<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1999
--------------------
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from ______________ to
Commission file number 0-22451
-----------
CBC HOLDING COMPANY
--------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
GEORGIA 58-2311557
----------- --------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
102 West Roanoke Drive, Fitzgerald, GA 31750
-----------------------------------------------
(Address of Principal Executive Offices)
(912) 423-4321
--------------
(Issuer's Telephone Number, Including Area Code)
Not Applicable
--------------
(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
------ -------
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: Common Stock $1 par value,
--------------------------
664,097 shares outstanding at September 30, 1999
- -------------------------------------------------
Transitional Small Business Disclosure Format (check one):
Yes No X
------ -------
<PAGE>
CBC Holding Company
and Subsidiary
INDEX
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
The following financial statements are provided for CBC
Holding Company and the subsidiary bank, Community Banking
Company of Fitzgerald.
Consolidated Balance Sheets (unaudited) - September
30, 1999 and December 31, 1998. 2
Consolidated Statements of Income (unaudited) - For
the Nine Months Ended September 30, 1999 and 1998
and For the Three Months Ended September, 30 1999 and 1998. 3
Consolidated Statements of Cash Flows (unaudited) -
For the Nine Months Ended September 30, 1999 and 1998. 4
Notes to Consolidated Financial Statements (unaudited) 5
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II: OTHER INFORMATION 13
The consolidated financial statements furnished have not been examined by
independent certified public accountants, but reflect, in the opinion of
management, all adjustments necessary for a fair presentation of the results of
operations for the periods presented.
The results of operations for the nine month period ended September 30, 1999 are
not necessarily indicative of the results to be expected for the full year.
1
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Balance Sheets
September 30, 1999 and December 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
September 30, December 31,
Assets 1999 1998
------------ ------------
<S> <C> <C>
Cash and due from banks $ 2,003,293 $ 2,430,708
Federal funds sold 2,390,000 4,450,000
----------- -----------
Total cash and cash equivalents 4,393,293 6,880,708
----------- -----------
Securities available for sale, at fair value 13,999,235 14,287,599
Loans, net of unearned income 36,006,313 32,194,281
Less - allowance for loan losses (466,005) (430,078)
----------- -----------
Loans, net 35,540,308 31,764,203
----------- -----------
Bank premises and equipment, less accumulated depreciation 2,009,639 2,102,186
Accrued interest receivable 632,627 624,225
Intangible assets, net of amortization 2,094,721 2,316,564
Other assets and accrued income 207,576 51,962
----------- -----------
Total Assets $58,877,399 $58,027,447
=========== ===========
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $ 7,005,224 $ 7,274,269
Interest-bearing 44,797,493 43,378,990
----------- -----------
Total deposits 51,802,717 50,653,259
Other liabilities and accrued expenses 280,969 350,684
Other borrowed funds - 111,500
----------- -----------
Total liabilities 52,083,686 51,115,443
----------- -----------
Shareholders' Equity
Common stock, $1 par value, authorized 10,000,000 shares, issued
and outstanding 664,097 shares 664,097 664,097
Paid-in capital surplus 5,976,873 5,976,873
Retained-earnings 417,718 261,911
Accumulated other comprehensive income (264,975) 9,123
----------- -----------
Total shareholders' equity 6,793,713 6,912,004
----------- ------------
Total Liabilities and Shareholders' Equity $58,877,399 $58,027,447
=========== ============
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Income
For the Nine Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1999 1998 1999 1998
------------ ----------- ----------- -----------
Interest Income:
Interest and fees on loans $ 815,664 $ 797,714 $ 2,310,864 $ 2,283,400
Income on federal funds sold 8,567 15,313 71,364 67,534
Interest on securities - Taxable 171,279 179,282 533,150 607,533
Interest on securities - Non Taxable 24,805 6,712 66,986 6,712
------------ ----------- ----------- -----------
Total interest income 1,020,315 999,021 2,982,364 2,965,179
------------ ----------- ----------- -----------
Interest Expense:
Interest on NOW and money market deposits 73,846 70,149 226,694 214,915
Interest on savings deposits 26,122 21,352 71,901 63,870
Interest on time deposits 358,426 366,661 1,078,483 1,079,855
Other interest expense 5,012 2,704 11,182 9,785
------------ ----------- ----------- -----------
Total interest expense 463,406 460,866 1,388,260 1,368,425
------------ ----------- ----------- -----------
Net interest income before loan losses 556,909 538,155 l,594,104 1,596,754
Less - provision for loan losses 15,000 15,000 45,000 45,000
------------ ----------- ----------- -----------
Net interest income after provision for loan losses 541,909 523,155 1,549,104 1,551,754
------------ ----------- ----------- -----------
Other Operating Income:
Service charges on deposit accounts 72,346 73,008 221,067 204,639
Other service charges, commissions and fees 12,250 6,582 46,009 26,081
Gain on sales of investment securities - 6,390 - 23,077
Other income 8,625 6,839 26,399 10,836
------------ ----------- ----------- -----------
Total other operating income 93,221 92,819 293,475 264,633
------------ ----------- ----------- -----------
Other Operating Expense:
Salaries 187,257 165,924 551,999 499,462
Employee benefits 45,259 37,194 138,879 119,609
Net occupancy expenses 45,290 45,979 133,798 128,640
Equipment rental and depreciation of equipment 38,740 39,746 119,784 117,143
Amortization 69,016 56,621 207,048 169,861
Other expenses 149,918 157,762 472,296 527,978
------------ ----------- ----------- -----------
Total other operating expenses 535,480 503,226 1,623,804 1,562,693
------------ ----------- ----------- -----------
Income Before Income Taxes 99,650 112,748 218,775 253,694
Income tax provision 27,549 28,401 62,968 71,013
------------ ----------- ----------- -----------
Net Income $ 72,101 $ 84,347 $ 155,807 $ 182,681
============ =========== =========== ===========
Income Per Share* $ 0.11 $ 0.13 $ 0.23 $ 0.28
============ =========== =========== ===========
</TABLE>
*Net Income / weighted average outstanding shares of 664,097
See accompanying notes to consolidated financial statements
3
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30,
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 155,807 $ 182,681
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 45,000 45,000
Depreciation 112,806 80,547
Amortization of intangible assets 207,048 169,861
Gain on sale of securities - (23,077)
Loss on sale of property and equipment 141
Changes in accrued income and other assets (149,219) (163,581)
Changes in accrued expenses and other liabilities (69,715) 26,817
------------- -----------
Net cash provided by operating activities 301,727 318,389
------------- -----------
Cash Flows from Investing Activities:
Net change in loans made to customers (3,821,105) (3,495,247)
Purchase of securities available for sale (3,929,804) (3,548,306)
Proceeds from sales, calls and maturities of available for sale securities 3,944,070 5,040,952
Proceeds from sale of property and equipment - 1,271
Purchases of property and equipment (20,259) (94,161)
------------- -----------
Net cash used in investing activities (3,827,098) (2,095,491)
------------- -----------
Cash Flows from Financing Activities:
Net change in demand and savings accounts (1,120,182) 722,874
Net change in other time deposits 2,269,638 606,365
Proceeds from short-term borrowings and federal funds purchased (111,500) 38,500
------------- -----------
Net cash provided by financing activities 1,037,956 1,367,739
------------- -----------
Net Decrease in Cash and Cash Equivalents (2,487,415) (409,363)
Cash and Cash Equivalents, Beginning of Year 6,880,708 3,183,896
------------ -----------
Cash and Cash Equivalents, End of Year $ 4,393,293 $ 2,774,533
============ ===========
Supplemental cash flow information:
Cash paid for interest $ 1,421,602 1,439,629
============ ===========
Cash paid for income taxes $ 56,695 $ 38,000
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information, and with the instructions to Form 10-QSB and Item 310
(b) of Regulation S-B of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine month period ended September
30, 1999, are not necessarily indicative of the results that may be expected
for the year ended December 31, 1999. For further information refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1998.
(2) New and Pending Pronouncements
Effective December 31, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments of an
Enterprise and Related Information." SFAS 131 establishes standards for the
disclosure of segment information about services, geographic areas, and
major customers. The Company acts as an independent community financial
services provider and offers traditional banking services to individual,
commercial, and government customers. Because management of the Company
views and operates the Bank as one versus multiple segments, no segmentation
of bank operations between services, types of customers and market areas is
provided.
Effective January 1, 1999, the Company adopted American Institute of
Certified Public Accountants Statement of Position 98-5 (SOP 98-5),
"Reporting the Costs of Start-Up Activities." SOP 98-5 applies to all
nongovernmental entities and requires that costs of start-up activities and
organization costs be expensed as incurred.
During the nine months ended September 30, 1999, the Company had
unrealized holding losses on investment securities, which were, reported as
comprehensive income. An analysis of accumulated other comprehensive income
since December 31, 1998 follows:
Accumulated other comprehensive income
at December 31, 1998 $ 9,123
Other comprehensive income, net of tax:
Change in unrealized gain (loss)
on securities available for sale, net
of deferred income tax benefit of $136,502 (274,098)
Less: Reclassification adjustment for (gains) losses
realized in net income -
-----------
(274,098)
-----------
Accumulated other comprehensive income at
September 30, 1999 $ (264,975)
===========
5
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
- -------------------------------------------------------------------------------
(3) Supplemental Financial Data
Components of other operating expenses greater than 1% of total interest
income and other income for the periods ended September 30, 1999 and 1998 are:
Three Months Ended Nine Months Ending
September 30, September 30,
1999 1998 1999 1998
--------- --------- -------- ----------
Supplies $ 7,119 $ 8,707 $ 30,238 $ 36,575
NCR processing 22,752 22,477 64,714 70,113
Advertising 10,517 22,476 32,474 27,549
(4) Year 2000 Compliance Issues
The Company utilizes and depends on data processing systems and software to
conduct its business. The approach of Year 2000 may present a problem because
many older computers having been programmed to recognize only the last two
digits of a year i.e., "98" is for the year 1998. Accordingly, with the new
millennium approaching, these computers will potentially recognize the year 2000
- - "00" as the year 1900, or just not be able to comprehend the date, thus,
potentially effecting the accuracy of, or ability to process any date sensitive
functions.
The Company's State of Readiness
The Company and the Bank do not use proprietary computer hardware or software.
(The Company has no hardware or software dependencies other than through the
Bank; hence, all further corporate references in this section will be to the
Bank.) The Bank adopted a plan in 1998 to make the Bank Year 2000 ready (the
"Year 2000 Plan"). Pursuant to the Bank's Year 2000 Plan, the Bank has completed
the installation of new personal computers which addressed a majority of the
known Year 2000 issues. The Bank has upgraded its primary internal system, an
IBM AS400, to a Year 2000 compliant version. The Bank has received
certification of Year 2000 compliance from all of its major vendors and logged
those certifications in a Year 2000 readiness database created to inventory and
track the compliance efforts of all major vendors as well as their primary
supporting vendors.
The Bank contracts with a third-party consultant to assist with its Year 2000
readiness efforts. The consultants installed a second AS400 and loaded a backup
of the core data processing system of the Bank, which enabled the Bank to
perform testing in a Year 2000 environment using actual data and transactions of
the Bank. Testing of the Bank's core data processing system has been completed
and found to be Year 2000 ready. Bank internal due-diligence testing of mission
critical vendor certified software commenced in early November 1998 and was
completed before September 30, 1999.
Management has completed its assessment of the Bank's significant commercial
loan relationships to determine the level of Year 2000 risk that may exist in
the Bank's customer base. To the extent that such risk has been identified,
management is requiring those customers to keep the Bank informed of their
progress in addressing Year 2000 problems. Assessments of loan relationships,
is an ongoing process and the Bank recognizes the inherent risk associated with
new customers as well as existing customers of the Bank. The Bank's credit
review processes have been modified to address this risk, including special
provisions in the Bank's loan loss reserve. The Bank's contingency plans for
customers who fail to adequately address this risk may include, but will not be
limited to, requiring such customers to pay off their loans.
6
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
- -------------------------------------------------------------------------------
Other third parties, with which the Bank has material relationships that may
be adversely impacted by Year 2000 risks, include its correspondent banks and
the utility companies.
The Bank's correspondent banks provide numerous services, including cash
letter settlements, federal funds sold, purchase lines, securities safekeeping
services, securities settlements, wire settlements, ACH settlements, and
ATM/debit card settlements. The correspondent banks have communicated to the
Bank that their systems are Year 2000 compliant. The Bank relied on proxy
testing to validate the correspondent banks' Year 2000 compliance.
The Bank's electric, gas, telephone, water and sewer utility companies have
provided information on their Year 2000 efforts. Local providers of electricity
are distributors and rely completely on electricity producers and switches.
Electric producers have provided limited information through the media.
The Bank had previously identified its major risks of Year 2000 issues to be
with its deposit check processing vendor and areas of its primary internal
processing software that are not addressed by the software vendor's
certification. In the first quarter of 1999, the Bank received certification and
proxy testing from its deposit check processing vendor that their system was
Year 2000 compliant. The Bank has tested the system to verify its Year 2000
readiness. In addition, all areas of the Bank's primary internal processing
software are now certified by the vendors as Year 2000 compliant.
The Costs to Address the Company's Year 2000 Issues
The Bank's costs for Year 2000 readiness were $40,453 during 1998 and
additional expenditures of $18,000 are anticipated during 1999. The majority of
the Bank's costs for Year 2000 readiness are for outsourced Year 2000 project
management. Management believes that due to the recent upgrades to their
system, any additional costs of upgrading software and hardware that are
incurred would have been incurred in the normal course of replacing equipment
and technology updates and would not be significant or have a material impact on
the Company's financial statements as a whole.
The Risks of the Company's Year 2000 Issues
There can be no assurance that all hardware and software that the Bank will
use, or that the Bank's customers, vendors and utility companies will use, will
be Year 2000 compliant. The Bank's customers, vendors and utility companies may
be negatively affected by the Year 2000 issue, and any difficulties incurred by
them in solving Year 2000 issues could negatively affect their ability to
perform their agreements with the Bank. The failure of the Bank's computer
systems or other applications could have a material adverse effect on the
Company's results of operations and financial condition.
The most likely worst case Year 2000 scenario for the Bank appears to be one
in which electrical service or phone service were disrupted to the community for
an extended period. As noted above, management of the risk associated with the
Bank's computer hardware and software, its commercial customer risk and its
correspondent bank risk have progressed as planned.
The foregoing are forward-looking statements reflecting management's current
assessment and estimates with respect to the Bank's Year 2000 compliance efforts
and the impact of Year 2000 issues on the Bank's business and operations.
Various factors could cause actual plans and results to differ materially from
those contemplated by such assessments, estimates and forward-looking
statements, many of which are beyond the control of the Bank. Some of these
factors include, but are not limited to representations by the Bank's vendors
and counterparties, technological advances, economic considerations, and
consumer perceptions. The Bank's Year 2000 compliance program is an ongoing
process involving continual evaluation and may be subject to change in response
to new developments.
7
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
The Company's Contingency Plans
The Bank has completed and the Board of Directors has approved a Year 2000
Business Resumption/Contingency Plan. The implementation of the plan is well
under way and involves procedures to be followed such as interruption in
telephone, electrical and other utility services. The Business
Resumption/Contingency Plan is designed to achieve a level of emergency
preparedness that is broad in its scope, encompassing the risk of loss or
business disruption resulting from unexpected events ranging from equipment
failure to natural disasters. It is designed to enable management continuity,
designate alternative facilities, provide for alternative administrative,
communication and data processing support, establish policies for data backup,
record retention and retrieval, reinforce security policies, and establish
organizational responsibility.
The outline of the Business Resumption/Contingency Plan includes power
outages, cash & tellers, customer service, loans, operations, primary and
secondary liquidity, and security issues. The focus of the Plan is to give
direction to each area of the Bank on how to perform their duties in the event
of possible disruption to normal operations resulting from Year 2000 issues. A
particular emphasis of the Plan is to educate and inform employees and customers
about Year 2000 readiness.
The Bank will attempt to obtain more information on the readiness of the
utilities in order to reduce the degree of uncertainty surrounding the utility
risk. To the extent that economically feasible contingency plans for utility
failures can be determined, management will incorporate such plans in the Bank's
policies.
To insure adequate cash reserves on hand to service the needs of its
customers, the Bank has opened accounts through the Fed Discount Window and
Federal Home Loan Bank stock. These provide additional sources of liquidity for
the Bank and enhance its ability to meet the potential cash demands of its
customers as the millennium approaches.
Employee and Customer Awareness
The Bank believes it is extremely important to communicate information to
employees and customers about the Year 2000 issue. The Bank has conducted
customer and employee awareness seminars designed to provide information about
the Bank's efforts and contingency plans to ensure that the Bank will have a
problem-free transition into the next century.
The Bank's Year 2000 committee has monthly meetings to address the status of
the Year 2000 project and insure the Bank has achieved its objectives and is
maintaining established timelines. In addition, a representative of the Year
2000 committee meets with the Board of Directors of the Bank each month to
review the progress of the Year 2000 efforts. Through this ongoing monitoring
and communication to management and the Board of Directors the Bank is able to
update its employees and its customers of its Year 2000 readiness.
The Bank continues its effort through communication in statements, phone
calls, direct contact, etc. to provide information and assistance to customers
in taking steps to minimize the risk of problems with the Year 2000. In
addition, the Bank regularly holds employee meetings to discuss the Bank's Year
2000 readiness and ways the employees can assist customers in becoming more
knowledgeable about the Year 2000. The Bank has developed a targeted
informational campaign with the slogan "Y2K - We're Prepared To Take You There".
On October 28, 1999 the Bank in partnership with local institutions hosted a
town hall meeting for interested individuals to ask questions regarding Year
2000. The bank is also using various marketing methods including local media,
statement stuffers and lobby posters to educate the public on the Year 2000
issue and communicate the Bank's Year 2000 readiness.
8
<PAGE>
CBC Holding Company and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Nine Months in the Periods Ended
September 30, 1999 and 1998
- --------------------------------------------------------------------------------
Interim Financial Condition
- ---------------------------
CBC Holding Company (the "Company") reported total assets of $58,877,399 as of
September 30, 1999, compared to $58,027,447 at December 31, 1998. The most
significant change in the composition of assets was an increase in net loans
from $31,764,203 to $35,540,308. Cash and cash equivalents decreased from
6,880,708 to 4,393,293 primarily due to a decrease in federal funds sold of
$2,060,000 (46.3%).
Liquidity
- ---------
The liquidity ratio for the Bank was 32.01% at September 30, 1999, compared to
38.1% at December 31, 1998. The Bank's liquid assets as a percentage of total
deposits were 8.5% at September 30, 1999, compared to 13.6% at December 31, 1998
The Company has approximately $2,500,000 in available federal fund lines of
credit with correspondent banks. The Bank drew on the federal funds lines of
credit briefly and for non-significant amounts during 1999. At least monthly,
management analyzes the level of off-balance sheet commitments such as unfunded
loan equivalents, loan repayments, maturity of investment securities, liquid
investment, and available fund lines in an attempt to minimize the possibility
that a potential shortfall will exist.
Capital
- -------
The capital of the Company totaled $6,793,713 as of September 30, 1999. The
capital of the Company and the Bank exceeded all prescribed regulatory capital
guidelines. Regulations require that the most highly rated banks maintain a Tier
1 leverage ratio of 3% plus an additional cushion of at least 1 to 2 percentage
points. Tier 1 capital consists of common shareholders' equity, less certain
intangibles. The Bank's Tier 1 leverage ratio was 8.9% at September 30, 1999,
compared to 8.8% at December 31, 1998. Regulations require that the Bank
maintain a minimum total risk weighted capital ratio of 8%, with one-half of
this amount, or 4%, made up of Tier 1 capital. Risk-weighted assets consist of
balance sheet assets adjusted by risk category, and off-balance sheet assets or
equivalents similarly adjusted. At September 30, 1999, the Bank had a risk-
weighted total capital ratio of 13.3%, compared to 13.5% at December 31, 1998,
and a Tier I risk-weighted capital ratio of 12.1%, compared to 12.4% at December
31, 1998.
Asset Quality
- -------------
Nonperforming assets which includes nonaccruing loans, repossessed collateral
and loans for which payments are more than 90 days past due, totaled $36,800, an
decrease of $3,900 from December 31, 1998. There were no related party loans
that were considered nonperforming at September 30, 1999. The composition of
the nonperforming assets is presented in the following table:
9
<PAGE>
CBC Holding Company and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Nine Months in the Periods Ended
September 30, 1999 and 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
September 30, December 31,
1999 1996
------------------ -----------------
<S> <C> <C>
Loans on nonaccrual $ 16,400 $ -
Loans over 90 days past-due & accruing 20,400 40,700
Other repossessed collateral - -
-------------- ------------
Total nonperforming assets $ 36,800 $ 40,700
============== ============
Total nonperforming assets as a percentage
of total loans (gross) and other real estate 0.10% 0.10%
---- ----
</TABLE>
The allowance for loan losses totaled $466,005 at September 30, 1999, an
increase of S35,927 from December 31, 1999. The allowance for loan losses
represented 1.3% and 1.39%--of total loans at September 30, 1999 and December
31, 1998, respectively. An analysis of the allowance for loan losses since
December 31, 1998 follows:
<TABLE>
<CAPTION>
<S> <C>
Allowance for loan losses at December 31, 1998 $ 430,078
Charge-offs:
Commercial -
Real Estate -
Installment 24,623
----------
Total 24,623
----------
Recoveries:
Commercial -
Real Estate -
Installment 15,550
----------
Total 15,550
----------
Provision charged to income 45,000
----------
Allowance for loan losses at September 30,1999 $ 466,005
==========
</TABLE>
The loan portfolio is reviewed periodically to evaluate the outstanding loans
and to measure the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review delinquency trends,
actual losses, and internal credit ratings. Management's judgment as to the
adequacy of the allowance based upon a number of
10
<PAGE>
CBC Holding Company and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Nine Months in the Periods Ended
September 30, 1999 and 1998
- -------------------------------------------------------------------------------
assumptions about future events which it believes to be reasonable, but which
may or may not be reasonable. However, because of the inherent uncertainty of
assumptions made during the evaluation process, there can be no assurance that
loan losses in future periods will not exceed the allowance for loan losses of
that additional allocations to the allowance will not be required.
The Bank was most recently examined by its primary regulatory authority in May
1999. There were no recommendations by the regulatory authority that in
management's opinion will have material effects on the Bank's liquidity, capital
resources or operations.
Investment Securities
- ---------------------
At September 30, 1999, the Bank had $13,999,235 in investment securities
available-for-sale. The net unrealized loss on available for sale securities,
net of deferred taxes, was $264,975 on September 30, 1999. During the period
ended September 30, 1999, the maturities and calls of investment securities
totaled $3,944,070, resulting in neither a gain or loss. The Bank invests
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable and tax exempt
securities.
Results of Operations
- ---------------------
Net interest income for the first nine months of 1999 was $1,594,104, an
increase of $2,650 (.02%) compared to the same period for 1998. Interest income
for the first nine months of 1999 was $2,982,364, representing an increase of
$17,185 (.05%) over the same period in 1998. The increase in interest income was
primarily due to an increase in total loans outstanding. Interest expense for
the first nine months of 1999 increased $19,835 (.67%) compared to the same
period in 1998. The increase in interest expense is primarily due to an increase
in average interest bearing deposits.
Amounts charged to expense related to the allowance for loan losses were
$45,000 for the first nine months of 1999 and 1998.
Other operating income for the first nine months of 1999 was $293,475, an
increase of $28,842 (10.9%) compared to the same period in 1998. The increase in
service charges on deposit accounts of $16,428 (8.0%) is due to an increase in
the number of accounts and deposit activity. The remaining increase in other
income was primarily due to an increase in mortgage origination income.
Other operating expenses for the first nine months of 1999 were $1,623,804, an
increase of $61,111 (3.9%) compared to the same period for 1998. The increase
is primarily attributable to an increase in amortization of organizational
expenses of $39,187 as required by Statement of Position 98-5 and an increase in
salaries and related employee expenses of $71,807. Other operating expenses
also had a decrease in Year 2000 expense of $16,754.
11
<PAGE>
CBC Holding Company
and Subsidiary
- --------------------------------------------------------------------------------
PART II: OTHER INFORMATION:
- ---------------------------
Item 1. Legal Proceedings
There are no material legal proceedings to which the Company is a party or
of which their property is the subject.
Item 2. Changes in Securities
(a) Not Applicable
(b) Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security-Holders
There were no matters submitted to security holders for a vote during the
nine months ended September 30, 1999.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
A. Exhibits - 27.1 Financial Data Schedule
B. There have been no reports filed on form 8-K for the nine months ended
September 30, 1999.
SIGNATURES
- ----------
In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CBC HOLDING COMPANY
/s/ George Ray
- -----------------------
George Ray
President / Chief Executive Officer
Date: November 4, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,003,293
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,390,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 13,999,235
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 36,006,313
<ALLOWANCE> (466,005)
<TOTAL-ASSETS> 58,877,399
<DEPOSITS> 51,802,717
<SHORT-TERM> 0
<LIABILITIES-OTHER> 280,969
<LONG-TERM> 0
0
0
<COMMON> 644,097
<OTHER-SE> 6,129,616
<TOTAL-LIABILITIES-AND-EQUITY> 58,877,399
<INTEREST-LOAN> 2,310,864
<INTEREST-INVEST> 600,136
<INTEREST-OTHER> 71,364
<INTEREST-TOTAL> 2,982,364
<INTEREST-DEPOSIT> 1,377,078
<INTEREST-EXPENSE> 11,182
<INTEREST-INCOME-NET> 1,594,104
<LOAN-LOSSES> 45,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,623,804
<INCOME-PRETAX> 218,775
<INCOME-PRE-EXTRAORDINARY> 155,807
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 155,807
<EPS-BASIC> .23
<EPS-DILUTED> .23
<YIELD-ACTUAL> 409
<LOANS-NON> 16,400
<LOANS-PAST> 20,400
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,293,000
<ALLOWANCE-OPEN> 430,078
<CHARGE-OFFS> 20,012
<RECOVERIES> 23,459
<ALLOWANCE-CLOSE> 466,005
<ALLOWANCE-DOMESTIC> 466,005
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
