EXHIBIT 99.1
  GEORGIA-CAROLINA BANCSHARES, INC.
 Financial Statements
 For the Years Ended December 31, 2009, 2008 and 2007




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GEORGIA-CAROLINA BANCSHARES, INC.
 Table of Contents
 Financial Statements
 For the Years Ended December 31, 2009, 2008 and 2007
 PageReport of Independent Registered Public Accounting Firm
    
    
    1Consolidated Statements of Financial Condition
    
    
    2Consolidated Statements of Income
    
    
    3Consolidated Statements of Comprehensive Income
    
    
    4Consolidated Statements of Shareholders Equity
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    7-41




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Report of Independent Registered Public Accounting Firm




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GEORGIA-CAROLINA BANCSHARES, INC.
 Consolidated Statements of Financial Condition
 December 31, 2009 and 2008  (dollars in thousands, except per share amounts)
 2009
    
    
    2008AssetsCash and due from banks
    
    $
    13,055
    
    
    $
    9,954Federal funds sold
    
    
    3,175
    
    
    
    Securities available-for-sale
    
    
    44,461
    
    
    
    57,594Loans, net of allowance for loan losses of $5,072 and $4,284, respectively
    
    
    331,777
    
    
    
    332,009Loans held for sale
    
    
    58,135
    
    
    
    28,402Bank premises and fixed assets
    
    
    9,654
    
    
    
    10,081Accrued interest receivable
    
    
    1,851
    
    
    
    1,934Foreclosed real estate, net of allowance
    
    
    4,466
    
    
    
    7,217Deferred tax asset, net
    
    
    1,018
    
    
    
    996Federal Home Loan Bank stock
    
    
    2,828
    
    
    
    2,201Bank-owned life insurance
    
    
    8,812
    
    
    
    8,402Other assets
    
    
    4,781
    
    
    
    2,038Total assets
    
    $
    484,013
    
    
    $
    460,828Liabilities and Shareholders EquityLiabilitiesDepositsNon-interest bearing
    
    $
    41,787
    
    
    $
    34,121Interest-bearing:NOW accounts
    
    
    36,395
    
    
    
    37,373Savings
    
    
    51,424
    
    
    
    55,426Money market accounts
    
    
    19,232
    
    
    
    9,772Time deposits of $100,000 or more
    
    
    179,123
    
    
    
    170,878Other time deposits
    
    
    77,279
    
    
    
    69,439Total deposits
    
    
    405,240
    
    
    
    377,009Federal funds purchased
    
    
    
    
    
    
    1,148Federal Home Loan Bank borrowings
    
    
    3,600
    
    
    
    6,000Deposit agreements
    
    
    3,697
    
    
    
    8,611Current portion of long-term debt
    
    
    
    
    
    
    100Long-term debt
    
    
    25,000
    
    
    
    25,400Other liabilities
    
    
    3,203
    
    
    
    3,476Total liabilities
    
    
    440,740
    
    
    
    421,744Shareholders equityPreferred stock, par value $.001; 1,000,000 shares
authorized; none issued
    
    
    
    
    
    
    Common stock, par value $.001; 9,000,000 shares
authorized; 3,499,477 and 3,456,816 shares issued and
outstanding, respectively
    
    
    4
    
    
    
    4Additional paid-in capital
    
    
    15,567
    
    
    
    15,268Retained earnings
    
    
    27,355
    
    
    
    23,604Accumulated other comprehensive income
    
    
    347
    
    
    
    208Total shareholders equity
    
    
    43,273
    
    
    
    39,084Total liabilities and shareholders equity
    
    $
    484,013
    
    
    $
    460,828
   2




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GEORGIA-CAROLINA BANCSHARES, INC.
 Consolidated Statements of Income
 For the Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands, except per share amounts)
 2009
    
    
    2008
    
    
    2007Interest incomeInterest and fees on loans
    
    $
    22,260
    
    
    $
    23,186
    
    
    $
    25,998Interest on taxable securities
    
    
    1,925
    
    
    
    2,763
    
    
    
    2,490Interest on nontaxable securities
    
    
    412
    
    
    
    337
    
    
    
    270Interest on Federal funds sold and cash in banks
    
    
    7
    
    
    
    85
    
    
    
    261Total interest income
    
    
    24,604
    
    
    
    26,371
    
    
    
    29,019Interest expenseInterest on time deposits of $100,000 or more
    
    
    5,415
    
    
    
    6,414
    
    
    
    6,687Interest on other deposits
    
    
    3,330
    
    
    
    5,536
    
    
    
    8,227Interest on funds purchased and other borrowings
    
    
    977
    
    
    
    1,088
    
    
    
    792Total interest expense
    
    
    9,722
    
    
    
    13,038
    
    
    
    15,706Net interest income
    
    
    14,882
    
    
    
    13,333
    
    
    
    13,313Provision for loan losses
    
    
    3,082
    
    
    
    1,456
    
    
    
    909Net interest income after
provision for loan losses
    
    
    11,800
    
    
    
    11,877
    
    
    
    12,404Non-interest incomeService charges on deposits
    
    
    1,496
    
    
    
    1,338
    
    
    
    1,273Gain on sale of mortgage loans
    
    
    9,735
    
    
    
    7,152
    
    
    
    7,762Other income
    
    
    2,926
    
    
    
    1,430
    
    
    
    897Total non-interest income
    
    
    14,157
    
    
    
    9,920
    
    
    
    9,932Non-interest expenseSalaries and employee benefits
    
    
    12,776
    
    
    
    10,958
    
    
    
    11,131Occupancy expenses
    
    
    1,516
    
    
    
    1,546
    
    
    
    1,523Other expenses
    
    
    6,610
    
    
    
    5,241
    
    
    
    5,162Total non-interest expense
    
    
    20,902
    
    
    
    17,745
    
    
    
    17,816Income before income taxes
    
    
    5,055
    
    
    
    4,052
    
    
    
    4,520Income tax expense
    
    
    1,303
    
    
    
    1,252
    
    
    
    1,619Net income
    
    $
    3,752
    
    
    $
    2,800
    
    
    $
    2,901Earnings per shareBasic
    
    $
    1.08
    
    
    $
    .82
    
    
    $
    .85Diluted
    
    $
    1.07
    
    
    $
    .80
    
    
    $
    .83
   3




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GEORGIA-CAROLINA BANCSHARES, INC.
 Consolidated Statements of Comprehensive Income
 For the Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands)
 2009
    
    
    2008
    
    
    2007Net income
    
    $
    3,752
    
    
    $
    2,800
    
    
    $
    2,901Unrealized holding gain (loss) arising during the
period, net of tax
    
    
    139
    
    
    
    (7
    )
    
    
    496Comprehensive income
    
    $
    3,891
    
    
    $
    2,793
    
    
    $
    3,397
   4




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GEORGIA-CAROLINA BANCSHARES, INC.
 Consolidated Statements of Shareholders Equity
 For the Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands)
 AccumulatedCommon
    
    
    Common
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    TotalStock
    
    
    Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Par Value
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    EquityBalance at January 1, 2007
    
    
    3,376,522
    
    
    $
    4
    
    
    $
    14,500
    
    
    $
    17,903
    
    
    $
    (281
    )
    
    $
    32,126Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,901
    
    
    
    
    
    
    
    2,901Change in unrealized gain (loss) on securities
available-for-sale, net of deferred taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    496
    
    
    
    496Proceeds from exercise of stock options
    
    
    8,500
    
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    33Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226Issuance of stock for compensation
    
    
    13,701
    
    
    
    
    
    
    
    189
    
    
    
    
    
    
    
    
    
    
    
    189Balance at December 31, 2007
    
    
    3,398,723
    
    
    
    4
    
    
    
    14,948
    
    
    
    20,804
    
    
    
    215
    
    
    
    35,971Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,800
    
    
    
    
    
    
    
    2,800Change in unrealized gain (loss) on securities
available-for-sale, net of deferred taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    (7
    )Proceeds from exercise of stock options
    
    
    43,133
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    21Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    134Issuance of stock for compensation
    
    
    14,960
    
    
    
    
    
    
    
    165
    
    
    
    
    
    
    
    
    
    
    
    165Balance at December 31, 2008
    
    
    3,456,816
    
    
    
    4
    
    
    
    15,268
    
    
    
    23,604
    
    
    
    208
    
    
    
    39,084Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,752
    
    
    
    
    
    
    
    3,752Change in unrealized gain (loss) on securities
available-for-sale, net of deferred taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    139Proceeds from exercise of stock options
    
    
    21,103
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    52Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    80Issuance of stock for compensation
    
    
    21,558
    
    
    
    
    
    
    
    167
    
    
    
    (1
    )
    
    
    
    
    
    
    166Balance at December 31, 2009
    
    
    3,499,477
    
    
    $
    4
    
    
    $
    15,567
    
    
    $
    27,355
    
    
    $
    347
    
    
    $
    43,273
   5




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GEORGIA-CAROLINA BANCSHARES, INC.
 Consolidated Statements of Cash Flows
 For the Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands)
 2009
    
    
    2008
    
    
    2007Cash flows from operating activitiesNet income
    
    $
    3,752
    
    
    $
    2,800
    
    
    $
    2,901Adjustments to reconcile net income to net
cash provided by (used in) operating activities:Depreciation and amortization
    
    
    677
    
    
    
    723
    
    
    
    752Provision for loan losses
    
    
    3,082
    
    
    
    1,456
    
    
    
    909Gains on sales of foreclosed real estate
    
    
    (1,764
    )
    
    
    (13
    )
    
    
    (33
    )(Gains) losses on sales of premises and equipment
    
    
    
    
    
    
    (1
    )
    
    
    32Increase in cash value of bank-owned life insurance
    
    
    (410
    )
    
    
    (316
    )
    
    
    (86
    )Stock-based compensation expense
    
    
    80
    
    
    
    134
    
    
    
    226Stock compensation
    
    
    166
    
    
    
    165
    
    
    
    189Deferred income tax
    
    
    (245
    )
    
    
    323
    
    
    
    (234
    )Net originations, proceeds and gain
on loans held for sale
    
    
    (29,733
    )
    
    
    11,145
    
    
    
    17,211(Increase) decrease in accrued interest receivable
    
    
    83
    
    
    
    181
    
    
    
    (377
    )Increase (decrease) in accrued interest payable
    
    
    (721
    )
    
    
    (1,110
    )
    
    
    54Net change in other assets and liabilities
    
    
    (2,386
    )
    
    
    226
    
    
    
    (8,384
    )Net cash provided by (used in) operating activities
    
    
    (27,419
    )
    
    
    15,713
    
    
    
    13,160Cash flows from investing activities(Increase) decrease in Federal funds sold
    
    
    (3,175
    )
    
    
    
    
    
    
    1,182Loan originations and collections, net
    
    
    (9,187
    )
    
    
    (24,983
    )
    
    
    (42,690
    )Purchases of available-for-sale securities
    
    
    (16,183
    )
    
    
    (27,262
    )
    
    
    (18,876
    )Proceeds from maturities and calls of
available-for-sale securities
    
    
    29,533
    
    
    
    28,564
    
    
    
    14,017Purchases of restricted securities
    
    
    (1,995
    )
    
    
    (4,816
    )
    
    
    (4,248
    )Proceeds from sales of restricted securities
    
    
    1,368
    
    
    
    4,102
    
    
    
    4,892Proceeds from sale of foreclosed real estate
    
    
    10,852
    
    
    
    1,939
    
    
    
    1,285Net additions to premises and equipment
    
    
    (145
    )
    
    
    (266
    )
    
    
    (456
    )Net cash provided by (used in) investing activities
    
    
    11,068
    
    
    
    (22,722
    )
    
    
    (44,894
    )Cash flows from financing activitiesIncrease (decrease) in deposits
    
    
    28,231
    
    
    
    (2,957
    )
    
    
    38,624Increase (decrease) in FHLB borrowings
    
    
    (2,400
    )
    
    
    14,657
    
    
    
    (15,485
    )Increase (decrease) in repurchase agreements
and other borrowings
    
    
    (6,431
    )
    
    
    (1,502
    )
    
    
    4,197Proceeds from stock options exercised
    
    
    52
    
    
    
    21
    
    
    
    33Net cash provided by financing activities
    
    
    19,452
    
    
    
    10,219
    
    
    
    27,369Net increase (decrease) in cash and due from banks
    
    
    3,101
    
    
    
    3,210
    
    
    
    (4,365
    )Cash and due from banks at beginning of the year
    
    
    9,954
    
    
    
    6,744
    
    
    
    11,109Cash and due from banks at end of the year
    
    $
    13,055
    
    
    $
    9,954
    
    
    $
    6,744
   6




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
 Nature of business
   Significant accounting policies
 Basis of presentation
 Estimates
 Significant concentrations of credit risk
  7




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
 Significant concentrations of deposit risk
 Cash and due from banks
 Investment securities
 Securities available-for-sale
       8




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
 Loans and interest income
  Derivatives and Hedging.
    9




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
   Allowance for loan losses
 Foreclosed real estate
 Bank premises and equipment
 Financial instruments
 Bank-owned life insurance (BOLI) Investments in Insurance Contracts.
  10




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
 Income taxes Income Taxes,
 Earnings per share Earnings Per Share.
 Fair value of financial instruments
  Cash and due from banks, Federal funds sold, and interest-bearing deposits in banks
 Available-for-sale securities
 Loans
  11




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Summary of significant accounting policies
 Deposit liabilities, other borrowings, and retail agreements
  Comprehensive income
 Stock-based compensation Compensation-Stock Compensation,
 Recently issued accounting standards
 Measuring Liabilities
at Fair Value, Fair Value Measurements and Disclosures.
  12




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Recently issued accounting standards
 Generally
Accepted Accounting Principles. The Hierarchy of Generally Accepted Accounting
Principles
 Fair Value Measurements and Disclosures,
 Investments-Debt and Equity Securities.
 Financial Instruments,
  13




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Recently issued accounting standards
 Fair Value Measurements and Disclosures, Accounting Changes and Error Corrections
 Derivatives and Hedging,
 Derivatives and Hedging,
 Transfers and Servicing,
  14




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 1Recently issued accounting standards
  Note 2Cash and due from banks
  Note 3Investment securities
  2009Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(in thousands)Available-for-sale securities:U.S. Government and agency
    
    $
    10,501
    
    
    $
    151
    
    
    $
    
    
    
    $
    10,652Mortgage-backed
    
    
    23,446
    
    
    
    680
    
    
    
    (222
    )
    
    
    23,904Corporate obligations
    
    
    195
    
    
    
    
    
    
    
    (73
    )
    
    
    122State and municipal
    
    
    9,776
    
    
    
    134
    
    
    
    (127
    )
    
    
    9,783Total
    
    $
    43,918
    
    
    $
    965
    
    
    $
    (422
    )
    
    $
    44,461
  15




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 3Investment securities
 2008Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(in thousands)Available-for-sale securities:U.S. Government and agency
    
    $
    26,690
    
    
    $
    640
    
    
    $
    
    
    
    $
    27,330Mortgage-backed
    
    
    19,899
    
    
    
    423
    
    
    
    (132
    )
    
    
    20,190Corporate obligations
    
    
    194
    
    
    
    
    
    
    
    (44
    )
    
    
    150State and municipal
    
    
    10,482
    
    
    
    30
    
    
    
    (588
    )
    
    
    9,924Total
    
    $
    57,265
    
    
    $
    1,093
    
    
    $
    (764
    )
    
    $
    57,594
  SecuritiesAvailable-for-SaleAmortized
    
    
    FairCost
    
    
    Value(in thousands)Less than one year
    
    $
    335
    
    
    $
    340One to five years
    
    
    2,345
    
    
    
    2,378Five to ten years
    
    
    6,032
    
    
    
    5,930Over ten years
    
    
    11,760
    
    
    
    11,909Mortgage-backed securities
    
    
    23,446
    
    
    
    23,904Total
    
    $
    43,918
    
    
    $
    44,461
    16




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GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 3Investment securities
  2009Less than
    
    
    OverTwelve Months
    
    
    Twelve MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value(In thousands)Securities available-for-sale:U. S. agency
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    State and municipal
    
    
    (1
    )
    
    
    197
    
    
    
    (126
    )
    
    
    1,426Corporate obligations
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    122Mortgage-backed
    
    
    (170
    )
    
    
    7,019
    
    
    
    (52
    )
    
    
    763Total
    
    $
    (171
    )
    
    $
    7,216
    
    
    $
    (251
    )
    
    $
    2,311
 2008Less than
    
    
    OverTwelve Months
    
    
    Twelve MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    FairLosses
    
    
    Value
    
    
    Losses
    
    
    Value(In thousands)Securities available-for-sale:U. S. agency
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    State and municipal
    
    
    (400
    )
    
    
    6,440
    
    
    
    (188
    )
    
    
    742Corporate obligations
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    150Mortgage-backed
    
    
    (131
    )
    
    
    4,224
    
    
    
    (1
    )
    
    
    728Total
    
    $
    (531
    )
    
    $
    10,664
    
    
    $
    (233
    )
    
    $
    1,620
  17




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 3Investment securities
    Note 4Loans
  2009
    
    
    2008(in thousands)Commercial and industrial
    
    $
    22,906
    
    
    $
    31,173Real estate  construction
    
    
    107,429
    
    
    
    105,032Real estate  residential
    
    
    66,050
    
    
    
    65,958Real estate  commercial
    
    
    133,140
    
    
    
    125,194Consumer
    
    
    7,468
    
    
    
    9,092336,993
    
    
    
    336,449Deferred loan fees
    
    
    (144
    )
    
    
    (156
    )336,849
    
    
    
    336,293Allowance for loan losses
    
    
    (5,072
    )
    
    
    (4,284
    )Loans, net
    
    $
    331,777
    
    
    $
    332,009
  18




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 4Loans
  2009
    
    
    2008
    
    
    2007Balance at beginning of the year
    
    $
    4,284
    
    
    $
    5,059
    
    
    $
    4,386Provision charged to operations
    
    
    3,082
    
    
    
    1,456
    
    
    
    909Recoveries
    
    
    48
    
    
    
    33
    
    
    
    52Loans charged off
    
    
    (2,342
    )
    
    
    (2,264
    )
    
    
    (288
    )Balance at end of the year
    
    $
    5,072
    
    
    $
    4,284
    
    
    $
    5,059
    19




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 4Loans
  2009
    
    
    2008(in thousands)Balance at beginning of the year
    
    $
    14,086
    
    
    $
    4,061Advances
    
    
    8,136
    
    
    
    10,921Repayments
    
    
    (8,402
    )
    
    
    (896
    )Balance at end of the year
    
    $
    13,820
    
    
    $
    14,086
 Note 5Foreclosed real estate
  2009
    
    
    2008(in thousands)Carrying amount of property
    
    $
    4,466
    
    
    $
    7,217Less: valuation allowance
    
    
    
    
    
    
    Balance at end of the year
    
    $
    4,466
    
    
    $
    7,217
  Note 6Bank premises and equipment
  2009
    
    
    2008(in thousands)Land and improvements
    
    $
    3,844
    
    
    $
    3,844Building and improvements
    
    
    6,331
    
    
    
    6,321Equipment, furniture and fixtures
    
    
    4,682
    
    
    
    4,58314,857
    
    
    
    14,748Less: accumulated depreciation
    
    
    (5,203
    )
    
    
    (4,667
    )Premises and equipment, net
    
    $
    9,654
    
    
    $
    10,081
   20




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 7Deposits
  2009
    
    
    2008(in thousands)One year or less
    
    $
    178,185
    
    
    $
    215,172Over one year through three years
    
    
    76,829
    
    
    
    24,245Over three years
    
    
    1,388
    
    
    
    900Balance at end of the year
    
    $
    256,402
    
    
    $
    240,317
  Note 8Federal Home Loan Bank advances
   21




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 9Line of credit
  Note 10Employee benefit plan
  Note 11Shareholders equity and regulatory requirements
    22




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
    Required to BeWell-CapitalizedRequired for
    
    
    Under PromptCapital Adequacy
    
    
    Corrective ActionActual
    
    
    Purposes
    
    
    ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2009:Total capital (to risk
weighted assets)Bank
    
    $
    47,782
    
    
    
    11.69
    %
    
    $
    32,698
    
    
    
    8.0
    %
    
    $
    40,872
    
    
    
    10.0
    %Consolidated
    
    $
    47,997
    
    
    
    11.74
    %
    
    $
    32,698
    
    
    
    8.0
    %
    
    $
    40,872
    
    
    
    10.0
    %Tier 1 capital (to risk
weighted assets)Bank
    
    $
    42,710
    
    
    
    10.45
    %
    
    $
    16,349
    
    
    
    4.0
    %
    
    $
    24,523
    
    
    
    6.0
    %Consolidated
    
    $
    42,926
    
    
    
    10.50
    %
    
    $
    16,349
    
    
    
    4.0
    %
    
    $
    24,523
    
    
    
    6.0
    %Tier 1 leverage (to
average assets)Bank
    
    $
    42,710
    
    
    
    8.91
    %
    
    $
    19,164
    
    
    
    4.0
    %
    
    $
    23,955
    
    
    
    5.0
    %Consolidated
    
    $
    42,926
    
    
    
    8.96
    %
    
    $
    19,164
    
    
    
    4.0
    %
    
    $
    23,956
    
    
    
    5.0
    %
  23




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
 Required to BeWell-CapitalizedRequired for
    
    
    Under PromptCapital Adequacy
    
    
    Corrective ActionActual
    
    
    Purposes
    
    
    ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2008:Total capital (to risk
weighted assets)Bank
    
    $
    43,075
    
    
    
    10.66
    %
    
    $
    32,323
    
    
    
    8.0
    %
    
    $
    40,404
    
    
    
    10.0
    %Consolidated
    
    $
    43,158
    
    
    
    10.68
    %
    
    $
    32,323
    
    
    
    8.0
    %
    
    $
    40,404
    
    
    
    10.0
    %Tier 1 capital (to risk
weighted assets)Bank
    
    $
    38,791
    
    
    
    9.60
    %
    
    $
    16,161
    
    
    
    4.0
    %
    
    $
    24,242
    
    
    
    6.0
    %Consolidated
    
    $
    38,875
    
    
    
    9.62
    %
    
    $
    16,161
    
    
    
    4.0
    %
    
    $
    24,242
    
    
    
    6.0
    %Tier 1 leverage (to
average assets)Bank
    
    $
    38,791
    
    
    
    8.61
    %
    
    $
    18,016
    
    
    
    4.0
    %
    
    $
    22,519
    
    
    
    5.0
    %Consolidated
    
    $
    38,875
    
    
    
    8.63
    %
    
    $
    18,016
    
    
    
    4.0
    %
    
    $
    22,520
    
    
    
    5.0
    %
     24




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
 Compensation-Stock Compensation,
   2009
    
    2008
    
    2007Expected volatility
    
    66.8%  95.7%
    
    37.4%  37.6%
    
    40.8%  40.8%Weighted-average volatility
    
    78.20%
    
    37.53%
    
    40.75%Expected dividends
    
    0%
    
    0%
    
    0%Expected term (in years)
    
    7.0  7.0
    
    7.0  7.0
    
    7.0  7.0Risk-free rate
    
    3.00%
    
    3.30%
    
    4.73%
   25




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
    WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at January 1, 2009
    
    
    286,875
    
    
    $
    9.18Granted
    
    
    25,613
    
    
    
    8.06Exercised
    
    
    (27,700
    )
    
    
    (3.79
    )Forfeited or expired
    
    
    (10,900
    )
    
    
    (7.43
    )Outstanding at December 31, 2009
    
    
    273,888
    
    
    $
    9.69
    
    
    
    4.43
    
    
    $
    267,086Exercisable at December 31, 2009
    
    
    217,894
    
    
    $
    9.44
    
    
    
    3.48
    
    
    $
    265,265
  26




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
 WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at January 1, 2008
    
    
    324,441
    
    
    $
    7.99Granted
    
    
    23,934
    
    
    
    10.85Exercised
    
    
    (61,500
    )
    
    
    (3.56
    )Forfeited or expired
    
    
    
    
    
    
    Outstanding at December 31, 2008
    
    
    286,875
    
    
    $
    9.18
    
    
    
    4.43
    
    
    $
    810,279Exercisable at December 31, 2008
    
    
    237,294
    
    
    $
    8.35
    
    
    
    3.70
    
    
    $
    810,279
   2009
    
    
    2008
    
    
    2007Weighted-average grant date fair value
    
    $
    5.70
    
    
    $
    4.86
    
    
    $
    7.30Total intrinsic value of options exercised
    
    $
    94,583
    
    
    $
    396,161
    
    
    $
    60,265
  27




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
  WeightedAverageGrant-DateNonvested Shares
    
    Shares
    
    
    Fair ValueNonvested at January 1, 2009
    
    
    49,581
    
    
    $
    6.36Granted
    
    
    25,613
    
    
    
    5.70Vested
    
    
    (15,200
    )
    
    
    7.14Forfeited
    
    
    (4,000
    )
    
    
    7.43Nonvested at December 31, 2009
    
    
    55,994
    
    
    $
    5.82
 WeightedAverageGrant-DateNonvested Shares
    
    Shares
    
    
    Fair ValueNonvested at January 1, 2008
    
    
    40,455
    
    
    $
    7.67Granted
    
    
    23,934
    
    
    
    4.86Vested
    
    
    (14,808
    )
    
    
    7.51Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2008
    
    
    49,581
    
    
    $
    6.36
   28




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 11Shareholders equity and regulatory requirements
  2009Income
    
    
    Shares
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Share(dollars in thousands, except per share)Basic EPSIncome available to common stockholders
    
    $
    3,752
    
    
    
    3,484,309
    
    
    $
    1.08Effect of stock options outstanding
    
    
    
    
    
    
    8,562
    
    
    
    0.01Diluted EPSIncome available to common stockholders,
plus conversions
    
    $
    3,752
    
    
    
    3,492,871
    
    
    $
    1.07
 2008Income
    
    
    Shares
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Share(dollars in thousands, except per share)Basic EPSIncome available to common stockholders
    
    $
    2,800
    
    
    
    3,426,860
    
    
    $
    0.82Effect of stock options outstanding
    
    
    
    
    
    
    76,996
    
    
    
    0.02Diluted EPSIncome available to common stockholders,
plus conversions
    
    $
    2,800
    
    
    
    3,503,856
    
    
    $
    0.80
 2007Income
    
    
    Shares
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Share(dollars in thousands, except per share)Basic EPSIncome available to common stockholders
    
    $
    2,901
    
    
    
    3,393,224
    
    
    $
    0.85Effect of stock options outstanding
    
    
    
    
    
    
    115,382
    
    
    
    0.02Diluted EPSIncome available to common stockholders,
plus conversions
    
    $
    2,901
    
    
    
    3,508,606
    
    
    $
    0.83
  29




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 12Income taxes
  2009
    
    
    2008
    
    
    2007Current tax provision
    
    $
    1,548
    
    
    $
    929
    
    
    $
    1,853Deferred tax expense/(benefit)
    
    
    (245
    )
    
    
    323
    
    
    
    (234
    )Total income tax expense
    
    $
    1,303
    
    
    $
    1,252
    
    
    $
    1,619
  2009
    
    
    2008
    
    
    2007Federal statutory rates
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State taxes, net of federal benefit
    
    
    3.6
    
    
    
    2.7
    
    
    
    4.3Tax-exempt income
    
    
    (2.8
    )
    
    
    (2.1
    )
    
    
    (1.2
    )Nondeductible interest
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.3State tax credits
    
    
    (2.6
    )
    
    
    (2.1
    )
    
    
    (3.0
    )Bank-owned life insurance
    
    
    (2.8
    )
    
    
    (2.6
    )
    
    
    (0.6
    )Other
    
    
    (3.9
    )
    
    
    0.6
    
    
    
    2.0Total
    
    
    25.8
    %
    
    
    30.9
    %
    
    
    35.8
    %
  30




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 12Income Taxes
   2009
    
    
    2008(in thousands)Deferred tax assetsAllowance for loan losses
    
    $
    1,285
    
    
    $
    1,236Unrealized loss on securities available-for-sale
    
    
    
    
    
    
    Amortization of GA low-income housing tax credits
    
    
    159
    
    
    
    122Executive compensation plans
    
    
    151
    
    
    
    70Nonaccrual loan interest
    
    
    33
    
    
    
    Valuation allowance on GA low-income housing tax credits
    
    
    (159
    )
    
    
    (122
    )Deferred income tax assets
    
    
    1,469
    
    
    
    1,306Deferred tax liabilitiesUnrealized gain on securities available-for-sale
    
    
    (195
    )
    
    
    (117
    )Qualified prepaids
    
    
    (58
    )
    
    
    Depreciation on bank premises and fixed assets
    
    
    (198
    )
    
    
    (193
    )Deferred income tax liabilities
    
    
    (451
    )
    
    
    (310
    )Net deferred income tax assets
    
    $
    1,018
    
    
    $
    996
   31




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 13Commitments and contingencies
    2009
    
    
    2008(in thousands)Commitments to extend credit
    
    $
    59,082
    
    
    $
    56,426Standby letters of credit
    
    
    5,712
    
    
    
    5,102Total
    
    $
    64,794
    
    
    $
    61,528
  
  32




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 13Commitments and contingencies
    2009
    
    
    2008
    
    
    2007(dollars in thousands)Office premises rental expense
    
    $
    284
    
    
    $
    285
    
    
    $
    276Equipment rental expense
    
    $
    13
    
    
    $
    13
    
    
    $
    27
 Note 14Supplemental consolidated cash flow information
 2009
    
    
    2008
    
    
    2007(dollars in thousands)Income taxes paid
    
    $
    1,630
    
    
    $
    1,397
    
    
    $
    2,354Interest paid
    
    $
    10,443
    
    
    $
    14,147
    
    
    $
    15,598Interest received
    
    $
    24,687
    
    
    $
    26,552
    
    
    $
    28,643Real estate acquired by foreclosure (non-cash)
    
    $
    6,337
    
    
    $
    8,660
    
    
    $
    1,136Unrealized gain/(loss) on securities (non-cash)
    
    $
    217
    
    
    $
    (11
    )
    
    $
    775
  33




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 15Fair value of financial instruments
 Fair Value Measurements
and Disclosures.
    2009
    
    
    2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueLoans and loans held for
sale, net of allowance
    
    $
    395.0
    
    
    $
    435.5
    
    
    $
    360.4
    
    
    $
    392.3Time deposits
    
    $
    256.4
    
    
    $
    259.7
    
    
    $
    240.3
    
    
    $
    245.1
   34




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 15Fair value of financial instruments
  Level 1
 Level 2
 Level 3
  Investment Securities Available-for-Sale
  Loans Held for Sale
   35




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 15Fair value of financial instruments
 Loans
  Foreclosed Assets
   Fair Value Measurements atDecember 31, 2009, Using,Total
    
    
    
    
    
    
    QuotedCarrying
    
    
    
    
    
    
    Prices inAmount in the
    
    
    Assets/
    
    
    Active
    
    
    Significant
    
    
    SignificantConsolidated
    
    
    Liabilities
    
    
    Markets for
    
    
    Other
    
    
    OtherBalance
    
    
    Measured at
    
    
    Identical
    
    
    Observable
    
    
    UnobservableSheet
    
    
    Fair Value
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    12/31/2009
    
    
    12/31/2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Available-for-sale
securities,
including FHLB
stock
    
    $
    47,289
    
    
    $
    47,289
    
    
    $
    
    
    
    $
    47,289
    
    
    $
    
  36




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 16Bank-owned life insurance (BOLI)
 Investments in Insurance Contracts,
 Note 17Other expenses
  2009
    
    
    2008
    
    
    2007(dollars in thousands)Data processing
    
    $
    1,044
    
    
    $
    904
    
    
    $
    906FDIC assessment
    
    
    883
    
    
    
    320
    
    
    
    241ORE expense/valuation adjustments
    
    
    781
    
    
    
    89
    
    
    
    54Legal and accounting
    
    
    518
    
    
    
    540
    
    
    
    475Printing and supplies
    
    
    321
    
    
    
    314
    
    
    
    309Advertising
    
    
    237
    
    
    
    277
    
    
    
    309Business development
    
    
    151
    
    
    
    167
    
    
    
    159Telecommunications
    
    
    207
    
    
    
    171
    
    
    
    142Outside services
    
    
    349
    
    
    
    381
    
    
    
    415Courier and postage
    
    
    150
    
    
    
    201
    
    
    
    229Software license fees
    
    
    142
    
    
    
    190
    
    
    
    237City and county taxes
    
    
    264
    
    
    
    263
    
    
    
    241Directors fees
    
    
    219
    
    
    
    219
    
    
    
    243Travel and employee meals & entertainment
    
    
    165
    
    
    
    158
    
    
    
    166Other
    
    
    1,179
    
    
    
    1,047
    
    
    
    1,036Total
    
    $
    6,610
    
    
    $
    5,241
    
    
    $
    5,162
 Note 18Comprehensive Income
  2009
    
    
    2008
    
    
    2007Unrealized holding gains/(losses) on
available-for-sale securities
    
    $
    217
    
    
    $
    (11
    )
    
    $
    775Tax effect
    
    
    (78
    )
    
    
    4
    
    
    
    (279
    )Net of tax amount
    
    $
    139
    
    
    $
    (7
    )
    
    $
    496
  37




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 19Quarterly Financial Data (Unaudited)
  
 2009
    
    
    20084Q
    
    
    3Q
    
    
    2Q
    
    
    1Q
    
    
    4Q
    
    
    3Q
    
    
    2Q
    
    
    1QInterest income
    
    $
    6,385
    
    
    $
    6,285
    
    
    $
    6,154
    
    
    $
    5,780
    
    
    $
    6,123
    
    
    $
    6,445
    
    
    $
    6,700
    
    
    $
    7,103Interest expense
    
    
    2,092
    
    
    
    2,399
    
    
    
    2,584
    
    
    
    2,647
    
    
    
    2,847
    
    
    
    2,987
    
    
    
    3,299
    
    
    
    3,905Net interest income
    
    
    4,293
    
    
    
    3,886
    
    
    
    3,570
    
    
    
    3,133
    
    
    
    3,276
    
    
    
    3,458
    
    
    
    3,401
    
    
    
    3,198Provision for loan losses
    
    
    1,172
    
    
    
    670
    
    
    
    613
    
    
    
    627
    
    
    
    730
    
    
    
    518
    
    
    
    (29
    )
    
    
    237Net interest income after
provision for loan losses
    
    
    3,121
    
    
    
    3,216
    
    
    
    2,957
    
    
    
    2,506
    
    
    
    2,546
    
    
    
    2,940
    
    
    
    3,430
    
    
    
    2,961Non-interest income
    
    
    3,570
    
    
    
    4,172
    
    
    
    3,727
    
    
    
    2,632
    
    
    
    2,169
    
    
    
    2,841
    
    
    
    2,352
    
    
    
    2,432Securities gain (loss)
    
    
    5
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    37
    
    
    
    20Non-interest expenses
    
    
    5,450
    
    
    
    5,365
    
    
    
    5,436
    
    
    
    4,651
    
    
    
    4,471
    
    
    
    4,429
    
    
    
    4,539
    
    
    
    4,306Income before income tax
expense
    
    
    1,246
    
    
    
    2,074
    
    
    
    1,248
    
    
    
    487
    
    
    
    313
    
    
    
    1,352
    
    
    
    1,280
    
    
    
    1,107Income tax expense
    
    
    282
    
    
    
    580
    
    
    
    349
    
    
    
    92
    
    
    
    97
    
    
    
    386
    
    
    
    414
    
    
    
    355Net income
    
    $
    964
    
    
    $
    1,494
    
    
    $
    899
    
    
    $
    395
    
    
    $
    216
    
    
    $
    966
    
    
    $
    866
    
    
    $
    752Basic earnings per common
share
    
    $
    0.28
    
    
    $
    0.43
    
    
    $
    0.26
    
    
    $
    0.11
    
    
    $
    0.06
    
    
    $
    0.29
    
    
    $
    0.25
    
    
    $
    0.22Diluted earnings per
common share
    
    $
    0.27
    
    
    $
    0.43
    
    
    $
    0.26
    
    
    $
    0.11
    
    
    $
    0.06
    
    
    $
    0.28
    
    
    $
    0.25
    
    
    $
    0.21
  38




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 20Condensed financial information on Georgia-Carolina Bancshares, Inc. (parent company
only)
 Condensed Balance Sheet
December 31, 2009 and 2008  (dollars in thousands)
 2009
    
    
    2008AssetsCash
    
    $
    185
    
    
    $
    616Investment in subsidiary
    
    
    43,057
    
    
    
    38,999Other assets
    
    
    34
    
    
    
    64Deferred tax benefit
    
    
    86
    
    
    
    91Total assets
    
    $
    43,362
    
    
    $
    39,770LiabilitiesNote payable
    
    $
    
    
    
    $
    500Other liabilities
    
    
    89
    
    
    
    186Total liabilities
    
    
    89
    
    
    
    686Shareholders equity
    
    
    43,273
    
    
    
    39,084Total liabilities and shareholders equity
    
    $
    43,362
    
    
    $
    39,770
  39




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 20Condensed financial information on Georgia-Carolina Bancshares, Inc. (parent company
only)
 Condensed Statement of Income
Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands)
 2009
    
    
    2008
    
    
    2007Income, dividends from subsidiary
    
    $
    
    
    
    $
    
    
    
    $
    ExpensesDirector compensation
    
    
    55
    
    
    
    47
    
    
    
    76Legal fees
    
    
    66
    
    
    
    106
    
    
    
    143Audit exam and accounting fees
    
    
    38
    
    
    
    10
    
    
    
    7Annual report and proxy
    
    
    60
    
    
    
    35
    
    
    
    55Shareholder services
    
    
    16
    
    
    
    17
    
    
    
    22Other
    
    
    18
    
    
    
    54
    
    
    
    94Total expenses
    
    
    253
    
    
    
    269
    
    
    
    397Loss before income tax benefits and equity in
undistributed earnings of subsidiary
    
    
    (253
    )
    
    
    (269
    )
    
    
    (397
    )Income tax benefits
    
    
    86
    
    
    
    86
    
    
    
    143Loss before equity in undistributed earnings of
subsidiary
    
    
    (167
    )
    
    
    (183
    )
    
    
    (254
    )Equity in undistributed earnings of subsidiary
    
    
    3,919
    
    
    
    2,983
    
    
    
    3,155Net income
    
    $
    3,752
    
    
    $
    2,800
    
    
    $
    2,901
  40




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 December 31, 2009 and 2008
 Note 20Condensed financial information on Georgia-Carolina Bancshares, Inc. (parent company
only)
 Condensed Statement of Cash Flows
Years Ended December 31, 2009, 2008 and 2007  (dollars in thousands)
 2009
    
    
    2008
    
    
    2007Cash flows from operating activitiesNet income
    
    $
    3,752
    
    
    $
    2,800
    
    
    $
    2,901Adjustments to reconcile net income to net cash
provided by operating activities:Stock-based compensation expense
    
    
    80
    
    
    
    134
    
    
    
    226Stock compensation
    
    
    167
    
    
    
    165
    
    
    
    189Equity in undistributed earnings of subsidiary
    
    
    (3,919
    )
    
    
    (2,983
    )
    
    
    (3,155
    )Net change in other assets and liabilities
    
    
    (63
    )
    
    
    145
    
    
    
    228Net cash provided by operating activities
    
    
    17
    
    
    
    261
    
    
    
    389Cash flows from financing activitiesPayments on borrowed funds
    
    
    (500
    )
    
    
    (100
    )
    
    
    (100
    )Proceeds from issuance of common stock, and
exercise of stock options
    
    
    52
    
    
    
    21
    
    
    
    33Net cash provided by (used in) financing activities
    
    
    (448
    )
    
    
    (79
    )
    
    
    (67
    )Net change in cash
    
    
    (431
    )
    
    
    182
    
    
    
    322Cash at beginning of the year
    
    
    616
    
    
    
    434
    
    
    
    112Cash at end of the year
    
    $
    185
    
    
    $
    616
    
    
    $
    434
  41