U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1998
[ ] Transition Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from ____________ to _____________
Commission file number: 0-24159
INDEPENDENT COMMUNITY BANKSHARES, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
Virginia 54-1696103
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
111 West Washington Street
Middleburg, Virginia 22117
(Address of Principle Executive Offices)
(540) 687-6377
(Issuer's Telephone Number, Including Area Code)
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 _____
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
1,812,594 shares of common stock, par value $5.00 per share,
outstanding as of August 10, 1998
* This Form 10-QSB also covers 276,600 Contractual Rights to Contingent
Merger Consideration, which are registered under the Securities Act of 1933, as
amended, pursuant to a registration statement declared effective on June 27,
1997.
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information Page No.
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Changes in Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of Operation
and Financial Condition 10
Part II. Other Information:
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE>
Independent Community Bankshares, Inc.
Consolidated Balance Sheets
(In Thousands)
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Assets:
Cash and due from banks $ 7,276 $ 6,129
Interest-bearing balances in banks 123 456
Temporary investments:
Federal funds sold - 1,300
Other money market investments 2,879 725
Securities (fair value: June 30, 1998,
$ 60,970, December 31, 1997,
$ 52,376 ) 60,685 63,696
Loans, net 112,042 103,253
Bank premises and equipment, net 5,572 5,527
Other assets 3,910 3,774
------------ ------------
Total assets $ 192,487 $ 184,860
============ ============
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Non-interest bearing $ 27,783 $ 26,603
Interest bearing 130,269 129,952
------------ ------------
Total deposits $ 158,052 $ 156,555
Federal funds purchased $ 1,000 $ -
Securities sold under agreements to
Repurchase 2,818 3,048
Federal Home Loan Bank advances 7,000 2,800
Other liabilities 1,190 771
------------ ------------
Total liabilities $ 170,060 $ 163,174
Shareholders' Equity
Common stock par value $5.00 per
share, authorized 10,000,000 shares;
issued and outstanding at June 30, 1998 - 1,812,594
issued and outstanding at December 31, 1997 - 1,812,594 $ 9,063 $ 9,063
Capital surplus 1,948 1,948
Retained earnings 11,422 10,874
Unrealized gain (loss) on securities
available for sale, net (6) (199)
------------ ------------
Total shareholders' equity $ 22,427 $ 21,686
Total liabilities and shareholders' equity $ 192,487 $ 184,860
============ ============
</TABLE>
<PAGE>
Independent Community Bankshares, Inc.
Consolidated Statements of Income
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Unaudited Unaudited
-------------------------------------------------
For the Six Months For the Quarter
Ended June 30, Ended June 30,
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $ 4,952 $ 4,333 $ 2,530 $ 2,195
Interest on investment securities
Taxable 49 67 22 31
Exempt from federal income taxes 320 335 157 174
Interest on securities available for sale
Taxable 889 1,090 405 592
Exempt from federal income taxes 328 - 172 -
Dividends 107 140 61 71
Interest on federal funds sold and other 85 97 68 40
---------- ---------- ---------- ----------
Total interest income $ 6,730 $ 6,062 $ 3,415 $ 3,103
Interest expense
Interest on deposits $ 2,505 $ 2,374 $ 1,261 $ 1,221
Interest on FHLB advances 133 95 95 45
Interest on short-term borrowings 9 55 4 31
---------- ---------- ---------- ----------
Total interest expense $ 2,647 $ 2,524 $ 1,360 $ 1,297
Net interest income $ 4,083 $ 3,538 $ 2,055 $ 1,806
Provision for loan losses 90 116 45 61
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses $ 3,993 $ 3,422 $ 2,010 $ 1,745
Other Income
Commissions and fees from fiduciary
Activities $ 424 $ 42 $ 204 $ 19
Service charges on deposit accounts 463 482 249 277
Net gains (losses) on securities
available for sale (52) (7) (40) (10)
Other operating income 165 - 127 -
---------- ---------- ---------- ----------
Total other income $ 1,000 $ 517 $ 540 $ 286
Other Expense
Advertising $ 97 $ 84 $ 65 $ 55
Salaries and employee benefits 1,757 1,263 886 620
Net occupancy expense of premises 381 270 217 138
Other operating expenses 924 687 496 414
---------- ---------- ---------- ----------
Total other expense $ 3,159 $ 2,304 $ 1,664 $ 1,227
Income before income taxes $ 1,834 $ 1,635 $ 886 $ 804
Income taxes 468 446 232 223
Net income $ 1,366 $ 1,189 $ 654 $ 58
========== ========== ========== ==========
Earnings per weighted average share:
(1998 - 1,812,594
1997 - 1,694,028 shares)
Net income per share $ 0.75 $ 0.70 $ 0.32 $ 0.34
Dividends per share $ 0.30 $ 0.20 $ 0.15 $ 0.11
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Independent Community Bankshares, Inc.
Consolidated Statement of Changes in Shareholders' Equity
For the Six Months Ended June 30, 1998 and 1997
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Common Capital Comprehensive Retained Comprehensive
Stock Surplus Income Earnings Income Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances - December 31, 1996 $ 4,299 $ 1,411 $ (519) $ 12,817 $ - $ 8,008
Comprehensive Income
Net income 1,189 1,189 1,189
Other comprehensive income
net of tax -
Unrealized loss on available for
sale securities 74
Less: Reclassification adjustment for
gains realized in net income 2
----------
Other comprehensive income, net of tax 76 76 76
----------
Total comprehensive income $ 1,265
==========
Cash dividends (174) (174)
Acquisition of common stock (114) (522) (636)
---------- ---------- ---------- ---------- ----------
Balances - June 30, 1997 $ 4,185 $ 889 $ (443) $ 13,832 $ 18,463
========== ========== ========== ========== ==========
Balances - December 31, 1997 $ 9,063 $ 1,948 $ (199) $ 10,874 $ - $ 21,686
Comprehensive Income
Net income 1,366 1,366 1,366
Other comprehensive income
net of tax 193
Unrealized loss on available for
sale securities
Less: Reclassification adjustment for
gains realized in net income
----------
Other comprehensive income, net of tax 193 193 193
----------
Total comprehensive income $ 1,559
==========
Cash dividends declared (818) (818)
---------- ---------- ---------- ---------- ----------
Balances - June 30, 1998 $ 9,063 $ 1,948 $ (6) $ 11,422 $ 22,427
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
Independent Community Bankshares, Inc.
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
---------------------------------
June 30, June 30,
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,366 $ 1,189
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 90 116
Depreciation and amortization 282 187
Net (gains) losses on securities available for sale 52 7
Discount accretion and premium amortization
on securities, net 99 97
Deferred taxes (23) -
Net (gains) losses on sale of assets - 15
(Increase) decrease in accrued interest receivable (27) (74)
Decrease in prepaid income taxes 101 78
(Increase) in other assets (199) (175)
Increase in accrued interest payable 71 64
Increase in other liabilities 230 (220)
------------ ------------
Net cash provided by operating activities $ 2,042 $ 1,284
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturity, principal paydowns and
calls of investment securities $ 2,637 $ 698
Proceeds from maturity, principal paydowns and
calls of securities available for sale 4,146 2,279
Proceeds from sale of securities available
for sale 2,024 2,075
Proceeds from sale of assets - 37
Purchase of investment securities - (1,889)
Purchase of securities available for sale (5,655) (15,815)
Net (increase) in loans (8,878) (2,377)
Purchases of bank premises and equipment (297) (1,062)
------------ ------------
Net cash (used in) investing activities $ (6,023) $ (16,054)
CASH FLOWS FROM FINANCING ACTIVTIES
Net increase in demand deposits, NOW accounts,
and savings accounts $ 530 $ 4,421
Net increase in certificates of deposits 968 8,487
Proceeds from Federal Home Loan Bank advances 5,000 -
Increase in Federal Funds sold 1,000 -
Dividends declared (818) (174)
Acquisition of common stock - (636)
Payment on Federal Home Loan Bank advances (800) (1,000)
Increase (decrease) in securities sold under agreement to
Repurchase (230) 1,314
------------ ------------
Net cash provided by financing activities $ 5,650 $ 12,412
Increase in cash and cash equivalents $ 1,669 $ (2,358)
CASH AND CASH EQUIVALENTS
Beginning $ 8,609 $ 9,919
============ ============
Ending $ 10,278 $ 7,561
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
Cash payments for:
Interest paid to depositors 2,434 2,460
Income taxes 505 414
SUPPLEMENTAL DISCLOSURES FOR NON-CASH
INVESTING AND FINANCING ACTIVITIES
Unrealized gain (loss) on securities available
for sale (9) (672)
</TABLE>
See Accompanying Note to Consolidated Financial Statements
<PAGE>
INDEPENDENT COMMUNITY BANKSHARES, INC.
Notes to Consolidated Financial Statements
(Unaudited)
For the Six Months Ended June 30, 1998 and 1997
Note 1. In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial
position as of June 30, 1998, and the results of operations and
changes in cash flows for the three months ended June 30, 1998 and
1997. The statements should be read in conjunction with the Notes to
Consolidated Financial Statements included in the Company's Annual
Report for the year ended December 31, 1997. The results of
operations for the six month periods ended June 30, 1998 and 1997,
are not necessarily indicative of the results to be expected for the
full year.
Note 2. Securities
Securities being held to maturity as of June 30, 1998 are summarized
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains (Losses) Value
------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 1,131 $ - $ (1) $ 1,130
Obligations of states and
Political subdivisions 12,915 283 - 13,198
Mortgaged backed securities 298 2 - 300
============ =========== =========== ===========
$ 14,344 $ 285 $ (1) $ 14,628
============ =========== =========== ===========
</TABLE>
<PAGE>
Securities available for sale as of June 30, 1998 are summarized below:
<TABLE>
<CAPTION>
----------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains (Losses) Value
----------------------------------------------------------
(000's omitted)
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $ 2,290 $ 5 $ (7) $ 2,288
Corporate securities 3,027 25 - 3,052
Obligations of states and
Political subdivisions 14,571 139 - 14,710
Mortgaged backed securities 25,692 15 (185) 25,522
Other 770 - - 770
------------- ------------ ------------ ------------
$ 46,350 $ 184 $ (192) $ 46,342
============= ============ ============ ============
</TABLE>
Note 3. The consolidated loan portfolio is composed of the following:
<TABLE>
<CAPTION>
-------------------------------
June 30, December 31,
1998 1997
-------------------------------
(000's omitted)
<S> <C> <C>
Commercial, financial and agricultural $ 17,562 $ 15,111
Real estate construction 4,363 3,798
Real estate mortgage 82,875 76,590
Installment loans to individuals 8,308 8,738
----------- -----------
Total loans 113,108 104,237
Less: Unearned income (3) (10)
Allowance for loan losses (1,062) (974)
----------- -----------
Loans, net $ 112,043 $ 103,253
=========== ===========
</TABLE>
ICBI had $252,000 in non-performing assets at June 30, 1998.
<PAGE>
Note 4. The following is a summary of transactions in the reserve for loan
losses:
-----------------------------
June 30, December 31,
1998 1997
-----------------------------
(000's omitted)
Balance at January 1 $ 974 $ 884
Provision charged to operating expense 90 178
Recoveries added to the reserve 22 40
Loan losses charged to the reserve (24) (128)
----------- ----------
Balance at the end of the period $ 1,062 $ 974
=========== ==========
The Company had no impaired loans at June 30, 1998 and December 31,
1997.
Nonaccrual loans excluded from impaired loan disclosure under FASB
114 amounted to $252,000 at June 30, 1998 and $243,000 at December 31, 1997. If
interest on these loans had been accrued, such income would have approximated
$24,000 for the first six months of 1998 and $2,000 in 1997.
Note 5. New Accounting Pronouncements
In February 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 132, "Employers
Disclosures about Pensions and Other Post Retirement Benefits." This
statement revises employers' disclosures about pension and other
postretirement benefit plans. It does not change the measurement or
recognition of those plans. This statement standardizes the
disclosure requirements for pensions and other postretirement
benefits to the extent practicable, requires additional information
on changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis, and eliminates certain
disclosures. Restatement of disclosures for earlier periods is
required. This statement is effective for the Company's financial
statement for the year ended December 31, 1998.
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement
requires companies to record derivative on the balance sheet as
assets and liabilities, measured at fair value. Gains or losses
resulting from changes in the values of those derivative would be
accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. This statement is not expected to
have a material impact on the Company's financial statements. This
statement is effective for fiscal years beginning after June 15,
1999, with earlier adoption encouraged. The Company will adopt this
accounting standard as required by January 1, 2000.
In March 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position ("SOP") 98-1, "Accounting for
the Costs of Computer Software Developed or Obtained for Internal
Use." This SOP provides guidance on accounting for the costs of
computer software developed or obtained for internal use. This SOP
requires that entities capitalize certain internal use software costs
once certain criteria are met. This SOP is not expected to have a
material impact on the Company's financial statements.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-Up Activities," which requires the costs of start-up activities
and organization costs to be expensed as incurred. This SOP is not
expected to have a material impact on the Company's financial
statements.
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This
statement establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general purpose financial statements.
Financial statements for prior periods have been restated as
required.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Summary
Net income for the six months ended June 30, 1998, increased 14.9% to
$1.4 million or $.75 per share compared to $1.2 million or $.70 per
share for the first six months of 1997. Annualized returns on average
assets and equity for the period ended June 30, 1998, were 1.45% and
12.32%, respectively, compared to 1.42% and 13.11% for the same
period in 1997.
The total assets of the Company increased to $192.5 million at June
30, 1998, compared to $184.9 million at December 31, 1997,
representing an increase of $7.6 million or 4.1%. Total loans at June
30, 1998 was $112.0 million, an increase of $8.8 million from the
December 31, 1997 balance of $103.3 million. The investment portfolio
has decreased 4.9% to $60.7 million at June 30, 1998 compared to
$63.7 million at December 31, 1997.
Shareholders' equity at June 30, 1998, totaled $22.4 million,
compared to $21.7 million at December 31, 1997. Book value per share
of common stock on June 30, 1998 was $12.37 per share compared to
$12.02 at December 31, 1997.
Net Interest Income
Net interest income is the Company's primary source of earnings and
represents the difference between interest and fees earned on earning
assets and the interest expense paid on deposits and other interest
bearing liabilities. Net interest income totaled $4.0 million for the
first six months of 1998 compared to $3.5 million for the same period
in 1997. Net interest income was positively affected by a 28 basis
point increase in the net interest margin from 4.85% at June 30, 1997
to 5.13% at June 30, 1998 and the increase in earning assets.
Noninterest Income
Service charges on deposit accounts for the first six months of 1998
totaled $463 thousand compared to $444 thousand for the same period
in 1997, an increase of 4.3%. Commission and fees from fiduciary
activities was $471 thousand at June 30, 1998 compared to $42
thousand at June 30, 1997. On August 1, 1997, the Company completed
its acquisition of its second wholly owned subsidiary, The Tredegar
Trust Company (Tredegar). Tredegar is an independent trust and
investment management company which contributed 100% of the increase
in commission and fees from fiduciary activities. This acquisition
was accounted for using the purchase method of accounting. The
Company's banking subsidiary opened a mortgage department in April
1998 which contributed $25 thousand to noninterest income in the
second quarter of 1998. Otherwise the Company currently derives most
of its other noninterest income from fees on deposit related products
and sales of non deposit investment products.
Noninterest Expense
In support of the Company's continued growth, total noninterest
expenses consisting of employee related costs, occupancy and other
overhead totaled $3.2 million for the first six months of 1998,
compared to $2.3 million for the same period in 1997, representing an
increase of $900 thousand or 37.1%. Tredegar's operating expenses
represent 54.1% of the increase in noninterest expense. Other
increases in noninterest expense are attributable to the start up of
the mortgage department and an increased branching network.
<PAGE>
Allowance for Loan Losses
The allowance for loan losses at June 30, 1998 was $1.1 million. This
is a $89 thousand increase from December 31, 1997. The current ratio
of the allowance for loan losses to gross loans is .94%. Management
believes the allowance for loan losses is adequate to cover credit
losses inherent in the loan portfolio at June 30, 1998. Loans
classified as loss, doubtful, substandard or special mention are
adequately reserved for and are not expected to have a material
impact beyond what has been reserved.
Capital Resources
Shareholders' equity at June 30, 1998 was $22.4 million compared to
$21.7 million on December 31, 1997. The retention of net income as
well as the decrease in allowance for unrealized loss on securities
available for sale have been contributing factors to growth in
shareholders' equity. During the first quarter of 1997, the Company
did purchase and retire 22,689 shares at a cost of $635,292.
At June 30, 1998, the Company's tier 1 and total risk-based capital
ratios were 18.6% and 19.6%, respectively, compared to 18.8% and
19.7% at December 31, 1997. The Company's leverage ratio was 11.3% at
June 30, 1998, compared to a ratio of 11.8% at December 31, 1997. The
Company's capital structure places it above the regulatory
guidelines, as the Company maintains a strong capital base to take
advantage of business opportunities while ensuring that it has the
resources to protect against the risks inherent in its business.
Year 2000
The Company utilizes and is dependent upon data processing systems
and hardware to conduct its business. The data processing systems
include various software packages licensed to the Company by outside
vendors and a mainframe processing system, which are run on in-house
computer networks. All of these systems are vulnerable to the Year
2000 issue.
In 1997 the Company initiated a review and assessment of all hardware
and software to confirm that it will function properly in the year
2000. Based on this assessment, the Company's mainframe, banking
software and networks are currently Year 2000 compliant or currently
in the process of being modified. Testing is scheduled for the third
and fourth quarter of 1998 to confirm this compliance. For certain
other systems, the Company has replaced or modified certain pieces of
hardware and/or software so that the systems will properly function
in the year 2000. The Company anticipates replacing and/or modifying
other systems specifically identified which are deemed not to be year
2000 compliant. For systems that the Company relies on third party
vendors, these vendors have been contacted and have indicated that
the hardware and/or software will be Year 2000 compliant.
The Company has also initiated formal communications with all
significant loan customers to determine the extent to which the
Company is vulnerable to those third parties' failure to remedy their
own Year 2000 issue. Based on these initial communications, the
Company believes that exposure to significant loan customers not
being Year 2000 compliant is minimal. The Company has also developed
a plan to formally communicate on a regular basis to its deposit
customers about its Year 2000 readiness. The depositor notification
plan begins in the third quarter of 1998 and continues through 1999.
The Company plans to complete the majority of the Year 2000 project
by December 31, 1998. To date, the Company has expensed approximately
$75,000 related to the assessment of, and efforts in connection with
the Year 2000 issue. Remaining expenditures are not expected to have
a material effect on the Company's consolidated financial statements.
The cost of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best
estimates, which were derived utilizing numerous assumptions of
future events including the continued availability of certain
resources, third party modification plans and other factors. However,
there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are
not limited to, the availability of personnel trained in this area,
<PAGE>
the ability of third party vendors to correct their software and
hardware, the ability of significant customers to remedy their Year
2000 issues, and similar uncertainties.
Forward-looking Statements
Certain information contained in this discussion may include
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
are generally identified by phrases such as "the Company expects,"
"the Company believes" or words of similar import. Such
forward-looking statements involve known and unknown risks including,
but not limited to, changes in general economic and business
conditions, interest rate fluctuations, competition within and from
outside the banking industry, new products and services in the
banking industry, risk inherent in making loans such as repayment
risks and fluctuating collateral values, changing trends in customer
profiles and changes in laws and regulations applicable to the
Company. Although the Company believes that its expectations with
respect to the forward-looking statements are based upon reliable
assumptions within the bounds of its knowledge of its business and
operations, there can be no assurance that actual results,
performance or achievements of the Company will not differ materially
from any future results, performance or achievements expressed or
implied by such forward-looking statements.
<PAGE>
Part II. Other Information
Item 1. Legal proceedings
None
Item 2. Change in securities.
None
Item 3. Defaults upon senior securities
None
Item 4. Submission of matters to a vote of security holders.
The Company's Annual Meeting of Shareholders was held
Wednesday, April 22, 1998 in Middleburg, Virginia. The
shareholders were asked to elect 14 directors to serve for
terms of one year each, to approve the Company's 1997
Stock Option Plan and to ratify the appointment of the
firm of Yount, Hyde & Barbour, PC as independent auditors
for the Company for the fiscal year ending December 31,
1998.
The votes cast for, against or withheld for the election
of directors were as follows:
<TABLE>
<CAPTION>
Name For Against Withheld
<S> <C> <C> <C>
Howard M. Armfield 1,381,489 0 0
Joseph L. Boling 1,381,089 400 0
Childs Frick Burden 1,381,489 0 0
J. Lynn Cornwell, Jr. 1,381,489 0 0
William F. Curtis 1,381,489 0 0
F. E. Deacon, III 1,377,339 4,150 0
George A. Horkan, Jr. 1,381,489 0 0
C. Oliver Iselin, III 1,381,489 0 0
William S. Leach 1,381,489 0 0
Thomas W. Nalls 1,381,489 0 0
John C. Palmer 1,381,489 0 0
John Sherman 1,381,489 0 0
Millicent W. West 1,381,489 0 0
Edward T. Wright 1,381,489 0 0
</TABLE>
The votes cast for, against or withheld for the remaining
items were as follows:
<TABLE>
<CAPTION>
Item For Against Abstentions
<S> <C> <C> <C>
1997 Stock Option Plan 1,343,387 21,390 20,862
Independent Auditors - 1,382,989 0 2,650
Yount, Hyde, & Barbour, P.C.
</TABLE>
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(filed electronically only)
(b) Reports on Form 8-K -- none.
<PAGE>
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 thereunto duly authorized.
INDEPENDENT COMMUNITY BANKSHARES, INC.
(Registrant)
Date: August 14, 1998 /s/ Joseph L. Boling
-------------------- -------------------------------------
Joseph L. Boling,
Chairman of the Board & CEO
Date: August 14, 1998 /s/ Alice P. Frazier
-------------------- -------------------------------------
Alice P. Frazier,
Senior Vice President & CFO
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,276
<INT-BEARING-DEPOSITS> 3,002
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 46,342
<INVESTMENTS-CARRYING> 14,344
<INVESTMENTS-MARKET> 14,628
<LOANS> 113,105
<ALLOWANCE> 1,062
<TOTAL-ASSETS> 192,487
<DEPOSITS> 158,052
<SHORT-TERM> 10,818
<LIABILITIES-OTHER> 1,190
<LONG-TERM> 0
0
0
<COMMON> 9,063
<OTHER-SE> 13,364
<TOTAL-LIABILITIES-AND-EQUITY> 192,487
<INTEREST-LOAN> 4,952
<INTEREST-INVEST> 1,778
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 6,730
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</TABLE>
