##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
   MID-AMERICA BANCSHARES, INC.
  
  
  
  
  
   x o
  o o x
  o x
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TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsThe unaudited consolidated financial statements of the registrant, Mid-America Bancshares,
Inc. (the Company) are as follows:Consolidated Balance Sheets  September 30, 2007 and December 31, 2006.Consolidated Statements of Earnings  For the three months and nine months ended
September 30, 2007 and 2006.Consolidated Statements of Comprehensive Earnings  For the three months and nine
months ended September 30, 2007 and 2006.Consolidated Statements of Cash Flows  For the nine months ended September 30, 2007
and 2006.Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk Factors.Item 2. Unregistered Sales of Equity securities and Use of Proceeds.Item 3. Defaults Upon Senior Securities.Item 4. Submission of Matters to a Vote of Security Holders.Item 5. Other Information.Item 6. Exhibits.SIGNATURESEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATION OF THE CEO & CFO
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MID-AMERICA BANCSHARES, INC.
 
 Consolidated Balance Sheets
 September 30, 2007 and December 31, 2006
 (Unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006(In Thousands)AssetsLoans, less allowance for loan losses of $8,695,000
and $7,754,000, respectively
    
    $
    817,324
    
    
    $
    686,690Securities:Available-for-sale, at market (amortized cost  $172,582,000 and
$169,391,000, respectively)
    
    
    170,544
    
    
    
    168,395Held-to-maturity, at amortized cost (market value  $9,461,000 and
$9,774,000, respectively)
    
    
    9,741
    
    
    
    9,740Total securities
    
    
    180,285
    
    
    
    178,135Restricted equity securities
    
    
    2,621
    
    
    
    2,174Federal funds sold
    
    
    
    
    
    
    7,145Interest-bearing deposits in financial institutions
    
    
    2,495
    
    
    
    2,559Loans held for sale
    
    
    5,431
    
    
    
    5,190Total earning assets
    
    
    1,008,156
    
    
    
    881,893Cash and due from banks
    
    
    18,850
    
    
    
    20,728Premises and equipment, net
    
    
    31,530
    
    
    
    32,626Accrued interest receivable
    
    
    6,348
    
    
    
    5,505Other real estate
    
    
    482
    
    
    
    185Intangible assets, net
    
    
    4,115
    
    
    
    4,714Goodwill
    
    
    19,147
    
    
    
    19,147Other assets
    
    
    2,190
    
    
    
    3,173Total assets
    
    $
    1,090,818
    
    
    $
    967,971Liabilities and Stockholders EquityDeposits
    
    $
    903,948
    
    
    $
    823,755Federal funds purchased
    
    
    8,903
    
    
    
    5,095Line of credit
    
    
    7,500
    
    
    
    2,000Securities sold under repurchase agreements
    
    
    19,713
    
    
    
    11,353Deferred tax liability
    
    
    707
    
    
    
    1,153Accrued interest and other liabilities
    
    
    5,525
    
    
    
    5,928Advances from Federal Home Loan Bank
    
    
    36,809
    
    
    
    15,747Total liabilities
    
    
    983,105
    
    
    
    865,031Stockholders equity:Series A Preferred Stock, authorized 25,000,000 shares
    
    
    
    
    
    
    Common stock, $1 par value; authorized 75,000,000 shares, issued
13,995,545 and 13,922,956 shares issued and outstanding, respectively
    
    
    13,995
    
    
    
    13,923Additional paid-in capital
    
    
    88,161
    
    
    
    87,666Retained earnings
    
    
    6,815
    
    
    
    1,966Net unrealized losses on available-for-sale securities, net of
income taxes of $780,000 and $381,000, respectively
    
    
    (1,258
    )
    
    
    (615
    )Total stockholders equity
    
    
    107,713
    
    
    
    102,940Total liabilities and stockholders equity
    
    $
    1,090,818
    
    
    $
    967,971
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MID-AMERICA BANCSHARES, INC.
 
 Consolidated Statements of Earnings
 Three Months and Nine Months Ended September 30, 2007 and 2006
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In Thousands, Except Per Share Amounts)Interest income:Interest and fees on loans
    
    $
    16,370
    
    
    
    9,094
    
    
    $
    46,276
    
    
    
    21,912Interest and dividends on taxable securities
    
    
    1,706
    
    
    
    1,179
    
    
    
    5,111
    
    
    
    2,597Interest and dividends on non-taxable securities
    
    
    516
    
    
    
    278
    
    
    
    1,434
    
    
    
    545Interest on Federal funds sold
    
    
    99
    
    
    
    80
    
    
    
    667
    
    
    
    467Interest on loans held for sale
    
    
    55
    
    
    
    30
    
    
    
    172
    
    
    
    85Interest and dividends on restricted equity securities
    
    
    40
    
    
    
    35
    
    
    
    110
    
    
    
    68Interest on interest-bearing deposit in financial institution
    
    
    28
    
    
    
    86
    
    
    
    84
    
    
    
    200Other interest income
    
    
    3
    
    
    
    3
    
    
    
    9
    
    
    
    3Total interest income
    
    
    18,817
    
    
    
    10,785
    
    
    
    53,863
    
    
    
    25,877Interest expense:Interest on negotiable order of withdrawal accounts
    
    
    735
    
    
    
    239
    
    
    
    2,651
    
    
    
    452Interest on money market and savings accounts
    
    
    1,632
    
    
    
    680
    
    
    
    4,259
    
    
    
    1,659Interest on certificates of deposit over $100,000
    
    
    4,252
    
    
    
    2,773
    
    
    
    12,520
    
    
    
    6,509Interest on certificates of deposit  other
    
    
    2,804
    
    
    
    1,732
    
    
    
    8,311
    
    
    
    4,030Interest on securities sold under repurchase agreements
    
    
    212
    
    
    
    77
    
    
    
    490
    
    
    
    128Interest on Federal funds purchased and other borrowed funds
    
    
    137
    
    
    
    27
    
    
    
    295
    
    
    
    27Interest on advances from the Federal Home Loan Bank
    
    
    398
    
    
    
    197
    
    
    
    983
    
    
    
    555Total interest expense
    
    
    10,170
    
    
    
    5,725
    
    
    
    29,509
    
    
    
    13,360Net interest income
    
    
    8,647
    
    
    
    5,060
    
    
    
    24,354
    
    
    
    12,517Provision for loan losses
    
    
    632
    
    
    
    83
    
    
    
    1,232
    
    
    
    247Net interest income after provision for loan losses
    
    
    8,015
    
    
    
    4,977
    
    
    
    23,122
    
    
    
    12,270Other income:Service charges on deposit accounts
    
    
    611
    
    
    
    315
    
    
    
    1,748
    
    
    
    729Investment banking fees and commissions, net
    
    
    472
    
    
    
    339
    
    
    
    1,341
    
    
    
    1,007Mortgage broker fees and fees on mortgage originations
    
    
    497
    
    
    
    431
    
    
    
    1,728
    
    
    
    1,056Gain on sale of securities, net
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Gain on sale of SBA loans
    
    
    30
    
    
    
    39
    
    
    
    69
    
    
    
    128Title company income
    
    
    47
    
    
    
    68
    
    
    
    187
    
    
    
    199Other fees and commissions
    
    
    248
    
    
    
    157
    
    
    
    793
    
    
    
    411Total other income
    
    
    1,905
    
    
    
    1,355
    
    
    
    5,866
    
    
    
    3,530Other expenses:Salaries and employee benefits
    
    
    4,055
    
    
    
    2,990
    
    
    
    12,423
    
    
    
    7,729Occupancy expenses, net
    
    
    619
    
    
    
    469
    
    
    
    1,861
    
    
    
    1,201Furniture and equipment expense
    
    
    539
    
    
    
    422
    
    
    
    1,592
    
    
    
    1,078Data processing expense
    
    
    436
    
    
    
    281
    
    
    
    1,278
    
    
    
    635Advertising and marketing
    
    
    88
    
    
    
    128
    
    
    
    253
    
    
    
    380Printing, stationary and supplies
    
    
    166
    
    
    
    119
    
    
    
    502
    
    
    
    340Amortization of intangible assets
    
    
    195
    
    
    
    65
    
    
    
    599
    
    
    
    65Loss on sale of securities, net
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    139Other operating expenses
    
    
    1,099
    
    
    
    733
    
    
    
    3,188
    
    
    
    1,633Loss and expense related to sale of other real estate
    
    
    6
    
    
    
    13
    
    
    
    7
    
    
    
    13Loss on disposal of fixed assets
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    2Total other expenses
    
    
    7,236
    
    
    
    5,222
    
    
    
    21,738
    
    
    
    13,215Earnings before income taxes
    
    
    2,684
    
    
    
    1,110
    
    
    
    7,250
    
    
    
    2,585Income taxes
    
    
    892
    
    
    
    345
    
    
    
    2,401
    
    
    
    683Net earnings
    
    $
    1,792
    
    
    $
    765
    
    
    $
    4,849
    
    
    $
    1,902Basic earnings per common share
    
    $
    .13
    
    
    
    .08
    
    
    
    .35
    
    
    
    .25Diluted earnings per common share
    
    $
    .13
    
    
    
    .08
    
    
    
    .34
    
    
    
    .25
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MID-AMERICA BANCSHARES, INC.
 
 Consolidated Statements of Comprehensive Earnings
 Three and Nine Months Ended September 30, 2007 and 2006
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(In Thousands)Net earnings
    
    $
    1,792
    
    
    $
    765
    
    
    $
    4,849
    
    
    $
    1,902Other comprehensive earnings (loss):Unrealized gains (losses) on available-for-sale
securities arising during period, net of taxes of
$581,000, $432,000, $412,000 and $177,000,
respectively
    
    
    921
    
    
    
    696
    
    
    
    (663
    )
    
    
    285Reclassification adjustment for (gains) losses included
in earnings, net of taxes of $13,000, $2,000, $13,000
and $53,000, respectively
    
    
    20
    
    
    
    (4
    )
    
    
    20
    
    
    
    86Other comprehensive earnings (loss)
    
    
    941
    
    
    
    692
    
    
    
    (643
    )
    
    
    371Comprehensive earnings
    
    $
    2,733
    
    
    $
    1,457
    
    
    $
    4,206
    
    
    $
    2,273
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MID-AMERICA BANCSHARES, INC.
 
 Consolidated Statements of Cash Flows
 Nine Months Ended September 30, 2007 and 2006
 Increase (Decrease) in Cash and Cash Equivalents
 (Unaudited)
 2007
    
    
    2006(In Thousands)Cash flows from operating activities:Interest received
    
    $
    52,497
    
    
    $
    25,104Fees and commissions received
    
    
    4,151
    
    
    
    2,474Interest paid
    
    
    (29,296
    )
    
    
    (12,796
    )Cash paid to suppliers and employees
    
    
    (18,961
    )
    
    
    (11,885
    )Origination of loans held for sale
    
    
    (85,229
    )
    
    
    (48,158
    )Proceeds from loan sales
    
    
    86,716
    
    
    
    49,889Income taxes paid
    
    
    (1,823
    )
    
    
    (1,988
    )Net cash provided by operating activities
    
    
    8,055
    
    
    
    2,640Cash flows from investing activities:Proceeds from sales, paydowns, maturities and calls of available-for-
sale securities
    
    
    24,474
    
    
    
    18,189Purchase of available-for-sale securities
    
    
    (27,645
    )
    
    
    (59,820
    )Purchase of restricted stock
    
    
    (445
    )
    
    
    (183
    )Loans made to customers, net of repayments
    
    
    (131,943
    )
    
    
    (56,090
    )Purchase of premises and equipment
    
    
    (836
    )
    
    
    (2,900
    )Proceeds from sale of fixed assets
    
    
    19
    
    
    
    Purchase of other real estate
    
    
    
    
    
    
    (208
    )Proceeds from sale of other real estate
    
    
    187
    
    
    
    668Decrease (increase) in interest-bearing deposits in financial
institutions
    
    
    64
    
    
    
    (2,109
    )Proceeds from sale of repossessed assets
    
    
    46
    
    
    
    Cash and
cash equivalents acquired in acquisition of Bank of the South
    
    
    
    
    
    
    15,292Net cash used in investing activities
    
    
    (136,079
    )
    
    
    (87,161
    )Cash flows from financing activities:Net increase in non-interest bearing, savings and NOW deposit
accounts
    
    
    44,441
    
    
    
    24,605Net increase in time deposits
    
    
    35,558
    
    
    
    48,208Cash payment for fractional shares
    
    
    
    
    
    
    (11
    )Cash expense in connection with acquisition
    
    
    
    
    
    
    (829
    )Proceeds from sale of common stock
    
    
    272
    
    
    
    1,622Increase in securities sold under repurchase agreements
    
    
    8,360
    
    
    
    5,946Proceeds from Federal Home Loan Bank advances, net
    
    
    21,062
    
    
    
    2,910Proceeds from advances from line of credit
    
    
    5,500
    
    
    
    Advances of Federal funds purchased
    
    
    3,808
    
    
    
    Net cash provided by financing activities
    
    
    119,001
    
    
    
    82,451Net decrease in cash and cash equivalents
    
    
    (9,023
    )
    
    
    (2,070
    )Cash and cash equivalents at beginning of period
    
    
    27,873
    
    
    
    33,134Cash and cash equivalents at end of period
    
    $
    18,850
    
    
    $
    31,064
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MID-AMERICA BANCSHARES, INC.
 Consolidated Statements of Cash Flows, Continued
 Nine Months Ended September 30, 2007 and 2006
 Increase (Decrease) in Cash and Cash Equivalents
 (Unaudited)
 2007
    
    
    2006(In Thousands)Reconciliation of net earnings to net cash provided by operating
activities:Net earnings
    
    $
    4,849
    
    
    $
    1,902Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation, amortization and accretion
    
    
    1,856
    
    
    
    1,161Amortization of intangible assets
    
    
    327
    
    
    
    37Provision for loan losses
    
    
    1,232
    
    
    
    247Stock based compensation expense
    
    
    295
    
    
    
    Loss on sale of securities, net
    
    
    33
    
    
    
    139Loss on sale of repossessed assets
    
    
    13
    
    
    
    Loss on disposal of premises and equipment
    
    
    2
    
    
    
    2Loss on sale of other real estate and related expenses
    
    
    
    
    
    
    8Restricted equity securities dividend reinvestment
    
    
    (2
    )
    
    
    (55
    )(Increase) decrease in loans held for sale
    
    
    (241
    )
    
    
    675Increase in interest receivable
    
    
    (843
    )
    
    
    (706
    )Increase in accrued interest payable
    
    
    19
    
    
    
    541Decrease in other liabilities
    
    
    (469
    )
    
    
    (1,271
    )(Increase) decrease in other assets
    
    
    984
    
    
    
    (40
    )Total adjustments
    
    
    3,206
    
    
    
    738Net cash provided by operating activities
    
    $
    8,055
    
    
    $
    2,640Supplemental Schedule of Non-Cash Activities:Change in unrealized gains (losses) in value of securities available-
for sale
    
    $
    (643
    )
    
    $
    371Net non-cash transfer from loans to other real estate and
repossessed assets, net
    
    $
    543
    
    
    $
    (210
    )Acquisition of Bank of the South effective August 31, 2006 (See
note 2 to consolidated financial statements related to share
exchange)
    
    $
    
    
    
    $
    59,516
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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 (Unaudited)
 Forward-Looking Statements
  (1) Basis of Presentation
   8




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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 (Unaudited)
 (1) Basis of Presentation, Continued
  (2) Share Exchange
  (In Thousands)Assets and liabilities of Bank of the South:Cash and Federal funds
    
    $
    15,323Loans, net
    
    
    287,950Securities
    
    
    71,532Fixed assets
    
    
    14,316Other assets
    
    
    4,137Deposits
    
    
    (350,164
    )Other liabilities
    
    
    (7,203
    )Net book value
    
    
    35,891Value of stock issued
    
    
    59,516Excess purchase price
    
    $
    23,625Allocation of excess purchase price:Premium on purchased deposits
    
    $
    4,720Market value adjustment to buildings
    
    
    4,315Loan discounts
    
    
    (2,581
    )Deposit discounts
    
    
    5266,980Deferred taxes at 38.29%
    
    
    (2,673
    )4,307Initial goodwill
    
    
    19,318Total allocation of excess purchase price
    
    $
    23,625
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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements
 (Unaudited)
 (3) Allowance for Loan Losses
    Nine Months EndedSeptember 30,(In Thousands)2007
    
    
    2006Balance, January 1, 2007 and 2006, respectively
    
    $
    7,755
    
    
    $
    3,649Add (deduct):Losses charged to allowance
    
    
    (341
    )
    
    
    (151
    )Recoveries credited to allowance
    
    
    49
    
    
    
    119Provision for loan losses
    
    
    1,232
    
    
    
    247Allowance acquired in acquisition of
Bank of the South
    
    
    
    
    
    
    3,202Balance, September 30, 2007 and 2006,
respectively
    
    $
    8,695
    
    
    $
    7,066
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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (4) Earnings Per Share
   Three Months EndedSeptember 30,(In Thousands, except share amounts)
    
    2007
    
    
    2006Basic EPS Computation:Numerator  net earnings available to common shareholders
    
    $
    1,792
    
    
    $
    765Denominator  weighted average number of common shares
outstanding
    
    
    13,947,271
    
    
    
    9,136,015Basic earnings per common share
    
    $
    .13
    
    
    $
    .08Diluted EPS Computation:Numerator  net earnings available to common shareholders
    
    $
    1,792
    
    
    $
    765Denominator:Weighted average number of common shares outstanding
    
    
    13,947,271
    
    
    
    9,136,015Dilutive effect of stock options
    
    
    232,488
    
    
    
    113,75714,179,759
    
    
    
    9,249,772Diluted earnings per common share
    
    $
    .13
    
    
    $
    .08
 Nine Months EndedSeptember 30,(In Thousands, except share amounts)
    
    2007
    
    
    2006Basic EPS Computation:Numerator  net earnings available to common shareholders
    
    $
    4,849
    
    
    $
    1,902Denominator  weighted average number of common shares
outstanding
    
    
    13,935,773
    
    
    
    7,568,689Basic earnings per common share
    
    $
    .35
    
    
    $
    .25Diluted EPS Computation:Numerator  net earnings available to common shareholders
    
    $
    4,849
    
    
    $
    1,902Denominator:Weighted average number of common shares outstanding
    
    
    13,935,773
    
    
    
    7,568,689Dilutive effect of stock options
    
    
    201,702
    
    
    
    113,75714,137,475
    
    
    
    7,682,446Diluted earnings per common share
    
    $
    .34
    
    
    $
    .25
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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (5) Employee Based Compensation Plans
 Stock Options
   Restricted Equity Incentives
   12




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MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (5) Employee Based Compensation Plans, Continued
 Restricted Equity Incentive Plan, Continued
  Incentive
    
    
    Stock
    
    
    
    
    
    
    Non-Stock
    
    
    Appreciation
    
    
    Restricted
    
    
    QualifiedOptions
    
    
    Rights
    
    
    Stock
    
    
    Stock Options
    
    
    TotalOutstanding at December 31, 2006
    
    
    622,191
    
    
    
    36,150
    
    
    
    260,000
    
    
    
    565,704
    
    
    
    1,484,045Granted
    
    
    
    
    
    
    2,000
    
    
    
    
    
    
    
    4,000
    
    
    
    6,000Exercised
    
    
    (44,019
    )
    
    
    
    
    
    
    (26,000
    )
    
    
    (2,570
    )
    
    
    (72,589
    )Forfeited or expired
    
    
    (11,916
    )
    
    
    (3,030
    )
    
    
    
    
    
    
    (2,500
    )
    
    
    (17,446
    )Outstanding at September 30, 2007
    
    
    566,256
    
    
    
    35,120
    
    
    
    234,000
    
    
    
    564,634
    
    
    
    1,400,010Exercisable at September 30, 2007
    
    
    566,256
    
    
    
    6,580
    
    
    
    
    
    
    
    111,045
    
    
    
    683,881Weighted average exercise price for
shares outstanding
    
    $
    7.62
    
    
    $
    8.91
    
    
    $
    8.76
    
    
    $
    8.44Weighted average exercise price for
shares exercisable
    
    $
    7.62
    
    
    $
    8.76
    
    
    
    
    
    
    $
    7.04Remaining weighted average contractual
life for shares outstanding, in years
    
    
    6.83
    
    
    
    8.96
    
    
    
    8.93
    
    
    
    8.51Remaining weighted average contractual
life for shares exercisable, in years
    
    
    6.83
    
    
    
    8.83
    
    
    
    
    
    
    
    6.77Aggregate intrinsic values of shares
outstanding
    
    $
    2,482,684
    
    
    $
    108,409
    
    
    $
    758,160
    
    
    $
    2,011,101Aggregate intrinsic value of exercisable
shares
    
    $
    2,482,684
    
    
    $
    21,319
    
    
    $
    
    
    
    $
    550,433
  13




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (5) Employee Based Compensation Plans, Continued
 Restricted Equity Incentive Plan, Continued
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2007
    
    
    2007(In Thousands)Stock-based compensation expense
    
    $
    97
    
    
    $
    295Deferred income tax benefit
    
    
    (37
    )
    
    
    (113
    )Impact of stock-based
compensation expense,
after tax effect
    
    $
    60
    
    
    $
    182
  2006/2007StockAppreciation
    
    Restricted
    
    StockRights
    
    Stock
    
    OptionsExpected volatility
    
    14.36% to 15.20%
    
    
    15.20
    %
    
    14.30% to 15.20%Expected dividend yield
    
    
    1.00
    %
    
    
    1.00
    %
    
    
    1.00
    %Expected term, in years
    
    
    6.50
    
    
    
    7.75
    
    
    
    7.00 to 7.75Risk-free rate
    
    4.69% to 5.10%
    
    
    4.69
    %
    
    4.51% to 4.69%
   14




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (6) Definitive Merger Agreement
  (7) Acquisition
  15




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (7) Acquisition, Continued
  September 30, 2006Mid-Bank of the
    
    
    America
    
    
    Pro Forma AdjustmentsSouth
    
    
    Bancshares
    
    
    
    
    
    
    
    
    
    
    Pro Forma(6)
    
    
    (7)
    
    
    Dr.
    
    
    Cr.
    
    
    Combined(In Thousands)Interest income
    
    $
    16,864
    
    
    
    25,877
    
    
    
    
    
    
    
    410
    (1)
    
    
    43,151Interest expense
    
    
    7,833
    
    
    
    13,360
    
    
    
    155
    (2)
    
    
    
    
    
    
    21,348Net interest income
    
    
    9,031
    
    
    
    12,517
    
    
    
    
    
    
    
    
    
    
    
    21,803Provision for loan losses
    
    
    (184
    )
    
    
    (247
    )
    
    
    
    
    
    
    
    
    
    
    (431
    )Net interest income after
provision for loan losses
    
    
    8,847
    
    
    
    12,270
    
    
    
    
    
    
    
    
    
    
    
    21,372Non-interest income
    
    
    1,828
    
    
    
    3,530
    
    
    
    
    
    
    
    
    
    
    
    5,358Non-interest expense
    
    
    7,551
    
    
    
    13,215
    
    
    
    450
    (3)72
    (4)
    
    
    
    
    
    
    21,288Income before income
taxes
    
    
    3,124
    
    
    
    2,585
    
    
    
    
    
    
    
    
    
    
    
    5,442Income tax expense
    
    
    1,093
    
    
    
    683
    
    
    
    
    
    
    
    102
    (5)
    
    
    1,674Net income
    
    $
    2,031
    
    
    
    1,902
    
    
    
    
    
    
    
    
    
    
    
    3,768Proforma per share information:Basic earnings per common
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    .28Diluted earnings per common
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    .27Weighted average share
outstanding:Basic
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,618,229Diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,731,986
 (1)
    
    Amortization of loan discount for 8 months ($2,581,000 over 4.2 years).(2)
    
    Amortization of certificate of deposit discount for 8 months ($526,000 in various amounts over 4 years).(3)
    
    Amortization of core deposits  base premium for 8 months ($4,720,000 over 7 years).(4)
    
    Additional depreciation of step-up of fixed asset for 8 months.(5)
    
    Income tax benefit related to amortization of intangible assets for 8 months.(6)
    
    Actual Bank of the South results for the 8 months ended August 31, 2006.(7)
    
    Actual results for the nine months ended September 30, 2006, including all activity relating to the Bank of the South assets and liabilities assumed in the merger
subsequent to August 31, 2006.
 16




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (8) Acquired Intangible Assets and Goodwill
  In ThousandsIntangibles:Deposit base premium
    
    $
    4,720Accumulated amortization as of September 30, 2007
    
    $
    759Amortization expense for the nine months ended
September 30, 2007
    
    $
    534Estimated amortization expense:Remaining for 2007
    
    $
    181For year ended 2008
    
    
    704For year ended 2009
    
    
    704For year ended 2010
    
    
    704For year ended 2011
    
    
    704For year ended 2012
    
    
    704
  In ThousandsGoodwill:Balance January 1, 2007
    
    $
    19,147Goodwill acquired during 2007
    
    
    Balance September 30, 2007
    
    $
    19,147
   17




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 Notes to Consolidated Financial Statements, Continued
 (Unaudited)
 (8) Acquired Intangible Assets and Goodwill, Continued
  Real EstateLoan
    
    
    Discount
    
    
    TimeDiscount
    
    
    Adjustment
    
    
    DepositAmortization/depreciation Period
    
    4.2 Years
    
    
    40 years
    
    
    VariousRemaining for 2007
    
    
    (156
    )
    
    
    27
    
    
    
    25Year ended 2008
    
    
    (620
    )
    
    
    108
    
    
    
    102Year ended 2009
    
    
    (620
    )
    
    
    108
    
    
    
    85Year ended 2010
    
    
    (513
    )
    
    
    108
    
    
    
    28Year ended 2011
    
    
    
    
    
    
    108
    
    
    
    Year ended 2012
    
    
    
    
    
    
    108
    
    
    
    Amortization/(accretion)
depreciation period
    
    4.2 Years
    
    40 Years
    
    Various
 18




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations
 General
        19




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations, Continued
 General, Continued
    Critical Accounting Policies
   20




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations, Continued
 Critical Accounting Policies, Continued
    21




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of
Operations, Continued
 Results of Operations
  Net Interest Income
  Provision for Loan Losses
  22




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Provision for Loan Losses, Continued
  Non-Interest Income
  Non-Interest Expense
  23




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Income Taxes
  Financial Condition
 Balance Sheet Summary
   Loans
  September 30,
    
    
    December 31,2007
    
    
    2006(In Thousands)Commercial, financial and agricultural
    
    $
    401,472
    
    
    $
    324,283Installment
    
    
    23,781
    
    
    
    22,123Real estate  mortgage
    
    
    224,171
    
    
    
    183,910Real estate  construction
    
    
    175,457
    
    
    
    162,312Lease financing
    
    
    1,138
    
    
    
    1,816Total
    
    $
    826,019
    
    
    $
    694,444
  24




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Loans, Continued
      25




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Loans, Continued
      26




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Loans, Continued
  September 30, 2007
    
    
    December 31, 2006Past Due
    
    
    
    
    
    
    Past Due90 Days
    
    
    Non-Accrual
    
    
    90 Days
    
    
    Non-Accrual(In Thousands)
    
    
    (In Thousands)Commercial, financial
and agricultural
    
    $
    390
    
    
    
    2,619
    
    
    $
    30
    
    
    
    1,295Installment loans
    
    
    16
    
    
    
    246
    
    
    
    1
    
    
    
    83Real estate mortgage
    
    
    103
    
    
    
    382
    
    
    
    58
    
    
    
    581Real estate -
construction
    
    
    415
    
    
    
    107
    
    
    
    
    
    
    
    18Lease financing
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    $
    937
    
    
    
    3,354
    
    
    $
    89
    
    
    
    1,977Renegotiated loans
    
    $
    
    
    
    
    
    
    
    $
    
  (In Thousands)
    
    
    SpecialSeptember 30, 2007
    
    Total
    
    
    Mention
    
    
    Substandard
    
    
    DoubtfulCommercial, financial and
agricultural
    
    $
    14,567
    
    
    
    2,526
    
    
    
    11,167
    
    
    
    874Real estate mortgage
    
    
    5,388
    
    
    
    1,006
    
    
    
    4,382
    
    
    
    Real estate construction
    
    
    2,235
    
    
    
    667
    
    
    
    1,568
    
    
    
    Installment
    
    
    486
    
    
    
    97
    
    
    
    378
    
    
    
    11Lease financing
    
    
    11
    
    
    
    
    
    
    
    11
    
    
    
    $
    22,687
    
    
    
    4,296
    
    
    
    17,506
    
    
    
    885
 (In Thousands)
    
    
    SpecialDecember 31, 2006
    
    Total
    
    
    Mention
    
    
    Substandard
    
    
    DoubtfulCommercial, financial and
agricultural
    
    $
    4,253
    
    
    
    995
    
    
    
    3,258
    
    
    
    Real estate mortgage
    
    
    2,668
    
    
    
    569
    
    
    
    2,099
    
    
    
    Real estate construction
    
    
    2,826
    
    
    
    2,740
    
    
    
    86
    
    
    
    Installment
    
    
    321
    
    
    
    69
    
    
    
    252
    
    
    
    Lease financing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    10,068
    
    
    
    4,373
    
    
    
    5,695
    
    
    
    
 27




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of
Operations, Continued
 Financial Condition, Continued
 Loans, Continued
    September 30, 2007
    
    
    December 31, 2006Percent of
    
    
    
    
    
    
    Percent ofLoans In
    
    
    
    
    
    
    Loans InIn
    
    
    Each Category
    
    
    In
    
    
    Each CategoryThousands
    
    
    To Total Loans
    
    
    Thousands
    
    
    To Total LoansCommercial, financial and
agricultural
    
    $
    4,841
    
    
    
    48.7
    %
    
    $
    4,141
    
    
    
    46.7
    %Real estate construction
    
    
    2,124
    
    
    
    21.2
    
    
    
    2,073
    
    
    
    23.4Real estate mortgage
    
    
    1,437
    
    
    
    27.1
    
    
    
    1,245
    
    
    
    26.5Installment
    
    
    271
    
    
    
    2.9
    
    
    
    260
    
    
    
    3.2Lease financing
    
    
    22
    
    
    
    0.1
    
    
    
    35
    
    
    
    0.2$
    8,695
    
    
    
    100.0
    %
    
    $
    7,754
    
    
    
    100.0
    %
  28




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Securities
  
    
    Debt securities for which the enterprise has the positive intent and ability to hold to
maturity are classified as held-to-maturity securities and reported at amortized costs.
    
    Debt and equity securities that are bought and held principally for the purpose of
selling them in the near term are classified as trading securities and reported at fair
value, with unrealized gains and losses included in earnings.
    
    Debt and equity securities not classified as either held-to-maturity securities or
trading securities are classified as available-for-sale securities and reported at fair
value, with unrealized gains and losses excluded from earnings and reported in a separate
component of stockholders equity.
  Available-for-SaleSeptember 30, 2007
    
    
    December 31, 2006(In Thousands)Estimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Market
    
    
    Amortized
    
    
    MarketCost
    
    
    Value
    
    
    Cost
    
    
    ValueU.S. Treasury and other U.S.
Government agencies and corporations
    
    $
    53,048
    
    
    
    52,881
    
    
    $
    59,219
    
    
    
    58,991Mortgage-backed securities
    
    
    78,406
    
    
    
    77,472
    
    
    
    76,281
    
    
    
    75,343Obligations of states and political
subdivisions
    
    
    39,628
    
    
    
    38,704
    
    
    
    32,391
    
    
    
    32,570Corporate bonds
    
    
    900
    
    
    
    887
    
    
    
    900
    
    
    
    891Equity investment
    
    
    600
    
    
    
    600
    
    
    
    600
    
    
    
    600$
    172,582
    
    
    
    170,544
    
    
    $
    169,391
    
    
    
    168,395
 29




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of
Operations, Continued
 Financial Condition, Continued
 Securities, Continued
 Held-to-MaturitySeptember 30, 2007
    
    
    December 31, 2006(In Thousands)Estimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Market
    
    
    Amortized
    
    
    MarketCost
    
    
    Value
    
    
    Cost
    
    
    ValueObligation of states and political
subdivisions
    
    $
    9,741
    
    
    
    9,461
    
    
    $
    9,740
    
    
    
    9,774$
    9,741
    
    
    
    9,461
    
    
    $
    9,740
    
    
    
    9,774
  Deposits
   Liquidity and Asset Management
  30




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Liquidity and Asset Management, Continued
      31




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Capital Position and Dividends
    32




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Financial Condition, Continued
 Capital Position and Dividends, Continued
   Off Balance Sheet Arrangements
   Remainder of 2007
    
    $
    1762008
    
    
    6942009
    
    
    7042010
    
    
    6062011
    
    
    370Thereafter
    
    
    2,288Total
    
    $
    4,838
 33




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 2. Managements Discussion and Analysis of Financial Condition and Result of Operations,
Continued
 Impact of Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
 Item 4. Controls and Procedures
  34




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##### Table of Contents



MID-AMERICA BANCSHARES, INC.
 FORM 10-Q
 Item 4. Controls and Procedures, Continued
  35




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
   (c)
    
    No repurchases for our securities were made during the quarter ended
September 30, 2007. The only restrictions on working capital and/or dividends are
those reported in Part I of this Quarterly Report on Form 10Q, as well as those
discussed with respect to dividends with respect to subsidiary banks securities as
discussed in the registration statement on Form S-4 (Commissions file No. 333-134247,
as amended) particularly in the section Supervision and Regulation and in the
discussion of the common stocks of the respective subsidiary banks.
 
 Item 3. DEFAULTS UPON SENIOR SECURITIES
   
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     
 Item 5. OTHER INFORMATION
   36




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 6. EXHIBITS
 (a)
    
    Rule 13a-14(a) Certifications.
Section 1350 Certifications. Any certification furnished pursuant to this Item will
not be deemed filed for purposes of Section 18 of the Securities Exchange Act (15
U.S.C. 78r), or otherwise subject to the liability of that section.
 (b)
    
    None.
 37




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##### Table of Contents



SIGNATURES
  
  DATE: November 14, 2007
    /s/ Gary L. ScottGary L. Scott, Chairman andChief Executive Officer DATE: November 14, 2007
    /s/ Jason K. WestJason K. West, Chief Financial Officer 38