2011 Annual Report - 2.4MB PDF

Fairmont
Gosnald “Butch” N. Floyd, Jr.
W.B. “Butch” Lennon
Rayford “Ray” Lupo
Zeb B. Oxendine
Hope Mills
Belton Jones
Dr. Kim Krivet
Maxton
R.L. Locklear
James Harold Collins
John Wilkerson
Charles David Locklear
Red Springs
John C. Ray
Baker Locklear
Alton McNeill
Madie Rae Locklear
George Thomas Ammons
Rowland
Sylvia Pate
Mady Owens
Donald Bonner
St. Pauls
Glennis Hunt
Truett Canady
Selected Financial Data
The following table sets forth certain selected financial data concerning the Bank for the years
ended December 31, 2011, 2010, 2009, 2008 and 2007. This information should be read in
conjunction with and is qualified in its entirety by reference to the detailed audited consolidated
The following table set forth certain selected financial data concerning the Bank for the years ended
financial statements and notes
thereto which are included in this Annual Report.
Selected Financial Data
December 31, 2011, 2010, 2009, 2008 and 2007. This information should be read in conjunction with
and is qualified in its entirety by reference to the detailed audited consolidated financial statements
and notes thereto which are included in this Annual Report.
2010 2008
2009
2008
2007
2011 20102011
2009
2007
Income Statement Data
(in thousands)
Interest income
Interest expense
Net interest income
Income Statement Date
(in thousands)
Interest
Income
$14,096
Interest
Expense
2,979
Net Interest
Income
11,117
$13,814
$13,814$14,096$13,270
2,979
3,597
3,597
3,888
11,117
10,217
10,217
9,382
Provision for833
loan loss
Provision for loan loss
962
Net
interest
income after
Net interest income after
provision
for loan loss 9,255
provision for loan loss
10,284
Other operating income
Other operating expenses
Income taxes
Securities gains (losses)
Other operating
2,280income
Other operating
10,127expenses
Income taxes
235
Securities(168)
gains (losses)
Extraordinary items
Net Income
Extraordinary items
0
Net Income
$2,034
Per Share Data
Per Share Data
Net income
Year end book value
Dividends declared
Balance Sheet Data
(in thousands)
Balance Sheet Date
(in thousands)
Loans,179,723
net
Investments
61,074
Total304,205
Assets
Deposits
260,590
Shareholders'
Equity
30,156
Loans, net
Investments
Total Assets
Deposits
Shareholders’ Equity
2,083
9,843
100
11
0
$1,406
Net income
$0.60
Year end8.59
book value
Dividends declared
.16
$0.41
8.33
.12
$13,270
$13,801
3,888
4,856
9,382
8,945
$13,801
$14,525
$ 14,525
4,856 5,635 5,635
8,945 8,890 8,890
833
962
657
657
510
10,284
9,255
8,725
8,725
8,435
8,435 8,247 8,247
2,280 2,489
2,083
10,127 10,111
9,843
235
100
36
(168)
4011
2,489
2,823
10,111
8,478
36
659
4021
2,823 2,997 2,997
8,478 8,417 8,417
659 756 756
21
0 0
0
$2,034$
0 0
$1,107
$2,142
0
0 0
$2,142
$ 2,071$2,071
0 0
$1,406
1,107
$0.60 $ 0.45
$0.41
8.59 11.24
8.33
.16 0.21.12
$$0.45
0.88
11.24
10.93
.21
0.27
510
643
643
$0.88
$ 0.85 $0.85
10.93 10.11 10.11
.27 0.26 .26
$167,840 $$168,224
$138,789
$167,840$179,723
$ 168,224
145,296 $145,296
$ 138,789
63,439
53,674
63,439 61,074 53,674
55,362 55,362
38,28738,287
283,123
265,730
236,693
220,534
283,123304,205
265,730
236,693
220,534
233,225
213,532
180,532
184,663
233,225260,590213,532
180,532
184,663
28,476
27,433
28,476 30,156 27,433
26,677 26,67724,70424,704
Net Interest Income
Net
Interest
Income
Thousands
Lumbee
Guaranty
Bank
Advisory
Boards
Pembroke
Roy Lacy Cummings
Archie Oxendine
LeMark Harris
Bobby Maynor
Linda Sheppard
Lycurous Lowry
Lumberton
Al Kahn
Elizabeth Matthews
Dr. J.C. Humphrey, Jr.
J.W. Hammonds
12,000
10,000
8,890
2007
2008
2009
2010 11,117 2011
10,217
8,890,000 8,945,000
9,382,000
10,217,000
11,117,000
9,382
8,945
8,000
6,000
4,000
2,000
2007
16
2008
2009
2010
2011
1
To Our
Shareholders
As we celebrate our 40th Anniversary we reflect back on the journey that has brought
us to this point. Our strength and stability during these turbulent times is because of your
dedication and loyalty to this bank. You, as a shareholder, have given us such a solid
foundation and allowed us to be successful. We thank you for that. Our bank is a strong
community bank with continued interest to serve our rural communities with their financial
needs.
Even in this challenging environment, the bank continues to grow our deposits and
loans. On April 6, 2012, we completed the purchase of two branches from New Century
Bancorp. We purchased the branches and deposits of their Raeford and Pembroke offices,
along with a limited number of loans. We are excited to welcome these new customers
to our Lumbee Guaranty Bank family. We then opened our second Pembroke location on
April 9, 2012. We now offer 14 locations in three counties to serve our customers. Also
in 2011, we upgraded our IT area for better efficiency and faster service.
The bank continues to have a “5” Star
rating from Bauer Financial, Inc. for our Capital
levels. Our ratings compare favorably to the
other banks in our Peer Group.
Please take time to review our Annual Report,
and again, thank you for your continued support
to make your bank the best Community Bank
around.
Sincerely,
PEMBROKE BRANCH
Glenn Walters
Crese Ransom
Barbara Jacobs
Dwayne Jacobs
Nancy Blue
Lottie Locklear
Heather Locklear
Debra Lamb
Tristan Brewington
Harrison Sweat
Linda Wilkins
Amanda Stickland
City Executive, SVP
Assistant Branch Manager
Loan Officer
Customer Service
Receptionist, Administrative Assistant
MSML Trainee
LUMBERTON
PINE STREET
Jay Britt
Ann N. Britt
Janice Hay
Mary Herring
Lorena Case
Amy Romine
Vice President, City Executive
AVP, Branch Manager
Assistant / Receptionist
Head Teller
ST. PAULS BRANCH
Susanne Malloy
Pam Miller
Sherrie McBee
Ismael Avila
Asst. VP, Branch Manager
Head Teller
HOPE MILLS BRANCH
Debby Malone
Yolanda Smith
Olympia Reed
Kristy Hoffman
Branch Manager
MAXTON BRANCH
William Jeffery Walters Branch Manager
Connie Locklear Loans
Dedria Barton
Victoria Oxendine
Anastasia Chavis
Victoria Talley
Rosa Hunt
RED SPRINGS BRANCH
Tony Dellinger
Branch Manager
Flora Locklear
Head Teller
Marie Chavis
Candace Lewis
Teresa Richardson
ROWLAND BRANCH
Larry R. Chavis
President/CEO
2
Mike Smith
Branch Manager, Loan Officer
Karen Michelle Smith
Amy Cribbs
Ashlee M. Chavis
FAIRMONT BRANCH
Crystal Collins
Betty Chavis
Geraldine Ivey
Teresa Hursey
Branch Manager
Head Teller
LUMBERTON
WEST 5th STREET
Judith Hunt
Cheryl Howington
Nikki Locklear
Angela Locklear
AVP, Branch Manager
Head Teller
LUMBERTON
FAYETTEVILLE ROAD
Alan Avant
VP, Branch Manager
Paula Strickland
Head Teller
Vickie Stephens
Loans
Barbara Schiavo
Crystal Jacobs
Catherine Davis
Kayla Locklear Peele
FALCON VILLAGE
Gloria Gist
Kelly Smith Deese
Tonya Oxendine
Branch Manager
LAKE RIM
Allen Davidson
VP Branch Manager
Carmen Serbio, III VP Business Development Officer
Judy Simpson
Head Teller
Nita Carter
Montserrat Harrison
ROVERS
Katara Oxendine
Clara Hewitt
Bradley Strickland
Lauren Oxendine
Lois Maynor
Greg Goins
MAINTENANCE TECHNICIAN
Garry Hunt
INVESTMENTS / MORTGAGE
LOANS
Brent Brooks
Sheila Humphrey
Gail Lassiter
Jay Gilbert
Investment Manager
(Pembroke Office)
Mortgage Manager
(Fayetteville Road Office)
Mortgage
(Fayetteville Road Office)
Mortgage Loan Officer
(Lake Rim Office)
15
Lumbee Guaranty Bank
Our Team
Lumbee Guaranty Bank
Board
of Directors
CORPORATE ADMINISTRATION
Larry Chavis
Derrick Staten
Thresia Locklear
Kyle R. Chavis
Bryan Maynor
Linda Chavis
Janet Newton
Janice Graham
Chad Hammond
Kim B. Jacobs
Debra Jefferson
President, CEO
Executive Vice President, Credit Branch Administrator
Senior Vice President, Operations
Senior Vice President, Credit Administrator
Senior Vice President, Branch Administrator
Vice President, Cashier Compliance
Vice President, Corporate Secretary, Personnel
Assistant Vice President, Training - Security Officer
Vice President, Chief Accounting Officer
Executive Administrative Assistant
Accounts Payable Assistant
BOOKKEEPING, DATA PROCESSING
Yvonne Locklear Supervisor, Operations Officer
Denise McNeill
Maxine Lowry
Christina C. Lowry
Jessica Hubbard
LOAN CONSOLIDATION
Sheila Locklear Operations Credit Officer
Tiki Aubin
Betty Vaughn
Paula Lowry Betty
JoAnn Chavis
PROBLEM ASSETS
Sheryl Griffin
STANDING: LEFT TO RIGHT
CHARLES A. MAYNOR
Owner, Southern Interiors & Design
Owner, H & M Developers
REDELL COLLINS
Secretary
Owner, Redell Collins
Construction
LARRY T. BROOKS
Retired Principal
James Thomas
Retired, BellSouth
SEATED: LEFT TO RIGHT
DR. MARTIN BROOKS
Vice Chairman
Physician, Brooks Medical Clinic
14
Arnold Locklear
Attorney, Chairman
Locklear, Jacobs, Hunt and Brooks
SYBIL BULLARD
President, JR Jones Grain
3
Statements of Cash Flows
2011
Corporate
Team
Lumbee Guaranty Bank
December 31
December 31
$2,034,202
$1,406,349
$ 1,107,185
833,255
( 81,848 )
409,522
166,649
( 185,768 )
961,606
( 11,102 )
481,418
92,022
( 214,040 )
645,721
( 40,175 )
526,300
73,816
( 136,760 )
( 61,460 )
( 37,913 )
49,393
( 25,249 )
( 14,350 )
( 113,760 )
314,322 ( 674,044 )
( 2,845,141 )
( 7,937,278 )
( 3,560,240 )
( 4,467,765 )
( 4,533,456 )
( 1,570,294 )
( 5,201,098 )
( 11,882,828 )
( 643,355 )
( 12,840,917 )
15,443,890
384,140
( 81,498 )
( 25,844,573 )
15,275,813
( 22,927,876 )
( 169,332 )
( 11,176,086 )
14,725,570
( 311,405 )
( 44,680 )
( 94,096 )
( 10,234,615 )
( 10,310,798 )
( 19,641,820 )
(1,000,000)
27,365,249
( 546,810 )
0
141,472
51,216
19,424,831
( 421,595 )
0
7,476
51,216
33,000,040
( 512,730 )
( 100,000 )
210,084
51,208
26,011,127
19,061,928
32,648,602
Increase(decrease) in cash and cash equivalents
11,243,056
7,180,836
7,805,684
Cash and Cash Equivalents at Beginning of Period
30,711,070
23,530,234
15,724,550
Cash and Cash Equivalents at End of Period
41,954,126
30,711,070
23,530,234
Supplemental Disclosures of
Cash Flow Information
Cash paid during the year for:
Interest
$3,003,915
$3,611,288
$ 4,002,265
$402,775
$218,000
BRYAN MAYNOR, exec. vp
Branch Administrator
KYLE R. CHAVIS, exec. vp
Credit Administrator
THRESIA LOCKLEAR, Sr. VP,
Operations
Operating Activities
Net Income
Adjustments to Reconcile Net Income
to Net Cash Provided
Provision for Possible Loan Losses
[Gain] Loss on Sale of Securities
Depreciation and Amortization
Amortization of Premiums (discount)
Deferred Income Taxes
Decrease [increase] in Accrued
Interest Receivable
Increase [decrease] in Accrued
Interest Payable
Decrease [increase] in Prepaid
Expenses and Other Assets
Increase [decrease] in Accrued Expenses
and Other Liabilities
Net Cash Provided by (used by)
Operating Activities
DERRICK STATEN, Sr. Exec. VP
Administration
Investing Activities
Net (increase) decrease in loans
Purchases of Premises and Equipment
Purchase of Investment Securities
Proceeds from Sale of Securities
Decrease [increase] in Real Estate acquired
in Settlement of Loans
JANET NEWTON, VP
Corporate Secretary
LINDA CHAVIS, VP
Cashier
Net cash provided by (used by)
Investing Activities
Financing Activities
Net Increase (decrease) from borrowings
Net Increase (decrease) in Deposit Accounts
Cash Dividends
Proceeds from Issuance of Stock
Increase (Decrease) Unrealized Gain / Loss
Stock-Based Compensation
Net cash provided by (used by)
Financing Activities
JANICE GRAHAM, AVP
Training
chadwick hammond, VP
Chief Accounting Officer
Larry R. Chavis,
President, CEO
4
December 31
INCOME TAXES
2011
2010
2009
$
266,673
13
Consolidated Statements of Shareholders’ Equity
Lumbee Guaranty Bank
Common
Stock
Surplus
Undivided
Profits
Net Unrealized Total Shareholder’s
Loss of Securities
Equity
And Analysis of Financial Condition
And Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes
included in this report.
Year Ended December 31, 2011
Balance at beginning of year
Management’s Discussion
$6,835,130
$7,007,215
$13,991,159
Net Income
2,034,202
$642,567 28,476,071
General
Issuance of common stock
Cash dividends paid on Common Stock
June. 2010 - $ .5 a share
[ 273,405 ]
Dec. 2010 - $ .07 a share
[ 273,405 ]
community bank which conducts its business from
Net change in Unrealized Gain (Loss) of
Available for Sale Securities
Stock-based compensation
Balance at End of Year
$ 6,835,130
twelve full services offices located strategically in
141,472
Robeson and Cumberland counties. The Bank extends
51,216
$ 7,058,431
both commercial and consumer loans throughout its
$ 15,478,550
$ 784,039
$ 30,156,150
Year Ended December 31, 2010
Balance at beginning of year
$4,247,247
$17,667,146
Net Income
1,406,349
Issuance of common stock
1,951,990
$635,091 27432,624
1,951,990
Cash dividends paid on Common Stock
June. 2010 - $ .05 a share
[ 170,878 ]
Dec. 2010 - $ .07 a share
[ 239,230 ]
Net change in Unrealized Gain (Loss) of
Available for Sale Securities
Stock-based compensation
51,216,
Other Adjustments
4,660,742
4,672,228
$ 7,007,215
$ 13,991,159
Balance at End of Year
$ 6,835,130
7,476
$ 642,567
28,476,071
Year Ended December 31, 2009
Balance at beginning of year
market area and offers a full range of deposit accounts
for its customer base.
$4,883,140
$4,883,140
Lumbee Guaranty Bank is an independent,
$4,196,039
$7,072,691
Net Income
1,107,185
$425,007 26,576,877
The bank has experienced significant sustained
growth over the past five years in assets and deposits.
interest rate earned or paid and
Dividends over the last five years have averaged 32.88%
by volume changes in interest-
of the average net income $1,752,254.
earning assets and interest-
bearing liabilities.
Gross loans have increased from $140,872,647
at December 31, 2007 to $183,347,822 at December
31, 2011, while net annual charge-offs over the last
8.8% in 2011 and 8.9% in 2010.
five years have averaged $347,800. Interest rates on
Non-interest expenses have
deposits and loans are set at competitive rates while
increased from $10,815,200 in
maintaining interest spreads of 4.65% in 2011 and
2010 to $10,960,419 in 2011. This
provided by operations resulted in a 7.4% growth rate
Dec. 2008 - $ .14 a share
[ 170,910 ]
in total assets for 2011.
12
$ 17,667,146
$ 635,091
Net interest income increased
is primarily a result of increased
FDIC Insurance expenses.
Gross loans grew 7.2% in 2011 and .1% in 2010.
Lumbee Guaranty Bank closely monitors changes in
51,208
$ 4,247,247
funds sold, securities purchased
31, 2007 to $260,589,543 at December 31, 2011.
[ 341,280]
$ 4,883,140
investment securities, federal
interest income is affected by the
June. 2008 - $ .13 a share
Balance at End of Year
interest and fees earned on loans,
deposits increased from $184,663,374 at December
interest bearing deposits. The sustained growth
Stock-based compensation
as the difference between gross
interest paid on deposits. Net
Cash dividends paid on Common Stock
210,084
its net interest income defined
2007 to $304,205,461 at December 31, 2011, and total
Issuance of common stock
dependent to a large degree on
under agreements to resell and
loans and investments and interest paid on average
Available for Sale Securities
The Bank’s earnings are
Assets increased from $220,534,232 at December 31,
4.52% in 2010 between interest earned on average
Net change in Unrealized Gain (Loss) of
Results of
Operations
the financial markets in order to maximize the yield on
27,432,624
its assets.
5
Management’s Discussion
Consolidated Statements of Earnings
Lumbee Guaranty Bank
Provision for Loan Losses
The provision for loan losses was $833,255, $961,606 and $656,842 respectively for
the years ended December 31, 2011, 2010 and 2009. The reserve for possible loan losses was
$3,208,582 at December 31, 2011, approximately 1.75% of gross outstanding loans at that
date. Management deems the 2011 reserve balance to be adequate for possible charge-offs in
subsequent years on the uncollected loan balances at December 31, 2011.
Liquidity and Capital Resources
The Bank’s liquidity position is primarily dependent upon its need to respond to loan
demand and short-term demand for funds caused by withdrawals from deposit account and
upon the liquidity of its assets. The Bank’s primary liquidity sources include cash and amounts
due from other banks, federal funds sold and U.S. Agency securities as well as other short-term
investment securities. In addition, the Bank has the ability to borrow funds form the Federal
Reserve System and to purchase federal funds from other financial institutions. The Bank’s
management believes its liquidity sources are adequate to meet its operating needs.
Total shareholder’s equity was $30,156,150 or 9.98% of total assets and $28,476,071 or
10.0% of total assets at December 31, 2011 and 2010 respectively.
Total Assets
THOUSANDS
Thousands
TOTAL ASSETS
320,000
300,000
280,000
260,000
240,000
220,000
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
304,205
265,730
220,534
236,693
2011
2010
2009
$ 11,753,519
$ 11,522,451
$ 10,946,781
720
995
1,155
217,482
1,265,554
120,898
1,081,820
77,467
901,038
859,060
14,096,335
1,088,129
13,814,293
1,343,381
13,269,822
1,739,780
540,505
$ 16,376,620
1,798,862
294,369
$ 15,907,524
1,909,356
580,664
$ 15,759,842
393,756
18,914
448,988
18,563
262,354
18,500
1,045,330
1,520,666
2,978,666
3,962,937
1,678,542
5,641,479
595,724
325,082
833,255
3,564,879
10,960,419
$ 13,939,085
1,101,612
2,027,775
3,596,938
3,833,026
1,669,864
5,532,890
579,172
403,467
961,606
3,338,065
10,815,200
$ 14,412,138
1,044,025
2,563,714
3,888,593
4,013,213
1,898,691 5,911,904
533,934
432,164
656,842
3,233,015
10,767,859
$ 14,656,452
2,437,535
235,282
1,495,386
100,139
1,103,390
36,381
$ 2,202,253
$ 1,395,247
$ 1,067,009
(168,052)
0
$ 2,034,201
11,102
0
$ 1,406,349
40,176
0
$ 1,107,185
Income Before Securities Gains (Losses)
and Extraordinary Items$ .59
Net Income$ .59
Cash Dividends$ .16
$ .41
$ .41
$ .12
Service Charges on Deposit Accounts
Other Operating Income Total Operating Income
Operating Expenses
Interest Paid on NOW and
Money Market Accounts
Interest Paid on Savings
Interest Paid on Time Certificates of
Deposit of $100,000 or more
Interest Paid on Other Time Deposits
Total Interest Expense
Salaries and Wages
Other Personnel Costs
Total Personnel Expense
Net Occupancy Expense
Equipment Expense
Provision for Loan Losses
Other Operating Expense
Total Other Noninterest Expense
Total Operating Expenses
Income Before Income Taxes
and Securities Gain (Losses),
and Extraordinary Items
Applicable Income Taxes
Income Before Securities Gains (Losses)
and Extraordinary Items
Securities Gains (Losses) less related
Taxes (Benefits)
Extraordinary items
Net Income
PER SHARE DATA (Based on the weighted
average number of shares outstanding.)
2007
6
283,123
Operating Income
Interest and Other Fees on Loans
Interest on Federal Funds Sold
and Securities Purchased
under Resale Agreement
Interest on Securities:
Federal Agency
State, County, and Municipals
Interest on Time Deposits
and Other Investments Total Interest
December 31 December 31 December 31
2008
2009
2010
2011
$
$
$
.45
.45
.21
11
Consolidated Statements of Condition
Lumbee Guaranty Bank and Subsidiary
December 31
December 31
2011
December 31
2010
2009
Consolidated Statements of Condition
Lumbee Guaranty Bank
Assets
Cash and Due From Banks
Investment Securities
available for sale
Investment Securities
held to maturity December
Federal Funds sold and repos
2011
27,914,172
32,567,512
26,904,637
0
1,000,000
1,000,000
179,722,747
167,839,919
168,224,059
2009
$ 29,711,100
$ 22,530,234
9,173,501
8,942,018
9,341,938
26,904,637 870,916
915,596
1,258,325
1,220,412
26,046,165
1,305,208
1,506,059
1,000,000
8,711,626
8,584,553
32,567,512
1,227,001
1,319,785
30,871,356
824,418
1,000,000
8,910,136
167,839,919
$304,205,461
8,942,018
915,596
1,258,325
1,305,208
$51,690,159
8,711,626
70,174,580
11,579,824
$ 283,122,660
57,193,259
69,951,721
Demand
$ 51,690,159
N.O.W. and Money Market accounts
70,174,580
Savings Total Deposits
11,579,824
Time Certificates of Deposit
of $100,000 or more Reserve for Interest due depositors
57,193,259
Other Time Deposits Other Liabilities
69,951,721
Reserve for Interest due depositors
Other Liabilities Shareholders' Equity
$22,530,234
2010
N.O.W. and Money Market accounts
Savings
Total Assets
$ 304,205,461
Time Certificates of Deposit
Liabilities and Shareholders’ofEquity
$100,000 or more
Deposits
Other Time Deposits
Total Liabilities
$29,711,100
33,159,575
26,046,165
31 December
31 30,871,356
December 31
Loans, net
Assets
Cash and Due From Banks Bank Premises and
$ 41,954,126
Investment Securities
Equipment, net
available for sale Foreclosed Real Estate
27,914,172
Investment Securities
Accrued Interest Receivable
held to maturity
33,159,575
Prepaid Expenses
Federal Funds sold and repos
0
Other Assets
Loans, net
179,722,747
Total Assets
Bank Premises and
Equipment, net
9,173,501
Foreclosed Real Estate Liabilities and Shareholders' Equity
1,227,001
Accrued Interest Receivable
1,319,785
Deposits
Prepaid Expenses
824,418
Demand
Other Assets
8,910,136
Total Deposits
$41,954,126
168,224,059
$283,122,660
$266,228,973
9,341,938
870,916
1,220,412
$45,177,640 1,506,059
$48,020,943
8,584,553
59,361,528
46,741,130
10,810,157
$ 266,228,97310,618,478
51,321,107
66,553,862
45,750,561
62,668,351
$ 45,177,640
59,361,528
260,589,543
10,810,157
$ 48,020,943
46,741,130
233,224,294
213,799,463
10,618,478
257,720
51,321,107
13,202,048
66,553,862
282,969
45,750,561 297,319
21,139,326
62,668,35124,699,566
260,589,543
233,224,294
274,049,311
213,799,463
254,646,589
238,796,348
257,720
13,202,048
282,969
21,139,326
297,319
24,699,566
$ 254,646,589
$ 238,796,348
Common Stock, par value $2.00
Total Liabilities Authorized 5,000,000 shares
$ 274,049,311
issued & outstanding 3,417,565, 3,417,565
Shareholders’ Equity
and 2,441,570 shares, respectfully
Common Stock, par value $2.00
Surplus
Authorized 5,000,000 shares
Undivided
Profits
issued & outstanding 3,417,565,
2,441,570
Net unrealized gains (losses) on6,835,130
and 2,441,570 shares, respectfully
Surplus
7,058,430
AFS securities
$6,835,130
7,058,430
15,478,551
$6,835,130
7,007,215
13,991,159
6,835,130
7,007,215
784,039
13,991,159
$4,883,140
4,247,247
17,667,147
4,883,140
642,567 4,247,247 635,091
Undivided Profits
15,478,551
Net unrealized holding gains
(losses)
on Equity
Total
Shareholders'
AFS Securities
784,039
$30,156,150
$28,476,071
Total Liabilities and Shareholders'
Equity
Total Shareholders’ Equity
30,156,150
304,205,461
28,476,071
283,122,660
266,228,973
27,432,625
Total Liabilities and Shareholders’ Equity
10
$ 304,205,461
$ 283,122,660
$35,000
$30,000
$24,704
$26,677
$27,432,625 #
$27,433
Risk Elements
As of the end of December 31, 2011, 2010 and 2009, past due and non-accrual loans, in thousands,
as extracted from the Call Reports, Schedule RC-N of December 31, 2011, 2010 and 2009 were as follows:
Past due 30
through 89 days
and still accruing
$27,432,625
635,091
$ 266,228
2011
$30,156,150
$28,476
$30,156
$25,000
$20,000
$15,000
2011
2010
Real Estate Loans
Installment Loans
Credit Cards and Related Plans
Commercial and all Other Loans
$1,133 $841
236
340
0
0
148
0
$1,074
16
0
0
$128
10
0
0
$3,516 $2,235
294
178
0
0
312
330
Total
$1,517 $1,181
$1,090
$138
$4,122 $2,743
$5,000
$0
2008
2009
2011
2010
Allowance for Loan Losses and Summary of Loan Loss Experience
As a matter of policy, the Bank maintains an allowance for loan losses. The allowance for loan losses is created by
direct charges to income, and losses on loans are charges against the allowance when realized. The amount of the
allowance is based upon an evaluation of the portfolio, current economic conditions, historical loan loss experience,
and other factors management deems appropriate. The Bank’s management believes its allowance for loan losses is
adequate under existing economic conditions.
The following table summarizes the Bank’s loan loss experience as of the end of December 31, 2010 and 2009.
2011
Balance at beginning of period
Charge-offs
Commercial, Financial and Agricultural
Real Estate
Installment Loans to Individuals
Credit Cards and Related Plans
Total Charge-offs
2010
$ 2,778
$ 2,183
0
330
100
11
$ 441
26
261
154
0
$ 441
Recoveries
Commercial, Financial and Agricultural
Real Estate
14
Installment Loans to Individuals
22
Credit Cards and Related Plans
3 Total Recoveries
39
2010
2011
0
26
42
6
74
Net Charge-offs
$ 402
$ 367
Additions Charged to Operations
$ 833
$ 962
$ 3,209
$ 2,778
.2%
.2%
Balance at end of period
$10,000
2007
non-accrual
2010
2011
Past due 90
days or more
and still accruing
17,667,147
Shareholders
Equity
2007 #
2009 Growth
#
$24,704,000 #
Thousands
Shareholders
Equity
Growth
642,567
Management’s Discussion
Ratio of Charge-offs during the period to
Average Gross Loans Outstanding
during the period
7
Key Ratios
Key Ratios
The following schedule of key ratios is presented for the years December 31, 2011, 2010, 2009 and 2008.
The following schedule of key ratios is presented for the years
2009 and 2008.
2011December
2010 31, 2011,
2009 2010,2008
2011 2010 2009 2008
Return on Equity and Assets
Return on Assets
Return on Equity Return
and Assets
on Equity
Return on Assets Dividend Payout Ratio
Return on EquityEquity to Assets (averages)
Ending Equity to Ending Assets
Dividend Payout Ratio
Average Interest Earning Assets
to Average Total Assets
Equity to Assets (averages)
Average Net Loans
Ending Equity to Ending Assets
to Average Total Loans
Average Interest Earning
Assets
Average Interest
Earning Assets
to
Average
to Average Total Assets Interest Bearing Liabilities
.67%
.52%
.42%
.94%
4.04%
8.39%
29.94%
30.77%
.67%26.88%
.52% 46.32%
.42%
.94%
The following schedule of 10.07%
key ratios is presented
for the years11.22%
December 31, 2011, 2010, 2009 and 2008.
6.68% 9.98%
5.01% 11.22% 4.04%
8.39%
2009
2008
9.91%
10.06%
10.32% 2011
11.27% 2010
Key6.68%
Ratios 5.01%
26.88%
29.94%
Return on Equity and Assets
84.86%
85.31%
9.98%
10.07%
Return on Assets
Return
on
Equity
9.91%
10.06%
86.71%
46.32%
88.19%
11.22%
.67%
6.68%
10.32%
.52%
5.01%
26.88%
98.53% 29.94%
9.98%
10.07%
9.91%
10.06%
106.09%
Dividend
Payout Ratio 98.30%
98.07%
98.49%
Equity to Assets (averages)
Ending
Equity to Ending
Assets
117.48%
101.21%
107.27% 86.71%
84.86%
85.31%
Average Interest Earning Assets
to Average Total Assets
84.86%
85.31%
Average Net Loans Average Net Loans
to Average Total Loans
98.07%
#
2009
2010 98.49%
2011 98.30%
to2008
Average Total98.30%
Loans
98.07%
Average0.94%
Interest Earning 0.42%
Assets
#
0.52%
0.67%
Average Interest Earning
Assets
1.50%
to Average Interest
Bearing Liabilities
117.48%
#
8.39%
4.04%
5.01%
6.68% 101.21%
schedule
toofAverage
Interest
117.48%
101.21%
107.27%
The following
key ratios is presented
for theBearing
years DecemberLiabilities
31, 2011, 2010, 2009 and 2008.
Return On Assets (%)
Key Ratios
20110.98% 2010
2009
0.94%
2008
$2,142,000 $1,107,000 $1,406,000 $2,034,000
30.77%
11.22%
.42%
4.04%
11.27%
46.32%
11.22%
10.32%
.94%
8.39%
30.77%
11.22%
11.27%
86.71%
88.19%
98.53%
98.49%
98.53%
88.19%
107.27%
106.09%
106.09%
Return On Assets (%)
#
2008
2009
2010
2011
Return on Equity and Assets
#
0.94%
0.42%
0.52%
0.67%
1.50%
0.67%
Return on Assets
.67%
.52%
.42%
.94%
#
8.39%
4.04%
5.01%
6.68%
0.52%
Return on Equity
6.68%
5.01%
4.04%
8.39% 0.42%
$2,142,000 $1,107,000 $1,406,000 $2,034,000
0.98%
Dividend Payout Ratio
26.88%
29.94%
46.32%
30.77%
0.94%
0.50%
1.00% transactions and there are currently no public tradOur
common
primarily
negotiated
Equity
to Assets
(averages) stock is traded 9.98%
10.07%in privately
11.22%
11.22%
0.67%
Ending Equity to Ending Assets
9.91%
10.06%
10.32%
11.27%
ing markets or published prices for the stock. On December 31, 2011, there were 1944 shareholders
0.52% of record.
Average Interest Earning Assets
0.42%
0.50%
to Average 2009,
Total Assets2010 0.00%
86.71% as shown
88.19%
During
and 2011 84.86%
we paid85.31%
dividends
on “consolidated statement of shareholder equity.” Our
Average Net Loans
2007
2008
2009
2010
2011
to Average
98.07%
98.30% between
98.49%
98.53%
stock
asTotal
of Loans
December 31, 2011
is trading
$15.00
and $16.00 per share.
Average Interest Earning Assets
0.00%
to Average Interest Bearing Liabilities
117.48%
101.21%
107.27%
106.09%
1.00%
Market for Our Common Stock
10.00%
8.72%
Return On
# Assets
2008 (%)
1.50%
0.98%
8.39%
Return On Equity (%)
2009
2010
2011
0.94%
0.42%
0.52%
0.67%
8.00%#
#
8.39%
4.04%
5.01%
6.68%
6.00% $2,142,000 $1,107,000 $1,406,000 $2,034,000
4.00%
2.00%
0.50%
2008
0.52%
2007
8.72%
4.04%
2009
Thousands
6.00%
4.00%
2010
2009
2007
2011
2010 2008
Net Income
6.68%
$2,500
4.04%
5.01%
$2,071
$2,142
$2,000
2.00%
2011
2009
2010
2011
We have audited the accompanying consolidated statements of condition of Lumbee
Guaranty Bank and Subsidiary as of December 31, 2011, 2010 and 2009, and the related
consolidated statements of income, stockholders’ equity, and cash flows for each of the
years in the three-year period ended December 31, 2011. These financial statements are
the responsibility of the Bank’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Lumbee
Guaranty Bank at December 31, 2011, 2010, and 2009, and the results of its operations
and its cash flows for each of the years in the three-year period ended December 31,
2011, in conformity with accounting principles generally accepted in the United States
of America.
Net Income
$2,500
$2,071
$2,000
$1,500
$1,500
0.00%
2007
2008
2009
2010
2011
$1,000
$2,071
$2,034
$2,034
$1,406
$1,406
February 15, 2012
____________________________________
NELSON PRICE & ASSOCIATES, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
$1,107
$500
$500
$2,500
$2,142
$1,107
$1,000
Net Income
Thousands
5.01%
The Board of Directors and Shareholders
Lumbee Guaranty Bank
Pembroke, North Carolina
8.39%
8.00%
$2,000
6.68%
4.04%
0.00%
2008
Return On Equity (%)
10.00%
6.68%
8.39%
5.01%
8.00%
2011
2.00%
0.00%
2008
2010
4.00%
0.00%
2007
8.72%
2009
6.00%
0.67%
0.42%
10.00%
Thousands
1.00%
0.94%
Return On Equity (%)
2007
INDEPENDENT AUDITOR’S REPORT
$-
$2,142
2007
$2,034
2008
2009
2010
2011
$2007
$1,406
$1,500
2008
2009
2010
2011
$1,107
8
$1,000
$500
$-
9
In This 2011
Report
TABLE OF CONTENTS
Letter to the Shareholders.......................................... 2
Stockholder Information
Board of Directors ....................................................... 3
Notice of Annual Meeting
Selected Financial Data................................................ 1
Corporate Team 2011................................................... 4
The Annual Stockholders’ Meeting of
Lumbee Guaranty Bank
will be held May 23, 2012
Main Office, Pembroke
Management’s Discussion.......................................... 5
Independent Auditor’s Report.................................. 9
Financial Statements................................................... 10
Our Team 2011............................................................. 14
Branch Advisory Boards............................................ 16
Stockholder Information.......................................... 17
Form 10-K
More detailed information relating to Lumbee Guaranty Bank is
contained on Form 10-K Annual Report to the Federal Deposit
Insurance Corporation. A copy of the 10-K for 2011 can be mailed,
without charge, upon request to:
Lumbee Guaranty Bank
P.O. Box 908
Pembroke, NC 28372
Stock Transfer Agent
About The Report
The 2011 Annual Report is presented in a summary format to provide information regarding the
performance of Lumbee Guaranty Bank in a manner that is meaningful and useful to the widest
range of readers. The audited consolidated financial statements of Lumbee Guaranty Bank and
subsidiary, Lumbee Guaranty Financial Services, Inc. and other more detailed analytical information
regarding the Corporation are contained in the Lumbee Guaranty Bank 2011 on Form 10-K with
the Federal Deposit Insurance Corporation.
First Citizens Bank
for information contact:
Lumbee Guaranty Bank
P.O. Box 908
Pembroke, NC 28372
Independent Accountants
Nelson Price & Associates
4904-B Salem Square Professional Park
Fayetteville Road
Lumberton, NC 28358
Member Federal Deposit Insurance
Corporation
This statement has not been reviewed for accuracy or relevancy
by the Federal Deposit Insurance Corporation.
17
FAIRMONT
301 North Walnut Street
Fairmont, NC 28340
(910) 628-7840 Phone
(910) 628-9924 Fax
HOPE MILLS
PO Box 589
3500 N. Main Street
Hope Mills, NC 28348
(910) 424-0010 Phone
(910) 423-2386 Fax
LUMBERTON
Pine Street Branch
PO Box 1486
600 North Pine Street
Lumberton, NC 28359
(910) 738-3200 Phone
(910) 618-9647 Fax
West 5th Street Branch
2899 W. 5th Street
Lumberton, NC 28358
(910) 739-8787 Phone
(910) 739-8781 Fax
FAYETTEVILLE
Falcon Village Branch
6313 Raeford Road
Fayetteville, NC 28304
(910) 867-0286 Phone
(910) 867-0810 Fax
Fayetteville Road Branch
4845 Fayetteville Road
Lumberton, NC 28358
(910) 671-9011 Phone
(910) 671-8753 Fax
MAXTON
104 Martin L. King, Jr. Drive
Maxton, NC 28364
(910) 844-3007 Phone
(910) 844-4067 Fax
Lake Rim Branch
2315 Bloom Avenue
Fayetteville, NC 28304
(910) 860-0159 Phone
(910) 860-0561 Fax
RED SPRINGS
PO Box 151, 215 E. 4th Street
Red Springs, NC 28377
(910) 843-5171 Phone
(910) 843-1199 Fax
ROWLAND
PO Box 398
201 N. Bond Street
Rowland, NC 28383
(910) 422-3572 Phone
(910) 422-8650 Fax
ST. PAULS
PO Box 176
306 South 5th Street
St. Pauls, NC 28384
(910) 865-4196 Phone
(910) 865-8415 Fax
PEMBROKE
PO Box 908
403 East Third Street
Pembroke, NC 28372
(910) 521-9707 Phone
(910) 521-0772 Fax
2011 Annual Report
Lumbee
guaranty bank
Generations come and go
but good service remains our goal.