8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 25, 2007

Independence Bancshares, Inc.

(Exact name of registrant

as specified in its charter)

South Carolina	333-121485	20-1734180
(State or other	(Commission	(I.R.S. Employer
jurisdiction of	File Number)	Identification No.)
incorporation)

500 East Washington Street, Greenville, South Carolina  29601
(Address of principal executive offices)             (Zip Code)

Registrant’s telephone number, including area code:  (864) 672-1776

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 25, 2007, Independence Bancshares, Inc., the bank holding company for Independence National Bank, issued a letter to its shareholders announcing its financial results for the year ended December 31, 2006.

Certain statements in the attached document contain “forward-looking statements,” such as statements relating to future plans and expectations.  Such forward-looking statements are subject to risks and uncertainties, such as a downturn in the economy, greater than expected non-interest expenses or excessive loan losses, which could cause actual results to differ materially from future plans and expectations expressed or implied by such forward-looking statements. For a more detailed description of factors that could cause such differences, please see our filings with the SEC.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate.  Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized.  The inclusion of this forward-looking information should not be construed as a representation by our company or any person that future events, plans, or expectations contemplated by our company will be achieved.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

A copy of the communication to shareholders is attached hereto as Exhibit 99.1.

ITEM 9.01FINANCIAL STATEMENTS AND EXHIBITS

(d)Exhibits.

The following exhibit is filed as part of this report:

Exhibit Number	Description
99.1	Communication to Shareholders for year ended December 31, 2006.

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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 hereunto duly authorized.

		INDEPENDENCE BANCSHARES, INC.
		By:	/s/ Lawrence R. Miller
		Name:	Lawrence R. Miller
		Title:	Chief Executive Officer
Dated:	January 25, 2007

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Communication to Shareholders for year ended December 31, 2006.

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EX-99.1

Exhibit 99.1

January 25, 2007

Dear Shareholder:

We are pleased to report the results of our first full year of operations and our first profitable quarter.  We finished the year strong and believe we have established a good foundation on which to continue to grow during 2007.      

At December 31, 2006, total gross loans outstanding were $63.0 million, increasing $8.1 million, or 15%, from September 30, 2006, and $37.0 million, or 142%, from December 31, 2005.  Total deposits as of December 31, 2006 were $56.9 million, increasing $12.8 million, or 29%, from September 30, 2006, and $40.5 million, or 247%, from December 31, 2005.  During the fourth quarter, we began using brokered deposits to support loan growth.  At the end of the year, brokered deposits were $12.4 million.  Prior to fourth quarter, deposit growth was achieved through strong deposit campaigns in our local market.  We continue to focus on attracting local deposits in our highly competitive market.

For the quarter ended December 31, 2006, operations resulted in net income of $20,790, representing our first profitable quarter.  We recognized $736,438 in net interest income for the quarter ended December 31, 2006 compared to $687,927 for the quarter ended September 30, 2006, an increase of $48,511, or 7%.  Net interest income for the year ended December 31, 2006 was $2.5 million.  We plan to continue our focus on the growth of deposits, loans, and our overall asset base, which will drive growth in net interest income and profitability in future quarters. 

During the quarter ended December 31, 2006, we recorded provision for loan losses of $110,000 compared to $522,750 for the quarter ended September 30, 2006.  As of December 31, 2006, it was determined that no additional reserve was needed for the loan relationship that became impaired during the third quarter.  The specific reserve of $398,900 (pre-tax) that was recorded in third quarter related to this loan relationship is included in the total allowance for loan losses as of December 31, 2006.  We are continuing to take action to mitigate the ultimate loss from this relationship. 

Independence National Bank is a full service commercial bank, providing traditional loan and deposit services, as well as online banking, commercial cash management, remote deposit capture, and other essential services for our clients.  We strive to maintain a personal focus and are dedicated to meeting the needs of our clients.  We value your support as a shareholder.  Please do not hesitate to contact us with any questions you may have. 

Best Regards,

Lawrence R. Miller	Charles D. Walters
President & CEO	Chairman of the Board

Financial Highlights

(unaudited)

Balance Sheet	As of
Data	12/31/2006		09/30/2006		12/31/2005
Total assets	$	75,730,333	$	67,788,237	$	40,813,891
Loans, gross	62,953,197		54,856,789		25,996,491
Allowance for loan losses	1,198,153		1,093,750		338,000
Deposits	56,906,716		44,057,888		16,416,346
Shareholders’ equity	18,473,469		18,406,290		19,038,548

Income Statement Data	For the Year Ended 12/31/2006			For the Quarter Ended 12/31/2006		For the Quarter Ended 09/30/2006
Net interest income	$	2,494,657		$	736,438	$	687,927
Provision for loan losses	865,750			110,000		522,750
Non-interest income	49,132			12,220		11,849
Non-interest expense	2,541,527			613,948		614,515
Net (loss) income	(641,728		)	20,790		(324,319		)
Net (loss) income per diluted share	$	(0.31	)	$	0.01	$	(0.16	)

Quarterly Net Interest Income ($$ in thousands)

Quarter End Gross Loans Outstanding ($$ in millions)

Quarter End Deposits Outstanding ($$ in millions)

Quarter End Total Assets ($$ in millions)

Certain statements in this document contain “forward-looking statements,” such as statements relating to future plans and expectations.  Such forward-looking statements are subject to risks and uncertainties, such as a downturn in the economy, greater than expected non-interest expenses or excessive loan losses, which could cause actual results to differ materially from future plans and expectations expressed or implied by such forward-looking statements. For a more detailed description of factors that could cause such differences, please see our filings with the SEC.

STOCK TRANSFER AGENT

Registrar & Transfer Company

Investor Relations Department

10 Commerce Drive

Cranford, NJ  07016-3572

(800) 368-5948

Registrar & Transfer Company makes it possible for you to update shareholder information online.  If you have had a change in address or other shareholder information, visit www.rtco.com, click on investor relations, and make your changes now!

FINANCIAL INFORMATION

Shareholders, analysts, and others seeking financial information should contact:

Ms. Kimberly D. Barrs

Chief Financial Officer

Independence Bancshares, Inc.

P. O. Box 1776

Greenville, SC  29602

500 E. Washington Street

Greenville, SC  29601

(864) 672-1776

24 Hour Account Access

(800) 657-7670

www.IndependenceNB.com

QUARTERLY REPORT TO SHAREHOLDERS

December 31, 2006