U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC
20459
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of the Securities Exchange Act of 1934
| For the Quarter Ended: |
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Commission File No.: |
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| SOUTHERN FINANCIAL BANCORP, INC. | ||
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| Virginia |
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54-1779978 |
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| (State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification Number) |
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| 37 East Main Street |
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20186 |
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| (address of principal executive office) |
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(Zip Code) |
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| Registrant’s Telephone Number, including area code: (540) 349-3900 | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 |
o |
As of October 31, 2002, there were 4,700,092 shares of the registrant’s Common Stock outstanding.
SOUTHERN FINANCIAL BANCORP, INC.
QUARTERLY REPORT ON FORM 10-Q
September 30, 2002
TABLE OF CONTENTS
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Page |
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| PART I. |
FINANCIAL INFORMATION |
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| Item 1. |
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Consolidated Balance Sheets as of September 30, 2002 (Unaudited) and December 31, 2001 |
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7 - 13 | |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14- 19 | |
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| Item 3. |
19 - 20 | ||
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| Item 4. |
20 | ||
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| PART II. |
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| Item 1. |
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| Item 2. |
21 | ||
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| Item 3. |
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| Item 4. |
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| Item 5. |
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| Item 6. |
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| PART III. |
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22 | |
2
SOUTHERN FINANCIAL BANCORP, INC.
FINANCIAL STATEMENTS
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September 30, |
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December 31, |
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| Assets |
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| Cash and due from banks |
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$ |
32,094,593 |
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$ |
21,290,594 |
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| Overnight earning deposits |
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6,577,279 |
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7,167,963 |
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| Investment securities - available for sale |
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238,255,994 |
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306,611,560 |
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| Loans receivable, net |
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594,952,864 |
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410,973,260 |
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| Cash surrender value of life insurance |
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21,994,918 |
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16,160,787 |
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| Premises and equipment, net |
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8,100,957 |
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6,796,246 |
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| Other assets |
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47,362,877 |
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15,976,548 |
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Total assets |
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$ |
949,339,482 |
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$ |
784,976,958 |
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| Liabilities and Stockholders’ Equity |
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| Liabilities: |
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| Deposits |
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$ |
804,008,003 |
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$ |
633,325,894 |
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| Advances from Federal Home Loan Bank - short term |
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17,000,000 |
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40,500,000 |
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| Advances from Federal Home Loan Bank - long term |
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15,000,000 |
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15,000,000 |
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| Company-obligated mandatorily redeemable securities of subsidiary holding solely parent debentures |
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13,000,000 |
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13,000,000 |
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| Securities sold under agreements to repurchase |
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5,682,320 |
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— |
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| Other liabilities |
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14,564,644 |
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18,482,865 |
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Total liabilities |
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869,254,967 |
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720,308,759 |
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| Stockholders’ equity: |
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| Preferred stock |
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129 |
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136 |
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| Common stock |
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46,943 |
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42,846 |
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| Capital in excess of par |
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65,254,591 |
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54,628,316 |
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| Retained earnings |
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13,815,865 |
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7,986,380 |
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| Accumulated other comprehensive income |
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966,987 |
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2,010,521 |
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Total stockholders’ equity |
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80,084,515 |
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64,668,199 |
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Total liabilities and stockholders’ equity |
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$ |
949,339,482 |
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$ |
784,976,958 |
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The accompanying notes are an integral part of these consolidated financial statements.
3
SOUTHERN FINANCIAL BANCORP, INC.
FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF INCOME
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Three Months Ended |
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Nine Months Ended |
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2002 |
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2001 |
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2002 |
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2001 |
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| Interest Income |
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| Loans |
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$ |
9,698,587 |
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$ |
7,750,290 |
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$ |
26,089,278 |
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$ |
23,195,325 |
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| Investment securities |
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2,940,438 |
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6,537,908 |
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11,665,316 |
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16,546,311 |
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Total interest income |
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12,639,025 |
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14,288,198 |
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37,754,594 |
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39,741,636 |
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| Interest Expense |
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| Deposits |
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3,746,707 |
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5,430,455 |
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10,789,195 |
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16,808,565 |
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| Borrowings |
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732,076 |
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1,609,473 |
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2,423,961 |
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4,255,045 |
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Total interest expense |
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4,478,783 |
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7,039,928 |
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13,213,156 |
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21,063,610 |
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Net interest income |
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8,160,242 |
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7,248,270 |
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24,541,438 |
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18,678,026 |
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| Provision for loan losses |
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950,000 |
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1,150,000 |
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4,010,000 |
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2,420,000 |
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Net interest income after provision for loan losses |
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7,210,242 |
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6,098,270 |
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20,531,438 |
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16,258,026 |
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| Other Income |
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| Account maintenance and electronic banking fees |
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674,906 |
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540,633 |
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1,959,699 |
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1,637,060 |
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| Commercial service fees |
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150,073 |
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82,024 |
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391,553 |
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226,894 |
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| Other loan fees |
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89,157 |
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91,119 |
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296,673 |
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312,194 |
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| System maintenance and license fees |
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43,455 |
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50,900 |
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176,307 |
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170,971 |
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| Income from bank owned life insurance |
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292,500 |
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232,500 |
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834,131 |
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697,500 |
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| Gain on sale of loans |
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217,093 |
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110,400 |
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464,800 |
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512,723 |
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| Gain (loss) on investment securities, net |
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(103,018 |
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362,879 |
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(405,360 |
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1,513,670 |
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| Other income (loss) |
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(15,515 |
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42,745 |
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(12,249 |
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125,269 |
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Total other income |
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1,348,651 |
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1,513,200 |
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3,705,554 |
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5,196,281 |
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| Other Expense |
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| Employee compensation and benefits |
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2,556,605 |
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2,098,105 |
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7,281,265 |
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6,402,549 |
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| Premises, equipment and data processing |
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1,361,951 |
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1,139,338 |
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3,825,309 |
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3,262,951 |
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| Other |
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718,732 |
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1,034,776 |
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2,117,767 |
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2,995,495 |
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Total other expense |
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4,637,288 |
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4,272,219 |
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13,224,341 |
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12,660,995 |
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Income before income taxes |
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3,921,605 |
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3,339,251 |
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11,012,651 |
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8,793,312 |
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| Provision for income taxes |
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1,246,400 |
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1,061,900 |
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3,501,400 |
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2,760,500 |
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Net income |
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$ |
2,675,205 |
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$ |
2,277,351 |
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$ |
7,511,251 |
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$ |
6,032,812 |
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| Earnings per common share: |
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Basic |
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$ |
0.60 |
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$ |
0.68 |
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$ |
1.72 |
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$ |
1.82 |
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Diluted |
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0.57 |
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0.65 |
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1.65 |
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1.75 |
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| Dividends declared per common share |
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0.12 |
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0.11 |
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0.36 |
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0.33 |
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Basic |
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4,482,585 |
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3,330,518 |
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4,352,442 |
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3,321,036 |
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Diluted |
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4,722,059 |
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3,497,666 |
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4,564,858 |
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3,442,133 |
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The accompanying notes are an integral part of these consolidated financial statements
4
SOUTHERN FINANCIAL BANCORP, INC.
FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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Three Months Ended |
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