UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**Form 10-Q**
Quarterly Report Pursuant to Section 13 or 15(d)			of the Securities Exchange Act of 1934For the quarterly period ended March 31, 2011Commission File No. 000-50047
Calvin B. Taylor Bankshares, Inc.(Exact name of registrant as specified in its Charter)

Maryland(State of incorporation or organization)

52-1948274(I.R.S. Employer Identification No.)

24 North Main Street, Berlin, Maryland 21811(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (410)641-1700
 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes [X] No ____

Indicate by check mark whether the registrant has submitted electronicallyand posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorterperiod that the registrant was required to submit and post such files). N/A (notrequired at this time)

Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer, a non-accelerated filer, or a smaller reporting company.See the definitions of "large accelerated filer," "accelerated filer" and"smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ____                                                                                     Accelerated filer [X] Non- accelerated filer ____ (Do not check if a smaller reporting company)     Smaller reporting company ____
Indicate by check mark whether the registrant is a shell company (as definedin Rule 12b-2 of the Exchange Act). Yes ____ No [X] 

On April 30, 2011, 3,000,508 shares of the registrant's common stock wereissued and outstanding.

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******Calvin B. Taylor Bankshares, Inc. and SubsidiaryForm 10-QIndex**Part I - Financial		InformationPageItem 1Consolidated		Financial StatementsConsolidated		Balance Sheets as of March 31, 2011 and December 31, 20103 Consolidated		Statements of Income for the three months ended March		31, 2011 and 20104Consolidated		Statements of Cash Flows for the three months ended March		31, 2011 and 20105-6Notes to		Consolidated Financial Statements7-16Item 2Management’s		Discussion and Analysis of Financial Conditionand Results		of Operations17-25Item 3Quantitative		and Qualitative Disclosures About Market Risks 25Item 4Controls and		Procedures26Part II - Other		InformationItem 1Legal		Proceedings26Item 1ARisk Factors26Item 2Unregistered		Sales of Equity Securities and Use of Proceeds28Item 3Defaults Upon		Senior Securities28Item 5Other		Information28Item 6Exhibits28-30Signatures31
 

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		Part I - Financial Information, Item 1 Financial Statements 		Calvin B. Taylor Bankshares, Inc. and Subsidiary 		Consolidated Balance Sheets   		(unaudited)  		March 31,		December 31, 		2011		2010		Assets		Cash and due from banks		 $             17,051,016 		 $             14,319,142 		Federal funds sold		                31,656,196 		                36,081,862 		Interest-bearing deposits		                10,658,500 		                11,650,849 		Investment securities available for sale		                44,813,118 		                59,801,920 		Investment securities held to maturity (approximate   		  fair value of $43,836,218 and $32,491,819)		                43,668,735 		                32,303,572 		Loans, less allowance for loan losses  		  of $1,120,292 and $983,178		              244,805,499 		              237,001,219 		Premises and equipment		                  6,345,269 		                  6,319,854 		Other real estate owned		                     779,500 		                     779,500 		Accrued interest receivable		                  1,184,823 		                  1,224,920 		Computer software		                     106,020 		                       89,521 		Bank owned life insurance		                  5,303,312 		                  5,260,539 		Prepaid expenses		                  1,002,148 		                  1,285,266  		Other assets		                         1,529 		                       29,640  		 $           407,375,665 		 $           406,147,804 		Liabilities and Stockholders' Equity		Deposits  		  Noninterest-bearing		 $             74,691,581 		 $             76,763,686 		  Interest-bearing		              251,793,458 		              250,014,068  		              326,485,039 		              326,777,754 		Securities sold under agreements to repurchase		                  4,572,801 		                  4,490,512 		Accrued interest payable 		                     132,159 		                     150,299 		Deferred income taxes		                     247,100 		                     383,326 		Other liabilities		                     709,996 		                     151,361  		              332,147,095 		              331,953,252 		Stockholders' equity  		  Common stock, par value $1 per share   		   authorized 10,000,000 shares, issued and outstanding  		   3,000,508 shares at March 31, 2011 and December 31, 2010		                  3,000,508 		                  3,000,508 		  Additional paid-in capital		                  8,733,438 		                  8,733,438 		  Retained earnings		                62,692,803 		                61,441,595  		                74,426,749 		                73,175,541 		  Accumulated other comprehensive income		                     801,821 		                  1,019,011  		                75,228,570 		                74,194,552  		 $           407,375,665 		 $           406,147,804       		See accompanying Notes to Consolidated Financial Statements
 

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		Calvin B. Taylor Bankshares, Inc. and Subsidiary 		Consolidated Statements of Income (unaudited)  		For the three months ended		March 31,		2011		2010		Interest and dividend revenue  		  Loans, including fees		 $               3,890,621 		 $               3,960,170 		  U.S. Treasury and government agency securities		                     244,518 		                     345,052 		  State and municipal securities		                       14,777 		                       12,325 		  Federal funds sold 		                       14,480 		                       11,956 		  Interest-bearing deposits		                       14,675 		                       19,496 		  Equity securities		                         8,014 		                       18,844 		          Total interest and dividend revenue		                  4,187,085 		                  4,367,843   		Interest expense  		  Deposits		                     403,474 		                     499,860 		  Borrowings		                         5,401 		                         8,846 		    Total interest expense		                     408,875 		                     508,706   		    Net interest income		                  3,778,210 		                  3,859,137   		Provision for loan losses		                     145,400 		                     421,000 		    Net interest income after provision for loan losses		                  3,632,810 		                  3,438,137   		Noninterest revenue  		  Service charges on deposit accounts		                     215,495 		                     224,735 		  ATM and debit card		                     137,259 		                     121,647 		  Increase in cash surrender value of  bank owned life insurance		                       42,772 		                       41,888 		  Gain on sale of assets		                            200 		                     148,236 		  Miscellaneous revenue		                       53,226 		                     101,686 		    Total noninterest revenue		                     448,952 		                     638,192   		Noninterest expenses  		  Salaries		                     874,987 		                     866,847 		  Employee benefits		                     362,595 		                     250,829 		  Occupancy		                     222,859 		                     228,842 		  Furniture and equipment		                     126,811 		                     124,670 		  Data proccessing		                       67,112 		                       73,226 		  ATM and debit card		                       46,640 		                       63,647 		  Deposit insurance premiums		                       75,954 		                       78,455 		  Other operating		                     336,096 		                     406,934 		    Total noninterest expenses		                  2,113,054 		                  2,093,450   		    Income before income taxes		                  1,968,708 		                  1,982,879 		Income taxes		                     717,500 		                     717,500   		Net income		 $               1,251,208 		 $               1,265,379   		Earnings per common share – basic and diluted		 $                        0.42 		 $                        0.42 
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		Calvin B. Taylor Bankshares, Inc. and Subsidiary 		Consolidated Statements of Cash Flows (unaudited)  		For the three months ended		March 31,		2011		2010		Cash flows from operating activities  		  Interest and dividends received		 $                4,295,782 		 $                4,354,052 		  Fees and commissions received		                      434,290 		                      525,329 		  Interest paid		                    (427,015)		                    (524,908)		  Cash paid to suppliers and employees		                 (1,803,524)		                 (1,999,269)		  Income taxes paid		                      (51,955)		                    (435,956)		                   2,447,578 		                   1,919,248 		Cash flows from investing activities  		  Certificates of deposit purchased, net of maturities		                      993,330 		                   3,830,680 		  Proceeds from maturities of investments available  		     for sale		                 23,575,000 		                 13,005,000 		  Purchase of investments available for sale		                 (8,985,881)		                                -   		  Proceeds from maturities of investments held to   		     maturity		                        65,000 		                   5,190,000 		  Purchase of investments held to maturity		               (11,452,495)		                 (5,769,273)		  Loans made, net of principal reductions		                 (7,949,680)		                 (7,671,344)		  Proceeds from sale of repossessed loan collateral, net of  		    cost of sale		                                -   		                        59,420 		  Purchases of premises, equipment,  		    and computer software		                    (175,437)		                      (51,625)		  Proceeds from sale of premises and equipment		                             200 		                        72,100 		                 (3,929,963)		                   8,664,958   		Cash flows from financing activities  		  Net increase (decrease) in  		    Time deposits		                 (3,481,121)		                   1,452,960 		    Other deposits		                   3,188,406 		                 (5,043,398)		    Securities sold under agreements to repurchase		                        82,289 		                    (812,911)		  Payments on note payable		                                -   		                        (6,625)		                    (210,426)		                 (4,409,974)  		Net increase in cash and cash equivalents		                 (1,692,811)		                   6,174,232 		Cash and cash equivalents at beginning of period		                 50,531,537 		                 43,489,772 		Cash and cash equivalents at end of period		 $              48,838,726 		 $              49,664,004 		See accompanying Notes to Consolidated Financial Statements
 

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		Calvin B. Taylor Bankshares, Inc. and Subsidiary 		Consolidated Statements of Cash Flows (unaudited)  		For the three months ended		March 31,		2011		2010		Reconciliation of net income to net cash provided  		  by operating activities  		  Net income		 $               1,251,208 		 $               1,265,379 		  Adjustments to reconcile net income to net cash  		    provided by operating activities  		Provision for loan losses		                     145,400 		                     421,000 		    Gain on sale of repossessed loan collateral		                              -   		                       (4,920)		    Amortization of premiums and accretion of  		      discount, net		                       68,599 		                       39,392 		    Depreciation and amortization		                     133,323 		                     145,034 		    Gain on sale of real property		                              -   		                     (55,061)		    Decrease (increase) in  		      Accrued interest receivable		                       40,097 		                     (53,184)		      Cash surrender value of bank owned life insurance		                     (42,773)		                     (41,888)		      Other assets		                     311,229 		                     406,851 		    Increase (decrease) in  		      Accrued interest payable		                     (18,140)		                     (16,202)		      Accrued income taxes		                     665,545 		                       34,374 		      Other liabilities		                   (106,910)		                   (221,527)		 $               2,447,578 		 $               1,919,248     		  Composition of cash and cash equivalents  		    Cash and due from banks		 $             17,051,016 		 $             17,549,372 		    Federal funds sold 		                31,656,196 		                31,988,106 		    Interest-bearing deposits, except for time deposits		                     131,514 		                     126,528 		 $             48,838,726 		 $             49,664,006                           		See accompanying Notes to Consolidated Financial Statements
 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited)**
1. Basis of Presentation	   	The accompanying unaudited consolidated financial statements conform with	accounting principles generally accepted in the United States of America and	with the instructions to Form 10-Q. Interim financial statements do not	include all the information and footnotes required for complete financial	statements. In the opinion of management, all adjustments considered	necessary for a fair presentation of financial position and results of	operations for these interim periods have been made. These adjustments are	of a normal recurring nature. Results of operations for the three months	ended March 31, 2011 are not necessarily indicative of the results that may	be expected in any other interim period or for the year ending December 31,	2011. For further information, refer to the audited consolidated financial	statements and related footnotes included in the Company's Form 10-K for the	year ended December 31, 2010.	    Consolidation has resulted in the elimination of all significant	intercompany accounts and transactions.
Cash Flows   	For purposes of reporting cash flows, cash and cash equivalents include	cash on hand, amounts due from banks, federal funds sold, and	interest-bearing deposits except for time deposits. Federal funds are	purchased and sold for one-day periods.

Per share data   	Earnings per common share are determined by dividing net income by the	weighted average number of common shares outstanding for the period, as	follows:
 		2011		2010		Three months ended March 31		                    3,000,508 		                    3,000,508 
 

2. Comprehensive Income

    Comprehensive income consists of:
 		For the three months ended 		March 31, 		2011		2010		Net income		 $                 1,251,208 		 $                 1,265,379 		Unrealized gain (loss) on investment securities  		  available for sale, net of income taxes		                     (217,190)		                         22,282 		Comprehensive income		 $                 1,034,018 		 $                 1,287,661 
 

 

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** 

Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
3. Investment Securities

    Investment securities are summarized as follows:
 			Amortized 			Unrealized			Unrealized			Fair 			cost			gains			losses			value			March 31, 2011    			Available for sale    			  U.S. Treasury			 $         41,590,108 			 $          898,583 			 $            7,361 			 $         42,481,330 			  State and municipal			                 290,484  						                 3,458 			               3,480 			                 290,462  						  Equity			              1,691,841 			             711,922 			           362,437 			              2,041,326  			 $         43,572,433 			 $       1,613,963 			 $        373,278 			 $         44,813,118 			Held to maturity    			  U.S. Treasury			 $         27,477,357 			 $          165,818 			 $          17,905 			 $         27,625,270 			  U.S. Government agency			            10,001,782 			               10,208 			             10,190 			            10,001,800 			  State and municipal			              6,189,596 			               19,837 			                  285 			              6,209,148  			 $         43,668,735 			 $          195,863 			 $          28,380 			 $         43,836,218      			December 31, 2010    			Available for sale    			  U.S. Treasury			 $         56,150,205 			 $          966,157 			 $          16,871 			 $         57,099,491 			  State and municipal			                 365,772  						                 4,031 			               3,709 			                 366,094  						  Equity			              1,691,841 			          1,008,745 			           364,251 			              2,336,335  			 $         58,207,818 			 $       1,978,933 			 $        384,831 			 $         59,801,920 			Held to maturity    			  U.S. Treasury			 $         19,487,287 			 $          178,407 			 $            5,147 			 $         19,660,547 			  U.S. Government agency			              7,002,448 			               13,646 			               6,850 			              7,009,244 			  State and municipal			              5,813,837 			               11,979 			               3,788 			              5,822,028  			 $         32,303,572 			 $          204,032 			 $          15,785 			 $         32,491,819 
 

 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
3. Investment Securities (Continued)

    The table below shows the gross unrealized losses and fair value of	securities that are in an unrealized loss position as of March 31, 2011,	aggregated by length of time that individual securities have been in a	continuous unrealized loss position. 
			Less than 12 months			12 months or more			Total			Fair			Unrealized			Fair			Unrealized			Fair			Unrealized			value			losses			value			losses			value			losses      			U. S. Treasury			 $   12,006,780 			 $    25,266 			 $             -   			 $             -   			 $   12,006,780 			 $    25,266 			U. S. Government Agency			        4,989,810 			       10,190 			                -   			                -   			        4,989,810 			       10,190 			State and municipal			           993,430 			         3,765 			                -   			                -   			           993,430 			         3,765 			Equity securities			             14,695 			     100,325 			       323,889 			       262,112 			           338,584 			     362,437  			 $   18,004,715 			 $  139,546 			 $    323,889 			 $    262,112 			 $   18,328,604 			 $  401,658 
    The debt securities for which an unrealized loss is recorded are issues	of the U. S. Treasury, the Federal Home Loan Bank (a U. S. government	agency), and general and highly rated revenue obligations of states and	municipalities. The Company has the ability and the intent to hold these	securities until they are called or mature at face value. Equity securities	for which an unrealized loss is recorded are issued by local community banks	and bank holding companies. Management believes that these fluctuations in	fair value reflect market conditions, and are not indicative of	other-than-temporary impairment of the investments. Management continues to	monitor the financial condition of the issuers.	    The amortized cost and estimated fair value of debt securities, by	contractual maturity, and the amount of pledged securities follow. Actual	maturities may differ from contractual maturities because issuers may have	the right to call or prepay obligations with or without call or prepayment	penalties.
			March 31, 2011			December 31, 2010			Amortized			Fair			Amortized			Fair			cost			value			cost			value    			Available for sale    			  Within one year			 $          22,667,422 			 $          22,750,679 			 $          35,163,533 			 $          35,292,775 			  After one year    			   through five years			             17,216,457 			             17,346,113 			             19,355,802 			             19,481,248 			  After ten years			               1,996,713  						               2,675,000  						               1,996,642  						               2,691,562  						 $          41,880,592 			 $          42,771,792 			 $          56,515,977 			 $          57,465,585     			Held to maturity    			  Within one year			 $          15,002,755 			 $          15,052,645 			 $            8,758,541 			 $            8,789,063 			  After one year    			   through five years			             28,665,980 			             28,783,573 			             23,545,031 			             23,702,756  			 $          43,668,735 			 $          43,836,218 			 $          32,303,572 			 $          32,491,819     			Pledged securities			 $          25,599,210 			 $          26,494,854 			 $          26,567,879 			 $          27,558,868 
    Investments are pledged to secure deposits of federal and local	governments. Pledged securities also serve as collateral for securities sold	under agreements to repurchase.

 
** 

 

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Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

4. Loans and Allowance for Loan Losses

Major classifications of loans are as follows:
				March 31, 2011				December 31, 2010				Real estate mortgages  				Construction, land development, and land				 $             19,455,536 				 $             21,792,060 				Residential 1 to 4 family				                92,258,901 				                94,296,749 				Commercial properties				              117,194,515 				              102,578,171 				Commercial 				                15,457,291 				                17,596,451 				Consumer				                  1,559,548 				                  1,720,966 				              245,925,791 				              237,984,397 				Allowance for loan losses				                  1,120,292 				                     983,178 				Loans, net				 $           244,805,499 				 $           237,001,219 
 

Nonperforming loans are loans past due 90 or more days and still accruing	plus nonaccrual loans. Nonperforming assets are comprised of nonperforming	loans combined with real estate acquired in foreclosure and held for sale.	The following table details the composition of nonperforming assets:
				March 31,				December 31,				2011				2010				Loans 90 days or more past due and still accruing  				Real estate mortgages  				Construction, land development, and land				 $                       -   				 $                       -   				Residential 1 to 4 family				                302,215 				                          -   				Commercial properties				                684,422 				                684,422 				Commercial 				                          -   				                          -   				Consumer				                          -   				                          -    				                986,637 				                684,422 				Nonaccruing loans  				Real estate mortgages  				Construction, land development, and land				             1,150,536 				             1,171,127 				Residential 1 to 4 family				                823,350 				                318,076 				Commercial properties				             1,885,085 				             2,610,204 				Commercial 				                          -   				                    7,114 				Consumer				                          -   				                          -    				             3,858,971 				             4,106,521   				Total nonperforming loans				             4,845,608 				             4,790,943 				Other real estate owned				                779,500 				                779,500 				Total nonperforming assets				 $          5,625,108 				 $          5,570,443   				Interest not accrued on nonaccruing loans				 $             149,881 				 $             156,805    				Interest included in net income on nonaccruing loans,  				year-to-date				 $                 8,700 				 $               93,033 
 

 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

4. Loans and Allowance for Loan Losses (continued)

The following is a schedule of transactions in the allowance for loan	losses by type of loan. The Company did not acquire any loans with	deteriorated credit quality during the periods presented. 
			Real estate mortgages    			Construction      			March 31, 2011			and Land			Residential			Commercial			Commercial			Consumer			Unallocated			Total			Beginning balance			$          235,437 			 $             50,602 			 $            356,993 			 $          194,946 			 $           119,228 			 $        25,972 			 $                   983,178 			Loans charged off			                             -   			                             -   			                               -   			             (2,945)			          (7,193)			                  -   			                     (10,138)			Recoveries			                             -   			                         150 			                               -   			                  284 			                1,418 			                  -   			                         1,852 			Provision charged to operations			                 35,000 			                             -   			                  117,500 			              44,899 			            (41,353)			         (10,646)			                      145,400 			Ending balance			 $          270,437 			 $             50,752 			 $            474,493 			 $         237,184 			 $           72,100 			 $        15,326 			 $                1,120,292        			Individually evaluated for impairment:      			Balance in allowance			 $          110,509 			 $                   -   			 $            350,000 			 $                  -   			 $                   -    			 $                   460,509 			Related loan balance			 $       1,525,626 			 $          823,350 			 $         2,569,507 			 $                  -   			 $                   -    			 $                4,918,483        			Collectively evaluated for impairment:      			Balance in allowance			 $           159,928 			 $             50,752 			 $             124,493 			 $         237,184 			 $           72,100 			 $        15,326 			 $                   659,783 			Related loan balance			 $    17,929,910 			 $    91,435,551 			 $   114,625,008 			 $   15,457,291 			 $      1,559,548  			 $            241,007,308               			December 31, 2010       			Beginning balance			 $           145,262 			 $             48,034 			 $                   2,192 			 $         380,161 			 $           53,638 			 $          8,474 			 $                   637,761 			Loans charged off			             (100,000)			             (190,093)			                               -   			       (354,854)			            (52,935)			                  -   			                    (697,882)			Recoveries			                             -   			                      1,100 			                               -   			               1,073 			              29,126 			                  -   			                       31,299 			Provision charged to operations			                190,175 			                 191,561  						                 354,801  						            168,566 			              89,399 			           17,498 			                   1,012,000 			Ending balance			 $          235,437 			 $             50,602 			 $            356,993 			 $         194,946 			 $          119,228 			 $        25,972 			 $                   983,178        			Individually evaluated for impairment:      			Balance in allowance			 $                         -   			 $                         -   			 $            330,759 			 $                  -   			 $                   -    			 $                  330,759 			Related loan balance			 $         1,171,127 			 $           361,743 			 $       2,566,537 			 $             7,114 			 $                   -    			 $                4,106,521        			Collectively evaluated for impairment:      			Balance in allowance			 $          235,437 			 $             50,602 			 $               26,234 			 $         194,946 			 $          119,228 			 $        25,972 			 $                   652,419 			Related loan balance			 $  20,620,933 			 $  93,935,006 			 $    100,011,634 			 $  17,589,337 			 $      1,720,966  			 $             233,877,876               			March 31, 2010       			Beginning balance			 $           145,262 			 $             48,034 			 $                   2,192 			 $         380,161 			 $           53,638 			 $          8,474 			 $                   637,761 			Loans charged off			                             -   			                             -   			                               -   			           (347,872)			              (27,981)			                  -   			                   (375,853)			Recoveries			                             -   			                             -   			                               -   			                    78 			             5,364  						                  -   			                         5,442 			Provision charged to operations			                115,000 			                  19,555  						                 143,029  						              76,077 			              25,295 			           42,044 			                      421,000 			Ending balance			 $          260,262 			 $             67,589 			 $              145,221 			 $         108,444 			 $           56,316 			 $        50,518 			 $                   688,350        			Individually evaluated for impairment:      			Balance in allowance			 $                         -   			 $                         -   			 $              127,561 			 $                  -   			 $                   -    			 $                   127,561 			Related loan balance			 $                         -   			 $            163,519 			 $        2,710,608 			 $                  -   			 $                   -    			 $                2,874,127        			Collectively evaluated for impairment:      			Balance in allowance			 $          260,262 			 $             67,589 			 $                17,660 			 $         108,444 			 $           56,316 			 $        50,518 			 $                   560,789 			Related loan balance			 $  23,506,980 			 $    98,102,641 			 $    102,454,131 			 $  19,009,547 			 $      2,053,137  			 $             245,126,436 
 

 

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Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

4. Loans and Allowance for Loan Losses (continued)

The table below shows the relationship of net charged-off loans and the	balance in the allowance to gross loans and average loans.
				Allowance for Loan Losses   				For three months ended 				For the year ended 				March 31 				December 31 				2011				2010 				2010      				Net loans charged off				 $            8,286 				 $        370,411  				 $        666,583       				Balance at end of period				 $     1,120,292 				 $        688,350  				 $        983,178       				Gross loans outstanding at the end of the period				 $ 245,925,791 				 $ 248,000,563  				 $ 237,984,397  				Allowance for loan loses to gross loans     				outstanding at the end of the period				0.46%				0.28% 				0.41%      				Average loans outstanding during the period				 $ 240,422,747 				 $ 243,850,884  				 $ 244,189,000  				Annualized net charge-offs as a percentage of     				average loans outstanding during the period				0.01%				0.62% 				0.27% 
Loans are considered past due when either principal or interest is not paidby the date on which payment is due. The following table is an analysis of pastdue loans by days past due and type of loan. 
		Age Analysis of Past Due Loans  		Greater than   		> 90 Days		30-59 Days		60-89 Days		90 Days		Total 		Total		Past Due and		March 31, 2011		Past Due		Past Due		Past Due		Past Due		Current		Loans		Accruing		Real Estate       		Construction, land development,       		and land		 $                 -   		 $       666,742 		 $       408,802 		 $    1,075,544 		 $       18,379,992 		 $       19,455,536 		 $                 -   		Residential 1 to 4 family		       2,678,830 		          950,970 		          835,400 		       4,465,200 		          87,793,701 		          92,258,901 		           302,215 		Commercial properties		          600,000 		          601,439 		       2,481,825 		       3,683,264 		        113,511,251 		        117,194,515 		           684,422 		Commercial 		          112,000 		                    -   		                    -   		          112,000 		          15,345,291 		          15,457,291 		                    -   		Consumer		            35,808 		              5,460 		                    -   		            41,268 		            1,518,280 		            1,559,548 		                    -   		Total		 $    3,426,638 		 $    2,224,611 		 $    3,726,027 		 $    9,377,276 		 $     236,548,515 		 $     245,925,791 		 $        986,637   		     		December 31, 2010       		Real Estate       		Construction, land development,       		and land		 $       474,843 		 $       234,719 		 $    1,089,719 		 $    1,799,281 		 $       19,992,779 		 $       21,792,060 		 $                 -   		Residential 1 to 4 family		       1,390,288 		          336,134 		                    -   		       1,726,422 		          92,570,327 		          94,296,749 		                    -   		Commercial properties		                    -   		            37,957 		       2,508,675 		       2,546,632 		        100,031,539 		        102,578,171 		           684,422 		Commercial 		          103,759 		              7,114 		                    -   		          110,873 		          17,485,578 		          17,596,451 		                    -   		Consumer		                    -   		            19,415 		                    -   		            19,415 		            1,701,551 		            1,720,966 		                    -   		Total		 $    1,968,890 		 $       635,339 		 $    3,598,394 		 $    6,202,623 		 $     231,781,774 		 $     237,984,397 		 $        684,422 
 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

4. Loans and Allowance for Loan Losses (continued)

Loans are considered impaired when management considers itunlikely that collection of principal and interest payments will be madeaccording to contractual terms, including principal and interest payments. Aperforming loan may be categorized as impaired based on knowledge ofcircumstances that are deemed relevant to loan collection. Not all impairedloans are past due nor are losses expected for every impaired loan. If a loss isexpected, an impaired loan may have specific reserves allocated to it in theallowance for loan losses. A schedule of impaired loans at period ends and theiraverage balances for the year follows:
			Unpaid  			Average			Principal			Recorded			Related			Recorded			March 31, 2011			Balance			Investment			Allowance			Investment			With no related allowance recorded    			Construction, land development, and land			 $           684,802 			 $           684,802 			 $                    -   			 $           694,387 			Residential 1 to 4 family			              823,350 			              823,350  			              826,208 			Commercial properties			              684,422 			              684,422  			              684,422 			With an allowance recorded    			Construction, land development, and land			              840,824 			              840,824 			              110,509 			              840,824 			Commercial properties			           1,885,085 			           1,885,085 			              350,000 			           1,885,085 			Total:    			Construction, land development, and land			           1,525,626 			           1,525,626 			              110,509 			           1,535,211 			Residential 1 to 4 family			              823,350 			              823,350 			                       -   			              826,208 			Commercial properties			           2,569,507 			           2,569,507 			              350,000 			           2,569,507 			Total, all categories			 $        4,918,483 			 $        4,918,483 			 $           460,509 			 $        4,930,926 
 
			December 31, 2010    			With no related allowance recorded    			Construction, land development, and land			 $        1,171,127 			 $        1,171,127 			 $                    -   			 $        1,194,397 			Residential 1 to 4 family			              361,743 			              361,743 			                       -   			              379,546 			Commercial properties			                88,488 			                88,488 			                       -   			                93,244 			Commercial 			                  7,114 			                  7,114 			                       -   			                  8,122 			With an allowance recorded    			Commercial properties			           2,478,049 			           2,478,049 			              330,759 			           2,484,804 			Total:    			Construction, land development, and land			           1,171,127 			           1,171,127 			                       -   			           1,194,397 			Residential 1 to 4 family			              361,743 			              361,743 			                       -   			              379,546 			Commercial properties			           2,566,537 			           2,566,537 			              330,759 			           2,578,048 			Commercial 			                  7,114 			                  7,114 			                       -   			                  8,122 
 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

4. Loans and Allowance for Loan Losses (continued)

Credit risk is measured based on an internally designed grading scale. Thegrades correspond to regulatory rating categories of pass, special mention,substandard, and doubtful. Evaluation of grades assigned to individual loans iscompleted no less than quarterly. Credit quality, as measured by internallyassigned grades, is an important component in the calculation of an adequateallowance for loan losses. The following table summarizes loans by creditquality indicator.
			March 31, 2011			December 31, 2010  			Real Estate Credit Risk Profile by Internally Assigned Grade 			Construction, land development, and land  			Pass			 $              13,747,684 			 $                 16,063,618 			Substandard			                   4,182,226 			                      4,557,315 			Doubtful  			Less than 90 days past due			                      375,090 			                         761,189 			Nonperforming: 90 days or more  			past due and/or non-accruing			                   1,150,536 			                         409,938 			Total			 $              19,455,536 			 $                 21,792,060   			Residential 1 to 4 family  			Pass			 $              86,771,560 			 $                 90,393,936 			Special Mention			                      249,164 			                                   -   			Substandard			                   4,112,612 			                      3,584,737 			Doubtful  			Less than 90 days past due			                                -   			                         292,091 			Nonperforming: 90 days or more  			past due and/or non-accruing			                   1,125,565 			                           25,985 			Total			 $              92,258,901 			 $                 94,296,749   			Commercial properties  			Pass			 $            109,822,337 			 $                 95,620,813 			Special Mention			                                -   			                                   -   			Substandard			                   4,802,671 			                      4,347,154 			Doubtful  			Less than 90 days past due			                                -   			                         132,155 			Nonperforming: 90 days or more  			past due and/or non-accruing			                   2,569,507 			                      2,478,049 			Total			 $            117,194,515 			 $               102,578,171   			Commercial Credit Risk Profile by Internally Assigned Grade 			Pass			 $              15,457,291 			 $                 17,589,337 			Doubtful  			Less than 90 days past due			                                -   			                             7,114 			Total			 $              15,457,291 			 $                 17,596,451   			Consumer Credit Risk Profile by Internally Assigned Grade  			Pass			 $                1,559,548 			 $                   1,720,966 			Total			 $                1,559,548 			 $                   1,720,966 
 

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** 

Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
 

5. Loan commitments

Loan commitments are agreements to lend to customers as long as there is	no violation of any conditions of the contracts. Outstanding loan	commitments and letters of credit consist of:
			March 31, 2011			December 31, 2010			Loan commitments and lines of credit  			  Construction and land development			 $                 8,015,111 			 $                 8,569,169 			  Other			                  16,725,502 			                  21,164,229  			 $               24,740,613 			 $               29,733,398   			Standby letters of credit			 $                 1,314,691 			 $                 1,590,367 
 

 

6. Assets Measured at Fair Value on a Recurring Basis

The Company values investment securities classified as available for sale	on a recurring basis and other real estate acquired through foreclosure at	fair value on a non-recurring basis. The fair value hierarchy established in	the Financial Accounting Standards Board Codification Topic 820 titled *Fair Value Measurements* defines three input levels for fair value	measurement. Level 1 is based on quoted market prices in active markets for	identical assets. Level 2 is based on significant observable inputs other	than those in Level 1. Level 3 is based on significant unobservable inputs.	The Company values US Treasury securities, government agency securities, and	an equity investment in an actively traded public utility under Level 1.	Municipal debt securities, equity investments in community banks, and other	real estate acquired through foreclosure are valued under Level 2. The	Company has no assets measured at fair value on a recurring or non-recurring	basis that are valued under Level 3 criteria. No assets were transferred	between levels of the fair value hierarchy during this period.

At March 31, 2011, values for available for sale investment securities	and other real estate owned were established as follows:
			Total			Level 1 Inputs			Level 2 Inputs			Investment securities available for sale (recurring)   			U.S. Treasury			 $      42,481,330 			 $      42,481,330 			 $                    -   			State and municipal			              290,462 			                       -   			              290,462 			Equity			           2,041,326 			              345,840 			           1,695,486 			Other real estate owned (non-recurring)			              779,500 			                       -   			              779,500  			 $      45,592,618 			 $      42,827,170 			 $        2,765,448 
 

The fair value of financial assets and financial liabilities, including	those financial assets and financial liabilities that are not measured and	reported at fair value on a recurring basis or non-recurring basis, and the	valuation methods used in estimating the fair value of financial instruments	is disclosed in the Company’s Annual Report on Form 10-K. It is not	practicable to report quarterly the fair value of financial assets and	liabilities measured on a non-recurring basis.

 

 

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** 

Calvin B. Taylor Bankshares, Inc. and SubsidiaryNotes to Consolidated Financial Statements (unaudited) (continued)**
7.    New accounting standards	   	The following accounting pronouncements have been approved by the	Financial Accounting Standards Board but had not become effective as of	March 31, 2011. These pronouncements would apply to the Company if the	Company or the Bank entered into an applicable activity. *    ASU No. 2010-06, "Fair Value Measurements and Disclosures (Topic 820) -	Improving Disclosures About Fair Value Measurements."*ASU 2010-06	requires expanded disclosures related to fair value measurements including	(i) the amounts of significant transfers of assets or liabilities between	Levels 1 and 2 of the fair value hierarchy and the reasons for the	transfers, (ii) the reasons for transfers of assets or liabilities in or out	of Level 3 of the fair value hierarchy, with significant transfers disclosed	separately, (iii) the policy for determining when transfers between levels	of the fair value hierarchy are recognized and (iv) for recurring fair value	measurements of assets and liabilities in Level 3 of the fair value	hierarchy, a gross presentation of information about purchases, sales,	issuances and settlements. ASU 2010-06 further clarifies that (i) fair value	measurement disclosures should be provided for each class of assets and	liabilities (rather than major category), which would generally be a subset	of assets or liabilities within a line item in the statement of financial	position and (ii) company’s should provide disclosures about the valuation	techniques and inputs used to measure fair value for both recurring and	nonrecurring fair value measurements for each class of assets and	liabilities included in Levels 2 and 3 of the fair value hierarchy.	Disclosures related to the gross presentation of Level 3 purchases, sales,	issuances and settlements of assets and liabilities was required for the	Company beginning January 1, 2011 and are included in Note 5.*    ASU No. 2010-20, "Receivables (Topic 310): Disclosure about the Credit	Quality of Financing Receivables and the Allowance for Credit Losses."*	ASU 2010-20 was effective for the Company with its annual reporting period	ended December 31, 2010. Since its adoption, the Company provides more	information about the credit quality of its financing receivables (loans),	including aging information and credit quality indicators. The disclosures	are disaggregated by portfolio segment. ASU No. 2011-01 postpones the	effective date for disclosures relating to troubled debt restructures (see	below).*    ASU No. 2011-01, "Receivables (Topic 310): Deferral of the Effective Date	of Disclosures about Troubled Debt Restructurings in Update No. 2010-20."*The amendments in ASU 2011-01 temporarily delay the effective date of	disclosures about troubled debt restructurings required under ASU 2010-20.	These disclosures are required in the first interim or annual period	beginning after June 15, 2011.*    ASU No. 2011-02, "Receivables (Topic 310): A Creditor’s Determination of	Whether a Restructuring is a Troubled Debt Restructuring."*The	amendments in ASU 2011-02 provide further clarification as to when a loan	modification or restructuring is considered a troubled debt restructuring	(TDR) for the purpose of achieving more consistent application of U.S. GAAP	for debt restructurings. In evaluating whether a restructuring constitutes a	TDR, a creditor must conclude that 1) the restructuring constitutes a	concession, and 2) the debtor is experiencing financial difficulties. These	disclosures are required in the first interim or annual period beginning	after June 15, 2011. 	    The accounting policies adopted by management are consistent with	accounting principles generally accepted in the United States of America and	are consistent with those followed by peer Banks.
 

 

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**Calvin B. Taylor Bankshares, Inc. and SubsidiaryPart 1. Financial InformationItem 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations
*    This Report contains statements which constitute forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933 andthe Securities Exchange Act of 1934. These statements appear in a number ofplaces in this Report and include all statements regarding the intent, belief orcurrent expectations of the Company, its directors, or its officers with respectto, among other things: (i) the Company's financing plans; (ii) trends affectingthe Company's financial condition or results of operations; (iii) the Company'sgrowth strategy and operating strategy; and (iv) the declaration and payment ofdividends. Investors are cautioned that any such forward-looking statements arenot guarantees of future performance and involve risks and uncertainties, andthat actual results may differ materially from those projected in theforward-looking statements as a result of various factors discussed herein andthose factors discussed in detail in the Company's filings with the Securitiesand Exchange Commission.*
    The following discussion of the financial condition and results of operationsof the Company should be read in conjunction with the Company's financialstatements and related notes and other statistical information includedelsewhere herein.

General

    Calvin B. Taylor Bankshares, Inc. (Company) was incorporated as a Marylandcorporation on October 31, 1995. The Company owns all of the stock of Calvin B.Taylor Banking Company (Bank), a commercial bank that was established in 1890and incorporated under the laws of the State of Maryland on December 17, 1907.The Bank operates nine banking offices in Worcester County, Maryland and onebanking office in Ocean View, Delaware. The Bank's administrative office islocated in Berlin, Maryland. The Bank is engaged in a general commercial andretail banking business serving individuals, businesses, and governmental unitsin Worcester County, Maryland, Ocean View, Delaware, and neighboring counties.    The Company currently engages in no business other than owning and managingthe Bank. The Bank employed 88 full time equivalent employees as of March 31,2011. The Bank hires seasonal employees during the summer. The Company has noemployees other than those hired by the Bank.

Use of estimates

    The preparation of financial statements in conformity with accountingprinciples generally accepted in the United State of America requires managementto make estimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements. These estimates and assumptions may affect thereported amounts of revenues and expenses during the reporting period. Actualresults could differ from these estimates. 

Critical Accounting Policies

    The Company’s financial condition and results of operations are sensitive toaccounting measurements and estimates of inherently uncertain matters. Whenapplying accounting policies in areas that are subjective in nature, managementuses its best judgment to arrive at the carrying value of certain assets. One ofthe most critical accounting policies applied is related to the valuation of theloan portfolio.     The allowance for loan losses (ALLL) represents management’s best estimate ofinherent probable losses in the loan portfolio as of the balance sheet date. Itis one of the most difficult and subjective judgments. The adequacy of theallowance for loan losses is evaluated no less than quarterly. The determinationof the balance of the allowance for loan losses is based on management’sjudgments about the credit quality of the loan portfolio as of the review date.It should be sufficient to absorb losses in the loan portfolio as determined bymanagement’s consideration of factors including an analysis of historicallosses, specific reserves for non-performing or past due loans, delinquencytrends, portfolio composition (including segment growth or shifting of balancesbetween segments, products and processes, and concentrations of credit, bothregional and by relationship), lending staff experience and changes, criticaldocumentation and policy exceptions, risk rating analysis, interest rates andthe competitive environment, economic conditions in the Bank’s service area, andresults of independent reviews, including audits and regulatory examinations.

 

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Financial Condition

    Total assets of the Company increased $1.2 million (.30%) from December 31,2010 to March 31, 2011. Combined deposits and customer repurchase agreementsdecreased $210,426 (.06%) during the same period. Average total assets andaverage total deposits each increased $18.0 million from first quarter 2010 tofirst quarter 2011. Throughout 2010, deposits and total assets grew as a resultof market instability that was part of a continuing general economic recession.At such times, many consumers seek the safety of conservatively run communitybanks. The first quarter of 2011 conforms to the historical pattern in which theBank sees a decrease in deposits during the first quarter of the year asbusiness customers in the resort area purchase inventory for the upcoming summerseason. For further discussion of seasonal activity that affects deposit levels,see the section titled Liquidity.

Loan Portfolio

    From December 31, 2010 to March 31, 2011 the gross loan portfolio has grown$7.9 million (3.34%). Growth in the loan portfolio has been funded by reductionsin federal funds sold and the investment portfolio. Because loans earn at higheraverage rates than federal funds sold or investments, this shift has a positiveeffect on earnings. There is no adverse impact on the Company’s ability to meetliquidity demands resulting from recent increases in the loan portfolio.    The Company makes loans to customers located primarily in the Delmarvaregion. Although the loan portfolio is diversified, its performance will beinfluenced by the economy of the region. 

Loan Quality and the Allowance for Loan Losses

    The allowance for loan losses (ALLL) represents an amount which managementbelieves to be adequate to absorb identified and inherent losses in the loanportfolio as of the balance sheet date. Valuation of the allowance is completedno less than quarterly. The determination of the allowance is inherentlysubjective as it relies on estimates of potential loss related to specificloans, the effects of portfolio trends, and other internal and external factors.    The ALLL consists of (i) formula-based reserves comprised of potential lossesin the balance of the loan portfolio segmented into homogeneous pools, (ii)specific reserves comprised of potential losses on loans that management hasidentified as impaired and (iii) unallocated reserves. Unallocated reserves arenot associated with a specific portfolio segment or a specific loan, but may beappropriate if properly supported and in accordance with GAAP.    The Company evaluates loan portfolio risk for the purpose of establishing anadequate allowance for loan losses. In determining an adequate level for theformula-based portion of the ALLL, management considers historical lossexperience for major types of loans. Homogenous categories of loans areevaluated based on loss experience in the most recent five years. Based on thisevaluation, management applies a formula to the current portfolio which givesweight to portfolio size and loss experience for categories of real estateconstruction loans, other real estate secured loans, other loans to commercialborrowers, and other consumer loans. However, historical data may not be anaccurate predictor of loss potential in the current loan portfolio.     Management also evaluates trends in delinquencies, the composition of theportfolio, concentrations of credit, and changes in lending products, processes,or staffing. Management further considers external factors such as the interestrate environment, competition, current local and national economic trends, andthe results of recent independent reviews by auditors and banking regulators.The protracted slow-down in the real-estate market has affected both the priceand time to market residential and commercial properties. Management closelymonitors such trends and the potential effect on the Company. Since thebeginning of the current adverse economic conditions in 2008, the Company hasexperienced historically high loan losses and provisions for loan losses.Management expects more loan losses in 2011.

 

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    Management employs a risk rating system which gives weight to collateralstatus (secured vs. unsecured), and to the absence or improper execution ofcritical contract or collateral documents. Unsecured loans and those loans withcritical documentation exceptions, as defined by management, are considered tohave greater loss exposure. Management incorporates these factors in theformula-based portion of the ALLL. Additionally, consideration is given to thosesegments of the loan portfolio which management deems to pose the greatestlikelihood of loss. A schedule of loans by credit quality indicator (riskrating) can be found in Note 4.    Management believes that in a general economic downturn, such as the regionhas experienced since mid-2008, the Bank’s greatest likelihood of loss is inunsecured loans - commercial and consumer, and in secured consumer loans.Reserves for these segments of the portfolio are included in the formula-basedportion of the ALLL. As of March 31, 2011, management reserved 125 bp againstunsecured loans, and consumer loans secured by other than real estate. Both ofthese reserves were increased during the first quarter of this year inrecognition of the prolonged economic challenges to regional, national, andglobal economies. Additionally, management reserved 10% against overdrawnchecking accounts which are a distinct high risk category of unsecured loan.     Borrowers whose cash flow is impaired as a result of prevailing economicconditions have also experienced depressed real estate values. Managementrecognizes that the combination of these circumstances – reduced revenue anddepressed collateral values, may increase the likelihood of loss in the Bank’sreal estate secured loan portfolio. Management closely monitors conditions thatmight indicate deterioration of collateral value on significant loans and, whenpossible, obtains additional collateral as required to limit the Bank’s lossexposure. The Bank expects commercial and consumer mortgage foreclosures tocontinue in 2011. Foreclosures may result in loan losses, costs to hold realestate acquired in foreclosure, and losses on the sale of real estate acquiredin foreclosure. While management is unable to predict the financial consequencesof future foreclosure activity, provision for loss on likely loan foreclosuresis included in specific reserves in the ALLL.    Historically, the absence or improper execution of a document has notresulted in a loss to the Bank, however, management recognizes that the Bank’sloss exposure is increased until a critical contract or collateral documentationexception is cured. At March 31, 2011, management reserved 10 bp against theoutstanding balances of loans identified as having critical documentationexceptions.    The provision for loan losses is a charge to earnings in the current periodto maintain the allowance at a level management has determined to beappropriate. The allowance is increased by current period provisions and byrecoveries of amounts previously charged-off. The allowance is decreased whenloans are charged-off as losses, which occurs when they are deemed to beuncollectible. Adjustments made to bring the balance in the allowance to thelevel established by management may result in an increase or decrease toexpense. A provision of $145,400 was made in the first quarter of 2011. Aprovision of $421,000 was made in the comparable period in 2010. Theyear-to-year increase in the level of the ALLL reflects the consequences of thecurrent economy. As the recession continues and borrowers’ suffer personal andprofessional financial hardship, the likelihood of loss on previously performingloans has increased. As Management identifies loans with heightened losspotential, a provision for those losses is recorded.     Management considers the March 31, 2011 allowance appropriate and adequate toabsorb identified and inherent losses in the loan portfolio. As of March 31,2011, management has not identified any loans which are anticipated to be whollycharged-off within the next 12 months. However, there can be no assurance thatcharge-offs in future periods will not exceed the allowance for loan losses orthat additional increases in the loan loss allowance will not be required.

 

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    The Bank experienced net charge-offs of $370,411 in the first quarter of 2010and $8,286 in the current year to date. In 2010, a loss of $347,214 wasattributable to a single unsecured commercial line of credit. Management expectsloan losses to continue throughout 2011, as reflected in the elevated level ofthe ALLL. See Note 4 for a schedule of transactions in the allowance for loanlosses.     The accrual of interest on a loan is discontinued when principal or interestis ninety days past due or when the loan is determined to be impaired, unlesscollateral is sufficient to discharge the debt in full and the loan is inprocess of collection. When a loan is placed in nonaccruing status, any interestpreviously accrued but unpaid, is reversed from interest income. Interestpayments received on nonaccrual loans may be recorded as cash basis income, oras a reduction of principal, depending on management’s judgment on a loan byloan basis. Accrual of interest may be restored when all principal and interestare current and management believes that future payments will be received inaccordance with the loan agreement.    Nonperforming loans are loans past due 90 or more days and still accruingplus nonaccrual loans. Nonperforming assets are comprised of nonperforming loanscombined with real estate acquired in foreclosure and held for sale.Nonperforming assets increased $54,665 (.98%) from December 31, 2010 to March31, 2011. See Note 4 for additional information about nonperforming assets.    Loans are considered impaired when management considers it unlikely thatcollection of principal and interest payments will be made according tocontractual terms. A performing loan may be categorized as impaired based onknowledge of circumstances that are deemed relevant to loan collection,including deterioration of the borrower’s financial condition or devaluation ofcollateral. Not all impaired loans are past due nor are losses expected forevery impaired loan.    Impaired loans may have specific reserves, or valuation allowances, allocatedto them in the ALLL. Estimates of loss reserves on impaired loans may bedetermined based on any of the three following measurement methods which conformto authoritative accounting guidance: (1) the present value of future cashflows, (2) the fair value of collateral, if repayment of the loan is expected tobe provided by underlying collateral, or (3) the loan’s observable fair value.The Bank selects and applies, on a loan-by-loan basis, the appropriate valuationmethod. Loans determined to be impaired, but for which no specific valuationallowance is made because management believes the loan is secured with adequatecollateral or the Bank will not take a loss on such loan, are grouped with otherhomogeneous loans for evaluation under formula-based criteria describedpreviously. Impaired loans including nonaccruing loans totaled $4,918,483 and$4,106,521 at March 31, 2011, and December 31, 2010, respectively. See Note 4for additional information about impaired loans.

 

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Liquidity

    Liquidity represents the ability to provide steady sources of funds for loancommitments and investment activities, as well as to provide sufficient funds tocover deposit withdrawals and payment of debt and operating obligations. Thesefunds can be obtained by converting assets to cash or by attracting newdeposits. The Company’s major sources of liquidity are loan repayments,maturities of short-term investments including federal funds sold, and increasesin core deposits. Funds from seasonal deposits are generally invested inshort-term U.S. Treasury Bills and overnight federal funds.     Due to its location in a seasonal resort area, the Bank typically experiencesa decline in deposits, federal funds sold and investment securities throughoutthe first quarter of the year when business customers are using their depositsto meet cash flow needs. Beginning late in the second quarter and throughout thethird quarter, additional sources of liquidity become more readily available asbusiness borrowers start repaying loans, and the Bank receives deposits fromseasonal business customers, summer residents and tourists.     Average liquid assets (cash and amounts due from banks, interest-bearingdeposits in other banks, federal funds sold, and investment securities) comparedto average deposits and retail repurchase agreements were 45.26% for the firstquarter of 2011 compared to 40.21% for the same quarter of 2010.    The Company has available lines of credit, including overnight federal fundsand reverse repurchase agreements, totaling $28,000,000 as of March 31, 2011.    Average net loans to average deposits were 73.89% versus 79.47% as of March31, 2011 and 2010, respectively. Average net loans decreased by 1.58% whileaverage deposits grew by 5.85%. Deposit increases were generally reinvested inovernight federal funds sold and investment securities. Average deposit balanceincreases occurred in all categories of deposits except time deposits. Whenmarket interest rates are very low, as they have been since late 2008, investorsmay prefer to remain more liquid by moving funds into NOW or money marketaccounts. This allows them to be able to act on an opportunity for higherearnings without waiting for a time deposit to mature. Resulting changes indeposit portfolio composition do not have a negative impact on the Company’sability to meet liquidity demands.

 

Interest Rate Sensitivity

    The primary objective of asset/liability management is to ensure the steadygrowth of the Company's primary source of earnings, net interest income. Netinterest income can fluctuate with significant interest rate movements. Tolessen the impact of these margin swings, the balance sheet should be structuredso that repricing opportunities exist for both assets and liabilities in roughlyequivalent amounts at approximately the same time intervals. Imbalances in theserepricing opportunities at any point in time constitute interest ratesensitivity.    Interest rate sensitivity refers to the responsiveness of interest-bearingassets and liabilities to changes in market interest rates. The rate-sensitiveposition, or gap, is the difference in the volume of rate-sensitive assets andliabilities at a given time interval. The general objective of gap management isto actively manage rate-sensitive assets and liabilities to reduce the impact ofinterest rate fluctuations on the net interest margin. Management generallyattempts to maintain a balance between rate-sensitive assets and liabilities asthe exposure period is lengthened to minimize the overall interest rate risk tothe Company.    Interest rate sensitivity may be controlled on either side of the balancesheet. On the asset side, management exercises some control over maturities.Also, loans are written to provide repricing opportunities on fixed rate notes.The Company's investment portfolio, including federal funds sold, provides themost flexible and fastest control over rate sensitivity since it can generallybe restructured more quickly than the loan portfolio.    On the liability side, deposit products are structured to offer incentives toattain the maturity distribution desired. Competitive factors sometimes makecontrol over deposits more difficult and, therefore, less effective as aninterest rate sensitivity management tool.    The asset mix of the balance sheet is continually evaluated in terms ofseveral variables: yield, credit quality, appropriate funding sources, andliquidity. Management of the liability mix of the balance sheet focuses onexpanding the various funding sources.    As of March 31, 2011, the Company was cumulatively asset-sensitive for alltime horizons. For asset-sensitive institutions, if interest rates shoulddecrease, the net interest margins should decline. Since all interest rates andyields do not adjust at the same velocity, the gap is only a general indicatorof rate sensitivity.

 

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Results of Operations

    Net income for the three months ended March 31, 2011***,***was$1,251,208 or $.42 per share, compared to $1,265,379 or $.42 per share for thefirst quarter of 2010. This represents a decrease of $14,171 or 1.12% from theprior year. The key components of net income are discussed in the followingparagraphs.     For the first quarter of 2011 compared to 2010, net interest income decreased$80,927 (2.10%). While balances of interest-bearing assets and liabilitiesincreased, lower yields caused overall reductions in both interest revenues andexpense. Although average total interest-earning assets increased $19.2 million(5.42%), decreased rates offset any revenue increases attributable to volume.Average interest-bearing liabilities increased $9.8 million (4.02%) whileexperiencing reduced related expense, again due to rate reductions.     The tax-equivalent quarterly yield on interest-earning assets decreased by 47basis points from 5.09% for first quarter 2010 to 4.62% in 2011. The quarterlyyield on interest-bearing liabilities decreased by 19 basis points from .84% in2010 to .65% in 2011. In combination, these shifts contribute to a decrease innet margin on interest-earning assets of 32 basis points.    The Company’s net interest income is one of the most important factors inevaluating its financial performance. Management uses interest rate sensitivityanalysis to determine the effect of rate changes. Net interest income isprojected over a one-year period to determine the effect of an increase ordecrease in the prime rate of 100 basis points. If prime were to decrease onehundred basis points, and all assets and liabilities maturing within that periodwere fully adjusted for the rate change, the Company would experience a decreaseof approximately 4.9% in net interest income. Conversely, if prime were toincrease one hundred basis points, and all assets and liabilities maturingwithin that period were fully adjusted for the rate change, the Company wouldexperience an increase in net interest income of the same percentage. Thesensitivity analysis does not consider the likelihood of these rate changes norwhether management’s reaction to this rate change would be to reprice its loansor deposits or both. 

 

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    The following table presents information including average balances ofinterest-earning assets and interest-bearing liabilities, the amount of relatedinterest income and interest expense, and the resulting yields by category ofinterest-earning asset and interest-bearing liability. In this table, dividendsand interest on tax-exempt securities and loans are reported on a fully taxableequivalent basis, which is a non-GAAP measure as defined in SEC Regulation G andItem 10 of SEC Regulation S-K. Management believes that these measures providebetter yield comparability as a tool for managing net interest income.
		Average Balances, Interest, and Yields		For the quarter ended		For the quarter ended		March 31, 2011		March 31, 2010		Average  		Average  		balance		Interest		Yield		balance		Interest		Yield      		Assets      		  Federal funds sold		 $   33,530,469 		 $        14,480 		0.18%		 $   29,389,496 		 $        11,956 		0.16%		  Interest-bearing deposits		      10,941,834 		           14,675 		0.54%		        9,956,179 		           19,496 		0.79%		  Investment securities		      88,884,897 		         289,164 		1.32%		      71,006,973 		         411,297 		2.35%		  Loans, net of allowance		    239,372,627 		      3,930,946 		6.66%		    243,207,854 		      3,992,843 		6.66%		    Total interest-earning assets		    372,729,827 		      4,249,265 		4.62%		    353,560,502 		      4,435,592 		5.09%		Noninterest-bearing cash		      15,298,687   		      15,383,108   		Other assets		      14,810,421   		      15,924,931   		        Total assets		 $ 402,838,935   		 $ 384,868,541         		Liabilities and Stockholders' Equity      		Interest-bearing deposits      		  NOW 		 $   59,716,925 		           51,333 		0.35%		 $   54,539,056 		           49,383 		0.37%		  Money market		      44,655,962 		           54,071 		0.49%		      36,294,849 		           44,647 		0.50%		  Savings		      47,721,463 		           40,663 		0.35%		      47,316,166 		           57,861 		0.50%		  Other time		      97,753,213 		         257,407 		1.07%		      99,652,437 		         347,969 		1.42%		    Total interest-bearing deposits		    249,847,563 		         403,474 		0.65%		    237,802,508 		         499,860 		0.85%		Securities sold under agreements to repurchase & federal funds purchased		        4,472,621 		             5,401 		0.49%		        6,652,091 		             8,152 		0.50%		Borrowed funds		                       - 		                     -  		             44,159 		                695 		6.38%		    Total interest-bearing liabilities		    254,320,184 		         408,875 		0.65%		    244,498,758 		         508,707 		0.84%		Noninterest-bearing deposits		      74,127,013   		      68,253,940   		    328,447,197 		         408,875 		0.50%		    312,752,698 		         508,707 		0.66%		Other liabilities		           346,740   		           504,585   		Stockholders' equity		      74,044,998   		      71,611,258   		        Total liabilities and      		        stockholders' equity		 $ 402,838,935   		 $ 384,868,541   		Net interest spread  		3.97%  		4.25%		Net interest income 		 $   3,840,390   		 $   3,926,885  		Net margin on interest-earning assets  		4.18%  		4.50%      		Tax equivalent adjustment in:      		    Investment income 		 $        21,855   		 $        35,075  		    Loan income 		 $        40,325   		 $        32,673  
 

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    Provisions for loan losses of $145,400 and $421,000 were recorded during thethree months ended March 31, 2011 and 2010, respectively. Net loans charged-offwere $8,286 and $370,411 during the first quarters of 2011 and 2010,respectively. Management expects additional losses to occur during 2011, andthose losses may be significant. Provisions for anticipated losses are includedin the ALLL. The decrease in loan losses from first quarter 2010 to 2011 resultsfrom the timing of events which trigger the recognition of loss. See LoanQuality and the Allowance for Loan Losses for a discussion of the provision forloan losses.    Noninterest revenue for the first quarter of 2011 is $189,240 (29.65%) lowerthan the comparable period last year. Non-recurring gains on sale of assets in2010 account for most of this variance. In 2010 the Bank liquidated an inventoryof old coin much of which has high precious metal content. Also, in the firstquarter of 2010, the Delaware Department of Transportation purchased a portionof the Company’s property in Ocean View for expansion of the adjacent highway.Gains on these two transactions comprised $143,315 of 2010 non-interest revenue.Included in miscellaneous revenue in 2010 were proceeds totaling $45,000 fromthe granting of easements related to the Ocean View roadway expansion.     Noninterest expense for the first quarter of 2011 is $19,604 (.94%), morethan last year. While most noninterest expense categories are slightly lower orflat, employee benefits increased by $111,766 (44.56%). The most significantincrease is in the cost of group insurance which increased $109,106 (78.60%).    Income taxes for the quarter ended March 31, 2011 are the same amount as lastyear, on a pre-tax income decrease of $14,171. This is consistent with theCompany’s effective tax rate of approximately 36.3%. 

Plans of Operation

    The Bank offers a full range of deposit services including checking, NOW,Money Market, and savings accounts, and time deposits including certificates ofdeposit. The transaction, savings, and certificate of deposit accounts aretailored to the Bank’s principal market areas at rates competitive to thoseoffered in the area. The Bank also offers Individual Retirement Accounts (IRA),Health Savings Accounts, and Education Savings Accounts. All deposits areinsured by the Federal Deposit Insurance Corporation (FDIC) up to the maximumamount allowed by law. The Bank solicits these accounts from individuals,businesses, associations and organizations, and governmental authorities. TheBank offers individual customers up to $50 million in FDIC insured depositsthrough the Certificate of Deposit Account Registry Services® network.     The Bank also offers a full range of short- to medium-term commercial andpersonal loans. Commercial loans include both secured and unsecured loans forworking capital (including inventory and receivables), business expansion(including acquisition of real estate and improvements), and purchase ofequipment and machinery. Consumer loans include secured and unsecured loans forfinancing automobiles, home improvements, education, and personal investments.The Bank originates commercial and residential mortgage loans and real estateconstruction and acquisition loans. These lending activities are subject to avariety of lending limits imposed by state and federal law. The Bank lends todirectors and officers of the Company and the Bank under terms comparable tothose offered to other borrowers entering into similar loan transactions. TheBoard of Directors approves all loans to officers and directors and reviewsthese loans every six months.    Other bank services include cash management services, 24-hour ATMs, debitcards, safe deposit boxes, travelers’ checks, direct deposit of payroll andsocial security funds, and automatic drafts for various accounts. The Bankoffers bank-by-phone and Internet banking services, including electronicbill-payment, to both commercial and retail customers. The Bank offers a remotecapture service that enables commercial customers to electronically capturecheck images and make on-line deposits. The Bank also offers non-depositinvestment products including retail repurchase agreements. 

 

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Capital Resources and Adequacy

    Total stockholders’ equity increased $1,034,018 from December 31, 2010 toMarch 31, 2011. This increase is attributable to comprehensive income recordedduring the period, as detailed in Note 2 of the Notes to Financial Statements.    Under the capital guidelines of the Federal Reserve Board and the FDIC, theCompany and Bank are currently required to maintain a minimum risk-based totalcapital ratio of 8%, with at least 4% being Tier 1 capital. Tier 1 capitalconsists of common stockholders' equity less accumulated other comprehensiveincome. In addition, the Company and the Bank must maintain a minimum Tier 1leverage ratio (Tier 1 capital to total assets) of at least 4%, but this minimumratio is increased by 100 to 200 basis points for other than the highest-ratedinstitutions.    Tier one risk-based capital ratios of the Company as of March 31, 2011 andDecember 31, 2010 were 32.3% and 33.0%, respectively. Both are substantially inexcess of regulatory minimum requirements. 

Website Access to SEC Reports

    The Bank maintains an Internet website at www.taylorbank.com.The Company’s periodic SEC reports, including annual reports on Form 10-K,quarterly reports on Form 10-Q, and current reports on Form 8-K, are accessiblethrough this website. Access to these filings is free of charge. The reports areavailable as soon as practicable after they are filed electronically with theSEC. 
 
**Item 3. Quantitative and Qualitative Disclosures About Market Risk
    The Company’s principal market risk exposure relates to interest rates oninterest-earning assets and interest-bearing liabilities. Unlike most industrialcompanies, the assets and liabilities of financial institutions such as theCompany and the Bank are primarily monetary in nature. Therefore, interest rateshave a more significant effect on the Company's performance than do the effectsof changes in the general rate of inflation and change in prices. In addition,interest rates do not necessarily move in the same direction or in the samemagnitude as the prices of goods and services. As discussed previously,management monitors and seeks to manage the relationships between interestsensitive assets and liabilities in order to protect against wide interest ratefluctuations, including those resulting from inflation.     At March 31, 2011, the Company’s interest rate sensitivity, as measured bygap analysis, showed the Company was asset-sensitive with a one-year cumulativegap of 21.83%, as a percentage of interest-earning assets. Generallyasset-sensitivity indicates that assets reprice more quickly than liabilitiesand in a rising rate environment net interest income typically increases.Conversely, if interest rates decrease, net interest income would decline. TheBank has classified its demand mortgage and commercial loans as immediatelyrepriceable. Unlike loans tied to prime, these rates do not necessarily changeas prime changes since the decision to call the loans or change the rates restswith management. 

 

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**Item 4. Controls and procedures
    Disclosure controls and procedures are designed and maintained by the Companyto ensure that information required to be disclosed in the Company’s publiclyfiled reports is recorded, processed, summarized and reported in a timelymanner. Such information must be available to management, including the ChiefExecutive Officer (CEO) and Treasurer, to allow them to make timely decisionsabout required disclosures. Even a well-designed and maintained control systemcan provide only reasonable, not absolute, assurance that its objectives areachieved. Inherent limitations in any system of controls include flawedjudgment, errors, omissions, or intentional circumvention of controls.    The Company’s management, including the CEO and Treasurer, performed anevaluation of the effectiveness of the design and operation of the Company’sdisclosure controls and procedures as of March 31, 2011. Based on thatevaluation, the Company’s management, including the CEO and Treasurer, hasconcluded that the Company’s disclosure controls and procedures are effective.The projection of an evaluation of controls to future periods is subject to therisk that procedures may become inadequate due to changes in conditionsincluding the degree of compliance with procedures.
**Changes in Internal Controls**
    During the quarter ended on the date of this report, there were nosignificant changes in the Company’s internal control over financial reportingthat have had or are reasonably likely to have a material effect on theCompany’s internal control over financial reporting. As of March 31, 2011, theCompany’s management, including the CEO and Treasurer, has concluded that theCompany’s internal controls over financial reporting are effective. 

 

 
**Part II. Other Information**
Item 1. Legal Proceedings   Not applicable

Item 1A. Risk Factors   The Company and the Bank are subject to various types of risk during thenormal conduct of business. There has been no material change in risk factors orlevels of risk as previously disclosed in Item 1A of the Company’s Annual Reporton Form 10-K for the year ended December 31, 2010.

 

 

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    Company publicly announced on August 14, 2003, that it wouldrepurchase up to 10% of its outstanding equity stock at that time. As of January1, 2005, and again on May 18, 2007, this plan was renewed by publicannouncement, making up to 10% of the Company’s outstanding equity stockavailable for repurchase at the time of each renewal. On January 13, 2010, aspart of its capital planning, the Board of Directors voted to temporarilysuspend the stock buy-back program. On February 9, 2011, the Board of Directorsvoted to suspend this program indefinitely.    There is no set expiration date for this program. No other stock repurchaseplan or program existed or exists simultaneously, nor has any other plan orprogram expired during the period covered by this table. Common sharesrepurchased under this plan are retired. From its inception through December 31,2009, 239,492 shares were retired under this program. No shares were retiredduring 2010 or year-to-date 2011. 
    The following table presents high and low bid information obtained from theOver the Counter Bulletin Board and from other trades known to management of theCompany. Because transactions in the Company’s common stock are infrequent andare often negotiated privately between the persons involved in thosetransactions, actual prices may be higher or lower than those included in thistable. Additionally, the number of shares traded at high or low prices may varysignificantly. There is no established public trading market in the stock, andthere is no likelihood that a trading market will develop in the near future.
 		2011 		2010		Sales price per share		High		Low 		High		Low		First quarter		 $          34.00 		 $          26.50  		 $          36.00 		 $          32.00 		Second quarter   		 $          42.00 		 $          29.00 		Third quarter   		 $          42.00 		 $          29.00 		Fourth quarter   		 $          40.00 		 $          26.00 
 

Item 3. Defaults Upon Senior Securities    Not applicable

Item 4. (Removed and Reserved)

Item 5. Other information		    There is no information required to be disclosed in a report on Form		8-K during the period covered by this report, which has not been		reported.

Item 6. Exhibits and Reports on Form 8-K		    a) Exhibits					        31. Certifications of Principal Executive Officer and					Principal Financial Officer pursuant to Section 302 of the					Sarbanes-Oxley Act of 2002.					        32. Certification of Principal Executive Officer and					Principal Financial Officer pursuant to Section 906 of the					Sarbanes-Oxley Act of 2002.

 

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Exhibit 31.1

Rule 13a-14(a) Certification of the Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Raymond M. Thompson, certify that:

I have reviewed this quarterly report on Form 10-Q of Calvin B. TaylorBankshares, Inc.;

1. Based on my knowledge, this report does not contain any untrue	statement of a material fact or omit to state a material fact necessary to	make the statements made, in light of the circumstances under which such	statements were made, not misleading with respect to the period covered by	this report;

2. Based on my knowledge, the financial statements, and other financial	information included in this report, fairly present in all material respects	the financial condition, results of operations and cash flows of the	registrant as of, and for, the periods presented in this report;

3. The registrant’s other certifying officer and I are responsible for	establishing and maintaining disclosure controls and procedures (as defined	in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over	financial reporting (as defined in Exchange Act Rules 13a-15(f) and	15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused			such disclosure controls and procedures to be designed under our			supervision, to ensure that material information relating to the			registrant, including its consolidated subsidiary, is made known to			us by others within those entities, particularly during the period			in which this report is being prepared;

b) designed such internal control over financial reporting, or			caused such internal control over financial reporting to be designed			under our supervision, to provide reasonable assurance regarding the			reliability of financial reporting and the preparation of financial			statements for external purposes in accordance with generally			accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure			controls and procedures and presented in this report our conclusions			about the effectiveness of the disclosure controls and procedures,			as of the end of the period covered by this report based on such			evaluation; and

d) disclosed in this report any change in the registrant’s			internal control over financial reporting that occurred during the			most recent fiscal quarter that has or is reasonably likely to			materially affect the registrant’s internal control over financial			reporting; and

4. The registrant’s other certifying officer and I have disclosed, based	on our most recent evaluation of internal control over financial reporting,	to the registrant’s auditors and the audit committee of the registrant’s	board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the			design or operation of internal control over financial reporting			which are reasonably likely to adversely affect the registrant’s			ability to record, process, summarize and report financial			information; and

b) any fraud, whether or not material, that involves management			or other employees who have a significant role in the registrant’s			internal control over financial reporting.
**Calvin B. Taylor Bankshares, Inc.**
Date: May 9, 2011
By: /s/ Raymond M. Thompson 			Raymond M. Thompson			Chief Executive Officer
 

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Exhibit 31.2

Rule 13a-14(a) Certification of the Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jennifer G. Hawkins, certify that:

I have reviewed this quarterly report on Form 10-Q of Calvin B. TaylorBankshares, Inc.;

1. Based on my knowledge, this report does not contain any untrue	statement of a material fact or omit to state a material fact necessary to	make the statements made, in light of the circumstances under which such	statements were made, not misleading with respect to the period covered by	this report;

2. Based on my knowledge, the financial statements, and other financial	information included in this report, fairly present in all material respects	the financial condition, results of operations and cash flows of the	registrant as of, and for, the periods presented in this report;

3. The registrant’s other certifying officers and I are responsible for	establishing and maintaining disclosure controls and procedures (as defined	in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over	financial reporting (as defined in Exchange Act Rules 13a-15(f) and	15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused			such disclosure controls and procedures to be designed under our			supervision, to ensure that material information relating to the			registrant, including its consolidated subsidiary, is made known to			us by others within those entities, particularly during the period			in which this report is being prepared;

b) designed such internal control over financial reporting, or			caused such internal control over financial reporting to be designed			under our supervision, to provide reasonable assurance regarding the			reliability of financial reporting and the preparation of financial			statements for external purposes in accordance with generally			accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure			controls and procedures and presented in this report our conclusions			about the effectiveness of the disclosure controls and procedures,			as of the end of the period covered by this report based on such			evaluation; and

d) disclosed in this report any change in the registrant’s			internal control over financial reporting that occurred during the			most recent fiscal quarter that has or is reasonably likely to			materially affect the registrant’s internal control over financial			reporting; and

4. The registrant’s other certifying officers and I have disclosed, based	on our most recent evaluation of internal control over financial reporting,	to the registrant’s auditors and the audit committee of the registrant’s	board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the			design or operation of internal control over financial reporting			which are reasonably likely to adversely affect the registrant’s			ability to record, process, summarize and report financial			information; and

b) any fraud, whether or not material, that involves management			or other employees who have a significant role in the registrant’s			internal control over financial reporting.
**Calvin B. Taylor Bankshares, Inc.**
Date: May 9, 2011
By: /s/ Jennifer G. Hawkins 			Jennifer G. Hawkins			Treasurer (Principal Financial & Accounting Officer)
 

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 Exhibit 31.2Exhibit 32Certification - Pursuant to 18 U.S.C. 1350(Section 906 of the Sarbanes-Oxley Act of 2002)

We, the undersigned, certify that to the best of our knowledge, based upon areview of the Quarterly Report on Form 10-Q for the period ended March 31, 2011,of Calvin B. Taylor Bankshares, Inc:

(1) The referenced report fully complies with the requirements of			Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as			amended; and

(2) The information contained in the Report fairly presents, in			all material respects, the financial condition and results of			operations of the Registrant.

 
**Calvin B. Taylor Bankshares, Inc.**
Date: May 9, 2011
By: /s/ Raymond M. Thompson 			Raymond M. Thompson			Chief Executive Officer
By: /s/ Jennifer G. Hawkins 			Jennifer G. Hawkins			Treasurer (Principal Financial & Accounting Officer)
 

 

 

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SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.
** 

Calvin B. Taylor Bankshares, Inc.

Date: May 9, 2011
By: /s/ Raymond M. Thompson 			Raymond M. Thompson			Chief Executive Officer
By: /s/ Jennifer G. Hawkins 			Jennifer G. Hawkins			Treasurer (Principal Financial & Accounting Officer)
 

 

 

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