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Merchants and Farmers Bank

Donalsonville, GA · Cert 15878

FDIC

Q4 2005

$97.1MAssets
$55.2MLoans
$78.9MDeposits
$11.1MEquity
Loan mix
81%RE $25.6M18%C&I $5.6M1%Consumer $0.2MQ4 2004Q4 2005
Deposit mix
88%Interest-bearing $69.4M12%Noninterest $9.5MQ4 2004Q4 2005

NIM

4.84%Q4 ’035.05%Q4 ’046.41%Q4 ’05+7%+22%

Non-interest income vs. expense

2.63%Q4 ’032.70%Q4 ’042.82%Q4 ’05+6%+6%

Executive Summary

  • Earnings: ROA of 1.45%, up 31 bps year over year; NIM at 4.49%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.17%.
  • Funding: loans stand at 69.94% of deposits as of Q4 2005.

Financial Results

Return on Assets (quarter, annualized)

1.45%+31 bps YoY

Net Interest Margin (quarter, annualized)

4.49%+80 bps YoY

Efficiency Ratio (quarter, annualized)

50.33%-529 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2004Q1 2005Q2 2005Q3 2005Q4 2005YoY ΔTrend
Earnings
Return on Assets1.14%1.35%0.89%1.40%1.45%+31 bps
Return on Equity9.42%11.57%7.58%11.82%12.59%+317 bps
Net Interest Margin3.69%3.74%4.37%4.54%4.49%+80 bps
Efficiency Ratio55.62%51.94%56.96%56.00%50.33%-529 bps
Non-Interest Burden1.95%1.79%2.34%2.36%2.07%+12 bps
Growth
Asset Growth (YoY)-2.13%-0.37%-0.22%4.09%2.40%+454 bps
Loan Growth (YoY)-7.22%-5.20%4.02%7.77%5.01%+1,223 bps
Deposit Growth (YoY)-2.37%-0.03%-0.53%-0.41%2.90%+527 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.02%0.06%0.06%0.27%0.17%+15 bps
Allowance / Loans1.54%1.55%1.68%1.58%1.67%+12 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital15.08%14.22%14.09%14.13%15.36%+29 bps
Equity / Assets11.84%11.46%12.00%11.70%11.41%-44 bps
Liquidity & Funding
Loans / Deposits68.54%72.70%81.77%84.95%69.94%+141 bps
Liquid Assets / Assets0.12%0.42%0.86%0.82%0.68%+56 bps
CRE / Total Capitaln/an/an/an/an/an/an/a