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US Securities and Exchange Commission
 Washington, DC 20549
 Form 10-Q
 Quarterly Report Pursuant To Section 13 or 15(d)
Of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2007
 Commission File Number 0001366367
 Yadkin Valley Financial Corporation
 (Exact name of registrant specified in its charter)
 North Carolina
    
    20-4495993(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 209 North Bridge Street, Elkin, North Carolina 28621
(address of principal executive offices)
 336-526-6300
(Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




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##### 



Part I. Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets
March 31, 2007 and December 31, 2006
    
    
    3Condensed Consolidated Statements of Income
Three Months Ended March 31, 2007 and 2006
    
    
    4Condensed Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2007 and 2006
    
    
    5Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2007 and 2006
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7-11Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    11-17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4. Controls and Procedures
    
    
    17Part II. Other InformationItem 2. Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    17Item 6. Exhibit Index
    
    
    18Signatures
    
    
    18Exhibits
    
    
    20-22EX-31.1EX-31.2EX-32.1
  
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YADKIN VALLEY FINANCIAL CORPORATION
 
 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 MARCH 31,
    
    
    DECEMBER 31,2007
    
    
    2006*ASSETSCASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    28,140,654
    
    
    $
    42,387,101Interest-bearing deposits
    
    
    21,503,704
    
    
    
    1,669,033Total cash and cash equivalents
    
    
    49,644,358
    
    
    
    44,056,134SECURITIES AVAILABLE FOR SALE-At fair value
(Amortized cost $134,562,852 in 2007 and
$128,278,242 in 2006)
    
    
    134,341,773
    
    
    
    127,520,514LOANS  Less allowance for loan losses of $11,091,951
in 2007 and $10,828,882 in 2006
    
    
    797,142,356
    
    
    
    804,080,971LOANS HELD FOR SALE
    
    
    52,095,917
    
    
    
    42,350,915ACCRUED INTEREST RECEIVABLE
    
    
    5,865,158
    
    
    
    5,796,450PREMISES AND EQUIPMENT, NET
    
    
    27,241,826
    
    
    
    27,098,420FEDERAL HOME LOAN BANK STOCK, AT COST
    
    
    2,782,300
    
    
    
    3,632,600INVESTMENT IN BANK-OWNED LIFE INSURANCE
    
    
    22,218,264
    
    
    
    22,796,932GOODWILL
    
    
    32,696,900
    
    
    
    32,696,900CORE DEPOSIT INTANGIBLE (net of accumulated
amortization of $3,639,268 in 2007 and $3,441,799
in 2006)
    
    
    4,840,240
    
    
    
    5,037,709OTHER ASSETS
    
    
    6,222,446
    
    
    
    4,834,028TOTAL ASSETS
    
    $
    1,135,091,538
    
    
    $
    1,119,901,573LIABILITIES AND STOCKHOLDERS EQUITYDEPOSITSNoninterest-bearing demand deposits
    
    $
    155,911,588
    
    
    $
    151,811,660Interest-bearing deposits:NOW, savings, and money market accounts
    
    
    233,774,945
    
    
    
    233,031,838Time certificates:Over $100,000
    
    
    232,566,689
    
    
    
    228,553,689Other
    
    
    303,244,959
    
    
    
    294,449,712Total deposits
    
    
    925,498,181
    
    
    
    907,846,899SHORT-TERM BORROWINGS
    
    
    61,506,003
    
    
    
    62,062,598LONG-TERM BORROWINGS
    
    
    12,000,000
    
    
    
    17,000,000ACCRUED INTEREST PAYABLE
    
    
    3,137,660
    
    
    
    2,975,097OTHER LIABILITIES
    
    
    5,969,559
    
    
    
    5,617,838TOTAL LIABILITIES
    
    
    1,008,111,403
    
    
    
    995,502,432STOCKHOLDERS EQUITYCommon stock, $1.00 par value; authorized 20,000,000
shares; issued 10,605,257 shares in 2007 and
10,611,052 shares in 2006
    
    
    10,605,257
    
    
    
    10,611,052SURPLUS
    
    
    71,194,595
    
    
    
    71,151,626RETAINED EARNINGS
    
    
    45,321,213
    
    
    
    43,107,431ACCUMULATED OTHER COMPREHENSIVE LOSS
    
    
    (140,930
    )
    
    
    (470,968
    )Total stockholders equity
    
    
    126,980,135
    
    
    
    124,399,141TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,135,091,538
    
    
    $
    1,119,901,573
 
 *
    
    Derived from audited consolidated financial statements  
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YADKIN VALLEY FINANCIAL CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 THREE MONTHS ENDED MARCH 31, 2007 AND 2006
 Three Months EndedMarch 31,2007
    
    
    2006INTEREST INCOMEInterest and fees on loans
    
    $
    16,409,149
    
    
    $
    13,821,390Interest on federal funds sold
    
    
    39,943
    
    
    
    26,325Interest on securities:Taxable
    
    
    1,226,452
    
    
    
    859,061Non-taxable
    
    
    286,912
    
    
    
    289,293Interest-bearing deposits
    
    
    13,313
    
    
    
    39,400Total interest income
    
    
    17,975,769
    
    
    
    15,035,469INTEREST EXPENSETime deposits of $100,000 or more
    
    
    2,718,469
    
    
    
    1,652,345Other deposits
    
    
    4,492,074
    
    
    
    3,269,709Borrowed funds
    
    
    548,430
    
    
    
    318,723Total interest expense
    
    
    7,758,973
    
    
    
    5,240,777NET INTEREST INCOME
    
    
    10,216,796
    
    
    
    9,794,692PROVISION FOR LOAN LOSSES
    
    
    300,000
    
    
    
    565,000NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES
    
    
    9,916,796
    
    
    
    9,229,692NONINTEREST INCOMEService charges on deposit accounts
    
    
    980,415
    
    
    
    897,146Other service fees
    
    
    842,121
    
    
    
    770,097Net gain on sales of mortgage loans
    
    
    1,410,702
    
    
    
    1,164,419Net gain on sales of investment securities
    
    
    
    
    
    
    11,724Income on investment
in bank owned life
insurance
    
    
    216,769
    
    
    
    144,924Mortgage banking income
    
    
    79,286
    
    
    
    78,879Bank owned life insurance death benefit
    
    
    481,940Other income
    
    
    67,395
    
    
    
    75,583Total noninterest income
    
    
    4,078,628
    
    
    
    3,142,772NONINTEREST EXPENSESalaries and employee benefits
    
    
    4,838,601
    
    
    
    4,565,199Occupancy and equipment expenses
    
    
    1,014,908
    
    
    
    954,524Printing and supplies
    
    
    143,505
    
    
    
    161,731Data processing
    
    
    100,927
    
    
    
    112,504Amortization of core deposit intangible
    
    
    197,469
    
    
    
    207,430Other
    
    
    1,968,998
    
    
    
    1,920,987Total noninterest expense
    
    
    8,264,408
    
    
    
    7,922,375INCOME BEFORE INCOME TAXES
    
    
    5,731,016
    
    
    
    4,450,089INCOME TAXES
    
    
    1,818,610
    
    
    
    1,521,887NET INCOME
    
    $
    3,912,406
    
    
    $
    2,928,202NET INCOME PER COMMON SHARE:Basic
    
    $
    0.37
    
    
    $
    0.27Diluted
    
    $
    0.36
    
    
    $
    0.27CASH DIVIDENDS PER COMMON SHARE
    
    $
    0.12
    
    
    $
    0.11
  
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YADKIN VALLEY FINANCIAL CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 THREE MONTHS ENDED MARCH 31, 2007 AND 2006
 Three Months EndedMarch 31,2007
    
    
    2006NET INCOME
    
    $
    3,912,406
    
    
    $
    2,928,202OTHER COMPREHENSIVE INCOME (LOSS), BEFORE TAX:Unrealized holding gains (losses) on securities available for sale
    
    
    536,649
    
    
    
    (169,468
    )Tax effect
    
    
    (206,611
    )
    
    
    65,245Unrealized holding gains (losses) on securities available for
sale, net of tax
    
    
    330,038
    
    
    
    (104,223
    )Reclassification adjustment for realized (gains) losses
    
    
    
    
    
    
    (11,724
    )Tax effect
    
    
    
    
    
    
    4,514Reclassification adjustment for realized (gains) losses, net of tax
    
    
    
    
    
    
    (7,210
    )OTHER COMPREHENSIVE INCOME(LOSS), NET OF TAX
    
    
    330,038
    
    
    
    (111,433
    )COMPREHENSIVE INCOME
    
    $
    4,242,444
    
    
    $
    2,816,769
  
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YADKIN VALLEY FINANCIAL CORPORATION
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 THREE MONTHS ENDED MARCH 31, 2007 AND 2006
 2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    3,912,406
    
    
    $
    2,928,202Adjustments to reconcile net income to net cash used by
operating activities:Net amortization of premiums on investment securities
    
    
    23,231
    
    
    
    97,627Provision for loan losses
    
    
    300,000
    
    
    
    565,000Net gain on sales of mortgage loans held for sale
    
    
    (1,410,702
    )
    
    
    (1,164,419
    )Net gain on sales of available for sale securities
    
    
    
    
    
    
    7,455(Increase) decrease in investment in Bank owned life
insurance
    
    
    578,667
    
    
    
    (144,924
    )Depreciation and amortization
    
    
    502,715
    
    
    
    479,937Net gain on sale of premises and equipment
    
    
    (7,951
    )
    
    
    Amortization of core deposit intangible
    
    
    197,469
    
    
    
    207,430Originations of mortgage loans held-for-sale
    
    
    (233,476,439
    )
    
    
    (177,136,195
    )Proceeds from sales of mortgage loans
    
    
    225,142,139
    
    
    
    169,355,400Increase in accrued interest receivable
    
    
    (68,708
    )
    
    
    (362,104
    )(Increase) decrease in other assets
    
    
    (1,388,418
    )
    
    
    490,821Increase in accrued interest payable
    
    
    162,563
    
    
    
    338,514(Decrease) increase in other liabilities
    
    
    145,113
    
    
    
    (207,771
    )Net cash used by operating activities
    
    
    (5,387,916
    )
    
    
    (4,545,027
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of available for sale securities
    
    
    (13,215,100
    )
    
    
    (10,735,396
    )Proceeds from sales of available for sale securities
    
    
    4,807,258
    
    
    
    2,544,581Proceeds from maturities of available for sale securities
    
    
    2,100,000
    
    
    
    6,149,887Net change in loans
    
    
    6,638,615
    
    
    
    (8,597,087
    )Purchases of premises and equipment
    
    
    (646,231
    )
    
    
    (683,436
    )Proceeds from redemption of Federal Home Loan Bank stock
    
    
    850,300
    
    
    
    585,000Purchases of Federal Home Loan Bank stock
    
    
    
    
    
    
    (131,100
    )Proceeds from sale of premises and equipment
    
    
    8,060
    
    
    
    Net cash provided by (used in) investing activities
    
    
    542,902
    
    
    
    (10,867,551
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net increase in checking, NOW, money market
and savings accounts
    
    
    4,843,035
    
    
    
    3,252,426Net increase in time certificates
    
    
    12,808,247
    
    
    
    15,943,930Net decrease in borrowed funds
    
    
    (5,556,594
    )
    
    
    (6,906,072
    )Purchases of common stock
    
    
    (580,148
    )
    
    
    (363,879
    )Dividends paid
    
    
    (1,272,631
    )
    
    
    (1,173,494
    )Proceeds from exercise of stock options
    
    
    191,329
    
    
    
    25,581Net cash provided by financing activities
    
    
    10,433,238
    
    
    
    10,778,492NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
    
    
    5,588,224
    
    
    
    (4,634,086
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    44,056,134
    
    
    
    55,493,487End of period
    
    $
    49,644,358
    
    
    $
    50,859,401
  
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Notes to Unaudited Condensed Consolidated Financial Statements
 1. Significant Accounting Policies
 Basis of Presentation
   2. Stock-based Compensation
    
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3. Commitments and Contingencies
   4. Earnings per share
  Three Months EndedMarch 31,2007
    
    
    2006Basic EPS denominator:Weighted average number of common shares outstanding
    
    
    10,614,120
    
    
    
    10,670,436Dilutive effect arising from assumed exercise of stock options
    
    
    207,606
    
    
    
    141,829Diluted EPS denominator
    
    
    10,821,726
    
    
    
    10,812,265
  5. Stockholders Equity
 
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6. Business Segment Information
  March 31, 2007
    
    Bank
    
    
    Sidus
    
    
    Other
    
    
    TotalInterest income (1)
    
    $
    17,420,739
    
    
    $
    625,772
    
    
    $
    (70,742
    )
    
    $
    17,975,769Interest expense
    
    
    7,306,565
    
    
    
    523,150
    
    
    
    (70,742
    )
    
    
    7,758,973Net interest income
    
    
    10,114,174
    
    
    
    102,622
    
    
    
    
    
    
    
    10,216,796Provision for loan losses
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    300,000Net interest income after
provision
for loan losses
    
    
    9,814,174
    
    
    
    102,622
    
    
    
    
    
    
    
    9,916,796Net gain (loss) on sale
of investment
Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income
    
    
    2,667,926
    
    
    
    1,410,702
    
    
    
    
    
    
    
    4,078,628Other expense
    
    
    7,025,362
    
    
    
    1,239,046
    
    
    
    21,059
    
    
    
    8,285,467Income before income taxes
    
    
    5,456,738
    
    
    
    274,278
    
    
    
    (21,059
    )
    
    
    5,709,957Income taxes (2)
    
    
    1,711,641
    
    
    
    106,968
    
    
    
    
    
    
    
    1,818,610Net income
    
    $
    3,745,097
    
    
    $
    167,310
    
    
    $
    (21,059
    )
    
    $
    3,912,406Total assets (3)
    
    $
    1,138,863,105
    
    
    $
    59,248,495
    
    
    $
    (63,020,062
    )
    
    $
    1,135,091,538Net loans
    
    
    797,142,356
    
    
    
    
    
    
    
    
    
    
    
    797,142,356Loans held for sale
    
    
    72,000
    
    
    
    52,023,917
    
    
    
    
    
    
    
    52,095,917Goodwill
    
    
    32,696,900
    
    
    
    4,943,872
    
    
    
    (4,943,872
    )
    
    
    32,696,900
 
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March 31, 2006
    
    Bank
    
    
    Sidus
    
    
    Other
    
    
    TotalInterest income (1)
    
    $
    14,645,895
    
    
    $
    443,387
    
    
    $
    (53,813
    )
    
    $
    15,035,469Interest expense
    
    
    4,945,097
    
    
    
    349,493
    
    
    
    (53,813
    )
    
    
    5,240,777Net interest income
    
    
    9,700,798
    
    
    
    93,894
    
    
    
    
    
    
    
    9,794,692Provision for loan losses
    
    
    565,000
    
    
    
    
    
    
    
    
    
    
    
    565,000Net interest income after
provision
for loan losses
    
    
    9,135,798
    
    
    
    93,894
    
    
    
    
    
    
    
    9,229,692Net gain (loss) on sale
of investment
Securities
    
    
    11,724
    
    
    
    
    
    
    
    
    
    
    
    11,724Other income
    
    
    2,170,004
    
    
    
    1,164,419
    
    
    
    
    
    
    
    3,334,423Other expense
    
    
    6,873,728
    
    
    
    1,252,022
    
    
    
    
    
    
    
    8,125,750Income before income taxes
    
    
    4,443,798
    
    
    
    6,291
    
    
    
    
    
    
    
    4,450,089Income taxes (2)
    
    
    1,519,465
    
    
    
    2,422
    
    
    
    
    
    
    
    1,521,887Net income
    
    $
    2,924,333
    
    
    $
    3,869
    
    
    
    
    
    
    $
    2,928,202Total assets (3)
    
    $
    1,054,257,614
    
    
    $
    46,333,860
    
    
    $
    (62,640,722
    )
    
    $
    1,037,950,752Net loans
    
    
    736,088,477
    
    
    
    
    
    
    
    
    
    
    
    736,088,477Loans held for sale
    
    
    275,585
    
    
    
    40,096,358
    
    
    
    
    
    
    
    40,371,943Goodwill
    
    
    32,136,183
    
    
    
    4,383,155
    
    
    
    (4,383,155
    )
    
    
    32,136,183
 
 (1)
    
    Note: The Bank allocates interest expense to Sidus based on the Banks cost of funds plus an
additional charge of 87.5 basis points. The additional basis points charge, reflected in interest
income to the Bank and interest expense to Sidus, is eliminated in the Other column.(2)
    
    Note: Income tax expense has been allocated to the Sidus business segment for comparative
purposes. As an LLC, Sidus passes its pre-tax income through to its single member, the Bank, which
is taxed on that income.(3)
    
    Note: Asset eliminations represent the Banks Due from Sidus account ($55,000,000 in 2007 and
2006), the Banks Investment in Sidus ($3,000,000 in 2007 and 2006), the Banks A/R from Sidus
($230,873 in 2007 and $257,567 in 2006), and Sidus Goodwill account ($4,943,872 in 2007 and
$4,383,155 in 2006) and Holding Company assets ($154,683 in 2007 and $2,461 in 2006). 7. Reclassifications
  8. New Accounting Standards
 
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Changes in Financial Position
  
 11




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12




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Liquidity, Interest Rate Sensitivity and Market Risk
     Results of Operations
  
 13




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Net Interest Income
   
 14




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Average Balance Sheets and Net Interest Income Analysis(Dollars in Thousands)(Unaudited)Three Months Ended:
    
    March 31, 2007
    
    
    March 31, 2006Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Rate
    
    
    Balance
    
    
    Interest
    
    
    RateINTEREST EARNING ASSETSFederal funds sold
    
    $
    2,352
    
    
    $
    40
    
    
    
    6.90
    %
    
    $
    2,346
    
    
    $
    26
    
    
    
    4.49
    %Interest bearing deposits
    
    
    1,889
    
    
    
    13
    
    
    
    2.79
    %
    
    
    3,868
    
    
    
    39
    
    
    
    4.09
    %Investment securities (1)
    
    
    129,935
    
    
    
    1,640
    
    
    
    5.12
    %
    
    
    117,085
    
    
    
    1,277
    
    
    
    4.42
    %Total loans (1,2)
    
    
    839,988
    
    
    
    16,445
    
    
    
    7.94
    %
    
    
    763,573
    
    
    
    13,847
    
    
    
    7.35
    %Total average earning assets (1)
    
    
    974,164
    
    
    
    18,138
    
    
    
    7.55
    %
    
    
    886,872
    
    
    
    15,189
    
    
    
    6.95
    %Noninterest earning assets
    
    
    112,099
    
    
    
    
    
    
    
    
    
    
    
    120,958Total average assets
    
    $
    1,086,263
    
    
    
    
    
    
    
    
    
    
    $
    1,007,830INTEREST BEARING LIABILITIESNOW and money market
    
    $
    187,540
    
    
    $
    1,091
    
    
    
    2.20
    %
    
    $
    201,580
    
    
    $
    900
    
    
    
    1.81
    %Savings
    
    
    36,745
    
    
    
    90
    
    
    
    0.99
    %
    
    
    40,681
    
    
    
    100
    
    
    
    1.00
    %Time certificates
    
    
    522,512
    
    
    
    6,102
    
    
    
    4.74
    %
    
    
    425,745
    
    
    
    3,922
    
    
    
    3.74
    %Total interest bearing deposits
    
    
    746,797
    
    
    
    7,211
    
    
    
    3.92
    %
    
    
    668,006
    
    
    
    4,922
    
    
    
    2.99
    %Repurchase agreements sold
    
    
    36,095
    
    
    
    298
    
    
    
    3.35
    %
    
    
    29,015
    
    
    
    199
    
    
    
    2.78
    %Borrowed funds
    
    
    21,543
    
    
    
    250
    
    
    
    4.71
    %
    
    
    45,917
    
    
    
    120
    
    
    
    1.06
    %Total interest bearing liabilities
    
    
    804,435
    
    
    
    7,759
    
    
    
    3.91
    %
    
    
    742,938
    
    
    
    5,241
    
    
    
    2.86
    %Noninterest bearing deposits
    
    
    147,045
    
    
    
    
    
    
    
    
    
    
    
    140,412Stockholders equity
    
    
    126,588
    
    
    
    
    
    
    
    
    
    
    
    118,041Other liabilities
    
    
    8,195
    
    
    
    
    
    
    
    
    
    
    
    8,515Total average liabilities and
stockholders equity
    
    $
    1,086,263
    
    
    
    
    
    
    
    
    
    
    $
    1,007,830NET INTEREST INCOME/

YIELD (3,4)
    
    
    
    
    
    $
    10,379
    
    
    
    4.32
    %
    
    
    
    
    
    $
    9,948
    
    
    
    4.55
    %INTEREST SPREAD (5)
    
    
    
    
    
    
    
    
    
    
    3.64
    %
    
    
    
    
    
    
    
    
    
    
    4.09
    %
 
 1.
    
    Yields related to securities and loans exempt from Federal income taxes are stated on a fully tax equivalent
basis, assuming a Federal income tax rate of 34%, reduced by the nondeductible portion of interest expense2.
    
    The loan average includes loans on which accrual of interest has been discontinued.3.
    
    Net interest income is the difference between income from earning assets and interest expense.4.
    
    Net interest yield is net interest income divided by total average earning assets.5.
    
    Interest spread is the difference between the average interest rate received on earning assets and the average
rate paid on interest bearing liabilities. Provisions and Allowance for Loan Losses
  
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##### Table of Contents



Noninterest Income
    Noninterest Expense
  
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##### Table of Contents



Income Tax Expense
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
  
 Part II. Other Information
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
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##### Table of Contents



Total Numberof Shares
    
    
    Maximum NumberPurchased as
    
    
    of Shares ThatTotal Number
    
    
    Average Price
    
    
    Part of
    
    
    May Yet Beof Shares
    
    
    Paid per
    
    
    Publicly
    
    
    Purchased UnderPeriod
    
    Purchased
    
    
    Share
    
    
    Announced Program
    
    
    the Program(1)January 1, 2007 to January 31, 2007
    
    
    1,110
    
    
    $
    19.00
    
    
    
    1,110
    
    
    
    47,386February 1, 2007 to February 28, 2007
    
    
    2,141
    
    
    
    19.78
    
    
    
    2,141
    
    
    
    45,245March 1, 2007 to March 31, 2007
    
    
    26,455
    
    
    
    19.53
    
    
    
    26,455
    
    
    
    18,790Total
    
    
    29,706
    
    
    $
    19.53
    
    
    
    29,706
 
 (1)
    
    The Companys stock repurchase program, as
approved by the Board of Directors effective July
2006 provides for the repurchase of up to 100,000
shares until April 30, 2007. There have been 81,210
shares purchased under the new 2006 plan. 
 Item 6. Exhibits
 Exhibit #
    
    Description31.1
    
    Rule 13a-14(a)/15d-14(a) Certification31.2
    
    Rule 13a-14(a)/15d-14(a) Certification32.1
    
    Section 1350 Certification
 
    
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##### Table of Contents



BY:
    
    /s/ William A. LongWilliam A. Long, President and Chief Executive OfficerBY:
    
    /s/ Edwin E. LawsEdwin E. Laws, Chief Financial Officer
  
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