<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 June 30, 2000
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[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from ______________ to _________________
Commission file number 0-22451
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CBC HOLDING COMPANY
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(Exact Name of Small Business Issuer as Specified in Its Charter)
GEORGIA 58-2311557
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
102 West Roanoke Drive, Fitzgerald, GA 31750
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(Address of Principal Executive Offices)
(912) 423-4321
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(Issuer's Telephone Number, Including Area Code)
Not Applicable
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(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
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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,
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697,263 shares outstanding at June 30, 2000
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Transitional Small Business Disclosure Format (check one):
Yes No X
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<PAGE>
CBC Holding Company
and Subsidiary
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
<S> <C>
The following financial statements are provided for CBC
Holding Company and the subsidiary bank, Community Banking
Company of Fitzgerald.
Consolidated Balance Sheets (unaudited) - June 30, 2000 and
December 31, 1999. 2
Consolidated Statements of Income (unaudited) - For the Six Months
Ended June 30, 2000 and 1999 and For the Three Months Ended June 30,
2000 and 1999. 3
Consolidated Statements of Cash Flows (unaudited) - For the Six Months
Ended June 30, 2000 and 1999. 4
Notes to Consolidated Financial Statements (unaudited) 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
PART II: OTHER INFORMATION 10
</TABLE>
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 six-month period ended June 30, 2000 are not
necessarily indicative of the results to be expected for the full year.
1
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Balance Sheets
June 30, 2000 and December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
Assets 2000 1999
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<S> <C> <C>
Cash and due from banks $ 2,174,178 $ 2,377,839
Federal funds sold 20,000 5,240,000
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Total cash and cash equivalents 2,194,178 7,617,839
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Securities available for sale, at fair value 13,189,213 13,542,975
Federal Home Loan Bank stock, at cost 174,100 174,100
Loans, net of unearned income 40,427,455 34,124,389
Less-allowance for loan losses (501,386) (450,349)
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Loans, net 39,926,069 33,674,040
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Bank premises and equipment, less accumulated depreciation 2,147,223 1,972,909
Accrued interest receivable 624,732 518,175
Intangible assets, net of amortization 1,937,420 2,027,185
Other assets and accrued income 228,343 202,222
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Total Assets $60,421,278 $59,729,445
=========== ===========
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $ 6,425,827 $ 6,982,725
Interest-bearing 45,227,730 45,637,578
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Total deposits 51,653,557 52,620,303
Other liabilities and accrued expenses 261,147 304,661
Other borrowed funds 1,500,000 -
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Total liabilities 53,414,704 52,924,964
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Shareholders' Equity
Common stock, $1 par value, authorized 10,000,000 shares, issued
and outstanding 697,263 and 664,097 shares at June 30, 2000 and
1999, respectively 697,263 664,097
Paid-in capital surplus 6,383,156 5,976,873
Retained earnings 279,422 504,306
Accumulated other comprehensive income (353,267) (340,795)
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Total shareholders' equity 7,006,574 6,804,481
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Total Liabilities and Shareholders' Equity $60,421,278 $59,729,445
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</TABLE>
2
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Income
For the Three Months 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:
Interest and fees on loans $ 913,184 $766,630 $1,746,720 $1,495,200
Income on federal funds sold 18,237 21,345 54,463 62,797
Interest on securities 191,321 201,721 385,167 404,052
---------- -------- ---------- ----------
Total interest income 1,122,742 989,696 2,186,350 1,962,049
---------- -------- ---------- ----------
Interest Expense:
Interest on NOW and money market deposits 73,757 75,294 147,224 152,848
Interest on savings deposits 26,985 23,909 54,315 45,779
Interest on time deposits 407,758 361,656 774,608 720,057
Other interest expense 3,642 5,131 4,332 6,170
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Total interest expense 512,142 465,990 980,479 924,854
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Net interest income before loan losses 610,600 523,706 1,205,871 1,037,195
Less - provision for loan losses 19,500 15,000 39,000 30,000
---------- -------- ---------- ----------
Net interest income after provision for loan losses 591,100 508,706 1,166,871 1,007,195
---------- -------- ---------- ----------
Other Operating Income:
Service charges on deposit accounts 86,719 72,862 164,876 148,721
Other service charges, commissions and fees 14,596 15,316 30,981 33,759
Other income 10,134 6,009 21,555 17,774
---------- -------- ---------- ----------
Total other operating income 111,449 94,187 217,412 200,254
---------- -------- ---------- ----------
Other Operating Expense:
Salaries 189,838 186,817 376,880 364,742
Employee benefits 45,381 45,440 92,403 93,620
Net occupancy expenses 48,583 43,174 89,439 88,508
Equipment rental and depreciation of equipment 48,044 45,904 87,783 81,044
Amortization 44,883 61,724 89,765 138,032
Other expenses 168,741 161,104 344,893 322,378
---------- -------- ---------- ----------
Total other operating expenses 545,470 544,163 1,081,163 1,088,324
---------- -------- ---------- ----------
Income Before Income Taxes 157,079 58,730 303,120 119,125
Income tax provision 45,183 14,382 88,040 35,419
---------- -------- ---------- ----------
Net Income $ 111,896 $ 44,348 $ 215,080 $ 83,706
========== ======== ========== ==========
Income Per Share* $ 0.17 $ 0.07 $ 0.32 $ 0.13
========== ======== ========== ==========
</TABLE>
* Net Income / weighted average outstanding shares of 672,526
and 664,097 at June 30, 2000 and 1999 respectively
3
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
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<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 215,080 $ 85,706
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 39,000 30,000
Depreciation 85,739 60,618
Amortization of intangible assets 89,765 152,617
Changes in accrued income and other assets (132,682) 27,149
Changes in accrued expenses and other liabilities (43,510) (186,130)
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Net cash provided by operating activities 253,392 169,960
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Cash Flows from Investing Activities:
Net change in loans made to customers (6,291,029) (2,308,036)
Purchase of securities available for sale 341,290 (3,929,804)
Proceeds from sales,calls and maturities of available for sale securities - 3,668,417
Purchases of property and equipment (260,053) (19,515)
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Net cash used in investing activities (6,209,792) (2,588,938)
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Cash Flows from Financing Activities:
Net change in non-interest bearing deposits (556,898) (2,716,246)
Net change in interest bearing deposits (409,848) 536,346
Cash dividends paid (515) -
Proceeds from short-term borrowings 1,500,000 -
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Net cash provided by (used in) financing activities 532,739 (2,179,900)
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Net Decrease in Cash and Cash Equivalents (5,423,661) (4,598,878)
Cash and Cash Equivalents, Beginning of Year 7,617,839 6,880,708
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Cash and Cash Equivalents, End of Year $ 2,194,178 $ 2,281,830
=========== ===========
Supplemental cash flow information:
Cash paid for interest $ 1,011,641 $ 960,461
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Cash paid for income taxes $ 53,983 $ 46,836
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</TABLE>
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 six-month period ended June 30, 2000, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000. 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, 1999.
(2) New and Pending Pronouncements
During 1999, the Company adopted FASB Statement No. 137, "Accounting for
Derivative Instruments and Hedging Activities". The statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities.
During 1998, the Company adopted FASB Statement No. 130, "Reporting
Comprehensive Income." The statement requires the reporting of comprehensive
income in addition to net income from operations. Comprehensive income is a
more inclusive financial reporting methodology that includes disclosure of
certain financial information that historically has not been recognized in the
calculation of net income.
(3) Other Comprehensive Income
During the six months ended June 30, 2000, 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, 1999 follows:
Accumulated other comprehensive income at December 31, 1999 $(340,795)
Other comprehensive income, net of tax:
Change in unrealized gain (loss)
on securities available for sale, net
of deferred income tax benefit of $181,986 (12,472)
Less: Reclassification adjustment for (gains) losses
realized in net income -
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(12,472)
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Accumulated other comprehensive income at June 30, 2000 $(353,267)
=========
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 June 30, 2000 and 1999 are:
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
------- ------- ------- -------
Supplies $11,001 $ 8,553 $27,702 $23,119
NCR processing 9,461 21,494 32,509 41,962
Advertising 11,417 11,642 23,427 21,957
Courier service 857 8,837 11,357 17,825
6
<PAGE>
CBC Holding Company and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Six Months in the Periods Ended
June 30, 2000 and 1999
Interim Financial Condition
---------------------------
CBC Holding Company (the "Company") reported total assets of $60,421,278 as of
June 30, 2000, compared to $59,729,445 at December 31, 1999. The most
significant change in the composition of assets was growth in net loans by
$6,252,029, an increase of 18.6% since December 31, 1999. This loan growth was
primarily funded by cash and cash equivalents, which decreased from $7,617,839
at December 31, 1999 to $2,194,178 at June 30, 2000.
Liquidity
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The liquidity ratio for the Bank was 24.8% at June 30, 2000, compared to 36.5%
at December 31, 1999. The Bank's liquid assets as a percentage of total
deposits were 4.2% at June 30, 2000, compared to 14.5% at December 31, 1999. The
Bank has approximately $2,500,000 in available federal fund lines of credit with
correspondent banks. In addition, the Bank has a $5,800,000 line of credit with
the Federal Home Loan Bank of which $4,300,000 is available at June 30, 2000. 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 $7,006,574 as of June 30, 2000. 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 9.3% at June 30, 2000,
compared to 8.7% at December 31, 1999. 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 June 30, 2000, the Bank had a risk-weighted
total capital ratio of 13.4%, compared to 14.3% at December 31, 1999, and a Tier
I risk-weighted capital ratio of 12.3%, compared to 13.1% at December 31, 1999.
Asset Quality
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Nonperforming assets which includes nonaccruing loans, repossessed collateral
and loans for which payments are more than 90 days past due, totaled $5,346, a
decrease of $83,136 from December 31, 1999. There were no related party loans
that were considered nonperforming at June 30, 2000. The composition of the
nonperforming assets is presented in the following table:
7
<PAGE>
CBC Holding Company and Subsidiary
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
For Each of the Six Months in the Period Ended
June 30, 2000 and 1999
June 30, December 31,
2000 1999
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Loans on nonaccrual 1,946 3,100
Loans over 90 days past-due & accruing 3,400 86,536
Other repossessed collateral - -
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Total nonperforming assets 5,346 89,636
===== ======
Total nonperforming assets as a percentage
of total loans (gross) and other real estate 0.01% 0.30%
----- ------
The allowance for loan losses totaled $501,386 at June 30, 2000, an increase
of $51,037 from December 31, 1999. The allowance for loan losses represented
1.2% and 1.3% of total loans at June 30, 2000 and December 31, 1999,
respectively. An analysis of the allowance for loan losses since December 31,
1999 follows:
Allowance for loan losses at December 31, 1999 $450,349
Charge-offs:
Commercial 2,155
Real Estate -
Installment 18,729
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Total 20,884
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Recoveries:
Commercial 1,020
Real Estate -
Installment 31,901
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Total 32,921
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Provision charged to income 39,000
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Allowance for loan losses at June 30, 2000 $501,386
========
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 Six Months in the Periods Ended
June 30, 2000 and 1999
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 of delinquency
trends, actual losses, and internal credit ratings. Management's judgment as to
the adequacy of the allowance is based upon a number of 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 June 30, 2000, the Bank had $13,189,213 in investment securities available-
for-sale. The net unrealized loss on available for sale securities, net of
deferred taxes, was $353,267 on June 30, 2000. During the period ended June 30,
2000, the maturities and calls of investment securities totaled $341,290,
resulting in neither a gain nor 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 six months of 2000 was $1,166,871, an
increase of $159,676 (15.8%) compared to the same period for 1999. Interest
income for the first six months of 2000 was $2,186,350, representing an increase
of $224,301 (11.4%) over the same period in 1999. The increase in interest
income was primarily due to an increase in interest on loans. Interest expense
for the first six months of 2000 increased $55,625 (6.0%) compared to the same
period in 1999. The increase in interest expense is primarily due an increase in
average rates on interest bearing deposits.
Amounts charged to expense related to the allowance for loan losses were
$39,000 and $30,000 for the first six months of 2000 and 1999.
Other operating income for the first six months of 2000 was $217,412, an
increase of $17,158 (8.6%) compared to the same period in 1999. This is
primarily attributable to an increase in service charges on deposit accounts of
$16,155 (10.9%) due to an increase in the number of accounts and deposit
activity.
Other operating expenses for the first six months of 2000 were $1,081,163, a
decrease of $7,161 (.10%) compared to the same period for 1999. The decrease is
primarily attributable to a decrease in amortization of organizational expenses
of $48,267 and an increase in other expenses and salaries of $34,653.
9
<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 six
months ended June 30, 2000.
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 six months ended June
30, 2000.
SIGNATURES
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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: August 11, 2000
10
