Table of Contents

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

OR

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 000-51843

 

 

ALARION FINANCIAL SERVICES, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)

 

 

 

Florida		20-3851373
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
One Northeast First Avenue, Ocala, Florida		34470
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code (352) 237-4500

 

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.

 

 

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  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). *    Yes  ¨    No  ¨

 

*	The registrant has not yet been phased into the interactive data requirements.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

 

Large accelerated filer		¨		Accelerated filer		¨
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		Smaller reporting company		x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

 

Common stock, par value $.01 per share		2,653,208 shares outstanding at May 13, 2011

 

 

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

INDEX

 

						Page
Part I. FINANCIAL INFORMATION
		Item 1.		Financial Statements
		Condensed Consolidated Balance Sheets - at March 31, 2011 (Unaudited) and at December 31, 2010					2
		Condensed Consolidated Statements of Operations (Unaudited) - Three Months ended March 31, 2011 and 2010					3
		Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - Three Months ended March 31, 2011 and 2010					4-5
		Condensed Consolidated Statements of Cash Flows (Unaudited) - Three Months ended March 31, 2011 and 2010					6
		Notes to Condensed Consolidated Financial Statements (Unaudited)					7-17
		Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			18-23
		Item 3.		Quantitative and Qualitative Disclosures About Market Risk			24
		Item 4.		Controls and Procedures			24
Part II. OTHER INFORMATION
		Item 1.		Legal Proceedings			25
		Item 1.A.		Risk Factors			25
		Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			25
		Item 3.		Defaults upon Senior Securities			25
		Item 4.		(Removed and Reserved)			25
		Item 5.		Other Information			25
		Item 6.		Exhibits			26
SIGNATURES							27

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Part I. FINANCIAL INFORMATION

Item  1. Financial Statements

Condensed Consolidated Balance Sheets

($ in thousands, except per share amounts)

 

		At March 31, 2011				At December 31, 2010
		(unaudited)
Assets
Cash and due from banks		$	10,190				3,127
Interest-earning deposits			123				262
Federal funds sold			17,265				3,015
Cash and cash equivalents			27,578				6,404
Securities available for sale			48,714				49,304
Loans, net of allowance for loan losses of $4,593 and $4,115			211,155				213,069
Loans held for sale			3,851				7,395
Accrued interest receivable			916				903
Premises and equipment, net			13,400				13,418
Other real estate owned, net			5,840				6,359
Federal Home Loan Bank stock, at cost			1,544				1,409
Deferred income taxes			3,184				3,347
Other assets			1,275				1,382
Total assets		$	317,457				302,990
Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing demand deposits			31,313				26,778
NOW, money-market and savings deposits			91,323				76,476
Time deposits less than $100,000			85,884				89,016
Time deposits greater than $100,000			54,186				59,074
Total deposits			262,706				251,344
Federal Home Loan Bank advances			22,000				21,000
Other borrowings			4,454				3,054
Accrued interest payable			447				436
Accrued expenses and other liabilities			1,042				522
Total liabilities			290,649				276,356
Stockholders’ equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized:
Preferred stock, Series A, $.01 par value; $1,000 liquidation value; 6,514 shares outstanding			—				—
Preferred stock, Series B, $.01 par value; $1,000 liquidation value; 326 shares outstanding			—				—
Additional paid-in capital, preferred			6,840				6,840
Preferred stock discount			(184	)			(200	)
Common stock, $.01 par value; 4,000,000 shares authorized, 2,653,208 shares issued and outstanding			27				27
Additional paid-in capital, common			26,694				26,693
Accumulated deficit			(6,233	)			(6,111	)
Accumulated other comprehensive loss			(336	)			(615	)
Total stockholders’ equity			26,808				26,634
Total liabilities and stockholders’ equity		$	317,457				302,990

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

($ in thousands, except per share amounts)

 

		Three Months Ended March 31,
		2011				2010
Interest income:
Loans		$	2,994				3,286
Securities			318				311
Other			4				33
Total interest income			3,316				3,630
Interest expense:
Deposits			858				1,176
Borrowings			168				177
Total interest expense			1,026				1,353
Net interest income			2,290				2,277
Provision for loan losses			525				790
Net interest income after provision for loan losses			1,765				1,487
Noninterest income:
Deposit account fees			93				95
Gain on sales of loans held for sale			234				175
Other			45				38
Total noninterest income			372				308
Noninterest expense:
Salaries and employee benefits			1,042				945
Occupancy and equipment			297				292
Data processing			136				135
Professional services			143				99
Advertising and promotion			40				39
Office supplies and printing			38				31
OREO expense			64				28
FDIC assessment			145				102
Other			253				237
Total noninterest expense			2,158				1,908
Loss before income tax benefit			(21	)			(113	)
Income tax benefit			(4	)			(36	)
Net loss			(17	)			(77	)
Preferred stock dividend requirements and accretion of preferred stock to par			105				104
Net loss available to common shareholders		$	(122	)			(181	)
Loss per common share – basic and diluted		$	(0.05	)			(0.07	)
Weighted-average number of common shares outstanding, basic			2,653,208				2,653,208
Dividends per common share		$	—				—

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

Three Months Ended March 31, 2011 and 2010

($ in thousands)

 

		Preferred Stock																								Common Stock																Accumulated
		Series A								Series B								Additional Paid-in																Additional Paid-In				Accumulated				Other Comprehensive				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Discount				Shares				Amount				Capital				Deficit				Loss				Equity
Balance at December 31, 2009			6,514			$	—				326			$	—				6,840				(265	)			2,653,208			$	27				26,680				(2,531	)			(45	)			30,706
Comprehensive loss:
Net loss (unaudited)			—				—				—				—				—				—				—				—				—				(77	)			—				(77	)
Net change in unrealized loss on securities available for sale, net of taxes of $22 (unaudited)			—				—				—				—				—				—				—				—				—				—				35				35
Comprehensive loss (unaudited)																																															(42	)
Share-based compensation (unaudited)			—				—				—				—				—				—				—				—				4				—				—				4
Preferred stock dividend requirements and Series B preferred stock accretion (unaudited)			—				—				—				—				—				17				—				—				—				(104	)			—				(87	)
Balance at March 31, 2010 (unaudited)			6,514			$	—				326			$	—				6,840				(248	)			2,653,208			$	27				26,684				(2,712	)			(10	)			30,581

(continued)

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited), Continued

Three Months Ended March 31, 2011 and 2010

($ in thousands)

 

		Preferred Stock																								Common Stock																Accumulated Other
		Series A								Series B								Additional Paid-in																Additional Paid-In				Accumulated				Comprehensive Income				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Discount				Shares				Amount				Capital				Deficit				(Loss)				Equity
Balance at December 31, 2010			6,514			$	—				326			$	—				6,840				(200	)			2,653,208			$	27				26,693				(6,111	)			(615	)			26,634
Comprehensive loss:
Net loss (unaudited)			—				—				—				—				—				—				—				—				—				(17	)			—				(17	)
Net change in unrealized loss on securities available for sale, net of taxes of $(167) (unaudited)			—				—				—				—				—				—				—				—				—				—				279				279
Comprehensive income (unaudited)																																															262
Share-based compensation (unaudited)			—				—				—				—				—				—				—				—				1				—				—				1
Preferred stock dividend requirements and Series B preferred stock accretion (unaudited)			—				—				—				—				—				16				—				—				—				(105	)			—				(89	)
Balance at March 31, 2011 (unaudited)			6,514			$	—				326			$	—				6,840				(184	)			2,653,208			$	27				26,694				(6,233	)			(336	)			26,808

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

		Three Months Ended March 31,
		2011				2010
Cash flows from operating activities:
Net loss		$	(17	)			(77	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for loan losses			525				790
Share-based compensation			1				4
Depreciation and amortization			141				155
Gain on sale of loans held for sale			(234	)			(175	)
Loans originated for sale			(12,302	)			(12,996	)
Proceeds from loans sold			16,080				14,588
Net amortization of premiums and discounts on securities available for sale			200				79
Deferred income tax benefit			(4	)			(37	)
Net amortization of deferred loan fees and costs			30				20
Loss on sale of other real estate owned			40				—
Net increase (decrease) in accrued interest payable			11				(4	)
Net increase in accrued interest receivable			(13	)			(18	)
Net decrease in other assets			107				151
Net increase in accrued expenses and other liabilities			520				586
Net cash provided by operating activities			5,085				3,066
Cash flows from investing activities:
Proceeds from principal repayments and maturities on securities available for sale			2,951				2,032
Purchase of securities available for sale			(2,115	)			(12,618	)
Net decrease in time deposits			—				990
Net decrease (increase) in loans			1,268				(2,573	)
Purchase of premises and equipment			(123	)			(48	)
Proceeds from sale of other real estate owned			570				—
Purchase of Federal Home Loan Bank stock			(135	)			—
Net cash provided by (used in) investing activities			2,416				(12,217	)
Cash flows from financing activities:
Net increase in deposits			11,362				10,005
Net increase (decrease) in other borrowings			1,400				(2,960	)
Net increase in advances from Federal Home Loan Bank			1,000				—
Preferred stock dividend requirements and Series B stock accretion			(89	)			(87	)
Net cash provided by financing activities			13,673				6,958
Net increase (decrease) in cash and cash equivalents			21,174				(2,193	)
Cash and cash equivalents at beginning of period			6,404				22,098
Cash and cash equivalents at end of period		$	27,578				19,905
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest		$	1,015				1,357
Income taxes		$	—				—
Noncash transactions:
Accumulated other comprehensive income, net change in unrealized gain (loss) on securities available for sale, net of taxes		$	279				35
Transfer of loans to other real estate owned		$	91				—

See accompanying Notes to Condensed Consolidated Financial Statements.

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation. In the opinion of the management of Alarion Financial Services, Inc. (the “Holding Company”), the accompanying condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position at March 31, 2011 and the results of operations and cash flows for the three-month periods ended March 31, 2011 and 2010. The results of operations for the three-month period ended March 31, 2011, are not necessarily indicative of results that may be expected for the year ending December 31, 2011.

The Holding Company owns 100% of the common stock of Alarion Bank (the “Bank”) and North Central Florida Developers Corporation (“NCFDC”) (together the “Company”). The Holding Company’s primary activity is the operation of the Bank and NCFDC. The Bank is a state (Florida)-chartered commercial bank. The Bank offers a variety of banking and financial services to individual and corporate customers through its six banking offices located in Ocala and Gainesville, Florida. The deposit accounts of the Bank are insured up to the applicable limits by the Federal Deposit Insurance Corporation. NCFDC holds loans or assets that might require a longer than desirable term hold to realize reasonable or full economic value.

Recent Accounting Standards Update. In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820), which amends the guidance for fair value measurements and disclosures. The guidance in ASU 2010-06 requires a reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and to describe the reasons for the transfers. Furthermore, ASU 2010-06 requires a reporting entity to present separately information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements using significant unobservable inputs; clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value; and amends guidance on employers’ disclosures about postretirement benefit plan assets to require that disclosures be provided by classes of assets instead of by major categories of assets. The ASU was effective for interim and annual reporting periods beginning January 1, 2010, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements. Those disclosures were effective January 1, 2011 and for interim periods thereafter. In the period of initial adoption, entities will not be required to provide the amended disclosures for any previous periods presented for comparative purposes. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The new disclosures will require significantly more information about credit quality in a financial institution’s loan portfolio. This statement addresses only disclosures and does not change recognition or measurement of the allowance. For public entities, the disclosures as of the end of a reporting period was effective for interim and annual reporting periods ending on December 31, 2010. The disclosures about activity that occurs during a reporting period was effective for interim and annual reporting periods beginning on or after January 1, 2011. For nonpublic entities, the disclosures are effective for annual reporting periods ending on or after December 15, 2011. The adoption of the ASU did not have a material impact on the Company’s consolidated financial statements.

(continued)

 

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

1. Basis of Presentation, Continued.

In January 2011, the FASB issued ASU No. 2011-01, Receivables (Topic 310) Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. The amendments in this Update delay the effective date of the disclosures about troubled debt restructurings in Update 2010-20 for public entities. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring is effective as outlined in ASU No. 2011-02. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2011, the FASB issued ASU No. 2011-02, Receivables (Topic 310) A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. This amends the guidance for troubled debt restructurings. The guidance clarifies the guidance on a creditor’s evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. For public entities, the amendments are effective for first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption. For nonpublic entities, the amendments are effective for annual periods ending on or after December 15, 2012, including interim periods within those annual periods. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial statements.

2. Securities. Securities have been classified according to management’s intent. The carrying amount of securities available for sale and their approximate fair values are as follows (in thousands):

 

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
At March 31, 2011-
Mortgage-backed securities		$	49,252				120				(658	)			48,714
At December 31, 2010-
Mortgage-backed securities		$	50,288				77				(1,061	)			49,304

At March 31, 2011 and December 31, 2010, securities with a carrying value of approximately $9.9 million and $10.5 million, respectively, were pledged for other borrowings and public funds.

 

(continued)

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

2. Securities, Continued. There were no sales of securities during the three months ended March 31, 2011 and 2010.

Securities with gross unrealized losses at March 31, 2011, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows (in thousands):

 

		Less Than Twelve Months
		Gross Unrealized Losses				Fair Value
Securities Available for Sale-
Mortgage-backed securities		$	(658	)			35,587

The unrealized losses on nineteen investment securities were caused by interest rate changes. It is expected that the securities would not be settled at a price less than the par value of the investments. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

 

(continued)

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ALARION FINANCIAL SERVICES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

3. Loans. The components of loans are as follows (in thousands):

 

		At March 31, 2011				At December 31, 2010
Real estate loans:
Office/retail		$	43,556				43,687
Multi-family			9,482				9,518
Land			22,821				23,345
Line of credit			9,501				9,088
Other			55,763				54,953
Residential			32,633				32,667
Construction			5,307				4,819
Home equity			10,237				10,676
Commercial			18,702				20,587
Consumer			7,385				7,471
Total loans			215,387				216,811
Allowance for loan losses			(4,593	)			(4,115	)
Deferred loan costs, net			361				373
Loans, net		$	211,155				213,069

An analysis of the change in the allowance for loan losses follows (in thousands):

 

		Three Months Ended March 31,
		2011																																												2010
		Office/ Retail				Multi- Family				Land				Line of Credit				Other				Residential				Home Construction				Equity				Commercial				Consumer				Total
Beginning balance		$	991				9				583				622				785				350				23				121				427				204				4,115				3,035
Provision for loan losses			28				—				38				10				(1	)			119				431				(115	)			(315	)			330				525				790
Recoveries			—				—				—				—				—				—				—				—				—				1				1				—
Charge-offs			—				—				(5	)			—				—				(15	)			—				—				(25	)			(3	)			(48	)			—
Ending balance		$	1,019				9				616				632				784				454				454				6				87				532				4,593				3,825
Individually evaluated for impairment:
Recorded investment		$	2,885				—				8,029				912				1,349				651				898				—				70				83				14,877
Balance in allowance for loan losses		$	668				—				337				476				192				173				—				—				84				178				2,108
Collectively evaluated for impairment:
Recorded investment		$	39,652				9,472				14,176				7,957				53,629				31,528				3,954				10,231				18,548				6,770				195,917
Balance in allowance for loan losses		$	351				10				279				156				593				281				455				6				—				354				2,485

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

3. Loans, Continued. The following summarizes the loan credit quality (in thousands):

 

Credit Risk Profile by Internally Assigned Grade:		Office/ Retail				Multi- Family				Land				LOC				Other				Residential Real Estate				Construction				HELOC				Commercial				Consumer				Total
March 31, 2011:
Grade:
Pass		$	34,091				9,482				12,790				5,778				50,233				30,508				4,409				10,188				16,678				6,707				180,864
Special mention			4,725				—				1,665				2,011				3,470				918				—				49				920				349				14,107
Substandard			4,740				—				8,366				1,712				2,060				1,207				898				—				1,104				329				20,416
Doubtful			—				—				—				—				—				—				—				—				—				—				—
Loss			—				—				—				—				—				—				—				—				—				—				—
Total		$	43,556				9,482				22,821				9,501				55,763				32,633				5,307				10,237				18,702				7,385				215,387
December 31, 2010:
Grade:
Pass			38,560				9,518				13,812				5,365				49,605				30,908				3,895				10,627				18,450				6,769				187,509
Special mention			408				—				1,371				2,010				3,278				594				—				49				897				352				8,959
Substandard			4,719				—				8,162				1,713				2,070				1,165				924				—				1,240				350				20,343
Doubtful			—				—				—				—				—				—				—				—				—				—				—
Loss			—				—				—				—				—				—				—				—				—				—				—
Total		$	43,687				9,518				23,345				9,088				54,953				32,667				4,819				10,676				20,587				7,471				216,811

Internally assigned loan grades are defined as follows:

Pass – A Pass loan’s primary source of loan repayment is satisfactory, with secondary sources very likely to be realized if necessary.

Special Mention – A Special Mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard – A Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – A loan classified Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss – A loan classified Loss is considered uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future.

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

3. Loans, Continued. Age analysis of past-due loans is as follows (in thousands):

 

		Accruing Loans
		30-59 Days Past Due				60-89 Days Past Due				Greater Than 90 Days Past Due				Total Past Due				Current				Nonaccrual Loans				Total Loans
At March 31, 2011:
Real estate loans:
Office/retail		$	—				3,480				—				3,480				39,613				463				43,556
Multi-family			—				—				—				—				9,482				—				9,482
Land			257				355				—				612				19,302				2,907				22,821
Line of credit			1,366				—				—				1,366				8,135				—				9,501
Other			193				—				—				193				54,028				1,542				55,763
Residential			1,573				—				—				1,573				30,236				824				32,633
Construction			—				—				—				—				5,307				—				5,307
Home equity			—				—				—				—				10,237				—				10,237
Commercial			—				—				—				—				18,548				154				18,702
Consumer			25				210				—				235				6,983				167				7,385
Total		$	3,414				4,045				—				7,459				201,871				6,057				215,387
At December 31, 2010:
Real estate loans:
Office/retail			392				2,620				—				3,012				40,206				469				43,687
Multi-family			—				—				—				—				9,518				—				9,518
Land			3,109				5				—				3,114				17,533				2,698				23,345
Line of credit			—				—				—				—				9,088				—				9,088
Other			—				—				—				—				53,417				1,536				54,953
Residential			496				358				—				854				31,031				782				32,667
Construction			—				—				—				—				4,819				—				4,819
Home equity			—				—				—				—				10,676				—				10,676
Commercial			91				—				—				91				20,338				158				20,587
Consumer			144				194				—				338				6,944				189				7,471
Total		$	4,232				3,177				—				7,409				203,570				5,832				216,811

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

3. Loans, Continued. The following summarizes the amount of impaired loans (in thousands):

 

		With No Related Allowance Recorded												With an Allowance Recorded												Total
		Recorded Investment				Unpaid Principal Balance				Related Allowance				Recorded Investment				Unpaid Principal Balance				Related Allowance				Recorded Investment				Unpaid Principal Balance				Related Allowance
March 31, 2011:
Real estate loans:
Office/retail		$	—				—				—				2,885				3,707				668				2,885				3,707				668
Multi-family			—				—				—				—				—				—				—				—				—
Land			4,816				6,114				—				3,213				3,666				337				8,029				9,780				337
Line of credit			—				—				—				912				1,388				476				912				1,388				476
Other			1,228				1,228				—				121				383				192				1,349				1,611				192
Residential			371				371				—				280				453				173				651				824				173
Construction			898				898				—				—				—				—				898				898				—
Home equity			—				—				—				—				—				—				—				—				—
Commercial			70				70				—				—				84				84				70				154				84
Consumer			—				—				—				83				261				178				83				261				178
		$	7,383				8,681				—				7,494				9,942				2,108				14,877				18,623				2,108
December 31, 2010:
Real estate loans:
Office/retail			—				—				—				2,858				3,681				667				2,858				3,681				667
Multi-family			—				—				—				—				—				—				—				—				—
Land			4,625				5,936				—				3,200				3,652				337				7,825				9,588				337
Line of credit			—				—				—				912				1,388				476				912				1,388				476
Other			1,228				1,228				—				116				377				192				1,344				1,605				192
Residential			621				707				—				127				161				34				748				868				34
Construction			923				923				—				—				—				—				923				923				—
Home equity			—				—				—				—				—				—				—				—				—
Commercial			—				—				—				164				240				76				164				240				76
Consumer			92				146				—				116				260				145				208				406				145
		$	7,489				8,940				—				7,493				9,759				1,927				14,982				18,699				1,927

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

3. Loans, Continued. The average net investment in impaired loans and interest income recognized and received on impaired loans are as follows (in thousands):

 

		For the Three Months Ended March 31, 2011
		Average Recorded Investment				Interest Income Recognized				Interest Income Received
Real estate loans:
Office/retail		$	3,539				51				51
Multi-family			—				—				—
Land			8,262				49				49
Line of credit			1,388				15				15
Other			1,539				—				—
Residential			757				—				—
Construction			911				8				8
Home equity			—				—				—
		$	16,396				123				123
Comparative totals for March 31, 2010		$	9,601				72				72

4. Loss Per Share. Basic loss per share has been computed on the basis of the weighted-average number of shares of common stock outstanding during the periods, which was 2,653,208 shares during the three-month periods ended March 31, 2011 and 2010, respectively. All outstanding stock options are not dilutive due to the net losses of the Company.

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

5. Share-Based Compensation. The Company adopted a stock option plan for its employees and directors (the “Plan”). Fifteen percent of the total amount of common shares outstanding, up to 450,000 shares (currently 397,981 shares), have been reserved under the Plan. Stock options are granted at an exercise price equal to or greater than the fair market value of the common stock on the date of grant. Options granted to directors vest immediately and for employees, the options primarily vest over two years starting with the date of grant and ending on the second anniversary thereof. At March 31, 2011, there were 128,262 options available for future grants under the Plan. A summary of stock option transactions under the Plan for the three-month period ended March 31, 2011, follows:

 

		Number of Options				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term				Aggregate Intrinsic Value
Options outstanding at December 31, 2010			246,203			$	10.12
Options forfeited			—				—
Options outstanding at March 31, 2011			246,203			$	10.12				5.61 years			$	—
Options exercisable at March 31, 2011			246,203			$	10.12				5.61 years			$	—

There were no options exercised during the three month periods ended March 31, 2011 and 2010. At March 31, 2011, there was no unrecognized compensation expense related to the nonvested share-based compensation arrangement granted under the plan. The total fair value of shares vesting and recognized as compensation was approximately $1,000 and $4,000 for the three month periods ended March 31, 2011 and 2010, respectively.

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

6. Fair Value Measurements. Our listing of financial assets subject to fair value measurements on a recurring basis are as follows (in thousands):

 

		Fair Value Measurements at Reporting Date Using
		Fair Value				Quoted Prices In Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
As of March 31, 2011-
Mortgage-backed securities		$	48,714				—				48,714				—
As of December 31, 2010-
Mortgage-backed securities		$	49,304				—				49,304				—

There were no transfers of securities between levels of inputs for the three months ended March 31, 2011.

Assets measured at fair value on a nonrecurring basis are summarized below (in thousands):

 

		Net Carrying Value at March 31, 2011																Total Losses				Total Losses Recorded In Operations for the Three-Month Period Ended March 31, 2011
		Total				Level 1				Level 2				Level 3
As of March 31, 2011:
Impaired loans		$	9,174				—				—				9,174				3,745				207
Other real estate owned		$	5,840				—				—				5,840				861				—

In addition, loans with a carrying value of $5,703,000 at March 31, 2011 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

 

(continued)

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Notes to Condensed Consolidated Financial Statements (Unaudited), Continued

 

6. Fair Value Measurements, Continued. Assets measured at fair value on a nonrecurring basis are summarized below (in thousands):

 

		Net Carrying Value at December 31, 2010																Total Losses				Total Losses Recorded In Operations For the Year Ended December 31, 2010
		Total				Level 1				Level 2				Level 3
As of December 31, 2010:
Impaired loans		$	9,088				—				—				9,088				3,717				3,493
Other real estate owned		$	6,359				—				—				6,359				1,134				1,107

In addition, loans with a carrying value of $5,894,000 at December 31, 2010 were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.

7. Fair Value of Financial Instruments. The estimated fair values of the Company’s financial instruments are as follows (in thousands):

 

		At March 31, 2011								At December 31, 2010
		Carrying Amount				Fair Value				Carrying Amount				Fair Value
Financial assets:
Cash and cash equivalents		$	27,578				27,578				6,404				6,404
Securities available for sale			48,714				48,714				49,304				49,304
Loans, net			211,155				211,221				213,069				214,080
Loans held for sale			3,851				3,851				7,395				7,395
Accrued interest receivable			916				916				903				903
Federal Home Loan Bank stock			1,544				1,544				1,409				1,409
Financial liabilities:
Deposits			262,706				263,957				251,344				253,656
Federal Home Loan Bank advances			22,000				20,572				21,000				19,404
Other borrowings			4,454				4,454				3,054				3,054
Accrued interest payable			447				447				436				436
Off-balance-sheet financial instruments			—				—				—				—

 

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Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Alarion Financial Services, Inc. (the “Holding Company”) owns 100% of the common stock of Alarion Bank (the “Bank”) and North Central Florida Developers Corporation (collectively the “Company”). The Holding Company’s primary activity is the operation of the Bank and North Central Florida Developers Corporation. The Bank is a state (Florida)-chartered commercial bank. The Company offers a variety of banking and financial services to individual and corporate customers through its six banking offices located in Ocala and Gainesville, Florida. North Central Florida Developers Corporation (“NCFDC”) holds loans or assets that might require a longer than desirable term hold to realize full or reasonable economic value.

The Bank’s deposits are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits. The Holding Company’s and NCFDC operations are subject to supervision and regulation of the Federal Reserve Board. The operations of the Bank are subject to the supervision and regulation of the FDIC and the Florida Office of Financial Regulation.

The Bank provides a variety of consumer and commercial banking services to individuals, businesses and industries. The basic services offered by the Bank include: demand interest-bearing and noninterest-bearing accounts, money-market deposit accounts, NOW accounts, time deposits, credit cards, cash management, direct deposits, notary services, money orders, night depository, travelers’ checks, cashier’s checks, domestic collections, savings bonds, bank drafts, automated teller services, drive-in tellers, and banking by mail. In addition, the Bank makes secured and unsecured commercial, consumer, and real estate loans and issues stand-by letters of credit. The Bank provides automated teller machine (ATM) cards and is a member of the Star ATM network, thereby permitting customers to utilize the convenience of larger ATM networks. In addition to the foregoing services, the offices of the Company provide customers with extended banking hours. The Company does not have trust powers and, accordingly, no trust services are provided.

The revenues of the Bank are primarily derived from interest on, and fees received in connection with real estate and other loans, and from interest and dividends from investment and mortgage-backed securities, and short-term investments. The principal sources of funds for the Bank’s lending activities are its deposits and borrowings, repayment of loans, and the sale and maturity of investment securities. The principal expenses of the Bank are the interest paid on deposits, and operating and general administrative expenses.

 

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As is the case with banking institutions generally, the Company’s operations are materially and significantly influenced by general economic conditions and by related monetary and fiscal policies of financial institution regulatory agencies, including the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the FDIC. Deposit flows and costs of funds are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing of real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered and other factors affecting local demand and availability of funds. The Company faces strong competition in the attraction of deposits (its primary source of lendable funds) and in the origination of loans.

Capital Resources, Commitments and Capital Requirements

The Bank’s principal sources of funds are those generated by the Bank, including net increases in deposits and borrowings, principal and interest payments on loans, and proceeds from maturities and sales of investment securities.

The Bank uses its capital resources principally to fund existing and continuing loan commitments and to purchase investment securities. Off-balance-sheet commitments to extend credit represent legally binding agreements to lend to customers with fixed expiration dates or other termination clauses. Since many commitments are expected to expire without being funded, committed amounts do not necessarily represent future cash requirements.

The following table summarizes the Bank’s contractual obligations, including certain on-balance sheet and off-balance sheet obligations, at March 31, 2011 (in thousands):

 

Contractual Obligations		Total
Time deposit maturities		$	140,070
Advances from Federal Home Loan Bank			22,000
Other borrowings			4,454
Commitments to extend credit			1,314
Unused lines of credit			15,467
Standby letters of credit			159
Total		$	183,464

Management believes that the Bank has adequate resources to fund all its commitments, that a majority of all of its existing commitments will be funded within 12 months and, if so desired, that the Bank can adjust the rates and terms on time deposits and other deposit accounts to retain or obtain new deposits in a changing interest rate environment.

 

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Regulatory Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory - and possibly additional discretionary - actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and percentages of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. If such minimum amounts and percentages are met, the Bank is considered “adequately capitalized.” If the actual amounts exceed the requirements of “adequately capitalized,” and meet even more stringent minimum standards, they are considered “well capitalized.” Management believes as of March 31, 2011, the Bank meets the capital requirements for a “well capitalized” financial institution.

The table below shows the total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios of the Bank at March 31, 2011 and December 31, 2010, and the minimum required amounts and percentages ($ in thousands).

 

		Actual								For Capital Adequacy Purposes								For Well Capitalized Purposes
		Amount				Percent				Amount				Percent				Amount				Percent
As of March 31, 2011:
Total capital (to Risk-Weighted Assets)		$	26,368				11.54	%		$	18,279				8.00	%		$	22,849				10.00	%
Tier I Capital (to Risk-Weighted Assets)			23,491				10.28				9,140				4.00				13,711				6.00
Tier I Capital (to Average Assets)			23,491				7.75				12,124				4.00				15,155				5.00
As of December 31, 2010:
Total capital (to Risk-Weighted Assets)			26,170				11.47				18,253				8.00				22,816				10.00
Tier I Capital (to Risk-Weighted Assets)			23,303				10.22				9,121				4.00				13,681				6.00
Tier I Capital (to Average Assets)			23,303				7.62				12,233				4.00				15,291				5.00

 

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Results of Operations

The following table shows selected ratios for the periods ended or at the dates indicated:

 

		Three Months Ended March 31, 2011				Year Ended December 31, 2010				Three Months Ended March 31, 2010
Average equity as a percentage of average assets			8.90	%			9.16	%			9.80	%
Total equity to total assets at end of period			8.44	%			8.79	%			9.61	%
Return on average assets (1)			(.02	)%			(1.01	)%			(.10	)%
Return on average equity (1)			(.25	)%			(10.98	)%			(1.02	)%
Noninterest expense to average assets (1)			2.86	%			3.12	%			2.47	%
Nonperforming loans to total loans at end of period (2)			2.87	%			2.74	%			2.32	%

 

(1)	Annualized for the three-months ended March 31, 2011 and 2010.

(2)	Nonperforming loans consist of nonaccrual loans and accruing loans contractually past due ninety days or more.

Changes in Financial Condition

Total assets increased $14.5 million or 5%, from $303.0 million at December 31, 2010 to $317.5 million at March 31, 2011, primarily as a result of a $21.2 million increase in cash and cash equivalents somewhat offset by a decrease in net loans of $1.9 million. Deposits increased $11.4 million from $251.3 million at December 31, 2010 to $262.7 million at March 31, 2011.

 

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Net Interest Margin and Interest-Rate Spread

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average costs; (iii) net interest/dividend income; (iv) interest-rate spread; and (v) net interest margin. Yields and costs were derived by dividing annualized income or expense by the average balance of assets or liabilities, respectively, for the periods shown. The yields and costs include certain fees which are considered to constitute adjustments to yields.

 

		Three Months Ended March 31,
		2011												2010
		Average Balance				Interest and Dividends				Average Yield/ Rate				Average Balance				Interest and Dividends				Average Yield/ Rate
		($ in thousands)
Interest-earning assets:
Loans		$	215,166				2,994				5.64	%		$	232,962				3,286				5.72	%
Securities			48,720				318				2.65				35,140				311				3.59
Other (1)			10,657				4				0.15				20,906				33				0.64
Total interest-earning assets			274,543				3,316				4.90				289,008				3,630				5.09
Noninterest-earning assets			31,106												24,179
Total assets		$	305,649											$	313,187
Interest-bearing liabilities:
Deposits			224,266				858				1.55				234,050				1,176				2.04
Federal Home Loan Bank advances and other borrowings			25,175				168				2.71				26,378				177				2.72
Total interest-bearing liabilities			249,441				1,026				1.67				260,428				1,353				2.11
Noninterest-bearing deposits			28,562												20,683
Noninterest-bearing liabilities			439												1,385
Stockholders’ equity			27,207												30,691
Total liabilities and stockholders’ equity		$	305,649											$	313,187
Net interest income						$	2,290											$	2,277
Interest-rate spread											3.23	%											2.98	%
Net interest margin (2)											3.38	%											3.20	%
Ratio of interest-earning assets to interest-bearing liabilities			1.10												1.11

 

(1)	Includes interest-earning deposits, federal funds sold and Federal Home Loan Bank stock.

(2)	Net interest margin is annualized net interest income divided by average interest-earning assets.

 

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Comparison of the Three-Month Periods Ended March 31, 2011 and 2010

General Operating Results. Net loss available to common shareholders for the three-month period ended March 31, 2011 was $122,000, or $(0.05) per basic and diluted common share, compared to a net loss of $181,000, or $(0.07) per basic and diluted common share, for the comparable period in 2010. The $59,000 decrease in net loss resulted primarily from a $13,000 increase in net interest income, a $64,000 increase in noninterest income and a $265,000 decrease in provision for loan losses, partially offset by a $250,000 increase in noninterest expense.

Interest Income. Interest income decreased $314,000 to $3.3 million for the three-month period ended March 31, 2011, when compared to the three-month period ended March 31, 2010. The decrease was due to a $14.5 million decrease in average interest-earning assets outstanding for the three months ended March 31, 2011 compared to the 2010 period and a decrease in the average yield earned on interest-earning assets from 5.09% for the three months ended March 31, 2010 to 4.90% for the three months ended March 31, 2011.

Interest Expense. Interest expense decreased $327,000 for the three-month period ended March 31, 2011 compared to the same 2010 period. The decrease was primarily due to decrease in the average cost of interest-bearing liabilities from 2.11% for the three months ended March 31, 2010 to 1.67% for the comparable 2011 period and a $10.9 million decrease in average interest bearing liabilities. Average interest-bearing liabilities decreased from $260.4 million outstanding during the three months ended March 31, 2010 to $249.4 million outstanding during the comparable period for 2011.

Provision for Loan Losses. The provision for loan losses is charged to operations to increase the total loan loss allowance to a level deemed appropriate by management. The provision is based upon the volume and type of lending conducted by the Company, industry standards, general economic conditions, particularly as they relate to the Company’s market area, and other factors related to the collectability of the Company’s loan portfolio. The Company recorded provisions for loan losses for the three-month periods ended March 31, 2011 and 2010 of $525,000 and $790,000, respectively. Management believes that the allowance for loan losses, which was $4.6 million or 2.13% of gross loans at March 31, 2011 is adequate.

Noninterest Income. Noninterest income increased $64,000 during the 2011 period. The increase was primarily due to a $59,000 increase in gain on sale of loans held for sale compared to the three-month period ended March 31, 2010.

Noninterest Expense. Noninterest expense increased by $250,000 from $1.9 million for the three-month period ended March 31, 2010 to $2.2 million for the three-month period ended March 31, 2011. The increase was primarily due to increases of $97,000 in salaries and employee benefits, $5,000 in occupancy and equipment expense, and $16,000 in other noninterest expense, all related to the overall growth of the residential mortgage department.

Income Taxes. The income tax benefit was $36,000 for the three-month period ended March 31, 2010. The income tax benefit was $4,000 for the corresponding period in 2011.

 

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Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable

 

Item 4.

Controls and Procedures

 

a.

Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed as of March 31, 2011, the Principal Executive and Principal Financial Officer of the Company concluded that the Company’s disclosure controls and procedures were adequate.

 

b.

Changes in internal controls. The Company made no significant changes in its internal controls over financial reporting during the quarter ended March 31, 2011 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

c.

Limitations on Effectiveness of Controls. The Company, including its Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

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Part II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

There are no material pending legal proceedings to which Alarion Financial Services, Inc. or its subsidiaries is a party or to which any of their property is subject.

 

Item 1.A.

Risk Factors

Not applicable

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

 

Item 3.

Defaults upon Senior Securities

Not applicable

 

Item 4.

(Removed and Reserved)

 

Item 5.

Other Information

Not applicable

 

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Item 6.

Exhibits

Exhibits marked with an (a) were filed with the Form 10-K filed with the Securities and Exchange Commission on March 15, 2006. Exhibits marked with a (b) were filed with the Form 8-K filed with the Securities and Exchange Commission on January 27, 2009. Exhibit (c) was filed in the Annual Report on Form 10-KSB/A filed with the Commission on July 17, 2006. The Exhibits marked with a (d) were filed in Form 8-K filed with the Commission on January 27, 2009.

 

Exhibit No.				Description of Exhibit
(a)		3.1		Articles of Incorporation
(a)		3.2		Bylaws
(b)		3.3		Articles of Amendment to the Articles of Incorporation authorizing the Series A Preferred Shares
(b)		3.4		Articles of Amendment to the Articles of Incorporation authorizing the Series B Preferred Shares
(a)		4.1		Specimen Common Stock Certificate
(a)		4.2		Warrant Plan and Specimen Warrant Plan
(b)		4.3		Form of Certificate for Series A Preferred Stock
(b)		4.4		Form of Certificate for Series B Preferred Stock
(c)		4.5		2005 Stock Plan
(a)		10.1		Employment Agreement with Jon M. Kurtz
(a)		10.2		Lease for Main Office
(b)		10.3		Letter Agreement, dated January 23, 2009 between AFSI and the United States Department of the Treasury
(b)		10.4		Form of Waiver
(b)		10.5		Form of Compliance Agreement
(b)		10.6		Securities Purchase Agreement – Standard Terms between the Company and the United States Department of the Treasury
(d)		10.8		Employment Agreement with Robert L. Page
(a)		14.1		Code of Ethics
(a)		21.1		Schedule of Subsidiaries
		31.1		Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
		31.2		Certification of Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
		32.1		Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
		32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 16, 2011

 

 

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