<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
Amendment No. 1 to the Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended December 31, 1998
-----------------
Commission file number 0-26254
Century South Banks, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1455591
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
60 Main Street West, Dahlonega, Georgia 30533
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (706) 864-1111
--------------
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $1.00 par value
-----------------------------
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 .
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Registrant's common stock (based upon the mean
of the closing high and low sales price reported by the Nasdaq Stock Market)
held by nonaffiliates as of March 24, 1999 was approximately $200,644,607. For
the purposes of this response, directors, executive officers, and holders of 5%
or more of the Registrant's common stock are considered affiliates of the
Registrant at that date.
The Registrant had 10,992,227 shares of its common stock outstanding as of March
24, 1999.
The following item is amended: Part IV, Item 14
<PAGE>
PART IV
-------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries, together with the independent auditors' report, appear in Item 8.
Page Number
Consolidated Financial Statements in Section
- --------------------------------- -----------
Independent Auditors' Report....................................... 27
Consolidated Balance Sheets at December 31, 1998 and 1997.......... 28
Consolidated Statements of Income for the Years Ended December 31,
1998, 1997, and 1996............................................. 29
Consolidated Statements of Shareholders' Equity and Comprehensive
Income for the Years Ended December 31, 1998, 1997, and 1996..... 30
Consolidated Statement of Cash Flows for the Years Ended
December 31, 1998, 1997, and 1996................................. 31-32
(2) Financial Statement Schedules
Financial statement schedules have been omitted because they are not applicable
or the required information has been incorporated in the consolidated financial
statements and related notes.
(3) Exhibit Index
Exhibit No. Document
- ----------- --------
3.1 Articles of Incorporation of Century South Banks, Inc.
Incorporated by reference from Registration Statement No.
33-18527 filed on Form S-8 on March 23, 1990 and as amended on
April 10, 1990.
3.2 Bylaws of Century South Banks, Inc. Incorporated by reference
from Registrations Statement No. 333-72579 filed on Form S-4 on
February 18, 1999.
10.1 Employee Stock Ownership Plan of Century South Banks, Inc.
Incorporated by reference from Registration Statement No.
33-18527 filed on Form S-8 on March 23, 1990 and as amended on
April 10, 1990.
10.2 Dividend Reinvestment Plan of Century South Banks, Inc.
Incorporated by reference from Registration Statement No.
33-37784 filed on Form S-3 on November 14, 1990 and as amended
on June 13, 1996 and March 31, 1999.
10.3 Incentive Stock Option Plan of Century South Banks, Inc.
Incorporated by reference from Registration Statement No.
33-91922 filed on Form S-8 on May 4, 1995 and as amended on
December 30, 1997.
10.4 Employee Compensation Agreements incorporated by reference from
the Annual Report filed on Form 10-K for the fiscal year ended
December 31, 1997.
13.1 Quarterly Report to Shareholders for the quarter ended December
31, 1998 filed herewith.
<PAGE>
21.1 Subsidiaries of Century South Banks, Inc. consist of:
Bank of Dahlonega - Dahlonega, Georgia
The Bank of Ellijay - Ellijay, Georgia
First Bank of Polk County - Copperhill, Tennessee
Georgia First Bank - Gainesville, Georgia
Fannin County Bank, N.A. - Blue Ridge, Georgia
Gwinnett National Bank - Duluth, Georgia
First Community Bank of Dawsonville - Dawsonville, Georgia
Peoples Bank - Lavonia, Georgia
Bank of Danielsville - Danielsville, Georgia
First South Bank, N.A. - Macon, Georgia
AmeriBank, N.A. - Savannah, Georgia
23.1 Consent of KPMG LLP
23.2 Consent of Porter Keadle Moore, LLP
23.3 Report of Porter Keadle Moore, LLP
27.1 Financial Data Schedule as of and for the year ended December
31, 1998 (for SEC use only).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended December 31, 1998.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CENTURY SOUTH BANKS, INC.
(Registrant)
/s/ James A. Faulkner
-------------------------------------------
James A. Faulkner
Vice Chairman, Chief Executive Officer, and
Director
/s/ Joseph W. Evans
------------------------------------------
Joseph W. Evans
President, Chief Operating Officer, Chief
Financial Officer and Director
/s/ Susan J. Anderson
-----------------------------------------
Susan J. Anderson
Senior Vice President and
Corporate Controller
Date: April 20, 1999
<PAGE>
Exhibit 13.1
CHIEF EXECUTIVE OFFICER'S MESSAGE
Dear Shareholder:
We are pleased to report net earnings for Century South Banks, Inc.
for the fourth quarter of 1998. Net income for the quarter was $3,899,000 as
compared to $3,328,000 for the fourth quarter of 1997, representing an increase
of 17.2%. Earnings per diluted share increased to $0.35 for the fourth quarter
of 1998 as compared to $0.30 for the same quarter of 1997, a 16.7% increase.
Net income for the year through December 31, 1998 was $14,681,000 or $1.32 per
diluted share as compared to $9,632,000 or $0.87 per diluted share through
December 31, 1997, representing an increase of 52.4%.
The quarterly cash dividend of $0.11125 per share paid on January 6, 1999,
represents a 4.7% increase over the same quarter of 1997 and a 1.1% increase
over the previous quarter's dividend.
We are very pleased with the overall performance of your company for
1998. This marks our first full year of operations as the "new" Century South
Banks, Inc. We accomplished most all of our objectives for the year, and are
most pleased that our return on average assets for the year ended 1998 was 1.38%
as compared to 0.91% for the year ended 1997. At December 31, 1998, our reserve
for loan losses was a strong 1.48% of total loans outstanding and our
nonperforming assets were in line with our peers at 0.82% of total assets.
During the fourth quarter, we concluded the sale of First National Bank of
Union County and its fifty million dollars in assets. We continue to progress
with the acquisition of the Independent Bank of Oxford, Alabama, and look
forward to that transaction being consummated in second quarter 1999.
The year 1998 was a great one, and we look forward to 1999 with much
excitement and expectation.
We appreciate your continued support of our company and welcome your
comments and questions.
Sincerely,
James A. Faulkner
Vice Chairman and
Chief Executive Officer
<PAGE>
Century South Banks, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------------------------
(amounts in thousands)
<S> <C> <C>
Assets
Cash and due from banks $ 49,227 $ 43,146
Federal funds sold 29,430 33,870
Interest-earning deposits in other banks 7,875 32,465
Investment securities 143,561 178,804
Loans, net of unearned income 788,020 758,731
Allowance for loan losses (11,631) (12,339)
Premises and equipment, net 23,686 26,849
Other assets 24,784 26,842
------------------------------
Total assets $1,054,952 $1,088,368
==============================
Liabilities
Noninterest-bearing deposits $ 135,788 $ 129,418
Interest-bearing deposits 777,165 830,918
Other short-term borrowings - 1,660
Federal Home Loan Bank advances 12,780 6,881
Long-term debt 35 39
Other liabilities 9,853 10,314
------------------------------
Total liabilities 935,621 979,230
------------------------------
Shareholders' Equity
Common stock 11,088 10,925
Additional paid-in capital 34,955 34,282
Retained earnings 73,442 63,566
Common stock in treasury, at cost (1,051) (306)
Accumulated other comprehensive income 897 671
------------------------------
Total shareholders' equity 119,331 109,138
------------------------------
Total liabilities and shareholders' equity $1,054,952 $1,088,368
==============================
</TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three months ended Twelve months ended
December 31, December 31,
1998 1997 1998 1997
-------------------------------------------------------
(amounts in thousands, except per share data)
<S> <C> <C> <C> <C>
Interest income $ 22,579 $ 23,293 $ 91,935 $ 90,806
Interest expense 9,265 10,416 38,541 40,348
-------------------------------------------------------
Net interest income 13,314 12,877 53,394 50,458
Provision for loan losses 300 209 1,772 5,201
Noninterest income 5,613 2,728 15,209 10,409
Noninterest expense 12,947 10,560 44,717 42,256
Income tax expense 1,781 1,508 7,433 3,778
-------------------------------------------------------
Net income $ 3,899 $ 3,328 $ 14,681 $ 9,632
=======================================================
Weighted average common shares outstanding
assuming dilution 11,162 11,116 11,161 11,101
Net income per share assuming dilution $ 0.35 $ 0.30 $ 1.32 $ 0.87
Dividends declared per share $0.11125 $0.10625 $0.43750 $0.41750
</TABLE>
<PAGE>
CenturySouthbanks
- ---------------------------------------------------------------------
Inc.
Executive Officers
- --------------------------------------------------------------------------------
William H. Anderson, II Chairman
J. Russell Ivie Vice Chairman
James A. Faulkner Vice Chairman & CEO
Joseph W. Evans President, COO & CFO
Tony E. Collins Executive Vice President & CAO
Stephen W. Doughty Executive Vice President & CCO
J. Thomas Wiley, Jr. Executive Vice President
Sidney J. Wooten Executive Vice President
Directors
- --------------------------------------------------------------------------------
William H. Anderson, II, Chairman Thomas T. Folger, Jr.
J. Russell Ivie, Vice Chairman Quill O. Healey
James A. Faulkner, Vice Chairman Frank C. Jones
James R. Balkcom, Jr. John B. McKibbon, III
William L. Chandler E. Paul Stringer
Joseph W. Evans
Affiliates
- --------------------------------------------------------------------------------
Bank of Dahlonega First Community Bank of Dawsonville
60 Main Street West 136 Highway 400 South
Dahlonega, GA 30533 Dawsonville, GA 30534
John L. Lewis, President Gary L. Evans, President
706-864-3314 706-216-5050
The Bank of Ellijay Peoples Bank
Sand and Broad street 13321 Jones Street
Ellijay, GA 30540 Lavonia, GA 30553
R. A. Robinson, CEO J. Douglas Cleveland, President
C. Paul Nealey, President 706-356-8040
706-276-3400
First Bank of Polk County Bank of Danielsville
40 Ocoee Street Courthouse Square
Copperhill, TN 37317 Danielsville, GA 30633
David E. Adkisson, President L. Banister Sexton, President
423-496-3261 706-795-2121
Georgia First Bank First South Bank, N.A.
455 Jesse Jewell Parkway 4951 Forsyth Road
Gainesville, GA 30501 Macon, GA 31210
Allen J. Satterfield, President Daniel M. Forrester, President
770-535-8000 912-757-2000
Fannin County Bank, N.A. AmeriBank, N.A.
480 W. First Street 7393 Hodgson Memorial Drive
Blue Ridge, GA 30513 Savannah, GA 31406
Steve M. Eaton, President J. Thomas Wiley, Jr., President
706-632-2075 912-232-3800
Gwinnett National Bank
3200 Peachtree Industrial Boulevard
Duluth, GA 30136
Terry C. Evans, President
770-497-9797
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
Selected Balances
- ---------------------------------------------------------------------------------------------
As of and for twelve months
ended December 31, Percentage
1998 1997 Change
---------------------------------------------
(amounts in thousands, except per share data)
<S> <C> <C> <C>
Loans, net $ 776,389 $ 746,392 4.02%
Deposits 912,953 960,336 (4.93)
Total assets 1,054,952 1,088,368 (3.07)
Shareholders' equity 119,331 109,138 9.34
Net income 14,681 9,632 52.42
Book value per share 10.85 10.04 8.07
Net income per share assuming dilution 1.32 0.87 51.72
Weighted average common shares outstanding
assuming dilution 11,161 11,101 0.54
Nonperforming loans 3,997 4,595 (13.01)
Other real estate and other
nonperforming assets 4,685 2,347 99.62
Financial Ratios
- ---------------------------------------------------------------------------------------------
Return on average assets 1.38% 0.91% 51.65%
Return on average shareholders' equity 12.84 9.11 40.94
Net interest margin (taxable equivalent) 5.52 5.28 4.55
Allowance for loan losses to loans 1.48 1.63 (9.20)
Nonperforming assets to total assets 0.82 0.64 28.13
</TABLE>
<PAGE>
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
Stock Information
Century South Banks, Inc. ("CSBI") lists its stock for trading on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"). The
ticker tape symbol is "CSBI". Market price for the quarter ended December 31,
1998:
Three month high ......................... $ 30.50
Three month low .......................... $ 25.75
Closing price ............................ $ 27.875
- --------------------------------------------------------------------------------
Shareholder Services
Shareholders wishing to change the name or address on their stock, to report
lost certificates or to consolidate accounts should contact:
Registrar and Transfer Company
Attn: Investor Relations
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
- --------------------------------------------------------------------------------
Dividend Reinvestment Plan/Cash Contributions
Shareholders wishing to automatically reinvest quarterly dividends into Century
South Banks, Inc. common stock or make voluntary cash contributions should
contact:
Registrar and Transfer Company
Attn: Investor Relations
10 Commerce Drive
Cranford, New Jersey 07016
(800) 368-5948
- --------------------------------------------------------------------------------
Investor Relations
Shareholders, analysts, and others seeking financial information on Century
South Banks, Inc. should contact one of the following:
James A. Faulkner Susan J. Anderson Joseph W. Evans
Vice Chairman & CEO Senior Vice President & Controller President, COO & CFO
(706) 864-3915 (706) 864-3915 (912) 475-4340
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditor
We consent to incorporation by reference in the Registration Statements on Form
S-3 (File Nos. 333-06377 and 33-37784) and on Forms S-8 (File No. 33-18527 and
33-91922) of Century South Banks, Inc. of our report dated March 5, 1997, except
for note 14, as to which the date is July 11, 1997 relating to the consolidated
statements of earnings, changes in shareholders' equity, and cash flows for the
year ended December 31, 1996, which report appears in the December 31, 1997
Annual Report on Form 10-K of Century South Banks, Inc.
PORTER KEADLE MOORE, LLP
Successor to the practice of
Evans, Porter, Bryan & Co.
Atlanta, Georgia
March 31, 1999
