<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 March 31, 2000
--------------------------------
[ ] Transition report under Section 13 or 15 (d) of the Exchange Act
For the transition period from to
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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
- ------------------------------- -------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
102 West Roanoke Drive
Fitzgerald, Georgia 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
--------------------------
(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,
--------------------------
664,097 shares outstanding at March 31, 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
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) - March 31, 2000 and
December 31, 1999. 2
Consolidated Statements of Income (unaudited) - For the Three
Months Ended March 31, 2000 and 1999. 3
Consolidated Statements of Cash Flows (unaudited) -
For the Three Months Ended March 31, 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
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 three-month period ended March 31, 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
March 31, 2000 and December 31, 1999
(Unaudited)
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<TABLE>
<CAPTION>
March 31, December 31,
Assets 2000 1999
----------- -----------
<S> <C> <C>
Cash and due from banks $ 1,687,442 $ 2,377,839
Federal funds sold 1,390,000 5,240,000
----------- -----------
Total cash and cash equivalents 3,077,442 7,617,839
----------- -----------
Securities available for sale, at fair value 13,342,884 13,542,975
Federal Home Loan Bank stock, at cost 174,100 174,100
Loans, net of unearned income 36,882,630 34,124,389
Less- allowance for loan losses (470,275) (450,349)
----------- -----------
Loans, net 36,412,355 33,674,040
----------- -----------
Bank premises and equipment, less accumulated depreciation 2,014,192 1,972,909
Accrued interest receivable 519,166 518,175
Intangible assets 1,982,303 2,027,185
Other assets and accrued income 456,611 202,222
----------- -----------
Total Assets $57,979,053 $59,729,445
=========== ===========
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing demand $ 6,515,637 $ 6,982,725
Interest-bearing demand 44,341,375 45,637,578
----------- -----------
Total deposits 50,857,012 52,620,303
Other liabilities and accrued expenses 247,910 304,661
----------- -----------
Total liabilities 51,104,922 52,924,964
----------- -----------
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 607,491 504,306
Accumulated other comprehensive income (374,330) (340,795)
----------- -----------
Total shareholders' equity 6,874,131 6,804,481
----------- -----------
Total Liabilities and Shareholders' Equity $57,979,053 $59,729,445
=========== ===========
</TABLE>
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<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Income
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
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<S> <C> <C>
Interest Income:
Interest and fees on loans $ 833,536 $728,570
Income on federal funds sold 36,226 41,452
Interest on securities 193,846 202,331
---------- --------
Total interest income 1,063,608 972,353
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Interest Expense:
Interest on NOW and money market deposits 73,467 77,554
Interest on savings deposits 27,329 21,870
Interest on time deposits 366,849 358,401
Other interest expense 691 1,039
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Total interest expense 468,336 458,864
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Net interest income before loan losses 595,272 513,489
Less - provision for loan losses 19,500 15,000
---------- --------
Net interest income after provision for loan losses 575,772 498,489
---------- --------
Other Operating Income:
Service charges on deposit accounts 78,157 75,859
Other service charges, commissions and fees 16,385 18,443
Other income 11,421 11,765
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Total other operating income 105,963 106,067
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Other Operating Expense:
Salaries 187,042 177,925
Employee benefits 47,022 48,180
Net occupancy expenses 40,856 45,334
Equipment rental and depreciation of equipment 39,739 35,140
Amortization 44,882 76,308
Other expenses 176,152 161,274
---------- --------
Total other operating expenses 535,693 544,161
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Income Before Income Taxes 146,042 60,395
Income tax provision 42,857 21,037
---------- --------
Net Income 103,185 39,358
========== ========
Income Per Share* $ 0.16 $ 0.06
========== ========
</TABLE>
* Net Income/weighted average outstanding shares of 664,097
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<PAGE>
CBC Holding Company and Subsidiary
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
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<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
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<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 103,185 $ 39,358
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses 19,500 15,000
Depreciation 38,754 30,309
Amortization of intangible assets 44,882 76,308
Changes in accrued income and other assets (255,389) 138,687
Changes in accrued expenses and other liabilities (56,742) (50,630)
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Net cash provided by (used in) operating activities (105,810) 249,032
----------- -----------
Cash Flows from Investing Activities:
Net change in loans made to customers (2,757,815) (682,954)
Purchase of securities available for sale - (1,897,188)
Proceeds from sales and maturities of available for
sale securities 166,556 1,106,219
Purchases of property and equipment (80,037) (8,182)
----------- -----------
Net cash used in investing activities (2,671,296) (1,482,105)
----------- -----------
Cash Flows from Financing Activities:
Net change in demand and savings account (467,088) (1,592,508)
Net change in other time deposits (1,296,203) 453,087
----------- -----------
Net cash used in financing activities (1,763,291) (1,139,421)
----------- -----------
Net Decrease in Cash and Cash Equivalents (4,540,397) (2,372,494)
Cash and Cash Equivalents, Beginning of Year 7,617,839 6,880,708
----------- -----------
Cash and Cash Equivalents, End of Year $ 3,077,442 $ 4,508,214
=========== ===========
Supplement cash flow information:
Cash paid for interest $ 498,833 $ 469,766
=========== ===========
Cash paid for income taxes $ 5,336 $ 2,983
=========== ===========
</TABLE>
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<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 three-month period ended March 31, 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 three months ended March 31, 2000, the Company had unrealized
holding gains 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 $192,837 (33,535)
Less: Reclassification adjustment for (gains) losses
realized in net income -
---------
(33,535)
---------
Accumulated other comprehensive income at March 31, 2000 $(374,330)
=========
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<PAGE>
CBC Holding Company and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
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(4) Supplemental Financial Data
Components of other operating expenses greater than 1% of total interest
income and other income for the periods ended March 31, 2000 and 1999 are:
Three Months Ended
March 31,
2000 1999
------- -------
Supplies $16,701 $14,586
NCR Processing $23,049 $20,468
Advertising $12,010 $10,315
-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 Three Months in the Period Ended
March 31, 2000 and 1999
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Interim Financial Condition
- ---------------------------
CBC Holding Company (the "Company") reported total assets of $57,979,053 as
of March 31, 2000, compared to $59,729,445 at December 31, 1999. The most
significant change in the composition of assets was a decrease in cash and cash
equivalents from $7,617,839 to $3,077,442. Of this decrease, $2,758,241 was
used to fund the increase in loans from $34,124,389 at December 31, 1999 to
$36,882,630 at March 31, 2000.
Liquidity
- ---------
The liquidity ratio for the Bank was 28.07% at March 31, 2000, compared to
36.5% at December 31, 1999. The Bank's liquid assets as a percentage of total
deposits were 6.1% at March 31, 2000, compared to 14.5% at December 31, 1999.
The Company has approximately $3,500,000 in available federal fund lines of
credit with correspondent banks. However, the Company has not advanced on these
lines during 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 $6,874,131 as of March 31, 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 9.16% at March 31, 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 March 31, 2000, the Bank had a risk-weighted
total capital ratio of 13.8% compared to 14.3% at December 31, 1999, and a Tier
I risk-weighted capital ratio of 12.6%, compared to 13.1% at December 31, 1999.
The decrease is primarily caused by the continued growth in the loans.
Asset Quality
- -------------
Nonperforming assets which includes nonaccruing loans, repossessed collateral
and loans for which payments are more than 90 days past due totaled $110,827, an
increase of $21,191 from December 31, 1999. There were no related party loans
which were considered nonperforming at March 31, 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 Three Months in the Period Ended
March 31, 2000 and 1999
- --------------------------------------------------------------------------------
March 31, December 31,
2000 1999
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Loans on nonaccrual $ 11,300 $ 3,100
Loans greater than 90 days past due 99,527 86,536
Other real estate owned - -
Other repossessed collateral - -
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Total nonperforming assets $110,827 $89,636
======== =======
Total nonperforming assets as a percentage
of total loans (gross) and other real estate 0.30% 0.30%
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The allowance for loan losses totaled $470,275 at March 31, 2000, an increase
of $19,926 from December 31, 1999. The allowance for loan losses represented
1.3% of total loans at March 31, 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 2,104
Real Estate -
Installment 2,942
--------
Total 5,046
--------
Recoveries:
Commercial 1,020
Real Estate -
Installment 4,452
--------
Total 5,472
--------
Provision charged to income 19,500
--------
Allowance for loan losses at March 31, 2000 $470,275
========
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
-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 Three Months in the Period Ended
March 31, 2000 and 1999
- --------------------------------------------------------------------------------
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 March 31, 2000, the Bank had $13,342,884 in investment securities
available-for-sale. The net unrealized loss on available for sale securities,
net of deferred taxes, was $374,330 on March 31, 2000. During the period ended
March 31, 2000, the maturities and calls of investment securities totaled
$166,556, 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 three months of 2000 was $595,272, an
increase of $81,783 (16%) compared to the same period for 1999. Interest income
for the first three months of 2000 was $1,063,608, representing an increase of
$91,255 (9%) over the same period in 1999. The increase in interest income was
primarily due to an increase in loans balances. Interest expense for the first
three months of 2000 increased $9,472 (2.1%) compared to the same period in
1999. 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 for the
first three months of 2000 and 1999 were $19,500 and $15,000, respectively.
Other operating income for the first three months of 2000 was $105,963,
compared to $106,067 in 1999.
Other operating expenses for the first three months of 2000 were $535,693, a
decrease of $8,468 (1.6%) compared to the same period for 1999. The change is
primarily due to a decrease in amortization expense of $31,426 and an increase
in employee salaries and benefits of $9,117.
-9-
<PAGE>
Community Banking 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
three months ended March 31, 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 three months ended
March 31, 2000.
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: May 3, 2000
-10-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,687,442
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 1,370,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 13,342,884
<INVESTMENTS-MARKET> 13,342,884
<LOANS> 36,882,630
<ALLOWANCE> (470,275)
<TOTAL-ASSETS> 57,979,053
<DEPOSITS> 50,857,012
<SHORT-TERM> 0
<LIABILITIES-OTHER> 247,910
<LONG-TERM> 0
0
0
<COMMON> 664,097
<OTHER-SE> 6,210,034
<TOTAL-LIABILITIES-AND-EQUITY> 57,979,053
<INTEREST-LOAN> 833,536
<INTEREST-INVEST> 193,846
<INTEREST-OTHER> 36,226
<INTEREST-TOTAL> 1,063,608
<INTEREST-DEPOSIT> 467,645
<INTEREST-EXPENSE> 468,336
<INTEREST-INCOME-NET> 575,772
<LOAN-LOSSES> 19,500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 535,693
<INCOME-PRETAX> 146,042
<INCOME-PRE-EXTRAORDINARY> 103,185
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,185
<EPS-BASIC> .16
<EPS-DILUTED> .16
<YIELD-ACTUAL> 4.0
<LOANS-NON> 11,300
<LOANS-PAST> 99,527
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 217,593
<ALLOWANCE-OPEN> 450,349
<CHARGE-OFFS> 5,046
<RECOVERIES> 5,623
<ALLOWANCE-CLOSE> 470,275
<ALLOWANCE-DOMESTIC> 470,275
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
