UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13(a) OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 2005
Commission File Number: 000-50047
CALVIN B. TAYLOR BANKSHARES, INC.
I.R.S. Employer Identification No.: 52-1948274
State of incorporation: Maryland
Address of principal executive offices: 24 North Main Street, Berlin,
Maryland 21811
Issuer's telephone number: (410) 641-1700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13(a) or 15(d) of the Exchange Act during the preceding
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
Indicate by check mark whether the registrant is an accelerated filer as defined
in Rule 12b-2 of the Exchange Act. 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: The registrant had 3,187,656
shares of common stock ($1.00 par) outstanding as of July 31, 2005.
Page 1
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Form 10-Q
Index
Part I- Financial Information Page
Item 1 Consolidated Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4-5
Consolidated Statements of Cash Flows 6-7
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
Item 3 Quantitative and Qualitative Disclosures About Market Risks 12-13
Item 4 Controls and Procedures 13
Part II-Other Information
Item 1 Legal Proceedings 14
Item 2 Changes in Securities and Use of Proceeds 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 14-17
Signatures 18
Page 2
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I - Financial Information
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
2005 2004
Assets
Cash and due from banks $ 18,594,369 $ 21,901,546
Federal funds sold 41,059,122 32,692,233
Interest-bearing deposits 2,150,017 2,161,496
Investment securities available for sale 6,557,865 5,921,287
Investment securities held to maturity
(approximate fair value of $138,275,900
and $155,107,700) 139,321,506 156,029,445
Loans, less allowance for loan losses
of $2,192,258 and $2,177,926 189,264,687 161,510,157
Premises and equipment 6,748,319 6,891,238
Accrued interest receivable 1,543,755 1,415,775
Computer software 296,437 322,209
Bank owned life insurance 4,290,242 4,214,806
Other assets 72,622 272,790
$ 409,898,941 $ 393,332,982
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 86,759,752 $ 78,542,414
Interest-bearing 245,863,324 241,229,944
332,623,076 319,772,358
Securities sold under agreements to repurchase 6,801,447 5,933,466
Accrued interest payable 114,498 116,502
Note payable 152,266 162,161
Deferred income taxes 730,971 549,070
Other liabilities 31,229 101,857
340,453,487 326,635,414
Stockholders' equity
Common stock, par value $1 per share
authorized 10,000,000 shares, issued and
outstanding 3,187,656 shares at June 30,2005
and 3,208,478 shares at December 31, 2004 3,187,656 3,208,478
Additional paid in capital 15,458,235 16,187,005
Retained earnings 49,105,752 45,917,427
67,751,643 65,312,910
Accumulated other comprehensive income 1,693,811 1,384,658
69,445,454 66,697,568
$ 409,898,941 $ 393,332,982
See accompanying Notes to Consolidated Financial Statements
Page 3
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
For the three months ended June 30,
2005 2004
Interest and dividend revenue
Loans, including fees $ 3,204,198 $ 2,906,603
U.S. Treasury and government agency
securities 764,872 662,180
State and municipal securities 71,951 66,339
Federal funds sold 225,819 80,821
Interest-bearing deposits 12,701 11,444
Equity securities 10,204 6,146
Total interest and dividend revenue 4,289,745 3,733,533
Interest expense
Deposits 383,715 379,891
Borrowings 5,219 4,330
Total interest expense 388,934 384,221
Net interest income 3,900,811 3,349,312
Provision for loan losses - -
Net interest income after
provision for loan losses 3,900,811 3,349,312
Noninterest revenue
Service charges on deposit accounts 266,598 269,269
ATM and debit card revenue 110,689 81,048
Miscellaneous revenue 95,421 115,911
Total noninterest revenue 472,708 466,228
Noninterest expenses
Salaries 766,409 759,793
Employee benefits 200,184 168,735
Occupancy 152,598 144,098
Furniture and equipment 126,753 153,696
Other operating 504,710 478,125
Total noninterest expenses 1,750,654 1,704,447
Income before income taxes 2,622,865 2,111,093
Income taxes 935,000 740,000
Net income $ 1,687,865 $ 1,371,093
Earnings per common share $ 0.53 $ 0.43
See accompanying Notes to Consolidated Financial Statements
Page 4
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
(Continued)
For the six months ended June 30,
2005 2004
Interest and dividend revenue
Loans, including fees $ 6,087,427 $ 5,812,630
U.S. Treasury and government agency
securities 1,535,965 1,335,728
State and municipal securities 144,978 126,508
Federal funds sold 406,003 153,362
Interest-bearing deposits 24,863 23,514
Equity securities 31,660 24,913
Total interest and dividend revenue 8,230,896 7,476,655
Interest expense
Deposits 740,310 778,455
Borrowings 9,638 8,303
Total interest expense 749,948 786,758
Net interest income 7,480,948 6,689,897
Provision for loan losses - -
Net interest income after
provision for loan losses 7,480,948 6,689,897
Noninterest revenue
Service charges on deposit accounts 522,196 521,490
ATM and debit card revenue 186,861 146,739
Miscellaneous revenue 193,312 217,383
Total noninterest revenue 902,369 885,612
Noninterest expenses
Salaries 1,532,588 1,533,724
Employee benefits 383,211 371,965
Occupancy 316,495 288,931
Furniture and equipment 248,464 280,946
Other operating 952,235 911,066
Total noninterest expenses 3,432,993 3,386,632
Income before income taxes 4,950,324 4,188,877
Income taxes 1,762,000 1,475,000
Net income $ 3,188,324 $ 2,713,877
Earnings per common share $ 1.00 $ 0.84
See accompanying Notes to Consolidated Financial Statements
Page 5
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the six months ended June 30,
2005 2004
Cash flows from operating activities
Interest received $ 8,036,145 $ 7,461,114
Fees and commissions received 901,216 914,244
Interest paid (751,952) (807,810)
Cash paid to suppliers and employees (3,085,257) (3,032,817)
Income taxes paid (1,730,920) (1,696,328)
3,369,232 2,838,403
Cash flows from investing activities
Certificates of deposit purchased,
net of maturities (1,000) (3)
Purchase of investments available for sale (145,379) (99,004)
Proceeds from maturities of investments
held to maturity 44,845,000 54,450,084
Purchase of investments held to maturity (28,070,433) (52,057,988)
Loans made, net of principal collected (27,754,530) (854,089)
Purchases of and deposit on premises,
equipment, and computer software (154,869) (243,441)
(11,281,211) 1,195,559
Cash flows from financing activities
Net increase (decrease) in
Time deposits (7,697,384) (6,821,176)
Other deposits 20,548,102 11,617,799
Securities sold under agreements
to repurchase 867,981 1,453,519
Payment on note payable (9,895) (9,321)
Common shares repurchased (749,592) (259,848)
12,959,212 5,980,973
Net increase (decrease) in cash and
cash equivalents 5,047,233 10,014,935
Cash and cash equivalents at beginning
of period 54,623,503 50,158,779
Cash and cash equivalents at end of period $ 59,670,736 $ 60,173,714
Page 6
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the six months ended June 30,
2005 2004
Reconciliation of net income to net cash
provided by operating activities
Net income $ 3,188,324 $ 2,713,877
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 323,560 326,500
Amortization of premiums and accretion
of discount, net (66,772) (927)
(Gain) loss on disposition of assets - 12,815
Decrease (increase) in
Accrued interest receivable (127,980) (14,614)
Cash surrender value of bank owned
life insurance (75,436) (81,185)
Other assets 200,168 11,324
Increase (decrease) in
Accrued interest payable (2,004) (21,052)
Other liabilities (70,628) (108,335)
$ 3,369,232 $ 2,838,403
Composition of cash and cash equivalents
Cash and due from banks $ 18,594,369 $ 18,110,361
Federal funds sold 41,059,122 42,050,901
Interest-bearing deposits, except
for time deposits 17,245 12,452
$ 59,670,736 $ 60,173,714
See accompanying Notes to Consolidated Financial Statements
Page 7
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Financial Statements (Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q. Accordingly, they
do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been made. These adjustments are of a normal recurring nature. Results of
operations for the six months ended June 30, 2005 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2005. For
further information, refer to the audited consolidated financial statements and
related footnotes for the Registrant's year ended December 31, 2004.
Consolidation has resulted in the elimination of all significant inter-
company accounts and transactions.
Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand, amounts due from banks, federal funds sold, and interest-bearing
deposits except for time deposits. Federal funds are purchased and sold for
one-day periods.
Per share data
Earnings per common share are determined by dividing net income by the
weighted average number of common shares outstanding for the period, as follows:
2005 2004
Three months ended June 30 3,196,432 3,222,311
Six months ended June 30 3,201,817 3,224,838
2. Comprehensive Income
Comprehensive income consists of:
Six months ended June 30,
2005 2004
Net income $ 3,188,324 $ 2,713,877
Unrealized gain (loss) on investment
securities available for sale, net of
income taxes 309,154 (91,341)
Comprehensive income $ 3,497,478 $ 2,622,536
3. Loan commitments
Loan commitments are agreements to lend to customers as long as there is no
violation of any conditions of the contracts. Outstanding loan commitments and
letters of credit consist of:
June 30,
2005 2004
Loan commitments $ 36,185,825 $ 29,012,919
Standby letters of credit $ 1,608,631 $ 2,809,485
Page 8
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion contains certain forward-looking statements within
the meaning of and made pursuant to the safe harbor provisions of the Private
Litigation Securities Reform Act of 1995.
The following discussion of the financial condition and results of
operations of the Registrant (the Company) should be read in conjunction with
the Company's financial statements and related notes and other statistical
information included elsewhere herein.
General
Calvin B. Taylor Bankshares, Inc. (the "Company") was incorporated as a
Maryland corporation on October 31, 1995. The Company owns all of the stock of
Calvin B. Taylor Banking Company (the "Bank"), a commercial bank that was
established in 1890 and incorporated under the laws of the State of Maryland on
December 17, 1907. This bank operates nine banking offices in Worcester County,
Maryland and one banking office in Ocean View, Delaware. The Bank's
administrative office is located in Berlin, Maryland. The bank is engaged in a
general commercial and retail banking business serving individuals, businesses,
and governmental units in Worcester County, Maryland, Ocean View, Delaware, and
neighboring counties.
The Company currently engages in no business other than owning and managing
the Bank.
Critical Accounting Policies
The Company's financial condition and results of operations are sensitive
to accounting measurements and estimates of inherently uncertain matters. When
applying accounting policies in areas that are subjective in nature, management
uses its best judgment to arrive at the carrying value of certain assets. One
of the most critical accounting policies applied is related to the valuation of
the loan portfolio. Management estimates the appropriate allowance for loan
losses, including the timing of loan charge-offs.
The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. It is one of the most difficult and subjective judgments.
The adequacy of the allowance for loan losses is evaluated periodically based on
a review of the loan portfolio, with a particular emphasis on non-accruing, past
due, and other loans that management believes require attention. The
determination of the reserve level relies on management's judgment about factors
affecting loan quality, current trends in delinquencies and charge-offs, and
anticipated changes in the composition and size of the portfolio. Management
also considers external factors such as changes in the interest rate
environment, the view of the Bank's regulators, economic conditions in the
Bank's service area and beyond, and legislation that affects the banking
industry.
Financial Condition
Total assets of the Company increased $16.6 million from December 31, 2004
to June 30, 2005. Combined deposits and customer repurchase agreements
increased $13.7 million during the same period. During the second quarter of
Page 9
the year, the Bank typically experiences a growth in deposits from seasonal
business customers, summer residents and tourists.
During the first six months of 2005, the Bank's gross loan portfolio has
increased $27.8 million. Funding for these loans was provided by growth in
deposits and a reduction of the investment portfolio. This increase in loans
does not negatively impact the Company's ability to meet liquidity demands.
Historically, the Company has low loan charge-offs. Based on a review of
the consolidated loan portfolio, the Company determined that an allowance of
1.14% of gross loans was adequate as of June 30, 2005. At December 31, 2004,
the allowance was 1.33% of gross loans. At June 30, 2005, loans delinquent
ninety days or more totaled $562,768 or .29% of the portfolio. At
December 31, 2004, loans delinquent ninety days or more totaled $391,676 or
.24% of the portfolio. There were no non-accruing loans as of June 30, 2005
or December 31, 2004.
The Company makes loans to customers located primarily in the Delmarva
region. Although the loan portfolio is diversified, its performance will be
influenced by the economy of the region.
Liquidity
The Company's major sources of liquidity are loan repayments, maturities of
short-term investments including federal funds sold, and increases in core
deposits. Throughout the first quarter of the year, when the Bank typically
experiences a decline in deposits, federal funds sold and investment securities
are primary sources of liquidity. During the second quarter of the year,
additional sources of liquidity become more readily available as business
borrowers accelerate repayment of loans, and the Bank receives seasonal
deposits. Throughout the second and third quarters the Bank maintains a high
liquidity level. Funds from seasonal deposits are generally invested in short-
term U.S. Treasury Bills and overnight federal funds. Average liquid assets
(cash and amounts due from banks, interest bearing deposits in other banks,
federal funds sold, and investment securities) compared to average deposits were
61.24% for the second quarter of 2005 compared to 65.11% for the first quarter
of 2005 and 65.41% for the second quarter of 2004. This decrease in liquidity
is primarily due to the growth of the loan portfolio and the resultant reduction
of the investment portfolio.
Results of Operations
Net income for the three months ended June 30, 2005, was $1,687,865 or $.53
per share, compared to $1,371,093 or $.43 per share for the second quarter of
2004. This represents an increase of $316,772 or 23.1% from the prior year.
Year to date net income has increased $474,447 or $.16 per share to $3,188,324
or $1.00 per share in 2005 from $2,713,877 or $.84 per share in 2004. The key
components of net income are discussed in the following paragraphs.
For the first six months of 2005 compared to 2004, net interest income
increased $791,051. Net interest income increased $551,499 in the 2nd quarter
of 2005 compared to the 2nd quarter of 2004. The yield on interest earning
assets increased by 52 basis points from 4.26% for 2nd quarter 2004 to 4.78% in
2005, while the quarterly yield on interest-bearing liabilities remained at .64%
for both years. These increases are attributable to growth in the loan
portfolio and the rise of market rates that began in mid-2004. The Company's
overnight investment in federal funds sold has repriced with the market, while
short-term debt securities are repricing more slowly. The Company's Management
has implemented gradual increases to deposit rates.
The Company's net interest income is one of the most important factors in
evaluating its financial performance. Management uses interest sensitivity
analysis to determine the effect of rate changes. Net interest income is
projected over a one-year period to determine the effect of an increase or
decrease in the prime rate of 100 basis points. If prime were to decrease one
hundred basis points, and all assets and liabilities maturing within that period
were fully adjusted for the rate change, the Company would experience a decrease
of less than five percent in net interest income. The sensitivity analysis does
not consider the likelihood of these rate changes nor whether management's
reaction to this rate change would be to reprice its loans or deposits.
Page 10
No provision for loan losses was charged to expense during the first six
months of 2005 or 2004. Net loans charged-off (recovered) were ($14,332) during
the first half of 2005 versus ($3,429) in the same period in 2004.
For the quarter ended June 30, 2005, noninterest revenue exceeds last year
by $6,480 primarily due to increased usage of VISA debit cards. For the first
six months of 2005, noninterest revenue exceeds last year by $16,757 also due,
primarily, to increased usage of VISA debit cards.
For the first six months of 2005, the noninterest expense variance of
$46,361 over 2004, includes an increase in salaries and employee benefits of
$10,110. For the 2nd quarter of 2005, the noninterest expense variance of
$46,207 over 2nd quarter 2004, includes a $38,065 increase in salaries and
benefits which relates to the timing of cash basis monthly payments for group
insurance. Stability of personnel costs is, in part, attributable to Management
implementing a strategy to reduce the number of year-round staff and employ
more seasonal employees in the summer when the local resorts bring increased
activity to branches. The Bank employed 98 full time equivalent employees as
of June 30, 2005. The Bank hires seasonal employees during the summer. The
Company has no employees other than those hired by the Bank.
For the quarter ended June 30,2005, income taxes are $195,000 higher than
the same quarter last year, on a pre-tax income increase of $511,722. For the
first six months of 2005, income taxes are $287,000 higher than last year, on a
pre-tax income increase of $761,447.
Plans of Operation
The Bank offers a full range of deposit services including checking, NOW,
Money Market, and savings accounts, and time deposits including certificates of
deposit. The transaction accounts and time certificates are tailored to the
Bank's principal market areas at rates competitive to those offered in the area.
In addition, the Bank offers certain retirement account services, such as
Individual Retirements Accounts ("IRAs"). All deposits are insured by the
Federal Deposit Insurance Corporation (the "FDIC") up to the maximum amount
allowed by law (generally, $100,000 per depositor subject to aggregation rules).
The Bank solicits these accounts from individuals, businesses, associations and
organizations, and governmental authorities.
The Company, through the Bank, offers a full range of short- to medium-term
commercial and personal loans. Commercial loans include both secured and
unsecured loans for working capital (including inventory and receivables),
business expansion (including acquisition of real estate and improvements), and
purchase of equipment and machinery. Consumer loans include secured and
unsecured loans for financing automobiles, home improvements, education, and
personal investments. The Company originates commercial and residential
mortgage loans and real estate construction and acquisition loans. These
lending activities are subject to a variety of lending limits imposed by state
and federal law. The Bank may not make any loans to any director or executive
officer (except for commercial loans to directors who are not officers or
employees) unless the Board of Directors of the Bank approves the loans. The
Board of Directors must review any such loan every six months.
Other bank services include cash management services, 24-hour ATM's, debit
cards, safe deposit boxes, travelers' checks, direct deposit of payroll and
social security, and automatic drafts. The Bank offers bank-by-phone and
Internet banking services, including electronic bill-payment, to both commercial
and retail customers.
Page 11
Capital Resources and Adequacy
Total stockholders' equity increased $2,747,886 from December 31, 2004 to
June 30, 2005. This increase is attributable to comprehensive income recorded
during the period, as detailed in Note 2 of the Notes to Financial Statements,
reduced by $749,592 used to repurchase and retire 20,822 shares of the
Company's common stock. Stock repurchases were at a price of $36.00 per share.
Under the capital guidelines of the Federal Reserve Board and the FDIC, the
Company and Bank are currently required to maintain a minimum risk-based total
capital ratio of 8%, with at least 4% being Tier 1 capital. Tier 1 capital
consists of stockholders' equity less accumulated other comprehensive income.
In addition, the Company and the Bank must maintain a minimum Tier 1 leverage
ratio (Tier 1 capital to total assets) of at least 4%, but this minimum ratio is
increased by 100-200 basis points for other than the highest-rated institutions.
Tier one risk-based capital ratios of the Company as of June 30, 2005 and
December 31, 2004 were 36.9% and 41.7%, respectively. Both are substantially
in excess of regulatory minimum requirements.
Website Access to SEC Reports
The Bank maintains an Internet website at www.taylorbank.com. The
Company's periodic SEC reports, including annual reports on Form 10-K, quarterly
reports on Form 10-Q, and current reports on Form 8-K, are accessible through
this website. Access to these filings is free of charge. The reports are
available as soon as practicable after they are filed electronically with the
SEC.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's principal market risk exposure relates to interest rates on
interest-earning assets and interest-bearing liabilities. Unlike most
industrial companies, the assets and liabilities of financial institutions such
as the Company and the Bank are primarily monetary in nature. Therefore,
interest rates have a more significant effect on the Company's performance than
do the effects of changes in the general rate of inflation and change in prices.
In addition, interest rates do not necessarily move in the same direction or in
the same magnitude as the prices of goods and services. As discussed previously,
management monitors and seeks to manage the relationships between interest
sensitive assets and liabilities in order to protect against wide interest rate
fluctuations, including those resulting from inflation.
At June 30, 2005, the Company's interest rate sensitivity, as measured by
gap analysis, showed the Company was asset-sensitive with a one-year cumulative
gap of 16.05%, as a percentage of interest-earning assets. Generally asset-
sensitivity indicates that assets reprice more quickly than liabilities and in a
rising rate environment net interest income typically increases. Conversely, if
interest rates decrease, net interest income would decline. The Bank has
classified its demand mortgage and commercial loans as immediately repriceable.
Unlike loans tied to prime, these rates do not necessarily change as prime
changes since the decision to call the loans and change the rates rests with
management.
Page 12
Item 4. Controls and procedures
Disclosure Controls and procedures are designed and maintained by the
Company to ensure that information required to be disclosed in the Company's
publicly filed reports is recorded, processed, summarized and reported in a
timely manner. Such information must be available to management, including the
Chief Executive Officer (CEO) and Treasurer, to allow them to make timely
decisions about required disclosures. Even a well-designed and maintained
control system can provide only reasonable, not absolute, assurance that its
objectives are achieved. Inherent limitations in any system of controls include
flawed judgment, errors, omissions, or intentional circumvention of controls.
The Company's management, including the CEO and Treasurer, performed an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of June 30, 2005. Based on that
evaluation, the Company's management, including the CEO and Treasurer, has
concluded that the Company's disclosure controls and procedures are effective.
The projection of an evaluation of controls to future periods is subject to the
risk that procedures may become inadequate due to changes in conditions
including the degree of compliance with procedures.
Changes in Internal Controls
During the quarter ended on the date of this report, there were no
significant changes in the Company's internal control over financial reporting
that have had or are reasonably likely to have a material affect on the
Company's internal control over financial reporting. As of June 30, 2005, the
Company's management, including the CEO and Treasurer, has concluded that the
Company's internal controls over financial reporting are effective.
Page 13
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part II. Other Information
Item 1 Legal Proceedings
Not applicable
Item 2 Changes in Securities and Use of Proceeds
(c) The following table presents information about the Company's
repurchase of its equity securities during the calendar quarter
ended on the date of this Form 10-Q.
(c ) Total number (d) Maximum Number
(a) Total (b) Average of Shares Purchased of Shares that may
Number Price Paid as Part of a Publicly yet be Purchased
Period of Shares per Share Announced Program Under the Program
April 648 $36.00 648 315,226
May 15,000 $36.00 15,000 300,226
June 200 $36.00 200 300,026
Totals 15,848 $36.00 15,848
The Company publicly announced on August 14, 2003, that it would repurchase
up to 10% of its outstanding equity stock at that time, which equated to a total
of 324,000 common shares available for repurchase. As of January 1, 2005, this
plan was renewed, by public announcement, making up to 10% of the Company's
outstanding equity stock at that time, which equates to a total of 320,848
common shares, available for repurchase in 2005. There is no expiration date for
this program. No other stock repurchase plan or program existed or exists
simultaneously, nor has any other plan or program expired during the period
covered by this table. Common shares repurchased under this plan are retired.
Item 3 Defaults Upon Senior Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
The Company held its annual meeting on May 11, 2005, during which the
items detailed in the proxy statement dated March 15, 2005, were
approved. This includes the reelection of the Board of Directors.
Item 5 Other information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits
2. Proxy Statement dated March 15, 2005, is incorporated by
reference.
31. Certifications of Principal Executive Officer and Principal
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 are presented on pages 15 and 16, respectively.
32. Certification of Principal Executive Officer and Principal
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 is presented on page 17.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
June 30, 2005.
Page 14
Exhibit 31.1
Certification - Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Reese F. Cropper, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Calvin B. Taylor
Bankshares, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiary, is made known to us
by others within those entities, particularly during the period in
which this report is being prepared;
b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the most recent
fiscal quarter that has or is reasonably likely to materially affect
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Calvin B. Taylor Bankshares, Inc.
Date: August 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
Page 15
Exhibit 31.2
Certification - Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jennifer G. Hawkins, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Calvin B. Taylor
Bankshares, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiary, is made known to us
by others within those entities, particularly during the period in
which this report is being prepared;
b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the most recent
fiscal quarter that has or is reasonably likely to materially affect
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent function):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Calvin B. Taylor Bankshares, Inc.
Date: August 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 16
Exhibit 32 - Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
We, the undersigned, certify that to the best of our knowledge, based upon
a review of the Quarterly Report on Form 10-Q for the period ended June 30,
2005 of the Registrant (the "Report"):
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Registrant.
Calvin B. Taylor Bankshares, Inc.
Date: August 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
Date: August 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 17
SIGNATURES
Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Calvin B. Taylor Bankshares, Inc.
Date: August 5, 2005_______ By:/s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
Date: August 5, 2005_______ By:/s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Page 18