-----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, AylXp//YhKBFZabFaDO9wyVbAqIdh9e3auAmxM6NZclLphlraT1SPO4pllVnYSUx jv2nEccpTXl/YmJYgqfmuQ== 0001002105-01-500063.txt : 20010815 0001002105-01-500063.hdr.sgml : 20010815 ACCESSION NUMBER: 0001002105-01-500063 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDEPENDENT COMMUNITY BANKSHARES INC CENTRAL INDEX KEY: 0000914138 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 541696103 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24159 FILM NUMBER: 1713626 BUSINESS ADDRESS: STREET 1: 111 W WASHINGTON ST STREET 2: C/O MIDDLEBURG BANK CITY: MIDDLEBURG STATE: VA ZIP: 22117 BUSINESS PHONE: 5406876377 MAIL ADDRESS: STREET 1: 111 WEST WASHINGTON STREET STREET 2: C/O MIDDLEBURG BANK CITY: MIDDLEBURG STATE: VA ZIP: 22117 10QSB 1 er476.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2001 [ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____________ to _____________ Commission file number: 0-24159 INDEPENDENT COMMUNITY BANKSHARES, INC. (Exact Name of Small Business Issuer as Specified in its Charter) Virginia 54-1696103 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 111 West Washington Street Middleburg, Virginia 20117 (Address of Principal Executive Offices) (703) 777-6327 (Issuer's Telephone Number, Including Area Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes __X__ No _____ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,752,258 shares of common stock, par value $5.00 per share, outstanding as of August 13, 2001 INDEPENDENT COMMUNITY BANKSHARES, INC. INDEX
Part I. Financial Information Page No. Item 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income 4 Consolidated Statements of Changes in Shareholders' Equity 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Results of Operation and Financial Condition 10 Part II. Other Information Item 1. Legal Proceedings 13 Item 2. Change in Securities 13 Item 3. Defaults upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14
2 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS INDEPENDENT COMMUNITY BANKSHARES, INC. Consolidated Balance Sheets (In Thousands, Except Share Data)
(Unaudited) June 30, December 31, 2001 2000 ------------ ------------ Assets: Cash and due from banks $ 7,303 $ 7,352 Interest-bearing balances in banks 212 79 Temporary investments: Federal funds sold - 8,600 Other money market investments 940 1,116 Securities (fair value: June 30, 2001, $90,186, December 31, 2000, $ 81,718) 89,987 81,577 Loans held for sale 8,668 2,131 Loans, net 186,230 175,794 Bank premises and equipment, net 6,677 6,349 Other assets 7,667 6,463 ------------ ------------ Total assets $ 307,684 $ 289,461 ============ ============ Liabilities and Shareholders' Equity Liabilities: Deposits: Non-interest bearing demand deposits $ 61,427 $ 56,980 Savings and interest-bearing demand deposits 101,161 96,275 Time deposits 75,427 71,385 ------------ ------------ Total deposits $ 238,015 $ 224,640 Securities sold under agreements to repurchase $ 13,120 $ 14,321 Long-term debt 24,935 21,300 Other liabilities 2,568 1,929 ------------ ------------ Total liabilities $ 278,638 $ 262,190 ------------ ------------ Shareholders' Equity Common stock par value $5.00 per share, authorized 10,000,000 shares; issued and outstanding at June 30, 2001 - 1,752,258 issued and outstanding at December 31, 2000 - 1,739,247 $ 8,761 $ 8,696 Capital surplus 741 556 Retained earnings 19,234 17,616 Accumulated other comprehensive income 310 403 ------------ ------------ Total shareholders' equity $ 29,046 $ 27,271 ------------ ------------ Total liabilities and shareholders' equity $ 307,684 $ 289,461 ============ ============
See Accompanying Notes to Consolidated Financial Statements. 3 INDEPENDENT COMMUNITY BANKSHARES, INC. Consolidated Statements of Income (In Thousands, Except Per Share Data)
Unaudited Unaudited -------------------------------------------------------------- For the Six Months For the Quarter Ended June 30, Ended June 30, 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Interest Income Interest and fees on loans $ 8,048 $ 6,552 $ 4,072 $ 3,404 Interest on investment securities Taxable 12 12 6 6 Exempt from federal income taxes 154 182 74 89 Interest on securities available for sale Taxable 1,373 1,478 685 834 Exempt from federal income taxes 792 563 411 288 Dividends 143 140 72 67 Interest on federal funds sold and other 132 109 85 22 ------------ ------------ ------------ ------------ Total interest income $ 10,654 $ 9,036 $ 5,405 $ 4,710 Interest Expense Interest on deposits $ 3,040 $ 2,470 $ 1,519 $ 1,236 Interest on long-term debt 465 353 221 283 Interest on short-term borrowings 606 284 242 154 ------------ ------------ ------------ ------------ Total interest expense $ 4,111 $ 3,107 $ 1,982 $ 1,673 Net interest income $ 6,543 $ 5,929 $ 3,423 $ 3,037 Provision for loan losses 150 200 75 125 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses $ 6,393 $ 5,729 $ 3,348 $ 2,912 Other Income Trust fee income $ 657 $ 755 $ 299 $ 389 Service charges on deposit accounts 711 612 399 291 Net gains on securities available for sale 246 (1) (6) (1) Fees on loans held for resale 574 319 275 177 Other operating income 322 66 123 41 ------------ ------------ ------------ ------------ Total other income $ 2,510 $ 1,751 $ 1,090 $ 897 Other Expense Advertising $ 170 $ 222 $ 101 $ 149 Salaries and employee benefits 3,428 2,606 1,688 1,292 Net occupancy expense of premises 581 601 308 316 Other operating expenses 1,392 1,155 733 625 ------------ ------------ ------------ ------------ Total other expense $ 5,571 $ 4,584 $ 2,830 $ 2,382 ------------ ------------ ------------ ------------ Income before income taxes $ 3,332 $ 2,896 $ 1,608 $ 1,427 Income taxes 841 731 409 350 ------------ ------------ ------------ ------------ Net income $ 2,491 $ 2,165 $ 1,199 $ 1,077 ============ ============ ============ ============ Earnings per weighted average share: Net income per share, basic $ 1.43 $ 1.24 $ 0.69 $ 0.63 Net income per share, diluted $ 1.40 $ 1.23 $ 0.67 $ 0.62 Dividends per share $ 0.50 $ 0.42 $ 0.25 $ 0.21
See Accompanying Notes to Consolidated Financial Statements. 4 INDEPENDENT COMMUNITY BANKSHARES, INC. Consolidated Statement of Changes in Shareholders' Equity For the Six Months ended June 30, 2001 and 2000 (In Thousands) (Unaudited)
Accumulated Other Common Capital Comprehensive Retained Comprehensive Stock Surplus Income (Loss) Earnings Income Total Balances - December 31, 1999 $ 8,895 $ 1,293 $ (1,965) $ 14,852 $ - $ 23,075 Comprehensive Income Net income 2,165 2,165 2,165 Purchase of common shares (57,785 shares) (289) (1,038) (1,327) Issuance of common shares in stock option plan (2,000 shares) 10 24 34 Discretionary transfer from retained earnings 2,000 (2,000) - Other comprehensive income net of tax: Unrealized gain on available for sale securities (net of tax $111) 216 216 216 ---------- Total comprehensive income $ 2,381 ========== Cash dividends declared (735) (735) ---------- ---------- ---------- ---------- ---------- Balances - June 30, 2000 $ 8,616 $ 2,279 $ (1,749) $ 14,282 $ 23,428 ========== ========== ========== ========== ========== Balances - December 31, 2000 $ 8,696 $ 556 $ 403 $ 17,616 $ - $ 27,271 Comprehensive Income Net income 2,491 2,491 2,491 Issuance of common shares in stock option plan (13,011 shares) 65 185 250 Other comprehensive income net of tax: Unrealized gain on available for sale securities (net of tax $36) 69 Reclassification adjustment for gains realized in net income (net of tax $84) (162) ---------- Other comprehensive income (net of tax $48) (93) (93) (93) ---------- Total comprehensive income $ 2,398 ========== Cash dividends declared (873) (873) ---------- ---------- ---------- ---------- ---------- Balances - June 30, 2001 $ 8,761 $ 741 $ 310 $ 19,234 $ 29,046 ========== ========== ========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements. 5 INDEPENDENT COMMUNITY BANKSHARES, INC. Consolidated Statements of Cash Flows (In Thousands)
Unaudited For the Six Months Ended ------------ ------------ June 30, June 30, 2001 2000 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,491 $ 2,165 Adjustments to reconcile net income to net cash used in operating activities Provision for loan losses 150 200 Depreciation and amortization 368 353 Net (gains) losses on securities available for sale (246) 1 Net losses on sales of equipment 3 - Discount accretion and premium amortization on securities, net (51) (7) Originations of loans held for sale (36,819) (17,501) Proceeds from sales of loans held for sale 30,282 15,245 (Increase) in other assets (1,216) (593) Increase in other liabilities 586 1,404 ------------ ------------ Net cash provided by (used in) operating activities $ (4,452) $ 1,267 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturity, principal paydowns and calls on investment securities $ 797 $ 369 Proceeds from maturity, principal paydowns and calls of securities available for sale 3,614 2,018 Proceeds from sale of securities available for sale 16,383 490 Proceeds from sale of bank premises and equipment 31 - Purchase of securities available for sale (29,048) (15,505) Net (increase) in loans (10,586) (16,018) Purchases of bank premises and equipment (690) (223) ------------ ------------ Net cash (used in) investing activities $ (19,499) $ (28,869) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase in demand deposits, NOW accounts, and savings accounts $ 9,333 $ 24 Net increase in certificates of deposits 4,042 571 Proceeds from Federal Home Loan Bank advances 26,600 29,100 Payment on Federal Home Loan Bank advances (22,600) (10,725) Payments on long-term debt (365) - Cash dividends paid (800) (735) Acquisition of common stock - (1,327) Issuance of common stock 250 34 Increase (decrease) in securities sold under agreement to repurchase (1,201) 1,564 ------------ ------------ Net cash provided by financing activities $ 15,259 $ 18,506 ------------ ------------ Decrease in cash and cash equivalents $ (8,692) $ (9,096) CASH AND CASH EQUIVALENTS Beginning $ 17,147 $ 20,557 ============ ============ Ending $ 8,455 $ 11,461 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest paid to depositors 3,073 2,425 Income taxes 1,069 820 SUPPLEMENTAL DISCLOSURES FOR NON-CASH INVESTING AND FINANCING ACTIVITIES Unrealized gain (loss) on securities available for sale (141) 327
See Accompanying Notes to Consolidated Financial Statements. 6 INDEPENDENT COMMUNITY BANKSHARES, INC. Notes to Consolidated Financial Statements For the Six Months Ended June 30, 2001 and 2000 (Unaudited) Note 1. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 2001 and the results of operations and changes in cash flows for the six months ended June 30, 2001 and 2000. The statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000. The results of operations for the six month periods ended June 30, 2001 and 2000 are not necessarily indicative of the results to be expected for the full year. Note 2. Securities Securities being held to maturity as of June 30, 2001 are summarized as follows:
-------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains (Losses) Value -------------------------------------------------------------- (In Thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 2 $ - $ (2) $ 248 Obligations of states and political subdivisions 5,870 201 - 6,071 Mortgaged backed securities 81 - - 81 ------------ ------------ ------------ ------------ $ 6,201 $ 201 $ (2) $ 6,400 ============ ============ ============ ============
Securities available for sale as of June 30, 2001 are summarized below:
-------------------------------------------------------------- Gross Gross Amortized Unrealized Unrealized Market Cost Gains (Losses) Value -------------------------------------------------------------- (In Thousands) U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 2,135 $ 40 $ (12) $ 2,163 Corporate securities 2,142 51 (59) 2,134 Obligations of states and political subdivisions 33,205 606 (275) 33,536 Mortgaged backed securities 35,399 241 (345) 35,295 Other 10,437 221 - 10,658 ------------ ------------ ------------ ------------ $ 83,318 $ 1,159 $ (691) $ 83,786 ============ ============ ============ ============
7 Note 3. The consolidated loan portfolio is composed of the following:
---------------------------- June 30, December 31, 2001 2000 ---------------------------- (In Thousands) Commercial, financial and agricultural $ 22,680 $ 22,555 Real estate construction 22,832 17,693 Real estate mortgage 131,071 126,676 Installment loans to individuals 11,593 10,674 ------------ ------------ Total loans 188,176 177,598 Less: Allowance for loan losses 1,946 1,804 ------------ ------------ Loans, net $ 186,230 $ 175,794 ============ ============
The Company had $148,836 in non-performing assets at June 30, 2001. Note 4. Reserve for Loan Losses The following is a summary of transactions in the reserve for loan losses:
----------------------------- June 30, December 31, 2001 2000 ----------------------------- (In Thousands) Balance at January 1 $ 1,804 $ 1,453 Provision charged to operating expense 150 400 Recoveries added to the reserve 19 47 Loan losses charged to the reserve (27) (96) ------------ ------------ Balance at the end of the period $ 1,946 $ 1,804 ============ ============
8 Note 5. Earnings Per Share The following table shows the weighted average number of shares used in computing earnings per share and the effect on the weighted average number of shares of potential dilutive common stock. Potential dilutive common stock has no effect on income available to common shareholders. The anti-dilutive effects of options covering 69,825 shares of common stock were not included in the calculation for June 30, 2000. There were no anti-dilutive effects from options at June 30, 2001.
June 30, 2001 June 30, 2000 Per share Per share Shares Amount Shares Amount -------------- -------------- -------------- -------------- Basic EPS 1,739,890 $ 1.43 1,749,721 $ 1.24 ============== ============== Effect of dilutive securities: stock options 34,023 13,643 -------------- -------------- Diluted EPS 1,773,914 $ 1.40 1,763,364 $ 1.23 ============== ============== ============== ==============
Note 6. Derivative Financial Instruments Interest rate swap agreements: During May 2000, the Company entered into two agreements to assume variable market-indexed interest payments in exchange for fixed-rate interest payments (interest rate swaps). The notional principal amount of interest rate swaps outstanding was $8,525,000 at June 30, 2001. The original term to maturity was 24 months. The weighted-average fixed payment rate was 7.0% at June 30, 2001. Variable interest payments received are based on three-month LIBOR. At June 30 , 2001, the weighted average rate of variable market-indexed interest payment obligations to the Company was 3.73%. The effect of these agreements was to transform fixed rate liabilities to variable rate liabilities. The net income from these agreements was $79,033 for the six month period ended June 30, 2001, which is charged to income as it accrues. The Company's current credit exposure on swaps is limited to the value of interest rate swaps that have become assets to the Company. At June 30, 2001, the fair value of interest rate swaps in an asset position was $269,728. 9 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Summary Net income for the six months ended June 30, 2001 increased 15.1% to $2.5 million or $1.40 per diluted share compared to $2.2 million or $1.23 per diluted share for the first six months of 2000. Annualized returns on average assets and equity for the six months ended June 30, 2001 were 1.6% and 17.1%, respectively, compared to 1.7% and 18.9% for the same period in 2000. Total assets for Independent Community Bankshares, Inc. (the "Company") increased to $307.7 million at June 30, 2001 compared to $289.5 million at December 31, 2000, representing an increase of $18.2 million or 6.3%. Total loans at June 30, 2001 were $186.2 million, an increase of $10.4 million from the December 31, 2000 balance of $175.8 million. The Company has hired additional commercial loan officers to expand its business development efforts. The driving forces behind the loan growth include a good local economy as well as customers' desire to seek a local financial institution that has the ability to make decisions locally regarding credit. The declining interest rate environment provided a strong market for mortgage refinancings and, as a result, loans held for sale increased $6.6 million to $8.7 million at June 30, 2001. The investment portfolio increased 10.3% to $90.0 million at June 30, 2001 compared to $81.6 million at December 31, 2000. Deposits increased $13.3 million to $238.0 million at June 30, 2001 from $224.6 million at December 31, 2000. Growth in the transactional accounts and time deposits account for $4.4 million and $4.0 million, respectively, of the increase during the first six months of 2001. Securities sold under agreements to repurchase with commercial checking accounts decreased $1.2 million from $14.3 million at December 31, 2000 to $13.1 million at June 30, 2001. Branch expansion and increased advertising have promoted awareness of the Company and resulted in additional business. Shareholders' equity was $29.0 million at June 30, 2001. This amount represents an increase of 6.5% from the December 31, 2000 balance of $27.3 million. The book value per common share was $16.58 at June 30, 2001 and $15.68 at December 31, 2000. Net Interest Income Net interest income is the Company's primary source of earnings and represents the difference between interest and fees earned on earning assets and the interest expense paid on deposits and other interest bearing liabilities. Net interest income totaled $6.5 million for the first six months of 2001 compared to $5.9 million for the same period in 2000. The increase is largely due to growth in the average earning assets. Average earning assets increased $47.3 million from $229.8 million at June 30, 2000 to $277.0 million at June 30, 2001. During the latter half of 2000, the funding mix for the growth in the earning assets changed to more reliance on borrowed money rather than low cost deposits causing a decrease in the margin. The effect of this change in the funding mix was largely recognized over the last twelve months and deposit growth has largely funded asset growth during the first six months of 2001. Noninterest Income Noninterest income consisting of fees from deposit accounts, fiduciary activities and mortgage banking increased 43.3% to $2.5 million for the first six months of 2001 compared to $1.8 million for the same period in 2000. Service charges on deposit accounts for the first six months of 2001 totaled $711,000 compared to $612,000 for the same period in 2000, an increase of 16.1%. The Company realized $246,000 in net gains on the investment portfolio for the six months ended June 30, 2001. Commissions and fees from fiduciary activities were $657,000 for the six month period ended June 30, 10 2001 compared to $755,000 for the same period in 2000. Fees on loans held for sale increased $255,000 or 79.9% to $574,000 at June 30, 2001 from the June 30, 2000 balance of $319,000. Other operating income increased $256,000 to $322,000 for the six months ended June 30, 2001 compared to $66,000 for the same period in 2000. The increase in other operating income is mostly attributed to commissions earned on sales of non-deposit investments. Noninterest Expense Total noninterest expense includes employee-related costs, occupancy and equipment expense and other overhead. Total noninterest expense was $5.6 million for the first six months of 2001 compared to $4.6 million for the same period in 2000. This is a 21.5% increase from the six months ended June 30, 2000 to the six months ended June 30, 2001. Salary and benefit expense increased 31.5% from $2.6 million for the six months ended June 30, 2000 to $3.4 million for the six months ended June 30, 2001. The Company has increased its staffing in both the business development and operations areas to support the significant asset growth. Commissions paid to employees for fee related business, such as mortgage originations and investment sales have increased by $250,000 to $337,000 as a result in the increase in sales volume. Net occupancy expense of premises decreased 3.3% from $601,000 for the six months ended June 30, 2000 to $581,000 for the six months ended June 30, 2001. Allowance for Loan Losses The allowance for loan losses at June 30, 2001 was $1.9 million compared to $1.6 million at June 30, 2000. The provision for loan losses decreased $50,000 from the June 30, 2000, $200,000 balance to $150,000 at June 30, 2001. The allowance for loan losses was 1.04% of total loans outstanding at June 30 , 2001. Net charge-offs as a percentage of loans was .01% for the six months ended June 30, 2001, and loans that were past due 90 days or more totaled $408 at June 30, 2001. Non-performing loans decreased to .08% of total loans outstanding at June 30, 2001 compared to .16% at June 30, 2000. Management believes the allowance for loan losses is adequate to cover credit losses inherent in the loan portfolio at June 30, 2001. Loans classified as loss, doubtful, substandard or special mention are adequately reserved for and are not expected to have a material impact beyond what has been reserved. Capital Resources Shareholders' equity at June 30, 2001 and June 30, 2000 was $29.0 million and $23.4 million, respectively. Total common shares outstanding at June 30, 2001 were 1,752,258. At June 30, 2001 the Company's tier 1 and total risk-based capital ratios were 12.3% and 13.2%, respectively, compared to 12.7% and 13.6% at December 31, 2000. The Company's leverage ratio was 8.9% at June 30, 2001 compared to 9.7% at December 31, 2000. The Company's capital structure places it above the regulatory guidelines, which affords the Company the opportunity to take advantage of business opportunities while ensuring that it has the resources to protect against risk inherent in its business. Forward-Looking Statements Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Such forward-looking statements involve known and unknown risks including, but not limited to, changes in 11 general economic and business conditions, interest rate fluctuations, competition within and from outside the banking industry, new products and services in the banking industry, risk inherent in making loans such as repayment risks and fluctuating collateral values, problems with technology utilized by the Company, changing trends in customer profiles and changes in laws and regulations applicable to the Company. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Change in Securities. None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders. Independent Community Bankshares, Inc. held its Annual Meeting of Shareholders on Wednesday, April 18, 2001 in Middleburg, Virginia. The shareholders were asked to vote on the election of the directors of the Company and to ratify the appointment of the firm Yount, Hyde & Barbour, PC as the independent auditors for the fiscal year ending December 31, 2001. The votes cast for or withheld for the election of the directors were as follows: NAME FOR WITHHELD ---- --- -------- Howard M. Armfield 1,308,288 31,592 Joseph L. Boling 1,307,288 3,992 Childs Frick Burden 1,308,288 31,592 J. Lynn Cornwell, Jr. 1,308,188 31,692 William F. Curtis 1,339,180 700 Robert C. Gilkison 1,307,888 31,992 C. Oliver Iselin, III 1,333,332 6,548 Thomas W. Nalls 1,307,648 32,232 John Sherman 1,308,288 31,592 Millicent W. West 1,308,188 31,692 Edward T. Wright 1,339,880 0 The votes cast for, against or abstain to approve the ratification of Yount, Hyde & Barbour, PC as independent auditors for the fiscal year ending December 31, 2001 were as follows: FOR AGAINST ABSTAIN --- ------- ------- Independent Auditors - Yount, Hyde & Barbour, PC 1,339,180 700 0 Item 5. Other Information. None Item 6. Exhibits and Reports on Form 8-K. a) Exhibits - None b) Reports on Form 8-K - None 13 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INDEPENDENT COMMUNITY BANKSHARES, INC. (Registrant) Date: August 14, 2001 /s/ Joseph L. Boling -------------------------------------- Joseph L. Boling Chairman of the Board & CEO Date: August 14, 2001 /s/ Alice P. Frazier -------------------------------------- Alice P. Frazier Senior Vice President & CFO 14 -----END PRIVACY-ENHANCED MESSAGE-----