| The Company competes with several local and regional commercial banks,
thrifts, credit unions and mortgage companies for deposits, loans and other
banking related financial services. There is intense competition in the Bank's
markets from other financial institutions as well as other "non-bank"
companies which engage in similar activities. Some of the Company's
competitors are not subject to the degree of regulatory review and
restrictions which apply to the Bank. In addition, the Company must compete
with much larger financial institutions which have greater financial resources
than the Company and aggressively compete for market share in the
Lamar/Forrest County market. These competitors attempt to gain market share
through their financial products mix, pricing strategies and banking center
locations. Legislative developments related to interstate branching and
banking in general, by providing large banking institutions easier access to a
broader marketplace, are creating more competitive pressure on smaller
financial institutions. The Company also competes with insurance companies,
savings banks, consumer finance companies, investment banking firms, brokerage houses, mutual fund managers, investment advisors and credit unions. Retail establishments compete for loans by offering credit cards and retail installment contracts for the purchase of goods and merchandise. It is
anticipated that competition from both bank and non-bank entities will
continue to grow. The Bank, which as of June 30, 1997 had the third largest
combined deposit market share in the three counties in which it operates, has
been able to compete effectively with other financial institutions by
emphasizing customer service and local office decision-making; by establishing long-term customer relationships and building customer loyalty; and by providing products and services designed to address the specific needs of its customers. |