SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2004
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 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 3,222,348
shares of common stock ($1.00 par) outstanding as of April 30, 2004.
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
Consolidated Statements of Cash Flows 5-6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-10
Item 3 Quantitative and Qualitative Disclosures About Market Risks 11
Item 4 Controls and Procedures 11
Part II - Other Information
Item 1 Legal Proceedings 12
Item 2 Changes in Securities and Use of Proceeds 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12-15
Signatures 16
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Part I - Financial Information
Consolidated Balance Sheets
(unaudited)
March December
2004 2003
Assets
Cash and due from banks $ 16,652,209 $ 20,482,866
Federal funds sold 42,217,542 29,525,781
Interest-bearing deposits 2,181,715 2,281,337
Investment securities available
for sale 9,382,970 9,265,471
Investment securities held to
maturity (approximate fair
value of $137,226,363 and
$150,075,210) 136,602,239 149,666,806
Loans, less allowance for loan
losses of $2,187,860 and $2,187,277 163,040,952 162,243,008
Premises and equipment 7,056,180 7,064,970
Accrued interest receivable 1,396,017 1,344,613
Bank owned life insurance 4,094,425 4,054,035
Other assets 451,259 557,514
$383,075,508 $386,486,401
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 67,950,589 $ 75,601,460
Interest-bearing 244,256,872 242,344,593
312,207,461 317,946,053
Securities sold under agreements
to repurchase 4,131,752 4,113,154
Pending purchases of investment
securities 561,673 -
Accrued interest payable 134,247 145,044
Note payable 176,461 181,087
Deferred income taxes 378,324 355,632
Other liabilities 573,174 109,399
318,163,092 322,850,369
Stockholders' equity
Common stock, par value $1 per
share; Authorized 10,000,000 shares,
issued and outstanding
3,224,898 shares at March 31, 2004, and
3,227,966 shares at December 31, 2003 3,224,898 3,227,966
Additional paid-in capital 16,761,705 16,869,085
Retained earnings 43,734,147 42,391,363
63,720,750 62,488,414
Accumulated other comprehensive income 1,191,666 1,147,618
64,912,416 63,636,032
$383,075,508 $386,486,401
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
For the three months ended March 31,
2004 2003
Interest and dividend revenue
Loans, including fees $ 2,906,027 $ 3,026,791
U.S. Treasury and Agency securities 673,548 756,863
State and municipal securities 60,169 49,045
Federal funds sold 72,541 133,640
Interest-bearing deposits 12,070 10,042
Equity securities 18,767 17,040
Total interest and dividend revenue 3,743,122 3,993,421
Interest expense
Deposit interest 398,564 657,727
Other 3,973 5,830
Total interest expense 402,537 663,557
Net interest income 3,340,585 3,329,864
Provision for loan losses - -
Net interest income after
provision for loan losses 3,340,585 3,329,864
Non-interest revenue
Service charges on deposit accounts 252,221 257,571
Miscellaneous revenue 167,163 115,485
Total non-interest revenue 419,384 373,056
Non-interest expenses
Salaries 773,931 747,203
Employee benefits 203,230 174,117
Occupancy 144,833 128,638
Furniture and equipment 127,250 142,282
Other operating 432,941 424,175
Total non-interest expenses 1,682,185 1,616,415
Income before income taxes 2,077,784 2,086,505
Income taxes 735,000 734,000
Net income $ 1,342,784 $ 1,352,505
Basic earnings per share $ 0.42 $ 0.42
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the three months ended March 31,
2004 2003
Cash flows from operating activities
Interest received $ 3,689,955 $ 3,961,786
Fees and commissions received 350,871 372,813
Interest paid (413,334) (702,594)
Cash paid to suppliers and employees (1,427,146) (1,538,160)
Income taxes paid (200,328) (97,758)
2,000,018 1,996,087
Cash flows from investing activities
Purchase of investment securities
available for sale (50,000) (25,000)
Proceeds from maturities of
investment securities held to
maturity 29,060,009 29,910,000
Purchase of investment securities
held to maturity (15,432,757) (30,810,292)
Loans made, net of principal collected (797,944) (5,995,255)
Purchases of and deposits on
premises, equipment, and intangibles (182,776) (531,356)
12,596,532 (7,451,903)
Cash flows from financing activities
Net increase (decrease) in
Time deposits (3,814,039) (1,346,600)
Other deposits (1,924,553) (6,644,863)
Securities purchased under agreements
to repurchase 18,598 (532,258)
Payment on note payable (4,626) (4,357)
Purchases and retirement of common shares (110,448) -
(5,835,068) (8,528,078)
Net increase (decrease) in cash 8,761,482 (13,983,894)
Cash and equivalents at beginning
of period 50,158,779 75,873,029
Cash and equivalents at end of period $ 58,920,261 $ 61,889,135
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)
For the three months ended March 31,
2004 2003
Reconciliation of net income to net
cash provided by operating activities
Net income $ 1,342,784 $ 1,352,505
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation and amortization 157,861 168,492
Security discount accretion, net
of premium amortization (1,762) (34,702)
(Gain) loss on disposition of assets 1,543 -
Decrease (increase) in
Accrued interest receivable (51,404) 3,068
Cash surrender value of bank owned
life insurance (40,390) -
Other assets 138,408 (17,978)
Increase (decrease) in
Accrued interest payable (10,797) (39,036)
Accrued income taxes 534,672 636,242
Other liabilities (70,897) (72,504)
$ 2,000,018 $ 1,996,087
Composition of cash and cash equivalents
Cash and due from banks $ 16,652,209 $ 18,128,997
Federal funds sold 42,217,542 43,560,048
Interest-bearing deposits, except
for time deposits 50,510 200,090
$ 58,920,261 $ 61,889,135
See accompanying Notes to Consolidated Financial Statements
Calvin B. Taylor Bankshares, Inc. and Subsidiary
Notes to Financial Statements
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 of financial position and results of operations have been made.
These adjustments are of a normal recurring nature. Results of operations for
the three months ended March 31, 2004 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2004. For further
information, refer to the audited consolidated financial statements and related
footnotes for the Registrant's fiscal period ended December 31, 2003.
Consolidation has resulted in the elimination of all significant
intercompany 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 of shares outstanding for the period. The weighted average
of common shares outstanding was 3,191,910 and 3,240,000 shares outstanding,
for the quarters ended March 31, 2004 and 2003, respectively.
2. Comprehensive Income
Comprehensive income consists of:
Three months ended March 31,
2004 2003
Net income $ 1,342,784 $ 1,352,505
Unrealized gain (loss) on investment
securities available for sale, net
of income taxes 44,048 (17,331)
Comprehensive income $ 1,386,832 $ 1,335,174
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:
March 31, December 31,
2004 2003
Loan commitments $ 27,510,634 $ 25,532,081
Standby letters of credit $ 3,307,773 $ 2,957,508
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.
Financial Condition, Liquidity and Sources of Capital
Total assets of the Company decreased $3.4 million from December 31, 2003
to March 31, 2004. During the first quarter of the year, the Bank typically
experiences a decline in deposits since business customers are using their
deposits to meet cash flow needs. This reduction of deposits reuslts in
reductions in either federal funds sold or investments in securities.
Generally, this situation reverses late in the second quarter of the year as
the Bank receives deposits from seasonal business customers, summer residents,
and tourists.
During the first quarter of 2004, the Bank's loan portfolio increased $.8
million. Funding for these loans was provided primarily by a reduction in
overnight federal funds sold. As loans earn at a higher rate than federal
funds sold, this shift has a positive impact on earnings.
The allowance for loan losses represents a reserve for potential losses in
the loan portfolio. The adequacy of the allowance for loan losses is
evaluated periodically based on a review of all significant loans, 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 and anticipated
changes in the composition and size of the portfolio, as well as assumptions
about the economy. Historically, the Company has low loan charge-offs. The
Bank's target levels for the allowance as a percentage of gross loans range from
approximately 1.00% to 1.35%. Based on review of the Bank's loan portfolio,
the Company determined that an allowance of 1.32% of gross loans was adequate
as of March 31, 2004. At December 31, 2003, the allowance was 1.33% of gross
loans. At March 31, 2004, there were no non-accruing loans and loans delinquent
ninety days or more, excluding non-accruing loans, totaled $659,976 or .40% of
the portfolio.
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 start repaying 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 64.27% for
the first quarter of 2004, compared to 62.54% for the first quarter of 2003.
The Bank's liquidity levels have remained atypically high since mid-2001 when
the Bank experience an influx of deposits as a result of general economic
conditions. Management believes that the deposit growth in late 2001 through
2003 was based in part in depositors' lack of confidence in the stock market
and their flight to the relative safety of insured deposits.
Results of Operations
Net income for the three months ended March 31, 2004, was $1,342,784 or
$.42 per share, compared to $1,352,505 or $.42 per share for the first quarter
of 2003. This represents a decrease of $9,721.
While earnings decreased slightly, net interest income increased by $10,721
in the first quarter of 2004 compared to the first quarter of 2003 due an
improved interest spread resulting from deposit rate reductions made early in
2003 which continue to offset declining yields on earning assets. Net interest
income is one of the most important factors in evaluating the financial
performance of the Company. The Company 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.
No provision for loan losses was made in the first quarters of 2004 or
2003. Net loan charge-offs(recoveries) were ($583) during the first quarter of
2004 versus ($1,530) during the first quarter of 2003.
Other operating revenues exceed last year primarily due to increases in the
cash surrender value of Bank Owned Life Insurance. The Bank invested $4.0
million in life insurance in August 2003. The increase in cash surrender value
during the first quarter of 2004 was $40.4 thousand.
Other expense variances include an increase in salaries and employee
benefits of $55.8 thousand, of which $26.8 thousand is increased salaries and
$38.1 thousand is group insurance. The Bank employed 100 full time equivalent
employees as of March 31, 2004. The Bank hires seasonal employees during the
summer. The Company has no employees other than those hired by the Bank.
Income taxes are $1,000 higher than last year, on a pre-tax income decrease
of $8,721.
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, also 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 loans 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.
Capital Resources and Adequacy
Total stockholders' equity increased $1,276,384 from December 31, 2003 to
March 31, 2004. This increase is attributable to the comprehensive income
recorded during the period, as detailed in Note 2 of the Notes to Financial
Statements, reduced by $110,448 used to purchase and retire 3,068 shares of
common stock. Stock repurchases were at a price of $36.00 dollars per share.
Under the capital guidelines of the Federal Reserve Board and the FDIC,
the Company and the 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 common shareholders' equity, qualifying perpetual
preferred stock, and minority interests in equity accounts of consolidated
subsidiaries, less certain intangibles. In addition, the Company and the Bank
must maintain a minimum Tier 1 leverage ratio (Tier 1 capital to total assets)
of at least 3%, but this minimum ratio is increased by 100 to 200 basis points
for other than the highest-rated institutions.
Tier one risk-based capital ratios of the Company as of March 31, 2004 and
2003 were 40.68% and 38.89%, 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 March 31, 2004, the Company's interest rate sensitivity, as measured by
gap analysis, showed the Company was asset-sensitive with a one-year cumulative
gap of 11.15%, 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.
Item 4. Controls and procedures
Within the ninety days prior to the date of this report, the Company's
management performed an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures and its internal
controls and procedures for financial reporting. Disclosure Controls are
procedures that are designed to ensure that information required to be
disclosed in the Company's publicly filed reports is reported in a timely
manner. As part of these controls, Management reviews information gathered
through systems developed for that purpose to determine the nature of required
disclosure.
Internal controls are procedures designed to provide management with
reasonable assurance that assets are safeguarded, and that transactions are
properly authorized, executed, and recorded to permit the preparation of
financial statements in accordance with generally accepted accounting
principles. Because of inherent limitations in any internal controls, errors or
irregularities may occur and not be detected. 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.
The Chief Executive Officer and the Treasurer of the Company have
concluded, based on the evaluation of disclosure controls and internal controls
that the financial information and disclosures included in periodic SEC filings
and the Company's financial statements are fairly presented in conformity with
generally accepted accounting principles.
Changes in Internal Controls
There were no significant changes in the company's internal controls or in
other factors that could significantly affect internal controls, including
corrective actions with regard to significant deficiencies and material
weaknesses.
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
e) 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
January none n/a none 311,966
February 500 $36.00 500 311,466
March 2,568 $36.00 2,568 308,898
Totals 3,068 $36.00 3,068 n/a
c
The Company publicly announced on August 14, 2003, that it would repurchase
up to 10% of its outstanding equity stock at that time, which equates to a total
of 324,000 common shares available for repurchase. There is no expiration date
for this program. No other stock repurchase plan or program exists at this
time, nor has any other plan or program expired during the period covered by
this table.
Item 3 Defaults Upon Senior Securities
Not applicable
Item 4 Submission of Matters to a Vote of Security Holders
There were no matters submitted to security holders for a vote during
the quarter ended March 31, 2004.
Item 5 Other information
Not applicable.
Item 6 Exhibits and Reports on Form 8-K
a) Exhibits
Proxy Statement dated March 15, 2004, is incorporated by reference.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
March 31, 2004.
Exhibit 31
Certification of Principal Executive Officer
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 quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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) for the registrant and we have:
a. designed such disclosure controls and procedures 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 quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of the quarterly
report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, 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 in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in the
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Calvin B. Taylor Bankshares, Inc.
Date: May 5, 2004_______ By: /s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Exhibit 31
Certification of Principal Financial Officer
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 quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly 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) for the registrant and we have:
a. designed such disclosure controls and procedures 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 quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of the quarterly
report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, 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 in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in the
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Calvin B. Taylor Bankshares, Inc.
Date: May 5, 2004_______ By: /s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
Exhibit 32
Certification of Principal Executive Officer and Principal Financial Officer
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 March 31,
2004 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: May 5, 2004_______ By: /s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2004_______ By: /s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)
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: May 5, 2004_______ By: /s/ Reese F. Cropper, Jr.
Reese F. Cropper, Jr.
Chairman & Chief Executive Officer
(Principal Executive Officer)
Date: May 5, 2004_______ By: /s/ Jennifer G. Hawkins
Jennifer G. Hawkins
Treasurer
(Principal Financial Officer)