SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 AND 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2003
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 1934
For the transition period from _______ to _______
Commission File Number: 000-25345
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COMMUNITY CAPITAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-2413468
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(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
P.O. Drawer 71269, Albany, Georgia 31708
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(Address of principal executive offices)
(229) 446-2265
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of March 31, 2003:
1,431,676 SHARES
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
PART I - FINANCIAL INFORMATION Page No.
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ITEM 1. Financial Statements
Consolidated balance sheets (unaudited) as of
December 31, 2002 and March 31, 2003 3
Consolidated statement of operations (unaudited)
for the three months ended March 31, 2002 and 2003 4
Consolidated statement of comprehensive income (unaudited)
for the three months ended March 31, 2002 and 2003 5
Statement of cash flows (unaudited) for the
three months ended March 31, 2002 and 2003 6
Item 2. Management's Discussion and Analysis of
Financial Condition and results of operations 9
Item 3. Controls and procedures 11
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 12
ITEM 2. Changes in Securities and use of proceeds 12
ITEM 3. Defaults on 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
Exhibit 1.1 - Placement Agreement Trust Preferred Securities 16
Exhibit 4.2 - Amended and Restated Agreement of Trust 59
Exhibit 4.3 - Indenture Agreement 126
Exhibit 4.4 - Guarantee Agreement 187
Exhibit 99.1 - President/CEO and CFO Certification 204
COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
March 31,2003 December 31, 2002
-------------- -----------------
ASSETS
------
Cash and due from banks $ 4,193 $ 6,920
Federal funds sold 5,254 0
Securities available for sale 17,019 16,968
Loans 90,094 81,713
Less allowance for loan losses 952 821
--------------- -------------------
Loans, net 89,142 80,892
Premises and equipment 3,020 3,058
Other assets 1,502 1,348
--------------- -------------------
TOTAL ASSETS $ 120,130 $ 109,186
=============== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Deposits
Non-interest bearing $ 6,715 $ 6,731
Interest bearing 88,201 79,273
--------------- -------------------
Total deposits 94,916 86,004
Other borrowings 14,823 12,590
Other liabilities 588 849
--------------- -------------------
TOTAL LIABILITIES 110,327 99,443
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Shareholders' equity
Preferred stock, par value not stated; 2,000,000 shares authorized;
no shares issued $ - - $ - -
Common stock, $1.00 par value, 10,000,000 shares authorized;
1,499,560 shares issued 1,500 1,500
Capital surplus 8,084 8,084
Retained earnings 423 354
Accumulated other comprehensive income 279 295
Less cost of treasury stock, 67,884 shares as of March 31, 2003
and 68,539 shares as of December 31, 2002 (483) (490)
--------------- -------------------
TOTAL SHAREHOLDERS' EQUITY 9,803 9,742
--------------- -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 120,130 $ 109,186
=============== ===================
2
COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three months ended March 31, 2003 and 2002
(Dollars in thousands, except earnings per share)
2003 2002
----------- ----------
INTEREST INCOME
Loans $ 1,473 $ 1,284
Investment securities 174 185
Deposits in banks 6 5
Federal funds sold 5 18
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TOTAL INTEREST INCOME 1,658 1,492
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INTEREST EXPENSE
Deposits 532 539
Other borrowed money 103 115
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TOTAL INTEREST EXPENSE 635 654
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NET INTEREST INCOME 1,023 838
Provision for loan losses 130 72
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 893 766
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OTHER INCOME
Service charges on deposit accounts 120 81
Financial service fees 13 15
Mortgage origination fees 82 53
Other service charges, commissions and fees 35 17
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250 166
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OTHER EXPENSES
Salaries and employee benefits 504 406
Equipment and occupancy expenses 145 82
Marketing expenses 27 22
Data processing expenses 81 55
Administrative expenses 148 97
Other expenses 120 89
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TOTAL EXPENSES 1,025 751
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INCOME (LOSS) BEFORE INCOME TAXES 118 181
Income tax expense 48 60
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NET INCOME $ 70 $ 121
=========== ==========
BASIC EARNINGS PER SHARE (weighted average shares used in
calculation: 1,431,370 in 2003 and 1,445,914 in 2002) $ .05 $ 08
=========== ==========
DILUTED EARNINGS PER SHARE (weighted average shares used in
calculation: 1,610,849 in 2003 and 1,497,984 in 2002) $ .04 $ .08
=========== ==========
3
COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Three months ended March 31, 2003 and 2002
(Dollars in thousands)
2003 2002
------------ -------------
NET INCOME $ 70 $ 121
Other comprehensive loss
Net unrealized holding gains (losses) arising during period, net
of tax expense (benefit) of $(9,000) in 2003 and $(61,000) in 2002 (16) (120)
------------ -------------
COMPREHENSIVE INCOME $ 54 $ 1
============ =============
4
COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months ended March 31, 2003 and 2002
(Dollars in thousands)
2003 2002
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 70 $ 121
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 64 43
Provision for loan losses 131 72
Decrease (increase) in interest receivable (37) 19
Other operating activities (379) (76)
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Net cash used in operating activities (151) 179
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (26) (58)
Net decrease (increase) in federal funds sold (5,254) 3,983
Net increase in loans (8,372) (5,067)
Proceeds from maturities of securities
available for sale 899 2,326
Purchase of securities available for sale (975) (5,488)
-------------- --------------
Net cash used in Investing activities (13,728) (4,304)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 8,912 3,417
Proceeds from Trust Preferred issuance 4,000 -
Decrease in federal funds purchased (1,705) -
Repayment of other borrowings (61) (92)
Sale (purchase) of treasury stock 6 (8)
-------------- --------------
Net cash provided by financing activities 11,152 3,317
-------------- --------------
Net increase (decrease) in cash (2,727) (808)
Cash and due from banks at beginning of period 6,920 4,471
-------------- --------------
Cash and due from banks at end of period $ 4,193 $ 3,663
============== ==============
SUPPLEMENTAL DISCLOSURE
Cash paid for interest $ 534 $ 675
============== ==============
NON-CASH TRANSACTION
Unrealized losses on securities available for
sale $ 25 $ 181
============== ==============
5
COMMUNITY CAPITAL BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Community Capital Bancshares, Inc. (the "Company") is a bank holding company
whose business is conducted by its wholly-owned subsidiary, Albany Bank & Trust
(the "Bank"). The Bank is a commercial bank located in Albany, Georgia. The
Bank provides a full range of banking services in its primary market area of
Dougherty County and the surrounding counties. The Bank commenced its banking
operations on April 28, 1999.
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company and
its subsidiary. Significant intercompany transactions and accounts are
eliminated in consolidation.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities as of the balance sheet date and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Material estimates that are particularly
susceptible to significant change in the near term relate to the determination
of the allowance for loan losses, the valuation of foreclosed real estate and
deferred taxes.
The interim financial statements included herein are unaudited but reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of the financial position and results of operations for the interim
period presented. All such adjustments are of a normal recurring nature. The
results of operations for the period ended March 31, 2003 are not necessarily
indicative of the results of a full year's operations, and should be read in
conjunction with the Company's annual report as filed on Form 10-KSB.
The accounting principles followed by the Company and the methods of applying
these principles conform with accounting principles generally accepted in the
United States of America (GAAP) and with general practices within the banking
industry.
INCOME TAXES
Deferred income tax assets and liabilities are determined using the balance
sheet method. Under this method, the net deferred tax asset or liability is
determined based on the tax effects of the temporary differences between the
book and tax basis of the various balance sheet assets and liabilities and gives
current recognition to changes in the tax rates and laws.
The Company and the Bank file a consolidated income tax return. Each entity
provides for income taxes based on its contribution to the income taxes
(benefits) of the consolidated group.
6
STOCK COMPENSATION PLANS
At March 31, 2003, the Company had two stock-based employee compensation plans,
which are described in more detail in the 2002 annual report. The Company
accounts for those plans under the recognition and measurement principles of
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. No stock-based employee compensation
cost is reflected in net income, as all options granted under those plans had an
exercise price equal to the market value of the underlying stock on the date of
grant. In addition, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure in December 2002. SFAS No. 148 amends
SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative
methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation. It also
amends the disclosure provisions of SFAS No. 123 to require prominent disclosure
about the effects on reported net income of an entity's accounting policy
decisions with respect to stock-based employee compensation. The Company has
not elected to adopt the recognition provisions of this Statement for
stock-based employee compensation and has elected to continue with accounting
methodology in Opinion No. 25 as permitted by SFAS No. 123.
QUARTER ENDED MARCH 31,
-----------------------
2003 2002
--------- --------
Net income, as reported $ $121,000
Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax effects (23,000) (25,000)
-------- --------
Pro forma net income $ 47,000 $ 96,000
======== ========
Earnings per share:
Basic - as reported $ .05 $ .08
======== ========
Basic - pro forma $ .03 $ .07
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Diluted - as reported $ .04 $ .08
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Diluted - pro forma $ .03 $ .06
======== ========
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion is intended to assist in an understanding of the Company's
financial condition and results of operations. This analysis should be read in
conjunction with the financial statements and related notes appearing in Item 1
of the March 31, 2003 Form 10-QSB and Management's Discussion and Analysis of
Financial Condition and Results of Operations appearing in the Company's Form
10-KSB for the year ended December 31, 2002.
FINANCIAL CONDITION
As of March 31, 2003 the Company's total assets were $120,130,000 representing
an increase of $10,944,000 or 10.02% from December 31, 2002. Earning assets
consist of Federal funds sold, investment securities and loans. These assets
provide the majority of the Company's earnings. The mix of earning assets is a
reflection of management's philosophy regarding earnings versus risk.
Federal funds sold represent an overnight investment of funds and can be
converted immediately to cash. At March 31, 2003, federal funds sold were
$5,254,000. At December 31, 2002, the Company had no federal funds sold.
Investment securities consist of U.S. Government and Agency securities and
municipal bonds. These investments are used to provide fixed maturities and as
collateral for advances and large public fund deposits. During the first
quarter, investment securities increased $51,000. All securities are classified
as available for sale, and are carried at current market values.
The loan portfolio is the largest earning asset and is the primary source of
earnings for the Company. At March 31, 2003 net loans were $89,142,000. The
loan portfolio increased $8,381,000 or 10.26% during the first quarter. At
March 31, 2003, the allowance for loan losses was $952,000 or 1.06% of total
loans. Management believes this is an adequate but not excessive amount based
upon the composition of the current loan portfolio and current economic
conditions. The relationship of the allowance to total loans will vary over
time based upon Management's evaluation of the loan portfolio. Management
evaluates the adequacy of the allowance on a monthly basis and adjusts it
accordingly by a monthly charge to earnings using the provision for loan losses.
During the first quarter of 2003, the provision for potential loan losses was
$130,000 as compared to the 2002 amount of $72,000.
In March, 2003, the Company formed a wholly owned Connecticut statutory
trust, Community Capital Statutory Trust I (the "Trust"), which issued $4
million aggregate principal amount of trust preferred securities. The trust
preferred securities represent guaranteed preferred beneficial interests in the
Company's junior subordinated deferrable interest debentures that qualify as
Tier I capital subject to the limitations under Federal Reserve Board
guidelines. The Company owns all of the $124,000 aggregate principal amount of
the common securities of the Trust. The proceeds from the issuance of the
common securities and the trust preferred securities were used by the Trust to
purchase $4.1 million of junior subordinated debentures of the Company, which
pay interest at a floating rate equal to the three-month LIBOR plus 315 basis
points. The proceeds received by the Company from the sale of the junior
subordinated debentures were used to provide additional paid in capital to the
Bank, to support future growth of the Bank. The debentures represent the sole
asset of the Trust. The debentures and related earnings statement effects are
eliminated in the Company's financial statements.
The trust preferred securities accrue and pay quarterly distributions based
on the liquidation value of $1,000 per capital security at a floating
8
rate equal to the three-month LIBOR plus 315 basis points. The Company has
entered into contractual arrangements which, taken collectively, constitute a
full and unconditional guarantee on a subordinated basis by the Company of the
obligations of the Trust under the trust preferred securities. The Company's
guarantee, however, does not apply if the Company does not make payments on the
debentures and, as a result, the Trust does not have sufficient funds to make
payments.
The trust preferred securities are mandatorily redeemable upon maturity of
the debentures on March 26, 2033, or upon earlier redemption of the debentures
as provided in the indenture. The Company has the right to redeem the debentures
purchased by the Trust in whole or in part, on or after March 26, 2008. As
specified in the indenture, if the debentures are redeemed on or after March 26,
2008 and prior to maturity, the redemption price will be the principal amount
and any accrued but unpaid interest. Additionally, the Company may redeem, at
any time (and possibly before March 26, 2008), within 120 days following the
occurrence of a change in banking, tax, investment company or other laws or
regulations that results in specified changes in the treatment of the trust
preferred securities for tax or regulatory capital purposes or under the
Investment Company Act of 1940. If the debentures are redeemed prior to March
26, 2008, the redemption price will be equal to 107.5% of the principal amount
plus any accrued and unpaid interest.
The majority of the funds from the Trust preferred securities were passed
through to the Bank in the form of additional paid in capital, to provide for
future growth of the Bank. These funds plus the increase in deposits during the
first quarter accounted for the increase in Federal funds sold.
Non-earning assets consist of premises and equipment, and other assets.
Premises and equipment decreased during the quarter as a result of depreciation
expense on these assets. Other assets consist primarily of accrued interest
receivable and increased $154,000 as a result of the larger loan portfolio upon
which to accrue interest.
The Company funds its assets primarily through deposits from customers.
Additionally, it will borrow funds from other sources to provide longer term
fixed rate funding for its assets. The Company must pay interest on the
majority of these funds and attempts to price these funds competitively in the
market place but at a level that it can safely re-invest the funds profitably.
At March 31, 2003, total deposits were $94,916,000 as compared to the year-end
amount of $86,004,000. This is an increase of $8,912,000 or 10.36%.
Interest bearing deposits are comprised of the following categories:
March 31, 2003 December 31, 2002
--------------- ------------------
Interest bearing demand and savings $ 28,404,000 $ 23,735,000
Certificates of deposit in
denominations of $100,000 or greater 17,976,000 16,413,000
Other Certificates of deposit 41,821,000 39,125,000
--------------- ------------------
Total $ 88,201,000 $ 79,273,000
=============== ==================
Other borrowings consist of Federal Home Loan Bank advances and are secured by
investment securities and loans of the Company. No new advances were obtained
during the current quarter.
9
CAPITAL ADEQUACY
The following table presents the Company's regulatory capital position as of
March 31, 2003.
Tier 1 Capital Ratio, actual 13.77%
Tier 1 Capital minimum requirement 4.00%
Tier 2 Capital Ratio, actual 16.74%
Tier 2 Capital minimum requirement 8.00%
Leverage Ratio 10.60%
Leverage Ratio minimum requirement 4.00%
The Company's ratios are well above the required regulatory minimums and provide
a sufficient basis to support future growth of the Company.
RESULTS OF OPERATIONS
Net income for the current year is $70,000 as compared to the 2002 amount of
$121,000. The decreased net income was a result of an overall increase in the
Company's net interest income and was offset by increased non-interest expense.
Total interest income increased $166,000 or 11.13% from the previous year. This
was the result of increased interest income on loans, which increased $189,000.
The increase in income was the direct result of the larger loan portfolio in the
current year. This increase was in spite of the major reductions in interest
rate levels during the past 12 months.
Interest expense for 2003 was $635,000. This is the major expense item for the
Company and decreased $31,000 from the previous year. This decrease is the
direct result of the overall current lower interest rate environment. The
Company has been able to reprice its increased level of deposits in the current
year at a lower interest than the previous year.
Net interest income after the provision for loan losses was $893,000 in 2003 as
compared to the 2002 amount of $766,000. This is an increase of $127,000 or
16.58%. This increase is the combined result of the increased level of earning
assets, and the lower cost of funds during the current year. The overall growth
rate has declined from previous years. Management is currently emphasizing a
better interest margin as opposed to the higher growth rate emphasis in previous
years.
Other income increased $84,000 to $250,000 in 2003. Service charges on deposit
accounts increased $39,000 or 48% due to the larger number of deposit accounts.
Mortgage origination fees increased $29,000 over the previous year. These fees
are generated by facilitating mortgage loans for customers, which are sold in
the secondary market. The low interest rate levels led to increases in this
area of activity in the Bank.
Non-interest expense increased $274,000 to $1,025,000 in 2003. This is an
increase of 36.48%. The largest area of increase was in the salary and employee
benefits category. This expense item is $504,000 in the current year as
compared to the 2002 amount of $406,000. This is an increase of $98,000 or
24.14%. The growth in this expense item is due to the increased staffing
required to properly serve the Company's customers and slightly higher levels of
pay during the current year.
10
Data processing expenses increased $26,000 or 47.27% over the previous year.
This is the result of the larger size of the Company. Other expenses increased
$31,000 to $120,000 in the current year. The majority of this increase is the
result of increased expenses for the mortgage loan department.
Diluted earnings per share for the current year are $0.04 and decreased $0.04 or
50% from the previous year.
FORWARD-LOOKING STATEMENTS
This document contains statements that constitute "forward-looking statements"
within the meaning of Sections 27A of the Securities Act of 1933, as amended,
and Sections 21E of the Securities Exchange Act of 1934, as amended. The words
"believe", "estimate", "expect", "intend", "anticipate" and similar expressions
and variations thereof identify certain of such forward-looking statements,
which speak only as of the dates that they were made. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise. Users are
cautioned that any such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that the actual results may
differ materially from those indicated in the forward-looking statements as a
result of various factors. Users are therefore cautioned not to place undue
reliance on these forward-looking statements.
ITEM 3. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation
of the Company's disclosure controls and procedures pursuant to Exchange
Act Rule 13a-14. Based upon that evaluation, the Company's Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Company (including its consolidated
subsidiaries) that is required to be included in the Company's periodic
filings with the Securities and Exchange Commission. There have been no
significant changes in the Company's internal controls or, to the Company's
knowledge, in other factors that could significantly affect those internal
controls subsequent to the date the Company carried out its evaluation, and
there have been no corrective actions with respect to significant
deficiencies or material weaknesses
11
PART II
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) None
(b) None
(c) On February 23,2003, Community Capital granted five members of
management options to purchase an aggregate of 50,000 shares of Community
Capital's common stock at an exercise price of $10.18 per share. These
options vest in 20% equal increments over five years beginning on the first
anniversary of the grant date for so long as the individual serves as an
employee of Community Capital or any of its affiliates. The options will
become fully vested if there is a change in control of Community Capital.
The options will expire on the tenth anniversary of the grant date or, if
earlier, 90 days after the optionee ceases to be employee of Community
Capital or any affiliate. Since the options were only granted to officers
of Community Capital and the Bank, the option grants did not involve a
public offering, and therefore were exempt from registration under Section
4(2) of the Securities Act of 1933.
In March, 2003, the Company formed a wholly owned Connecticut
statutory trust, Community Capital Statutory Trust I (the "Trust"), which
issued $4 million aggregate principal amount of trust preferred securities.
The trust preferred securities represent guaranteed preferred beneficial
interests in the Company's junior subordinated deferrable interest
debentures that qualify as Tier I capital subject to the limitations under
Federal Reserve Board guidelines. The Company owns all of the $124,000
aggregate principal amount of the common securities of the Trust. The
proceeds from the issuance of the common securities and the trust preferred
securities were used by the Trust to purchase $4.1 million of junior
subordinated debentures of the Company, which pay interest at a floating
rate equal to the three-month LIBOR plus 315 basis points. The debentures
represent the sole asset of the Trust.
The trust preferred securities accrue and pay quarterly distributions
based on the liquidation value of $1,000 per capital security at a floating
rate equal to the three-month LIBOR plus 315 basis points. The Company has
entered into contractual arrangements which, taken collectively, constitute
a full and unconditional guarantee on a subordinated basis by the Company
of the obligations of the Trust under the trust preferred securities. The
Company's guarantee, however, does not apply if the Company does not make
payments on the debentures and, as a result, the Trust does not have
sufficient funds to make payments.
The trust preferred securities are mandatorily redeemable upon
maturity of the debentures on March 26, 2033, or upon earlier redemption of
the debentures as provided in the indenture. The Company has the right to
redeem the debentures purchased by the Trust in whole or in part, on or
after March 26, 2008. As specified in the indenture, if the debentures are
redeemed on or after March 26, 2008 and prior to maturity, the redemption
price will be the principal amount and any accrued but unpaid interest.
Additionally, the Company may redeem, at any time (and possibly before
March 26, 2008), within 120 days following the occurrence of a change in
banking, tax, investment company or other laws or regulations that results
in specified changes in the treatment of the trust preferred securities for
tax or regulatory capital purposes or under the Investment Company Act of
1940. If the debentures are redeemed prior to March 26, 2008, the
redemption price will be equal to 107.5% of the principal amount plus any
accrued and unpaid interest.
FTN Financial Capital Markets and Keefe, Bruyette & Woods, Inc. served
as placement agents in connection with the issuance of the trust preferred
securities and debentures and each were compensated $60,000 for their
services. Since the trust preferred securities and debentures were issued
to an institutional investors the securities were exempt from registration
under Rule 506 of the Securities Act of 1933.
ITEM 3. DEFAULTS ON 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) REPORTS ON FORM 8-K
None
(b) EXHIBIT 1.1
Trust Preferred Placement Agreement
(c) EXHIBIT 4.2
Amended and restated declaration of trust
(d) EXHIBIT 4.3
Indenture Agreement
(d) EXHIBIT 4.4
Guarantee Agreement
12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMMUNITY CAPITAL BANCSHARES, INC.
May 14, 2003 /s/ Robert E. Lee
------------ -----------------------
Date Robert E. Lee,
President
May 14, 2003 /s/ David J. Baranko
------------ ------------------------
Date David J. Baranko
Chief Financial Officer
(Duly authorized officer and
principal financial / accounting
officer )
13
Certification
I, Charles M. Jones, III, Chief Executive Officer of Community Capital
Bancshares, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Community Capital
Bancshares, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a)all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b)any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 14, 2003
/s/ Charles M. Jones, III
-----------------------------
Charles M. Jones, III
Chief Executive Officer
14
Certification
I, David J. Baranko, Chief Financial Officer of Community Capital Bancshares,
Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Community Capital
Bancshares, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):
a)all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b)any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 14, 2003
/s/ David J. Baranko
-----------------------
David J. Baranko
Chief Financial Officer
15