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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 AND 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
1934
For the transition period from _______ to _______
Commission File Number: 000-25345
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COMMUNITY CAPITAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-2413468
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(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
P.O. Drawer 71269, Albany, Georgia 31708
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(Address of principal executive offices)
(229) 446-2265
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(Registrant'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)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 30, 2000:
1,049,403 SHARES
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
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ITEM 1. Financial Statements
Consolidated Balance Sheets (unaudited) 3
Consolidated statements of operations (unaudited) 4
Consolidated statements of comprehensive Income (loss)
(unaudited) 5
Consolidated Statements of Cash Flows (unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and results of operations 8
PART II - OTHER INFORMATION
ITEM 2. Changes in Securities and use of proceeds 10
ITEM 5. Other Matters 10
ITEM 6. Exhibits and reports on Form 8-K: 10
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COMMUNITY CAPITAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
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<S> <C> <C>
ASSETS
Cash and due from banks $ 1,139,154 $ 949,326
Federal funds sold -- 810,000
Securities available for sale 13,412,664 13,351,772
Loans 33,917,166 19,607,865
Less allowance for loan losses 420,037 300,000
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Loans, net 33,497,129 19,307,865
Premises and equipment 2,696,990 1,910,055
Other assets 614,666 412,437
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$ 51,360,603 $ 36,741,455
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest bearing demand $ 4,731,551 $ 2,925,670
Interest bearing demand and savings 13,534,983 8,808,195
Time deposits over $100,000 5,347,215 4,888,828
Other time deposits 16,541,528 11,395,227
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Total deposits 40,155,277 28,017,920
Federal funds purchased 660,000
Federal Home Loan Bank advance 1,708,474 --
Other liabilities 148,783 155,409
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TOTAL LIABILITIES 42,672,534 $ 28,173,329
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SHAREHOLDERS' EQUITY
Preferred Stock, par value not stated; 2,000,000 shares
authorized; no shares issued $ -- $ --
Common Stock, $1.00 par value, 10,000,000 shares authorized;
1,050,000 shares issued 1,050,000 1,050,000
Capital surplus 8,538,483 8,538,483
Accumulated deficit (871,216) (973,154)
Accumulated other comprehensive loss (23,200) (47,203)
Treasury stock, 597 shares and 0 shares respectively (5,998) --
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TOTAL SHAREHOLDERS' EQUITY 8,688,069 8,568,126
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$ 51,360,603 $ 36,741,455
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</TABLE>
See Notes to Consolidated Financial Statements
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COMMUNITY CAPITAL BANCSHARES AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
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September 30, September 30, September 30, September 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
INTEREST INCOME
Loans 751,206 230,406 1,878,990 297,333
Taxable securities 216,533 54,040 632,111 97,135
Deposits in banks 5,353 -- 6,778 --
Federal funds sold 10,396 108,402 63,697 169,767
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TOTAL INTEREST INCOME 983,488 392,848 2,581,576 564,235
------------ ------------ ------------ ------------
INTEREST EXPENSE
Deposits 457,777 161,069 1,208,908 191,067
Other borrowed money 26,531 97 34,645 11,429
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TOTAL INTEREST EXPENSE 484,308 161,166 1,243,553 202,496
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NET INTEREST INCOME 499,180 231,682 1,338,023 361,739
Provision for loan losses 35,000 120,000 129,000 210,000
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NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 464,180 111,682 1,209,023 151,739
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OTHER INCOME
Service charges on deposit accounts 36,526 11,373 83,749 12,614
Other service charges, commissions and fees 54,026 7,685 66,938 9,617
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TOTAL OTHER INCOME 90,552 19,058 150,687 22,231
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OTHER EXPENSES
Salaries and employee benefits 255,906 163,623 670,285 410,266
Equipment and occupancy expense 73,437 73,778 195,196 137,604
Marketing expense 19,007 22,432 56,760 38,177
Data processing expense 32,013 21,707 90,428 44,315
Administrative expenses 60,984 12,731 146,280 34,587
Loan expenses 8,733 -- 14,144 --
Organizational and preopening expenses -- -- -- 27,580
Other operating expenses 28,050 43,276 84,679 110,043
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TOTAL OTHER EXPENSES 478,130 337,547 1,257,772 802,572
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 76,602 (206,807) 101,938 (628,602)
Income tax expense -- -- -- --
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NET INCOME (LOSS) $ 76,602 $ (206,807) $ 101,938 $ (628,602)
============ ============ ============ ============
INCOME (LOSS) PER COMMON SHARE $ 0.07 $ (0.20) $ 0.10 $ (0.60)
============ ============ ============ ============
Weighted average shares outstanding 1,049,876 1,050,000 1,049,918 1,050,000
============ ============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
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COMMUNITY CAPITAL BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
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September 30, September 30, September 30, September 30,
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2000 1999 2000 1999
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NET INCOME (LOSS) $ 76,602 $ (206,807) $ 101,938 $ (628,602)
Other Comprehensive Income:
Net unrealized holding gains (losses) 105,651 11,764 36,368 11,764
Tax effect (35,921) (4,000) (12,365) (4,000)
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COMPREHENSIVE INCOME (LOSS) $ 146,332 $ (199,043) $ 125,941 $ (620,838)
============ ============ ============ ============
</TABLE>
See notes to Consolidated financial statements
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COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended September 30, 2000 and 1999
<TABLE>
<CAPTION>
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 101,938 $ (628,602)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 94,903 41,829
Provision for loan losses 129,000 210,000
Imputed interest on advances from Organizers -- 1,495
Increase in interest receivable (160,574) (192,130)
Other operating activities (85,631) 65,009
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Net cash used in operating activities 79,636 (502,399)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (881,838) (1,019,137)
Net (increase) decrease in Federal funds sold 810,000 (4,105,000)
Net increase in loans (14,318,264) (13,416,981)
Proceeds from maturities of securities available for sale 1,497,530 8,000,000
Purchase of securities available for sale (1,497,069) (15,462,167)
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Net cash used in Investing activities (14,389,641) (26,003,285)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 12,137,357 18,789,613
Proceeds from advances under line of Credit -- 205,000
Proceeds from FHLB advance 1,800,000
Increase in Federal funds purchased 660,000
Repayment of other borrowings (91,526) (697,122)
Purchase of Treasury stock (5,998)
Repayment of advances from organizers -- (80,000)
Net proceeds from sale of common stock -- 9,583,473
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Net cash provided by financing activities 14,499,833 27,800,964
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Net increase in cash 189,828 1,295,280
Cash and due from banks at beginning of period 949,326 5,220
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Cash and due from banks at end of period $ 1,139,154 $ 1,300,500
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SUPPLEMENTAL DISCLOSURE
Cash paid for interest $ 1,240,970 $ 133,730
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NON-CASH TRANSACTION
Unrealized losses (gains) on securities available for sale $ 36,368 $ (7,764)
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</TABLE>
See notes to Consolidated Financial Statements
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COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Community Capital Bancshares, Inc. (the "Company") was organized on August
19,1998 to operate as a bank holding company pursuant to the Federal Bank
Holding Company Act of 1956, as amended, and to purchase 100% of the issued and
outstanding capital stock of Albany Bank & Trust N.A. (the "Bank"), an
association organized under the laws of the United States, which conducts a
general banking business in Albany, Georgia. The Organizers filed an application
with the Office of the Comptroller of the Currency (the "OCC") to charter the
proposed bank. The Company filed an application to become a bank holding company
with the Board of Governors of the Federal Reserve System (the "Federal
Reserve") and the Georgia Department of Banking and Finance. Upon obtaining
regulatory approval, the Company became a registered bank holding company
subject to regulation by the Federal Reserve and the Department of Banking and
Finance.
The company received final approvals and commenced banking operations on April
28, 1999.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements include the accounts of the Company and
the Bank. All intercompany accounts and transactions have been eliminated in
consolidation.
The interim financial statements included herein are unaudited but reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the financial position and results of operations for the interim
period presented. All such adjustments are of a normal recurring nature. The
results of operations for the period ended September 30, 2000 are not
necessarily indicative of the results of a full year's operations.
The accounting principles followed by the Company and the methods of applying
these principles conform with generally accepted accounting principles (GAAP)
and with general practices within the banking industry.
In preparing financial statements in conformity with GAAP, management is
required to make estimates and assumptions that affect the reported amounts in
the financial statements. Actual results could differ significantly from those
estimates. Material estimates common to the banking industry that are
particularly susceptible to significant change in the near term include, but are
not limited to, the determinations of the allowance for loan losses, the
valuations of real estate acquired in connection with or in lieu of foreclosure
on loans, and valuation allowances associated with deferred tax assets, the
recognition of which are based on future taxable income.
Income Taxes
The Company will be subject to Federal and state income taxes when taxable
income is generated. No income taxes have been accrued because of the
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operating losses incurred during the preopening period.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
At September 30, 2000 the Company's assets increased $14,620,000 from the
December 31, 1999 amount to $51,361,000 an increase of 39.8%. Loans increased to
33,497,000 from the year-end amount of $19,308,000. This is an increase of
$14,189,000 or 73.5%. The increase in assets was primarily funded by increased
deposits. Total deposits at September 30, 2000 increased $12,137,000 to
$40,155,000. Additionally, in late June, the bank obtained a $1,800,000 advance
from the Federal Home Loan Bank. This advance is at a fixed rate and has fixed
principal reductions over its 60 month term. It is collateralized by investment
securities owned by the bank. Federal funds purchased provided additional
funding of $660,000.
There were no related party loans that were considered nonperforming at June 30,
2000. At September 30, 2000 the Company had no non-accruing loans outstanding.
RESULTS OF OPERATIONS
Earnings for the nine months were $102,000. Primary and fully diluted earnings
per share for the first nine months were $0.10 per share. Comparisons with the
results of operations for the prior period would not be meaningful as during
1999 the Company was still in its development stage. The Company commenced
banking operations on April 28, 1999.
The growth in earning assets is reflected in the earnings for the current year.
Interest and fees on loans for the current year was $1,879,000. This amount
should continue to increase proportionately as the loans increase. Total
interest expense is $1,244,000 and is increasing as the deposit base of the bank
increases. The resulting net interest income for the current year is $1,338,000.
This represents a net interest margin of 4.35%. In order to improve
profitability, the bank must continue to increase this margin.
The provision for loan losses of $129,000 represents the expense recognized by
the Company during the current year to provide for potential loan losses by
replenishing the allowance for loan losses. At September 30, 2000 the allowance
for loan losses was $420,000. This represents 1.24% of total loans outstanding.
During the second quarter of 2000, the Company initiated two new services to its
customers. The Bank hired a full time registered representative to provide full
service and discount brokerage services. Additionally, the Bank hired a mortgage
originator to provide traditional mortgage financing to its customers. The
revenues from these activities are reflected in other service charges,
commissions and fees, which was $48,000 for nine months ended September 30,
2000.
CAPITAL
The following table presents the Company's regulatory capital position as of
September 30, 2000.
<TABLE>
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Tier 1 Capital Ratio, actual 24.44%
Tier 1 Capital minimum requirement 4.00%
Tier 2 Capital Ratio, actual 25.62%
Tier 2 Capital minimum requirement 8.00%
Leverage Ratio 19.33%
Leverage Ratio minimum requirement 4.00%
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The Company's capital ratios will continue to decrease as it continues to grow;
the current amounts of capital are expected to be adequate for the foreseeable
future.
FORWARD-LOOKING STATEMENTS
This document contains statements that constitute "forward-looking statements"
within the meaning of Sections 27A of the Securities Act of 1933, as amended,
and Sections 21E of the Securities Exchange Act of 1934, as amended. The words
"believe", "estimate", "expect", "intend", "anticipate" and similar expressions
and variations thereof identify certain of such forward-looking statements,
which speak only as of the dates that they were made. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. Users are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that the actual results may
differ materially from those indicated in the forward-looking statements as a
result of various factors. Users are therefore cautioned not to place undue
reliance on these forward-looking statements.
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ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBIT 10.8 - 2000 OUTSIDE DIRECTORS STOCK OPTION PLAN
(B) EXHIBIT 10.9 - NON-QUALIFIED STOCK OPTION AGREEMENT - CHAIRMAN
(C) EXHIBIT 10.10 - NON-QUALIFIED STOCK OPTION AGREEMENT - R. BISHOP
(D) EXHIBIT 27. FINANCIAL DATA SCHEDULE
(E) REPORTS ON FORM 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNITY CAPITAL BANCSHARES, INC.
November 13, 2000 /s/ Robert E. Lee
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Date Robert E. Lee,
President
November 13, 2000 /s/ David J. Baranko
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Date David J. Baranko
Chief Financial Officer
(Duly authorized officer and
principal financial / accounting
officer )
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