##### 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 September 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.)
 2410 Paces Ferry Road, Suite 190, Atlanta, Georgia 30339
 (770) 863-9225
 Not Applicable
 þ o
 o þ
   o þ




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##### Table of Contents



ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)
    
    
    (Audited)ASSETSCash and due from banks
    
    $
    997,910
    
    
    $
    327,054Interest-bearing deposits in banks
    
    
    249,123
    
    
    
    58,212Federal funds sold
    
    
    23,454,000
    
    
    
    1,539,000Cash and cash equivalents
    
    
    24,701,033
    
    
    
    1,924,266Securities available for sale
    
    
    21,301,384
    
    
    
    17,798,362Other securities
    
    
    958,900
    
    
    
    964,700Loans, net of allowance for loan losses of $765,470 and
$1,013,372, respectively
    
    
    98,401,431
    
    
    
    85,657,038Premises and equipment, net
    
    
    398,225
    
    
    
    411,708Accrued interest receivable and other assets
    
    
    2,596,949
    
    
    
    2,015,701Total assets
    
    $
    148,357,922
    
    
    $
    108,771,775LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits
    
    $
    121,920,800
    
    
    $
    71,487,957Other borrowings
    
    
    15,000,000
    
    
    
    26,500,000Accrued interest payable and other liabilities
    
    
    312,865
    
    
    
    252,529Total liabilities
    
    
    137,233,665
    
    
    
    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;
2,361,312 and 2,374,312 issued and outstanding;
accumulated undeclared dividends of $1,222,707 and $874,267 (liquidation preference of $5,903,280)
    
    
    23,613
    
    
    
    23,743Common stock, $.01 par value, 15,000,000 shares authorized,
6,381,479 and 6,364,423 shares issued and outstanding
    
    
    63,815
    
    
    
    63,644Capital surplus
    
    
    23,366,614
    
    
    
    23,363,077Accumulated deficit
    
    
    (12,179,146
    )
    
    
    (12,781,559
    )Accumulated other comprehensive loss
    
    
    (150,639
    )
    
    
    (137,616
    )Total shareholders equity
    
    
    11,124,257
    
    
    
    10,531,289Total liabilities and shareholders equity
    
    $
    148,357,922
    
    
    $
    108,771,775
  2




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##### Table of Contents



ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the three months ended
    
    
    For the nine months endedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Interest income:Loans, including fees
    
    $
    1,801,375
    
    
    $
    1,335,160
    
    
    $
    5,154,145
    
    
    $
    4,177,607Interest-bearing deposits
    
    
    1,989
    
    
    
    253
    
    
    
    3,053
    
    
    
    570Investment securities
    
    
    281,132
    
    
    
    316,440
    
    
    
    784,555
    
    
    
    868,369Other investments
    
    
    7,855
    
    
    
    3,938
    
    
    
    27,975
    
    
    
    11,575Federal funds sold
    
    
    196,538
    
    
    
    3,110
    
    
    
    303,965
    
    
    
    26,209Total interest income
    
    
    2,288,889
    
    
    
    1,658,901
    
    
    
    6,273,693
    
    
    
    5,084,330Interest expense:Deposits
    
    
    911,217
    
    
    
    452,552
    
    
    
    2,131,550
    
    
    
    1,445,070Other borrowings
    
    
    119,662
    
    
    
    92,973
    
    
    
    408,527
    
    
    
    230,244Total interest expense
    
    
    1,030,879
    
    
    
    545,525
    
    
    
    2,540,077
    
    
    
    1,675,314Net interest income
    
    
    1,258,010
    
    
    
    1,113,376
    
    
    
    3,733,616
    
    
    
    3,409,016Provision for loan losses
    
    
    155,000
    
    
    
    298,000
    
    
    
    220,000
    
    
    
    529,000Net interest income after provision for loan losses
    
    
    1,103,010
    
    
    
    815,376
    
    
    
    3,513,616
    
    
    
    2,880,016Other income:Deposit fees
    
    
    28,229
    
    
    
    29,835
    
    
    
    84,115
    
    
    
    78,349Gain on sale of investments
    
    
    
    
    
    
    50,018
    
    
    
    
    
    
    
    50,018Miscellaneous fees
    
    
    6,802
    
    
    
    4,126
    
    
    
    34,734
    
    
    
    16,288Total other income
    
    
    35,031
    
    
    
    83,979
    
    
    
    118,849
    
    
    
    144,655Other expense:Salaries and other compensation
    
    
    435,552
    
    
    
    396,963
    
    
    
    1,331,362
    
    
    
    1,251,630Employee benefits
    
    
    99,036
    
    
    
    75,124
    
    
    
    284,594
    
    
    
    227,793Net occupancy and equipment expense
    
    
    194,717
    
    
    
    187,640
    
    
    
    559,723
    
    
    
    588,506Professional and other outside services
    
    
    134,128
    
    
    
    105,850
    
    
    
    437,091
    
    
    
    298,867Other expense
    
    
    147,410
    
    
    
    114,934
    
    
    
    411,103
    
    
    
    356,830Total other expenses
    
    
    1,010,843
    
    
    
    880,511
    
    
    
    3,023,873
    
    
    
    2,723,626Net earnings
    
    
    127,198
    
    
    
    18,844
    
    
    
    608,592
    
    
    
    301,045Preferred stock dividends paid during the
quarter upon conversion of shares of preferred
stock
    
    
    (4,142
    )
    
    
    
    
    
    
    (6,178
    )
    
    
    Preferred stock dividends
    
    
    (119,036
    )
    
    
    (120,825
    )
    
    
    (354,020
    )
    
    
    (359,849
    )Net earnings (loss) attributable to common
stockholders
    
    $
    4,020
    
    
    $
    (101,981
    )
    
    $
    248,394
    
    
    $
    (58,804
    )Basic earnings (loss) per common share
    
    $
    .00
    
    
    $
    (.02
    )
    
    $
    .04
    
    
    $
    .01
  3




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##### Table of Contents



ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the nine months endedSeptember 30,2005
    
    
    2004Net earnings
    
    $
    608,592
    
    
    $
    301,045Other comprehensive income:Unrealized (losses) gains on securities
available for sale:Holding gains (losses) arising during the period,
net of taxes of $(7,968) and $67,636, respectively.
    
    
    (13,023
    )
    
    
    110,251Reclassification adjustment for gain included in
net earnings, net of taxes of $0 and $18,987.
    
    
    
    
    
    
    (31,031
    )Comprehensive income
    
    $
    595,569
    
    
    $
    380,265
  4




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##### Table of Contents



ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the nine months endedSeptember 30,2005
    
    
    2004Cash flows from operating activities:Net earnings
    
    $
    608,592
    
    
    $
    301,045Adjustments to reconcile net earnings
to net cash provided by operating activities:Net amortization (accretion) of securities available for sale
    
    
    7,080
    
    
    
    147Depreciation expense
    
    
    130,182
    
    
    
    167,132Provision for loan losses
    
    
    220,000
    
    
    
    529,000Gain on sale of investments
    
    
    
    
    
    
    (50,018
    )Change in deferred loan fees and costs
    
    
    35,938
    
    
    
    4,433Change in other assets
    
    
    (48,775
    )
    
    
    117,076Change in accrued interest receivable
    
    
    (108,193
    )
    
    
    (28,219
    )Change in accrued interest payable
    
    
    94,202
    
    
    
    (16,976
    )Change in other liabilities
    
    
    (33,865
    )
    
    
    (77,529
    )Net cash provided by operating activities
    
    
    905,161
    
    
    
    946,091Cash flows from investing activities:Maturities of securities available for sale
    
    
    1,000,000
    
    
    
    7,499,774Purchase of securities available for sale
    
    
    (4,531,095
    )
    
    
    (12,145,469
    )Proceeds from sale of securities available for sale
    
    
    
    
    
    
    3,105,400Proceeds from sale of other securities
    
    
    5,800
    
    
    
    Loans originated, net of principal repayments
    
    
    (13,416,642
    )
    
    
    (7,482,321
    )Proceeds from sale of other real estate owned
    
    
    
    
    
    
    501,304Purchases of premises and equipment
    
    
    (116,700
    )
    
    
    (67,381
    )Net cash used by investing activities
    
    
    (17,058,637
    )
    
    
    (8,588,693
    )Cash flows from financing activities:Net change in deposits
    
    
    50,432,843
    
    
    
    (10,227,914
    )Proceeds from other borrowings
    
    
    
    
    
    
    8,000,000Repayments on other borrowings
    
    
    (11,500,000
    )
    
    
    (372,444
    )Net proceeds from the sale of common stock
    
    
    
    
    
    
    3,661,660Stock offering costs
    
    
    (2,600
    )
    
    
    Net cash provided by financing activities
    
    
    38,930,243
    
    
    
    1,061,302Net increase (decrease) in cash and cash equivalents
    
    
    22,776,767
    
    
    
    (6,581,300
    )Cash and cash equivalents:Beginning of period
    
    
    1,924,266
    
    
    
    8,227,848End of period
    
    $
    24,701,033
    
    
    $
    1,646,548
  5




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##### Table of Contents



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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##### Table of Contents



Stock Compensation Plans
 Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees
 For the nine months endedSeptember 30,2005
    
    
    2004Net earnings (loss) attributable to common
stockholdersAs reported
    
    $
    248,394
    
    
    $
    (58,804
    )Effect of stock options grants
    
    
    (110,270
    )
    
    
    (92,162
    )Pro forma
    
    $
    138,124
    
    
    $
    (150,966
    )Basic earnings per shareAs reported
    
    $
    .04
    
    
    $
    (.01
    )Pro forma
    
    $
    .02
    
    
    $
    (.04
    )
 7




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NOTE 2  EARNINGS PER COMMON SHARE
  For the three months endedSeptember 30,2005
    
    
    2004Basic earnings per common share:Weighted average common shares outstanding
    
    
    6,371,567
    
    
    
    5,778,427Net earnings
    
    $
    127,198
    
    
    $
    18,844Preferred stock dividend paid upon conversion of
shares of preferred stock
    
    
    (4,142
    )
    
    
    Preferred stock dividend
    
    
    (119,036
    )
    
    
    (120,825
    )Net earnings attributable to common stockholders
    
    $
    4,020
    
    
    $
    (101,981
    )Basic earnings per common share
    
    $
    .00
    
    
    $
    (.02
    )
   For the nine months endedSeptember 30,2005
    
    
    2004Basic earnings per common share:Weighted average common shares outstanding
    
    
    6,369,691
    
    
    
    4,059,378Net earnings
    
    $
    608,592
    
    
    $
    301,045Preferred stock dividend paid upon conversion of
shares of preferred stock
    
    
    (6,178
    )
    
    
    Preferred stock dividend
    
    
    (354,020
    )
    
    
    (359,849
    )Net earnings attributable to common stockholders
    
    $
    248,394
    
    
    $
    (58,804
    )Basic earnings per common share
    
    $
    .04
    
    
    $
    .01
  NOTE 3  ISSUANCE OF COMMON STOCK
  8




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TABLE OF CONTENTS  Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Controls and ProceduresPART IIItem 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  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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##### Table of Contents



Results
of Operations
     11




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##### Table of Contents



Allowance for Loan Losses
       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
    
    $
    991,367
    
    
    
    4
    
    
    $
    132,934
    
    
    $
    731,060
    
    
    
    1
    
    
    
    14,621
    
    
    $
    260,307
    
    
    
    3
    
    
    $
    118,313
    
    
    $
    260,307
    
    
    
    3
    
    
    $
    118,313Real Estate 
Commercial
    
    
    1,127,137
    
    
    
    2
    
    
    
    14,348
    
    
    
    727,923
    
    
    
    1
    
    
    
    4,368
    
    
    
    399,214
    
    
    
    1
    
    
    
    9,980
    
    
    
    399,214
    
    
    
    1
    
    
    
    9,980Real Estate 
Individual
    
    
    1,265,836
    
    
    
    5
    
    
    
    19,230
    
    
    
    357,812
    
    
    
    1
    
    
    
    358
    
    
    
    908,024
    
    
    
    4
    
    
    
    18,872
    
    
    
    908,024
    
    
    
    4
    
    
    
    18,872Installment 
Individual
    
    
    15,138
    
    
    
    1
    
    
    
    378
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,138
    
    
    
    1
    
    
    
    378
    
    
    
    15,138
    
    
    
    1
    
    
    
    378Totals
    
    $
    3,399,478
    
    
    
    12
    
    
    $
    166,890
    
    
    $
    1,816,795
    
    
    
    3
    
    
    $
    19,347
    
    
    $
    1,582,683
    
    
    
    9
    
    
    $
    147,543
    
    
    $
    1,582,683
    
    
    
    9
    
    
    $
    147,543
 13




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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
    
    $
    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
    14




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Allowance for Loan Losses
  For the Nine
    
    
    For theMonths Ended
    
    
    Year EndedSeptember 30,
    
    
    December 31,2005
    
    
    2004(Dollars in thousands)Average loans outstanding
    
    $
    93,736
    
    
    $
    84,801Loans outstanding at period end
    
    $
    99,167
    
    
    $
    86,670Total nonperforming loans
    
    $
    1,583
    
    
    $
    2,048Beginning balance of allowance
    
    $
    1,013
    
    
    $
    1,205Loans charged off:Commercial
    
    
    (304
    )
    
    
    (983
    )Real estate  commercial
    
    
    (15
    )
    
    
    (209
    )Real estate  individual
    
    
    0
    
    
    
    (91
    )Installment loans to individuals
    
    
    (149
    )
    
    
    (65
    )Total charge-offs
    
    
    (468
    )
    
    
    (1,348
    )Recoveries of previous charge-offs:Installment loans to individuals
    
    
    0
    
    
    
    0Total recoveries
    
    
    0
    
    
    
    0Net loans charged-off
    
    
    (468
    )
    
    
    (1,348
    )Provision for loan losses
    
    
    220
    
    
    
    1,156Balance at period end
    
    $
    765
    
    
    $
    1,013Net charge-offs to average loans
    
    
    0.50
    %
    
    
    1.59
    %Allowance as percent of total loans
    
    
    0.77
    %
    
    
    1.17
    %Nonperforming loans as a percentage of
total loans
    
    
    1.60
    %
    
    
    2.36
    %Allowance as a percent of
nonperforming loans
    
    
    48.33
    %
    
    
    49.47
    %
  Nine Months
    
    
    Percentage of
    
    
    
    
    
    
    Percentage ofEnded
    
    
    loans in
    
    
    Year ended
    
    
    loans inSeptember 30,
    
    
    each category
    
    
    December 31,
    
    
    each category2005
    
    
    to total loans
    
    
    2004
    
    
    to total loansCommercial
    
    $
    420,934
    
    
    
    9.67
    %
    
    $
    696,639
    
    
    
    14.87
    %Real estate 
individual
    
    
    112,230
    
    
    
    61.88
    %
    
    
    127,998
    
    
    
    49.54
    %Real estate 
commercial
    
    
    167,348
    
    
    
    20.84
    %
    
    
    118,475
    
    
    
    26.15
    %Installment loans
to individuals
    
    
    64,958
    
    
    
    7.61
    %
    
    
    70,260
    
    
    
    9.44
    %Total
    
    $
    765,470
    
    
    
    100.00
    %
    
    $
    1,013,372
    
    
    
    100.00
    %
  15




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##### Table of Contents



Average Balances, Income and Expense, and Rates
  Interest-
    
    
    
    
    
    InterestEarning Assets/
    
    Average
    
    
    Income/
    
    
    Yield/Bearing Liabilities
    
    Balance
    
    
    Cost
    
    
    CostFederal funds sold
    
    $
    13,955,366
    
    
    $
    303,965
    
    
    
    2.90
    %Interest-bearing deposits
    
    
    145,202
    
    
    
    3,053
    
    
    
    2.80
    %Investment securities
    
    
    19,171,851
    
    
    
    812,530
    
    
    
    5.65
    %Loans
    
    
    93,735,794
    
    
    
    5,154,145
    
    
    
    7.33
    %Total
    
    $
    127,008,213
    
    
    $
    6,273,693
    
    
    
    6.58
    %Deposits
    
    $
    95,193,868
    
    
    $
    2,131,550
    
    
    
    2.99
    %Other borrowings
    
    
    17,362,275
    
    
    
    408,527
    
    
    
    3.14
    %Total
    
    $
    112,556,143
    
    
    $
    2,540,077
    
    
    
    3.01
    %Net interest income/spread
    
    
    
    
    
    $
    3,733,616
    
    
    
    3.57
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.92
    %
  16




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##### Table of Contents



Deposits
  Deposit CompositionSeptember 30,
    
    
    December 31,2005
    
    
    2004Percent of
    
    
    
    
    
    
    Percent ofAmount
    
    
    Deposits
    
    
    Amount
    
    
    Deposits(Dollar in thousands)Demand deposits
    
    $
    6,362
    
    
    
    5.22
    %
    
    $
    7,203
    
    
    
    10.08
    %Escrow deposits
    
    
    2
    
    
    
    0
    %
    
    
    1
    
    
    
    0
    %Total non-interesting-bearing.
    
    
    6,364
    
    
    
    5.22
    %
    
    
    7,204
    
    
    
    10.08
    %Now accounts
    
    
    6,565
    
    
    
    5.38
    %
    
    
    2,716
    
    
    
    3.80
    %MMDA
    
    
    57,615
    
    
    
    47.26
    %
    
    
    23,309
    
    
    
    32.61
    %Savings
    
    
    2,009
    
    
    
    1.65
    %
    
    
    276
    
    
    
    0.39
    %Certificates of deposits of
$100K or more
    
    
    10,912
    
    
    
    8.95
    %
    
    
    8,111
    
    
    
    11.34
    %Brokered deposits of $100K or
more
    
    
    19,520
    
    
    
    16.01
    %
    
    
    14,370
    
    
    
    20.10
    %Total certificates of deposit
of $100K or more
    
    
    30,432
    
    
    
    24.96
    %
    
    
    22,481
    
    
    
    31.44
    %Certificate of deposits less
than $100K
    
    
    17,748
    
    
    
    14.56
    %
    
    
    14,021
    
    
    
    19.61
    %Brokered deposits less than $100K
    
    
    1,188
    
    
    
    .97
    %
    
    
    1,481
    
    
    
    2.07
    %Total certificates of deposit
less than $100K
    
    
    18,936
    
    
    
    15.53
    %
    
    
    15,502
    
    
    
    21.68
    %Total
    
    $
    121,921
    
    
    
    100.00
    %
    
    $
    71,488
    
    
    
    100.00
    %Total brokered deposits
    
    $
    20,708
    
    
    
    
    
    
    $
    15,851
 Liquidity and Sources of Capital
  17




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##### Table of Contents



Bank
    
    MinimumCapital
    
    RegulatoryRatio
    
    RequirementCapital ratios at September 30, 2005Tier 1 capital
    
    
    11.86
    %
    
    
    4.0
    %Tier 2 capital
    
    
    0.84
    %Total risk-based capital ratio
    
    
    12.70
    %
    
    
    8.0
    %Leverage ratio
    
    
    7.31
    %
    
    
    4.0
    %
  i.e.
  Liquidity And Rate Sensitivity
   18




---



##### 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
    
    
    71,870
    
    
    
    3,132
    
    
    
    6,866
    
    
    
    17,449
    
    
    
    99,317Investment securities
    
    
    1,951
    
    
    
    500
    
    
    
    481
    
    
    
    19,328
    
    
    
    22,260Federal funds sold
    
    
    23,454
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,454Total earning assets
    
    
    97,471
    
    
    
    3,632
    
    
    
    7,347
    
    
    
    36,777
    
    
    
    145,227Interest-bearing liabilities:Money market and NOW
    
    
    64,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,180Savings deposits
    
    
    2,009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,009Time deposits
    
    
    968
    
    
    
    23,541
    
    
    
    18,371
    
    
    
    6,490
    
    
    
    49,370Other liabilities
    
    
    6,000
    
    
    
    5,000
    
    
    
    
    
    
    
    4,000
    
    
    
    15,000Total interest-bearing liabilities
    
    
    73,157
    
    
    
    28,541
    
    
    
    18,371
    
    
    
    10,490
    
    
    
    130,559Interest-sensitivity gap
    
    $
    24,314
    
    
    $
    (24,909
    )
    
    $
    (11,024
    )
    
    $
    26,287
    
    
    $
    14,668Cumulative interest-sensitivity gap
    
    $
    24,314
    
    
    $
    (595
    )
    
    $
    (11,619
    )
    
    $
    14,668Ratio of interest-sensitivity gap
to total earning assets
    
    
    16.74
    %
    
    
    (17.15
    %)
    
    
    (7.59
    %)
    
    
    18.10
    %
    
    
    10.10
    %Ratio of cumulative interest-
sensitivity gap to total earning
assets
    
    
    16.74
    %
    
    
    (0.41
    %)
    
    
    (8.00
    %)
    
    
    10.10
    %
  Loan Portfolio
  19




---



##### Table of Contents



PercentAmount
    
    
    of totalCommercial
    
    $
    9,608,613
    
    
    
    9.67
    %Real estate  individual
    
    
    61,456,482
    
    
    
    61.88
    %Real estate  commercial
    
    
    20,697,721
    
    
    
    20.84
    %Installment loans to individuals
    
    
    7,554,382
    
    
    
    7.61
    %Gross loans
    
    
    99,317,198
    
    
    
    100.00
    %Less: Net deferred loan fees
    
    
    (150,297
    )Allowance for loan loss
    
    
    (765,470
    )Total net loans
    
    $
    98,401,431
  Regulatory Matters
  
 Item 3. Controls and Procedures.
  20




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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.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
  10.1
    
    *Amendment to James L. Box Non-qualified Stock Option Agreement (Incorporated
by reference to Exhibit 10.1 to the Companys Form 8-K filed on September 1, 2005, File
No. 000-24023).10.2
    
    *Amendment to the 2005 Executive Cash Bonus Plan (Incorporated by reference to
the information contained in Item 1.01 of the Companys Form 8-K filed on September 22,
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:
November 10, 2005
    
    By:
    
    /s/ James L. Box

James L. BoxPresident and Chief Executive OfficerBy:
    
    /s/ Wayne W. Byers

Wayne W. ByersChief Financial Officer
 22