Form 11-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 11-K

 

 

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2008

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from              to             

Commission file number: 000-30517

 

 

 

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

American Community Bank

401(k) Profit Sharing Plan.

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

American Community Bancshares, Inc.,

4500 Cameron Valley Parkway,

Suite 150,

Charlotte, North Carolina 28211

 

 

The following financial statements and reports, which have been prepared pursuant to the requirements of the Employee Retirement Income Security Act of 1974, are filed as part of this Annual Report on Form 11-K:

Statements of net assets available for benefits December 31, 2008 and 2007

Statement of changes in net assets available for benefits, year ended December 31, 2008

Notes to financial statements

 

 

 

Exhibit Index

 

23.1    Consent of Independent Registered Accounting Firm

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

AMERICAN COMMUNITY BANK

401(K) PROFIT SHARING PLAN

  By:   AMERICAN COMMUNITY BANK
    A division of Yadkin Valley Bank
Date: June 10, 2009   By:  

/s/ Dan R. Ellis, Jr.

    Dan R. Ellis, Jr.
    Senior Vice President

American Community Bank 401(k)

Profit Sharing Plan

Financial Statements

and

Supplemental Schedule

December 31, 2008 and 2007

And for the

Year Ended December 31, 2008

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

 

 

TABLE OF CONTENTS

 

     Page No.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     1

FINANCIAL STATEMENTS

   

Statements of Net Assets Available for Benefits

      2

Statement of Changes in Net Assets Available for Benefits

      3

Notes to Financial Statements

      4

SUPPLEMENTAL SCHEDULE

   

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

    15

LOGO

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustee and Participants

American Community Bank 401(k) Profit Sharing Plan

Monroe, North Carolina

We have audited the accompanying statements of net assets available for benefits of the American Community Bank 401(k) Profit Sharing Plan (the “Plan”) as of December 31, 2008 and 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2008. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the American Community Bank 401(k) Profit Sharing Plan as of December 31, 2008 and 2007 and the changes in its net assets available for benefits for the year ended December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

Our audits of the Plan’s financial statements were performed for the purpose of forming an opinion on the financial statements taken as a whole. The supplemental schedule of assets held at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. This supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

LOGO

Charlotte, North Carolina

June 8, 2009

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

December 31, 2008 and 2007

 

 

 

     2008    2007  

ASSETS

      

Investments, at fair value

      

American Community Bancshares, Inc. stock

    $ 297,721    $ 173,205  

Mutual funds

      1,113,420      1,743,061  

Common collective funds

      499,168      438,753  

Cash and temporary investments

      115,076      88,159  

Participant loans

      117,547      132,502  
               
     2,142,932      2,575,680  
               

NET ASSETS REFLECTING ALL INVESTMENTS AT FAIR VALUE

      2,142,932      2,575,680  
               

Adjustments from fair value to contract value for fully benefit-responsive investment contract

      36,469      (1,196 )
               

NET ASSETS AVAILABLE FOR BENEFITS

    $ 2,179,401    $ 2,574,484  
               

 

 

See accompanying notes.    Page 2

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

For the Year Ended December 31, 2008

 

 

 

     2008  

ADDITIONS

   

INVESTMENT INCOME

   

Interest and dividend income

    $ 7,214  

Interest on loans to participants

      6,894  
        
     14,108  
        

CONTRIBUTIONS

   

Employer

      111,013  

Participants’

      327,231  

Rollovers

      1,037  
        
     439,281  
        

TOTAL ADDITIONS

      453,389  
        

DEDUCTIONS

   

Net depreciation in fair value of investments

      596,958  

Benefits paid to participants

      235,491  

Administrative expenses

      16,023  
        

TOTAL DEDUCTIONS

      848,472  
        

NET DECREASE

      (395,083 )

NET ASSETS AVAILABLE FOR BENEFITS

   

BEGINNING OF YEAR

      2,574,484  
        

END OF YEAR

    $ 2,179,401  
        

 

 

See accompanying notes.    Page 3

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE A – PLAN DESCRIPTION

American Community Bank 401(k) Profit Sharing Plan is a defined contribution plan covering substantially all employees of American Community Bank, the plan sponsor (the “Company” or “Employer”), with participation effective upon date of employment. An employee is eligible for Company matching contributions after 1,000 hours of service within 12 consecutive months of employment and having attained the age of 21. Annual employer profit sharing contributions are at the sole discretion of the Company.

The Plan is administered by the third party administrator as appointed by the Company’s Board of Directors. Plan assets are held in a trust fund, and transactions are executed therein by the trust department of TD Ameritrade.

Profit sharing contributions to the Plan are allocated to the individual participant’s account in the proportion that each participant’s annual compensation bears to the total annual compensation of all participants.

The Plan also has a 401(k) feature. Participants may contribute a portion of their compensation to the Plan. These contributions are fully vested at the time of the contribution and the participants can select from twenty three options where the contributions are to be invested. The Company matches contributions of up to 3% of each employee’s salary. Matching contributions of $111,013 were made during the year ended December 31, 2008.

Investment income or loss is allocated to the individual participant’s account in the proportion which the account of each such participant bears to the total of the accounts of all participants.

The Plan also allows participant loans. The minimum amount participants may borrow from the Plan is $500 with a maximum of 50% of the participant’s account balance. All loans are secured by the participant’s vested balance and bear interest at a rate comparable to interest rates charged on secured personal loans. The interest rates varied from 4.25% to 7.25% at December 31, 2008. Loan repayments must be amortized in level payments, not less frequently than every pay period, over a period not extending five years from the date of the loan.

Active employees participating in the Plan at age 59  1/2 are permitted to withdraw up to 100% of their account balance in order to take advantage of other investment opportunities.

Upon termination of the Plan or upon complete discontinuance of contributions under the Plan, the rights of all participants to the amounts credited to the participants’ accounts are nonforfeitable, and upon the occurrence of either of such events, the assets of the trust shall be administered and distributed to the participants and the beneficiaries at such time or times and in such nondiscriminatory manner as is determined by the committee to be consistent with Employee Retirement Income Security Act of 1974 and its related regulations (ERISA).

 

4

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE A – PLAN DESCRIPTION (Continued)

 

Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the employer’s matching and discretionary contributions and earnings thereon is based on years of service as follows:

Vesting

 

     Years of service  
     Less than 2     2     3     4     5     6 or more  

Percent vested

    0 %   20 %   40 %   60 %   80 %   100 %

Forfeitures are created when participants terminate employment before becoming entitled to their full benefits under the Plan. Forfeitures are used to pay Plan administrative expenses and/or reduce employer match. Total forfeitures were $10,139 for the year ended December 31, 2008. The Plan has not yet determined the use of the forfeitures from 2008.

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements of the Plan are prepared on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.

Investment Valuation and Income Recognition

Investments in temporary investments and corporate stocks are carried at fair value as determined by quoted market prices. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year end. For investments in common collective funds, fair value represents the Plan’s proportionate share of the total fair value of the securities in the common collective funds. Loans to participants are secured and are valued at cost plus accrued interest, which approximates fair value.

The Plan has adopted Financial Accounting Standards Board (“FASB”) Staff Position AAG INV-1 and Statement of Position (“SOP”) No. 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the “FSP”). The FSP requires the Statement of Net Assets Available for Benefits to present the fair value of the Plan’s investments as well as the adjustment from fair value to contract value for the fully benefit-responsive investment contracts. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis for the fully benefit-responsive investment contracts.

 

5

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

The fair value of the Plan’s interest in a stable value common collective trust fund is based upon the fair value of the fund’s underlying managed group annuity contract, as reported by the insurance company issuer of the contract. The fully benefit responsive stable value fund is valued at contract value as estimated by the administrator of the fund. As described in the FSP, the investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits for a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. As required by the FSP, the Statements of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value basis.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Net Depreciation in Fair Value of Investments

Net depreciation in fair value of investments includes realized gains and losses and appreciation or depreciation in the fair market value of the Plan’s investments, except for its benefit-responsive investment contract, for which the appreciation or depreciation in the contract value is included.

Expenses

Administrative expenses are paid by the Plan, as provided in the plan agreement.

Payment of Benefits

Benefits are reported when paid.

Plan Termination

Although there is no intention to do so, the Plan can be terminated at any time by the Company. If terminated, the rights of all affected participants to the amounts credited to such participants’ accounts shall be non-forfeitable and the assets of the Plan shall be administered and distributed to the participants and beneficiaries at such time and in such nondiscriminatory manner as prescribed by ERISA and its related regulations.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

 

6

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Risks and Uncertainties

Investment securities, in general, are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.

Adoption of New Accounting Standard

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards No. 157 (“SFAS No. 157”), Fair Value Measurements. SFAS No. 157 which defines fair value, establishes a framework for measuring fair value under current accounting pronouncements that require or permit fair value measurement and enhances disclosures about fair value measurements. Effective January 1, 2008, the Plan adopted SFAS No. 157. SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction value hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date;

Level 2 – Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and

Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Common Stocks

These investments are valued at the closing price reported on the active market on which the individual securities are traded.

Mutual Funds

These investments are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and classified within level 1 of the valuation hierarchy.

 

7

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Common Collective Funds

These investments are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is classified within level 2 of the valuation hierarchy because the NAV’s unit price is quoted on a private market that is not active; however, the unit price is based on underlying investments which are traded on an active market.

The Plan’s investment in a fully benefit-responsive investment contract is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer. The contracts are classified within level 3 of the valuation hierarchy.

Cash and Temporary Investments (Money Market Funds)

These investments are public investment vehicles valued using $1 for the NAV. The money market funds are classified within level 2 of the valuation hierarchy.

Loans to Participants

Loans to participants are valued at amortized cost, which approximates fair value and are classified within level 3 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

NOTE C – INCOME TAX STATUS

The Plan obtained its latest determination letter in July 2003, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan Administrator believes that the Plan continues to be operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

 

8

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE D – FAIR VALUE OF FINANCIAL INVESTMENTS

Investments held by the Plan at December 31, 2008 and 2007, are summarized in the following tables. Investments that represent 5% or more of the Plan’s net assets and investments with companies who are known to be a party-in-interest to the Plan are separately identified.

 

     2008     2007  

Investments at fair value as determined by quoted market price

     

Corporate stocks

     

American Community Bancshares, Inc. stock*

    $ 297,721     $ 173,205  
                

Common collective funds

     

MetLife Stable Value Fund

      394,485       274,799  

Other

      104,683 **     163,954 **
                
     499,168       438,753  
                

Mutual funds

     

DFA Emerging Markets Value Fund

      77,079 **     170,621  

T Rowe Price Total Equity Market Index Fund

      189,357       282,123  

Vanguard Specialized Energy Fund

      151,008       283,646  

Vanguard Inflation Protected Securities Fund

      252,795       222,852  

Dodge and Cox International Stock Fund

      132,097       277,695  

Other

      311,084 **     506,124 **
                
     1,113,420       1,743,061  
                

Cash and temporary investments*

      115,076 **     88,159 **
                

Investment at cost plus accrued interest, which approximates market value

     

Participant loans*

      117,547       132,502  
                
   $ 2,142,932     $ 2,575,680  
                

 

* Party-in-interest to the Plan.
** Investments that individually do not represent 5% or more of the Plan’s net assets.

 

9

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE D – FAIR VALUE OF FINANCIAL INVESTMENTS (Continued)

 

The following presents detail of the net depreciation in fair value of investments for the year ended December 31, 2008. Amounts include realized gains and losses and appreciation or depreciation in the fair market value of the Plan’s investments, except for its fully benefit-responsive investment contract (MetLife Stable Value Fund), for which the appreciation or depreciation in the contract value is included.

 

     2008  

Mutual funds and corporate stock

    $ (565,991 )

Common collective funds

      (30,967 )
        
   $ (596,958 )
        

See “Adoption of New Accounting Standard” in Note B above for discussions of the methodologies and assumptions used to determine fair value of the Plan’s investments.

Below are the Plan’s financial instruments carried at fair value on a recurring basis by the SFAS 157 fair value hierarchy levels described in Note B.

 

Description

    December 31,
2008		    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		    Significant
Other
Observable
Inputs
(Level 2)		    Significant
Unobservable
Inputs
(Level 3)

Assets:

            

Mutual funds

    $ 1,113,420    $ 1,113,420      

Common collective funds

      499,168         104,683      394,485

Corporate stocks – ACB

      297,721    $ 297,721      

Money market fund

      115,076         115,076   

Participant loans

      117,547            117,547
                           

Total assets

    $ 2,142,932    $ 1,411,141    $ 219,759    $ 512,032
                           

 

10

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE D – FAIR VALUE OF FINANCIAL INVESTMENTS (Continued)

 

The table below sets forth a summary of changes in the fair value of the Plan’s level 3 assets for the year ended December 31, 2008:

 

Description

    Common
Collected Funds
Fully Benefit
Responsive
Investment
Contract		     Participant
Loans		     Total  

Balance at December 31, 2007

    $ 274,799     $ 132,502     $ 407,301  

Realized gains/(losses)

      —         —         —    

Unrealized gains/(losses) relating to investments held at the reporting period

      (23,312 )     —         (23,312 )

Purchases, sales, issuances, settlements, net

      142,998       (14,955 )     128,043  
                        

Balance at December 31, 2008

    $ 394,485     $ 117,547     $ 512,032  
                        

NOTE E – FULLY BENEFIT RESPONSIVE INVESTMENT CONTRACT OF STABLE VALUE FUND COMMON COLLECTIVE TRUST

The Plan is invested in a common collective trust managed by AST Trust Company which invests solely in a managed group annuity contract with Metropolitan Life Insurance Company (“issuer”), Metlife Stable Managed GAC (Contract #25554). The accounts are credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses.

The investment contract specifies certain conditions under which distributions from the contracts would be payable at amounts below contract value. Such circumstances include premature contract termination initiated by the employer and certain other employer-initiated events. The contract limits the circumstances under which the Issuer may terminate the contract. Examples of circumstances which would allow the Issuer to terminate the contract include the Plan’s loss of its qualified status, uncured material breaches of responsibilities, or material and adverse changes to the provisions of the Plan. If one of these events were to occur, the Issuer could terminate the contract at an amount less than contract value. Currently, management believes that the occurrence of an event that would cause the Plan to transact contract distributions at less than contract value is not probable.

 

11

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE E – FULLY BENEFIT RESPONSIVE INVESTMENT CONTRACT OF STABLE VALUE FUND COMMON COLLECTIVE TRUST (Continued)

 

The crediting interest rates of the contract is based on agreed-upon formulas with the Issuer, as defined in the contract agreement, but cannot be less than 0%. Such interest rates are reviewed periodically for resetting. Interest rates will reflect capital market developments, the performance of the separate account assets backing the contract, and the expected and actual contributions and withdrawals of all of the plans participating in the contract. The resulting gains and losses in the fair value of the investment contract relative to the contract value, if any, are reflected in the Statements of Net Assets Available for Benefits as Adjustment from fair value to contract value for fully benefit-responsive investment contracts (“adjustment”). If the adjustment is positive, this indicates that the contract value is greater than the fair value. The embedded losses will be amortized in the future through a lower interest crediting rate than would otherwise be the case. If the adjustment is negative, this indicates that the contract value is less than the fair value. The embedded gains will cause the future interest crediting rate to be higher than it otherwise would have been. A positive adjustment is reflected in the Plan’s 2008 Statement of Net Assets Available for Benefits in the amount of $36,469.

The average yields of the guaranteed investment contract are as follows for the year ended December 31, 2008:

 

     2008  

Based on actual earnings

    -5.32 %

Based on interest rate credited to participants

    4.46 %

The following table reconciles the fair value of the fully benefit-responsive investment contract with its contract value as of December 31, 2008 and 2007:

 

     2008    2007  

Fair value

    $ 394,485    $ 274,799  

Adjustment from fair value to contract value

      36,469      (1,196 )
               

Contract value

    $ 430,954    $ 273,603  
               

NOTE F – RELATED-PARTY TRANSACTIONS

As of December 31, 2008 and 2007, the Plan has invested in 29,046 and 18,061 in shares of common stock of American Community Bancshares, Inc (ABCA) with a fair value of $297,721 and $173,205, respectively. Certain plan investments include cash and money market accounts of the trustee and therefore qualify as party-in-interest. Also see Note D.

 

12

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

NOTES TO FINANCIAL STATEMENTS

As of December 31, 2008 and 2007 and for the year ended December 31, 2008

 

 

 

NOTE G – SUBSEQUENT EVENTS

On September 9, 2008, the Plan Sponsor entered into a definitive agreement to be acquired by Yadkin Valley Financial Corporation (“Yadkin Valley”) and the Plan Sponsor became a wholly-owned division of Yadkin Valley operating under its current name as of April 16, 2009. As a result, the Plan and its assets will be merged into Yadkin Valley’s Plan at a date to be determined.

 

13

SUPPLEMENTAL SCHEDULE

 

14

AMERICAN COMMUNITY BANK 401(k) PROFIT SHARING PLAN

SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)

Plan Number 001    Employer Identification Number 56-2073258

December 31, 2008

 

 

 

(a)    (b)    (c)    (d)    (e)
    

Identity of Issue,

Borrower, Lessor or

Similar Party

  

Description of Investment

Including Maturity Date, Rate

of Interest, Collateral, Par

or Maturity Value

    Cost    Current
Value

*

   

Cash and temporary investments

       X    $ 115,076
               
  

Corporate stocks

         

*

   

American Community Banchares, Inc.

   

Common Stock

    X      297,721
               
  

Common collective funds

         
  

MetLife Stable Value Fund

   

Common collective trust fund

    X      394,485
  

Multi-Dimensional Perform

   

Collective investment funds

    X      20,292
  

Multi-Dimensional Power

   

Collective investment funds

    X      42,260
  

Multi-Dimensional Preserve

   

Collective investment funds

    X      39,518
  

Multi-Dimensional Protect

   

Collective investment funds

    X      2,613
               
              499,168
               
  

Mutual funds

         
  

DFA Emerging Markets Value Fund

   

Mutual Fund

    X      77,079
  

DFA US Small Cap Value Fund

   

Mutual Fund

    X      76,881
  

Dodge and Cox International Stock Fund

   

Mutual Fund

    X      132,097
  

T. Rowe Price Real Estate

   

Mutual Fund

    X      35,272
  

T. Rowe Price Total Equity Market Index Fund

   

Mutual Fund

    X      189,357
  

Vanguard Admiral Fund

   

Mutual Fund

    X      14,097
  

Vanguard Specialized Energy Fund

   

Mutual Fund

    X      151,008
  

Vanguard Inflation Protected Securities Fund

   

Mutual Fund

    X      252,795
  

Vanguard Strategic Equity Fund

   

Mutual Fund

    X      25,442
  

Vanguard Target Retirement 2005 Fund

   

Mutual Fund

    X      6,081
  

Vanguard Target Retirement 2015 Fund

   

Mutual Fund

    X      68,340
  

Vanguard Target Retirement 2025 Fund

   

Mutual Fund

    X      40,053
  

Vanguard Target Retirement 2035 Fund

   

Mutual Fund

    X      15,080
  

Vanguard Target Retirement 2045 Fund

   

Mutual Fund

    X      1,775
  

Vanguard Target Retirement Income Fund

   

Mutual Fund

    X      28,063
               
              1,113,420
               

*

   

Participant loans

   

4.25% - 7.25% due 2009-2014

    -      117,547
               
            $ 2,142,932
               

 

* Party-in-Interest to the Plan.
X Cost omitted for participant directed investments