Attached files
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| 8-K - FORM 8-K - UWHARRIE CAPITAL CORP | d8k.htm |
Exhibit 99.1
June 14, 2010
Dear Shareholder:
Through the fundamentals of responsible banking and our commitment to build strong customer relationships, we continue to have solid performance and a strong capital base. We believe our strength and stability offer security for our customers and our communities in these uncertain times, and we are well-positioned to continue to provide capital to local and family-owned businesses in the markets we serve. During the first quarter of 2010, total assets increased to $486.3 million from $461.8 million for the same period 2009. Net loans held increased to $357.1 million from $333.6 million, up 7.1% and deposits increased to $380.3 million from $362.4 million, up 4.9%.
For the first quarter of 2010, net interest income was $4.6 million, an increase of $280 thousand, or 6.5% over the first three months of 2009. Net interest margin was 4.31%, up from 4.10% for the same period 2009; this compares favorably to our peer at 3.31%. Net interest income and margin improved as the result of both our deposit mix and our effective pricing of interest-bearing assets and liabilities. Noninterest income totaled $1.6 million for the first quarter of 2010, compared with $2.3 million in the first quarter 2009. Noninterest income was less than first quarter last year, primarily due to the unprecedented additional $944 thousand revenue generated by our mortgage banking activities in the first part of 2009. Net income for the quarter ended March 31, 2010, was $539 thousand, a decrease from $905 thousand for the first quarter of 2009. Net income available to common shareholders was $378 thousand as of March 31, 2010, compared to $743 thousand as of March 31, 2009.
Uwharrie Capital Corp remains strong, profitable and focused on a brighter future. With economic indicators starting to show some improvement, we are looking forward to helping our customers and our communities through the recovery. While many other financial institutions are looking inward, we are uniquely positioned to take advantage of market opportunities. Our experienced managers and qualified associates have the depth and experience to take us forward far beyond this recession.
Several initiatives are well underway, or have been recently introduced, that will continue to position us competitively in the markets we serve and allow additional growth. Immediately after the Annual Meeting of Shareholders, we launched our new corporate websites for each of our subsidiary banks and Uwharrie Capital Corp that incorporate many user-friendly applications and ease of navigation…all with a new look and feel.
We are also planning to expand of our footprint within the counties we currently serve. Sometime in late June, Bank of Stanly will be opening our new West Stanly facility in Locust as we move from a temporary office into a new full service financial center. Additionally, we purchased property for a new office in Richfield for Bank of Stanly. We are rapidly moving to begin construction of a new office in Afton Village that will allow Cabarrus Bank & Trust to serve more customers from that community. Recognizing the need for added visibility and
convenience for Anson Bank & Trust, a new site has been acquired for an office in Anson County.
Perhaps surprising for a community bank, your Company has led the way with new products and solutions. We continue that trend when later in the summer Uwharrie Capital Corp will be launching our mobile banking application “e-zMobile - Our Most Convenient Location.” Your Company will be offering the most state-of-the-art banking solution that will allow our customers to do their banking from the convenience of their cell phone, anytime and anywhere. We are committed to being a high touch financial services company with the products, services and delivery systems one would only expect to find at the most sophisticated banks.
It is an exciting time to be part of the Uwharrie Capital Corp family and we hope you are pleased with the results and activities of your Company. The conventional ideals of doing the right thing, building financial strength, delivering quality products and developing meaningful relationships continue to guide and direct us and we appreciate the confidence you have placed in us. Together, we are making a difference.
Sincerely,
UWHARRIE CAPITAL CORP
Roger L. Dick
President and Chief Executive Officer
Uwharrie Capital Corp and Subsidiaries
Consolidated Balance Sheets
| (Amounts in thousands except share and per share data) |
March 31, 2010 |
March 31, 2009 |
||||||
| Assets |
||||||||
| Cash and due from banks |
$ | 10,314 | $ | 13,675 | ||||
| Investment securities available for sale |
77,355 | 76,077 | ||||||
| Federal funds sold |
— | — | ||||||
| Loans held for sale |
1,459 | 3,959 | ||||||
| Loans held for investment |
362,538 | 338,147 | ||||||
| Less: Allowance for loan losses |
5,401 | 4,573 | ||||||
| Net loans held for investment |
357,137 | 333,574 | ||||||
| Interest receivable |
2,086 | 2,089 | ||||||
| Premises and equipment, net |
13,885 | 12,160 | ||||||
| Federal Home Loan Bank stock |
3,221 | 3,236 | ||||||
| Bank-owned life insurance |
5,762 | 5,557 | ||||||
| Goodwill |
987 | 987 | ||||||
| Other real estate owned |
3,894 | 3259 | ||||||
| Other assets |
10,235 | 7,252 | ||||||
| Total assets |
$ | 486,335 | $ | 461,825 | ||||
| Liabilities |
||||||||
| Deposits: |
||||||||
| Demand, noninterest-bearing |
$ | 46,238 | $ | 47,183 | ||||
| Interest checking and money market accounts |
139,089 | 116,325 | ||||||
| Savings accounts |
33,354 | 30,247 | ||||||
| Time deposits, $100,000 and over |
67,995 | 66,927 | ||||||
| Other time deposits |
93,604 | 101,757 | ||||||
| Total deposits |
380,280 | 362,439 | ||||||
| Interest payable |
411 | 516 | ||||||
| Short-term borrowed funds |
22,822 | 22,748 | ||||||
| Long-term debt |
35,641 | 30,500 | ||||||
| Other liabilities |
2,570 | 2,796 | ||||||
| Total liabilities |
441,724 | 418,999 | ||||||
| Shareholders’ Equity |
||||||||
| Preferred Stock, no par value: 10,000,000 shares authorized; |
||||||||
| 10,000 shares of series A issued and outstanding |
10,000 | 10,000 | ||||||
| 500 shares of series B issued and outstanding |
500 | 500 | ||||||
| Discount on preferred stock |
(375 | ) | (475 | ) | ||||
| Common stock, $1.25 par value: 20,000,000 shares authorized; issued and outstanding or in process of issuance 7,593,929 and 7,593,929 shares, respectively. |
||||||||
| Book value per share $4.54 in 2010 and $4.31 in 2009 |
9,492 | 9,492 | ||||||
| Additional paid-in capital |
14,031 | 14,026 | ||||||
| Unearned ESOP compensation |
(648 | ) | (718 | ) | ||||
| Undivided profits |
10,434 | 10,751 | ||||||
| Accumulated other comprehensive income (loss) |
1,177 | (750 | ) | |||||
| Total shareholders’ equity |
44,611 | 42,826 | ||||||
| Total liabilities and shareholders’ equity |
$ | 486,335 | $ | 461,825 | ||||
Uwharrie Capital Corp and Subsidiaries
Consolidated Statements of Income
| Three Months Ended March 31, |
||||||||
| (Amounts in thousands except share and per share data) |
2010 | 2009 | ||||||
| Interest Income |
||||||||
| Interest and fees on loans |
$ | 5,302 | $ | 5,375 | ||||
| Interest on investment securities |
744 | 970 | ||||||
| Other interest income |
8 | 24 | ||||||
| Total interest income |
6,054 | 6,369 | ||||||
| Interest Expense |
||||||||
| Interest paid on deposits |
1,084 | 1,608 | ||||||
| Interest on borrowed funds |
408 | 479 | ||||||
| Total interest expense |
1,492 | 2,087 | ||||||
| Net Interest Income |
4,562 | 4,282 | ||||||
| Provision for loan losses |
213 | 372 | ||||||
| Net interest income after provision for loan losses |
4,349 | 3,910 | ||||||
| Noninterest Income |
||||||||
| Service charges on deposit accounts |
566 | 568 | ||||||
| Other service fees and commissions |
661 | 454 | ||||||
| Loss on sale of securities |
(98 | ) | (40 | ) | ||||
| Loss on sale of nonmarketable securities |
— | (172 | ) | |||||
| Income from mortgage loan sales |
346 | 1,436 | ||||||
| Other income |
128 | 83 | ||||||
| Total noninterest income |
1,603 | 2,329 | ||||||
| Noninterest Expense |
||||||||
| Salaries and employee benefits |
2,828 | 2,873 | ||||||
| Occupancy expense |
266 | 245 | ||||||
| Equipment expense |
182 | 181 | ||||||
| Data processing |
202 | 191 | ||||||
| Other operating expenses |
1,694 | 1,389 | ||||||
| Total noninterest expense |
5,172 | 4,879 | ||||||
| Income before income taxes |
780 | 1,360 | ||||||
| Provision for income taxes |
241 | 455 | ||||||
| Net Income |
$ | 539 | $ | 905 | ||||
| Net Income |
$ | 539 | $ | 905 | ||||
| Dividends - preferred stock |
(161 | ) | (162 | ) | ||||
| Net income available to common shareholders |
$ | 378 | $ | 743 | ||||
| Net Income Per Common Share |
||||||||
| Basic |
$ | 0.05 | $ | 0.10 | ||||
| Assuming dilution |
$ | 0.05 | $ | 0.10 | ||||
| Weighted Average Common Shares Outstanding |
||||||||
| Basic |
7,484,586 | 7,467,685 | ||||||
| Assuming dilution |
7,484,586 | 7,467,685 | ||||||