<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE) FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition Period from _________to_________
Commission File Number O-18460
COMMUNITY CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0866395
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
109 Montague Avenue
Greenwood, SC 29646
(Address of principal executive
offices, including zip code)
(864) 961-8200
(Registrant's telephone number, including area code)
------------------------------------------------
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 the number of shares outstanding of each of the issuer's classes of
common stock as of the date of this filing.
1,218,336 shares of common stock, $1.00 par value
PAGE 1 OF 15
EXHIBIT INDEX ON PAGE 2
<PAGE>
COMMUNITY CAPITAL CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. Financial Information Page No.
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995............................................ 3
Condensed Consolidated Statements of Income - Six months ended June 30,
1996 and 1995 and Three months ended June 30, 1996
and 1995. ................................................... 4
Condensed Consolidated Statement of Stockholders' Equity for
the Six months ended June 30, 1996.......................... 5
Condensed Consolidated Statements of Cash Flows - Six months
ended June 30, 1996 and 1995................................ 6
Notes to Condensed Consolidated Financial Statements......... 7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. .............................. 9-13
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security-Holders...... 14
Item 6. Exhibits and Reports on Form 8-K. ....................... 14
(a) Exhibits. ........................................... 15
(b) Reports on Form 8-K. ................................ 14
</TABLE>
2
<PAGE>
COMMUNITY CAPITAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------------ ------------------
ASSETS:
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 4,198,348 $ 2,949,289
Interest bearing balances due from banks 79,938
Federal funds sold 560,000 2,330,000
------------------ ------------------
4,838,286 5,279,289
Securities available-for-sale 23,129,720 22,445,925
Loans receivable 69,989,041 63,203,789
Less allowance for loan losses (761,811) (671,338)
------------------ ------------------
Loans, net 69,227,230 62,532,451
Premises, furniture & equipment, net 3,010,520 2,530,820
Other assets 3,634,190 3,311,492
------------------ ------------------
Total assets $ 103,839,946 $ 96,099,977
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing $ 10,596,702 $ 9,447,005
Interest bearing 69,691,168 63,690,569
------------------ ------------------
80,287,870 73,137,574
Federal funds purchased and securities
sold under agreements to repurchase 4,383,000 3,034,000
Advances from Federal Home Loan Bank 5,357,964 6,243,561
Accrued interest and other liabilities 921,416 753,272
------------------ ------------------
Total liabilities 90,950,250 83,168,407
------------------ ------------------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value, 10,000,000 shares
authorized, 1,218,336 and 1,153,060 shares
issued and outstanding at June 30, 1996 and
December 31, 1995, respectively 1,218,336 1,153,060
Surplus 11,998,129 11,254,039
Unrealized gain (loss) on securities
available-for-sale, net of deferred taxes (308,516) 177,297
Retained earnings (deficit) (18,253) 347,174
------------------ ------------------
Total shareholders' equity 12,889,696 12,931,570
------------------ ------------------
Total liabilities and shareholders' equity $ 103,839,946 $ 96,099,977
=================== ===================
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
COMMUNITY CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
---------------------------------------- -------------------------------
1996 1995 1996 1995
---------------------------------------- ------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $ 3,101,627 $ 2,404,875 $ 1,601,695 $ 1,269,540
Securities 695,018 284,938 355,576 170,673
Other interest income 57,348 32,994 18,069 31,507
------------------ ------------------ ------------------ ------------------
3,853,993 2,722,807 1,975,340 1,471,720
------------------ ------------------ ------------------ ------------------
Interest expense:
Deposit accounts 1,651,320 1,002,359 813,146 567,803
FHLB advances 154,090 188,239 73,612 97,944
Other interest expense 90,056 51,784 65,159 29,969
------------------ ------------------ ------------------ ------------------
1,895,466 1,242,382 951,917 695,716
------------------ ------------------ ------------------ ------------------
Net interest income 1,958,527 1,480,425 1,023,423 776,004
Provision for loan losses 105,000 22,373 55,000 16,373
------------------ ------------------ ------------------ ------------------
Net interest income after
provision for loan losses 1,853,527 1,458,052 968,423 759,631
--------- --------- ------- -------
Other operating income:
Service charges 250,712 196,177 131,307 102,364
Residential mortgage
origination fees 132,649 43,521 72,570 23,473
Gain (loss) on sales
of securities 17,033 (21,638) 11,852 0
Other income 253,168 117,696 121,534 26,663
------------------ ------------------ ------------------ ------------------
653,562 335,756 337,263 152,500
------------------ ------------------ ------------------ ------------------
Other operating expenses:
Salaries and benefits 916,909 653,717 465,137 310,095
Net occupancy expense 286,975 168,673 146,777 71,367
Other operating expenses 695,976 567,444 381,411 303,224
------------------ ------------------ ------------------ ------------------
1,899,860 1,389,834 993,325 684,686
------------------ ------------------ ------------------ ------------------
Income before taxes 607,229 403,974 312,361 227,445
Income tax provision 217,143 147,045 108,007 83,767
------------------ ------------------ ------------------ ------------------
Net income $ 390,086 $ 256,929 $ 204,354 $ 143,678
=================== =================== =================== ===================
Earnings per share:
Primary .30 .35 .16 .19
------------------ ------------------ ------------------ ------------------
Fully diluted .30 .35 .16 .19
------------------ ------------------ ------------------ ------------------
WEIGHTED AVERAGE COMMON SHARES
AND EQUIVALENTS
Primary 1,316,551 843,418 1,339,055 866,040
------------------ ------------------ ------------------ ------------------
Fully diluted 1,316,551 843,418 1,339,055 866,040
------------------ ------------------ ------------------ ------------------
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
COMMUNITY CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
for the six months ended June 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Unrealized
Gain (loss)
on Securi-
Common Stock ties For Retained Total
Shares Amount Surplus Sale, Net Earnings Equity
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1995 1,153,060 $ 1,153,060 $ 11,254,039 $ 177,297 $ 347,174 $ 12,931,570
Proceeds from
exercise of
stock options 7,785 7,785 54,198 61,983
5% stock dividend 57,491 57,491 689,892 (755,513) (8,130)
Change in fair
value for the
period (485,813) (485,813)
Net income
for the period 390,086 390,086
-------------- -------------- -------------- -------------- -------------- ---------------
Balance, June
30, 1996 1,218,336 $ 1,218,336 $ 11,998,129 $ (308,516) $(18,253) $12,889,696
============== =============== =============== =============== ============== ================
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
COMMUNITY CAPITAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------------------ -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 390,086 $ 256,929
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 200,316 140,948
Provision for possible loan losses 105,000 22,373
Amortization of organizational costs 6,812 19,113
Amortization less accretion on investments 31,396 21,517
Amortization of deferred loan costs 64,393 36,732
(Gain) loss on sale of securities (17,033) 21,638
Disbursements for mortgages held for sale (5,268,155) (953,280)
Proceeds of sales of residential mortgages 5,352,780 878,285
Increase in interest receivable (68,022) (107,866)
Increase in interest payable 83,393 105,254
Decrease in other assets 17,217 134,150
Increase (decrease) in other liabilities 84,751 (128,020)
------------------ ------------------
Net cash provided by operating activities 982,934 447,773
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net increase in loans to customers (6,948,797) (3,392,951)
Purchases of securities available-for-sale (9,406,105) (4,661,897)
Sales of securities available-for-sale 4,012,383 977,891
Maturities of securities available-for-sale 3,931,046 500,000
Purchases of investments held-to-maturity (1,406,374)
Maturities of investments held-to-maturity 100,000
Purchases of premises and equipment (680,016) (529,633)
------------------ ------------------
Net cash used by investing activities (9,091,489) (8,412,964)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of capital stock 5,272,304
Proceeds from exercise of stock options 61,983
Stock dividend fractional shares paid in cash (8,130)
Repayment of organizational notes (457,189)
Net increase in deposits accounts 7,150,296 13,382,284
Proceeds from FHLB borrowings 2,700,000 4,650,000
Repayments of FHLB borrowings (3,585,597) (3,363,042)
Net increase (decrease) fed funds purchased 1,349,000 (2,534,000)
------------------ ------------------
Net cash provided by financing activities 7,667,552 16,950,357
------------------ ------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (441,003) 8,985,166
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,279,289 3,038,958
------------------ ------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,838,286 $ 12,024,124
------------------- ===================
Cash paid during the period for:
Income taxes $ 148,400 $ 173,641
Interest $ 1,812,073 $ 1,137,128
</TABLE>
6
<PAGE>
COMMUNITY CAPITAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with the requirements for interim financial statements and,
accordingly, they are condensed and omit disclosures which would substantially
duplicate those contained in the most recent annual report to stockholders. The
financial statements as of June 30, 1996 and for the interim periods ended June
30, 1996 and 1995 are unaudited and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation. The financial information as of December 31, 1995 has been
derived from the audited financial statements as of that date. For further
information, refer to the financial statements and the notes included in the
Company's 1995 Annual Report.
Note 2 - Adoption of Accounting Principle
In October 1995, the Financial Accounting Standards Board issued FASB Statement
No. 123, "Accounting for Stock-Based Compensation," effective for transactions
entered into in fiscal years that begin after December 15, 1995. FASB 123
recommends that companies account for stock compensation on a fair value based
method which requires compensation cost to be measured at the grant date based
on the value of the award and to be recognized over the service period. As an
alternative, companies may continue to record compensation cost based on the
excess, if any, of the quoted market price of the stock at the grant date (or
other measurement date) over the amount an employee must pay to acquire the
stock (APB Opinion No. 25). However, if a company elects this method, it must
include in the financial statements certain disclosures which reflect pro forma
amounts as if the fair value method had been used.
Management has elected to continue accounting for grants under the Company's
stock option plans based on the provisions of APB Opinion No. 25 with pro forma
disclosures in the financial statements as if the fair value method had been
used. As permitted by FASB 123, the Company will not apply the disclosure
requirements to complete interim financial statements.
Note 3- Borrowings
As of June 30, 1996, the Company obtained a $5,000,000 unsecured line of credit
from another financial institution. $3,500,000 of this line is expected to be
used to capitalize the Belton Bank (see note 4 below). Approximately $900,000
were used subsequent to June 30, 1996 to acquire approximately 4.9% of the
outstanding common stock of another bank holding company, and approximately
$600,000 will be used to purchase data processing and branch equipment. The
remainder of the line will be available for general corporate purposes.
7
<PAGE>
COMMUNITY CAPITAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 4 - Shareholders' Equity
On April 15, 1996 the Board of Directors declared a 5% stock dividend.
Accordingly, amounts equal to the fair market value of the additional shares
issued have been charged to retained earnings and credited to common stock and
capital surplus. Earnings per share and weighted average shares outstanding have
been restated to reflect the 5% stock dividend. Cash was paid for fractional
shares.
The Company has announced plans for a new community bank in Belton, South
Carolina with an expected initial capitalization of $3,500,000. Management
expects the bank to open in the fourth quarter of 1996. The bank will be 100%
owned by the parent Company. The Company expects to borrow $3,500,000 for the
purpose of capitalizing the Belton Bank (see Note 3 above). The opening of the
proposed bank is contingent upon regulatory approval.
8
<PAGE>
COMMUNITY CAPITAL CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
The following is a discussion of the Company's financial condition as of June
30, 1996 compared to December 31, 1995, and the results of operations for the
three and six months ended June 30, 1996 compared to the three and six months
ended June 30, 1995. These results reflect the net results of the Clemson Bank
which commenced business on June 22, 1995. These comments should be read in
conjunction with the Company's condensed consolidated financial statements and
accompanying footnotes appearing in this report.
Results of Operations
Net Interest Income
For the six months ended June 30, 1996, net interest income increased $478,102,
or 32.29% over the six months ended June 30, 1995. For the quarter ended June
30, 1996, net interest income increased $247,419, or 31.88% over the second
quarter of 1995.
The improvement in both the six and three month periods ended June 30, 1996 is
related to an increase in the volume of interest earning assets and is partially
offset by the increase in the rates paid on deposit accounts and a decline in
the rates earned on assets largely due to a decrease in the percentage of loans
to total earning assets. The increase in the volume of both assets and
liabilities was attributable to growth in the branch opened during February of
1995, the opening of the Clemson Bank in June 1995, management's ability to
strengthen its influence in the Greenwood market, and strategies implemented by
management during 1995 to decrease the loans-to-funds and loans-to-assets
ratios.
Interest expense on liability accounts increased 52.57% and 36.83% for the six
months and for the quarter ended June 30, 1996, respectively, due mainly to an
increase in the volume of interest bearing deposits which were used to fund the
growth in loans and investment securities. Interest expense was also affected by
an increase in the rates paid on deposits due to the general influence of prime
rate changes and a competitive pricing program to compete with other community
banks and regional banks.
The influence of the factors above had the effect of decreasing the interest
rate spread approximately 58 basis points to 3.49% and decreasing the net yield
on earning assets 49 basis points to 4.26% for the six months period ended June
30, 1996. Also, the influence of the factors above had the effect of decreasing,
for the quarter ended June 30, 1996, the interest rate spread approximately 21
basis points to 3.64% and decreasing the net yield on earning assets 22 basis
points to 4.38%.
Provision and Allowance for Loan Losses
The provision for loan losses is the charge to operating earnings that
management feels is necessary to maintain the allowance for possible loan losses
at an adequate level. For the six months and the quarter ended June 30, 1996,
the provision was $105,000 and $55,000, respectively, an increase of $82,627 and
$38,627 over the 1995 comparable periods, respectively. The increases do not
reflect a negative trend in nonperforming or classified assets but is indicative
of management's decision to maintain the target ratio of the allowance for loan
losses to total loans. Based on present information, management believes the
allowance for loan losses is adequate at June 30, 1996 to meet presently known
and inherent risks in the loan portfolio.
9
<PAGE>
COMMUNITY CAPITAL CORPORATION
Non-Interest Income
Total non-interest income for the six months ended June 30, 1996 was $653,562,
an increase of $317,806 or 94.65%, from the comparable period in 1995. Total
non-interest income for the quarter ended June 30, 1996, was $337,263, an
increase of $184,763 or 121.16%, from the comparable period in 1995.
The improvement in both the six and three month periods ended June 30, 1996, is
primarily due to the increase in fees from the sale of residential mortgages and
from the sale of mutual funds in addition to an increase in all other categories
of other income due to overall growth in the Company.
Non-Interest Expense
Total non-interest expense for the six months ended June 30, 1996 was
$1,889,860, an increase of $510,026 or 36.70% higher than the non-interest
expense of $1,389,834 for the six months ended June 30, 1995. For the quarter
ended June 30, 1996, non-interest expense was $993,325, an increase of $308,639
or 45.08% higher than the non-interest expense of $684,686 for the quarter ended
June 30, 1995.
The primary component of non-interest expense is salaries and benefits, which,
for the six months and quarter ended June 30, 1996, increased by $263,192 and
$155,042, an increase of 40.26% and 50%, respectively, over the comparable 1995
periods.
The increase in total non-interest expense and all categories of non-interest
expense for the periods being presented is due primarily to the opening of the
Clemson Bank on June 22, 1995.
Income Taxes
For all periods presented the effective income tax rate was approximately 36%.
The income tax provision for the six months and the quarter ended June 30, 1996
was $217,143 and $108,007, compared to $147,045 and $83,767 for the comparable
1995 periods, respectively.
Net Income
The combination of the above factors resulted in net income for the six months
ended June 30, 1996 of $390,086 as compared to $256,929 for the comparable
period in 1995, an increase of $133,157, or 51.83%. For the quarter ended June
30, 1996, net income was $204,354 as compared to $143,678 for the comparable
period in 1995, an increase of $60,676 or 42.23%.
The development and organization of the Clemson Bank, including initial
operating expenditures, and the Company's expansion strategies negatively
impacted earnings for 1995. During 1996, the Company's earnings have benefited
from the growth, particularly in net interest income, of the Clemson Bank.
On May 8, 1996, the Company announced plans to work with a group of organizers
in the capitalization of a community bank in Belton, South Carolina. The opening
of the proposed bank in Belton is contingent upon regulatory approval.
Management expects the opening of the proposed Belton Bank to negatively impact
earnings with an estimated loss for 1996 in the range of $250,000 to $300,000.
10
<PAGE>
COMMUNITY CAPITAL CORPORATION
Assets and Liabilities
During the first six months of 1996, total assets grew $7,739,969, or 8.05% when
compared to December 31, 1995. Most of the growth was attributable to the
continued demand for loans funded by the $7,150,296 increase in deposits
resulting from aggressive pricing strategies by management, customer
dissatisfaction with larger regional banks, and the implementation of an
employee award plan.
Investment Securities
Investment securities increased $683,795 during the period in order to maintain
the percentage of investment securities to total assets.
Loans
Demand for quality loans remained strong in the Greenwood marketplace. Net loans
increased $6,694,779 or 10.71% during the period. Balances within the major loan
receivable categories as of June 30, 1996 and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------------- --------------------
<S> <C> <C>
Commercial and agricultural $ 12,293,902 $ 13,349,226
Real estate 44,366,814 38,295,636
Home equity 7,861,014 6,593,037
Consumer, installment 3,957,321 3,721,774
Consumer, credit card and checking 1,131,103 868,736
Residential mortgages held for sale 281,500 299,000
Other, net 97,387 76,380
-------------------- --------------------
$ 69,989,041 $ 63,203,789
==================== ====================
</TABLE>
Risk Elements in the Loan Portfolio
The following is a summary of risk elements in the loan portfolio:
<TABLE>
<CAPTION>
June 30,
----------------------------------------------
1996 1995
-------------------- ---------------------
<S> <C> <C>
Loans:
Nonaccrual loans $ 121,881 $ 8,881
Accruing loans more than 90
days past due $ 206,128 $ 67,000
Loans identified by the internal
review mechanism:
Criticized $ 1,501,184 $ 1,429,462
Classified $ 2,026,648 $ 2,053,957
</TABLE>
11
<PAGE>
COMMUNITY CAPITAL CORPORATION
Activity in the Allowance for Loan Losses
is as follows:
<TABLE>
<CAPTION>
1996 1995
-------------------- -------------------
<S> <C> <C>
Balance, January 1, $ 671,338 $ 580,528
Provision for loan losses for the period 105,000 22,373
Net loans (charged off) recovered for
the period (14,527) (4,219)
-------------------- ---------------------
Balance, end of period $ 761,811 $ 598,682
==================== ====================
Gross loans outstanding, end of period $ 69,989,041 $ 53,992,078
Allowance for Loan Losses to loans outstanding 1.09 1.11%
</TABLE>
Premises and Equipment
The acquisition of a new operations center for approximately $500,000 and
renovations to the new facility were the principal contributor to the $479,700
increase in premises and equipment net of accumulated depreciation.
Deposits
Total deposits increased $7,150,296 or 9.78% from December 31, 1995. Expressed
in percentages, non-interest bearing deposits increased 12.17% and interest
bearing deposits increased 9.42%.
Balances within the major deposit categories as of June 30, 1996 and December
31, 1995 are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------------- --------------------
<S> <C> <C>
Non-interest bearing demand deposits $ 10,596,702 $ 9,447,005
Interest bearing demand deposits 8,622,274 8,028,202
Savings deposits 20,507,970 17,419,236
Certificates of deposit 40,560,924 38,243,131
-------------------- --------------------
$ 80,287,870 $ 73,137,574
==================== ====================
</TABLE>
Liquidity
During 1995, management implemented strategies to decrease the loans-to-assets
and loans-to-funds ratios. The Company continues to operate within the
recommendations of the Board of Directors with a loans-to-assets ratio of 66.7%
and a loans-to-funds ratio of 76.9% as of June 30, 1996. Although the amount of
advances from the FHLB has decreased $885,597 from the December 31, 1995 balance
of $6,243,561, management expects to continue using these advances as a source
of funding. Additionally, the Company has approximately $9,300,000 of unused
lines of credit for federal funds purchases available to it.
12
<PAGE>
COMMUNITY CAPITAL CORPORATION
Capital Resources
Stockholders' equity was increased by net income of $390,086 for the six months
ended June 30, 1996. Also, 7,785 stock options were exercised under the
Company's Employee Incentive Stock Option Plan resulting in an increase to
equity of $61,983. Due to changes in the market rates of interest, the fair
value of the Company's securities available for sale decreased, which had the
effect of decreasing stockholders' equity by $485,813 net of the deferred tax
effects.
Bank holding companies, such as the Company, and their bank subsidiaries are
required by banking regulators to meet certain minimum levels of capital
adequacy. These are expressed in the form of certain ratios. Capital is
separated into Tier I capital (essentially common stockholders' equity less
intangible assets) and Tier II capital (essentially the allowance for loan
losses limited to 1.25% of risk-weighted assets). The first two ratios, which
are based on the degree of credit risk in the company's assets, provide the
weighting of assets based on assigned risk factors and include off-balance sheet
items such as loan commitments and stand-by letters of credit. The ratio of Tier
I capital to risk-weighted assets must be at least 4.0% and the ratio of total
capital (Tier I capital plus Tier 2 capital) to risk-weighted assets must be at
least 8.0%. The capital leverage ratio supplements the risk-based capital
guidelines. Banks and bank holding companies are required to maintain a minimum
ratio of Tier I capital to adjusted quarterly average total assets of 3.0%.
The following table summarizes the Company's risk-based capital at June 30,
1996:
Risk based capital ratios
Tier I 17.3%
Total capital 18.3%
Leverage ratio 13.1%
The Company anticipates the construction of a permanent facility for The Clemson
Bank during 1996. The cost of the premises and equipment is expected to be in
the range of $1,300,000 to $1,500,000.
Regulatory Matters
The management of the Company is not aware of any current recommendations by
regulatory authorities which, if they were to be implemented, would have a
material effect on liquidity, capital resources, or operations.
13
<PAGE>
COMMUNITY CAPITAL CORPORATION
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 20, 1996, the Company held its Annual Meeting of Shareholders for the
purpose of (a) electing eight members to the board of directors; (b) ratifying
the appointment of Tourville, Simpson & Henderson, certified public accountants,
as the Company's independent auditors for the fiscal year ending December 31,
1996; and (c)to ratify the adoption of an amemdment to the Company's Incentive
Stock Option and Nonstatutory Stock Option Plan (1993). Each of the nominees for
director received the number of affirmative votes of shareholders required for
such nominee's election in accordance with the Bylaws of the Company, Tourville,
Simpson & Henderson received the requisite number of affirmative votes required
for approval pursuant to the Bylaws of the Company, and adoption of the
amendment to the Company's Incentive Stock Option and Nonstatutory Plan was
ratified by the required number of affirmative votes of shareholders required
for such amendments. Of the 1,160,227 outstanding shareholders of the Company,
656,227 shareholders either voted in person or by proxy for the three matters
presented for shareholders' approval.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
I. Earnings per share computations
(b) Reports on Form 8-K
During the quarter ended June 30, 1996 the Company did not
file any reports on Form 8-k.
Items 1, 2 and 5 are not applicable.
SIGNATURE
Pursuant to the requirements 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.
COMMUNITY CAPITAL CORPORATION
By:
William G. Stevens
President & Chief Executive Officer
Date: August 13, 1996 By:
James H. Stark
Chief Financial Officer
14
<PAGE>
EXHIBIT I
COMMUNITY CAPITAL CORPORATION
EARNINGS PER SHARE
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
Primary and Fully Diluted June 30, June 30,
-------------------- --------------
Earnings Per Share 1996 1995 1996 1995
- -------------------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net income $ 390,086 $ 256,929 $ 204,354 $ 143,678
Add: Interest revenue
from assumed purchase
of government securities,
net of tax 1,412 39,408 3,331 18,800
-------------- -------------- -------------- --------------
Adjusted net income for
fully diluted shares $ 391,498 $ 296,337 $ 207,685 $ 162,478
============== ============== ============== ==============
Weighted average number
of common shares
outstanding 1,217,310 659,639 1,218,065 687,916
Dilutive stock
equivalents 99,241 183,779 120,990 178,124
-------------- -------------- -------------- --------------
Total stock and
equivalents 1,316,551 843,418 1,339,055 866,040
========= ============== ========= ==============
Earnings per share of
common and equivalent
share $ .30 $ .35 $ .16 $ .19
============== ============== ============== ==============
</TABLE>
(1) Restated for the effect of the 5% stock dividend in May of 1996.
(2) Computed using the Treasury Stock Aggregate Method modified for the 20%
limitation.
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,198,348
<INT-BEARING-DEPOSITS> 79,938
<FED-FUNDS-SOLD> 560,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 23,129,720
<INVESTMENTS-CARRYING> 23,129,720
<INVESTMENTS-MARKET> 23,129,720
<LOANS> 69,989,041
<ALLOWANCE> 761,811
<TOTAL-ASSETS> 103,839,946
<DEPOSITS> 80,287,870
<SHORT-TERM> 9,740,964
<LIABILITIES-OTHER> 921,416
<LONG-TERM> 0
1,218,336
0
<COMMON> 0
<OTHER-SE> 11,671,360
<TOTAL-LIABILITIES-AND-EQUITY> 103,839,946
<INTEREST-LOAN> 3,101,627
<INTEREST-INVEST> 695,018
<INTEREST-OTHER> 57,348
<INTEREST-TOTAL> 3,853,993
<INTEREST-DEPOSIT> 1,651,320
<INTEREST-EXPENSE> 1,895,466
<INTEREST-INCOME-NET> 1,958,527
<LOAN-LOSSES> 105,000
<SECURITIES-GAINS> 17,033
<EXPENSE-OTHER> 1,899,860
<INCOME-PRETAX> 607,229
<INCOME-PRE-EXTRAORDINARY> 607,229
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 390,086
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 4.26
<LOANS-NON> 121,881
<LOANS-PAST> 206,128
<LOANS-TROUBLED> 2,026,648
<LOANS-PROBLEM> 1,501,184
<ALLOWANCE-OPEN> 671,338
<CHARGE-OFFS> 14,527
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 761,811
<ALLOWANCE-DOMESTIC> 761,811
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
