-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IGOZ99UkLpRywW/qib5evS/GQ+vxG1GuXm8BBR5MLQchxQE/LwUTL7WF16hnbwmm Yqx/WcqLyUnWwN4dKOYBzw== /in/edgar/work/0000950129-00-004993/0000950129-00-004993.txt : 20001017 0000950129-00-004993.hdr.sgml : 20001017 ACCESSION NUMBER: 0000950129-00-004993 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20001016 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRANDBANC INC CENTRAL INDEX KEY: 0000719488 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 521332050 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 000-16187 FILM NUMBER: 740992 BUSINESS ADDRESS: STREET 1: 1800 ROCKVILLE PIKE STREET 2: PO BOX 2022 CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: 3017701300 MAIL ADDRESS: STREET 1: 1800 ROCKVILLE PIKE CITY: ROCKVILLE STATE: MD ZIP: 20852 FORMER COMPANY: FORMER CONFORMED NAME: FWB BANCORPORATION DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY BANCSHARES INC CENTRAL INDEX KEY: 0000785813 STANDARD INDUSTRIAL CLASSIFICATION: [6021 ] IRS NUMBER: 521489098 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 1275 PENNSYLVANIA AVE., N.W. CITY: WASHINGTON STATE: DC ZIP: 20004 BUSINESS PHONE: 202-496-40 MAIL ADDRESS: STREET 1: 1275 PENNSYLVANIA AVE NW CITY: WASHINGTON STATE: DC ZIP: 20004 425 1 h80984e425.txt CENTURY BANCSHARES, INC. FOR GRANDBANC, INC. 1 Filed by Century Bancshares, Inc. Pursuant to Rule 425 of the Securities Act of 1933 Subject Company: GrandBanc, Inc. Commission File No: 000-16234 THE FOLLOWING COMMUNICATION WILL BE DISSEMINATED TO EMPLOYEES OF GRANDBANC, INC. BEGINNING ON OCTOBER 16, 2000: CENTURY BANCSHARES, INC. ABOUT CENTURY NATIONAL BANK Century National Bank -- a locally-owned and operated community bank--has been serving the Washington DC metropolitan area for over 17 years. Century has remained competitive by offering a wide array of products--comparable to those at larger banks--while maintaining a high level of personal service. Century is committed to building strong relationships in order to meet the needs of area professionals, non-profit organizations and small businesses. Responsiveness to customer requests and quick turnaround on credit and loan requests are just a few of the ways that we meet this goal. At Century, we recognize that each customer's banking needs are unique. That is why we remain committed to providing the most personalized and friendly service in town. FUTURE DIRECTION Since 1994, part of Century's strategic plan has been seeking out opportunities to expand our branch network throughout the Washington DC metropolitan area. In the last six years, Century has opened one branch office in the District of Columbia, one in Montgomery County, Maryland and three in Northern Virginia. These new offices have allowed us to reach new customers and provide more convenient service to our existing customers. As the Washington metro area continues to grow, it is important for us to bring branches to the communities where our customers live and work. In 2000, Century looks forward to opening a new loan production office in Rockville, Maryland followed by a new full-service branch office in Reston, Virginia. In addition to expanding our branch network, Century is always looking for products to bring to our customers. 1999 saw the expansion of our mortgage lending department; the development of an insurance agency and a strategic partnership with Washington Financial, LLC in order to provide insurance products; and an enhanced credit card program. In the coming months, Century looks to providing our customers with debit cards and on-line banking services. As we grow in branches and services, we look forward to being your bank for the NEW CENTURY. 2 CENTURY BANCSHARES, INC. CHAIRMAN'S MESSAGE To Our Shareholders and Friends: As the century came to a close, growth and expansion remained the two defining trends for Century National Bank. New product lines were added. Existing products were enhanced. All of these changes were implemented as part of our continuing effort to improve the quality of service we provide our customers. During the first quarter of 1999, our mortgage lending department was expanded to offer a wider variety of loan products. These new products became available just as interest rates fell to the lowest point in 4 years, and Century was ready to serve the needs of customers looking to refinance or purchase homes. In December, our credit card program was enhanced to include many new features, such as airline miles and purchase points. In mid-October, Century Insurance Agency, LLC, a subsidiary of Century National Bank, opened its doors. Offering life, health, disability, and many other types of insurance, the agency provides these products with the personalized and friendly service our customers have come to expect. Not only are a number of new "non-traditional" financial products available at Century, but the time-consuming process of obtaining additional insurance needed for a loan is simplified when your banker can also be your insurance agent. Another milestone in the month of October was the opening of Century's sixth branch office in Dumfries, Virginia. The acquisition of the former One Valley branch represents our continuing goal to expand into the Washington, DC metro area suburbs. Dumfries is the third branch of Century National Bank to open in Northern Virginia and the first in Prince William County. Century's net income reached a record $1.2 million in 1999. The increase in earnings reflects the continued growth in loans and deposits resulting from our expansion into the Maryland and Virginia suburbs of Washington, DC as well as the introduction of new fee-based products and services. As the next century opens, we look forward to bringing new products and services to our customers, while maintaining the high level of service for which we are known. A sneak peek at what's ahead: debit cards and Internet banking will be making their debut in 2000. Sincerely, /s/ JOSEPH S. BRACEWELL Joseph S. Bracewell Chairman of the Board 3 CENTURY BANCSHARES, INC. FINANCIAL HIGHLIGHTS (In Thousands, except per share amounts)
AVERAGES 1999 1998 1997 - -------- ---------- ---------- ---------- Assets $ 170,157 $ 144,738 $ 114,461 Loans, net 128,419 99,724 75,908 Deposits 138,388 121,543 96,744 Stockholders' equity 15,546 14,189 8,773
AT YEAR-END 1999 1998 1997 - ----------- ---------- ---------- ---------- Assets $ 204,809 $ 151,350 $ 152,640 Loans, net 138,076 115,231 94,171 Deposits 153,900 126,211 129,605 Stockholders' equity 15,668 15,317 13,536
FOR THE YEAR 1999 1998 1997 - ------------ ---------- ---------- ---------- Net income $ 1,189 $ 637 $ 336 Diluted earnings per share 0.42 0.24 0.18 Book value per share 5.76 5.40 5.29
FINANCIAL HIGHLIGHTS REFER TO CENTURY BANCSHARES 1999 ANNUAL REPORT ON FORM 10-K FOR A COMPLETE SET OF CONSOLIDATED FINANCIAL STATEMENTS. [Graphic of Bar Charts depicting Average Assets, Average Deposits, Average Loans, Average Equity] 4 CENTURY BANCSHARES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (In thousands, except per share amounts)
INCOME STATEMENT DATA 1999 1998 1997 1996 1995 - --------------------- ---------- ---------- ---------- ---------- ---------- Interest income $ 13,220 $ 11,355 $ 9,209 $ 7,690 $ 7,079 Interest expense 4,996 4,537 3,765 2,776 2,562 ---------- ---------- ---------- ---------- ---------- Net interest income 8,224 6,818 5,444 4,914 4,517 Provision for credit losses 640 620 336 160 26 ---------- ---------- ---------- ---------- ---------- Net interest income after provision for credit losses 7,584 6,198 5,108 4,754 4,491 Noninterest income 1,669 1,103 922 720 590 Noninterest expense 7,335 6,309 5,460 4,920 4,157 ---------- ---------- ---------- ---------- ---------- Income before taxes 1,918 992 570 554 924 Income taxes 729 355 234 275 311 ---------- ---------- ---------- ---------- ---------- Net income $ 1,189 $ 637 $ 336 $ 279 $ 613 COMMON SHARE DATA (1) - --------------------- Net income - basic $ 0.42 $ 0.24 $ 0.20 $ 0.20 $ 0.53 Net income - diluted 0.42 0.24 0.18 0.19 0.50 Book value (2) 5.76 5.40 5.29 4.85 4.68 Common shares outstanding - end of period 2,721,902 2,574,219 2,209,229 1,146,028 1,046,047 Weighted average common shares 2,804,994 2,632,787 1,710,316 1,371,940 1,153,943 Diluted weighted average common shares 2,832,683 2,688,583 1,852,683 1,454,483 1,213,698 BALANCE SHEET DATA - ------------------ Total assets $ 204,809 $ 151,350 $ 152,640 $ 107,186 $ 101,730 Investments (3) 53,144 23,385 46,632 25,631 21,690 Total loans, net 138,076 115,231 94,171 70,676 69,204 Allowance for credit losses 1,519 1,128 887 826 740 Total deposits 153,900 126,211 129,605 90,985 90,539 Long term debt 11,900 5,301 6,511 6,850 -- Total stockholders' equity 15,668 15,317 13,536 6,750 6,365 PERFORMANCE DATA - ---------------- Return on average total assets 0.70% 0.44% 0.29% 0.27% 0.68% Return on average total equity 7.65 4.49 3.83 4.20 11.49 Net interest margin 5.15 5.07 5.17 5.74 5.42 Loans to deposit 89.7 91.3 72.7 77.7 76.4 ASSET QUALITY RATIOS - -------------------- Nonperforming assets to total assets 0.25% 1.02% 0.49% 0.30% 0.49% Nonperforming loans to total loans 0.37 1.34 0.74 0.46 0.45 Net loan charge-offs to average loans 0.21 0.38 0.36 0.10 0.04 Allowance for credit losses to total loans 1.10 0.98 0.94 1.17 1.07 Allowance to nonperforming loans 295 73 127 257 240 CAPITAL RATIOS - -------------- Tier 1 risk based capital 9.74% 11.60% 12.27% 8.99% 9.22% Total risk based capital 10.79 12.56 13.19 10.13 10.34 Tier 1 leverage 7.64 9.46 8.83 6.35 6.80
Notes: (1) Per share data has been adjusted to reflect five percent Common Stock dividends in 1999, 1998, 1997 and 1995, seven percent Common Stock dividends in 1996, and retroactively restated to reflect the five percent Common Stock dividends declared on February 18, 2000. (2) Book value per common share is based on stockholders' equity divided by the number of common shares outstanding, adjusted for stock dividends. (3) Investments include federal funds sold and interest-bearing deposits in other financial institutions. REFER TO CENTURY BANCSHARES 1999 ANNUAL REPORT ON FORM 10-K FOR A COMPLETE SET OF CONSOLIDATED FINANCIAL STATEMENTS. 5 CENTURY BANCSHARES, INC. FINANCIAL REVIEW This summary annual report presents the financial condition and operating results of Century Bancshares, Inc. (the Company) and its wholly owned subsidiary bank, Century National Bank (the Bank). This simplified format is provided for your information. Shareholders desiring more detailed information may request a copy of the Company's 1999 Annual Report on Form 10-K. You may also visit our web site at: http:www.centurybank.com for other information about your Company. OVERVIEW Century Bancshares, Inc. was incorporated in Delaware in 1985. As a registered bank holding company, the Company conducts most of its business through its subsidiary, Century National Bank, a full service bank which opened for business in 1982. The Bank provides a broad line of financial products and services to small and middle market businesses and individuals in the greater Washington, DC metropolitan area. As of December 31, 1999, the Company had total assets of $204.8 million, total loans of $138.1 million, total deposits of $153.9 million, and total stockholders' equity of $15.7 million. With the addition of a new Prince William County branch office in Dumfries, Virginia, in October 1999, the Company operates six banking offices, as follows: INTERNATIONAL SQUARE BRANCH - MAIN OFFICE 1875 Eye Street, NW, Washington, DC 20006 PENNSYLVANIA AVENUE BRANCH - 1275 Pennsylvania Avenue, NW, Washington, DC 20004 MCLEAN BRANCH - 6832 Old Dominion Drive, McLean, Virginia 22101 TYSONS CORNER BRANCH - 8251 Greensboro Drive, McLean, Virginia 22102 BETHESDA BRANCH - 7625 Wisconsin Avenue, Bethesda, Maryland 20814 DUMFRIES BRANCH - 18116 Triangle Shopping Plaza, Dumfries, Virginia 22026 The Company's principal executive offices are located at 1275 Pennsylvania Avenue, NW, Washington, DC 20004, and its phone number at that address is (202) 496-4100. At December 31, 1999, there were approximately 1,000 shareholders of the Company's common stock. COMPANY OPERATIONS [Graphic of twenty dollar bills] GENERAL The Company holds deposits for individuals, businesses, and other organizations, and provides certain services related thereto for the convenience of its depositors. In most cases, the Company pays interest on funds which it holds on deposit for customers, and it also charges fees for certain services that it provides. The interest expense paid on deposits, and the noninterest income earned from service charges, are primarily related to the volume of deposits handled by the Company. The Company's primary source of revenue is the interest income and fees which it earns by lending and investing the funds which are held on deposit. Because loans generally earn higher rates of interest than investments, the Company seeks to employ as much of its deposit funds as possible in the form of loans to individuals, businesses and other organizations. In the interest of liquidity, however, a portion of the Company's deposits are maintained in cash, government securities, deposits with other financial institutions, and overnight loans of excess reserves (known as "federal funds sold") to large correspondent banks. The revenue which the Company earns is essentially a function of the amount of the Company's loans and deposits, as well as the profit margin and fee income which can be generated thereon. 6 GROWTH OF OPERATIONS The Company's current strategic plan is directed toward the enhancement of its franchise value and operating profitability through a significant increase in its asset size, the development of new commercial accounts and loans, and expansion in the nearby Maryland and Virginia markets. The Company plans to acquire or establish banking offices in high-density commercial districts, and may in some cases open a temporary loan production office prior to establishing a full service branch. The Company acquired its first branch office in downtown Washington, DC in 1994 and in 1996 established an LPO in Tysons Corner, Virginia, which was replaced by a full service branch in April 1997. In October 1997, the Company purchased a full-service branch in McLean, Virginia, from Eastern American Bank, FSB. In June 1997, the Company established an LPO in Bethesda, Maryland, which was replaced by a full service branch in January 1998. In October 1999, the Company acquired a full-service branch in Dumfries, Virginia, from One Valley Bancorp. [Graphic of pencil and receipts] EMPLOYEES AND PREMISES At December 31, 1999, the Company employed 60 employees. The Company's principal executive offices and all of its banking offices are leased under agreements expiring at various dates, including renewal options, through 2012. LEGAL MATTERS The nature of the business of the Company causes it (and the Bank) to be involved in routine legal proceedings from time to time. Management of the Company believes that there are no pending or threatened legal proceedings that upon resolution would have a material adverse impact on the Company. [Graphic of people's legs and briefcase] STOCKHOLDER MATTERS The Company's Common Stock currently trades on the NASDAQ SmallCap Market under the symbol "CTRY." Continued inclusion of the Common Stock for quotation on the NASDAQ SmallCap Market requires that the Company satisfy a minimum tangible net worth or net income standard, and that the Common Stock satisfy minimum standards as to public float, bid price and market makers. There can be no assurance, however, that the Company will continue to satisfy these requirements. The Company has not paid cash dividends on its shares of Common Stock to date. The declaration and payment of future cash dividends will depend on, among other things, the Company's earnings, the general economic and regulatory climate, the Company's liquidity and capital requirements, and other factors deemed relevant by the Company's Board of Directors. The Company's ability to pay dividends is limited in part, by the ability of the Bank to pay dividends to the Company. The Company has declared stock dividends from time to time in the past. The most recent stock dividend declared by the Company was a 5% stock dividend declared on February 18, 2000, payable on April 17, 2000, to holders of record of shares of Common Stock as of March 15, 2000. The declaration of future stock dividends is at the discretion of the Board of Directors. RESULTS OF OPERATIONS [Graphic of dollar bills] NET INCOME Net income was $1,188,622 ($0.42 per diluted common share) for 1999, compared with net income of $636,884 ($0.24 per diluted common share) for 1998, an increase of $551,738 or 87%. The increase in net income for 1999 compared with 1998 resulted principally from a $1,406,044 increase in net interest income and a $565,864 increase in noninterest income. These increases were the result of an 18.6% increase in average earning assets and the addition of four new branch offices during the past three years. Partially offsetting these increases during 1999 were a corresponding increase in average interest-bearing liabilities of 18.1%, as well as increases in several noninterest expense categories resulting from the establishment of the four new branch office locations, and a $20,000 increase in the provision for credit losses resulting from increased reserves in relation to loan portfolio growth during the year. 7 NET INTEREST INCOME Net interest income was $8,223,952 for 1999, an increase of $1,406,044 or 20.6% compared with net interest income of $6,817,908 for 1998. The Company's average total interest-earning assets increased to $159.6 million for 1999 from $134.6 million for 1998, representing an 18.6% increase between the years. The net interest margin of 5.15% for 1999 increased 8 basis points from 5.07% for 1998, the result of a 30 basis point decline in the average cost of interest bearing liabilities, which was partially offset by a 16 basis point decline in the average yield on interest earning assets. PROVISION FOR CREDIT LOSSES Provisions for credit losses are charged to income to bring the total allowance for credit losses to a level deemed appropriate by management based on such factors as historical experience, the volume and type of lending conducted by the Company, the amount of nonperforming assets, regulatory policies, generally accepted accounting principles, general economic conditions, and other factors related to the collectibility of loans in the Company's portfolio. The provision for credit losses was $640,000 in 1999, compared with $620,000 for 1998, increasing $20,000, or 3.2%. The increase was largely the result of a 19.8% increase in loans, net of unearned income, to $138.1 million at December 31, 1999 from $115.2 million at year-end 1998. Net charge-offs decreased to $249,000 in 1999, from $379,000 in 1998, the result of a $134,000 decrease in charge-offs in the commercial loan portfolio accompanied by reduced charge-offs and recoveries in other loan categories. Management believes the allowance is adequate to absorb losses inherent in the loan portfolio. [Graphic of dollar bills and coins] NONINTEREST INCOME Noninterest income for 1999 was $1,669,137, an increase of $565,864 or 51.3% compared with noninterest income of $1,103,273 in 1998. This increase resulted largely from growth of fees earned in the credit card program, increases in service charges on deposit accounts, commissions from a new mortgage loan origination program, as well as other commissions and other fee income. NONINTEREST EXPENSE Noninterest expense was $7,335,254 in 1999, compared with $6,309,406 in 1998, representing an increase of $1,025,848 or 16.3%. The increase in 1999 was due largely to increases in salaries and employee benefits of $782,937 and data processing services of $422,265. These increases in salaries and employee benefits reflect the opening of the Dumfries branch office in October 1999, a full year of compensation expense for the employees at the branch opened in 1998, the addition of personnel to support growth in the loan portfolio, and a reduction in the amount of loan origination costs deferred in the current year. The increases in the cost of data processing services were primarily attributable to growth in the credit card program, additional transaction volume, and efforts to prepare for and comply with Year 2000 readiness issues. INCOME TAX EXPENSE The Company's income tax expense includes federal, state and local income taxes. The provision for income taxes was $729,213 in 1999 compared to $354,891 in 1998 and $233,602 in 1997. This reflects effective tax rates of 38.0 percent in 1999, 35.8 percent in 1998, and 41.0 percent in 1997. The effective tax rate was reduced in 1999 and 1998 from previous years due to the increase in interest income derived from US agency securities and short term investments which are not fully taxable for state and local purposes, and a greater portion of earnings derived from Virginia and Maryland where the local income tax rates are lower than in Washington, DC. [Graphic of calculator, coffee, paper] LOANS The Company presently is, and in the future expects to remain, a middle market banking organization serving professionals and businesses with interests in and around the Washington, DC metropolitan area. As of December 31, 1999 and 1998, approximately $90.0 million (65%) and $73.8 million (64%) of the Company's total loan portfolio, respectively, consisted of loans secured by real estate, of which one-to-four-family residential mortgage loans and home 8 equity lines of credit represented $34.7 million (25%) and $34.9 million (30%), respectively, of the Company's total loan portfolio. Loan concentrations are defined as aggregate credits extended to a number of borrowers engaged in similar activities or resident in the same geographic region, which would cause them to be similarly affected by economic or other conditions. The Company, on a routine basis, evaluates these concentrations for purposes of policing its concentrations and making necessary adjustments in its lending practices to reflect current economic conditions, loan to deposit ratios, and industry trends. As a result of the Company's existing branch locations, the Company has significant concentrations of customers and assets in the Washington, DC metropolitan area. ASSET QUALITY NONPERFORMING ASSETS Generally, interest on loans is accrued and credited to income based upon the principal balance outstanding. It is the Company's policy to discontinue the accrual of interest income and classify a loan as non-accrual when principal or interest is past due 90 days or more and the loan is not well secured and in the process of collection, or when, in the opinion of management, principal or interest is not likely to be paid in accordance with the terms of the obligation. The Company will generally charge-off loans after 120 days of delinquency unless adequately collateralized and in the process of collection. A loan is considered in the process of collection if, based on a probable specific event, management believes that the loan will be repaid or brought current within a reasonable period of time. Loans will not be returned to accrual status until the loan has been brought current and future payments of principal and interest appear certain. Interest accrued and unpaid at the time a loan is placed on non-accrual status is charged against interest income. Subsequent payments received are applied to the outstanding principal balance until the status of the loan has changed. The following table sets forth certain information with respect to the Company's non-accrual loans, OREO, and accruing loans which are contractually past due 90 days or more as to principal or interest, for the periods indicated:
NONPERFORMING ASSETS (DOLLARS IN THOUSANDS) Year Ended December 31, ------------------------------------------ 1999 1998 1997 ---------- ---------- ---------- Non-accrual loans $ 515 $ 1,163 $ 624 Accruing past due 90 days or more -- 383 76 ---------- ---------- ---------- Total nonperforming loans 515 1,546 700 Other real estate owned -- -- 52 Total nonperforming loans $ 515 $ 1,546 $ 752 ---------- ---------- ---------- Nonperforming loans to total loans 0.37% 1.34% 0.74% Nonperforming to total assets 0.25% 1.02% 0.49%
ALLOWANCE FOR CREDIT LOSSES The Company maintains an allowance for credit losses based upon, among other things, such factors as historical experience, the volume and type of lending conducted by the Company, the amount of nonperforming assets, regulatory policies, generally accepted accounting principles, general economic conditions, and other factors related to the collectibility of loans in the Company's portfolio. Although management believes it uses the best information available to make determinations with respect to the allowance for credit losses, future adjustments may be necessary if such factors and conditions differ from the assumptions used in making the initial determinations. Based upon criteria consistently applied during the periods, the Company's allowance for credit losses was $1,519,000 (1.10% of total loans), $1,128,000 (0.98% of total loans) and $887,000 (0.94% of total loans) as of 9 December 31, 1999, 1998 and 1997, respectively. The allowance for credit losses as a percentage of nonperforming loans was 295%, 73% and 127% as of December 31, 1999, 1998 and 1997, respectively. The following table sets forth an analysis of the Company's allowance for credit losses for the periods indicated:
ALLOWANCE FOR CREDIT LOSSES (DOLLARS IN THOUSANDS) Year Ended December 31, 1999 1998 1997 ------ ------ ------ Beginning balance of allowance $1,128 $ 887 $ 826 Loans charged-off 270 487 452 Recoveries of previous charge-offs 21 108 177 ------ ------ ------ Net loans charged-off 249 379 275 Provision for credit losses 640 620 336 ------ ------ ------ Balance at end of period $1,519 $1,128 $ 887 ------ ------ ------ Net charge-offs to average loans 0.19% 0.38% 0.36% Allowance as % of total loans 1.10 0.98 0.94 Nonperforming loans as % of total loan 0.37 1.34 0.74 Allowance as % of nonperforming loan 295 73 127
INVESTMENT ACTIVITIES The Company's investment portfolio of $22.5 million as of December 31, 1999 consisted mostly of U.S. government agency obligations. This represented an increase of $13.2 million compared to the investment securities of $9.3 million at December 31, 1998. Investment securities available-for-sale are stated at fair value. These securities may be sold, retained until maturity, or pledged as collateral for liquidity and borrowing in response to changing interest rates, changes in prepayment risk, and other factors as a part of the Company's overall asset liability management strategy. Investment securities held-to-maturity are stated at cost, adjusted for amortization of premium and accretion of discount. The Company has the intent and ability to hold these securities until maturity, and they are also available to be pledged as collateral for liquidity and borrowing needs if and when such needs may occur. DEPOSIT ACTIVITIES The Company's total deposits at year-end 1999 were $153.9 million, an increase of $27.7 million, or 22%, compared to the year-end 1998 balance. Total average deposits were $138.4 million for the year ended December 31, 1999, an increase of $16.8 million, or 14% compared with average deposits of $121.5 million for the year ended December 31, 1998. The Company views deposit growth as a significant challenge in its effort to increase its asset size. Thus, the Company is focusing on its branching program with increased emphasis on commercial accounts, and the offering of more competitive interest rates and products to stimulate deposit growth. BORROWINGS Borrowings consist of advances from the Federal Home Loan Bank of Atlanta ("FHLBA"), deposits received in the Company's U.S. Treasury Tax and Loan Account, and securities sold under repurchase agreements. Such borrowings were $33.3 million and $8.5 million at December 31, 1999 and 1998 respectively. LIQUIDITY The Company's Asset/Liability Management Policy is intended to maintain adequate liquidity for the Company and thereby enhance its ability to raise funds to support asset growth, meet deposit withdrawals and lending needs, maintain reserve requirements and otherwise sustain operations. The Company accomplishes this 10 primarily through management of the maturities of its interest-earning assets and interest-bearing liabilities. The Company believes that its present liquidity position is adequate to meet its current and future needs. Asset liquidity is provided by cash and assets which are readily marketable, or which can be pledged, or which will mature in the near future. The asset liquidity of the Bank is maintained in the form of vault cash, demand deposits with commercial banks, federal funds sold, interest bearing deposits with other financial institutions, short- term investment securities, other investment securities available-for-sale, and short-term loans. The Company has defined "cash and cash equivalents" as those amounts included in cash and due from banks and federal funds sold. As of December 31, 1999, the Bank had cash and cash equivalents of $20.2 million, an increase of $7.0 million, when compared with the $13.2 million at December 31, 1998. Liability liquidity is provided by access to core funding sources, principally various customers' deposit accounts in the Company's market area. As a member of the Federal Home Loan Bank of Atlanta, the Company is authorized to borrow funds secured by a blanket pledge of its portfolio of 1-to-4-family residential mortgage loans and other collateral. The Company also has approved lines of credit from larger correspondent banks to borrow excess reserves on an overnight basis (known as "federal funds purchased") in the amount of $5.7 million. As of December 31, 1999, the Company had no federal funds purchased, repurchase agreements amounting to $6.4 million, and was utilizing $26.3 of its available FHLBA borrowings in the form of advances with an average cost of 5.27%. The Company utilizes fixed-rate term credit advances from the FHLBA to fund fixed-rate real estate loans of comparable terms and maturities. CAPITAL RESOURCES Total stockholders' equity as of December 31, 1999 was $15.7 million, an increase of $0.4 million in 1999 and $1.8 million in 1998, compared to stockholders' equity of $15.3 million and $13.5 million as of December 31, 1998 and 1997, respectively. In 1999, additional capital was raised from the exercise of stock options amounting to $60,760, and 136,500 treasury shares were acquired at a cost of $789,863. In 1998, additional capital was raised from the exercise of warrants and stock options amounting to $1.1 million. Net income was $1,188,622 in 1999 and $636,884 in 1998. The OCC has established certain minimum risk-based capital standards that apply to national banks, and the Company is subject to certain capital requirements imposed on bank holding companies by the Federal Reserve Board. At December 31, 1999, the Bank exceeded all applicable regulatory capital requirements for classification as a "well capitalized" bank, and the Company satisfied all applicable regulatory requirements imposed on it by the Federal Reserve Board. YEAR 2000 COMPLIANCE General. The "Year 2000 problem" arose because many existing computer programs use only the last two digits to refer to a year. Therefore, these computer programs do not properly recognize a year that begins with "20" instead of the familiar "19." If not corrected, many computer applications could fail or create erroneous results. The failure of the Company, its vendors or its borrowers to address these issues could have a material effect on the Company's business, results of operations, or financial condition. In December 1997, the Company adopted a plan for the assessment of its exposure to the Year 2000 problem, completion of any required remediation, and testing of systems compliance. The costs to address the Company's Year 2000 issues have not had a significant impact on the financial position or results of operations of the Company. Transition Into the Year 2000. The Company suffered no failures in any system or product upon the date change from December 31, 1999 to January 1, 2000. Management is not aware of any vendor used by the Company for data processing or related services which experienced a material failure of its product or service due to a Year 2000 related problem. In addition, management is not aware of any customer which suffered losses related to a Year 2000 problem which would adversely affect that customer's financial condition or its ability to repay any outstanding loan it has from the Bank. Ongoing Plans. Although many of the critical dates have passed, some experts predict that Year 2000 related failures could occur throughout the year. Accordingly, the Company's project team will continue to monitor 11 the Company's IT and non-IT systems and attempt to identify any potential problems during the course of the year. In addition, the Company will continue to monitor the Year 2000 compliance of the third parties with which the Company transacts business. The Company continues to maintain its contingency plans with respect to Year 2000 related issues and believes that if its own systems should fail, it could temporarily convert to manual systems for mission critical business functions. [Graphic of adding machine] INDEPENDENT AUDITORS' REPORT THE BOARD OF DIRECTORS CENTURY BANCSHARES, INC. We have audited, in accordance with generally accepted auditing standards, the consolidated balance sheets of Century Bancshares, Inc. and subsidiary as of December 31, 1999 and 1998, and the related consolidated statements of income, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1999 (not presented herein); and in our report dated January 31, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheets as of December 31, 1999 and 1998 and the related condensed consolidated statements of income for each of the years in the three-year period ended December 31, 1999 (included on pages 12 and 13 herein) is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. KPMG LLP McLean, VA February 18, 2000 12 CENTURY BANCSHARES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998 1999 1998 ASSETS: ------------- ------------- Cash and due from banks $ 9,222,000 $ 8,950,733 Federal funds sold 11,015,000 4,285,000 Interest bearing deposits in other banks 19,667,075 9,847,315 Investment securities: Available for sale, at fair value 16,495,049 6,811,356 Held to maturity, at amortized cost - fair value of $5,837,867 (1999) and $2,449,680 (1998) 5,966,403 2,441,537 Loans 138,076,486 115,231,298 Less: allowance for credit losses (1,518,911) (1,128,147) ------------- ------------- Loans, net 136,557,575 114,103,151 Leasehold improvements, furniture and equipment, net 1,372,267 1,372,370 Accrued interest receivable 1,034,270 742,721 Loans held for sale 439,600 -- Deposit premium 1,675,813 1,546,232 Net deferred taxes 767,893 683,113 Other assets 595,948 566,373 ------------- ------------- Total Assets $ 204,808,898 $ 151,349,901 ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Deposits: Noninterest bearing $ 36,571,508 $ 31,676,194 Interest bearing 117,328,222 94,535,082 ------------- ------------- Total deposits 153,899,730 126,211,276 Federal funds purchased and securities sold under agreement to repurchase 6,358,654 1,359,330 Other borrowings 26,900,223 7,101,911 Other liabilities 1,982,184 1,360,710 ------------- ------------- Total Liabilities 189,140,791 136,033,227 ------------- ------------- STOCKHOLDERS' EQUITY: Common stock, $1 par value; 5,000,000 shares authorized; 2,858,402 and 2,574,219 shares issued at December 31, 1999 and 1998, respectively 2,858,402 2,574,219 Additional paid in capital 13,700,452 12,343,631 Retained earnings -- 392,384 Treasury stock, at cost, 136,500 shares (789,863) -- Other comprehensive income (loss), net of tax effect (100,884) 6,440 ------------- ------------- Total Stockholders' Equity 15,668,107 15,316,674 ------------- ------------- Commitments and contingencies Total Liabilities and Stockholders' Equity $ 204,808,898 $ 151,349,901 ------------- -------------
13 CENTURY BANCSHARES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 1999 1998 1997 INTEREST INCOME: ----------- ----------- ----------- Interest and fees on loans $11,542,779 $ 9,393,33 $ 7,554,812 Interest on federal funds sold 264,204 350,846 258,311 Interest on deposits in other banks 646,800 708,431 749,568 Interest on securities available for sale 574,836 718,829 529,963 Interest on securities held to maturity 191,570 184,035 116,220 ----------- ----------- ----------- Total interest income 13,220,189 11,355,480 9,208,874 INTEREST EXPENSE: Interest on deposits: Savings accounts 884,150 818,417 210,928 NOW accounts 221,816 298,423 282,169 Money market accounts 640,427 771,400 773,799 Certificates under $100,000 1,385,414 1,254,993 1,216,180 Certificates $100,000 and over 1,021,854 894,004 764,576 ----------- ----------- ----------- Total interest on deposits 4,153,661 4,037,237 3,247,652 ----------- ----------- ----------- Interest on other borrowings 842,576 500,335 517,644 ----------- ----------- ----------- Total interest expense 4,996,237 4,537,572 3,765,296 ----------- ----------- ----------- Net interest income 8,223,952 6,817,908 5,443,578 Provision for credit losses 640,000 620,000 336,200 ----------- ----------- ----------- Net interest income after provision for credit losses 7,583,952 6,197,908 5,107,378 NONINTEREST INCOME: Service charges on deposit accounts 660,942 447,105 409,747 Other operating income 1,008,195 625,745 512,637 Gain on sale of securities -- 14,570 -- Gain on sale of other real estate owned -- 15,853 -- ----------- ----------- ----------- Total noninterest income 1,669,137 1,103,273 922,384 NONINTEREST EXPENSE: Salaries and employee benefits 2,858,900 2,075,963 2,201,299 Occupancy and equipment expense 842,263 825,839 649,846 Professional fees 696,113 925,664 691,501 Depreciation and amortization 445,381 471,591 502,556 Amortization of deposit premiums 198,052 189,538 68,477 Data processing 1,155,809 733,544 533,794 Communications 355,242 278,611 200,456 Federal deposit insurance premiums 20,124 17,678 13,996 Other operating expenses 763,370 790,978 598,077 ----------- ----------- ----------- Total noninterest expense 7,335,254 6,309,506 5,460,002 ----------- ----------- ----------- Income before income tax expense 1,917,835 991,775 569,760 Income tax expense 729,213 354,891 233,602 ----------- ----------- ----------- NET INCOME 1,188,622 636,884 336,158 ----------- ----------- ----------- Basic income per common share $ .42 $ 0.24 $ 0.20 Diluted income per common share $ .42 $ .24 $ 0.18 Weighted average common shares outstanding 2,804,994 2,632,787 1,710,316
14 CENTURY BANCSHARES, INC. DIRECTORS OFFICERS Joseph S. Bracewell(B)(C) Joseph S. Bracewell(1) Martha J. MacLeod Chairman of the Board Chairman, President & CEO Vice President Century National Bank Ali Mahmood Assistant Vice President George Contis, M.D., M.P.H.(B)(C) Michael M. Amin Karmen Mangasarian President, Medical Service Assistant Vice President Assistant Vice President Corporation International John R. Cope(B)(C) Shaza L. Anderson Mary Ann Michniak Partner, Law Firm of Bracewell & Patterson, Senior Vice President Internal Auditor L.L.P. Bernard J. Cravath(B) Scot R. Browning Johanne M. Mullarkey President, Reality Properties, Inc. Senior Vice President Assistant Vice President Marvin Fabrikant(C) David S. Cohen Catherine Upshur Purnell Senior Loan Executive, Vice President & Controller Assistant Vice President Century National Bank Neal R. Gross(B)(C) George W. Connors M. Evelyn Reed Chairman and President, Senior Vice President Assistant Vice President Neal R. Gross and Company, Inc. Thomas B. Hoppin(C) Kathleen M. Curtis, CRCM F. Kathryn Roberts Executive Vice President, Senior Vice President Vice President & SPRY Foundation Corporate Secretary Roger C. Johnson(C) Loren C. Geisler Rita M. Schumer Founding Partner, Law Firm of Senior Vice President Assistant Vice President Koonz, McKenney, Johnson, DePaolis & Lightfoot Michael E. Kossak, D.D.S.(C) Marvin Fabrikant Deborah B. Thompson Private Practice of Periodontics Senior Loan Executive Assistant Vice President William S. McKee(B) Robert W. Hutchins William J. Thompson Partner, Law Firm of Executive Vice President Vice President McKee, Nelson, Ernst & Young William C. Oldaker(B)(C) Charles V. Joyce III(1) Linda W. Townsend Founding Parner, Law Firm of Senior Vice President & CFO Senior Vice President Oldaker & Harris, L.L.P. Susan Peterson(C) Padma Kapadia Donald D. Wipf President, Susan Peterson Assistant Controller Vice President Productions, Inc. Ellen B. Safir(C) Patrick D. Krop Managing Director of Investments, Assistant Vice President The Howard Hughes Medical Institute James M. Lull Senior Vice President
(B) Director of Century Bancshares, Inc. (C) Director of Century National Bank (1) Executive officers of Century Bancshares, Inc. and Century National Bank 15 ADVISORY BOARD Hedy M. Ablard James P. Muldoon METCOR Ltd. Lewis D. Andrews, Jr. Sean Murphy, Esq. President Muldoon, Murphy & Faucette Glass Packaging Institute Mark Burdett Ann C. Page Vice President Nova Commercial Realty Vann Canada, Jr., Esq. Daniel M. Press, Esq. Miles & Stockbridge Chung & Press, PC Philip Chung, Esq. Thomas J. Raffa Chung & Press, PC President Raffa & Associates, PC Lawrence J. Gaffey Benjamin Schlesinger, Ph.D. Murphy, Dean & Gaffey Benjamin Schlesinger & Associates, Inc. Robert W. Haas, Esq. Bernard J. Wunder, Esq. Haas & Anderson, PC Wunder, Knight, Thelen, Forscey & Devierno, PLLC Dr. Sharon G. Hadary Thomas Zaucha Executive Director President & CEO National Foundation for National Grocers Association Women Business Owners Barbara G. Harris Envision Corporation Thomas P. Langan, CPA, CFP Ross, Langan & McKendree, L.L.P. Debora E. May May & Barnhard, PC Larry D. Meyers President Meyers & Associates
16 CORPORATE INFORMATION Corporate Name and Address: Century Bancshares, Inc. 1275 Pennsylvania Avenue, NW Washington, DC 20004 202-496-4100 Place and Date of Incorporation: Delaware, 1985 Security Description Common Stock, $1.00 par value CUSIP No.: 156436 Ticker Symbol: CTRY Where Traded: NASDAQ SmallCap Market Market Makers: Ferris, Baker, Watts & Co. 410-685-2600 Koonce Securities, Inc. 301-897-9700 M. H. Meyerson & Co., Inc. 800-333-3113 Scott & Stringfellow, Inc. 703-836-9755 Trident Securities, Inc. 919-781-8900 Transfer Agent ChaseMellon Shareholder Services 1-800-851-9677 Auditors: KPMG LLP Legal Counsel: Bracewell & Patterson, L.L.P. Fiscal Year: December 31 Annual Meeting: June 2, 2000 11:00 AM JW Marriott Hotel, Washington, DC Dividend History: 1993-1995 5% per year (Stock) 1996 7% Stock 1997-2000 5% per year (Stock) Form 10-K: Copies of the Company's 1999 Annual Report on Form 10-K are available upon request.
17 BRANCH OFFICES WASHINGTON, DC International Square Branch 1875 Eye Street, NW Washington, DC 20006 Pennsylvania Avenue Branch 1275 Pennsylvania Avenue, NW Washington, DC 20004 NORTHERN VIRGINIA Tysons Corner Branch 8251 Greensboro Drive [Graphic of Washington D.C. metropolitan McLean, VA 22102 area indicating branch locations] McLean Branch 6832 Old Dominion Drive McLean, VA 22101 Dumfries Branch 18116 Triangle Shopping Plaza Dumfries, VA 22026 MARYLAND Bethesda Branch 7625 Wisconsin Avenue Bethesda, MD 20814 Rockville Loan Production Office 1680 East Gude Drive, Suite 201 Rockville, MD 20851 BRANCH HOURS TELEPHONE & CONTACT Monday - Friday 9:00 a.m. to 5:00 p.m. Main Number 202-496-4000 (Except for the McLean and Dumfries Fax 202-496-4004 Branches.) Toll Free 800-262-9816 McLean Branch Hours TeleBanc 800-364-0468 Monday - Thursday 9:00 a.m. to 4:30 p.m. E-Mail mail@centurybank.com Friday 9:00 a.m. to 6:00 p.m. Web www.centurybank.com Saturday 9:00 a.m. to Noon Dumfries Branch Hours Lobby Hours Monday - Thursday 9:00 a.m. to 5:00 p.m. Friday 9:00 a.m. to 6:00 p.m. Drive Thru Hours Monday - Friday 8:30 a.m. to 6:00 p.m. Saturday 8:30 a.m. to Noon 18 CENTURY BANCSHARES, INC. 2000 SECOND QUARTER REPORT CENTURY BANCSHARES, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION JUNE 30, 2000 AND 1999 (UNAUDITED)
JUNE 30, 2000 1999 -------------- -------------- ASSETS Cash and due from bank $ 8,104,150 $ 5,058,255 Federal funds sold 10,205,537 10,000,000 Interest bearing deposits in other banks 5,250,650 18,379,479 Investment securities available-for-sale, at fair value 24,919,726 9,104,036 Investment securities held-to-maturity, at cost, fair value of $20,463,896 and $1,970,114 at June 30, 2000 and June 30, 1999, respectively 20,461,073 2,054,782 Loans, net of unearned income 153,947,331 130,197,206 Less allowance for credit losses (1,743,332) (1,408,621) -------------- -------------- Loans, net 152,203,999 128,788,585 Leasehold improvements, furniture, and equipment, net 1,336,500 1,212,123 Accrued interest receivable 1,382,348 940,203 Loans held for sale 649,600 180,000 Deposit premium, net 1,560,608 1,451,463 Net deferred taxes 772,707 707,616 Other assets 873,497 561,737 -------------- -------------- Total Assets $ 227,720,395 $ 178,438,279 -------------- -------------- LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Noninterest-bearing $ 38,978,437 $ 32,327,729 Interest-bearing 128,775,932 113,471,967 -------------- -------------- Total deposits 167,754,369 145,799,696 Federal funds purchased and securities sold under agreements to repurchase 11,277,842 2,888,086
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June 30, 2000 1999 -------------- -------------- Long term debt: Federal Home Loan Bank advances 20,845,361 12,057,742 Preferred securities of subsidiary trust 8,800,000 -- Other borrowings 586,643 583,582 Other liabilities 1,933,022 1,320,734 -------------- -------------- Total Liabilities 211,197,237 162,649,840 -------------- -------------- STOCKHOLDERS' EQUITY: Common stock, $1 par value; 5,000,000 shares authorized; 2,875,188 and 2,721,116 shares issued at June 30, 2000 and June 30, 1999, respectively 2,875,188 2,721,116 Treasury stock, at cost, 141,500 and 5,000 shares at June 30, 2000 and June 30, 1999, respectively (819,863) (30,303) Additional paid in capital 13,756,298 13,030,553 Retained earnings 821,361 121,026 Other comprehensive income (loss), net of tax effect (109,826) (53,953) -------------- -------------- Total Stockholders' Equity 16,523,158 15,788,439 Commitments and contingencies Total Liabilities and Stockholders' Equity $ 227,720,395 $ 178,438,279 -------------- --------------
20 DIRECTORS Joseph S. Bracewell (B) (C) Chairman of the Board Century National Bank George Contis, M.D., M.P.H. (B)(C) President, Medical Service Corporation International John R. Cope (B) (C) Partner, Law Firm of Bracewell & Patterson, L.L.P. Bernard J. Cravath (B) President, Reality Properties, Inc. Marvin Fabrikant (C) Senior Loan Executive, Century National Bank Neal R. Gross (B) (C) Chairman and President, Neal R. Gross and Company, Inc. Thomas B. Hoppin (C) Executive Vice President, SPRY Foundation Roger C. Johnson (C) Founding Partner, Law Firm of Koonz, McKenney, Johnson, DePaolis & Lightfoot Michael E. Kossak, D.D.S. (C) Private Practice of Periodontics William S. McKee (B) Partner, Law Firm of McKee, Nelson, Ernst & Young William C. Oldaker (B) (C) Founding Parner, Law Firm of Oldaker & Harris, L.L.P. Susan Peterson (C) President, Susan Peterson Productions, Inc. Ellen B. Safir (C) Managing Director of Investments, The Howard Hughes Medical Institute (B) Director of Century Bancshares, Inc. (C) Director of Century National Bank 21 CENTURY NATIONAL BANK BRANCH OFFICES WASHINGTON, DC International Square Branch 1875 Eye Street, NW Washington, DC 20006 Pennsylvania Avenue Branch 1275 Pennsylvania Avenue, NW Washington, DC 20004 NORTHERN VIRGINIA Tysons Corner Branch 8251 Greensboro Drive McLean, VA 22102 McLean Branch 6832 Old Dominion Drive McLean, VA 22101 Dumfries Branch 18116 Triangle Shopping Plaza Dumfries, VA 22026 MARYLAND Bethesda Branch 7625 Wisconsin Avenue Bethesda, MD 20814 Rockville Loan Production Office 1680 East Gude Drive, Suite 201 Rockville, MD 20851 TELEPHONE & CONTACT Main Number 202-496-4000 Fax 202-496-4004 Toll Free 800-262-9816 TeleBanc 800-364-0468 E-Mail mail@centurybank.com Web www.centurybank.com CENTURY BANCSHARES, INC. 1275 Pennsylvania Avenue, NW Washington, DC 20004 Tel: 202-496-4100 22 CENTURY BANCSHARES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 2000 AND 1999
SIX MONTHS ENDED JUNE 30, 2000 1999 ------------ ------------ INTEREST INCOME: Interest and fees on loans $ 6,615,784 $ 5,510,757 Interest on federal funds sold 373,900 116,589 Interest on deposits in other banks 302,505 271,490 Interest on securities available-for-sale 531,407 225,433 Interest on securities held-to-maturity 326,748 71,662 ------------ ------------ Total interest income 8,150,344 6,195,931 INTEREST EXPENSE: Interest on deposits: Savings accounts 388,883 427,127 NOW accounts 101,248 115,222 Money market accounts 448,410 328,021 Certificates under $100,000 694,367 663,330 Certificates $100,000 and over 729,720 461,896 ------------ ------------ Total interest on deposits 2,362,628 1,995,596 ------------ ------------ Interest on borrowings 931,872 315,339 ------------ ------------ Total interest expense 3,294,500 2,310,935 ------------ ------------ Noninterest income 4,855,844 3,884,996 Provision for credit losses 380,000 325,000 ------------ ------------ Net interest income after provision for credit losses 4,475,844 3,559,996 Noninterest income: Service charges on deposit accounts 442,656 328,624 Other operating income 604,708 507,383 ------------ ------------ Total noninterest income 1,047,364 836,007 ------------ ------------
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SIX MONTHS ENDED JUNE 30, 2000 1999 ------------ ------------ Noninterest expense: Salaries and employee benefits 1,597,577 1,384,446 Occupancy and equipment expense 475,218 420,552 Professional fees 497,165 348,198 Depreciation and amortization 226,531 227,446 Amortization of deposit premiums 115,204 94,768 Data processing 692,861 545,486 Communications 193,874 169,928 Federal deposit insurance premiums 14,692 8,656 Other operating expenses 367,966 382,204 ------------ ------------ Total noninterest expense 4,181,088 3,581,684 ------------ ------------ Income before income tax expense 1,342,120 814,319 Income tax expense 519,798 309,877 ------------ ------------ Net income $ 822,322 $ 504,442 ------------ ------------ Basic income per common share $ 0.30 $ 0.18 Diluted income per common share $ 0.30 $ 0.18 Weighted average common shares outstanding 2,754,782 2,847,408 Diluted weighted average common shares outstanding 2,770,998 2,875,342
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