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, 1999
------------------
[ ] 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 Identification No.)
Organization)
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 October 15, 1999 988,650 shares of the registrant's common stock were
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements:
Consolidated Balance Sheets as of
September 30, 1999 and December 31, 1998................1
Consolidated Statements of Income
for the three months and nine months ended
September 30, 1999 and September 30, 1998 ..............2
Consolidated Statements of Comprehensive Income
for the three months and nine months ended
September 30, 1999 and September 30, 1998 .............3
Consolidated Statements of Cash Flows
for the nine months ended
September 30, 1999 and September 30, 1998 ..............4
Notes to Consolidated Financial Statements .............5
Item 2. Management's Discussion and Analysis or Plan of Operation ..7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .....................................10
Item 2. Changes in Securities..................................10
Item 3. Defaults upon Senior Securities .......................10
Item 4. Submission of Matters to a Vote
of Security Holders .................................10
Item 5. Other Information .....................................10
Item 6. Exhibits and Reports on Form 8-K ......................10
Signatures .......................................................11
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Balance Sheets
Assets
------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---- ----
(Unaudited) (Audited)
<S> <C> <C>
Cash and due from banks $ 6,674,434 7,275,835
Federal funds sold 2,380,000 2,320,000
Interest-bearing deposits in other financial institutions 102,583 756,687
----------- --------------
Cash and cash equivalents 9,157,017 10,352,522
Investment securities available for sale 35,460,071 29,457,412
Loans, net 132,625,908 121,827,463
Premises and equipment, net 5,772,035 5,422,602
Federal Home Loan Bank stock, at cost 509,800 1,013,200
Accrued interest and dividends receivable 1,231,038 1,114,880
Other assets 2,636,958 671,863
------------- -----------
Total assets $ 187,392,827 169,859,942
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Deposits:
Non-interest bearing $ 11,158,151 8,501,973
Interest- bearing deposits 60,227,344 44,555,271
Savings accounts 7,818,682 9,089,074
Time deposits less than $100,000 70,526,766 74,388,954
Time deposits greater than $100,000 17,485,667 18,441,449
------------ ------------
Total deposits 167,216,610 154,976,721
Securities sold under agreements to repurchase 717,896 1,117,264
Line of credit 750,000 -
Federal Home Loan Bank Advances 5,000,000 -
Other liabilities 1,816,082 2,139,844
------------- -----------
Total liabilities 175,500,588 158,233,829
----------- -----------
Stockholders' Equity:
Preferred stock, no par value; 1,000,000 shares
authorized; none issued and outstanding - -
Common stock, $.10 par value; 4,000,000 shares
authorized; 988,650 shares issued in 1999 and 990,647
shares issued 1998; outstanding 985,636 in 1999 and
984,662 in 1998 98,869 90,059
Additional paid-in-capital 9,086,789 7,783,384
Retained earnings 3,736,560 4,528,267
Unearned ESOP shares (414,000) (468,000)
Unearned compensation (204,784) (286,339)
Treasury stock, at cost (75,876) (59,777)
Accumulated other comprehensive income (335,319) 38,519
------------- -----------
Total stockholders' equity 11,892,239 11,626,113
------------ ------------
Total liabilities and stockholders' equity $ 187,392,827 169,859,942
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest and dividend income:
Interest and fees on loans $ 3,116,313 2,856,057 9,096,641 7,814,335
Interest on federal funds sold 76,621 114,106 320,927 267,017
Interest bearing deposits in other financial institutions 7,036 17,079 15,971 45,790
Interest and dividends on taxable investment securities 493,918 334,907 1,291,265 823,922
----------- ----------- ----------- -----------
Total interest and dividend income 3,693,888 3,322,149 10,724,804 8,951,064
Interest expense:
Deposit accounts 1,802,082 1,783,807 5,402,585 4,726,220
Securities sold under agreement to repurchase 19,197 29,597 50,894 82,653
Other borrowings 41,168 -- 41,908 135,130
----------- ----------- ----------- -----------
Total interest expense 1,862,447 1,813,404 5,495,387 4,944,003
----------- ----------- ----------- -----------
Net interest income 1,831,441 1,508,745 5,229,417 4,007,061
Provision for loan losses 75,000 80,000 295,700 200,000
----------- ----------- ----------- -----------
Net interest income after provision
for loan losses 1,756,441 1,428,745 4,933,717 3,807,061
----------- ----------- ----------- -----------
Other income:
Service charges on deposit accounts 126,989 99,414 371,632 284,863
Gain(loss) on sale of loans (2,776) -- 49,102 --
Gain on sale of fixed assets -- -- 58,359 --
Gain on sale of investments and mortgage-backed
securities -- -- 68,201 136,513
Other 56,249 31,082 102,988 87,416
----------- ----------- ----------- -----------
Total other income 180,462 130,496 650,282 508,792
----------- ----------- ----------- -----------
Other expenses:
Salaries and employee benefits 868,372 774,475 2,547,173 2,261,470
Occupancy 294,632 196,247 843,817 540,546
Other 377,227 402,168 1,083,639 1,180,157
----------- ----------- ----------- -----------
Total other expenses 1,540,231 1,372,890 4,474,629 3,982,173
----------- ----------- ----------- -----------
Income before income taxes 396,672 186,351 1,109,370 333,680
----------- ----------- ----------- -----------
Income tax expense 139,414 65,545 390,379 117,535
----------- ----------- ----------- -----------
Net income $ 257,258 120,806 718,991 216,145
----------- ----------- ----------- -----------
Basic income per share $ .27 .13 .77 .23
----------- ----------- ----------- -----------
Diluted income per share $ .26 .12 .74 .22
----------- ----------- ----------- -----------
Weighted average shares outstanding - basic 959,906 947,827 937,470 924,748
----------- ----------- ----------- -----------
Weighted average shares outstanding - diluted 1,001,597 998,902 975,319 978,665
----------- ----------- ----------- -----------
Dividends declared per common share .08 .16 .24 .48
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
CCF HOLDING COMPANY
Consolidated Statement of Comprehensive Income
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Earnings $ 257,258 120,806 718,991 95,340
--------- ------- ------- ------
Other comprehensive income, net of tax:
Unrealized gains on investment
securities available for sale:
Holding gains(losses) arising during
the period, net of taxes of $(90,368),
$(95,697), $(202,849) and $12,665 (147,693) (156,402) (331,526) 20,700
Reclassification adjustment for
gain(loss) included in earnings, net
of taxes $0, $0, $25,889,and $51,820 0 0 (42,312) (84,693)
--------- ------- ------- ------
Other comprehensive loss (147,693) (156,402) (373,838) (63,993)
--------- ------- ------- ------
Comprehensive income $ 109,565 (35,596) 345,153 152,152
========= ======= ======= =======
</TABLE>
3
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 718,991 216,145
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Provision for loan losses 295,700 200,000
Depreciation, amortization, and accretion, net 363,111 324,943
Amortization of management stock bonus plan expense 64,583 80,570
ESOP compensation expense 107,879 136,916
Net gain(loss) on sale of investment securities and mortgage-backed securities (68,201) (136,513)
Net (gain)loss on sale of loans (49,102) 206
Net (gain)loss on sale of fixed assets (58,359) 347
Increase in accrued interest and dividends receivable (116,158) (261,545)
Increase in other assets (1,965,095) (496,937)
Decrease in other liabilities (489,071) (41,246)
------------ ------------
Net cash provided by(used in) operating activities (1,195,722) 22,886
------------ ------------
Cash flows from investing activities:
Proceeds from maturing investment securities-available for sale 18,750,000 19,071,347
Proceeds from sales of investment securities-available for sale 552,580 1,402,995
Proceeds from redemption of Federal Home Loan Bank Stock 503,400 --
Purchases of investment securities-available for sale (25,713,863) (32,127,695)
Principal repayments on mortgage-backed securities-available for sale 63,114 380,448
Proceeds from sales of mortgage-backed securities-available for sale -- 1,167,169
Loan originations, net (16,458,207) (30,096,983)
Proceeds from sale of loans 5,504,495 6,786,249
Premises and equipment retired 85,901 296,922
Proceeds from sale of premises and equipment 132,722 347
Purchases of premises and equipment (854,060) (999,214)
------------ ------------
Net cash used in investing activities (17,433,918) (34,118,415)
------------ ------------
Cash flows from financing activities:
Net increase in savings and demand deposit accounts 17,057,859 22,186,652
Net increase(decrease) in certificates of deposits (4,817,971) 38,847,450
Net increase(decrease) in securities sold under agreements to repurchase (399,368) 440,856
Decrease(increase) in Federal Home Loan Bank advances 5,000,000 (18,510,000)
Advances on line of credit 750,000 --
Net increase in advance payments by
borrowers for property taxes and insurance 137,991 309,256
Dividends paid (285,343) (264,488)
ESOP Shares allocated -- 109,430
Cash paid in lieu of fractional shares (835) (651)
Common stock repurchased (8,198) (51,190)
------------ ------------
Net cash provided by financing activities 17,434,135 43,067,315
------------ ------------
Increase in cash and cash equivalents (1,195,505) 8,971,786
Cash and cash equivalents at beginning of period 10,352,522 8,741,316
------------ ------------
Cash and cash equivalents at end of period $ 9,157,017 17,713,102
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 5,540,749 4,944,003
============ ============
Income taxes paid $ 725,000 30,000
============ ============
Non cash transactions effecting investing activities:
Transfer of loans to other assets owned $ 93,000 --
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<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, 1999 and September 30, 1998 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, operating results, and cash flows 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 three and nine month period ended September
30, 1999 are not necessarily indicative of the results for the entire year
ending December 31, 1999.
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 December 31, 1998 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 September 21, 1999, the Company declared a cash dividend of $.08 per share to
stockholders of record on October 5, 1999. These dividends were payable on
October 20, 1999. For period ending during 1998, per share cash dividends have
been adjusted for stock dividends.
5. Stock Dividend
--------------
On March 16, 1999, the Company declared a 10% stock dividend per share to
stockholders of record on April 1, 1999. This dividend was payable on April 15,
1999. Cash was paid in lieu of fractional shares at the rate of $14.25 per
share. As a result of the stock dividend, the Company transferred $1,280,827
from retained earnings to additional paid in capital.
6. Earnings per share
------------------
Basic EPS excludes dilution and is computed by dividing net income by weighted
average shares outstanding which includes Management Stock Bonus Plan shares
which have been awarded whether vested or not and exclude unallocated shares
under the Company's employee stock ownership plan until they are committed to be
released for allocation. Diluted EPS is computed by dividing net income by
weighted average shares outstanding plus potential common stock resulting from
dilutive stock options.
All average share and per share data in the accompanying consolidated financial
statements and all share and per share data have been restated to reflect the
10% stock dividend declared in December 1997, which was effected on January 15,
1998 and the 10% stock dividend declared on March 16, 1999, which was effected
on April 15, 1999.
The following is a reconciliation of the amounts used in the computation of both
"basic earnings per share" and "diluted earnings per share".
5
<PAGE>
6. Earnings per share (continued)
------------------------------
For the three months ended September 30, 1999
<TABLE>
<CAPTION>
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
<S> <C> <C> <C>
Basic earnings per share $257,258 959,906 $0.27
Effect of dilutive common stock issuance's:
Stock Options 41,692
-----------------------------------
Diluted Earnings per share $257,258 1,001,598 $0.26
===============================================
For the three months ended September 30, 1998
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
Basic earnings per share $120,806 947,827 $0.13
Effect of dilutive common stock issuance's:
Stock Options 51,075
-----------------------------------
Diluted Earnings per share $120,806 998,902 $0.12
===============================================
For the nine months ended September 30, 1999
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
Basic earnings per share $718,991 937,470 $0.77
Effect of dilutive common stock issuance's:
Stock Options 37,849
-----------------------------------
Diluted Earnings per share $718,991 975,319 $0.74
===============================================
For the nine months ended September 30, 1998
Per share
Net Earnings Common Shares Amount
------------ ------------- ------
Basic earnings per share $216,145 924,748 $0.23
Effect of dilutive common stock issuance's:
Stock Options 53,917
-----------------------------------
Diluted Earnings per share $216,145 978,665 $0.22
===============================================
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
CCF Holding Company (the "Company") may from time to time make written or oral
"forward-looking statements", including statements contained in the Company's
filings with the Securities and Exchange Commission (including this report on
Form 10QSB), in its reports to stockholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward looking statements involve risks and uncertainties, such as
statements of the Company's plans, objectives, expectations, estimates and
intentions, that are subject to change based on various important factors (some
of which are beyond the Company's control). The following factors, among others,
could cause the Company's financial performance to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in forward
looking statements: the strength of the United States economy in general and the
strength of the local economies in which the Company conducts operations; the
effects of, and changes in, trade, monetary and fiscal policies and laws,
including interest rate policies of the Board of Governors of the Federal
Reserve System, inflation, interest rate and market and monetary fluctuations;
the timely development of and acceptance of new products and services of the
Company and the perceived overall value of these products and services by users,
including the features, pricing and quality compared to competitors' products
and services; the willingness of users to substitute competitors' products and
services for the Company's products and services; the success of the Company in
gaining regulatory approval of its products and services, when required; the
impact of changes in financial services' laws and regulations (including laws
concerning taxes, banking, securities and insurance); technological changes;
disruption in data processing caused by computer malfunctions associated with
the year 2000 problem; acquisitions; changes in consumers spending and saving
habits; and the success of the Company at managing the risks involved in the
foregoing.
The Company cautions that these important factors are not exclusive. The Company
does not undertake to update any forward looking statement, whether written or
oral, that may be made from time to time by or on behalf of the Company.
Comparison of Financial Condition at September 30, 1999 and December 31, 1998
Assets - The Company's assets increased by 10.3%, or $17.5 million, between
December 31, 1998 and September 30, 1999. Net loans receivable increased 8.8% to
$132.6 million at September 30, 1999, up $10.8 million from $121.8 million at
December 31, 1998. The Company's loan growth includes approximately $7.2 million
in commercial real estate loans and $10.7 million in consumer loans, primarily
indirect consumer loans. The growth has been partially offset by the sale, in
January 1999, of $5.4 million in fixed rate mortgage (1 to 4 family dwellings)
loans for a net decrease in the mortgage (1 to 4 family dwellings) loan
portfolio of $6.6 million.
Investment securities increased from $29.5 million on December 31, 1998 to $35.5
million on September 30, 1999. This increase was partially the result of $6.0
million is in short term Federal Home Loan Bank Discount Notes that will mature
during the fourth quarter of 1999 providing liquidity to the bank during the
century rollover. Other assets increased $2.0 million from December 31, 1998 to
September 30, 1999. This increase was primarily due to the purchase of a life
insurance asset of $1.3 million. Additionally, the dealer reserve account,
associated with the indirect lending function increased by $293,000.
Liabilities - Total deposits during the nine months ended September 30, 1999
grew to $167.2 million, an increase of $12.2 million from $155.0 million at
December 31, 1998. Deposit growth was primarily in transaction accounts with a
$2.7 million increase in non-interest bearing accounts and a $15.7 million
increase in interest bearing transaction accounts which was partially offset by
a reduction of $4.8 million in the time deposit balances. The Bank continues to
stress transaction account growth in its marketing strategy.
Other liabilities decreased $324,000 during the period. This decrease is
primarily due to payment of $342,000 for income taxes due for the year ending
1998 which was partially offset by an increase in the overnight balance in the
official check account of $162,000.
The Company opened and drew $750,000 on a line of credit of $1,000,000. The
interest rated charged on this line of credit is prime minus .75%. These funds
were downstreamed to the Bank as a capital infusion. In addition, the bank drew
$5,000,000 with a six month maturity on a line of credit (at a rate of 5.96%) at
the Federal Home Loan Bank of Atlanta in September 1999. Subsequent to quarter
end, the bank drew an additional $5,000,000 with a three month maturity (at a
rate of 5.98%) at the Federal Home Loan Bank. The second draw was done in order
to follow the liquidity plan established for the century rollover.
7
<PAGE>
Stockholders' Equity - Stockholders' equity increased $266,000 or 2.2%, from
December 31, 1998 to September 30, 1999. This increase was the result of the
Company's net income, Employee stock ownership plan allocations, management
stock bonus plan expense, partially offset by the change in unrealized losses on
securities available for sale. The Company also declared three quarterly
dividends totaling $285,000 which partially offset the increase in stockholders
equity. The ratio of stockholders' equity as a percentage of total assets
decreased to 6.3% at September 30, 1999 from 6.84% at December 31, 1998. Book
value per share increased from $11.73 at December 31, 1998 to $12.02 at
September 30, 1999.
Liquidity - The Bank's liquidity was 20.10% on September 30, 1999. In addition
to the customary means of meeting liquidity needs, the Bank had $2.4 million in
Federal Funds sold available and unused lines of credit totaling $8.5 million.
Comparison of Operating Results for the Three Months and Nine Months Ended
September 30, 1999 and 1998
Net Income - The Company's net income of $257,258 for the three month period
ending September 30, 1999 increased by $136,452 from $120,806 over the same
three month period ending September 30, 1998. Income of $718,991 for the nine
month period ended September 30, 1999 increased by $502,846 or 232%, from a net
income of $216,145 for the nine month period ending September 30, 1998. The
change in net income was primarily due to an increase of net interest income,
generated through loan growth and interest on securities.
Net Interest Income - Net interest income for the three-month period ended
September 30, 1999 increased $323,000 or 21.3% from $1.5 million in 1998 to $1.8
million for the same period in 1999. For the nine month periods ending September
30, 1999 and September 30, 1998 net interest income increased $1.2 million or
30.5%. The increase in the average balance of loans receivable during the
nine-month period ended September 30, 1999, of $12.7 million resulted in a $1.3
million or 16.4% increase in interest income from loans to $9.1 million from
$7.8 million, respectively. Investment securities and federal funds sold
interest income increased $521,000 from September 30, 1998 to September 30,
1999, to $1.6 million from $1.1 million. Interest expense increased $551,000 to
$5.5 million for the nine-month period ended September 30, 1999 from $5.0
million for the same period in 1998. This increase is the result of the
increased balances in interest bearing deposits during the nine months ended
September 30, 1999.
Provision for Loan Losses - The Bank's provision for loan losses increased for
the nine month period ended September 30, 1999 compared to the same period in
1998, increasing to $295,700 from $200,000. At September 30, 1999 the allowance
for non-mortgage loan losses to the non-mortgage loan portfolio was 1.08%.
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. Currently, management believes that its allowance for loan
losses is adequate. However, there can be no assurances that further additions
will not be needed. Management will continue to monitor and adjust the allowance
as necessary in future periods based on growth in the loan portfolio, loss
experience which has been minimal, and the continued expected changing mix of
loans in the loan portfolio. Loans internally classified as Substandard for the
period ending September 30, 1999 totaled $604,476 and for the period ending
December 31, 1998 substandard loans totaled $786,762. Loans classified as
doubtful totaled $51,613 for the period ending September 30, 1999, there were no
loans classified as doubtful at December 31, 1998. Non accrual loans increased
from $111,536 at December 31, 1998 to $189,196 at September 30, 1999. Charge
offs during the period ending September 30, 1999 totaled $62,931, representing
0.05% of loans outstanding.
Other Income - Service charges on deposit accounts increased 28% from $99,000 at
September 30, 1998 to $127,000 for the same three month period ending September
30, 1999. During the nine month period ending September 30, 1999, service charge
income on deposit accounts had increased to $38,000. This represented an
increase of 30.4% over the same period ending September 30, 1998. This increase
is attributed to the rising number of transaction accounts. Other income
includes a net gain on the sale of mortgage loans of $49,102. During the first
quarter of 1999, a block of fixed rate Fannie Mae qualified mortgage loans were
sold to Fannie Mae with servicing retained. Additionally, a gain of $58,359 was
booked during the first quarter related to the sale of a building in Riverdale
Georgia. This office was closed in 1996.
Other Expenses - Other expenses for the three month period ended September 30,
1999 increased 12.1% from $1.4 million for the three-month period ended
September 30, 1998 to $1.5 million for the same period in 1999, an increase of
$167,000. For the nine month period ending September 30, 1999, other expenses
increased by 12.3% or $492,000. Salaries and employee benefits increased to $2.6
million for the nine month period ended September 30, 1999 compared to $2.3
million during the same nine-month period in 1998, an increase of $286,000.
8
<PAGE>
Other expenses (cont'd): Occupancy expenses increased by $303,000 for the nine
month period. This included an increase of $87,000 for processing the growing
number of transaction accounts from the period ending September 30, 1998 to the
same nine-month period ending September 30, 1999.
Year 2000 - The Bank has developed a Business Resumption Plan and a Contingency
Plan which were approved by the Board of Directors prior to the June 30, 1999
deadline as required by the regulators. The Bank's plans cover those areas
deemed mission critical including those systems certified as Year 2000
compliant.
Costs associated with the Year 2000 project have been negligible and have mostly
been absorbed in the expansion expenses taking place over the last 24 months.
The new technologies and processing systems installed during that period were
certified Year 2000 compliant at management's insistence, as they were added.
All credit customers with balances outstanding or commitments exceeding $100,000
have been evaluated for their Year 2000 compliance efforts. There have been no
Y2K credit risks noted through the period ending September 30, 1999. All new
loans exceeding the $100,000 threshold require an indemnity from the customer
regarding issues relating to the millennium date change.
The Company will monitor uncertainties related to the Year 2000 issues by
continuing to request an update on all critical and important vendors through
the remainder of 1999. If any concerns are identified related to any critical
vendor, the contingency plans will be implemented immediately to assure
continued service the Bank's customers.
The Year 2000 liquidity plan has been developed to included projected cash needs
and sources of the funds that could be required during the century rollover.
Funds are available from maturing discount notes and lines of credit with
correspondent banks. The bank has drawn $10 million (including $5 million drawn
subsequent to September 30, 1999) on the line of credit at the Federal Home Loan
Bank to ensure a liquid position through the century rollover period.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future events,
which are inherently uncertain, including the progress and results of testing
plans and the readiness of all vendors, suppliers and customers. The electrical
provider that the Company uses has asserted that they are Year 2000 compliant.
The Company has begun planning for the century rollover weekend. The event plan
includes testing that will occur after the rollover to ensure that there will be
no interruption of services to our customers. Additionally, the plan will
address actions to be taken should any problems be identified. As noted
previously, a business interruption and contingency plan have been completed and
can be utilized if necessary.
Despite the best efforts of management to address this issue, the vast number of
external entities that have direct and indirect business relationships with the
Company, such as customers, vendors, payment systems providers and other
financial institutions, makes it impossible to assure that a failure to achieve
compliance by one or more of these entities would not have material adverse
impact on operations.
9
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Changes in Securities and Use of Proceeds.
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) NONE
(b) NONE
10
<PAGE>
CCF HOLDING COMPANY AND SUBSIDIARY
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, 1999 BY:\s\ David B. Turner
----------------- ---------------------------------
David B. Turner
President and
Chief Executive Officer
Date: November 12, 1999 BY:\s\ Mary Jo Rogers
----------------- ---------------------------------
Mary Jo Rogers
Sr. Vice President and
Chief Financial Officer
11
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 6,674
<INT-BEARING-DEPOSITS> 103
<FED-FUNDS-SOLD> 2,380
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 35,460
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 133,804
<ALLOWANCE> 1,178
<TOTAL-ASSETS> 187,393
<DEPOSITS> 167,217
<SHORT-TERM> 6,467
<LIABILITIES-OTHER> 1,816
<LONG-TERM> 0
0
0
<COMMON> 99
<OTHER-SE> 11,793
<TOTAL-LIABILITIES-AND-EQUITY> 187,392
<INTEREST-LOAN> 9,097
<INTEREST-INVEST> 1,291
<INTEREST-OTHER> 337
<INTEREST-TOTAL> 10,725
<INTEREST-DEPOSIT> 5,403
<INTEREST-EXPENSE> 5,496
<INTEREST-INCOME-NET> 5,229
<LOAN-LOSSES> 296
<SECURITIES-GAINS> 68
<EXPENSE-OTHER> 4,475
<INCOME-PRETAX> 1,109
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 719
<EPS-BASIC> .77
<EPS-DILUTED> .74
<YIELD-ACTUAL> 4.0
<LOANS-NON> 189
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 656
<ALLOWANCE-OPEN> 943
<CHARGE-OFFS> 63
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 1,178
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
