<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
------------------
[ ] 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: 333-13583
First Georgia Community Corp.
-------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2261088
------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
150 Covington Street, Jackson, Georgia 30233
---------- --------------------------------------------
(Address of principal executive offices)
(770) 504-1090
(Issuer's telephone number)
N/A
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of August 1, 2000: 758,458; $5 par value
Transitional Small Business Disclosure Format Yes No X
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<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
--------------------------------------------------------------------------------
INDEX
-----
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 2000......................3
Consolidated Statements of Income and Comprehensive Income
(Loss) - Three Months Ended June 30, 2000 and 1999
and Six Months Ended June 30, 2000 and 1999....................4
Consolidated Statements of Cash Flows - Six
Months Ended June 30, 2000 and 1999............................5
Notes to Consolidated Financial Statements......................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........7
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders......13
Item 6 - Exhibits and Reports on Form 8-K.........................13
Signatures........................................................14
2
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
<TABLE>
<S> <C>
Assets
------
Cash and due from banks $ 1,776,624
Federal funds sold 4,730,000
Securities available-for-sale, at fair value 7,909,315
Loans held for sale 243,702
Loans 50,563,814
Less allowance for loan losses 776,302
------------------
Loans, net 49,787,512
------------------
Premises and equipment 2,177,440
Other assets 2,643,806
------------------
Total assets $ 69,268,399
==================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Demand $ 7,687,064
Interest-bearing demand 15,735,946
Savings 916,825
Time 32,806,547
------------------
Total deposits 57,146,382
Other borrowings 4,310,807
Other liabilities 377,677
------------------
Total liabilities 61,834,866
------------------
Commitments and contingent liabilities
Stockholders' equity
Common stock, par value $5; 10,000,000 shares authorized;
758,458 shares issued and outstanding 3,792,290
Capital surplus 3,754,816
Retained earnings 91,873
Accumulated other comprehensive loss (205,446)
------------------
Total stockholders' equity 7,433,533
------------------
Total liabilities and stockholders' equity $ 69,268,399
==================
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------- ----------------------------------
2000 1999 2000 1999
--------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Interest income
Loans $ 1,250,655 $ 699,241 $ 2,342,213 $ 1,309,461
Taxable securities 122,403 116,819 242,275 202,234
Federal funds sold 55,004 31,980 90,928 77,137
---------------- ---------------- ---------------- -------------
Total interest income 1,428,062 848,040 2,675,416 1,588,832
---------------- ---------------- ---------------- -------------
Interest expense
Deposits 640,014 368,674 1,201,931 694,881
Other borrowings 66,404 - 100,939 -
---------------- ---------------- ---------------- -------------
Total interest expense 706,418 368,674 1,302,870 694,881
---------------- ---------------- ---------------- -------------
Net interest income 721,644 479,366 1,372,546 893,951
Provision for loan losses 78,000 55,000 146,000 101,000
---------------- ---------------- ---------------- -------------
Net interest income after
provision for loan losses 643,644 424,366 1,226,546 792,951
---------------- ---------------- ---------------- -------------
Other operating income 110,531 57,156 206,126 112,690
---------------- ---------------- ---------------- -------------
Other expenses
Salaries and employee benefits 237,722 180,463 470,910 358,537
Occupancy and equipment expenses 64,604 57,682 123,749 117,374
Other operating expenses 214,077 167,681 414,530 284,014
---------------- ---------------- ---------------- -------------
Total other expenses 516,403 405,826 1,009,189 759,925
---------------- ---------------- ---------------- -------------
Net income before income taxes 237,772 75,696 423,483 145,716
Income tax expense 56,200 - 94,700 -
---------------- ---------------- ---------------- -------------
Net income 181,572 75,696 328,783 145,716
---------------- ---------------- ---------------- -------------
Other comprehensive income (loss):
Unrealized gains (losses) on securities
available-for-sale arising during period, net of tax (1,366) (130,565) 8,015 (192,642)
---------------- ---------------- ---------------- -------------
Comprehensive income (loss) $ 180,206 $ (54,869) $ 336,798 $ (46,926)
================ ================ ================ =============
Basic and diluted earnings
per common share $ 0.24 $ 0.10 $ 0.43 $ 0.19
================ ================ ================ =============
Weighted average shares outstanding 758,458 758,458 758,458 758,458
================ ================ ================ =============
Cash dividends per common share $ - $ - $ - $ -
================ ================ ================ =============
</TABLE>
See Notes to Consolidated Financial Statements.
4
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------------ --------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 328,783 $ 145,716
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 65,557 62,298
Net increase in loans held for sale (159,813) -
Provision for loan losses 146,000 101,000
Increase in interest receivable (174,798) (76,837)
Increase in interest payable 47,719 40,026
Other operating activities (26,671) 31,316
------------------ --------------------
Net cash provided by operating activities 226,777 303,519
------------------ --------------------
INVESTING ACTIVITIES
Purchases of securities available-for-sale (101,212) (3,000,000)
Proceeds from maturities of securities available-for-sale - 436,807
Net increase in Federal funds sold (2,340,000) (280,000)
Net increase in loans (10,207,747) (6,416,550)
Purchase of premises and equipment (46,613) (57,049)
------------------ --------------------
Net cash used in investing activities (12,695,572) (9,316,792)
------------------ --------------------
FINANCING ACTIVITIES
Net increase in deposits 8,960,361 10,259,159
Repayment of other borrowings (3,907) -
Proceeds from other borrowings 2,550,000 -
------------------ --------------------
Net cash provided by financing activities 11,506,454 10,259,159
------------------ --------------------
Net increase (decrease) in cash and due from banks (962,341) 1,245,886
Cash and due from banks, beginning of period 2,738,965 675,969
------------------ --------------------
Cash and due from banks, end of period $ 1,776,624 $ 1,921,855
================== ====================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for:
Interest $ 1,255,151 $ 654,855
Income taxes $ 71,816 $ -
NONCASH TRANSACTION
Net unrealized (gains) losses on securities available-for-sale $ (12,143) $ 192,642
</TABLE>
See Notes to Consolidated Financial Statements.
5
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial information for First Georgia Community
Corp. (the "Company") included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim period.
The results of operations for the three and six month periods ended
June 30, 2000 are not necessarily indicative of the results to be
expected for the full year.
NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities".
The effective date of this statement has been deferred by SFAS No. 137
until fiscal years beginning after June 15, 2000. However, the
statement permits early adoption as of the beginning of any fiscal
quarter after its issuance. The Company expects to adopt this statement
effective January 1, 2001. SFAS No. 133 requires the Company to
recognize all derivatives as either assets or liabilities in the
balance sheet at fair value. For derivatives that are not designated as
hedges, the gain or loss must be recognized in earnings in the period
of change. For derivatives that are designated as hedges, changes in
the fair value of the hedged assets, liabilities, or firm commitments
must be recognized in earnings or recognized in other comprehensive
income until the hedged item is recognized in earnings, depending on
the nature of the hedge. The ineffective portion of a derivative's
change in fair value must be recognized in earnings immediately.
Management has not yet determined what effect the adoption of SFAS No.
133 will have on the Company's earnings or financial position.
There are no other accounting pronouncements that have had, or are
expected to have, a material effect on the Company's financial
statements.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following is management's discussion and analysis of certain
significant factors which have affected the financial position and
operating results of the Company and its bank subsidiary, First Georgia
Community Bank (the "Bank"), during the periods included in the
accompanying consolidated financial statements.
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS
Certain of the statements made herein under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" ("MD&A") are forward-looking statements for purposes of the
Securities Act of 1933, as amended (the "Securities Act") and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
as such may involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements
of the Company to be materially different from future results,
performance or achievements expressed or implied by such
forward-looking statements. Such forward looking statements include
statements using the words such as "may," "will," "anticipate,"
"should," "would," "believe," "contemplate," "expect," "estimate,"
"continue," "may," "intend," or other similar words and expressions of
the future. Our actual results may differ significantly from the
results we discuss in these forward-looking statements.
These forward-looking statements involve risks and uncertainties and
may not be realized due to a variety of factors, including, without
limitation: the effects of future economic conditions; governmental
monetary and fiscal policies, as well as legislative and regulatory
changes; the risks of changes in interest rates on the level and
composition of deposits, loan demand, and the values of loan
collateral, securities, and other interest-sensitive assets and
liabilities; interest rate risks; the effects of competition from other
commercial banks, thrifts, mortgage banking firms, consumer finance
companies, credit unions, securities brokerage firms, insurance
companies, money market and other mutual funds and other financial
institutions operating in the Company's market area and elsewhere,
including institutions operating regionally, nationally, and
internationally, together with such competitors offering banking
products and services by mail, telephone, computer, and the Internet.
Liquidity and Capital Resources
As of June 30, 2000, the liquidity ratio of the Company, as determined
under guidelines established by regulatory authorities, was
satisfactory. Management considers the Company's liquidity to be
adequate to meet operating and loan funding requirements. The liquidity
ratio (i.e. cash, short-term assets and marketable assets divided by
deposits and other borrowings) for the Company was approximately 24%.
As the Company grows, management will continue to monitor liquidity and
make adjustments as deemed necessary.
7
<PAGE>
At June 30, 2000, the capital ratios of the Company and the Bank were
adequate based on regulatory minimum capital requirements. The minimum
capital requirements and the actual capital ratios for the Company and
the Bank are as follows:
Actual
----------------------------
First First
Georgia Georgia Regulatory
Community Community Minimum
Corp. Bank Requirement
------------ ------------- -----------
Leverage capital ratios 11.64 % 10.28 % 4.00 %
Risk-based capital ratios:
Core capital 13.52 11.95 4.00
Total capital 14.78 13.20 8.00
Financial Condition
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999 Increase (Decrease)
-------------- ---------------- --------------------------------
(Dollars in Thousands) Amount Percent
----------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 1,777 $ 2,739 $ (962) (35.14) %
Federal funds sold 4,730 2,390 2,340 97.91
Securities 7,909 7,796 113 1.45
Loans, net 49,787 39,726 10,061 25.33
Loans held for sale 244 84 160 190.51
Premises and equipment 2,177 2,196 (19) (0.86)
Other assets 2,644 2,403 241 10.03
-------------- ---------------- --------------
$ 69,268 $ 57,334 $ 11,934 20.82
============== ================ ==============
Deposits $ 57,146 $ 48,186 $ 8,960 18.60 %
Other borrowings 4,311 1,765 2,546 144.28
Other liabilities 377 286 91 31.88
Stockholders' equity 7,434 7,097 337 4.75
-------------- ---------------- --------------
$ 69,268 $ 57,334 $ 11,934 20.82
============== ================ ==============
</TABLE>
As indicated in the above table, the Company's total assets grew at a rate of
20.82%. Deposit growth of $8,960,000 and increased other borrowings of
$2,546,000 were used to fund loan growth with the remainder invested primarily
in Federal funds sold. The Company is using other borrowings as an alternative
funding mechanism to deposits. The Company's loan to deposit ratio has increased
from 83.73% at December 31, 1999 to 88.48% at June 30, 2000, indicating
continued strong loan demand in the Company's primary market area of Butts
County. Stockholders' equity has increased by $337,000 due to net income of
$329,000 and decreases of $8,000 in unrealized losses on securities
available-for-sale.
8
<PAGE>
Results of Operations For The Three Months Ended June 30, 2000 and 1999 and for
the Six Months Ended June 30, 2000 and 1999
Following is a summary of the Company's operations for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------------
2000 1999 Increase (Decrease)
--------------- ------------- ----------------------------------
(Dollars in Thousands) Amount Percent
------------------------------- --------------- ----------------
<S> <C> <C> <C> <C>
Interest income $ 1,428 $ 848 $ 580 68.40 %
Interest expense 706 369 337 91.61
--------------- ------------- ---------------
Net interest income 722 479 243 50.54
Provision for loan losses 78 55 23 41.82
Other income 110 57 53 93.83
Other expense 516 405 111 27.25
--------------- ------------- ---------------
Pretax income 238 76 162 214.11
Income taxes 56 - 56 -
--------------- ------------- ---------------
Net income $ 182 $ 76 $ 106 93.63
=============== ============= ===============
<CAPTION>
Six Months Ended
June 30,
-------------------------------
2000 1999 Increase (Decrease)
--------------- ------------- ----------------------------------
(Dollars in Thousands) Amount Percent
------------------------------- --------------- ----------------
<S> <C> <C> <C> <C>
Interest income $ 2,676 $ 1,589 $ 1,087 68.39 %
Interest expense 1,303 695 608 87.50
--------------- ------------- ---------------
Net interest income 1,373 894 479 53.54
Provision for loan losses 146 101 45 44.55
Other income 206 113 93 82.91
Other expense 1,009 760 249 32.80
--------------- ------------- ---------------
Pretax income 424 146 278 190.62
Income taxes 95 - 95 -
--------------- ------------- ---------------
Net income $ 329 $ 146 $ 183 101.61
=============== ============= ===============
</TABLE>
As indicated in the above tables, the Company's net interest income has
increased by $243,000 and $479,000 for the second quarter and first six months
of 2000 as compared to the same periods in 1999. The Company's net interest
margin increased to 4.84% during the first six months of 2000 as compared to
4.75% for the first six months of 1999 and 4.60% for the entire year of 1999.
The increase in net interest income and net interest margin is due primarily to
the increased volume of average loans. The Company has been able to offset
higher interest rates paid on deposits with higher yields earned on loans.
9
<PAGE>
The provision for loan losses increased by $23,000 and $45,000 for the second
quarter and first six months of 2000 as compared to the same periods in 1999.
The amounts provided are due primarily to loan growth and inherent risk in the
loan portfolio. The Company's allowance for loan losses as a percentage of total
loans amounted to 1.54% at June 30, 2000 and December 31, 1999. The allowance
for loan losses is maintained at a level that is deemed appropriate by
management to adequately cover all known and inherent risks in the loan
portfolio. Management's evaluation of the loan portfolio includes a continuing
review of loan loss experience, current economic conditions which may affect the
borrower's ability to repay, and the underlying collateral value.
Information with respect to nonaccrual, past due, and restructured loans at June
30, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
June 30,
----------------------------------
2000 1999
----------------------------------
(Dollars in Thousands)
----------------------------------
<S> <C> <C>
Nonaccrual loans $ 0 $ 0
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing 0 0
Restructured loans 0 0
Loans, now current about which there are serious doubts as to the
ability of the borrower to comply with loan repayment terms 0 0
Interest income that would have been recorded on nonaccrual
and restructured loans under original terms 0 0
Interest income that was recorded on nonaccrual and restructured loans 0 0
</TABLE>
It is the policy of the Bank to discontinue the accrual of interest income when,
in the opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected and (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection.
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.
10
<PAGE>
Information regarding certain loans and allowance for loan loss data through
June 30, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
2000 1999
--------------- ----------------
(Dollars in Thousands)
----------------------------------
<S> <C> <C>
Average amount of loans outstanding $ 45,648 $ 27,613
=============== ================
Balance of allowance for loan losses at beginning of period $ 620 $ 434
--------------- ----------------
Loans charged off
Commercial and financial $ - $ -
Real estate mortgage - -
Instalment 1 -
--------------- ----------------
1 -
--------------- ----------------
Loans recovered
Commercial and financial - -
Real estate mortgage - -
Instalment 11 -
--------------- ----------------
11 -
--------------- ----------------
Net charge-offs (recoveries) (10) -
--------------- ----------------
Additions to allowance charged to operating expense during period 146 101
--------------- ----------------
Balance of allowance for loan losses at end of period $ 776 $ 535
=============== ================
Ratio of net loans charged off during the period to
average loans outstanding (.02)% -%
=============== ================
</TABLE>
Other income increased by $53,000 and $93,000 for the second quarter and first
six months of 2000 as compared to the same periods in 1999 due primarily to
increases in service charges on deposit accounts and income associated with the
increase in cash surrender value of life insurance policies on directors and
executive officers.
Other expenses have increased by $111,000 and $249,000 for the second quarter
and first six months of 2000 as compared to the same periods in 1999. Increased
salaries and employee benefits and increased other operating expenses accounted
for the majority of the increases. Salaries and employee benefits have increased
due to an increase in the number of full time equivalent employees to 22 at June
30, 2000 from 17 at June 30, 1999 and to normal salary increases. Increased
deferred compensation expense and overall deposit and asset growth have caused
the increases in other operating expenses.
The Company recorded income tax provisions of $56,000 and $95,000 for the second
quarter and first six months of 2000 due to the Company becoming cumulatively
profitable in the second quarter of 2000 and the complete utilization of its net
operating loss carryover.
11
<PAGE>
The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, that will have or are reasonably
likely to have a material effect on its liquidity, capital resources or
operations. The Company is also not aware of any current recommendations by the
regulatory authorities which, if they were implemented, would have such an
effect.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The annual meeting of the stockholders of the Company was held
on May 18, 2000.
(b) The following directors were selected at the meeting to serve
terms for the upcoming year:
Rick Ballard Joey McClelland
Charles Carter Alex Pollack
John Coleman Bob Ryan
Dan Fears, Jr. Herb Warren
Bill Jones George Weaver
Harry Lewis
(c) Mauldin & Jenkins, LLC was approved as the Company's certified
public accountants.
The shares represented at the meeting (526,160 or
69.37%) voted as follows:
Item (b) Item (c)
# of # of
Shares Shares
------ ------
For 526,136 525,350
Against - 400
Abstained 24 410
-------- --------
Total 526,160 526,160
======== ========
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
27. Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
None.
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FIRST GEORGIA COMMUNITY CORP.
(Registrant)
DATE: August 11, 2000 BY: /s/ John L. Coleman
----------------- --------------------------------------------
John L. Coleman, President and C.E.O.
(Principal Executive Officer)
DATE: August 11, 2000 BY: /s/ Elaine S. Kendrick
--------------- --------------------------------------------
Elaine S. Kendrick, Secretary and Treasurer
(Principal Financial and Accounting Officer)
14
