||||||
Non-Interest
Expense
|
||||||||||
Salaries
and employee benefits
|
12,280
|
10,609
|
10,073
|
|||||||
Occupancy
|
1,336
|
1,266
|
1,035
|
|||||||
Equipment
|
1,192
|
1,152
|
1,002
|
|||||||
State
taxes
|
436
|
375
|
348
|
|||||||
Data
processing
|
393
|
422
|
479
|
|||||||
Professional
services
|
541
|
647
|
302
|
|||||||
Other
|
4,201
|
3,647
|
3,327
|
|||||||
Total
non-interest expense
|
20,379
|
18,118
|
16,566
|
|||||||
Income
before income taxes
|
8,117
|
9,300
|
8,699
|
|||||||
Income
Taxes
|
2,086
|
2,749
|
2,653
|
|||||||
Net
income
|
$
|
6,031
|
$
|
6,551
|
$
|
6,046
|
||||
Earnings
Per Share
|
||||||||||
Basic
|
$
|
0.92
|
$
|
1.01
|
$
|
0.94
|
||||
Diluted
|
$
|
0.90
|
$
|
0.99
|
$
|
0.92
|
||||
Weighted
Average Shares Outstanding:
|
||||||||||
Basic
|
6,581,203
|
6,483,370
|
6,425,615
|
|||||||
Diluted
|
6,668,042
|
6,585,807
|
6,538,250
|
Accumulated
|
|||||||||||||||||||
Shares
of
|
Additional
|
Other
|
|||||||||||||||||
Common
|
Common
|
Paid-in
|
Retained
|
Comprehensive
|
|||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Income
(Loss)
|
Total
|
||||||||||||||
Balance
at January 1, 2005
|
6,421,396
|
$
|
6,421
|
$
|
25,003
|
$
|
13,746
|
$
|
133
|
$
|
45,303
|
||||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
—
|
—
|
—
|
6,046
|
—
|
6,046
|
|||||||||||||
Other
comprehensive income, net of tax:
|
|||||||||||||||||||
Change
in fair value of securities available for sale
|
—
|
—
|
—
|
—
|
(456
|
)
|
(456
|
)
|
|||||||||||
Comprehensive
income
|
5,590
|
||||||||||||||||||
Stock
options exercised
|
42,620
|
43
|
362
|
—
|
—
|
405
|
|||||||||||||
Issuance
of common stock
|
520
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Stock
compensation expense
|
—
|
—
|
12
|
—
|
—
|
12
|
|||||||||||||
Cash
dividends declared ($0.73 per share)
|
—
|
—
|
—
|
(4,719
|
)
|
—
|
(4,719
|
)
|
|||||||||||
Tax
benefit from exercise of stock options
|
—
|
—
|
9
|
—
|
—
|
9
|
|||||||||||||
Balance
at December 31, 2005
|
6,464,536
|
$
|
6,464
|
$
|
25,386
|
$
|
15,073
|
$
|
(323
|
)
|
$
|
46,600
|
|||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
—
|
—
|
—
|
6,551
|
—
|
6,551
|
|||||||||||||
Other
comprehensive income, net of tax:
|
|||||||||||||||||||
Change
in fair value of securities available for sale
|
—
|
—
|
—
|
—
|
5
|
5
|
|||||||||||||
Comprehensive
income
|
6,556
|
||||||||||||||||||
Stock
options exercised
|
44,945
|
45
|
364
|
—
|
—
|
409
|
|||||||||||||
Issuance
of common stock
|
14,926
|
15
|
218
|
—
|
—
|
233
|
|||||||||||||
Stock
compensation expense
|
—
|
—
|
36
|
—
|
—
|
36
|
|||||||||||||
Cash
dividends declared ($0.75 per share)
|
—
|
—
|
—
|
(4,893
|
)
|
—
|
(4,893
|
)
|
|||||||||||
Tax
benefit from exercise of stock options
|
—
|
—
|
43
|
—
|
—
|
43
|
|||||||||||||
Balance
at December 31, 2006
|
6,524,407
|
$
|
6,524
|
$
|
26,047
|
$
|
16,731
|
$
|
(318
|
)
|
$
|
48,984
|
|||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
—
|
—
|
—
|
6,031
|
—
|
6,031
|
|||||||||||||
Other
comprehensive income, net of tax:
|
|||||||||||||||||||
Change
in fair value of securities available for sale
|
—
|
—
|
—
|
—
|
46
|
46
|
|||||||||||||
Prior
service cost at initiation of defined benefit plan
|
—
|
—
|
—
|
—
|
(704
|
)
|
(704
|
)
|
|||||||||||
Amortization
of unrecognized prior service costs and net gains/losses
|
—
|
—
|
—
|
—
|
98
|
98
|
|||||||||||||
Comprehensive
income
|
5,471
|
||||||||||||||||||
Stock
options exercised
|
74,026
|
74
|
775
|
—
|
—
|
849
|
|||||||||||||
Issuance
of common stock
|
25,012
|
25
|
395
|
—
|
—
|
420
|
|||||||||||||
Common
stock repurchased and retired
|
(16,900
|
)
|
(16
|
)
|
(203
|
)
|
(219
|
)
|
|||||||||||
Stock
compensation expense
|
—
|
—
|
97
|
—
|
—
|
97
|
|||||||||||||
Cash
dividends declared ($0.75 per share)
|
—
|
—
|
—
|
(4,955
|
)
|
—
|
(4,955
|
)
|
|||||||||||
Tax
benefit from exercise of
|
|||||||||||||||||||
stock
options
|
—
|
—
|
52
|
—
|
—
|
52
|
|||||||||||||
Balance
at December 31, 2007
|
6,606,545
|
$
|
6,607
|
$
|
27,163
|
$
|
17,807
|
$
|
(878
|
)
|
$
|
50,699
|
2007
|
2006
|
2005
|
||||||||
Cash
Flows from Operating Activities
|
||||||||||
Net
income
|
$
|
6,031
|
$
|
6,551
|
$
|
6,046
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||||
Depreciation
and amortization
|
1,476
|
1,257
|
1,127
|
|||||||
Provision
for credit losses
|
482
|
625
|
1,100
|
|||||||
Deferred
income tax (benefit)
|
(305
|
)
|
759
|
(24
|
)
|
|||||
Originations
of loans held for sale
|
(123,406
|
)
|
(109,444
|
)
|
(117,364
|
)
|
||||
Proceeds
from sales of loans held for sale
|
122,549
|
107,082
|
110,914
|
|||||||
Net
gains on sales of loans
|
(1,984
|
)
|
(1,895
|
)
|
(1,809
|
)
|
||||
(Gain)
loss on sale of securities available for sale
|
20
|
—
|
(2
|
)
|
||||||
Gains
on sales of foreclosed real estate
|
—
|
(5
|
)
|
—
|
||||||
Loss
on sale of premises and equipment
|
18
|
3
|
8
|
|||||||
Earnings
on bank owned life insurance
|
(397
|
)
|
(354
|
)
|
(393
|
)
|
||||
Increase
in accrued interest receivable
|
(159
|
)
|
(642
|
)
|
(491
|
)
|
||||
Increase
(decrease) in accrued interest payable
|
(16
|
)
|
868
|
162
|
||||||
Write-down
of foreclosed real estate
|
—
|
—
|
3
|
|||||||
Other
- net
|
1,129
|
(864
|
)
|
(291
|
)
|
|||||
Net
cash provided by (used in) operating activities
|
5,438
|
3,941
|
(1,014
|
)
|
||||||
Cash
Flows from Investing Activities
|
||||||||||
Net
(increase) decrease in interest bearing deposits in banks
|
5,226
|
(5,196
|
)
|
5,177
|
||||||
Net
(increase) decrease in federal funds sold
|
20,345
|
(20,345
|
)
|
6,034
|
||||||
Activity
in securities available for sale:
|
||||||||||
Sales
|
805
|
—
|
3,645
|
|||||||
Maturities,
prepayments and calls
|
8,807
|
4,822
|
7,944
|
|||||||
Purchases
|
(15,090
|
)
|
(11,783
|
)
|
(6,394
|
)
|
||||
Activity
in securities held to maturity:
|
||||||||||
Maturities
|
943
|
392
|
691
|
|||||||
Investment
in PFC Statutory Trust I and II
|
—
|
(248
|
)
|
(155
|
)
|
|||||
Proceeds
from sales of SBA loan pools
|
1,139
|
—
|
3,405
|
|||||||
Increase
in loans made to customers, net of principal collections
|
(14,821
|
)
|
(27,959
|
)
|
(56,633
|
)
|
||||
Purchases
of premises and equipment
|
(5,191
|
)
|
(2,718
|
)
|
(4,377
|
)
|
||||
Proceeds
from sales of premises and equipment
|
190
|
4
|
124
|
|||||||
Proceeds
from sales of foreclosed real estate
|
—
|
42
|
—
|
|||||||
Purchase
of bank owned life insurance
|
(5,000
|
)
|
—
|
—
|
||||||
Deposit
assumption and transfer
|
—
|
(1,268
|
)
|
—
|
||||||
Net
cash used in investing activities
|
(2,647
|
)
|
(64,257
|
)
|
(40,539
|
)
|
2007
|
2006
|
2005
|
||||||||
Cash
Flows from Financing Activities
|
||||||||||
Net
increase in deposits
|
$
|
495
|
$
|
67,115
|
$
|
36,225
|
||||
Net
increase (decrease) in short-term borrowings
|
3,125
|
(3,985
|
)
|
3,985
|
||||||
Decrease
in secured borrowings
|
(488
|
)
|
(244
|
)
|
(1,583
|
)
|
||||
Proceeds
from issuance of long-term borrowings
|
—
|
2,000
|
8,000
|
|||||||
Repayments
of long-term borrowings
|
(2,000
|
)
|
(5,000
|
)
|
(5,000
|
)
|
||||
Proceeds
from junior subordinated debentures
|
—
|
8,248
|
5,155
|
|||||||
Common
stock issued
|
1,269
|
642
|
405
|
|||||||
Repurchase
and retirement of common stock
|
(219
|
)
|
—
|
—
|
||||||
Cash
dividends paid
|
(4,893
|
)
|
(4,719
|
)
|
(4,624
|
)
|
||||
Net
cash provided by (used in) financing activities
|
(2,711
|
)
|
64,057
|
42,563
|
||||||
Net
change in cash and due from banks
|
80
|
3,741
|
1,010
|
|||||||
Cash
and Due from Banks
|
||||||||||
Beginning
of year
|
14,964
|
11,223
|
10,213
|
|||||||
End
of year
|
$
|
15,044
|
$
|
14,964
|
$
|
11,223
|
||||
Supplemental
Disclosures of Cash Flow Information
|
||||||||||
Interest
paid
|
$
|
15,649
|
$
|
11,709
|
$
|
7,185
|
||||
Income
taxes paid
|
2,297
|
1,667
|
3,020
|
|||||||
Supplemental
Disclosures of Non-Cash Investing Activities
|
||||||||||
Fair
value adjustment of securities available for sale, net of
tax
|
$
|
46
|
$
|
5
|
$
|
(456
|
)
|
|||
Transfer
of securities held to maturity to available for sale
|
825
|
—
|
—
|
Net
income, as reported
|
$
|
6,046
|
||
Add
stock compensation expensed
|
12
|
|||
Less
total stock-based compensation expense determined under fair
value method
for all qualifying awards, net of tax
|
586
|
|||
Pro
forma net income
|
$
|
5,472
|
||
Earnings
Per Share
|
||||
Basic
- as reported
|
$
|
0.94
|
||
Basic
- Pro forma
|
0.85
|
|||
Diluted
- as reported
|
0.92
|
|||
Diluted
- pro forma
|
0.84
|
Gross
|
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
||||||||||
Securities
Available for Sale
|
Cost
|
Gains
|
Losses
|
Value
|
|||||||||
December
31, 2007
|
|||||||||||||
U.S.
Government agency securities
|
$
|
3,796
|
$
|
22
|
$
|
—
|
$
|
3,818
|
|||||
Obligations
of states and political subdivisions
|
16,248
|
83
|
195
|
16,136
|
|||||||||
Mortgage-backed
securities
|
18,706
|
23
|
189
|
18,540
|
|||||||||
Corporate
bonds
|
1,532
|
—
|
20
|
1,512
|
|||||||||
Mutual
funds
|
3,041
|
—
|
135
|
2,906
|
|||||||||
$
|
43,323
|
$
|
128
|
$
|
539
|
$
|
42,912
|
||||||
December
31, 2006
|
|||||||||||||
U.S.
Government agency securities
|
$
|
8,346
|
$
|
22
|
$
|
57
|
$
|
8,311
|
|||||
Obligations
of states and political subdivisions
|
13,719
|
69
|
169
|
13,619
|
|||||||||
Mortgage-backed
securities
|
10,434
|
27
|
229
|
10,232
|
|||||||||
Corporate
bonds
|
1,550
|
—
|
38
|
1,512
|
|||||||||
Mutual
funds
|
3,041
|
—
|
107
|
2,934
|
|||||||||
$
|
37,090
|
$
|
118
|
$
|
600
|
$
|
36,608
|
||||||
Securities
Held to Maturity
|
|||||||||||||
December
31, 2007
|
|||||||||||||
State
and municipal securities
|
$
|
3,562
|
$
|
48
|
$
|
5
|
$
|
3,605
|
|||||
Mortgage-backed
securities
|
767
|
—
|
4
|
763
|
|||||||||
$
|
4,329
|
$
|
48
|
$
|
9
|
$
|
4,368
|
||||||
December
31, 2006
|
|||||||||||||
State
and municipal securities
|
$
|
5,155
|
$
|
38
|
$
|
35
|
$
|
5,158
|
|||||
Mortgage-backed
securities
|
949
|
—
|
6
|
943
|
|||||||||
$
|
6,104
|
$
|
38
|
$
|
41
|
$
|
6,101
|
Less
than 12 Months
|
More
than 12 Months
|
Total
|
|||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
||||||||||||||
December
31, 2007
|
|||||||||||||||||||
Available
for Sale
|
|||||||||||||||||||
Obligations
of states and political subdivisions
|
$
|
2,984
|
$
|
38
|
$
|
6,460
|
$
|
157
|
$
|
9,444
|
$
|
195
|
|||||||
Mortgage-backed
securities
|
10,582
|
88
|
4,435
|
101
|
15,017
|
189
|
|||||||||||||
Corporate
bonds
|
—
|
—
|
1,512
|
20
|
1,512
|
20
|
|||||||||||||
Mutual
funds
|
—
|
—
|
2,906
|
135
|
2,906
|
135
|
|||||||||||||
Total
|
$
|
13,566
|
$
|
126
|
$
|
15,313
|
$
|
413
|
$
|
28,879
|
$
|
539
|
|||||||
Held
to Maturity
|
|||||||||||||||||||
State
and municipal securities
|
$
|
83
|
$
|
—
|
$
|
980
|
$
|
5
|
$
|
1,063
|
$
|
5
|
|||||||
Mortgage-backed
securities
|
—
|
—
|
763
|
4
|
763
|
4
|
|||||||||||||
Total
|
$
|
83
|
$
|
—
|
$
|
1,743
|
$
|
9
|
$
|
1,826
|
$
|
9
|
|||||||
December
31, 2006
|
|||||||||||||||||||
Available
for Sale
|
|||||||||||||||||||
U.S.
Government agency securities
|
$
|
2,988
|
$
|
1
|
$
|
4,050
|
$
|
56
|
$
|
7,038
|
$
|
57
|
|||||||
Obligations
of states and political subdivisions
|
4,927
|
114
|
3,471
|
55
|
8,398
|
169
|
|||||||||||||
Mortgage-backed
securities
|
948
|
21
|
6,503
|
208
|
7,451
|
229
|
|||||||||||||
Corporate
bonds
|
—
|
—
|
1,513
|
38
|
1,513
|
38
|
|||||||||||||
Mutual
funds
|
—
|
—
|
2,934
|
107
|
2,934
|
107
|
|||||||||||||
Total
|
$
|
8,863
|
$
|
136
|
$
|
18,471
|
$
|
464
|
$
|
27,334
|
$
|
600
|
|||||||
Held
to Maturity
|
|||||||||||||||||||
State
and municipal securities
|
$
|
—
|
$
|
—
|
$
|
2,392
|
$
|
35
|
$
|
2,392
|
$
|
35
|
|||||||
Mortgage-backed
securities
|
943
|
6
|
—
|
—
|
943
|
6
|
|||||||||||||
Total
|
$
|
943
|
$
|
6
|
$
|
2,392
|
$
|
35
|
$
|
3,335
|
$
|
41
|
Held
to Maturity
|
|
Available
for Sale
|
|
||||||||||
|
|
Amortized
|
|
Fair
|
|
Amortized
|
|
Fair
|
|
||||
|
|
Cost
|
|
Value
|
|
Cost
|
|
Value
|
|||||
Due
in one year or less
|
$
|
646
|
$
|
642
|
$
|
1,998
|
$
|
1,994
|
|||||
Due
from one year to five years
|
784
|
792
|
8,667
|
8,680
|
|||||||||
Due
from five to ten years
|
1,128
|
1,144
|
3,530
|
3,564
|
|||||||||
Due
after ten years
|
1,004
|
1,027
|
7,381
|
7,228
|
|||||||||
Mortgage-backed
securities
|
767
|
763
|
18,706
|
18,540
|
|||||||||
Mutual
funds
|
—
|
—
|
3,041
|
2,906
|
|||||||||
Total
|
$
|
4,329
|
$
|
4,368
|
$
|
43,323
|
$
|
42,912
|
2007
|
|
2006
|
|||||
Commercial
and agricultural
|
$
|
128,145
|
$
|
132,843
|
|||
Real
estate:
|
|||||||
Construction
|
93,249
|
87,063
|
|||||
Residential
1-4 family
|
60,616
|
64,545
|
|||||
Multi-family
|
6,353
|
6,927
|
|||||
Commercial
|
137,620
|
117,608
|
|||||
Farmland
|
20,125
|
20,126
|
|||||
Consumer
|
10,646
|
10,658
|
|||||
456,754
|
439,770
|
||||||
Less
unearned income
|
(681
|
)
|
(601
|
)
|
|||
$
|
456,073
|
$
|
439,169
|
2007
|
2006
|
2005
|
||||||||
Balance
at beginning of year
|
$
|
4,033
|
$
|
5,296
|
$
|
4,236
|
||||
Provision
for credit losses
|
482
|
625
|
1,100
|
|||||||
Charge-offs
|
(151
|
)
|
(1,945
|
)
|
(65
|
)
|
||||
Recoveries
|
643
|
57
|
25
|
|||||||
Net
(charge-offs) recoveries
|
492
|
(1,888
|
)
|
(40
|
)
|
|||||
Balance
at end of year
|
$
|
5,007
|
$
|
4,033
|
$
|
5,296
|
2007
|
|
2006
|
|
2005
|
||||||
December
31
|
||||||||||
Impaired
loans without a valuation allowance
|
$
|
3,379
|
$
|
7,328
|
$
|
1,733
|
||||
Impaired
loans with a valuation allowance
|
3,052
|
51
|
4,917
|
|||||||
Total
impaired loans
|
$
|
6,431
|
$
|
7,379
|
$
|
6,650
|
||||
Valuation
allowance related to impaired loans
|
$
|
72
|
$
|
17
|
$
|
924
|
||||
Years
Ended December 31
|
||||||||||
Average
investment in impaired loans
|
$
|
2,938
|
$
|
6,475
|
$
|
6,925
|
||||
Interest
income recognized on a cash basis on impaired loans
|
457
|
272
|
569
|
2007
|
2006
|
||||||
Land
and premises
|
$
|
12,261
|
$
|
11,962
|
|||
Equipment,
furniture and fixtures
|
7,569
|
7,246
|
|||||
Construction
in progress
|
4,462
|
664
|
|||||
24,292
|
19,872
|
||||||
Less
accumulated depreciation and amortization
|
8,865
|
8,335
|
|||||
Total
premises and equipment
|
$
|
15,427
|
$
|
11,537
|
2008
|
$
|
268
|
||
2009
|
218
|
|||
2010
|
91
|
|||
2011
|
58
|
|||
2012
|
45
|
|||
Total
minimum payments required
|
$
|
680
|
2007
|
|
2006
|
|||||
Demand
deposits, non-interest bearing
|
$
|
86,883
|
$
|
91,657
|
|||
NOW
and money market accounts
|
149,565
|
147,277
|
|||||
Savings
deposits
|
55,210
|
52,228
|
|||||
Time
certificates, $100,000 or more
|
99,540
|
99,863
|
|||||
Other
time certificates
|
76,138
|
75,816
|
|||||
Total
|
$
|
467,336
|
$
|
466,841
|
2008
|
$
|
148,893
|
||
2009
|
7,378
|
|||
2010
|
4,046
|
|||
2011
|
6,778
|
|||
2012
|
8,583
|
|||
$
|
175,678
|
2007
|
|
2006
|
|
2005
|
||||||
Amount
outstanding at end of year
|
$
|
10,125
|
$
|
—
|
$
|
3,985
|
||||
Weighted
average interest rate at December 31
|
4.26
|
%
|
—
|
5.13
|
%
|
|||||
Maximum
month-end balance during the year
|
18,695
|
6,500
|
3,985
|
|||||||
Average
balance during the year
|
5,961
|
1,388
|
69
|
|||||||
Average
interest rate during the year
|
5.52
|
%
|
5.40
|
%
|
5.80
|
%
|
(dollars
in thousands)
|
Issuance
|
|
Preferred
|
|
Rate
|
|
Initial
|
|
Rate
at
|
|
Maturity
|
|
|||||||
Issuance
Trust
|
|
Date
|
|
Security
|
|
Type
|
|
Rate
|
|
12/31/07
|
|
Date
|
|||||||
PFC
Statutory Trust I
|
12/2005
|
$
|
5,000
|
Fixed
|
(1)
|
6.39
|
%
|
6.39
|
%
|
3/2036
|
|||||||||
PFC
Statutory Trust II
|
6/2006
|
$
|
8,000
|
Variable
|
(2)
|
7.02
|
%
|
6.84
|
%
|
7/2036
|
(1) |
Fixed
rate until March 15, 2011, at which time becomes a variable rate,
adjusted
quarterly, equal to 145 basis points over the three month LIBOR
rate.
|
(2) |
The
variable rate preferred securities reprice
quarterly.
|
2007
|
|
2006
|
|
2005
|
||||||
Current
|
$
|
2,391
|
$
|
1,990
|
$
|
2,677
|
||||
Deferred
provision (benefit)
|
(305
|
)
|
759
|
(24
|
)
|
|||||
Total
income taxes
|
$
|
2,086
|
$
|
2,749
|
$
|
2,653
|
2007
|
|
2006
|
|||||
Deferred
Tax Assets
|
|||||||
Allowance
for credit losses
|
$
|
1,579
|
$
|
1,213
|
|||
Deferred
compensation
|
160
|
166
|
|||||
Supplemental
executive retirement plan
|
275
|
—
|
|||||
Unrealized
loss on securities available for sale
|
140
|
164
|
|||||
Loan
fees/costs
|
242
|
204
|
|||||
Other
|
132
|
135
|
|||||
Total
deferred tax assets
|
2,528
|
1,882
|
|||||
Deferred
Tax Liabilities
|
|||||||
Depreciation
|
$
|
88
|
$
|
103
|
|||
Loan
fees/costs
|
2,346
|
1,937
|
|||||
Core
deposit intangible
|
157
|
205
|
|||||
Other
|
378
|
359
|
|||||
Total
deferred tax liabilities
|
2,969
|
2,604
|
|||||
Net
deferred tax liabilities
|
$
|
(441
|
)
|
$
|
(722
|
)
|
Percent
|
Percent
|
Percent
|
|||||||||||||||||
2007
|
of
Pre-tax
|
2006
|
of
Pre-tax
|
2005
|
Pre-tax
|
||||||||||||||
Amount
|
Income
|
Amount
|
Income
|
Amount
|
Income
|
||||||||||||||
Income
tax at statutory rate
|
$
|
2,841
|
35.0
|
%
|
$
|
3,255
|
35.0
|
%
|
$
|
3,031
|
35.0
|
%
|
|||||||
Adjustments
resulting from:
|
|||||||||||||||||||
Tax-exempt
income
|
(316
|
)
|
(3.9
|
)
|
(275
|
)
|
(2.9
|
)
|
(244
|
)
|
(2.8
|
)
|
|||||||
Net
earnings on life insurance policies
|
(139
|
)
|
(1.7
|
)
|
(112
|
)
|
(1.2
|
)
|
(125
|
)
|
(1.4
|
)
|
|||||||
Other
|
(300
|
)
|
(3.7
|
)
|
(119
|
)
|
(1.3
|
)
|
(9
|
)
|
(.1
|
)
|
|||||||
Total
income tax expense
|
$
|
2,086
|
25.7
|
%
|
$
|
2,749
|
29.6
|
%
|
$
|
2,653
|
30.7
|
%
|
Net
periodic pension cost:
|
||||
Service
Cost
|
$
|
91
|
||
Interest
Cost
|
41
|
|||
Amortization
of prior service cost
|
70
|
|||
Net
periodic pension cost
|
$
|
202
|
||
Weighted
average assumptions:
|
||||
Discount
rate
|
5.94
|
%
|
||
Rate
of compensation increases
|
5.00
|
The
following table sets forth the change in benefit obligation at
December
31, 2007:
|
Change
in Benefit Obligation:
|
||||
Benefit
obligation at inception of plan during the year
|
$
|
704
|
||
Service
cost
|
91
|
|||
Interest
cost
|
41
|
|||
Actuarial
gain
|
(28
|
)
|
||
Benefit
obligation at end of year
|
808
|
Net
gain
|
$
|
(28
|
)
|
|
Prior
service cost
|
634
|
|||
Total
recognized in accumulative other comprehensive
loss
|
$
|
606
|
Projected
benefit obligation
|
$
|
808
|
||
Accumulated
benefit obligation
|
633
|
2008
- 2012
|
$
|
0
|
||
2013
- 2017
|
33
|
2007
|
|
2006
|
|||||
Commitments
to extend credit
|
$
|
108,095
|
$
|
100,792
|
|||
Standby
letters of credit
|
3,489
|
2,650
|
Grant
period ended
|
Expected
Life
|
Risk
Free
Interest
Rate
|
Expected
Volatility
|
Dividend
Yield
|
Average
Fair
Value
|
|||||||||||
December
31, 2007
|
6.5
years
|
4.59
|
%
|
15.66
|
%
|
4.92
|
%
|
$
|
1.69
|
|||||||
December
31, 2006
|
6.5
years
|
4.97
|
%
|
16.53
|
%
|
4.83
|
%
|
$
|
1.88
|
|||||||
December
31, 2005
|
10
years
|
4.47
|
%
|
17.23
|
%
|
4.44
|
%
|
$
|
4.37
|
2007
|
2006
|
2005
|
|||||||||||||||||
|
|
Weighted
|
|
|
|
Weighted
|
|
|
|
Weighted
|
|
||||||||
|
|
|
|
Average
|
|
|
|
Average
|
|
|
|
Average
|
|
||||||
|
|
|
|
Exercise
|
|
|
|
Exercise
|
|
|
|
Exercise
|
|
||||||
|
|
Shares
|
|
Price
|
|
Shares
|
|
Price
|
|
Shares
|
|
Price
|
|||||||
Outstanding
at beginning of year
|
699,729
|
$
|
13.70
|
687,674
|
$
|
13.28
|
619,794
|
$
|
12.51
|
||||||||||
Granted
|
97,250
|
15.32
|
57,000
|
15.13
|
122,500
|
16.22
|
|||||||||||||
Exercised
|
(74,026
|
)
|
11.47
|
(44,945
|
)
|
9.13
|
(42,620
|
)
|
9.50
|
||||||||||
Expired
|
(1,700
|
)
|
5.88
|
—
|
—
|
—
|
—
|
||||||||||||
Forfeited
|
(94,100
|
)
|
16.60
|
—
|
—
|
(12,000
|
)
|
16.77
|
|||||||||||
Outstanding
at end of year
|
627,153
|
$
|
13.80
|
699,729
|
$
|
13.70
|
687,674
|
$
|
13.28
|
||||||||||
Exercisable
at end of year
|
450,895
|
$
|
13.46
|
570,523
|
$
|
13.66
|
543,668
|
$
|
14.15
|
Weighted
average
|
|||||||
Shares
|
Fair
value
|
||||||
Non-vested
January 1, 2006
|
144,006
|
$
|
2.01
|
||||
Granted
|
57,000
|
1.82
|
|||||
Vested
|
(71,800
|
)
|
1.26
|
||||
Forfeited
|
—
|
—
|
|||||
Non-vested
December 31, 2006
|
129,206
|
$
|
2.37
|
||||
Granted
|
97,250
|
1.69
|
|||||
Vested
|
(32,898
|
)
|
2.61
|
||||
Forfeited
|
(17,300
|
)
|
2.02
|
||||
Non-vested
December 31, 2007
|
176,258
|
$
|
1.98
|
Options
Outstanding
|
|
Options
Exercisable
|
|
||||||||||||||||
Range
of exercise prices
|
|
Number
|
|
Weighted
average remaining contractual life (years)
|
|
Weighted
average exercise price
|
|
Number
|
|
Weighted
average remaining contractual life (years)
|
|
Weighted
average exercise price
|
|||||||
$5.88
- $6.18
|
5,356
|
2.0
|
$
|
6.18
|
5,356
|
2.0
|
$
|
6.18
|
|||||||||||
11.11
- 12.49
|
242,797
|
3.6
|
11.32
|
224,189
|
3.4
|
11.27
|
|||||||||||||
12.50
- 14.74
|
86,800
|
5.4
|
13.30
|
41,300
|
2.5
|
13.33
|
|||||||||||||
14.75
- 15.99
|
78,500
|
8.4
|
15.28
|
19,100
|
7.0
|
15.31
|
|||||||||||||
16.00
- 17.50
|
213,700
|
7.3
|
16.47
|
160,950
|
7.7
|
16.57
|
|||||||||||||
627,153
|
5.7
|
$
|
13.80
|
450,895
|
4.7
|
$
|
13.46
|
|
|
|
|
|
|
|
|
To
be Well
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
Capitalized
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
Under
Prompt
|
|
||||||||
|
|
|
|
|
|
Capital
Adequacy
|
|
Corrective
Action
|
|
||||||||||
|
|
Actual
|
|
|
|
Purposes
|
|
Provisions
|
|
||||||||||
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||
December
31, 2007
|
|||||||||||||||||||
Tier
1 capital (to average assets):
|
|||||||||||||||||||
Company
|
$
|
50,825
|
9.28
|
%
|
$
|
21,906
|
4.00
|
%
|
NA
|
NA
|
|||||||||
Bank
|
50,210
|
9.19
|
21,860
|
4.00
|
$
|
27,325
|
5.00
|
%
|
|||||||||||
Tier
1 capital (to risk-weighted assets):
|
|||||||||||||||||||
Company
|
50,825
|
11.37
|
17,887
|
4.00
|
NA
|
NA
|
|||||||||||||
Bank
|
50,210
|
11.26
|
17,840
|
4.00
|
26,760
|
6.00
|
|||||||||||||
Total
capital (to risk-weighted assets):
|
|||||||||||||||||||
Company
|
55,832
|
12.49
|
35,774
|
8.00
|
NA
|
NA
|
|||||||||||||
Bank
|
55,217
|
12.38
|
35,679
|
8.00
|
44,599
|
10.00
|
|||||||||||||
December
31, 2006
|
|||||||||||||||||||
Tier
1 capital (to average assets):
|
|||||||||||||||||||
Company
|
$
|
49,042
|
9.27
|
%
|
$
|
21,173
|
4.00
|
%
|
NA
|
NA
|
|||||||||
Bank
|
48,162
|
9.11
|
21,147
|
4.00
|
$
|
26,432
|
5.00
|
%
|
|||||||||||
Tier
1 capital (to risk-weighted assets):
|
|||||||||||||||||||
Company
|
49,042
|
11.03
|
17,784
|
4.00
|
NA
|
NA
|
|||||||||||||
Bank
|
48,162
|
10.91
|
17,662
|
4.00
|
26,493
|
6.00
|
|||||||||||||
Total
capital (to risk-weighted assets):
|
|||||||||||||||||||
Company
|
53,075
|
11.94
|
35,567
|
8.00
|
NA
|
NA
|
|||||||||||||
Bank
|
52,195
|
11.82
|
35,324
|
8.00
|
44,155
|
10.00
|
Before-
|
Tax
|
|||||||||
Tax
|
Benefit
|
Net-of-Tax
|
||||||||
Amount
|
(Expense)
|
Amount
|
||||||||
2007
|
||||||||||
Unrealized
holding gains arising during the year
|
$
|
71
|
($25
|
)
|
$
|
46
|
||||
Reclassification
adjustments for gains realized in net income
|
—
|
—
|
—
|
|||||||
Net
unrealized gains
|
$
|
71
|
($25
|
)
|
$
|
46
|
||||
2006
|
||||||||||
Unrealized
holding gains arising during the year
|
$
|
8
|
($3
|
)
|
$
|
5
|
||||
Reclassification
adjustments for gains realized in net income
|
—
|
—
|
—
|
|||||||
Net
unrealized gains
|
$
|
8
|
($3
|
)
|
$
|
5
|
||||
2005
|
||||||||||
Unrealized
holding losses arising during the year
|
$
|
(689
|
)
|
$
|
234
|
$
|
(455
|
)
|
||
Reclassification
adjustments for gains realized in net income
|
(2
|
)
|
1
|
(1
|
)
|
|||||
|
||||||||||
Net
unrealized losses
|
$
|
(691
|
)
|
$
|
235
|
$
|
(456
|
)
|
2007
|
|
|
|
2006
|
|
|
|
||||||
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
|
||||
|
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
|||||
Financial
Assets
|
|||||||||||||
Cash
and due from banks, interest-bearing
|
|||||||||||||
deposits
in banks, and federal funds sold
|
$
|
15,297
|
$
|
15,297
|
$
|
40,788
|
$
|
40,788
|
|||||
Securities
available for sale
|
42,912
|
42,912
|
36,608
|
36,608
|
|||||||||
Securities
held to maturity
|
4,329
|
4,368
|
6,104
|
6,101
|
|||||||||
Investment
in PFC Statutory Trusts
|
403
|
403
|
403
|
403
|
|||||||||
Federal
Home Loan Bank stock
|
1,858
|
1,858
|
1,858
|
1,858
|
|||||||||
Loans
receivable, net
|
433,904
|
434,120
|
420,768
|
420,215
|
|||||||||
Loans
held for sale
|
17,162
|
17,407
|
14,368
|
14,684
|
|||||||||
Accrued
interest receivable
|
3,165
|
3,165
|
3,006
|
3,006
|
|||||||||
Financial
Liabilities
|
|||||||||||||
Deposits
|
$
|
467,336
|
$
|
468,326
|
$
|
466,841
|
$
|
466,719
|
|||||
Short-term
borrowings
|
10,125
|
10,093
|
—
|
—
|
|||||||||
Long-term
borrowings
|
12,500
|
12,436
|
21,500
|
20,880
|
|||||||||
Secured
borrowings
|
1,418
|
1,418
|
1,906
|
1,906
|
|||||||||
Junior
subordinated debentures
|
13,403
|
13,275
|
13,403
|
13,403
|
|||||||||
Accrued
interest payable
|
1,399
|
1,399
|
1,415
|
1,415
|
Net
Income
|
Shares
|
Per
Share
|
||||||||
(Numerator)
|
(Denominator)
|
Amount
|
||||||||
Year
Ended December 31, 2007
|
||||||||||
Basic
earnings per share:
|
$
|
6,031
|
6,581,203
|
$
|
0.92
|
|||||
Effect
of dilutive securities:
|
—
|
86,839
|
(.02
|
)
|
||||||
Diluted
earnings per share:
|
$
|
6,031
|
6,668,042
|
$
|
0.90
|
|||||
Year
Ended December 31, 2006
|
||||||||||
Basic
earnings per share:
|
$
|
6,551
|
6,483,370
|
$
|
1.01
|
|||||
Effect
of dilutive securities:
|
—
|
102,437
|
(.02
|
)
|
||||||
Diluted
earnings per share:
|
$
|
6,551
|
6,585,807
|
$
|
0.99
|
|||||
Year
Ended December 31, 2005
|
||||||||||
Basic
earnings per share:
|
$
|
6,046
|
6,425,615
|
$
|
0.94
|
|||||
Effect
of dilutive securities:
|
—
|
112,635
|
(.02
|
)
|
||||||
Diluted
earnings per share:
|
$
|
6,046
|
6,538,250
|
$
|
0.92
|
2007
|
|
2006
|
|||||
Assets
|
|||||||
Cash
|
$
|
4,929
|
$
|
5,183
|
|||
Investment
in the Bank
|
63,084
|
61,104
|
|||||
Due
from the Bank
|
783
|
731
|
|||||
Other
assets
|
403
|
403
|
|||||
Total
assets
|
$
|
69,199
|
$
|
67,421
|
|||
Liabilities
and Shareholders’ Equity
|
|||||||
Dividends
payable
|
$
|
4,955
|
$
|
4,893
|
|||
Junior
subordinated debentures
|
13,403
|
13,403
|
|||||
Other
liabilities
|
142
|
141
|
|||||
Shareholders’
equity
|
50,699
|
48,984
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
69,199
|
$
|
67,421
|
2007
|
|
2006
|
|
2005
|
||||||
Dividend
Income from the Bank
|
$
|
4,700
|
$
|
5,150
|
$
|
4,250
|
||||
Other
Income
|
27
|
19
|
—
|
|||||||
Total
Income
|
4,727
|
5,169
|
4,250
|
|||||||
Expenses
|
(1,236
|
)
|
(934
|
)
|
(205
|
)
|
||||
Income
before income tax benefit
|
3,491
|
4,235
|
4,045
|
|||||||
Income
Tax Benefit
|
—
|
294
|
69
|
|||||||
Income
before equity in undistributed income of the Bank
|
3,491
|
4,529
|
4,114
|
|||||||
Equity
in Undistributed Income of the Bank
|
2,540
|
2,022
|
1,932
|
|||||||
Net
income
|
$
|
6,031
|
$
|
6,551
|
$
|
6,046
|
2007
|
2006
|
2005
|
||||||||
Operating
Activities
|
||||||||||
Net
income
|
$
|
6,031
|
$
|
6,551
|
$
|
6,046
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Equity
in undistributed income of subsidiary
|
(2,540
|
)
|
(2,022
|
)
|
(1,932
|
)
|
||||
Net
change in other assets
|
—
|
(294
|
)
|
(69
|
)
|
|||||
Net
change in other liabilities
|
1
|
141
|
—
|
|||||||
Other
- net
|
97
|
35
|
12
|
|||||||
Net
cash provided by operating activities
|
3,589
|
4,411
|
4,057
|
|||||||
Investing
Activities
|
||||||||||
Contribution
to subsidiary
|
—
|
(8,000
|
)
|
(5,000
|
)
|
|||||
Purchase
of trust common securities
|
—
|
(248
|
)
|
(155
|
)
|
|||||
Net
cash used in investing activities
|
—
|
(8,248
|
)
|
(5,155
|
)
|
|||||
Financing
Activities
|
||||||||||
Proceeds
from junior subordinated debentures
|
—
|
8,248
|
5,155
|
|||||||
Common
stock issued
|
1,269
|
642
|
405
|
|||||||
Repurchase
and retirement of common stock
|
(219
|
)
|
—
|
—
|
||||||
Dividends
paid
|
(4,893
|
)
|
(4,719
|
)
|
(4,624
|
)
|
||||
Net
cash provided by (used in) financing activities
|
(3,843
|
)
|
4,171
|
936
|
||||||
|
||||||||||
Net
increase (decrease) in cash
|
(254
|
)
|
334
|
(162
|
)
|
|||||
Cash
|
||||||||||
Beginning
of year
|
5,183
|
4,849
|
5,011
|
|||||||
End
of year
|
$
|
4,929
|
$
|
5,183
|
$
|
4,849
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
||||||
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|||||
Year
Ended December 31, 2007
|
|||||||||||||
Interest
income
|
$
|
9,811
|
$
|
10,346
|
$
|
10,331
|
$
|
9,648
|
|||||
Interest
expense
|
3,806
|
4,033
|
4,000
|
3,794
|
|||||||||
Net
interest income
|
6,005
|
6,313
|
6,331
|
5,854
|
|||||||||
Provision
for credit losses
|
257
|
105
|
60
|
60
|
|||||||||
Non-interest
income
|
946
|
1,149
|
1,063
|
1,317
|
|||||||||
Non-interest
expenses
|
4,820
|
5,184
|
5,017
|
5,358
|
|||||||||
Income
before income taxes
|
1,874
|
2,173
|
2,317
|
1,753
|
|||||||||
Income
taxes
|
340
|
607
|
686
|
453
|
|||||||||
Net
income
|
$
|
1,534
|
$
|
1,566
|
$
|
1,631
|
$
|
1,300
|
|||||
Earnings
per common share:
|
|||||||||||||
Basic
|
$
|
.23
|
$
|
.24
|
$
|
.24
|
$
|
.21
|
|||||
Diluted
|
.23
|
.24
|
.24
|
.19
|
|||||||||
Year
Ended December 31, 2006
|
|||||||||||||
Interest
income
|
$
|
8,126
|
$
|
8,763
|
$
|
9,765
|
$
|
9,790
|
|||||
Interest
expense
|
2,493
|
2,864
|
3,510
|
3,710
|
|||||||||
Net
interest income
|
5,633
|
5,899
|
6,255
|
6,080
|
|||||||||
Provision
for credit losses
|
—
|
—
|
550
|
75
|
|||||||||
Non-interest
income
|
946
|
1,089
|
1,091
|
1,050
|
|||||||||
Non-interest
expenses
|
4,314
|
4,466
|
4,636
|
4,702
|
|||||||||
Income
before income taxes
|
2,265
|
2,522
|
2,160
|
2,353
|
|||||||||
Income
taxes
|
675
|
777
|
617
|
680
|
|||||||||
Net
income
|
$
|
1,590
|
$
|
1,745
|
$
|
1,543
|
$
|
1,673
|
|||||
Earnings
per common share:
|
|||||||||||||
Basic
|
$
|
.25
|
$
|
.27
|
$
|
.24
|
$
|
.25
|
|||||
Diluted
|
.24
|
.27
|
.23
|
.25
|
PACIFIC
FINANCIAL CORPORATION
(Registrant)
|
|||
/s/ Dennis A. Long | /s/ Denise Portmann | ||
Dennis A. Long, President and CEO |
Denise Portmann, CFO |
||
Principal
Executive Officer and Director
|
Principal
Financial and Accounting Officer
|
|
/s/
Dennis A. Long
|
/s/
Denise Portmann
|
|
Dennis
A. Long, President and CEO and Director
|
Denise
Portmann, CFO
|
|
Principal
Executive Officer
|
Principal
Financial and Accounting Officer
|
|
Remaining
Directors
|
||
/s/
Gary C. Forcum
|
/s/
G. Dennis Archer
|
|
Gary
C. Forcum (Chairman of the Board)
|
G.
Dennis Archer
|
|
/s/
Joseph A. Malik
|
/s/
Duane E. Hagstrom
|
|
Joseph
A. Malik
|
Duane
E. Hagstrom
|
|
/s/
Steward L. Thomas
|
/s/
John Ferlin
|
|
Steward
L. Thomas
|
John
Ferlin
|
|
/s/
Douglas M. Schermer
|
/s/
Robert J. Worrell
|
|
Douglas
M. Schermer
|
Robert
J. Worrell
|
|
/s/
Susan C. Freese
|
/s/
Randy W. Rognlin
|
|
Susan
C. Freese
|
Randy
W. Rognlin
|
|
/s/
Randy Rust
|
/s/
Edwin Ketel
|
|
Randy
Rust
|
Edwin
Ketel
|
|
EXHIBIT
NO.
|
EXHIBIT
|
||
3.1
|
Restated
Articles of Incorporation. Incorporated by reference to Exhibit 3.2
to the
Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30,
2000.
|
||
3.2
|
Bylaws.
Incorporated by reference to Exhibit 2b to Form 8-A filed by the
Company
and
declared effective on March 7, 2000 (Registration No.
000-29329).
|
||
10.1*
|
Employment
Agreement with Dennis A. Long dated July 1, 2005. Incorporated by
reference
to Exhibit 10.1 to the Company's Annual Report on Form 10-K for the
year
ended
December 31, 2006 (the "2005 10-K").*
|
||
10.2
|
Employment
Agreement with John Van Dijk dated July 1, 2005. Incorporated by
reference
to Exhibit 10.2 to the 2005 10-K.*
|
||
10.3
|
Employment
Agreement with Bruce D. MacNaughton dated July 1, 2005. Incorporated
by
reference to Exhibit 10.3 to the 2005 10-K.*
|
||
10.4
|
Employment
Agreement with Denise Portmann dated July 1, 2005. Incorporated
by reference
to Exhibit 10.4 to the 2005 10-K.*
|
||
10.5
|
Bank
of the Pacific Incentive Stock Option Plan. Incorporated by reference
to
Exhibit 10.7
to the Company’s Annual Report on Form 10-K for the year ended December
31, 1999
(the "1999 10-K").*
|
||
10.6
|
The
Bank of Grays Harbor Incentive Stock Option Plan. Incorporated by
reference to Exhibit
10.8 of the 1999 10-K.*
|
||
10.7
|
2000
Stock Incentive Compensation Plan, as amended (the "2000 Plan").
Incorporated by reference
to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended
March 31, 2007 (the "March 2007 10-Q").*
|
||
10.8
|
Forms
of stock option agreements under the 2000 Plan. Incorporated by reference
to Exhibits
10.2 and 10.3 to the March 2007 10-Q.*
|
||
10.9
|
Senior
Officer Incentive Plan.*
|
||
10.10
|
The
Bank of Grays Harbor Employee Deferred Compensation Plan. Incorporated
by reference
to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the year
ended
December 31, 2000.*
|
||
10.11
|
Supplemental
Executive Retirement Plan effective January 1, 2007. Incorporated
by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
dated March 13, 2008 (the "March 2008 8-K")*.
|
||
10.12
|
Individual
Participation Agreement (SERP) dated March 13, 2008,
between the Company
and Dennis A. Long. Incorporated
by reference to Exhibit 10.2 to the March 2008
8-K.*
|
||
10.13
|
Individual
Participation Agreement (SERP) dated March 13, 2008,
between the Company
and John Van Dijk. Incorporated
by reference to Exhibit 10.3 to the March 2008
8-K.*
|
||
10.14
|
Individual
Participation Agreement (SERP) dated March 13, 2008,
between the Company
and Bruce MacNaughton. Incorporated by
reference to Exhibit 10.4 to the March 2008 8-K.*
|
||
10.15
|
Individual
Participation Agreement (SERP) dated March 13, 2008,
between the Company
and Denise Portmann. Incorporated by reference
to Exhibit 10.5 to the March 2008 8-K.*
|
||
21
|
Subsidiaries
of Registrant - Bank of the Pacific, organized under Washington
law
|
||
23.1
|
Consent
of Deloitte & Touche, LLP, Independent Registered Public Accounting
Firm
|
||
23.2
|
Consent
of McGladrey & Pullen, LLP, Independent Registered Public Accounting
Firm
|
||
31.1
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a)
|
||
31.2
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a)
|
||
32
|
Certifications
Under 18 U.S.C. 1350
|
||
99
|
Description
of common stock of the Company. Incorporated by reference to Exhibit
99
to the Company’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2000.
|
||
*
Listed document is a management contract, compensation plan or
arrangement.
|