8-K

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) December 10, 2010

UWHARRIE CAPITAL CORP

(Exact name of Registrant as specified in its charter)

NORTH CAROLINA	000-22062	56-1814206
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification number)

132 NORTH FIRST STREET, ALBEMARLE, NORTH CAROLINA 28001

(Address of principal executive offices)

Registrant’s telephone number, including area code (704) 982-4415

N/A

(Former address of principal executive offices)

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:

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

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

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

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

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On December 10, 2010, Uwharrie Capital Corp (the “Registrant”) released a quarterly report to its shareholders that included a letter to the shareholders from President and CEO Roger L. Dick and unaudited financial information for the period ended September 30, 2010. A copy of this report is attached hereto as Exhibit 99.1 and incorporated by reference herein.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

Exhibit No.	Description of Exhibit
99.1	Quarterly report to shareholders for the period ended September 30, 2010.

This Current Report on Form 8-K (including information included or incorporated by reference herein) may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of Registrant’s goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. These statements are based upon the current belief and expectations of Registrant’s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond Registrant’s control).

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.

UWHARRIE CAPITAL CORP
By:	/s/ Robert O. Bratton
	Robert O. Bratton
	Principal Financial Officer

Dated: December 10, 2010

EXHIBIT INDEX

Exhibit Number	Description of Exhibit
99.1	Quarterly report to shareholders for the period ended September 30, 2010.

EX-99.1

Exhibit 99.1

Third Quarter Report

September 30, 2010

December 8, 2010

Dear Shareholder:

Earnings from operations have remained strong during 2010 thanks to a very strong core deposit base at all our banks and good yields on our earning assets which have provided some of the strongest net margin income in the industry. Additionally, our Strategic Investment Advisors and its asset management services continue to grow and make a positive contribution to our earnings. Once again, in the low rate environment, our mortgage team has had another outstanding year contributing additional fee income. Net income increased for the quarter ended September 30, 2010 at $497 thousand compared to $290 thousand for the same quarter in 2009. Year to date, net income decreased $451 thousand from $1.8 million for the nine months ended September 30, 2009 compared to $1.4 million at September 30, 2010. The reason for the decline in the 9-month comparison is due to a greater portion of mortgage income coming in the earlier part of the prior year versus 2010 when it is occurring later in the year. We anticipate continued strong mortgage fee income for the balance of 2010 and consequently, our earnings for 2010 should exceed 2009.

Unfortunately, while having one of the strongest years in earnings from operations, the economic environment and the financial crisis of the moment is requiring that a good portion of these earnings be set aside as additions to our loan loss provision. During the third quarter of 2010, we put $2.0 million into the allowance, compared to $295 thousand for the same period of 2009. Year to date 2010 $3.1 million has been expensed to the loan loss provision, compared to $863 thousand for the same nine month period of 2009. Management recognizes the systemic risk in the environment and will continue to take the necessary steps, even at the expense of current earnings, to assure our solid long-term positioning.

Our “customer first” approach to relationship banking has enabled Uwharrie Capital Corp and its subsidiaries to continue to capture market share and profitably grow our balance sheet. We are blessed by the confidence our communities have in us and our growth continues to be from local deposits and loans as opposed to “hot money” and purchased assets. We are growing locally, at home. Total assets ended the quarter at $529 million, up from $477 million at September 30, 2009, representing 10.8% or $51.5 million growth in assets. Core banking activities remain strong with growth in loans for the quarter of $13.0 million and growth in deposits of $15.7 million. For the nine months ended September 30, 2010, loans increased $32.1 million to $385.8 million and deposits grew $48.8 million to $425.5 million in spite of the fact that economic growth declined or remained flat in some of the counties in our markets.

All of this tells a strong story about the continued positive growth and development of our community banks in these challenging times. Our stock price should be reflecting this in

terms of better prices. Bank stocks today are not trading at the values to earnings that they historically have due to the uncertainty of a global economy and fears of a “double dip.” We are confident that our share price along with other banks will begin to return to a more rational range of values as confidence in a recovery of our economy improves. Bank stocks in general are selling at discounts to book value. This has only happened once or twice in the last 50 years. The lack of liquidity in today’s market explains more about the valuation of investments than does the traditional function of expected future earnings. By analogy, it’s like going to a Saturday estate auction and seeing a fine Chippendale piece of furniture worth many thousands of dollars but the only bidders are a couple of folks who just have $5 between them. This fine piece of great value is sold for $5 at such an auction. Similarly, the value of many securities, like that of our own company, is being sold in similar auctions, which is what the stock exchange is on a daily basis. And like the estate sale, there is a shortage of bidders that creates the lack of liquidity which is affecting current prices. But remain confident that reason and rational thinking will return and so will values for Chippendale pieces as well as community bank stocks … farm land and homes are suffering the same lack of liquidity and their loss in values similarly reflect it.

Our values and our mission remain the same. Uwharrie Capital Corp is a multibank holding company for locally-owned, community-focused banks, owned for and by the People seeking to invest their resources back into their own communities. Our mission is to provide capital, jobs and opportunities to local businesses and citizens to allow them to control their own destiny and for the benefit of their children. Working together with this shared vision as evidenced in these times of economic adversity, we continue to grow and prosper and create real value not just to our bottom lines but in our communities and the places we call home. Thank you for your continued support and we wish you and your family a healthy and blessed holiday.

Sincerely,

UWHARRIE CAPITAL CORP

/s/ Roger L. Dick

Roger L. Dick

President and Chief Executive Officer

Uwharrie Capital Corp and Subsidiaries

Consolidated Balance Sheets

(Amounts in thousands except share and per share data)	September 30, 2010			September 30, 2009
Assets
Cash and due from banks	$	16,505		$	10,947
Investment securities available for sale		90,983			85,277
Federal funds sold		—			—
Loans held for sale		3,096			1,332
Loans held for investment		385,843			351,794
Less: Allowance for loan losses		7,462			4,828
Net loans held for investment		378,381			346,966
Interest receivable		2,179			2,174
Premises and equipment, net		14,546			13,480
Federal Home Loan Bank stock		3,379			3,201
Bank-owned life insurance		5,902			5,652
Other real estate owned		3,887			2,623
Goodwill		987			987
Other assets		9,501			8,065
Total assets	$	529,346		$	480,704
Liabilities
Deposits:
Demand, noninterest-bearing	$	48,085		$	43,825
Interest checking and money market accounts		182,052			120,616
Savings accounts		36,783			32,796
Time deposits, $100,000 and over		67,367			71,220
Other time deposits		91,262			103,030
Total deposits		425,549			371,487
Interest payable		380			456
Short-term borrowed funds		22,010			29,816
Long-term debt		32,587			31,648
Other liabilities		2,616			2,807
Total liabilities		483,142			436,214
Shareholders’ Equity
Preferred Stock, no par value: 10,000,000 shares authorized;
10,000 shares of series A issued and outstanding		10,000			10,000
500 shares of series B issued and outstanding		500			500
Discount on preferred stock		(325	)		(425	)
Common stock, $1.25 par value: 20,000,000 shares authorized; issued and outstanding or in process of issuance 7,593,929 and 7,407,851 shares, respectively.
Book value per share $4.54 in 2009 and $4.17 in 2008. (1)		9,492			9,492
Additional paid-in capital		14,032			14,029
Unearned ESOP compensation		(711	)		(683	)
Undivided profits		10,939			11,345
Accumulated other comprehensive income (loss)		2,277			232
Total shareholders’ equity		46,204			44,490
Total liabilities and shareholders’ equity	$	529,346		$	480,704

Uwharrie Capital Corp and Subsidiaries

Consolidated Statements of Income

	Three Months Ended September 30,						Nine Months Ended September 30,
(Amounts in thousands except share and per share data)	2010			2009			2010			2009
Interest Income
Interest and fees on loans	$	5,393		$	5,281		$	16,187		$	15,874
Interest on investment securities		722			931			2,222			2,846
Other interest income		9			14			27			57
Total interest income		6,124			6,226			18,436			18,777
Interest Expense
Interest paid on deposits		1,035			1,491			3,167			4,656
Interest on borrowed funds		443			438			1,289			1,356
Total interest expense		1,478			1,929			4,456			6,012
Net Interest Income		4,646			4,297			13,980			12,765
Provision for loan losses		2,053			295			3,096			863
Net interest income after provision for loan losses		2,593			4,002			10,884			11,902
Noninterest Income
Service charges on deposit accounts		583			616			1,712			1,751
Other service fees and commissions		782			595			2,211			1,627
Gain on sale of securities		1,520			124			1,484			104
Loss on sale of nonmarketable securities		—			—			—			(172	)
Total other-than-temporary impairment loss		—			—			—			(1,782	)
Portion of loss recognized in other comprehensive income		—			(183	)		—			1,395
Net impairment recognized in other comprehensive income		—			(183	)		—			(387	)
Income from mortgage loan sales		880			364			1,616			2,931
Other income		172			117			340			281
Total noninterest income		3,937			1,633			7,363			6,135
Noninterest Expense
Salaries and employee benefits		2,975			2,822			8,689			8,581
Occupancy expense		322			302			860			789
Equipment expense		210			186			568			547
Data processing		212			203			623			592
Other operating expenses		2,087			1,802			5,453			4,966
Total noninterest expense		5,806			5,315			16,193			15,475
Income before income taxes		724			320			2,054			2,562
Provision for income taxes		227			30			687			744
Net Income	$	497		$	290		$	1,367		$	1,818
Net Income	$	497		$	290		$	1,367		$	1,818
Dividends - preferred stock		(161	)		(160	)		(484	)		(481	)
Net income available to common shareholders	$	336		$	130		$	883		$	1,337
Net Income Per Common Share (1)
Basic	$	0.04		$	0.02		$	0.12		$	0.18
Assuming dilution	$	0.04		$	0.02		$	0.12		$	0.18
Weighted Average Common Shares Outstanding (1)
Basic		7,490,196			7,476,197			7,487,875			7,472,033
Assuming dilution		7,490,196			7,476,197			7,487,875			7,472,033