<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, 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)
(229) 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 September 30, 2000
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Transitional Small Business Disclosure Format (check one):
Yes X No _____
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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) - September 30, 2000 and
December 31, 1999. 2
Consolidated Statements of Income (unaudited) - For the Nine Months
Ended September 30, 2000 and 1999 and For the Three Months Ended September, 30
2000 and 1999. 3
Consolidated Statements of Cash Flows (unaudited) - For the Nine Months
Ended September 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 nine-month period ended September 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
September 30, 2000 and December 31, 1999
(Unaudited)
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<TABLE>
<CAPTION>
September 30, December 31,
Assets 2000 1999
------------ ------------
<S> <C> <C>
Cash and due from banks $ 2,001,631 $ 2,377,839
Federal funds sold 280,000 5,240,000
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Total cash and cash equivalents 2,281,631 7,617,839
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Securities available for sale, at fair value 13,197,204 13,542,975
Federal Home Loan Bank stock, at cost 225,000 174,100
Loans, net of unearned income 42,435,875 34,124,389
Less - allowance for loan losses (495,308) (450,349)
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Loans, net 41,940,567 33,674,040
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Bank premises and equipment, less accumulated depreciation 2,110,758 1,972,909
Accrued interest receivable 768,799 518,175
Intangible assets, net of amortization 1,892,538 2,027,185
Other assets and accrued income 117,777 202,222
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Total Assets $ 62,534,274 $ 59,729,445
============ ============
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $ 6,334,951 $ 6,982,725
Interest-bearing 46,627,279 45,637,578
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Total deposits 52,962,230 52,620,303
Other liabilities and accrued expenses 303,127 304,661
Other borrowed funds 2,000,000 --
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Total liabilities 55,265,357 52,924,964
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Shareholders' Equity
Commom stock, $1 par value, authorized 10,000,000 shares, issued
and outstanding 697,263 and 664,097 shares at September 30, 2000
and 1999, respectively 697,263 664,097
Paid-in capital surplus 6,383,156 5,976,873
Retained earnings 420,959 504,306
Accumulated other comprehensive income (232,461) (340,795)
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Total shareholders' equity 7,268,917 6,804,481
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Total Liabilities and Shareholders' Equity $ 62,534,274 $ 59,729,445
============ ============
</TABLE>
2
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Income
For the Nine Months Ended September 30, 2000 and 1999
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<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $1,022,535 $ 815,664 $2,769,255 $2,310,864
Income on federal funds sold 10,032 8,567 64,495 71,364
Interest on securities 190,572 196,084 575,739 600,136
---------- ---------- ----------- -----------
Total interest income 1,223,139 1,020,315 3,409,489 2,982,364
---------- ---------- ----------- -----------
Interest Expense:
Interest on NOW and money market deposits 74,413 73,846 221,637 226,694
Interest on savings deposits 27,060 26,122 81,375 71,901
Interest on time deposits 441,968 358,426 1,216,576 1,078,483
Other interest expense 45,636 5,012 49,968 11,182
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Total interest expense 589,077 463,406 1,569,556 1,388,260
---------- ---------- ----------- -----------
Net interest income before loan losses 634,062 556,909 1,839,933 1,594,104
Less - provision for loan losses 19,500 15,000 58,500 45,000
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Net interest income after provision for loan losses 614,562 541,909 1,781,433 1,549,104
---------- ---------- ----------- -----------
Other Operating Income:
Service charges on deposit accounts 90,285 72,346 255,161 221,067
Other service charges, commissions and fees 9,755 12,250 40,736 46,009
Other income 11,901 8,625 33,456 26,399
---------- ---------- ----------- -----------
Total other operating income 111,941 93,221 329,353 293,475
---------- ---------- ----------- -----------
Other Operating Expense:
Salaries 192,193 187,257 569,073 551,999
Employee benefits 46,871 45,259 139,274 138,879
Net occupancy expenses 44,426 45,290 133,865 133,798
Equipment rental and depreciation of equipment 52,483 38,740 140,266 119,784
Amortization 44,882 69,016 134,647 207,048
Other expenses 106,049 149,918 488,086 472,296
---------- ---------- ----------- -----------
Total other operating expenses 486,904 535,480 1,605,211 1,623,804
---------- ---------- ----------- -----------
Income Before Income Taxes 239,599 99,650 505,575 218,775
Income tax provision 73,498 27,549 148,958 62,968
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Net Income $ 166,101 $ 72,101 $ 356,617 $ 155,807
========== ========== =========== ===========
Income Per Share* $ 0.24 $ 0.11 $ 0.53 $ 0.23
========== ========== =========== ===========
</TABLE>
* Net Income / weighted average outstanding shares of 678,138 and 664,097 at
September 30, 2000 and 1999, respectively.
3
<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
================================================================================
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
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<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 356,617 $ 155,807
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 58,500 45,000
Depreciation 137,356 112,806
Amortization of intangible assets 134,647 207,048
Changes in accrued income and other assets (166,177) (149,219)
Changes in accrued expenses and other liabilities (1,536) (69,715)
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Net cash provided by operating activities 519,407 301,727
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Cash Flows from Investing Activities:
Net change in loans made to customers (8,325,027) (3,821,105)
Purchase of securities available for sale (50,900) (3,929,804)
Proceeds from sales, calls and maturities of available for sale securities 454,105 3,944,070
Purchases of property and equipment (275,205) (20,259)
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Net cash used in investing activities (8,197,027) (3,827,098)
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Cash Flows from Financing Activities:
Net change in non-interest bearing deposits (669,977) (269,045)
Net change in interest bearing deposits 1,011,904 1,418,501
Dividends paid (515) --
Proceeds from short-term borrowings and federal funds purchased 2,000,000 (111,500)
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Net cash provided by financing activities 2,341,412 1,037,956
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Net Decrease in Cash and Cash Equivalents (5,336,208) (2,487,415)
Cash and Cash Equivalents, Beginning of Year 7,617,839 6,880,708
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Cash and Cash Equivalents, End of Year $ 2,281,631 $ 4,393,293
=========== ===========
Supplemental cash flow information:
Cash paid for interest $ 1,580,621 $ 1,421,602
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Cash paid for income taxes $ 79,483 $ 56,695
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</TABLE>
4
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
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(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, 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 nine months ended September 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:
<TABLE>
<S> <C>
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 $119,752 108,334
Less: Reclassification adjustment for (gains) losses
realized in net income -
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108,334
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Accumulated other comprehensive income at September 30, 2000 $ (232,461)
=============
</TABLE>
5
<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
================================================================================
(4) Supplemental Financial Data
Components of other operating expenses greater than 1% of total interest
income and other income for the periods ended September 30, 2000 and 1999 are:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ending
September 30, September 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Supplies $ 14,660 $ 7,119 $ 42,36 $ 30,238
NCR processing -- 22,752 32,509 64,714
Advertising 9,106 10,517 32,533 32,474
</TABLE>
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 Nine Months in the Periods Ended
September 30, 2000 and 1999
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Interim Financial Condition
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CBC Holding Company (the "Company") reported total assets of $62,534,274 as
of September 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 of
$8,266,527, an increase of 24.5% 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 $2,281,631 at September 30, 2000.
Liquidity
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The liquidity ratio for the Bank was 23.9% at September 30, 2000, compared
to 36.5% at December 31, 1999. The Bank's liquid assets as a percentage of total
deposits were 4.3% at September 30, 2000, compared to 14.5% at December 31, 1999
The Company 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 $3,800,000 was available at
September 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 ensure adequate liquidity exists at all times.
Capital
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The capital of the Company totaled $7,268,917 as of September 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 September 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 September 30, 2000, the Bank had a risk-
weighted total capital ratio of 13.3%, compared to 14.3% at December 31, 1999,
and a Tier I risk-weighted capital ratio of 12.2%, 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
$37,013, a decrease of $52,623 from December 31, 1999. There were no related
party loans that were considered nonperforming at September 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 Nine Months in the Periods Ended
September 30, 2000 and 1999
================================================================================
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------- --------------
<S> <C> <C>
Loans on nonaccrual $ 19,425 $ 3,100
Loans over 90 days past-due & accruing 17,588 86,536
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Total nonperforming assets $ 37,013 $ 89,636
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Total nonperforming assets as a percentage
of total loans (gross) and other real estate 0.09% 0.30%
-------------- --------------
</TABLE>
The allowance for loan losses totaled $495,308 at September 30, 2000, an
increase of $44,959 from December 31, 1999. The allowance for loan losses
represented 1.2% and 1.3% of total loans at September 30, 2000 and December 31,
1999, respectively. An analysis of the allowance for loan losses since December
31, 1999 follows:
<TABLE>
<S> <C>
Allowance for loan losses at December 31, 1999 $ 450,349
Charge-offs:
Commercial 23,171
Real Estate --
Installment 25,379
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Total 48,550
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Recoveries:
Commercial 1,020
Real Estate --
Installment 33,989
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Total 35,009
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Provision charged to income 58,500
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Allowance for loan losses at September 30, 2000 $ 495,308
==============
</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 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
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, 2000 and 1999
================================================================================
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, 2000, the Bank had $13,197,204 in investment securities
available-for-sale. The net unrealized loss on available for sale securities,
net of deferred taxes, was $232,461 on September 30, 2000. During the period
ended September 30, 2000, the maturities and calls of investment securities
totaled $454,105, 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 2000 was $1,781,433, an
increase of $232,329 (15.0%) compared to the same period for 1999. Interest
income for the first nine months of 2000 was $3,409,489, representing an
increase of $427,125 (14.3%) 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 nine months of 2000 increased $181,296 (13.1%) compared to
the same period in 1999. The increase in interest expense is primarily due to an
increase in average rates on interest bearing deposits.
Amounts charged to expense related to the allowance for loan losses were
$58,500 and $45,000 for the first nine months of 2000 and 1999, respectively.
Other operating income for the first nine months of 2000 was $329,353, an
increase of $35,878 (12.2%) compared to the same period in 1999. This is
primarily attributable to an increase in service charges on deposit accounts of
$34,094 (15.4%) is due to an increase in the number of accounts and deposit
activity.
Other operating expenses for the first nine months of 2000 were $1,605,211,
a decrease of $18,593 (1.1%) compared to the same period for 1999. The decrease
is primarily attributable to a decrease in amortization of organizational
expenses of $72,401.
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
nine months ended September 30, 2000.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K.
A. Exhibits - 27.1 Financial Data Schedule
B. here have been no reports filed on form 8-K for the nine months ended
September 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
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/s/ George Ray
-------------------------------------
George Ray
President / Chief Executive Officer
Date: October 17, 2000
10
