##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the quarterly period ended June 30, 2005
 o
    
    TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
File No. 000-24043
 ebank Financial Services, Inc.
  Georgia
    
    58-2349097(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
  
   
   
  þ o
   o þ




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TABLE OF CONTENTS  Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Controls and ProceduresItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURESEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO    Table of Contents  ebank
Financial Services, Inc. and Subsidiary
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)
    
    
    (Audited)ASSETSCash and due from banks
    
    $
    372,394
    
    
    $
    327,054Interest-bearing deposits in banks
    
    
    195,803
    
    
    
    58,212Federal funds sold
    
    
    29,586,000
    
    
    
    1,539,000Cash and cash equivalents
    
    
    30,154,197
    
    
    
    1,924,266Securities available for sale
    
    
    17,848,692
    
    
    
    17,798,362Other securities
    
    
    958,900
    
    
    
    964,700Loans, net of allowance for loan losses of $812,159 and
$1,013,372, respectively
    
    
    95,640,656
    
    
    
    85,657,038Premises and equipment, net
    
    
    390,586
    
    
    
    411,708Accrued interest receivable and other assets
    
    
    2,520,474
    
    
    
    2,015,701Total assets
    
    $
    147,513,505
    
    
    $
    108,771,775LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits
    
    $
    121,167,383
    
    
    $
    71,487,957Other borrowings
    
    
    15,000,000
    
    
    
    26,500,000Accrued interest payable and other liabilities
    
    
    325,999
    
    
    
    252,529Total liabilities
    
    
    136,493,382
    
    
    
    98,240,486Shareholders equity:Series A preferred stock, $.01 par value, 8% cumulative,
convertible into one share of common stock; 10,000,000
shares authorized;
2,369,312 and 2,374,312 issued and outstanding;
accumulated undeclared dividends of $1,107,410 and
$874,267 (liquidation preference of $5,923,280)
    
    
    23,693
    
    
    
    23,743Common stock, $.01 par value, 15,000,000 shares authorized,
6,371,458 and 6,364,423 shares issued and outstanding
    
    
    63,715
    
    
    
    63,644Capital surplus
    
    
    23,362,492
    
    
    
    23,363,077Accumulated deficit
    
    
    (12,302,201
    )
    
    
    (12,781,559
    )Accumulated other comprehensive loss
    
    
    (127,575
    )
    
    
    (137,616
    )Total shareholders equity
    
    
    11,020,123
    
    
    
    10,531,289Total liabilities and shareholders equity
    
    $
    147,513,505
    
    
    $
    108,771,775
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ebank Financial Services, Inc. and Subsidiary
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the three months ended
    
    
    For the six months endedJune 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income:Loans, including fees
    
    $
    1,833,847
    
    
    $
    1,398,361
    
    
    $
    3,352,769
    
    
    $
    2,842,447Interest-bearing deposits
    
    
    679
    
    
    
    145
    
    
    
    1,064
    
    
    
    317Investment securities
    
    
    245,776
    
    
    
    269,303
    
    
    
    483,303
    
    
    
    551,929Other investments
    
    
    9,695
    
    
    
    3,981
    
    
    
    20,120
    
    
    
    7,637Federal funds sold
    
    
    101,458
    
    
    
    3,722
    
    
    
    127,548
    
    
    
    23,100Total interest income
    
    
    2,191,455
    
    
    
    1,675,512
    
    
    
    3,984,804
    
    
    
    3,425,430Interest expense:Deposits
    
    
    747,213
    
    
    
    471,884
    
    
    
    1,220,333
    
    
    
    992,519Other borrowings
    
    
    121,943
    
    
    
    70,503
    
    
    
    288,865
    
    
    
    137,270Total interest expense
    
    
    869,156
    
    
    
    542,387
    
    
    
    1,509,198
    
    
    
    1,129,789Net interest income
    
    
    1,322,299
    
    
    
    1,133,125
    
    
    
    2,475,606
    
    
    
    2,295,641Provision for loan losses
    
    
    38,000
    
    
    
    200,000
    
    
    
    65,000
    
    
    
    231,000Net interest income after provision for loan losses
    
    
    1,284,299
    
    
    
    933,125
    
    
    
    2,410,606
    
    
    
    2,064,641Other income:Deposit fees
    
    
    27,140
    
    
    
    28,005
    
    
    
    55,886
    
    
    
    48,514Miscellaneous fees
    
    
    22,896
    
    
    
    6,606
    
    
    
    27,932
    
    
    
    12,161Total other income
    
    
    50,036
    
    
    
    34,611
    
    
    
    83,818
    
    
    
    60,675Other expense:Salaries and other compensation
    
    
    471,886
    
    
    
    404,071
    
    
    
    895,810
    
    
    
    854,666Employee benefits
    
    
    99,618
    
    
    
    73,432
    
    
    
    185,558
    
    
    
    152,669Net occupancy and equipment expense
    
    
    185,814
    
    
    
    187,837
    
    
    
    365,005
    
    
    
    400,866Professional and other outside services
    
    
    176,480
    
    
    
    93,631
    
    
    
    302,963
    
    
    
    193,018Other expense
    
    
    134,723
    
    
    
    112,481
    
    
    
    263,694
    
    
    
    241,896Total other expenses
    
    
    1,068,521
    
    
    
    871,452
    
    
    
    2,013,030
    
    
    
    1,843,115Net earnings
    
    
    265,814
    
    
    
    96,284
    
    
    
    481,394
    
    
    
    282,201Preferred stock dividends paid during the
quarter upon conversion of shares of preferred
stock
    
    
    
    
    
    
    
    
    
    
    (2,036
    )
    
    
    Preferred stock dividends
    
    
    (118,141
    )
    
    
    (119,512
    )
    
    
    (234,984
    )
    
    
    (239,024
    )Net earnings (loss) attributable to common
stockholders
    
    $
    147,673
    
    
    $
    (23,228
    )
    
    $
    244,374
    
    
    $
    43,177Basic earnings (loss) per common share
    
    $
    .02
    
    
    $
    (.01
    )
    
    $
    .04
    
    
    $
    .01
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ebank Financial Services, Inc. and Subsidiary
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the six months endedJune 30,2005
    
    
    2004Net earnings
    
    $
    481,394
    
    
    $
    282,201Other comprehensive income:Unrealized (losses) gains on securities
available for sale:Holding gains (losses) arising during the period,
net of taxes of $6,144 and $(206,122), respectively
    
    
    10,041
    
    
    
    (336,876
    )Comprehensive income (loss)
    
    $
    491,435
    
    
    $
    (54,675
    )
  4




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ebank Financial Services, Inc. and Subsidiary
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the six months endedJune 30,2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    481,394
    
    
    $
    282,201Adjustments to reconcile net earnings
to net cash provided by operating activities:Net amortization (accretion) of securities available for sale
    
    
    4,448
    
    
    
    (1,047
    )Depreciation expense
    
    
    87,971
    
    
    
    120,614Provision for loan losses
    
    
    65,000
    
    
    
    231,000Change in deferred loan fees and costs
    
    
    41,075
    
    
    
    16,821Change in other assets
    
    
    7,299
    
    
    
    207,828Change in accrued interest receivable
    
    
    (104,060
    )
    
    
    (35,055
    )Change in accrued interest payable
    
    
    89,011
    
    
    
    (11,940
    )Change in other liabilities
    
    
    (15,541
    )
    
    
    (114,406
    )Net cash provided by operating activities
    
    
    656,597
    
    
    
    696,016Cash flows from investing activities:Maturities of securities available for sale
    
    
    1,000,000
    
    
    
    7,499,774Purchase of securities available for sale
    
    
    (1,038,595
    )
    
    
    (9,574,388
    )Proceeds from sale of securities available for sale
    
    
    
    
    
    
    1,000,000Proceeds from sale of other securities
    
    
    5,800
    
    
    
    Loans originated, net of principal repayments
    
    
    (10,503,847
    )
    
    
    (8,000,560
    )Proceeds from sale of other real estate owned
    
    
    
    
    
    
    501,304Purchases of premises and equipment
    
    
    (66,850
    )
    
    
    (61,195
    )Net cash used by investing activities
    
    
    (10,603,492
    )
    
    
    (8,635,065
    )Cash flows from financing activities:Net increase in deposits
    
    
    49,679,426
    
    
    
    (7,653,028
    )Proceeds from other borrowings
    
    
    
    
    
    
    5,681,000Repayments on other borrowings
    
    
    (11,500,000
    )
    
    
    (372,444
    )Net proceeds from the sale of common stock
    
    
    
    
    
    
    3,671,339Stock offering costs
    
    
    (2,600
    )
    
    
    Net cash provided by financing activities
    
    
    38,176,826
    
    
    
    1,326,867Net increase (decrease) in cash and cash equivalents
    
    
    28,229,931
    
    
    
    (6,612,182
    )Cash and cash equivalents:Beginning of period
    
    
    1,924,266
    
    
    
    8,227,848End of period
    
    $
    30,154,197
    
    
    $
    1,615,666
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ebank Financial Services, Inc. and Subsidiary
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1  BASIS OF PRESENTATION
    Significant Accounting Policies
   Use of Estimates
  6




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Stock Compensation Plans
 Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees
 For the six months ended June 30,2005
    
    
    2004Net earnings
attributable to common
stockholders
    
    As reported
    
    $
    244,374
    
    
    $
    43,177Effect of stock options grants
    
    
    (6,115
    )
    
    
    (23,041
    )Pro forma
    
    $
    238,259
    
    
    $
    20,136Basic earnings per share
    
    As reported
    
    $
    .04
    
    
    $
    .01Pro forma
    
    $
    .04
    
    
    $
    .01
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NOTE 2  EARNINGS PER COMMON SHARE
  For the three months endedJune 30,2005
    
    
    2004Basic earnings per common share:Weighted average common shares outstanding
    
    
    6,371,458
    
    
    
    4,240,016Net earnings
    
    $
    265,814
    
    
    $
    96,284Preferred stock dividend
    
    
    (118,141
    )
    
    
    (119,512
    )Net earnings attributable to common stockholders
    
    $
    147,673
    
    
    $
    (23,228
    )Basic earnings per common share
    
    $
    .02
    
    
    $
    (.01
    )
   For the six months endedJune 30,2005
    
    
    2004Basic earnings per common share:Weighted average common shares outstanding
    
    
    6,368,737
    
    
    
    3,190,407Net earnings
    
    $
    481,394
    
    
    $
    282,201Preferred stock dividend paid upon conversion of
shares of preferred stock
    
    
    (2,036
    )
    
    
    Preferred stock dividend
    
    
    (234,984
    )
    
    
    (239,024
    )Net earnings attributable to common stockholders
    
    $
    244,374
    
    
    $
    43,177Basic earnings per common share
    
    $
    .04
    
    
    $
    .01
  NOTE 3  ISSUANCE OF COMMON STOCK
  8




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FINANCIAL INFORMATION
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  
    
    significant increases in competitive pressure in the banking and financial services
industries;
    
    changes in the interest rate environment which could reduce anticipated or actual margins;
    
    changes in political conditions or the legislative or regulatory environment;
    
    general economic conditions, either nationally or regionally and especially in our
primary service area, becoming less favorable than expected resulting in, among other
things, a deterioration in credit quality;
    
    changes occurring in business conditions and inflation;
    
    changes in technology;
    
    changes in monetary and tax policies;
    
    changes in the securities markets;
    
    the potential economic effects of terrorist attacks, such as those that occurred on
September 11, 2001, as well as other acts of violence or war, including the ongoing
military actions in Iraq and Afghanistan; and
    
    other risks and uncertainties detailed from time to time in our filings with the
Securities and Exchange Commission.
 General
  9




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Financial Condition
   Results of Operations
    10




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Results of Operations
     Allowance for Loan Losses
  11




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12




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Total
    
    
    
    
    
    
    
    
    
    Potential
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Classified
    
    
    
    
    
    Allocated
    
    Problem
    
    
    
    
    
    Allocated
    
    Impaired
    
    
    
    
    
    Allocated
    
    performing
    
    
    
    
    
    AllocatedLoans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    ProvisionCommercial
    
    $
    1,157,447
    
    
    
    5
    
    
    $
    207,932
    
    
    $
    743,844
    
    
    
    1
    
    
    
    14,877
    
    
    $
    413,603
    
    
    
    4
    
    
    $
    193,055
    
    
    $
    413,603
    
    
    
    4
    
    
    $
    193,055Real Estate 
Commercial
    
    
    1,119,390
    
    
    
    2
    
    
    
    12,134
    
    
    
    1,119,390
    
    
    
    2
    
    
    
    12,134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real Estate 
Individual
    
    
    519,594
    
    
    
    4
    
    
    
    18,053
    
    
    
    359,647
    
    
    
    1
    
    
    
    360
    
    
    
    159,947
    
    
    
    3
    
    
    
    17,693
    
    
    
    159,947
    
    
    
    3
    
    
    
    17,693Installment 
Individual
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totals
    
    $
    2,796,431
    
    
    
    11
    
    
    $
    238,119
    
    
    $
    2,222,881
    
    
    
    4
    
    
    $
    27,371
    
    
    $
    573,550
    
    
    
    7
    
    
    $
    210,748
    
    
    $
    573,550
    
    
    
    7
    
    
    $
    210,748
   Total
    
    
    
    
    
    
    
    
    
    Potential
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Classified
    
    
    
    
    
    Allocated
    
    Problem
    
    
    
    
    
    Allocated
    
    Impaired
    
    
    
    
    
    Allocated
    
    performing
    
    
    
    
    
    AllocatedLoans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    Provision
    
    Loans
    
    No.
    
    ProvisionCommercial
    
    $
    2,244,933
    
    
    
    6
    
    
    $
    313,411
    
    
    $
    768,846
    
    
    
    1
    
    
    $
    26,295
    
    
    $
    1,476,087
    
    
    
    5
    
    
    $
    287,116
    
    
    $
    1,476,087
    
    
    
    5
    
    
    $
    287,116Real Estate 
Commercial
    
    
    745,813
    
    
    
    1
    
    
    
    4,475
    
    
    
    745,813
    
    
    
    1
    
    
    
    4,475
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real Estate 
Individual
    
    
    1,115,805
    
    
    
    6
    
    
    
    50,998
    
    
    
    585,631
    
    
    
    3
    
    
    
    1,478
    
    
    
    530,174
    
    
    
    3
    
    
    
    49,520
    
    
    
    530,174
    
    
    
    3
    
    
    
    49,520Installment 
Individual
    
    
    42,000
    
    
    
    1
    
    
    
    1,260
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,000
    
    
    
    1
    
    
    
    1,260
    
    
    
    42,000
    
    
    
    1
    
    
    
    1,260Totals
    
    $
    4,148,551
    
    
    
    14
    
    
    $
    370,144
    
    
    $
    2,100,290
    
    
    
    5
    
    
    $
    32,248
    
    
    $
    2,048,261
    
    
    
    9
    
    
    $
    337,896
    
    
    $
    2,048,261
    
    
    
    9
    
    
    $
    337,896
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Allowance for Loan Losses
  For the Six
    
    For theMonths Ended
    
    Year EndedJune 30,
    
    December 31,2005
    
    2004(Dollars in thousands)Average loans outstanding
    
    $
    92,074
    
    
    $
    84,801Loans outstanding at period end
    
    $
    96,453
    
    
    $
    86,670Total nonperforming loans
    
    $
    525
    
    
    $
    2,048Beginning balance of allowance
    
    $
    1,013
    
    
    $
    1,205Loans charged off:Commercial
    
    
    (156
    )
    
    
    (983
    )Real estate  commercial
    
    
    (15
    )
    
    
    (209
    )Real estate  individual
    
    
    0
    
    
    
    (91
    )Installment loans to individuals
    
    
    (95
    )
    
    
    (65
    )Total charge-offs
    
    
    (266
    )
    
    
    (1,348
    )Recoveries of previous charge-offs:Installment loans to individuals
    
    
    0
    
    
    
    0Total recoveries
    
    
    0
    
    
    
    0Net loans charged-off
    
    
    (266
    )
    
    
    (1,348
    )Provision for loan losses
    
    
    65
    
    
    
    1,156Balance at period end
    
    $
    812
    
    
    $
    1,013Net charge-offs to average loans
    
    
    0.29
    %
    
    
    1.59
    %Allowance as percent of total loans
    
    
    0.84
    %
    
    
    1.17
    %Nonperforming loans as a percentage of
total loans
    
    
    0.54
    %
    
    
    2.36
    %Allowance as a percent of
nonperforming loans
    
    
    154.68
    %
    
    
    49.47
    %
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Percentage of
    
    
    
    
    
    Percentage ofSix Months
    
    loans in
    
    Year ended
    
    loans inEnded
    
    each category
    
    December 31,
    
    each categoryJune 30, 2005
    
    to total loans
    
    2004
    
    to total loansCommercial
    
    $
    485,932
    
    
    
    11.28
    %
    
    $
    696,639
    
    
    
    14.87
    %Real estate 
individual
    
    
    109,053
    
    
    
    58.39
    %
    
    
    127,998
    
    
    
    49.54
    %Real estate 
commercial
    
    
    155,134
    
    
    
    22.19
    %
    
    
    118,475
    
    
    
    26.15
    %Installment loans
to individuals
    
    
    62,040
    
    
    
    8.14
    %
    
    
    70,260
    
    
    
    9.44
    %Total
    
    $
    812,159
    
    
    
    100.00
    %
    
    $
    1,013,372
    
    
    
    100.00
    %
   Average Balances, Income and Expense, and Rates
  InterestAverage
    
    Income/
    
    Yield/Interest-Earning Assets/ Bearing Liabilities
    
    Balance
    
    Cost
    
    CostFederal funds sold
    
    $
    8,916,783
    
    
    $
    127,548
    
    
    
    2.86
    %Interest-bearing deposits
    
    
    102,858
    
    
    
    1,064
    
    
    
    2.07
    %Investment securities
    
    
    18,458,068
    
    
    
    503,423
    
    
    
    5.45
    %Loans
    
    
    92,074,443
    
    
    
    3,352,769
    
    
    
    7.28
    %Total
    
    $
    119,552,152
    
    
    $
    3,984,804
    
    
    
    6.67
    %Deposits
    
    $
    86,653,611
    
    
    $
    1,220,333
    
    
    
    2.82
    %Other borrowings
    
    
    18,562,989
    
    
    
    288,865
    
    
    
    3.11
    %Total
    
    $
    105,216,600
    
    
    $
    1,509,198
    
    
    
    2.87
    %Net interest income/spread
    
    
    
    
    
    $
    2,475,606
    
    
    
    3.80
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    4.14
    %
 15




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##### Table of Contents



Deposits
  Deposit CompositionJune 30,
    
    December 31,2005
    
    2004Percent
    
    
    
    
    
    Percentof
    
    
    
    
    
    ofAmount
    
    Deposits
    
    Amount
    
    Deposits(Dollar in thousands)Demand deposits
    
    $
    5,954
    
    
    
    4.91
    %
    
    $
    7,203
    
    
    
    10.08
    %Escrow deposits
    
    
    2
    
    
    
    0
    %
    
    
    1
    
    
    
    0
    %Total non-interesting-bearing.
    
    
    5,956
    
    
    
    4.91
    %
    
    
    7,204
    
    
    
    10.08
    %Now accounts
    
    
    4,861
    
    
    
    4.01
    %
    
    
    2,716
    
    
    
    3.80
    %MMDA
    
    
    59,625
    
    
    
    49.20
    %
    
    
    23,309
    
    
    
    32.61
    %Savings
    
    
    5,448
    
    
    
    4.50
    %
    
    
    276
    
    
    
    0.39
    %Certificates of deposits of
$100K or more
    
    
    6,493
    
    
    
    5.36
    %
    
    
    8,111
    
    
    
    11.34
    %Brokered deposits of $100K or
more
    
    
    20,307
    
    
    
    16.78
    %
    
    
    14,370
    
    
    
    20.10
    %Total certificates of deposit
of $100K or more
    
    
    26,800
    
    
    
    22.14
    %
    
    
    22,481
    
    
    
    31.44
    %Certificate of deposits less
than $100K
    
    
    17,289
    
    
    
    14.26
    %
    
    
    14,021
    
    
    
    19.61
    %Brokered deposits less than $100K
    
    
    1,188
    
    
    
    0.98
    %
    
    
    1,481
    
    
    
    2.07
    %Total certificates of deposit
less than $100K
    
    
    18,477
    
    
    
    15.24
    %
    
    
    15,502
    
    
    
    21.68
    %Total
    
    $
    121,167
    
    
    
    100.00
    %
    
    $
    71,488
    
    
    
    100.00
    %Total brokered deposits
    
    $
    21,495
    
    
    
    
    
    
    $
    15,851
 Liquidity and Sources of Capital
  16




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##### Table of Contents



Bank
    
    MinimumCapital
    
    RegulatoryRatio
    
    RequirementCapital ratios at June 30, 2005Tier 1 capital
    
    
    11.92
    %
    
    
    4.0
    %Tier 2 capital
    
    
    0.91
    %Total risk-based capital ratio
    
    
    12.83
    %
    
    
    8.0
    %Leverage ratio
    
    
    7.23
    %
    
    
    4.0
    %
  i.e.
  Liquidity And Rate Sensitivity
   17




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##### Table of Contents



After threeWithin
    
    but within
    
    After one
    
    Afterthree
    
    twelve
    
    but within
    
    fivemonths
    
    months
    
    five years
    
    years
    
    Total(Dollars in Thousands)Interest-earning assets:Interest-earning deposits
    
    $
    196
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    196Loans
    
    
    66,760
    
    
    
    2,599
    
    
    
    9,030
    
    
    
    18,219
    
    
    
    96,608Investment securities
    
    
    959
    
    
    
    
    
    
    
    997
    
    
    
    16,852
    
    
    
    18,808Federal funds sold
    
    
    29,586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,586Total earning assets
    
    
    97,501
    
    
    
    2,599
    
    
    
    10,027
    
    
    
    35,071
    
    
    
    145,198Interest-bearing liabilities:Money market and NOW
    
    
    64,470
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,470Savings deposits
    
    
    5,448
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,448Time deposits
    
    
    4,603
    
    
    
    32,007
    
    
    
    8,668
    
    
    
    
    
    
    
    45,278Other liabilities
    
    
    
    
    
    
    11,000
    
    
    
    
    
    
    
    4,000
    
    
    
    15,000Total interest-bearing liabilities
    
    
    74,521
    
    
    
    43,007
    
    
    
    8,668
    
    
    
    4,000
    
    
    
    130,196Interest-sensitivity gap
    
    $
    22,980
    
    
    $
    (40,408
    )
    
    $
    1,359
    
    
    $
    31,071
    
    
    $
    15,002Cumulative interest-sensitivity gap
    
    $
    22,980
    
    
    $
    (17,428
    )
    
    $
    (16,069
    )
    
    $
    15,002Ratio of interest-sensitivity gap
to total earning assets
    
    
    15.83
    %
    
    
    (27.83
    %)
    
    
    0.94
    %
    
    
    21.40
    %
    
    
    10.33
    %Ratio of cumulative interest-sensitivity gap to total earning
assets
    
    
    15.83
    %
    
    
    (12.00
    %)
    
    
    (11.07
    %)
    
    
    10.33
    %
  Loan Portfolio
  18




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##### Table of Contents



PercentAmount
    
    of totalCommercial
    
    $
    10,895,361
    
    
    
    11.28
    %Real estate  individual
    
    
    56,406,059
    
    
    
    58.39
    %Real estate  commercial
    
    
    21,440,468
    
    
    
    22.19
    %Installment loans to individuals
    
    
    7,866,360
    
    
    
    8.14
    %Gross loans
    
    
    96,608,248
    
    
    
    100.00
    %Less: Net deferred loan fees
    
    
    (155,433
    )Allowance for loan loss
    
    
    (812,159
    )Total net loans
    
    $
    95,640,656
  Regulatory Matters
  
 Item 3. Controls and Procedures.
  19




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##### Table of Contents



PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 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.
  1.

    to elect two Class I directors to serve for three-year terms; and2.

    to approve an amendment to the Companys Stock Incentive Plan, increasing the
number of shares of common stock available under such plan to 650,000.
   CLASS I
    
    FOR
    
    
    AGAINST
    
    
    WITHHELDTerry L. Ferrero
    
    
    5,527,368
    
    
    
    -0-
    
    
    
    17,060Walter Drakeford
    
    
    5,527,868
    
    
    
    -0-
    
    
    
    16,560
   FOR
    
    
    AGAINST
    
    
    ABSTAIN3,485,942
    
    
    
    56,340
    
    
    
    6,920
 
 Item 5. Other Information.
  20




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##### Table of Contents



Item 6. Exhibits.
  10.1
    
    Standstill Agreement by and among the Company and Edward L. Terry and Gary R.
Rhineheart and certain of their related interests (Incorporated by reference to Exhibit
99.1 to the Companys Form 8-K filed on May 17, 2005, File No. 000-24023).10.2
    
    *Amendment to the Companys Stock Incentive Plan effective as of May 16, 2005
(Incorporated by reference to Exhibit 10.1 to the Companys Form 8-K filed on May 31,
2005, File No. 000-24023).10.3
    
    *Summary Description of the 2005 Executive Cash Bonus Plan (Incorporated by
reference to the information contained in Item 1.01 under the heading Approval of 2005
Executive Cash Bonus Opportunities of the Companys Form 8-K filed on July 1, 2005,
File No. 000-24023).10.4
    
    *Summary Description of Director Compensation Arrangements (Incorporated by
reference to the information contained in Item 1.01 under the heading Approval of
Change in Directors Compensation Arrangement of the Companys Form 8-K filed on July
1, 2005, File No. 000-24023).31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Denotes management contract or compensation plan or arrangement. 21




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##### Table of Contents



SIGNATURES
  ebank Financial Services, Inc.Date: August 9, 2005
    
    By:
    
    /s/ James L. BoxJames L. BoxPresident and Chief Executive OfficerBy:
    
    /s/ Wayne W. ByersWayne W. ByersChief Financial Officer
 22