U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: September 30, 1997
------------------
[X] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
---------------- -----------------------
Commission file number: 0-25846
CCF HOLDING COMPANY
-----------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Georgia 58-2173616
- ----------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
101 North Main Street
Jonesboro, Georgia 30236
----------------------------------------
(Address of Principal Executive Offices)
(770) 478-8881
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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
------ -------
Number of shares outstanding of each of the issuer's classes of common equity:
At November 7, 1997, 817,955 shares of the registrant's common stock were
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
----- ------
<PAGE>
FORM 10-QSB
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C>
Item 1.Financial Statements:
Consolidated Balance Sheets as of
September 30, 1997 and December 31, 1996........................1
Consolidated Statements of Income
for the three months and nine months ended
September 30, 1997 and September 30, 1996 ......................3
Consolidated Statements of Cash Flows
for the nine months ended
September 30, 1997 and September 30, 1996 ......................4
Notes to Consolidated Financial Statements .....................6
Item 2.Management's Discussion and Analysis or Plan of Operation .........8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .............................................12
Item 2. Changes in Securities..........................................12
Item 3. Defaults upon Senior Securities ...............................12
Item 4. Submission of Matters to a Vote
of Security Holders .........................................12
Item 5. Other Information .............................................12
Item 6. Exhibits and Reports on Form 8-K ..............................12
Signatures ...............................................................13
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited) (Unaudited)
ASSETS
<S> <C> <C>
Cash and due from banks $ 3,765,784 2,059,373
Interest-bearing deposits in other financial institutions 599,444 2,688,113
Investment securities available for sale 7,942,078 6,473,228
Mortgage-backed securities available for sale 1,963,211 9,310,804
Federal Home Loan Bank stock, at cost 1,013,200 1,013,200
Loans receivable 90,456,414 65,492,572
Less unearned income (606,229) (569,075)
Less allowance for loan losses (625,264) (547,142)
------------- ----------
Loans, net 89,224,921 64,376,355
------------- ----------
Accrued interest and dividends receivable 399,185 438,000
Premises and equipment, net 2,667,836 1,871,417
Real estate owned -- --
Other assets 1,768,455 278,807
------------- ----------
Total assets $ 109,344,114 88,509,297
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing $ 4,797,724 2,384,101
Interest bearing 81,613,108 64,382,739
------------- ----------
Total Deposits 86,410,832 66,766,840
Advance payments by borrowers for
property taxes and insurance 394,286 153,134
Deferred income taxes 321,144 352,940
Federal Home Loan Bank advances 10,000,000 7,500,000
Dividends payable -- 429,038
Other liabilities 566,665 169,722
------------- ----------
Total liabilities 97,692,927 75,371,674
------------- ----------
</TABLE>
1
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
(Unaudited) (Unaudited)
Stockholders' Equity:
Preferred stock, no par value; 1,000,000 shares
<S> <C> <C>
authorized; none issued and outstanding -- --
Common stock, $.10 par value; 4,000,000 shares
authorized; 824,310 shares issued in 1997 and
915,900 in 1996; outstanding 817,955 in 1997
and 899,232 in 1996 82,431 91,590
Additional paid-in-capital 6,054,449 7,470,917
Retained earnings 6,306,807 6,475,785
Unearned ESOP shares (558,000) (612,000)
Unearned compensation (412,195) (371,304)
Treasury stock, at cost (83,993) (202,519)
Net unrealized holding gains on investment and
mortgage-backed securities available for sale 261,688 285,154
------------- ----------
Total stockholders' equity 11,651,187 13,137,623
------------- ----------
Total liabilities and stockholders' equity $ 109,344,114 88,509,297
============= ==========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- -----------------------
1997 1996 1997 1996
----------- ---------- --------- ---------
Interest and dividend income:
<S> <C> <C> <C> <C>
Loans $ 1,870,012 989,397 4,897,275 2,911,987
Interest-bearing deposits in
other financial institutions 18,484 10,320 56,675 56,806
Investment securities 89,596 189,964 223,080 670,844
Mortgage-backed securities 28,797 175,570 156,594 477,431
Dividends on Federal Home Loan Bank stock 18,515 18,465 55,190 54,993
----------- --------- --------- ---------
Total interest and dividend income 2,025,404 1,383,716 5,388,814 4,172,061
Interest expense
Deposit accounts 910,677 596,667 2,437,521 1,847,925
Federal Home Loan Bank advances 135,104 16,444 270,289 16,444
----------- --------- --------- ---------
Total interest expense 1,045,781 613,111 2,707,810 1,864,369
----------- --------- --------- ---------
Net interest income 979,623 770,605 2,681,004 2,307,692
Provision for loan losses 30,005 108,014 81,505 122,206
----------- --------- --------- ---------
Net interest income after provision
for loan losses 949,618 662,591 2,599,499 2,185,486
----------- --------- --------- ---------
Other income:
Loan fees and service charges on deposit accounts 136,948 22,554 461,991 189,245
Gain on sale of loans -- 36,435 24,647 36,435
Gain on sale of premises and equipment 35,672 35,672 --
Gain on sale of investments and mortgage-backed
securities 176 15,119 355,741 15,119
Other operating income 46,033 25,075 105,563 69,545
----------- --------- --------- ---------
Total other income 218,829 99,183 983,614 310,344
----------- --------- --------- ---------
Other expenses:
Salaries and employee benefits 728,510 305,012 2,127,287 903,417
Occupancy 223,365 101,873 662,681 351,828
Federal insurance premiums 11,236 34,789 31,866 104,633
Savings Association Insurance Fund Assessment -- 397,568 -- 397,568
Other 214,985 167,635 698,123 405,461
----------- --------- --------- ---------
Total other expenses 1,178,096 1,006,877 3,519,957 2,162,907
----------- --------- --------- ---------
Income (loss) before income taxes (9,649) (245,103) 63,156 332,923
Income tax expense (benefit) (3,377) (153,109) 22,105 43,762
----------- --------- --------- ---------
Net income (loss) $ (6,272) (91,994) 41,051 289,161
=========== ========= ========= =========
Net income (loss) per share $ (.01) (.10) .05 .27
=========== ========= ========= =========
Weighted average shares outstanding $ 763,142 892,775 782,591 1,054,272
=========== ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1997 1996
------------- ---------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 41,051 289,161
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Provision for loan losses 81,505 122,206
Depreciation, amortization, and accretion, net 130,044 10,574
Amortization of management stock bonus plan expense 109,109 37,591
Net gain on sale of investment securities and
mortgage-backed securities (355,741) (15,119)
Net gain on sale of loans (24,647) (36,435)
Net gain on sale of premises and equipment (35,672) --
Decrease in accrued interest and
dividends receivable 38,815 28,524
Increase in other assets (1,489,648) (36,306)
Savings Association Insurance Fund
Assessment Payable 397,568
Increase (decrease) in other liabilities 363,591 (162,753)
------------ ----------
Net cash (used in) provided by operating activities (1,141,593) 635,011
------------ ----------
Cash flows from investing activities:
Proceeds from maturing investment securities-
available for sale 923,077 --
Proceeds from maturing investment securities-
held to maturity -- 3,992,875
Proceeds from sales of investment securities-
available for sale 2,391,211 3,000,312
Purchases of investment securities-available for sale (4,457,427) (1,632,419)
Purchases of investment securities-held to maturity -- (787,640)
Principal repayments on mortgage-backed securities-
available for sale 1,026,409 1,601,121
Proceeds from sales of mortgage-backed securities-
available for sale 6,291,692 371,705
Purchases of mortgage-backed securities-available for sale -- (1,823,455)
Purchases of mortgage-backed securities-held to maturity -- (881,494)
Loan (originations) repayments, net (26,590,739) (6,933,159)
Proceeds from sale of loans 1,803,570 2,455,221
Purchases of premises and equipment (1,104,090) (331,937)
Proceeds from sale of premises and equipment 99,304 --
------------ ----------
Net cash used in by investing activities (19,616,993) (968,870)
------------ ----------
</TABLE>
4
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------------
1997 1996
------------- ------------
Cash flows from financing activities:
Net increase in savings and
<S> <C> <C>
demand deposit accounts 6,967,173 1,130,900
Net increase (decrease) in certificates of deposits 12,676,819 (474,349)
Increase in Federal Home Loan Bank advances 2,500,000 2,500,000
Net increase in advance payments by
borrowers for property taxes and insurance 241,152 427,914
Dividends paid (639,067) (600,161)
ESOP shares allocated 87,303 101,372
Contribution to management stock bonus plan (578,464)
Common stock repurchased and retired (1,457,052) (2,299,490)
------------ ----------
Net cash provided by financing activities 20,376,328 207,722
------------ ----------
Decrease in cash and cash equivalents (382,258) (126,137)
Cash and cash equivalents at beginning of period $ 4,747,486 2,771,882
------------ ----------
Cash and cash equivalents at end of year $ 4,365,228 2,645,745
============ ==========
Supplemental disclosure of cash flow information:
Interest paid $ 2,615,915 1,260,150
============ ==========
Income taxes paid 71,360 162,216
============ ==========
Supplemental disclosure of noncash investing and financing activities:
Treasury stock resulting from employee withholdings $ 33,352 --
============ ==========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
---------------------
The consolidated financial statements for the three and nine month periods ended
September 30, 1997 and 1996 are unaudited and reflect all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods. Accordingly, they do not include all
information and disclosures required by generally accepted accounting principles
for complete financial statements.
The results of operations for the nine month period ended September 30, 1997 are
not necessarily indicative of the results for the entire year ending December
31, 1997.
2. Accounting Policies
-------------------
Reference is made to the accounting policies of the Company described in the
notes to the consolidated financial statements contained in the Company's Annual
Report on Form 10-KSB for the fiscal year ended September 30, 1996 filed with
the Securities and Exchange Commission.
3. Reclassifications
-----------------
Certain amounts in the prior period financial statements have been reclassified
to conform to the presentation used in the current period consolidated financial
statements.
4. Cash Dividend
-------------
On December 11, 1996, the Company declared a semi-annual cash dividend of $.25
per share and a special cash dividend of $.25 per share to stockholders of
record on December 25, 1996. These dividends were paid on January 15, 1997.
On June 12, 1997, the Company declared a semi-annual cash dividend of $ .275 per
share to stockholders of record on June 30, 1997. These dividends were paid on
July 15, 1997.
5. Change in Year-end
------------------
On December 10, 1996, the Company's board of directors approved a change in the
Company's year-end from September 30 to December 31. The Company filed its
transition report on Form 10-QSB for the period from October 1, 1996 to December
31, 1996.
6
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
6. Repurchase of Common Stock
--------------------------
The Company retired 190,250 shares of common stock held as treasury stock at
September 30, 1996. In addition, the Company purchased and retired an additional
91,590 and 84,100 shares of the Company's common stock during the six-month
period ended June 30, 1997 and the three-month period ended December 31, 1996,
respectively.
7. Name Change
-----------
Effective February 4, 1997, the Office of Thrift Supervision ("OTS") gave
approval for the Association to change its name to Heritage Bank. This name has
been fully phased in to all its markets.
8. Recent Accounting Pronouncements
--------------------------------
In January 1997, the Securities and Exchange Commission approved rule amendments
(the Release) regarding disclosures about derivative financial instruments,
other financial instruments and derivative commodity instruments. The Release
requires inclusion in the footnotes to the financial statements of extensive
detail about the accounting policies followed by a registrant in connection with
its accounting for derivative financial instruments and derivative commodity
instruments. The accounting policy requirements become effective for all
registrants for filings that include financial statements for periods ending
after June 15, 1997. The Company does not presently have any derivative
financial instruments or derivative commodity instruments as defined in the
Release.
In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share". SFAS No.
128 supersedes Accounting Principles Board Opinion No. 15 "Earnings Per Share"
and specifies the computation, presentation, and disclosure requirements for
earnings per share (EPS) for entities with publicly held common stock or
potential issuable common stock. SFAS No. 128 replaces the presentation of
primary EPS with a presentation of basic EPS and fully diluted EPS with diluted
EPS. It also requires dual presentation of basic and diluted EPS on the face of
the income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
SFAS No. 128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997. The expected impact on the Company's
financial statements of the provisions of SFAS No. 128 is not expected to be
material.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Comparison of Financial Condition at September 30, 1997 and December 31, 1996
Assets - The Company's assets increased by 23.5%, or $20.8 million, between
December 31, 1996 and September 30, 1997. Loans receivable increased 39% to
$89.2 million at September 30, 1997, up $24.8 million from $64.4 million at
December 31, 1996. The Company's loan growth is primarily centered in the
commercial lending and single family construction loans. Commercial loans have
increased approximately $11 million and construction loans by approximately $12
million due primarily to the addition of new loan originators at the main office
in Clayton County and entry into the Henry (McDonough) and Fayette
(Fayetteville) County markets. In order to fund a portion of this loan growth,
cash, interest bearing deposits in other financial institutions and investment
and mortgage-backed securities, combined, decreased by $6.2 million, or 30.2%,
to $14.3 million at September 30, 1997 from $20.5 million at December 31, 1996.
Other assets increased to $1.5 million, of which $1.4 million represents
construction in progress on the Company's two new full service offices in
McDonough and Fayetteville, Georgia. In addition, premises and equipment
increased by $796,000 or 42.6% from December 31, 1996 to September 30, 1997
which is primarily due to the renovation of the bank's main office in Jonesboro
and the set up of temporary banking facilities in McDonough and Fayetteville,
Georgia. The Company opened temporary banking facilities in McDonough and
Fayetteville, Georgia in February 1997 and April 1997, respectively.
Liabilities - Total deposits during the nine months ended September 30, 1997
grew to $86.0 million, an increase of $19.2 million, or 28.7%, from $66.8
million at December 31, 1996. The increase in deposits is a result of general
deposit growth at the main office in Jonesboro and the Company's entry into the
Henry and Fayette County markets. Federal Home Loan Bank advances also increased
$2.5 million or 33% from $7.5 million at December 31, 1996 compared to $10
million at September 30, 1997. The increases in deposits and Federal Home Loan
Bank advances provided the necessary funding for the balance sheet growth.
Stockholders' Equity - Stockholders' equity decreased $1.4 million, or 10.7%,
from $13.1 million at December 31, 1996 to $11.7 million at September 30, 1997.
This decrease was primarily the result of the Company's repurchase of 91,590
shares of its common stock for $1.5 million during the nine months ended
September 30, 1997. In addition, the Company declared a semi-annual dividend
totaling $210,000. The ratio of stockholders' equity as a percentage of total
assets decreased to 10.7% at September 30, 1997 from 14.8% at December 31, 1996.
Book value per share decreased to $14.24 at September 30, 1997 from $14.61 at
December 31, 1996.
Comparison of Operating Results for the Three Months Ended September 30, 1997
and 1996
Performance Overview
Net Income - The Company's net loss of $6,000 for the three-month period ended
September 30, 1997 decreased by $86,000, or 93.5%, from net loss of $ 92,000 for
the same period in 1996. The net loss for the three month period ended September
30, 1997 resulted primarily due to an increase of $171,000, or 17%, in other
expenses, which is partially offset by an increase in loan fees and service
charges on deposit accounts as a result of general loan and deposit growth at
the main office and the Company's expansion into the Henry and Fayette County
markets. The increase in other expenses represents costs associated with the
opening, staffing and equipping of the Fayetteville and
8
<PAGE>
McDonough offices, as well as, the hiring of additional personnel in Heritage
Bank's Jonesboro office in order to provide its customers with additional loan
products. The increase in other expenses represents costs associated with the
opening, staffing and equipping of the Fayetteville and McDonough offices, as
well as, the hiring of additional personnel in Heritage Bank's Jonesboro office
in order to provide its customers with additional loan products. A reduction in
net income compared to prior periods, as a result of these increased expenses,
is expected by management of the Company to continue for the remainder of 1997
until the new offices mature and higher levels of loans and deposit activity are
achieved. The Company believes that this expansion of markets, personnel,
products and services should enhance long-term shareholder value and does not
expect the decrease in earnings will be as great after 1997. This statement of
beliefs concerning the expansion of the Company is a forward looking statement.
The Private Securities Litigation Reform Act of 1995 (the "Act") provides
protection to the Company in making certain forward looking statements that are
accompanied by meaningful cautionary statements that identify important factors
that could cause actual results to differ materially from the forward looking
statement. As with any expansion, if new offices or additional personnel do not
ultimately result in increased loan and deposit activity and increased net
income, these expenses would continue to have an adverse affect on net income
during 1998 and in future periods.
Net Interest Income - Net interest income for the three-month period ended
September 30, 1997 increased $209,000 or 27.1 %, from $771,000 in 1996 to
$980,000 for the same period in 1997. The increase in the average balance of
loans receivable during the three-month period ended September 30, 1997,
compared to the same period in 1996, resulted in a $911,000, or 92%, increase in
interest income from loans to $1.9 million from $989,000, respectively.
Conversely, investment and mortgage-backed securities interest income decreased
$248,000 from 1997 to 1996 to $118,000 from $366,000. The decrease was due to
the liquidation of investment securities to fund loan growth. Interest expense
increased $433,000 to $1.0 million for the three-month period ended September
30, 1997 from $613,000 for the same period in 1996. This increase is the result
of the increase in deposits and due to FHLB advances outstanding during the
quarter ended September 30, 1997.
Provision for Loan Losses - The Association's provision for loan losses
decreased for the three month period ended September 30, 1997 compared to the
same period in 1996 by decreasing to $30,000 from $108,000. Management
periodically evaluates the adequacy of the allowance for loan losses, including
an evaluation of past loan loss experience, current economic conditions, volume,
growth and collateral of the loan portfolio. Management also reviews classified
assets, including those loans and assets listed as non-performing. Management
currently believes that its allowance for loan losses is adequate. However,
there can be no assurances that further additions will not be needed.
Other Income - Other income increased 121%, or $120,000, to $219,000 in the
three-month period ended September 30, 1997 from $99,000 for the same period in
1996. This increase was primarily due to loan and deposit growth. Loan fees and
service charges on deposit accounts increased to $137,000 in the three-month
period ended September 30, 1997 from $23,000 for the same period in 1996.
9
<PAGE>
Other Expenses - Other expenses for the three month period ended September 30,
1997 increased 20% from $1.0 million for the three-month period ended September
30, 1996 to approximately $1.2 million for the same period in 1997, an increase
of $200,000. As discussed above under net income, this increase is the result of
additional personnel hired by the Company since the three-month period ended
September 30, 1996. Salaries and employee benefits increased to $729,000 for the
three month period ended September 30, 1997 compared to $305,000 during the same
three-month period in 1996. In addition, occupancy expense increased $121,000 to
$223,000 for the three-month period ended September 30, 1997 from $102,000
during the same period in 1996. The increase in other expenses for the three
month period ended September 30, 1997 is partially offset by the $398,000
special, one-time Savings Association Insurance Fund Assessment which was
incurred in the same period in 1996.
Liquidity Resources - The Company's wholly-owned subsidiary, Heritage Bank (the
"Bank") is required to maintain minimum levels of liquid assets as defined by
the Office of Thrift Supervision (OTS) regulations. The OTS minimum required
liquidity ratio is 5% and the minimum short-term liquidity ratio is 1%. The
Bank's liquidity ratio averaged 15.72% during September 1997 compared to 42.5%
during September 1996. The Bank manages its liquidity levels in order to meet
funding needs for deposit outflows, payments of real estate taxes and escrow
accounts on mortgage loans, loan funding commitments, and repayments of
borrowings, when applicable. The primary source of funds are deposits,
amortization and prepayments of loans, the sale and maturity of investment and
mortgage-backed securities, short-term Federal Home Loan Bank advances and funds
provided by operations.
Comparison of Operating Results for the Nine Months Ended September 30, 1997 and
1996
Performance Overview
Net Income - The Company's net income of $41,000 for the nine month period ended
September 30, 1997 was $248,000 or 85.8% less than the same period in 1996 of
$289,000. The decrease resulted principally from an increase in other expenses
of $ 1.3 million or 59% from $2.2 million for the nine month period ended
September 30, 1996 compared to $3.5 million for the same period in 1997. This
increase in other expenses was partially off-set by $356,000 in gains on sales
of investments and mortgage-backed securities.
As discussed above, the increase in other expenses represents costs associated
with the opening, staffing and equipping of the Fayetteville and McDonough
offices, as well as, the hiring of additional personnel in Heritage Bank's
Jonesboro office in order to provide its customers with additional loan
products. A reduction in net income compared to prior periods, as a result of
these increased expenses, is expected by management of the Company to continue
for the remainder of 1997 until the new offices mature and higher levels of loan
and deposit activity are achieved. The Company believes that this expansion of
markets, personnel, products and services should enhance long-term shareholder
value and does not expect the decrease in earnings will be as great after 1997.
This statement of beliefs concerning the expansion of the Company is a forward
looking statement. The Private Securities Litigation Reform Act of 1995 (the
"Act") provides protection to the Company in making certain forward looking
statements that are accompanied by meaningful cautionary statements that
identify important factors that could cause actual results to differ materially
from the forward looking statement. As with any expansion, if new offices or
additional personnel do not ultimately result in increased loan and deposit
activity and increased net income, these expenses would continue to have an
adverse affect on net income during 1998 and in future periods.
10
<PAGE>
Net Interest Income - Net interest income for the nine-month period ended
September 30, 1997 increased by $373,000, or 13.8%, from $2.3 million in 1996 to
$2.7 million for the same period in 1997. The increase in the average balance of
loans receivable during the nine-month period ended September 30, 1997, compared
to the same period in 1996, resulted in a $2 million, or 69% increase in
interest income from loans to $4.9 million from $2.9 million. Conversely,
investment and mortgage-backed securities interest income decreased $720,000
from 1997 to 1996 to $380,000 from $1.1 million. The decrease was due to the
liquidation of investment securities to fund loan growth. Interest expense
increased by $800,000 to $2.7 million for the nine-month period ended September
30, 1997 from $1.9 million for the same period in 1996. This increase is the
result of the increase in deposits and due to FHLB advances outstanding for the
nine months ended September 30, 1997.
Provision for Loan Losses - The provision for loan losses decreased to $82,000
for the nine month period ended September 30, 1997 compared to $122,000 for the
nine month period ended September 30, 1996. Management periodically evaluates
the adequacy of the allowance for loan losses, including an evaluation of past
loan loss experience, current economic conditions, volume, growth and collateral
of the loan portfolio. Management also reviews classified assets, including
those loans and assets listed as non-performing. Management currently believes
that its allownace for loan losses is adequate. However, there can be no
assurances that further additions will not be needed.
Other Income - Other income increased 217%, or $674,000, to $984,000 in the
nine-month period ended September 30, 1997 from $310,000 for the same period in
1996. This increase was the result of gains on sales of investments and
mortgage-backed securities of $356,000 recognized during the nine months ended
September 30, 1997. In addition, due to loan and deposit growth, loan fees and
service charges on deposit accounts increased to $462,000 from $189,000 which
also contributes to the increase in other income.
Other Expenses - Other expenses for the nine months ended September 30, 1997
increased 59% from $2.2 million for the nine month period ended September 30,
1996 to $3.5 million for the same period in 1997, an increase of $1.3 million.
As discussed above under net income, this increase is the result of additional
personnel hired by the Company since the nine month period ended September 30,
1996. Salaries and employee benefits increased to $2.1 million for the nine
month period ended September 30, 1997 compared to $903,000 during the same
period in 1996. In addition, occupancy expense increased $311,000 to $663,000
for the nine month period ended September 30, 1997 from $352,000 during the same
period in 1996. The increase in other expenses for the nine month period ended
September 30, 1997 is partially offset by the $398,000 special, one-time,
Savings Association Insurance Fund Assessment which was incurred in the same
period in 1996.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Changes in Securities
NONE
Item 3. Defaults upon Senior Securities.
NONE
Item 4. Submission of Matters to a Vote of Security Holders.
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Per Share Earnings
(b) No report on Form 8-K was filed during the third quarter of 1997.
12
<PAGE>
CCF HOLDING COMPANY
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CCF HOLDING COMPANY
Date: November 12, 1997 BY: \s\David B. Turner
-------------------------------------
David B. Turner
President and
Chief Executive Officer
Date: November 12, 1997 BY: \s\Mary Jo Rogers
-------------------------------------
Mary Jo Rogers
Vice President and
Chief Financial Officer
13
Exhibit 11
CCF HOLDING COMPANY AND SUBSIDIARY
Computation of Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, 1997 September 30, 1997
------------------ ------------------
Common stock - shares issued,
<S> <C> <C>
net of 4,168 treasury stock 820,142 911,732
Unallocated ESOP shares (57,600) (61,200)
-------- --------
Common stock - shares outstanding 762,542 850,532
Weighted average ESOP shares - committed 600 2,400
Weighted average shares repurchased -- (70,341)
-------- --------
Weighted average shares outstanding 763,142 782,591
======== ========
Net income per share $ (.01) .05
======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 3,766
<INT-BEARING-DEPOSITS> 599
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,905
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 89,831
<ALLOWANCE> 625
<TOTAL-ASSETS> 109,344
<DEPOSITS> 86,411
<SHORT-TERM> 10,715
<LIABILITIES-OTHER> 567
<LONG-TERM> 0
0
0
<COMMON> 82
<OTHER-SE> 11,569
<TOTAL-LIABILITIES-AND-EQUITY> 109,344
<INTEREST-LOAN> 4,897
<INTEREST-INVEST> 380
<INTEREST-OTHER> 112
<INTEREST-TOTAL> 5,389
<INTEREST-DEPOSIT> 2,437
<INTEREST-EXPENSE> 2,708
<INTEREST-INCOME-NET> 2,681
<LOAN-LOSSES> 82
<SECURITIES-GAINS> 356
<EXPENSE-OTHER> 3,520
<INCOME-PRETAX> 63
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
<YIELD-ACTUAL> 7.32
<LOANS-NON> 217
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 570
<ALLOWANCE-OPEN> 547
<CHARGE-OFFS> 4
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 625
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
