10-Q 1 d10q.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 25049 FORM 10-Q [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to__________ Commission File Number 000-23465 CODDLE CREEK FINANCIAL CORP. ---------------------------------------------------- (Exact name of registrant as specified in its charter) North Carolina 56-2045998 ------------------------------ --------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 347 North Main Street/Post Office Box 117 Mooresville, North Carolina 28115 ------------------------------------------------- (Address of principal executive offices) (Zip code) (704) 664-4888 ------------------------ (Issuer's telephone number) N/A -------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check [X] whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ As of August 13, 2002 there were issued and outstanding 699,156 shares of the Registrant's common stock, no par value. CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY INDEX

This Form 10-Q contains forward-looking statements consisting of estimates with respect to the financial condition, results of operations and other business of Coddle Creek Financial Corp. that are subject to various factors which could cause actual results to differ materially from those estimates. Factors which could influence the estimates include changes in the national, regional and local market conditions, legislative and regulatory conditions, and an adverse interest rate environment. CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30, 2002 and December 31, 2001

NOTE: The Condensed Consolidated Statement of Financial Condition as of December 31, 2001 has been derived from the audited financial statements at that date. See Notes to Condensed Consolidated Financial Statements. 1 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION June 30, 2002 and December 31, 2001

2 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended June 30, 2002 and 2001

See Notes to Condensed Consolidated Financial Statements. 3 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME For the Six Months Ended June 30, 2002 and 2001

See Notes to Condensed Consolidated Financial Statements. 4 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, 2002 and 2001

(Continued) 5 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Six Months Ended June 30, 2002 and 2001

See Notes to Condensed Consolidated Financial Statements. 6 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- NOTE 1. NATURE OF BUSINESS On December 30, 1997, pursuant to a Plan of Conversion which was approved by its members and regulators, Mooresville Savings Bank, Inc., SSB (the "Bank" or "Mooresville Savings") converted from a North Carolina-chartered mutual savings bank to a North Carolina-chartered stock savings bank (the "Conversion") and became a wholly-owned subsidiary of Coddle Creek Financial Corp. (the "Company"). Coddle Creek was formed to acquire all of the common stock of the Bank upon its conversion to stock form. The Company has no operations and conducts no business of its own other than owning Mooresville Savings, investing its portion of the net proceeds received in the Conversion, and lending funds to the Employee Stock Ownership Plan (the "ESOP"), which was established in connection with the Conversion. Mooresville Savings' results of operations depend primarily on its net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities. The Bank's operations are also affected by non-interest income, such as miscellaneous income from loans, customer deposit account service charges, and other sources of revenue. The Bank's principal operating expenses, aside from interest expense, consist of compensation and associated benefits, occupancy costs, furniture and fixture expense, data processing charges, and other general and administrative expenses. Concurrent with the Conversion, and pursuant to North Carolina regulations, the Bank established a liquidation account in an amount equal to its net worth at the time of Conversion. The liquidation account is maintained for the benefit of eligible deposit account holders who continued to maintain their deposit accounts in the Bank after Conversion. Only in the event of a complete liquidation of the Company will each deposit account holder be entitled to receive a liquidation distribution from the liquidation account in the amount of the then current adjusted subaccount balance for deposit accounts then held before any liquidation distribution may be made with respect to common stock. Dividends paid by the Bank cannot be paid from this liquidation account. The Bank may not declare or pay a cash dividend on or repurchase any of its common stock if its net worth would thereby be reduced below either the aggregate amount then required for the liquidation account or the minimum regulatory capital requirements imposed by federal and state regulations. For a period of five years after its Conversion, the Bank must obtain written approval from the North Carolina Commissioner of Banks before declaring or paying a cash dividend on its common stock in an amount in excess of one-half of the greater of (i) the Bank's net income for the most recent fiscal year end, or (ii) the average of the Bank's net income after dividends for the most recent year end and not more than two of the immediately preceding fiscal year ends. On January 2, 2001, the Board of Directors of the Company declared a special return of capital dividend of $20.00 per share for stockholders of record as of January 19, 2000 and payable on January 24, 2001. The ESOP purchased 40,327 additional shares with proceeds from the 2001 return of capital dividend in 2001. 7 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- NOTE 2. BASIS OF PRESENTATION The accompanying unaudited financial statements (except for the statements of financial condition at December 31, 2001, which is from audited financial statements at that date) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (none of which were other than normal recurring accruals) necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. The results of operations for the six month period ended June 30, 2002 are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2002. The accounting policies followed are as set forth in Note 1 of the Notes to Consolidated Financial Statements in the 2001 Annual Report to Shareholders of the Company. NOTE 3. EARNINGS PER SHARE Earnings per share has been calculated in accordance with Financial Accounting Standards Board Statement No. 128, Earnings Per Share, and Statement of Position 93-6, Employers' Accounting for Employee Stock Ownership Plans. For purposes of this computation, the number of shares of common stock purchased by the Bank's ESOP which have not been allocated to participant accounts are not assumed to be outstanding. Options to purchase 58,131 shares of common stock at $31.00 per share were outstanding during the first and second quarter of 2002 and 2001. The average market price during the second quarter of 2002 was higher than the exercise price of $31.00; therefore, 667 incremental shares were included in computing dilutive earnings per share. The average market price was lower than the exercise price of $31.00, during the second quarter of 2001; therefore, the incremental shares are not considered dilutive and are not included in the calculation of dilutive earnings per share. The following are reconciliations of the amounts used in the per share calculations for 2002 and 2001:

8 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- NOTE 3. EARNINGS PER SHARE (CONTINUED)

NOTE 4. STOCK OPTION AND MANAGEMENT RECOGNITION PLANS The Company's stockholders approved the Company's Stock Option Plan and the Bank's Management Recognition Plan (the "MRP") on January 26, 2000. The Stock Option Plan reserves for issuance up to 67,447 stock options to officers, directors, and employees at the time of the adoption either in the form of incentive stock options or non-incentive stock options. The exercise price of the stock options may not be less than the fair value of the Company's common stock at date of grant, as adjusted for the stock splits and dividends affecting market value. As permitted under generally accepted accounting principles, grants under the plan will be accounted for following the provisions of APB Opinion No. 25 and its related interpretations. At June 30, 2002, 58,131 options have been granted at an exercise price of $31.00, of which 46,125 options are currently exercisable. No options have been exercised to date, and all options granted are outstanding at June 30, 2002. During the quarter ending March 31, 2001, simultaneous with the payment of the $20 per share special dividend to shareholders, all officers, directors and employees holding options received an option bonus of $20 per option share held by such officers, directors or and employees resulting in a one time recorded compensation expense of $1.2 million. The MRP reserved for issuance 26,979 shares of common stock to officers, directors, and employees at the time of the adoption. The Bank issued 24,281 shares and 400 shares from authorized but unissued common stock to fund the MRP on January 26, 1999 and January 26, 2000, respectively. The restricted common stock under the MRP vests 25% at the date of grant and 25% annually beginning on the one year anniversary of the date of grant. The Company recorded compensation expense in the amount of $235,000 during the first quarter of 2001 for the special $20 per share return of capital dividend that was paid to holders of unvested MRP shares. 9 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- NOTE 5. NOTE PAYABLE AND FEDERAL HOME LOAN BANK ADVANCES In January 2001, the Company borrowed funds from an outside bank primarily to fund the special return of capital dividend. During the first quarter of 2002, the Company paid the note balance in full in the amount of $12,700,000. The Bank has an outstanding advance from the Federal Home Loan Bank in the amount of $5,000,000 which bears interest at 2.33% per annum and is due September 2002. 10 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND DECEMBER 31, 2001: At June 30, 2002 and December 31, 2001 total assets amounted to $138.7 million and $149.9 million, respectively. Loans receivable, net, decreased from $119.1 million at December 31, 2001 to $118.8 million at June 30, 2002, a $.3 million decrease. Deposits decreased $3.9 million from $112.9 million at December 31, 2001 to $109.0 million at June 30, 2002. Investment securities decreased $.9 million from $4.6 million at December 31, 2001 to $3.7 million at June 30, 2002 due to maturities of securities during the first quarter of 2002. Stockholders' equity increased by $174,000 for the six months ended June 30, 2002. This increase is primarily due to net income of $509,000 offset by the payment of a dividend of $308,000 paid during the first six months of 2002. The Company's liquidity position declined during the six months as cash and cash equivalents decreased $10.2 million to $11.2 million at June 30, 2002 from $21.4 million at December 31, 2001. This decrease is primarily a result of the payment on the note payable and a decrease in savings deposits offset by additional proceeds from advances from the FHLB and maturities of investment securities. The Bank's level of nonperforming loans, defined as loans past due 90 days or more, has historically been and continues to be low as a percentage of total loans outstanding. The Bank had $2.9 million of loans outstanding which were delinquent more than 90 days at June 30, 2002, compared to $1.6 million at December 31, 2001. This increase is due to slower customer payments and the addition of a few large dollar loans into this delinquency category. Based on management's analysis of the adequacy of the allowance for loan losses, the composition of the loan portfolio, the credit risk inherent in the portfolio and historical loan loss experience, the allowance for loan losses is $.9 million at June 30, 2002 and at December 31, 2001. Management believes the allowance to be adequate to absorb any future losses in the portfolio. See loan analysis on pages 14 and 15. At June 30, 2002, the Company's capital amounted to $21.2 million, which as a percentage of total consolidated assets was 15%, and was in excess of the regulatory capital requirements at such date. COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001: General. Net income (loss) for the three and six months ended June 30, 2002 was $215,000 and $509,000, respectively, compared to $108,000 and $(585,000) during the same quarter in 2001. The increase in earnings was primarily attributable to a decline in cost of funds for the three and six month period ended June 30, 2002 and to a decrease in compensation expense. Compensation expense decreased during the six months ended June 30, 2002 due to the fact that $1.2 million was paid in bonuses to officers, directors and employees holding options under the Company's stock option plan, and $235,000 was expensed due to dividends paid on unvested MRP shares, during the same periods in 2001. Interest income. Interest income decreased by $.5 million to $2.3 million for the three months ended June 30, 2002 from $2.8 million for the three months ended June 30, 2001 and decreased $.9 million to $4.8 million for the six months ended June 30, 2002 from the $5.7 million for the six months ended June 30, 2001. The decrease is primarily due to a decrease in the average balance of interest-earning assets during the first six months of 2002 as compared to 2001. Approximately 96% of the Bank's assets were interest-earning at June 30, 2002, and approximately 89% of such interest-earning assets were held in the form of loans receivable. See rate-volume table on page 13. 11 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- Interest expense. Interest expense decreased by $.8 million from $1.7 million during the three months ended June 30, 2001 to $.9 million for the three months ended June 30, 2002. Interest expense decreased by $1.5 million from $3.5 million for the six months ended June 30, 2001 to $2.0 million for the six months ended June 30, 2002. The decrease is due in part to lower interest rates paid on interest-bearing liabilities outstanding during the first six months of 2002 in comparison to the same six month period a year earlier. In addition, there was a decrease in the balance of average interest bearing liabilities which resulted, in part, to the payment of the note payable in full during the first quarter of 2002. See rate-volume table on page 13. Net interest income. Net interest income increased by $.2 from $1.1 million for the three months ended June 30, 2001 to $1.3 for the three months ended June 30, 2002. Net interest income increased by $ .6 million from $2.2 million for the six months ended June 30, 2001 to $2.8 million for the six months ended June 30, 2002. The increase is primarily due to the decrease in interest expense discussed above. Provision for loan losses. The Bank did not make any loan loss provisions during the six months ended June 30, 2002 and 2001. Provisions, which are charged to operations, and the resulting loan loss allowances, are amounts the Bank's management believes will be adequate to absorb losses on existing loans that may become uncollectible. Loans are charged off against the allowance when management believes that collectibility is unlikely. The evaluation to increase or decrease the provision and resulting allowances is based both on prior loan loss experience and other factors, such as changes in the nature and volume of the loan portfolio, overall portfolio quality, and current economic conditions. The Bank's level of nonperforming loans has remained consistently low in relation to prior periods and total loans outstanding. At June 30, 2002, the Bank's level of general valuation allowances for loan losses amounted to $890,000, which management believes is adequate to absorb potential losses in its loan portfolio. Non-interest expense. Non-interest expense remained stable at $1.0 million for the three months ended June 30, 2002 and 2001. Non interest expense decreased by $1.2 million from $3.3 million for the six months ended June 30, 2001 to $2.1 million for the six months ended June 30, 2002. Specifically, compensation expense decreased by $1.2 million from 2001 to 2002 due primarily to the decrease in MRP expense related to the special dividends paid on unvested MRP shares ($235,000) and option bonuses ($1.1 million) paid to all option holders during 2001. All other categories of non-interest expense fluctuated by insignificant amounts between the two periods. 12 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- RATE/VOLUME ANALYSIS Six months ended June 30, 2002 vs 2001 Increase (Decrease) Due to ------------------------------------- Volume Rate Net ------------------------------------- (In Thousands) Interest Income: Interest-bearing deposits $ (76) $ (193) $ (269) Investments (35) 10 (25) Loans receivable (314) (299) (613) ------------------------------------- Total interest income (425) (482) (907) ------------------------------------- Interest Expense: Deposits 49 (1,015) (966) Note payable and FHLB advances (390) (185) (575) ------------------------------------- Total interest expense (341) (1,200) (1,541) ------------------------------------- Net Interest Income $ (84) $ 718 $ 634 ===================================== 13 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- LOANS RECEIVABLE BREAKDOWN

14 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- ANALYSIS OF LOAN LOSSES

15 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- NET INTEREST INCOME The following table provides information concerning the Bank's yields on interest earning assets and cost of funds on interest-bearing liabilities for the six months ended June 30, 2002 and the year ended December 31, 2001.

*Annualized 16 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- CAPITAL RESOURCES AND LIQUIDITY: The term "liquidity" generally refers to an organization's ability to generate adequate amounts of funds to meet its needs for cash. More specifically for financial institutions, liquidity ensures that adequate funds are available to meet deposit withdrawals, fund loan and capital expenditure commitments, maintain reserve requirements, pay operating expenses, and provide funds for debt service, dividends to stockholders, and other institutional commitments. Funds are primarily provided through financial resources from operating activities, expansion of the deposit base, borrowings, the sale or maturity of investments, the ability to raise equity capital, or maintenance of shorter term interest-bearing deposits. Mooresville Savings must maintain liquidity in the form of cash, cash equivalents and investment securities, including mortgage-backed securities, equal to at least 10% of total assets. The Bank's liquidity ratio at June 30, 2002 was considerably in excess of such requirements. The Bank's liquidity has increased from December 31, 2001 in order to fund the Bank's expected loan growth. Given its excess liquidity and its ability to borrow from the Federal Home Loan Bank, the Bank believes that it will have sufficient funds available to meet anticipated future loan commitments, unexpected deposit withdrawals, and other cash requirements. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The Company's accounting policies are fundamental to understanding management's discussion and analysis of results of operations and financial condition. The Company's significant accounting policies are discussed in detail in Note 1 of the consolidated financial statements of the Company's 2001 Annual Report. The following is a summary of the allowance for loan losses, one of the most complex and judgmental accounting policies of the Company. The allowance for loan losses is increased by charges to income and decreased by charge-offs (net of recoveries). The allowance is an amount that management believes will be adequate to absorb estimated losses on existing loans. Management's periodic evaluation of the adequacy of the allowance is based on the Bank's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to pay, the estimated value of any underlying collateral, and current economic conditions. The loan portfolio is further analyzed by each loan type and delinquency status to determine the risk category for each loan that is used in calculating the allowance for loan losses. Loans delinquent greater than 90 days are evaluated individually for loss exposure, while other loans are evaluated aggregately by type. While management uses the best information to make evaluations, future adjustments may be necessary, if economic or other conditions differ substantially from the assumptions used. 17 CODDLE CREEK FINANCIAL CORP. AND SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -------------------------------------------------------------------------------- IMPACT OF THE INFLATION AND CHANGING PRICES: The financial statements and accompanying footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The assets and liabilities of the Bank are primarily monetary in nature, and changes in market interest rates have a greater impact on the Bank's performance than do the effects of inflation. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company has not experienced any material changes in its portfolio risk, other than rates previously disclosed, during the three month period ended June 30, 2002. 18 Part II. OTHER INFORMATION Item 1. Legal Proceedings The Company is not engaged in any material legal proceedings at the present time. From time to time, the Company is a party to legal proceedings within the normal course of business wherein it enforces its security interest in loans made by it and other matters of a like kind. Item 2. Changes in Securities and Use of Proceeds Not applicable Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders The Company held an Annual Meeting of Stockholders on April 25, 2002. The purpose of the meeting was to vote on the following proposals: 1. Election of six directors: 2. Ratification of appointment of McGladrey & Pullen, LLP as independent auditors for the fiscal year ending December 31, 2002. At the Annual Meeting the following resolutions were made and resolved the number of votes specified below: 1.

The above constitute all of the members of the Company's Board of Directors. No other members are continuing who were not elected at the annual meeting. 2. RESOLVED, that the appointment of McGladrey & Pullen, LLP, as independent auditor for the year ending December 31, 2002, be and is hereby ratified and approved. For Against Abstain Broker Non-Votes -------------------------------------------------------------- 584,695 - 1,130 - 99.81% 0.00% 0.19% - 19 Item 5. Other Information Not applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit(3)(i) Certificate of Incorporation, incorporated herein by reference to Exhibit (3)(i) to the Registration Statement on Form S-1, Registration No. 333-35497, dated September 12, 1997, and amended on November 5 and 10, 1997. Exhibit(3)(ii) Bylaws, incorporated herein by reference to Exhibit (3)(ii) to the Registration Statement on Form S-1, Registration No. 333-35497, dated September 12, 1997, and amended on November 5 and 10, 1997. Exhibit(4) Specimen Stock Certificate, incorporated herein by reference to Exhibit (4) to the Registration Statement on Form S-1, Registration No. 333-35497, dated September 12, 1997, and amended on November 5 and 10, 1997. Exhibit(10)(a) Employment Agreement between Mooresville Savings Bank, Inc., S.S.B. and George W. Brawley, Jr. dated December 30, 1997, as amended on December 15, 1998, incorporated herein by reference to Exhibit 10 (a) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(b) Employment Agreement between Mooresville Savings Bank, Inc., S.S.B. and Dale W. Brawley dated December 30, 1997, as amended on December 15, 1998, incorporated herein by reference to Exhibit 10 (b) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(c) Employment Agreement between Mooresville Savings Bank, Inc., S.S.B. and Billy R. Williams dated December 30, 1997, as amended on December 15, 1998, incorporated herein by reference to Exhibit 10 (c) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(d) Employee Stock Ownership Plan and Trust of Mooresville Savings Bank, Inc., S.S.B., incorporated by reference to Exhibit 10(d) to the Company's Form 10-K for the year ended December 31, 1997. Exhibit(10)(e) Mooresville Savings Bank, Inc., S.S.B. Severance Plan, incorporated herein by reference to Exhibit 10(f) to the Registration Statement on Form S-1, Registration No. 333-35497, dated September 12, 1997, and as amended on November 5 and 10, 1997. Exhibit(10)(f) Capital Maintenance Agreement between Coddle Creek Financial Corp. and Mooresville Savings Bank, Inc., S.S.B., incorporated by reference to Exhibit 10(f) to the Company's Form 10-K for the year ended December 31, 1997. 20 Exhibit(10)(g) Management Recognition Plan of Mooresville Savings Bank, Inc., S.S.B., incorporated herein by reference to Exhibit 10(g) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(h) Stock Option Plan of Coddle Creek Financial Corp., incorporated herein by reference to Exhibit 10(h) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(i) (i) Amended and Restated Retirement Payment Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Donald R. Belk, George W. Brawley and Claude U. Voils, Jr. dated September 3, 1979, as amended and restated September 8, 1997 and as amended on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(i) to the Company's Form 10-K for the year ended December 31, 1998. (ii) Retirement Payment Agreement between Mooresville Savings Bank, Inc., S.S.B. and Calvin E. Tyner dated September 3, 1979, as amended on September 8, 1997, incorporated herein by reference to Exhibit 10(i)(ii) to the Company's Form 10-K for the year ended December 31, 1998. (iii) Amended and Restated Director's Deferred Compensation Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Donald R. Belk, George W. Brawley, Jr., and Claude U. Voils, Jr. dated January 1, 1985, as amended and restated on March 31, 1988 and September 8, 1997 and as amended for Messrs. Belk, Brawley, and Voils on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(iii) to the Company's Form 10-K for the year ended December 31, 1998. (iv) Amended and Restated Director's Deferred Compensation Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Donald R. Belk, George W. Brawley, Jr.., Calvin E. Tyner, and Claude U. Voils, Jr. dated December 1, 1985, as amended and restated on September 8, 1997 and as amended for Messrs. Belk, Brawley and Voils on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(iv) to the Company's Form 10-K for the year ended December 31, 1998. (v) Amended and Restated Retirement Plan Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of George W. Brawley, Jr., Donald R. Belk, Claude U. Voils, Jr. and Calvin E. Tyner dated November 1, 1993, as amended and restated on September 15, 1997, and as amended for Messrs. Brawley, Belk, and Voils on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(v) to the Company's Form 10-K for the year ended December 31, 1998. 21 (vi) Amended and Restated Retirement Payment Agreements between Mooresville Savings Bank, S.S.B. and George W. Brawley, Jr. dated December 1, 1990, as amended and restated on September 8, 1997 and as amended on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(vi) to the Company's Form 10-K for the year ended December 31, 1998. (vii) Amended and Restated Retirement Payment Agreement between Mooresville Savings Bank, S.S.B. and Dale W. Brawley dated November 1, 1990, amended and restated on October 21, 1993, as amended and restated on September 8, 1997, incorporated herein by reference to Exhibit 10(i)(vii) to the Company's Form 10-K for the year ended December 31, 1998. (viii) Amended and Restated Retirement Payment Agreements between (a) Mooresville Savings Bank, Inc., S.S.B. and each of Donald R. Belk, George W. Brawley, Jr., and Claude U. Voils, Jr. dated March 1, 1993, as amended and restated on September 8, 1997 and as amended for each of them on December 16, 1998 and (b) Mooresville Savings Bank, Inc., S.S.B. and Dale W. Brawley dated February 11, 1993, as amended and restated on October 21, 1993 and September 8, 1997, incorporated herein by reference to Exhibit 10(i)(viii) to the Company's Form 10-K for the year ended December 31, 1998. (ix) Amended and Restated Retirement Payment Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Dale W. Brawley and George W. Brawley, Jr. dated August 1, 1993, amended and restated on October 23, 1993 for Dale W. Brawley, as amended and restated on September 8, 1997, and as amended for George W. Brawley on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(ix) to the Company's Form 10-K for the year ended December 31, 1998. (x) Amended and Restated Retirement Payment Agreement between Mooresville Savings Bank, Inc., S.S.B. and Jack G. Lawler dated June 1, 1994, as amended and restated on September 8, 1997, incorporated herein by reference to Exhibit 10(i)(x) to the Company's Form 10-K for the year ended December 31, 1998. (xi) Amended and Restated Salary Continuation Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Dale W. Brawley, George W. Brawley, Jr., Patricia B. Clontz, and Richard E. Woods dated September 1, 1984, as amended and restated on September 17, 1997, and as amended for George W. Brawley on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(x) to the Company's Form 10-K for the year ended December 31, 1998. 22 (xii) Amended and Restated Supplemental Income Agreements between Mooresville Savings Bank, Inc., S.S.B. and each of Dale W. Brawley, George W. Brawley, Jr., Billy R. Williams, Donald G. Jones and Richard E. Woods dated November 1, 1993, as amended and restated on September 17, 1997, and as amended for George W. Brawley on December 16, 1998, incorporated herein by reference to Exhibit 10(i)(xii) to the Company's Form 10-K for the year ended December 31, 1998. (xiii) Amended and Restated Salary Continuation Agreements between Mooresville Savings Bank, S.S.B. and each of Lucille Doster, Marie Hedrick, Carol Huffman, Brenda Johnson, D. Glenn Jones, and Nancy Lee Petrea dated February 1, 1988, as amended and restated on September 17, 1997, incorporated herein by reference to Exhibit 10(i)(xiii) to the Company's Form 10-K for the year ended December 31, 1998. Exhibit(10)(j) Mooresville Savings Bank, Inc., S.S.B. Non-Qualified Excess Savings Plan, incorporated herein by reference to Exhibit 10(i) to the Registration Statement on Form S-1, Registration No. 333-35497, dated September 12, 1997, as amended on November 5 and 10, 1997. (b) No reports on Form 8-K were filed during the three months ended June 30, 2002. 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CODDLE CREEK FINANCIAL CORP. Dated August 13, 2002 By: /s/ George W. Brawley, Jr. --------------------- ------------------------------ George W. Brawley President and CEO Dated August 13, 2002 By: /s/ Billy R. Williams --------------------- ------------------------------ Billy R. Williams Secretary/Controller 24

CODDLE CREEK FINANCIAL CORP 10-Q