##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For
the quarterly period ended June 30, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-51284
 Integrity Bancshares, Inc.
  Georgia
    
    58-2508612(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer
Identification No.)
 11140 State Bridge Road, Alpharetta, Georgia 30022
 (770) 777-0324  (Issuers telephone number)
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
  o o þ
 o þ




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##### 



INTEGRITY BANCSHARES, INC.
AND SUBSIDIARY
 INDEX
 PagePART I.
    
    FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets  June 30, 2006 and December 31, 2005
    
    
    3Consolidated
Statements of Income and Comprehensive Income
Three and Six Months Ended June 30, 2006 and 2005
    
    
    4Consolidated
Statements of Cash Flows -
Six Months Ended June 30, 2006 and 2005
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II.
    
    OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults Upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    21Item 6. Exhibits
    
    
    21Signatures
    
    
    22Certifications
    
    
    23EX-31.1 SECTION 302 CERTIFICATION OF CEOEX-31.2 SECTION 302 CERTIFICATION OF PFOEX-32.0 SECTOIN 906 CERTIFICATION OF CEO/PFOEX-99.1 AUDIT COMMITTEE CHARTER
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 INTEGRITY BANCSHARES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,2006
    
    December 31,(In thousands)
    
    (Unaudited)
    
    2005ASSETS:Cash and due from banks
    
    $
    5,902
    
    
    $
    5,068Interest-bearing deposits in banks
    
    
    81
    
    
    
    67Federal funds sold
    
    
    
    
    
    
    6,243Securities available for sale, at fair value
    
    
    96,989
    
    
    
    73,924Other investments
    
    
    2,627
    
    
    
    889Loans, net of unearned income
    
    
    814,932
    
    
    
    651,778Less: allowance for loan losses
    
    
    (7,591
    )
    
    
    (5,612
    )Net loans
    
    
    807,341
    
    
    
    646,166Premises and equipment, net
    
    
    13,323
    
    
    
    11,865Bank owned life insurance
    
    
    20,171
    
    
    
    Other assets
    
    
    11,833
    
    
    
    8,853Total assets
    
    $
    958,267
    
    
    $
    753,075LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-bearing demand
    
    $
    15,607
    
    
    $
    13,046Interest-bearing:Demand
    
    
    158,614
    
    
    
    163,487Savings
    
    
    16,670
    
    
    
    9,768Time, $100,000 and over
    
    
    167,860
    
    
    
    135,474Other time
    
    
    452,209
    
    
    
    352,669Total deposits
    
    
    810,960
    
    
    
    674,444Federal funds purchased
    
    
    8,375
    
    
    
    Federal Home Loan Bank advances
    
    
    25,000
    
    
    
    Subordinated debt
    
    
    34,022
    
    
    
    6,186Other liabilities
    
    
    7,958
    
    
    
    6,326Total liabilities
    
    
    886,315
    
    
    
    686,956STOCKHOLDERS EQUITY:Common stock, no par value; 50,000,000 shares authorized; 14,633,342 and
14,361,542 shares issued and outstanding, respectively
    
    
    58,621
    
    
    
    56,992Retained earnings
    
    
    15,343
    
    
    
    10,144Accumulated other comprehensive loss
    
    
    (2,012
    )
    
    
    (1,017
    )Total stockholders equity
    
    
    71,952
    
    
    
    66,119Total liabilities and stockholders equity
    
    $
    958,267
    
    
    $
    753,075
 See Accompanying Notes to Condensed Consolidated Financial Statements.
 3




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##### Table of Contents



INTEGRITY BANCSHARES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 Three months
    
    Six monthsended June 30,
    
    ended June 30,(Dollars in thousands, except share and per share amounts)
    
    2006
    
    2005
    
    2006
    
    2005Interest incomeLoans, including fees
    
    $
    17,966
    
    
    $
    9,317
    
    
    $
    33,539
    
    
    $
    16,988Interest-bearing deposits in banks
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    3Federal funds sold
    
    
    137
    
    
    
    6
    
    
    
    228
    
    
    
    13Taxable investment securities
    
    
    1,161
    
    
    
    670
    
    
    
    2,068
    
    
    
    1,277Total interest income
    
    
    19,265
    
    
    
    9,994
    
    
    
    35,837
    
    
    
    18,281Interest expenseTime deposits, $100,000 and over
    
    
    1,963
    
    
    
    458
    
    
    
    3,590
    
    
    
    975Other deposits
    
    
    6,980
    
    
    
    3,342
    
    
    
    12,660
    
    
    
    5,702Federal Home Loan Bank advances
    
    
    16
    
    
    
    178
    
    
    
    24
    
    
    
    371Short-term borrowings
    
    
    25
    
    
    
    43
    
    
    
    58
    
    
    
    93Subordinated debt
    
    
    504
    
    
    
    97
    
    
    
    894
    
    
    
    184Total interest expense
    
    
    9,487
    
    
    
    4,118
    
    
    
    17,226
    
    
    
    7,325Net interest income
    
    
    9,778
    
    
    
    5,876
    
    
    
    18,611
    
    
    
    10,956Provision for loan losses
    
    
    848
    
    
    
    664
    
    
    
    2,139
    
    
    
    1,235Net interest income after provision for loan losses
    
    
    8,930
    
    
    
    5,212
    
    
    
    16,472
    
    
    
    9,721Noninterest incomeService charges on deposit accounts
    
    
    21
    
    
    
    15
    
    
    
    41
    
    
    
    26Increase in CSV of bank owned life insurance
    
    
    171
    
    
    
    0
    
    
    
    171
    
    
    
    0Other operating income
    
    
    161
    
    
    
    181
    
    
    
    270
    
    
    
    360Total noninterest income
    
    
    353
    
    
    
    196
    
    
    
    482
    
    
    
    386Noninterest expenseSalaries and employee benefits
    
    
    2,525
    
    
    
    1,737
    
    
    
    4,835
    
    
    
    3,238Net occupancy and equipment expenses
    
    
    651
    
    
    
    431
    
    
    
    1,152
    
    
    
    834Other operating expenses
    
    
    1,548
    
    
    
    897
    
    
    
    2,833
    
    
    
    1,568Total noninterest expense
    
    
    4,724
    
    
    
    3,065
    
    
    
    8,820
    
    
    
    5,640Income before income taxes
    
    
    4,559
    
    
    
    2,343
    
    
    
    8,134
    
    
    
    4,467Income tax expense
    
    
    1,778
    
    
    
    868
    
    
    
    3,176
    
    
    
    1,658Net income
    
    $
    2,781
    
    
    $
    1,475
    
    
    $
    4,958
    
    
    $
    2,809Unrealized (loss) gain on securities available
for sale arising during period, net of tax
    
    
    (788
    )
    
    
    492
    
    
    
    (995
    )
    
    
    (40
    )Comprehensive income
    
    
    1,993
    
    
    
    1,967
    
    
    
    3,963
    
    
    
    2,769Basic earnings per common share
    
    $
    .19
    
    
    $
    .11
    
    
    $
    0.34
    
    
    $
    .21Diluted earnings per common share
    
    $
    .18
    
    
    $
    .10
    
    
    $
    0.32
    
    
    $
    .20Dividends per share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 See Accompanying Notes to Condensed Consolidated Financial Statements.
 4




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##### Table of Contents



INTEGRITY BANCSHARES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  Six monthsended June 30,(In thousands)
    
    2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    4,958
    
    
    $
    2,809Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization of premises and equipment
    
    
    265
    
    
    
    254Stock compensation
    
    
    856
    
    
    
    479Increase in interest receivable
    
    
    (1,562
    )
    
    
    (581
    )Increase in interest payable
    
    
    2,290
    
    
    
    84Increase in cash value of bank owned life insurance
    
    
    (171
    )
    
    
    Provision for loan losses
    
    
    2,139
    
    
    
    1,235Net gains on sales of premises and equipment
    
    
    (137
    )
    
    
    (206
    )Net loss on sale of other real estate
    
    
    142
    
    
    
    Net other operating activities
    
    
    (2,169
    )
    
    
    (321
    )Net cash provided by operating activities
    
    
    6,611
    
    
    
    3,753Cash flows from investing activities:Net increase in interest-earning deposits in banks
    
    
    (14
    )
    
    
    (98
    )Net decrease (increase) in federal funds sold
    
    
    6,243
    
    
    
    (770
    )Proceeds from maturities and paydowns of securities available-for-sale
    
    
    7,269
    
    
    
    6,202Purchases of other investments
    
    
    (1,738
    )
    
    
    (467
    )Purchases of securities available for sale
    
    
    (30,835
    )
    
    
    (15,477
    )Purchase of bank owned life insurance
    
    
    (20,000
    )
    
    
    Net loans made to customers, net of principal collected on loans
    
    
    (164,689
    )
    
    
    (138,012
    )Purchases of premises and equipment
    
    
    (1,663
    )
    
    
    (313
    )Proceeds from sale of other real estate
    
    
    1,073
    
    
    
    Net cash used in investing activities
    
    
    (204,354
    )
    
    
    (148,935
    )Cash flows from financing activities:Net increase in noninterest-bearing deposits
    
    
    2,561
    
    
    
    656Net increase in interest-bearing deposits
    
    
    133,955
    
    
    
    135,039Net increase (decrease) in federal funds purchased
    
    
    8,375
    
    
    
    (4,279
    )Proceeds from exercised stock options
    
    
    850
    
    
    
    750Increase in Federal Home Loan advances
    
    
    25,000
    
    
    
    3,000Issuance of subordinated debt
    
    
    27,836
    
    
    
    Net proceeds from sale of common stock
    
    
    
    
    
    
    14,995Net cash provided by financing activities
    
    
    198,577
    
    
    
    150,162Net increase in cash and due from banks
    
    
    834
    
    
    
    4,980Cash and due from banks at beginning of period
    
    
    5,068
    
    
    
    1,275Cash and due from banks at end of period
    
    $
    5,902
    
    
    $
    6,255Supplemental disclosures of cash paid during the period:Interest
    
    $
    14,937
    
    
    $
    7,241Income taxes
    
    $
    3,952
    
    
    $
    1,868Supplemental disclosures of noncash investing activities:Transfer of loans to other real estate owned
    
    $
    1,375
    
    
    $
    
 See Accompanying Notes to Condensed Consolidated Financial Statements.
 5




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##### Table of Contents



INTEGRITY BANCSHARES, INC.
AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1. BASIS OF PRESENTATION
     NOTE 2. ACCOUNTING POLICIES
  NOTE 3. STOCK COMPENSATION PLANS
   6




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##### Table of Contents



Three Months Ended
    
    Six Months Ended(Dollars in Thousands)
    
    June 30, 2005Net income available to common stockholders:As reported
    
    $
    1,475
    
    
    $
    2,809Pro forma
    
    
    1,190
    
    
    
    2,590Basic earnings per common share:As reported
    
    
    .11
    
    
    
    .21Pro forma
    
    
    .09
    
    
    
    .20Diluted earnings per common share:As reported
    
    
    .10
    
    
    
    .20Pro forma
    
    
    .08
    
    
    
    .18
    7




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##### Table of Contents



Employee Plan
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Value ($000)Outstanding at March 31, 2006
    
    
    1,220,412
    
    
    $
    4.67Granted (below market)
    
    
    2,250
    
    
    
    2.45Granted (at market)
    
    
    40,000
    
    
    
    12.80Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (15,000
    )
    
    
    11.90Outstanding at June 30, 2006
    
    
    1,247,662
    
    
    $
    4.84
    
    
    
    5.9
    
    
    $
    9,120Vested and exercisable at June 30, 2006
    
    
    519,837
    
    
    $
    3.52
    
    
    
    7.0
    
    
    $
    4,486
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Value ($000)Outstanding at December 31, 2005
    
    
    1,409,072
    
    
    $
    4.67Granted (below market)
    
    
    13,590
    
    
    
    2.45Granted (at market)
    
    
    124,000
    
    
    
    12.19Exercised
    
    
    (128,800
    )
    
    
    3.35Forfeited
    
    
    (170,200
    )
    
    
    9.70Outstanding at June 30, 2006
    
    
    1,247,662
    
    
    $
    4.84
    
    
    
    5.9
    
    
    $
    9,120Vested and exercisable at June 30, 2006
    
    
    519,837
    
    
    $
    3.52
    
    
    
    7.0
    
    
    $
    4,486
  8




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##### Table of Contents



Number of
    
    
    Weighted AverageShares
    
    
    Grant-Date Fair ValueNonvested stock options beginning of period
    
    
    733,127
    
    
    $
    5.77Granted
    
    
    42,250
    
    
    
    12.25Vested
    
    
    (32,552
    )
    
    
    5.81Forfeited
    
    
    (15,000
    )
    
    
    11.90Nonvested stock options end of period
    
    
    727,825
    
    
    $
    5.77
  Number of
    
    
    Weighted AverageShares
    
    
    Grant-Date Fair ValueNonvested stock options beginning of period
    
    
    991,720
    
    
    $
    5.89Granted
    
    
    137,590
    
    
    
    11.23Vested
    
    
    (231,285
    )
    
    
    1.48Forfeited
    
    
    (170,200
    )
    
    
    9.69Nonvested stock options end of period
    
    
    727,825
    
    
    $
    5.77
    9




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##### Table of Contents



Three Months EndedJune 30,2006
    
    2005Weighted-average volatility
    
    
    30
    %
    
    
    33
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected life (in years)
    
    
    7.50
    
    
    
    10.0Risk-free rate
    
    
    5.0
    %
    
    
    4.5
    %
 Six Months EndedJune 30,2006
    
    2005Weighted-average volatility
    
    
    30
    %
    
    
    33
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected life (in years)
    
    
    7.50
    
    
    
    10.0Risk-free rate
    
    
    4.7
    %
    
    
    4.5
    %
 Director Plan
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Value ($000)Outstanding at March 31, 2006
    
    
    440,000
    
    
    $
    4.16Granted
    
    
    
    
    
    
    Exercised
    
    
    (45,000
    )
    
    
    2.44Forfeited
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    395,000
    
    
    $
    4.18
    
    
    
    7.2
    
    
    $
    3,148Vested and exercisable at June 30, 2006
    
    
    395,000
    
    
    $
    4.18
    
    
    
    7.2
    
    
    $
    3,148
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    Value ($000)Outstanding at December 31, 2005
    
    
    538,000
    
    
    $
    3.85Granted
    
    
    
    
    
    
    Exercised
    
    
    (143,000
    )
    
    
    2.92Forfeited
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    395,000
    
    
    $
    4.18
    
    
    
    7.2
    
    
    $
    3,148Vested and exercisable at June 30, 2006
    
    
    395,000
    
    
    $
    4.18
    
    
    
    7.2
    
    
    $
    3,148
 10




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##### Table of Contents



NOTE 4. EARNINGS PER SHARE
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Basic Earnings Per Share:Weighted average common shares outstanding
    
    
    14,607,842
    
    
    
    13,300,278
    
    
    
    14,532,423
    
    
    
    13,108,462Net income
    
    $
    2,780,953
    
    
    $
    1,475,294
    
    
    $
    4,957,936
    
    
    $
    2,809,017Basic earnings per share
    
    $
    0.19
    
    
    $
    0.11
    
    
    $
    0.34
    
    
    $
    0.21Diluted Earnings Per Share:Weighted average common shares outstanding
    
    
    14,607,842
    
    
    
    13,300,278
    
    
    
    14,532,423
    
    
    
    13,108,462Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the period
    
    
    629,831
    
    
    
    1,197,846
    
    
    
    923,505
    
    
    
    1,160,570Total weighted average common shares and
common stock equivalents outstanding
    
    
    15,237,673
    
    
    
    14,498,124
    
    
    
    15,455,928
    
    
    
    14,269,032Net income
    
    $
    2,780,953
    
    
    $
    1,475,294
    
    
    $
    4,957,936
    
    
    $
    2,809,017Diluted earnings per share
    
    $
    0.18
    
    
    $
    0.10
    
    
    $
    0.32
    
    
    $
    0.20
  11




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Statements
   Critical Accounting Policies
   Allowance for loan losses
 12




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##### Table of Contents



Liquidity and Capital Resources
    ActualMinimumRegulatoryConsolidated
    
    Bank
    
    Requirement*Leverage capital ratios
    
    
    10.81
    %
    
    
    11.16
    %
    
    
    5.00
    %Risk-based capital ratios:Tier 1 capital
    
    
    10.15
    
    
    
    10.46
    
    
    
    6.00Total capital
    
    
    11.79
    
    
    
    11.24
    
    
    
    10.00
 
 *
    
    The percentages listed as the Minimum Regulatory Requirement are those required to maintain
a well-capitalized status.  Commitments and Contractual Obligations
   13




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##### Table of Contents



June 30, 2006Commitments to extend credit
    
    $
    325,930,000Letters of credit
    
    
    1,855,000$
    327,785,000
   Financial Condition
   14




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##### Table of Contents



June 30,
    
    %(Dollars in thousands)
    
    2006
    
    2005
    
    ChangeTotal securities
    
    $
    92,548
    
    
    $
    58,425
    
    
    
    58.40
    %Loans, net
    
    
    764,374
    
    
    
    488,010
    
    
    
    56.63Earning assets
    
    
    875,473
    
    
    
    551,564
    
    
    
    58.73Total assets
    
    
    911,946
    
    
    
    587,266
    
    
    
    55.29Non-interest-bearing deposits
    
    
    14,673
    
    
    
    12,793
    
    
    
    14.70Interest-bearing deposits
    
    
    779,639
    
    
    
    469,986
    
    
    
    65.89Borrowed funds
    
    
    37,136
    
    
    
    26,095
    
    
    
    42.31Total funds
    
    
    831,448
    
    
    
    508,874
    
    
    
    63.39Total equity
    
    
    71,106
    
    
    
    47,964
    
    
    
    48.25
 Asset Quality
   June 30,(Dollars in Thousands)
    
    2006
    
    2005Nonaccrual loans
    
    $
    542
    
    
    $
    0Loans contractually past due ninety days or more as to interest
or principal payments and still accruing
    
    
    3,679
    
    
    
    0Restructured loans
    
    
    0
    
    
    
    0Potential problem loans
    
    
    820
    
    
    
    4,422Interest income that would have been recorded on nonaccrual
and restructured loans under original terms
    
    
    4
    
    
    
    0Interest income that was recorded on nonaccrual and
restructured loans
    
    
    0
    
    
    
    0
  15




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##### Table of Contents



Results of Operations for the Three and Six Months Ended June 30, 2006 and 2005
    16




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##### Table of Contents



Allowance for Loan Losses
  Six Months EndedJune 30,(Dollars in Thousands)
    
    2006
    
    
    2005Average amount of loans outstanding
    
    $
    738,477
    
    
    $
    456,840Balance of allowance for loan losses at beginning of period
    
    $
    5,612
    
    
    $
    3,433Loans charged offCommercial and financial
    
    
    
    
    
    
    (210
    )Real estate mortgage
    
    
    (160
    )
    
    
    Installment
    
    
    
    
    
    
    (160
    )
    
    
    (210
    )Loans recoveredCommercial and financial
    
    
    
    
    
    
    Real estate mortgage
    
    
    
    
    
    
    56Installment
    
    
    
    
    
    
    
    
    
    
    56Net charge-offs
    
    
    (160
    )
    
    
    (154
    )Additions to allowance charged to operating expense during period
    
    
    2,139
    
    
    
    1,235Balance of allowance for loan losses at end of period
    
    $
    7,591
    
    
    
    4,514Ratio of net loans charged off during the period to
average loans outstanding
    
    
    0.02
    %
    
    
    0.03
    %
  17




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##### Table of Contents



Noninterest Income
   Noninterest Expense
     18




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
  19




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##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 (a)
    
    The Companys Annual Meeting of Stockholders was held on May 17, 2006.(b)
    
    See (c) below for the name of each director elected at the meeting and the name
of each other director whose term of office as a director continued after the
meeting.(c)
    
    The following matters were voted on at the meeting as was previously identified in
the Proxy materials forwarded to each stockholder. The shares represented at
the meeting (11,041,090 or 75.68% of the total outstanding shares on the record
date) voted as follows:
  Director
    
    
    For
    
    
    Against
    
    
    WithheldAlan K. Arnold
    
    
    11,026,210
    
    
    
    0
    
    
    
    14,880James E. Bridges
    
    
    10,975,810
    
    
    
    0
    
    
    
    65,280Clinton M. Day
    
    
    11,026,510
    
    
    
    0
    
    
    
    14,580Joseph J. Ernest
    
    
    11,026,210
    
    
    
    0
    
    
    
    14,880
  For
    
    Against
    
    Abstain6,783,280
    
    
    170,738
    
    
    
    4,087,072
 20




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##### Table of Contents



ITEM 5. OTHER INFORMATION.
  
 ITEM 6. The following exhibits are furnished with this report:
 31.1
    
    Certification of the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certificate of Principal Financial Officer Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.32.0
    
    Certification of the Chief Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Audit Committee Charter
 21




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##### Table of Contents



SIGNATURES
  INTEGRITY BANCSHARES, INC.(Registrant)DATE: August 14, 2006
    
    BY:
    
    /s/ Steven M. SkowSteven M. Skow, President and C.E.O.(Principal Executive Officer)DATE: August 14, 2006
    
    BY:
    
    /s/ Suzanne LongSuzanne Long, Senior VP & C.F.O.(Principal Financial and Accounting Officer)
 22