<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>er503.txt
<DESCRIPTION>FORM 10-QSB
<TEXT>
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 September 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 October 31, 2001
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
INDEX
<TABLE>
<CAPTION>
<S> <C>
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 Operations
and Financial Condition 11
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INDEPENDENT COMMUNITY BANKSHARES, INC.
Consolidated Balance Sheets
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
Unaudited)
September 30, December 31,
2001 2000
------------- -------------
<S> <C> <C>
Assets:
Cash and due from banks $ 10,565 $ 7,352
Interest-bearing balances in banks 184 79
Temporary investments:
Federal funds sold 2,675 8,600
Other money market investments 722 1,116
Securities (fair value: September 30, 2001,
$98,192, December 31, 2000, $81,718) 97,944 81,577
Loans held for sale 10,810 2,131
Loans, net 193,028 175,794
Bank premises and equipment, net 7,361 6,349
Other assets 8,725 6,463
------------- -------------
Total assets $ 332,014 $ 289,461
============= =============
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Non-interest bearing demand deposits $ 65,816 $ 56,980
Savings and interest-bearing demand deposits 106,945 96,275
Time deposits 85,179 71,385
------------- -------------
Total deposits $ 257,940 $ 224,640
Securities sold under agreements to
repurchase $ 13,764 $ 14,321
Long-term debt 25,870 21,300
Other liabilities 3,683 1,929
------------- -------------
Total liabilities $ 301,257 $ 262,190
------------- -------------
Shareholders' Equity:
Common stock par value $5.00 per
share, authorized 10,000,000 shares;
issued and outstanding at September 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 20,185 17,616
Accumulated other comprehensive income 1,070 403
------------- -------------
Total shareholders' equity $ 30,757 $ 27,271
------------- -------------
Total liabilities and shareholders' equity $ 332,014 $ 289,461
============= =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
3
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
Consolidated Statements of Income
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Unaudited Unaudited
-----------------------------------------------------
For the Nine Months For the Quarter
Ended September 30, Ended September 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 12,197 $ 10,192 $ 4,149 $ 3,640
Interest on investment securities
Taxable 17 18 5 6
Exempt from federal income taxes 226 269 72 87
Interest on securities available for sale
Taxable 2,157 2,294 784 816
Exempt from federal income taxes 1,199 852 407 289
Dividends 208 165 65 25
Interest on federal funds sold and other 169 142 37 33
---------- ---------- ---------- ----------
Total interest income $ 16,173 $ 13,932 $ 5,519 $ 4,896
Interest Expense
Interest on deposits $ 4,519 $ 3,838 $ 1,479 $ 1,368
Interest on long-term debt 759 671 294 318
Interest on short-term borrowings 798 464 192 180
---------- ---------- ---------- ----------
Total interest expense $ 6,076 $ 4,973 $ 1,965 $ 1,866
Net interest income $ 10,097 $ 8,959 $ 3,554 $ 3,030
Provision for loan losses 225 325 75 125
---------- ---------- ---------- ----------
Net interest income after provision
for loan losses $ 9,872 $ 8,634 $ 3,479 $ 2,905
Other Income
Trust fee income $ 976 $ 1,172 $ 319 $ 417
Service charges on deposit accounts 1,063 886 352 274
Net gains (losses) on securities
available for sale 312 (1) 66 -
Fees on loans held for resale 1,028 475 454 155
Other operating income 451 137 129 72
---------- ---------- ---------- ----------
Total other income $ 3,830 $ 2,669 $ 1,320 $ 918
Other Expense
Advertising $ 224 $ 247 $ 54 $ 25
Salaries and employee benefits 5,189 4,083 1,761 1,477
Net occupancy expense of premises 872 874 291 273
Other operating expenses 2,215 1,842 823 687
---------- ---------- ---------- ----------
Total other expense $ 8,500 $ 7,046 $ 2,929 $ 2,462
---------- ---------- ---------- ----------
Income before income taxes $ 5,202 $ 4,257 $ 1,870 $ 1,361
Income taxes 1,322 1,052 481 321
---------- ---------- ---------- ----------
Net income $ 3,880 $ 3,205 $ 1,389 $ 1,040
========== ========== ========== ==========
Earnings per weighted average share:
Net income per share, basic $ 2.22 $ 1.84 $ 0.79 $ 0.60
Net income per share, diluted $ 2.18 $ 1.83 $ 0.77 $ 0.60
Dividends per share $ 0.75 $ 0.63 $ 0.25 $ 0.21
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
Consolidated Statement of Changes in Shareholders' Equity
For the Nine Months ended September 30, 2001 and 2000
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Common Capital Comprehensive Retained Comprehensive
Stock Surplus Income (Loss) Earnings Income Total
------ ------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances - December 31, 1999 $8,895 $ 1,293 $ (1,965) $ 14,852 $ - $ 23,075
Comprehensive Income
Net income 3,205 3,205 3,205
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
Issuance of common shares (16,038 shares) 80 277 357
Other comprehensive income
net of tax:
Unrealized gain on available for
sale securities (net of tax $476) 924 924 924
-------------
Total comprehensive income $ 4,129
=============
Cash dividends declared (1,096) (1,096)
------ ------- ------------- -------- --------
Balances - September 30, 2000 $8,696 $ 556 $ (1,041) $ 16,961 $ 25,172
====== ======= ============= ======== ========
Balances - December 31, 2000 $8,696 $ 556 $ 403 $ 17,616 $ - $ 27,271
Comprehensive Income
Net income 3,880 3,880 3,880
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 $452) 873
Reclassification adjustment for
gains realized in net income (net of tax $106) (206)
-------------
Other comprehensive income (net of tax $346) 667 667 667
-------------
Total comprehensive income $4,547
=============
Cash dividends declared (1,311) (1,311)
------ ------- ------------- -------- --------
Balances - September 30, 2001 $8,761 $ 741 $ 1,070 $ 20,185 $ 30,757
====== ======= ============= ======== ========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
Consolidated Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Unaudited
For the Nine Months Ended
-------------------------------
September 30, September 30,
2001 2000
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,880 $ 3,205
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Provision for loan losses 225 325
Depreciation and amortization 564 530
Net (gains) losses on securities available for sale (312) 1
Net losses on sales of equipment 3 -
Discount accretion and premium amortization on securities, net (105) (9)
Originations of loans held for sale (64,035) (25,935)
Proceeds from sales of loans held for sale 55,356 25,923
(Increase) in other assets (2,136) (941)
Increase in other liabilities 1,149 1,832
------------ ------------
Net cash provided by (used in) operating activities $ (5,411) $ 4,931
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturity, principal paydowns and calls on investment securities $ 987 $ 542
Proceeds from maturity, principal paydowns and
calls of securities available for sale 5,984 3,248
Proceeds from sale of securities available for sale 20,426 490
Purchase of securities available for sale (42,335) (15,584)
Net (increase) in loans (17,459) (22,603)
Proceeds from sale of bank premises and equipment 34 -
Purchases of bank premises and equipment (1,552) (524)
------------ ------------
Net cash (used in) investing activities $ (33,915) $ (34,431)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, NOW accounts, and savings accounts $ 19,506 $ 2,147
Net increase in certificates of deposits 13,794 6,831
Proceeds from Federal Home Loan Bank advances 49,100 31,900
Payment on Federal Home Loan Bank advances (44,100) (16,900)
Payments on long-term debt (430) -
Cash dividends paid (1,238) (1,096)
Acquisition of common stock - (1,327)
Issuance of common stock 250 34
Increase (decrease) in securities sold under agreement to repurchase (557) 2,374
------------ ------------
Net cash provided by financing activities $ 36,325 $ 23,963
------------ ------------
Decrease in cash and cash equivalents $ (3,001) $ (5,537)
CASH AND CASH EQUIVALENTS
Beginning $ 17,147 $ 20,557
============ ============
Ending $ 14,146 $ 15,020
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest paid to depositors 4,596 3,745
Income taxes 1,567 1,252
SUPPLEMENTAL DISCLOSURES FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Unrealized gain on securities available for sale 1,013 1,400
Stock issued under merger agreement (16,038 shares) - 357
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
Notes to Consolidated Financial Statements
For the Nine Months Ended September 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 September 30,
2001 and the results of operations and changes in cash flows for the nine months
ended September 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 nine month periods ended September 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 September 30, 2001 are
summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains (Losses) Value
-------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 250 $ - $ 2 $ 252
Obligations of states and
political subdivisions 5,695 246 - 5,941
Mortgaged backed securities 66 - - 66
---------- ---------- ---------- ----------
$ 6,011 $ 246 $ 2 $ 6,259
========== ========== ========== ==========
</TABLE>
7
<PAGE>
Securities available for sale as of September 30, 2001 are summarized
below:
<TABLE>
<CAPTION>
-----------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains (Losses) Value
-----------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 1,099 $ 25 $ - $ 1,124
Corporate securities 2,094 39 (78) 2,055
Obligations of states and
political subdivisions 33,454 908 (83) 34,279
Mortgaged backed securities 42,440 554 (30) 42,964
Other 11,225 286 - 11,511
------------ ------------ ------------ ------------
$ 90,312 $ 1,812 $ (191) $ 91,933
============ ============ ============ ============
</TABLE>
Note 3.
The consolidated loan portfolio is composed of the following:
-----------------------------
September 30, December 31,
2001 2000
-----------------------------
(In Thousands)
Commercial, financial and agricultural $ 22,355 $ 22,555
Real estate construction 24,816 17,693
Real estate mortgage 136,030 126,676
Installment loans to individuals 11,857 10,674
------------- -------------
Total loans 195,058 177,598
Less: Allowance for loan losses 2,030 1,804
------------- -------------
Loans, net $ 193,028 $ 175,794
============= =============
The Company had $105,727 in non-performing assets at September 30,
2001.
8
<PAGE>
Note 4. Reserve for Loan Losses
The following is a summary of transactions in the reserve for loan
losses:
------------------------------
September 30, December 31,
2001 2000
------------------------------
(In Thousands)
Balance at January 1 $ 1,804 $ 1,453
Provision charged to operating expense 225 400
Recoveries added to the reserve 29 47
Loan losses charged to the reserve (28) (96)
------------- -------------
Balance at the end of the period $ 2,030 $ 1,804
============= =============
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 September 30, 2000. There were no anti-dilutive effects from
options at September 30, 2001.
September 30, 2001 September 30, 2000
Per share Per share
Shares Amount Shares Amount
---------- ----------- ----------- ----------
Basic EPS 1,744,013 $ 2.22 1,741,000 $ 1.84
=========== ==========
Effect of dilutive
securities:
stock options 36,075 13,639
---------- -----------
Diluted EPS 1,780,088 $ 2.18 1,754,639 $ 1.83
========== =========== =========== ==========
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 September 30,
2001. The original term to maturity was 24 months. The weighted-average
fixed payment rate was 7.0% at September 30, 2001. Variable interest
payments received are based on three-month LIBOR. At September 30,
2001, the weighted average rate of variable market-indexed interest
payment obligations to the Company was 3.23%. The effect of these
agreements was to transform fixed rate liabilities to variable rate
liabilities. The net income from these agreements was $153,727 for the
nine month period ended September 30, 2001, which is charged to income
as it accrues.
9
<PAGE>
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
September 30, 2001, the fair value of interest rate swaps in an asset
position was $280,120.
Note 7. Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board Issued two
statements - Statement 141, Business Combinations, and Statement 142, Goodwill
and Other Intangible Assets, which will potentially impact the accounting for
goodwill and other intangible assets. Statement 141 eliminates the pooling
method of accounting for business combinations and requires that intangible
assets that meet certain criteria be reported separately from goodwill. The
Statement also requires negative goodwill arising from a business combination to
be recorded as an extraordinary gain. Statement 142 eliminates the amortization
of goodwill and other intangibles that are determined to have an indefinite
life. The Statement requires, at a minimum, annual impairment tests for goodwill
and other intangible assets that are determined to have an indefinite life.
Upon adoption of these Statements, an organization is required to
re-evaluate goodwill and other intangible assets that arose from business
combinations entered into before July 1, 2001. If the recorded other intangible
assets do not meet the criteria for recognition, they should be classified as
goodwill. Similarly, if there are other intangible assets that meet criteria for
recognition but were not separately recorded from goodwill, they should be
reclassified from goodwill. An organization also must reassess the useful lives
of intangible assets and adjust the remaining amortization periods accordingly.
Any negative goodwill must be written-off.
The standards generally are required to be implemented by the Company
in its 2002 financial statements. The adoption of these standards will not have
a material impact on the financial statements.
Note 8. Subsequent Event
On October 19, 2001, the Board of Directors approved the issuance of
$10 million in trust preferred debt through participation by the Company in a
trust preferred pool. Under the terms of the pool, the trust preferred debt
would mature in 30 years and be non-callable for the first five years. After
five years, the trust preferred debt would be callable at each interest reset
date. The stated interest rate, which would reset semi-annually, would be
variable and tied to six month LIBOR plus approximately 3.75%. Interest payments
on the trust preferred debt may be deferred for the first five years. The
Company expects to issue the trust preferred debt in late November 2001.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Summary
Net income for the nine months ended September 30, 2001 increased 21.1%
to $3.9 million or $2.18 per diluted share compared to $3.2 million or $1.83 per
diluted share for the first nine months of 2000. Annualized returns on average
assets and equity for the nine months ended September 30, 2001 were 1.7% and
17.5%, respectively, compared to 1.7% and 18.2% for the same period in 2000.
Total assets for Independent Community Bankshares, Inc. (the "Company")
increased to $332.0 million at September 30, 2001 compared to $289.5 million at
December 31, 2000, representing an increase of $42.5 million or 14.7%. Total
loans at September 30, 2001 were $193.0 million, an increase of $17.2 million
from the December 31, 2000 balance of $175.8 million. The Company is located in
one of the fastest growing counties and metropolitan areas in the United States.
In addition, the Company has increased its customer base as a result of
increased advertising and consolidation in the banking industry within its local
market. These factors have contributed to the solid loan and deposit growth
experienced over the past year. The declining interest rate environment
continued to provide a strong market for mortgage refinancings and, as a result,
loans held for sale increased $8.7 million to $10.8 million at September 30,
2001. The investment portfolio increased 20.1% to $97.9 million at September 30,
2001 compared to $81.6 million at December 31, 2000. Deposits increased $33.3
million to $257.9 million at September 30, 2001 from $224.6 million at December
31, 2000. Growth in the transactional accounts and time deposits account for
$8.8 million and $13.8 million, respectively, of the increase during the first
nine months of 2001. Securities sold under agreements to repurchase with
commercial checking accounts decreased $557,000 from $14.3 million at December
31, 2000 to $13.8 million at September 30, 2001.
Shareholders' equity was $30.8 million at September 30, 2001. This
amount represents an increase of 12.8% from the December 31, 2000 balance of
$27.3 million. The book value per common share was $17.55 at September 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 $10.1 million for the first nine months of 2001
compared to $9.0 million for the same period in 2000. The increase is largely
due to growth in the average earning assets. Average earning assets increased
$45.6 million from $237.0 million at September 30, 2000 to $282.7 million at
September 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 in the latter half of 2000 and
deposit growth has largely funded asset growth during the first nine months of
2001.
Noninterest Income
Noninterest income consisting of fees from deposit accounts, fiduciary
activities and mortgage banking increased 43.5% to $3.8 million for the first
nine months of 2001 compared to $2.7 million for the same period in 2000.
Current market conditions have spurred a refinance boom that has provided
significant volume increases in mortgage fees on loans held for sale as well as
enabled the Company to recognize gains in its investment portfolio. Service
charges on deposit accounts for the first nine months
11
<PAGE>
of 2001 totaled $1.1 million compared to $886,000 for the same period in 2000,
an increase of 20.0%. The Company realized $312,000 in net gains on the
investment portfolio for the nine months ended September 30, 2001. Commissions
and fees from fiduciary activities were $976,000 for the nine month period ended
September 30, 2001 compared to $1.2 million for the same period in 2000. Fees on
loans held for sale increased $553,000 or 116.4% to $1.0 million at September
30, 2001 from the September 30, 2000 balance of $475,000. Other operating income
increased $314,000 to $451,000 for the nine months ended September 30, 2001
compared to $137,000 for the same period in 2000. Additional staff in the
non-deposit investment sales area has contributed to the increase in other
operating income.
Noninterest Expense
Total noninterest expense includes employee-related costs, occupancy
and equipment expense and other overhead. Total noninterest expense was $8.5
million for the first nine months of 2001 compared to $7.0 million for the same
period in 2000. This is a 20.6% increase from the nine months ended September
30, 2000 to the nine months ended September 30, 2001. Salary and benefit expense
increased 27.1% from $4.1 million for the nine months ended September 30, 2000
to $5.2 million for the nine months ended September 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 $405,000 to $535,000 as a result in the increase in sales volume.
Net occupancy expense of premises decreased $2,000 from $874,000 for the nine
months ended September 30, 2000 to $872,000 for the nine months ended September
30, 2001.
Allowance for Loan Losses
The allowance for loan losses at September 30, 2001 was $2.0 million
compared to $1.7 million at September 30, 2000. The provision for loan losses
decreased $100,000 from the September 30, 2000, $325,000 balance to $225,000 at
September 30, 2001. The allowance for loan losses was 1.04% of total loans
outstanding at both September 30, 2001 and September 30, 2000. At September 30,
2001, net loan recoveries were $1,000. There were no loans past due 90 days or
more at September 30, 2001. Non-performing loans decreased to .05% of total
loans outstanding at September 30, 2001 compared to .11% at September 30, 2000.
Management believes the allowance for loan losses is adequate to cover credit
losses inherent in the loan portfolio at September 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 September 30, 2001 and September 30, 2000 was
$30.8 million and $25.2 million, respectively. Total common shares outstanding
at September 30, 2001 were 1,752,258.
At September 30, 2001 the Company's tier 1 and total risk-based capital
ratios were 12.3% and 13.1%, respectively, compared to 12.7% and 13.6% at
December 31, 2000. The Company's leverage ratio was 9.3% at September 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
12
<PAGE>
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 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.
13
<PAGE>
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.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits - None
b) Reports on Form 8-K - None
14
<PAGE>
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: November 14, 2001 /s/ Joseph L. Boling
--------------------------------------
Joseph L. Boling
Chairman of the Board & CEO
Date: November 14, 2001 /s/ Alice P. Frazier
--------------------------------------
Alice P. Frazier
Senior Vice President & CFO
15
</TEXT>
</DOCUMENT>