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Such factors include uncertainties regarding our ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, our ability to compete successfully without any significant degradation in our margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the impact of negative economic conditions on our customers and such customers’ workforce, the continuing increase in domestic healthcare costs, demand and prices for our products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange and accounting rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. |
The financial statements listed below are included under Item 8 of this Annual Report on Form 10-K: Consolidated statements of income for each of the three years in the period ended August 26, 2006 Consolidated balance sheets as of August 26, 2006 and August 27, 2005 Consolidated statements of shareholders’ equity for each of the three years in the period ended August 26, 2006 Consolidated statements of cash flows for each of the three years in the period ended August 26, 2006 Notes to consolidated financial statements Report of Ernst & Young LLP, Independent Registered Public Accounting Firm Management’s Report on Internal Control Over Financial Reporting Report of Ernst & Young LLP, Independent Registered Public Accounting Firm The following additional schedule is filed herewith: Schedule II - Valuation and qualifying accounts and reserves for each of the three years in the period ended August 26, 2006 UNIFIRST CORPORATION AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 26, 2006 Separate financial statements of the Company have been omitted because the Company is primarily an operating company and all subsidiaries included in the consolidated financial statements are totally held. |
Such factors include uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel, and labor, the impact of negative economic conditions on the Company’s customers and such customer’s workforce, the extent of costs necessitated by, and declines in revenues from customers adversely affected by, the recent hurricanes in Florida and the Gulf Coast, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange, and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. |
The financial statements listed below are included under Item 8 of this Form 10-K. Consolidated statements of income for each of the three years in the period ended August 27, 2005 Consolidated balance sheets as of August 27, 2005 and August 28, 2004 Consolidated statements of shareholders’ equity for each of the three years in the period ended August 27, Consolidated statements of cash flows for each of the three years in the period ended August 27, 2005 Notes to consolidated financial statements Report of Ernst & Young LLP, Independent Registered Public Accounting Firm Management’s Report on Internal Control Over Financial Reporting Report of Ernst & Young LLP, Independent Registered Public Accounting Firm The following additional schedule is filed herewith: Schedule II - Valuation and qualifying accounts and reserves for each of the three years in the period ended August 27, 2005 UNIFIRST CORPORATION AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 27, 2005 Separate financial statements of the Company have been omitted because the Company is primarily an operating company and all subsidiaries included in the consolidated financial statements are totally held. |
Such factors include uncertainties regarding the Company’s ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company’s ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel, and labor, the impact of negative economic conditions on the Company’s customers and such customer’s workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company’s products and services, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange, and accounting rules, strikes and unemployment levels, the Company’s efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. |
The financial statements listed below are included under Item 8 of this Form 10-K. Consolidated statements of income for each of the three years in the period ended August 28, 2004 Consolidated balance sheets as of August 28, 2004 and August 30, 2003 Consolidated statements of shareholders’ equity for each of the three years in the period ended August 28, 2004 Consolidated statements of cash flows for each of the three years in the period ended August 28, 2004 Notes to consolidated financial statements Report of Ernst & Young LLP, Independent Auditors The following additional schedule is filed herewith: Schedule II - Valuation and qualifying accounts and reserves for each of the three years in the period ended August 28, 2004 UNIFIRST CORPORATION AND SUBSIDIARIES SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 28, 2004 Separate financial statements of the Company have been omitted because the Company is primarily an operating company and all subsidiaries included in the consolidated financial statements are totally held. |
Such factors include uncertainties regarding the Company's ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, the Company's ability to compete successfully without any significant degradation in its margin rates, seasonal fluctuations in business levels, uncertainties regarding the price levels of natural gas, electricity, fuel, and labor, the impact of negative economic conditions on the Company's customers and such customer's workforce, the continuing increase in domestic healthcare costs, demand and prices for the Company's products and services, the impact of interest rate variability upon the Company's interest rate swap arrangements, additional professional and internal costs necessary for compliance with recent and proposed future changes in Securities and Exchange Commission (including the Sarbanes-Oxley Act of 2002), New York Stock Exchange, and accounting rules, strikes and unemployment levels, the Company's efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy and general economic conditions. |
The financial statements listed below are included under Item 8 of this Form 10-K. Consolidated balance sheets as of August 30, 2003 and August 31, 2002 Consolidated statements of income for each of the three years in the period ended August 30, 2003 Consolidated statements of shareholders' equity for each of the three years in the period ended August 30, 2003 Consolidated statements of cash flows for each of the three years in the period ended August 30, 2003 Notes to consolidated financial statements Report of Ernst & Young LLP, Independent Auditors Report of Arthur Andersen LLP, Independent Public Accountants The following additional schedule is filed herewith: Schedule II - Valuation and qualifying accounts and reserves for each of the three years in the period ended August 30, 2003 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Board of Directors and Shareholders UniFirst Corporation We have audited the consolidated financial statements of UniFirst Corporation and subsidiaries as of August 30, 2003 and August 31, 2002, and for each of the two years then ended, and have issued our report thereon dated November 4, 2003 (included elsewhere in this Form 10-K). |
NAME TITLE DATE ---- ----- ---- /s/ Ronald D. Croatti Principal Executive November 21, 2001 - --------------------------- Officer and Director Ronald D. Croatti /s/ John B. Bartlett Principal Financial November 21, 2001 - ----------------------------- Officer and Principal John B. Bartlett Accounting Officer /s/ Cynthia Croatti Director November 21, 2001 - ----------------------------- Cynthia Croatti /s/ Donald J. Evans Director November 21, 2001 - ----------------------------- Donald J. Evans /s/ Albert Cohen Director November 21, 2001 - ----------------------------- Albert Cohen /s/ Phillip L. Cohen Director November 21, 2001 - ----------------------------- Phillip L. Cohen REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE TO THE CONSOLIDATED FINANCIAL STATEMENTS To UniFirst Corporation: We have audited, in accordance with auditing standards generally accepted in the United States, the consolidated financial statements included in this Form 10-K, and have issued our report thereon dated October 31, 2001. |
NAME TITLE DATE - ---- ----- ---- /s/ Aldo Croatti Chairman and Director November 27, 2000 - -------------------- Aldo Croatti /s/ Ronald D. Croatti Principal Executive November 27, 2000 - -------------------- Officer and Director Ronald D. Croatti /s/ John B. Bartlett Principal Financial November 27, 2000 - -------------------- Officer and Principal John B. Bartlett Accounting Officer /s/ Cynthia Croatti Director November 27, 2000 - -------------------- Cynthia Croatti /s/ Donald J. Evans Director November 27, 2000 - -------------------- Donald J. Evans /s/ Reynold L. Hoover Director November 27, 2000 - -------------------- Reynold L. Hoover /s/ Albert Cohen Director November 27, 2000 - -------------------- Albert Cohen REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE TO THE CONSOLIDATED FINANCIAL STATEMENTS To UniFirst Corporation: We have audited, in accordance with auditing standards generally accepted in the United States, the consolidated financial statements included in this Form 10-K, and have issued our report thereon dated October 31, 2000. |
NAME TITLE DATE ---- ----- ---- Aldo Croatti Chairman and Director November 25, 1998 - ----------------------- Aldo Croatti Ronald D. Croatti Principal Executive November 25, 1998 - ----------------------- Officer and Director Ronald D. Croatti John B. Bartlett Principal Financial November 25, 1998 - ----------------------- Officer and Principal John B. Bartlett Accounting Officer Cynthia Croatti Director November 25, 1998 - ----------------------- Cynthia Croatti Donald J. Evans Director November 25, 1998 - ----------------------- Donald J. Evans Reynold L. Hoover Director November 25, 1998 - ----------------------- Reynold L. Hoover Albert Cohen Director November 25, 1998 - ----------------------- Albert Cohen REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE TO THE CONSOLIDATED FINANCIAL STATEMENTS To the Board of Directors and Shareholders of UniFirst Corporation: We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in this Form 10-K, and have issued our report thereon dated November 3, 1998. |
ARTHUR ANDERSEN LLP Boston, Massachusetts November 1, 1994 UNIFIRST CORPORATION AND SUBSIDIARIES - - ------------------------------------- SCHEDULE II - - ----------- NOTE RECEIVABLE FROM RELATED PARTY - - ---------------------------------- There was no activity for the year ended August 29, 1992 UNIFIRST CORPORATION AND SUBSIDIARIES - - ------------------------------------- SCHEDULE V - - ---------- PROPERTY, PLANT AND EQUIPMENT FOR EACH OF THE - - --------------------------------------------- THREE YEARS IN THE PERIOD ENDED AUGUST 27, 1994 - - ----------------------------------------------- UNIFIRST CORPORATION AND SUBSIDIARIES - - ------------------------------------- SCHEDULE VI - - ----------- ACCUMULATED DEPRECIATION AND AMORTIZATION FOR EACH OF - - ----------------------------------------------------- THE THREE YEARS IN THE PERIOD ENDED AUGUST 27, 1994 - - --------------------------------------------------- UNIFIRST CORPORATION AND SUBSIDIARIES - - ------------------------------------- SCHEDULE VIII - - ------------- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR EACH - - ------------------------------------------------------- OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 27, 1994 - - ------------------------------------------------------ UNIFIRST CORPORATION AND SUBSIDIARIES - - ------------------------------------- SCHEDULE X - - ---------- SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR EACH - - --------------------------------------------------- OF THE THREE YEARS IN THE PERIOD ENDED AUGUST 27, 1994 - - ------------------------------------------------------ EXHIBIT INDEX ------------- Description ----------- 3-A Restated Articles of Organization -- incorporated by reference to Exhibit 3-A to the Company's Registration Statement on Form S-1 (No. |
These international operations may be subject to a number of risks, including: • difficulties in staffing and managing foreign operations; • political and economic instability (including acts of terrorism, civil unrest, forms of violence and outbreaks of war), which could impact our ability to ship, manufacture, and/or receive product; • unexpected changes in regulatory requirements and laws; • longer customer payment cycles and difficulty collecting accounts receivable; • export duties, import controls and trade barriers (including quotas); • governmental restrictions on the transfer of funds; • burdens of complying with a wide variety of foreign laws and labor practices; • fluctuations in currency exchange rates, which could affect component costs, local payroll, utility and other expenses; • inability to utilize net operating losses generated by our foreign operations to reduce our U.S. income taxes; and • our foreign locations may be impacted by hurricanes, earthquakes, water shortages, tsunamis, floods, typhoons, fires, extreme weather conditions and other natural or manmade disasters. |
These international operations may be subject to a number of risks, including: • difficulties in staffing and managing foreign operations; • political and economic instability (including acts of terrorism, civil unrest, forms of violence and outbreaks of war), which could impact our ability to ship and/or receive product; • unexpected changes in regulatory requirements and laws; • longer customer payment cycles and difficulty collecting accounts receivable; • export duties, import controls and trade barriers (including quotas); • governmental restrictions on the transfer of funds; • burdens of complying with a wide variety of foreign laws and labor practices; • fluctuations in currency exchange rates, which could affect component costs, local payroll, utility and other expenses; and • inability to utilize net operating losses generated by our foreign operations to reduce our U.S. income taxes; • our foreign locations may be impacted by hurricanes, earthquakes, water shortages, tsunamis, floods, typhoons, fires, extreme weather conditions and other natural or manmade disasters. |
These international operations may be subject to a number of risks, including: • difficulties in staffing and managing foreign operations; • political and economic instability (including acts of terrorism, civil unrest, forms of violence and outbreaks of war), which could impact our ability to ship and/or receive product; • unexpected changes in regulatory requirements and laws; • longer customer payment cycles and difficulty collecting accounts receivable; • export duties, import controls and trade barriers (including quotas); • governmental restrictions on the transfer of funds; • burdens of complying with a wide variety of foreign laws and labor practices; • fluctuations in currency exchange rates, which could affect component costs, local payroll, utility and other expenses; and • inability to utilize net operating losses incurred by our foreign operations to reduce our U.S. income taxes; • our foreign locations may be impacted by hurricanes, earthquakes, water shortages, tsunamis, floods, typhoons, fires, extreme weather conditions and other natural or manmade disasters. |
(i) Previous filing on Form S-1 is incorporated by reference, exhibit number indicated (ii) Incorporated by reference to report on Form 10-K for the year ended 06/30/87 (iii) Incorporated by reference to report on Form 10-K for the year ended 06/30/86 (iv) Incorporated by reference to report on Form 10-K for the year ended 06/30/85 (v) Incorporated by reference, Key Tronic Corporation 1990 Proxy Statement, pages C-1-D3 (vi) Incorporated by reference to report on Form 10-K for the year ended 06/30/91 (vii) Incorporated by reference to report on Form 10-K for the year ended 07/04/92 (viii) Incorporated by reference to report on Form 8-K filed August 12, 1993 (ix) Incorporated by reference, Key Tronic Corporation 1996 Proxy Statement, pages 10-11 (x) Incorporated by reference, Key Tronic Corporation 1995 Proxy Statement, pages 19-22 (xi) Incorporated by reference to report on Form 10-Q for the quarter ended January 1, 2000 (xii) Incorporated by reference to report on Form 10-K for the year ended July 1, 2000 (xiii) Incorporated by reference to report on Form 10-Q for the quarter ended September 29, 2001 (xiv) Incorporated by reference to Form 10-Q for the quarter ended January 1, 2000 (21) Subsidiaries of Registrant (23) Independent Auditors’ Consent and Report on Financial Statement Schedule INDEPENDENT AUDITORS’ CONSENT AND REPORT ON FINANCIAL STATEMENT SCHEDULE We consent to the incorporation by reference in Registration Statement No. |
Dated: September 11, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: /s/ JACK W. OEHLKE September 11, 2002 Jack W. Oehlke (Director, President and Chief Executive Officer) Date /s/ RONALD F. KLAWITTER September 11, 2002 Ronald F. Klawitter (Principal Finnancial Officer) Date /s/ DALE F. PILZ September 11, 2002 Dale F. Pilz (Director) Date /s/ WENDELL J. SATRE September 11, 2002 Wendell J. Satre (Director) Date /s/ YACOV A. SHAMASH September 11, 2002 Yacov A. Shamash (Director) Date /s/ PATRICK SWEENEY September 11, 2002 Patrick Sweeney (Director) Date /s/ WILLIAM E. TERRY September 11, 2002 William E. Terry (Director) Date CERTIFICATION I, Jack W. Oehlke, President and Chief Executive Officer of Key Tronic Corporation, certify that: (1) I have reviewed this annual report on form 10-K of Key Tronic Corporation; (2) Based on my knowledge, this annual 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 annual report; (3) Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report. |
INCOME TAXES Income taxes consist of the following: 1997 1996 1995 ---------------------------- Current income taxes: Federal $ 68 $ (50) $ (162) Foreign 531 (144) 308 State 58 140 107 ------------------------------ $657 $ (54) $ 253 Deferred income taxes: Federal $225 $1,435 $2,062 Foreign (1) (106) (108) State (19) (35) (4) ------------------------------ $205 $1,294 $1,950 ---------------------------- Total income taxes $862 $1,240 $2,203 ============================ The Company's effective tax rate differs from the federal tax rate as follows: Year Ended Year Ended Year Ended June 28, June 29, July 1, 1997 1996 1995 - --------------------------------------------------------------------------- (in thousands) Federal income tax provision (benefit) at statutory rates $359 $(202) $2,252 Effect of foreign loss (income) not subject to federal income tax 279 2,130 (181) Permanent differences: Tax credits - (147) - Life insurance premiums 33 39 26 Other (339) (329) (95) Foreign tax provision (benefit) at foreign statutory rate 91 (2,169) 491 Adjustment for effect of beneficial tax rate on foreign manufacturing income (loss) 439 1,918 (290) - --------------------------------------------------------------------------- Income tax provision $862 $1,240 $2,203 In 1997 and 1996 foreign losses increase the Company's effective income tax rate since such losses are not deductible for U.S. income tax purposes. |
The domestic and foreign components of income (loss) before income taxes were: Year Ended Year Ended Year Ended June 28, June 29, July 1, 1997 1996 1995 - --------------------------------------------------------------------------- (in thousands) Domestic $ 674 $3,356 $6,090 Foreign 756 (3,951) 534 - --------------------------------------------------------------------------- Income (loss) before income taxes $1,430 $ (595) $6,624 Deferred income tax provision consists of the following for the year ended: June 28, June 29, 1997 1996 - ----------------------------------------------------------------------- (in thousands) Allowance for doubtful accounts $ 9 $ 24 Inventory 268 (189) Accrued liabilities (524) 34 Deferred compensation - 13 Depreciation and amortization (585) (1,342) Net operating loss carryforward 1,086 1,136 Tax credit carryovers (22) (198) Other (27) (142) Change in valuation allowance - 1,958 - ----------------------------------------------------------------------- Deferred income tax provision $ 205 $1,294 Deferred income taxes result from temporary differences in the timing of recognition of revenue and expenses. |
Deferred income tax assets and liabilities consist of the following at: June 28, June 29, 1997 1996 - ----------------------------------------------------------------------- (in thousands) Allowance for doubtful accounts $ 370 $ 379 Inventory 1,623 1,891 Vacation accrual 385 341 Self insurance accrual 145 65 Litigation accrual - 24 Warranty accrual 196 149 State deferred asset 162 143 Other 704 327 - ----------------------------------------------------------------------- Current deferred income tax assets 3,585 3,319 Current portion of valuation allowance (2,141) (2,024) - ----------------------------------------------------------------------- Current deferred income tax assets net of valuation allowance 1,444 1,295 - ----------------------------------------------------------------------- Litigation accrual 306 306 Deferred compensation 210 210 Depreciation and amortization (501) (800) Net operating loss carryforward 9,525 10,318 Tax credit carryovers 666 644 Other 119 118 - ----------------------------------------------------------------------- Noncurrent deferred income tax assets 10,325 10,796 Valuation allowance net of current portion (6,468) (6,585) - ----------------------------------------------------------------------- Noncurrent deferred income tax assets net of valuation allowance $ 3,857 $ 4,211 At June 28, 1997 the Company had tax loss carryforwards of approximately $27.2 million, which expire in varying amounts in the years 2003 through 2011. |
Following is a summary of all plan activity: Weighted Number Average Price Range Of Options Exercise Price - ----------------------------------------------------------------------------- Outstanding, July 2, 1994 $3.56 to $11.88 2,987,726 $5.22 - ----------------------------------------------------------------------------- Granted during 1995 $7.25 to $14.625 269,377 $9.10 Stock appreciation rights exercised $4.50 (9,380) $4.50 Options exercised $3.56 to $11.38 (184,956) $7.04 Expired or canceled $4.50 to $11.13 (130,386) $8.55 - ----------------------------------------------------------------------------- Outstanding, July 1, 1995 $3.56 to $14.625 2,932,381 $5.32 - ----------------------------------------------------------------------------- Granted during 1996 $8.34 to $16.25 538,000 $13.49 Options exercised $3.56 to $10.12 (77,709) $7.86 Expired or canceled $3.56 to $16.25 (68,144) $7.92 - ----------------------------------------------------------------------------- Outstanding, June 29, 1996 $3.56 to $16.25 3,324,528 $6.53 - ----------------------------------------------------------------------------- Granted during 1997 $5.50 to $ 7.13 477,800 $5.64 Options exercised $4.50 to $ 4.69 (6,400) $4.51 Expired or canceled $4.50 to $16.25 (2,542,369) $4.69 - ----------------------------------------------------------------------------- Outstanding, June 28, 1997 $3.56 to $16.25 1,253,559 $9.93 - ----------------------------------------------------------------------------- Additional information regarding options outstanding as of June 28, 1997 is as follows: Of the 3,324,528 options outstanding as of June 29, 1996, 2,671,236 were exercisable, and of the 2,932,381 options outstanding as of July 1, 1995, 2,577,544 were exercisable. |
Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: ♦ Volatility in the marketplace which may affect market supply, demand of our products or currency exchange rates; ♦ Increased competition from within the EMS industry or the decision of OEMs to cease or limit outsourcing; ♦ Changes in the reliability and efficiency of our operating facilities or those of third parties; ♦ Risks related to availability of labor; ♦ Increases in certain raw material costs such as copper and oil; ♦ Commodity and energy cost instability; ♦ Risks related to FDA noncompliance; ♦ The loss of a major customer; ♦ General economic, financial and business conditions that could affect our financial condition and results of operations; ♦ Increased or unanticipated costs related to compliance with securities and environmental regulation; ♦ Disruption of global or local information management systems due to natural disaster or cyber-security incident; ♦ Outbreaks of epidemic, pandemic, or contagious diseases, such as the recent novel coronavirus that affect our operations, our customers' operations or our suppliers' operations. |
Minneapolis, Minnesota March 23, 2021 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (IN THOUSANDS) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (IN THOUSANDS) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) NOTE 1. |
Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: ♦ Volatility in the marketplace which may affect market supply, demand of our products or currency exchange rates; ♦ Increased competition from within the EMS industry or the decision of OEMs to cease or limit outsourcing; ♦ Changes in the reliability and efficiency of our operating facilities or those of third parties; ♦ Risks related to availability of labor; ♦ Increases in certain raw material costs such as copper and oil; ♦ Commodity and energy cost instability; ♦ Risks related to FDA noncompliance; ♦ The loss of a major customer; ♦ General economic, financial and business conditions that could affect our financial condition and results of operations; ♦ Increased or unanticipated costs related to compliance with securities and environmental regulation; ♦ Disruption of global or local information management systems due to natural disaster or cyber-security incident; ♦ Outbreaks of epidemic, pandemic, or contagious diseases, such as the recent novel coronavirus that affect our operations, our customers' operations or our suppliers' operations. |
Minneapolis, Minnesota March 19, 2020 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to Consolidated Statement of Operations and comprehensive Income (Loss) NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to Consolidated Statement of Operations and comprehensive Income (Loss) NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (IN THOUSANDS) See accompanying notes to Consolidated Statement of Operations and comprehensive Income (Loss) NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (IN THOUSANDS) See accompanying notes to Consolidated Statement of Operations and comprehensive Income (Loss) NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) NOTE 1. |
333-00888) 3.2 Bylaws (incorporated by reference to Exhibit 3.2 to Form 10-K filed on April 1, 2019) 10.1 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005)** 10.2 Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Exhibit 99.1 to Form 8-K filed November 7, 2014)** 10.3 Amended and Restated Employment Agreement with Richard Wasielewski dated March 15, 2017 (incorporated by reference to Exhibit 10.1 to Form 10-K filed May 19, 2017)** 10.4 Restated Equity Appreciation Rights Plan dated March 11, 2015 (incorporated by reference to Appendix A to Definitive Proxy Statement filed March 24, 2015)** 10.5 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.6 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016). |
333-00888) 3.2 Bylaws (incorporated by reference to Form 8-K filed on March 25, 2016) 10.1 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005)** 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4 Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015)** 10.5 Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014)** 10.6 Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014)** 10.7 Form of Employment Agreement with Richard Wasielewski dated March 15, 2014(incorporated by reference to Form 10-K filed March 11, 2015)** 10.8 Restated Equity Appreciation Rights Plan dated March 11, 2015 (incorporated by reference to Appendix A to Definitive Proxy Statement filed March 24, 2015)** 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12 Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015)** 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2018 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: · Volatility in the marketplace which may affect market supply, demand of our products or currency exchange rates; · Increased competition from within the EMS industry or the decision of OEMs to cease or limit outsourcing; · Changes in the reliability and efficiency of our operating facilities or those of third parties; · Risks related to availability of labor; · Increases in certain raw material costs such as copper and oil; · Commodity and energy cost instability; · Risks related to FDA noncompliance; · The loss of a major customer; · General economic, financial and business conditions that could affect our financial condition and results of operations; · Increased or unanticipated costs related to compliance with securities and environmental regulation; · Disruption of global or local information management systems due to natural disaster or cyber-security incident; The factors identified above are believed to be important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. |
Minneapolis, Minnesota April 1, 2019 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2018 AND 2017 (IN THOUSANDS, EXCEPT SHARE DATA) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (IN THOUSANDS) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (IN THOUSANDS) See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) NOTE 1. |
333-00888) 3.2 Bylaws (amended and restated through March 13, 2019)* 10.1 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005)** 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4 Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015)* ** 10.5 Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014)** 10.6 Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014)** 10.7 Form of Employment Agreement with Richard Wasielewski dated March 15, 2014 (incorporated by reference to Form 10-K filed March 11, 2015)** 10.8 Restated Equity Appreciation Rights Plan dated March 11, 2015 (incorporated by reference to Appendix A to Definitive Proxy Statement filed March 24, 2015)** 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12 Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 10-Q filed November 5, 2015)** 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2017 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
(incorporated by reference to Form 8-K filed January 8, 2018) 10.22 Employment Agreement with Constance Beck dated January 8, 2018 (incorporated by reference to Form 8-K filed January 12, 2018) 10.23 Lease Agreement dated February 21, 2018 by and between Manufacturing Assembly Solutions of Monterrey, Inc., a wholly owned Mexican subsidiary of the Company, and OPERADORA STIVA, S.A. DE C.V. (incorporated by reference to Form 8-K filed February 27, 2018) 10.24 Consulting Agreement with Crosscourt Group, LLC dated February 22, 2018 (incorporated by reference to Form 8-K filed February 27, 2018) 10.25 Separation and Release of claims dated October 10, 2018 between Nortech Systems Inc. and Mohammed Mahmood (incorporated by reference to Form 8-K filed October 10, 2018) 10.26 Amendment to Amended and Restated Employment Agreement between Nortech Systems Inc. and Richard Wasielewski dated December 19, 2018 (incorporated by reference to Form 8-K filed December 21, 2018) 10.27 Employment Agreement between Nortech Systems Inc. and Jay D. Miller to serve as Interim President dated effective January 1, 2019 (incorporated by reference to Form 8-K filed December 21, 2018) 10.28 Employment Agreement between Nortech Systems Inc. and Jay D. Miller to serve as President and CEO dated effective February 27, 2019 (incorporated by reference to Form 8-K filed February 20, 2019) 21 Subsidiaries of Nortech Systems Incorporated* 23 Consent of Baker Tilly Virchow Krause, LLP* 31.1 Certification of the Chief Executive Officer and President pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: · Volatility in the marketplace which may affect market supply, demand of our products or currency exchange rates; · Increased competition from within the EMS industry or the decision of OEMs to cease or limit outsourcing; · Changes in the reliability and efficiency of our operating facilities or those of third parties; · Risks related to availability of labor; · Increases in certain raw material costs such as copper and oil; · Commodity and energy cost instability; · Risks related to FDA noncompliance; · The loss of a major customer; · General economic, financial and business conditions that could affect our financial condition and results of operations; · Increased or unanticipated costs related to compliance with securities and environmental regulation; · Disruption of global or local information management systems due to natural disaster or cyber-security incident; The factors identified above are believed to be important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. |
Exhibits and Financial Statements Schedules 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12 Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015)** 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2017 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
333-00888) 3.2 Bylaws (incorporated by reference to Form 8-K filed on March 25, 2016) 10.1 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005)** 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4 Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015)** 10.5 Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014)** 10.6 Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014)** 10.7 Form of Employment Agreement with Richard Wasielewski dated March 15, 2014(incorporated by reference to Form 10-K filed March 11, 2015)** 10.8 Restated Equity Appreciation Rights Plan dated March 11, 2015 (incorporated by reference to Appendix A to Definitive Proxy Statement filed March 24, 2015)** 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12 Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 10-Q filed November 5, 2015)** 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2017 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
Minneapolis, Minnesota March 8, 2017 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME DECEMBER 31, 2016 AND 2015 See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2016 AND 2015 See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 2016 AND 2015 See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 See accompanying notes to consolidated financial statements NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 NOTE 1 - Nature of Business and Summary of Significant Accounting Policies Nature of Business Our manufacturing services include complete medical devices, printed circuit board assemblies, wire and cable assemblies, and complex higher level electromechanical assemblies for a wide range of medical, industrial and defense and aerospace industries. |
A summary of long-term debt balances at December 31, 2016 and 2015 is as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 Future maturity requirements for long-term debt outstanding as of December 31, 2016, are as follows: NOTE 4 - Income Taxes The income tax expense (benefit) for the years ended December 31, 2016 and 2015 consists of the following: The statutory rate reconciliation for the years ended December 31, 2016 and 2015 is as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015 Income (loss) from operations before income taxes was derived from the following sources: Deferred tax assets (liabilities) at December 31, 2016 and 2015, consist of the following: We established a valuation allowance because we determined that it was more likely than not that a portion of the net operating loss carryforwards and research and development credit would not be utilized. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015)* 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014 (incorporated by reference to Form 10-K filed March 11, 2015) 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013* (incorporated by reference to Form 10-K filed March 11, 2015) 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12**Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015) 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2017 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015) 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014(incorporated by reference to Form 10-K filed March 11, 2015) 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013(incorporated by reference to Form 10-K filed March 11, 2015) 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12** Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015) 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd. (incorporated by reference to Form 10-K filed March 21, 2016) 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 10.15 Ninth Amendment dated September 29, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 10-Q filed November 2, 2016) 10.16 Tenth Amendment dated January 12, 2017 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association. |
All other property and equipment are depreciated by the NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2015 AND 2014 NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) straight-line method over their estimated useful lives, as follows: Property and equipment at December 31, 2015 and 2014: Other Intangible Assets Finite Life Intangible assets at December 31, 2015 and 2014 are as follows: Amortization expense related to these assets was as follows: Estimated future annual amortization expense associated with finite lived intangible assets is expected to be as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2015 AND 2014 NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment of Goodwill and Other Intangible Assets In accordance with ASC 350, Goodwill and Other Intangible Assets, goodwill is not amortized but is required to be reviewed for impairment at least annually or when events or circumstances indicate that carrying value may exceed fair value. |
NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2015 AND 2014 NOTE 3 FINANCING AGREEMENTS (Continued) A summary of long-term debt balances at December 31, 2015 and 2014 is as follows: Future maturity requirements for long-term debt outstanding as of December 31, 2015, are as follows: NOTE 4 INCOME TAXES The income tax (benefit) expense for the years ended December 31, 2015 and 2014 consists of the following: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2015 AND 2014 NOTE 4 INCOME TAXES (Continued) The statutory rate reconciliation for the years ended December 31, 2015 and 2014 is as follows: Income (loss) from operations before income taxes was derived from the following sources: Deferred tax assets (liabilities) at December 31, 2015 and 2014, consist of the following: We established a valuation allowance because we determined that it was more likely than not that a portion of the NOL and R&D credit would not be utilized. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers (incorporated by reference to Form 10-K filed March 11, 2015)* 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014 (incorporated by reference to Form 10-K filed March 11, 2015) 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013* (incorporated by reference to Form 10-K filed March 11, 2015) 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12** Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015) 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd* 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 23.1 Consent of RSM US LLP. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers(incorporated by reference to Form 10-K filed March 11, 2015) 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014(incorporated by reference to Form 10-K filed March 11, 2015) 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013(incorporated by reference to Form 10-K filed March 11, 2015) 10.9 Lease Agreement dated April 1, 2015 between the Company and LSOP 3 MN 3, LLC (incorporated by reference to Form 8-K filed April 9, 2015) 10.10 Seventh Amendment dated May 7, 2015 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 13, 2015) 10.11 Asset Purchase Agreement dated June 17, 2015 between the Company and Devicix, LLC (incorporated by reference to Form 10-Q filed August 5, 2015) 10.12** Restated Amendment to Employment Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 5, 2015) 10.13 Lease Agreement dated November 12, 2015 between the Company and Suzhou Industrial Park Biotech Development Co., Ltd* 10.14 Eighth Amendment dated February 22, 2016 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed February 24, 2016) 23.1 Consent of RSM US LLP* 31.1 Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
A summary of long-term debt balances at December 31, 2014 and 2013 is as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2014 AND 2013 NOTE 3 FINANCING AGREEMENTS (Continued) Future maturity requirements for long-term debt outstanding as of December 31, 2014, are as follows: NOTE 4 INCOME TAXES The income tax expense for the years ended December 31, 2014 and 2013 consists of the following: The statutory rate reconciliation for the years ended December 31, 2014 and 2013 is as follows: Income from operations before income taxes was derived from the following sources: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2014 AND 2013 NOTE 4 INCOME TAXES (Continued) Deferred tax assets (liabilities) at December 31, 2014 and 2013, consist of the following: The net deferred taxes summarized above have been classified on the accompanying consolidated balance sheets as follows: We have determined that it is more likely than not that our deferred tax assets will be realized, principally through anticipated taxable income in future tax years. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers* 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014* 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013* 23.1 Consent of McGladrey LLP. |
333-00888) 10.1** 2005 Incentive Compensation Plan (incorporated by reference to Exhibit A to Definitive Proxy Statement filed March 31, 2005) 10.2 Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association dated May 27, 2010 (incorporated by reference to Form 10-Q filed August 12, 2010) 10.3 Sixth Amendment dated March 16, 2014 to Third Amended and Restated Credit and Security Agreement between the Company and Wells Fargo Bank, National Association (incorporated by reference to Form 8-K filed May 21, 2014) 10.4** Form of Change of Control Agreement for Named Executive Officers* 10.5** Amendment dated November 5, 2014 to Employment Agreement with Michael Degen (incorporated by reference to Form 8-K filed November 7, 2014) 10.6** Consulting Agreement with Michael Degen dated November 5, 2014 (incorporated by reference to Form 8-K filed November 7, 2014) 10.7** Form of Employment Agreement with Richard Wasielewski dated March 15, 2014* 10.8** Restated Equity Appreciation Rights Plan dated March 6, 2013* 23.1 Consent of McGladrey LLP. |
A summary of long-term debt balances at December 31, 2013 and 2012 is as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2013 AND 2012 NOTE 3 FINANCING AGREEMENTS (Continued) Future maturity requirements for long-term debt outstanding as of December 31, 2013, are as follows: NOTE 4 INCOME TAXES The income tax expense for the years ended December 31, 2013 and 2012 consists of the following: The statutory rate reconciliation for the years ended December 31, 2013 and 2012 is as follows: Income from operations before income taxes was derived from the following sources: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED STATEMENTS (Continued) DECEMBER 31, 2013 AND 2012 NOTE 4 INCOME TAXES (Continued) Deferred tax assets (liabilities) at December 31, 2013 and 2012, consist of the following: The net deferred taxes summarized above have been classified on the accompanying consolidated balance sheets as follows: We have determined that it is more likely than not that our deferred tax assets will be realized, principally through anticipated taxable income in future tax years. |
The Mankato operations results are not included in the consolidated financial statements since the date of acquisition was after December 31, 2010; however the table below reflects our unaudited pro forma combined results of operations as if the acquisition had taken place as of January 1, 2010: Combined results for the two companies for the year ended December 31, 2010 were adjusted for the following in order to create the unaudited proforma results in the table above: •Additional rent expense of approximately $178,000 for the lease of the facility from Winland, •Additional depreciation expense of approximately $158,000 resulting from the adjustment of property and equipment to their fair values, NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) DECEMBER 31, 2010 AND 2009 NOTE 13 SUBSEQUENT EVENT (UNAUDITED) (Continued) •Elimination of inventory obsolescence charges of approximately $297,000 as we did not acquire Winland's inventory as part of the acquisition, •Tax benefit of approximately $489,000 using an effective tax rate of 38 percent, •The impact of these adjustments on outstanding shares of 2,742,389 was to decrease proforma loss per share by $0.29. |
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY TABLE OF CONTENTS DECEMBER 31, 2003, 2002, and 2001 INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2003 AND 2002 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 2003, 2002, AND 2001 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002, AND 2001 NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003, 2002, AND 2001 INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION ITEM 9. |
March 29, 2003 /s/ MICHAEL J. DEGEN Michael J. Degen President, Chief Executive Officer and Director March 29, 2003 /s/ MYRON KUNIN Myron Kunin, Chairman and Director March 29, 2003 /s/ RICHARD W. PERKINS Richard W. Perkins, Director March 29, 2003 /s/ C. TRENT RILEY C. Trent Riley, Director March 29, 2003 /s/ KEN LARSON Ken Larson, Director Sarbanes-Oxley Section 302 Certification I, Michael J. Degen, certify that: 1.I have reviewed this annual report on Form 10-K of Nortech Systems, Inc. and Subsidiary; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4.The registrant's other certifying officers 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 subsidiary, is made known to us by others within those entities, particularly during the period in which this annual 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 annual report (the "Evaluation Date"); and c)presented in this annual 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 officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee or 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 officers and I have indicated in this annual 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: March 29, 2003 /s/ MICHAEL J. DEGEN Michael J. Degen President and Chief Executive Officer Sarbanes-Oxley Section 302 Certification I, Garry M. Anderly, certify that: 1.I have reviewed this annual report on Form 10-K of Nortech Systems, Inc. and Subsidiary; 2.Based on my knowledge, this annual 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 annual report; 3.Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4.The registrant's other certifying officers 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 subsidiary, is made known to us by others within those entities, particularly during the period in which this annual 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 annual report (the "Evaluation Date"); and c)presented in this annual 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 officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee or 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 officers and I have indicated in this annual 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. |
The future minimum lease payments are as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 NOTE 6 INCOME TAXES The provision for income taxes for each of the three years in the period ended December 31, 1998, consists of the following: Net deferred tax assets at December 31, 1998 and 1997, consist of the following: The statutory rate reconciliation for each of the three years in the period ended December 31, 1998 is as follows: NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 NOTE 6 INCOME TAXES (CONTINUED) The Company has available for Federal income tax purposes, operating loss carryforwards, unused investment and other tax credits, and unused research and development credits which may provide future tax benefits, expiring as follows: The Company utilized operating loss carryforwards of $506,000 $1,341,000 and $642,000 for the years ended December 31, 1998, 1997, and 1996, respectively, to offset federal taxable income. |
NOTE 8 INCOME TAXES The provision for income taxes for each of the three years in the period ended December 31, 1996, consists of the following: 1996 1995 1993 ---------- --------- ------------ Current Taxes - Federal $ 10,000 $ 37,000 $ 17,183 Current Taxes - State 72,000 63,000 17,023 Deferred Taxes 110,000 (100,000) (280,000) ---------- --------- ------------ Total Expense (Benefit) $ 192,000 $ 0 $ (245,794) ---------- --------- ------------ ---------- --------- ------------ Deferred tax assets at December 31, 1996 and 1995, consist of the following: 1996 1995 ------------ ------------ Net Operating Loss (NOL) Carryforwards $ 1,415,000 $ 1,635,000 Tax Credit Carryforwards 235,000 295,000 Other 40,000 30,000 Valuation Allowance (240,000) (400,000) ------------ ------------ Total $ 1,450,000 $ 1,560,000 ------------ ------------ ------------ ------------ NOTE 8 INCOME TAXES (CONTINUED) The statutory rate reconciliation for each of the three years in the period ended December 31, is as follows: 1996 1995 1994 ----------- ------------ ----------- Statutory Tax Provision $ 217,000 $ 453,000 $ 319,000 State Income Taxes 78,000 80,000 50,000 Additional NOL Carryforwards 0 (851,000) 0 Increase (Reduction) in Deferred Tax Valuation Allowance (Net of Expired Tax Credit Carryforwards) (100,000) 300,000 (600,000) Other (3,000) 18,000 (14,794) ----------- ----------- ----------- Income Tax Provision (Benefit) Expense $ 192,000 $ 0 $ (245,794) ----------- ----------- ----------- ----------- ----------- ----------- The Company has available for Federal income tax purposes, operating loss carryforwards, unused investment credits, and unused research and development credits which may provide future tax benefits, expiring as follows: Investment Research and Operating Loss Tax Credit Development Tax Year of Expiration Carryforward Carryforward Credit Carryforward ------------------ -------------- ------------ ------------------- 1997 $ 0 $ 4,064 $ 43,051 1998 0 50,888 97,643 1999 3,035,800 39,965 0 2001 767,300 0 0 2002 253,200 0 0 2003 109,700 0 0 -------------- ------------- ------------- Totals $ 4,166,000 $ 94,917 $ 140,694 -------------- ------------- ------------- -------------- ------------- ------------- During 1995 the Company identified an additional $2,503,778 of net operating loss carryforwards related to final tax regulations. |
Following is a summary of the Plan's transactions: Option Price Shares (Per Share) --------- ------------ Balance as of December 31, 1992 22,500 $1.75 Granted January 21, 1993 15,000 $1.625 --------- Balance as of December 31, 1993 37,500 $1.625 - $1.75 Granted January 24, 1994 10,000 $3.625 --------- Balance as of December 31, 1994 47,500 $1.625 - $3.625 Granted December 1, 1995 95,000 $5.25 Exercised (5,000) $1.75 --------- Balance as of December 31, 1995 137,500 $1.625 - $5.25 Granted December 1, 1996 - - Exercised - - --------- Balance as of December 31, 1996 137,500 $1.625 - $5.25 --------- --------- NOTE 11 EMPLOYEE STOCK OPTION AND AWARD PLANS (CONTINUED) A summary of the status of fixed options outstanding at December 31, 1996, is as follows: Outstanding Exercisable Average Remaining Exercise Price Options Options Contractural Life -------------- ----------- ----------- ----------------- 1.625 15,000 15,000 6 Years 1.75 17,500 17,500 5 Years 3.625 10,000 10,000 7 Years 5.25 95,000 19,000 9 Years During 1993, the Company adopted a gain sharing plan. |
The following table shows the adjustments made between the GAAP and NON-GAAP measurements: GAAP Measurement Calculation Return on Average Assets Net Income / Average Assets Return on Average Equity Net Income / Average Equity Book Value Total Shareholders’ Equity / Shares Outstanding Common Equity Ratio Total Shareholders’ Equity / Total Assets Non- GAAP Measurement Calculation Return on Average Tangible Assets Net Income plus Intangible Amortization (net of tax) / Average Assets less Average Intangible Assets Return on Average Tangible Equity Net Income plus Intangible Amortization (net of tax) / Average Equity less Average Intangible Assets Tangible Book Value Total Shareholders’ Equity less Intangible Assets / Shares outstanding Tangible Common Equity Ratio Total Shareholders’ Equity less Intangible Assets / Total Assets less Intangible Assets Results of Operations: Management’s Overview The following discussion and analysis is intended to assist the reader in reviewing the financial information presented and should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein. |
Signature Title Date /s/ G. Warren Elliott Chairman of the Board and Director March 10, 2014 G. Warren Elliott /s/ William E. Snell, Jr. President and Chief Executive Officer and Director March 10, 2014 William E. Snell, Jr. (Principal Executive Officer) /s/ Mark R. Hollar Treasurer and Chief Financial Officer (Principal March 10, 2014 Mark R. Hollar Financial and Accounting Officer) /s/ Charles S. Bender II Director March 10, 2014 Charles S. Bender II /s/ Martin R. Brown Director March 10, 2014 Martin R. Brown /s/ Daniel J. Fisher Director March 10, 2014 Daniel J. Fisher /s/ Donald A. Fry Director March 10, 2014 Donald A. Fry /s/ Allan E. Jennings, Jr. Director March 10, 2014 Allan E. Jennings, Jr. /s/ Richard E. Jordan, III Director March 10, 2014 Richard E. Jordan, III /s/ Stanley J. Kerlin Director March 10, 2014 Stanley J. Kerlin /s/ Donald H. Mowery Director March 10, 2014 Donald H. Mowery /s/ Stephen E. Patterson Director March 10, 2014 Stephen E. Patterson /s/ Martha B. Walker Director March 10, 2014 Martha B. Walker Exhibit Index for the Year Ended December 31, 2013 Item Description 3.1 Articles of Incorporation of the Corporation. |
The following table shows the adjustments made between the GAAP and NON-GAAP measurements: GAAP Measurement Calculation Return on Average Assets Net Income / Average Assets Return on Average Equity Net Income / Average Equity Book Value Total Shareholders’ Equity / Shares Outstanding Common Equity Ratio Total Shareholders’ Equity / Total Assets Non- GAAP Measurement Calculation Return on Average Tangible Assets Net Income plus Intangible Amortization (net of tax) / Average Assets less Average Intangible Assets Return on Average Tangible Equity Net Income plus Intangible Amortization (net of tax) / Average Equity less Average Intangible Assets Tangible Book Value Total Shareholders’ Equity less Intangible Assets / Shares outstanding Tangible Common Equity Ratio Total Shareholders’ Equity less Intangible Assets / Total Assets less Intangible Assets Results of Operations: Management’s Overview The following discussion and analysis is intended to assist the reader in reviewing the financial information presented and should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein. |
The following table shows the adjustments made between the GAAP and NON-GAAP measurements: GAAP Measurement Calculation Return on Average Assets Net Income / Average Assets Return on Average Equity Net Income / Average Equity Book Value Total Shareholders’ Equity / Shares Outstanding Common Equity Ratio Total Shareholders’ Equity / Total Assets Non-GAAP Measurement Calculation Return on Average Tangible Assets Net Income plus Intangible Amortization (net of tax) / Average Assets less Average Intangible Assets Return on Average Tangible Equity Net Income plus Intangible Amortization (net of tax) / Average Equity less Average Intangible Assets Tangible Book Value Total Shareholders’ Equity less Intangible Assets / Shares outstanding Tangible Common Equity Ratio Total Shareholders’ Equity less Intangible Assets / Total Assets less Intangible Assets Results of Operations: Management’s Overview The following discussion and analysis is intended to assist the reader in reviewing the financial information presented and should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein. |
Fair Value of Derivative Instruments in the Consolidated Balance Sheets were as follows as of December 31, 2010: The Effect of Derivative Instruments on the Statement of Income for the Year Ended December 31, 2010 follows: Derivatives in ASC Topic 815 Cash Flow Hedging Relationships (Dollars in thousands) Date / Type Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain or (Loss) Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) December 31, 2010 Interest rate contracts $ (322) Interest Expense $ (718) Other income (expense) $ - December 31, 2009 Interest rate contracts $ Interest Expense $ (716 ) Other income (expense) $ - Note 15. |
Signature Title Date /s/ Charles M. Sioberg Charles M. Sioberg Chairman of the Board and Director March 12, 2008 /s/ William E. Snell, Jr. William E. Snell, Jr. President and Chief Executive Officer and Director March 12, 2008 /s/ Mark R. Hollar Mark R. Hollar Treasurer and Chief Financial Officer (Principal Financial And Accounting Officer) March 12, 2008 /s/ Charles S. Bender II Charles S. Bender II Director March 12, 2008 /s/ Martin R. Brown Martin R. Brown Director March 12, 2008 /s/ G. Warren Elliot G. Warren Elliot Director March 12, 2008 /s/ Donald A. Fry Donald A. Fry Director March 12, 2008 /s/ Allan E. Jennings, Jr. Allan E. Jennings, Jr. Director March 12, 2008 /s/ Stanley J. Kerlin Stanley J. Kerlin Director March 12, 2008 /s/ H. Huber McCleary H. Huber McCleary Director March 12, 2008 /s/ Jeryl C. Miller Jeryl C. Miller Director March 12, 2008 /s/ Stephen E. Patterson Stephen E. Patterson Director March 12, 2008 /s/ Kurt E. Suter Kurt E. Suter Director March 12, 2008 /s/ Martha B. Walker Martha B. Walker Director March 12, 2008 Exhibit Index for the Year Ended December 31, 2007 Item Description 3.1 Articles of Incorporation of the Corporation. |
Signature Title Date /s/ Charles M. Sioberg Charles M. Sioberg Chairman of the Board and Director March 10, 2005 /s/ William E. Snell, Jr. William E. Snell, Jr. President and Chief Executive Officer and Director March 10, 2005 /s/ Mark R. Hollar Mark R. Hollar Treasurer and Chief Financial Officer (Principal Financial And Accounting Officer) March 10, 2005 /s/ Charles S. Bender II Charles S. Bender II Director March 10, 2005 /s/ G. Warren Elliott G. Warren Elliott Director March 10, 2005 /s/ Donald A. Fry Donald A. Fry Director March 10, 2005 /s/ Dennis W. Good, Jr. Dennis W. Good, Jr. Director March 10, 2005 /s/ Allan E. Jennings, Jr. Allan E. Jennings, Jr. Director March 10, 2005 /s/ H. Huber McCleary H. Huber McCleary Director March 10, 2005 /s/ Jeryl C. Miller Jeryl C. Miller Director March 10, 2005 Stephen E. Patterson Director March 10, 2005 /s/ Kurt E. Suter Kurt E. Suter Director March 10, 2005 Martha B. Walker Director March 10, 2005 Exhibit Index for the Year Ended December 31, 2004 DOCUMENTS INCORPORATED BY REFERENCE FRANKLIN FINANCIAL SERVICES CORPORATION FORM 10-K INDEX Part I Item 1. Business Item 3. |
Signature Title Date Charles M. Sioberg Chairman of the Board and Director March 23, 2004 /s/ William E. Snell, Jr. William E. Snell, Jr. President and Chief Executive Officer and Director March 23, 2004 /s/ Elaine G. Meyers Elaine G. Meyers Treasurer and Chief Financial Officer (Principal Financial And Accounting Officer) March 23, 2004 /s/ Charles S. Bender II Charles S. Bender II Director March 23, 2004 /s/ G. Warren Elliott G. Warren Elliott Director March 23, 2004 /s/ Donald A. Fry Donald A. Fry Director March 23, 2004 Dennis W. Good, Jr. Director March 23, 2004 /s/ Allan E. Jennings, Jr. Allan E. Jennings, Jr. Director March 23, 2004 /s/ H. Huber McCleary H. Huber McCleary Director March 23, 2004 /s/ Jeryl C. Miller Jeryl C. Miller Director March 23, 2004 Stephen E. Patterson Director March 23, 2004 /s/ Kurt E. Suter Kurt E. Suter Director March 23, 2004 /s/ Martha B. Walker Martha B. Walker Director March 23, 2004 Exhibit Index for the Year Ended December 31, 2003 FRANKLIN FINANCIAL SERVICES CORPORATION FORM 10-K INDEX Part I Item 1. Business Item 2. |
Officer and Director /s/ Charles S. Bender II ______________________________ Executive Vice March 4, 1999 Charles S. Bender II President and Director /s/ Elaine G. Meyers ______________________________ Treasurer and Chief March 4, 1999 Elaine G. Meyers Financial Officer (Principal Financial and Accounting Officer) /s/ G. Warren Elliott ______________________________ Director March 4, 1999 G. Warren Elliott /s/ Omer L. Eshleman ______________________________ Director March 4, 1999 Omer L. Eshleman /s/ Doanld A. Fry ______________________________ Director March 4, 1999 Donald A. Fry /s/ Dennis W. Good, Jr. ______________________________ Director March 4, 1999 Dennis W. Good, Jr. /s/ H. Huber McCleary ______________________________ Director March 4, 1999 H. Huber McCleary /s/ Jeryl C. Miller ______________________________ Director March 4, 1999 Jeryl C. Miller /s/ Stephen E. Patterson ______________________________ Director March 4, 1999 Stephen E. Patterson /s/ Charles M. Sioberg ______________________________ Director March 4, 1999 Charles M. Sioberg /s/ Martha B. Walker ______________________________ Director March 4, 1999 Martha B. Walker Exhibit Index for the Year Ended December 31, 1998 Item Description 3.1 Articles of Incorporation of the Corporation. |
Signature Title Date /s/ Jay L. Benedict, Jr. Chairman of the Board March 7, 1996 Jay L. Benedict, Jr. and Director /s/ Robert G. Zullinger Vice Chairman of the Board March 7, 1996 Robert G. Zullinger and Director /s/ Charles S. Bender II Executive Vice March 7, 1996 Charles S. Bender II President and Director /s/ Frank S. Elliott Sr. Vice President March 7, 1996 Frank S. Elliott /s/ Elaine G. Meyers Treasurer and Chief March 7, 1996 Elaine G. Meyers Financial Officer /s/ Charles R. Diller Director March 7, 1996 Charles R. Diller /s/ G. Warren Elliott Director March 7, 1996 G. Warren Elliott /s/ John M. Hull III Director March 7, 1996 John M. Hull III Form 10-K December 31, 1995 Signature Page (continued) /s/ H. Huber McCLeary Director March 7, 1996 H. Huber McCleary /s/ Jeryl C. Miller Director March 7, 1996 Jeryl C. Miller /s/ Charles M. Sioberg Director March 7, 1996 Charles M. Sioberg /s/ William E. Snell, Jr. President, William E. Snell, Jr. Chief Executive Officer March 7, 1996 and Director /s/ Martha B. Walker Director March 7, 1996 Martha B. Walker /s/ Dennis W. Good, Jr. Director March 7, 1996 Dennis W. Good, Jr. /s/ Omer L. Eshleman Director March 7, 1996 Omer L. Eshleman Exhibit Index for the Year Ended December 31, 1995 Item Description 3.1 Articles of Incorporation of the Corporation. |
Under the final rules, which went into effect on January 1, 2020, depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9%, off-balance-sheet exposures of 25% or less of total consolidated assets and trading assets plus trading liabilities of 5% or less of total consolidated assets, are deemed “qualifying community banking organizations” and are eligible to opt into the “community bank leverage ratio framework.” A qualifying community banking organizati on that elects to use the community bank leverage ratio framework and that maintains a leverage ratio of greater than 9% is considered to have satisfied the generally applicable risk-based and leverage capital requirements under the Basel III capital rules and, if applicable, is considered to have met the “well capitalized” ratio requirements for purposes of its primary federal regulator’s prompt corrective action rules, discussed above. |
Selected Financial Data (Dollars in Thousands, Except Per Share Data) Interest Income $ 106,197 $ 112,836 $ 99,395 $ 86,930 $ 81,154 Net Interest Income 101,326 103,343 92,504 82,982 77,965 Provision for Credit Losses 9,645 2,027 2,921 2,215 Noninterest Income (1) 111,165 53,053 51,565 51,746 53,681 Noninterest Expense 149,962 113,609 111,503 109,447 113,213 Income Attributable to Noncontrolling Interests (2) (11,078) - - - - Net Income Attributable to CCBG (3) 31,576 30,807 26,224 10,863 11,746 Per Common Share: Basic Net Income $ 1.88 $ 1.84 $ 1.54 $ 0.64 $ 0.69 Diluted Net Income 1.88 1.83 1.54 0.64 0.69 Cash Dividends Declared 0.57 0.48 0.32 0.24 0.17 Diluted Book Value 19.05 19.40 18.00 16.65 16.23 Diluted Tangible Book Value (4) 13.76 14.37 12.96 11.68 11.23 Performance Ratios: Return on Average Assets 0.93 % 1.03 % 0.92 % 0.39 % 0.43 % Return on Average Equity 9.36 9.72 8.89 3.83 4.22 Net Interest Margin (FTE) 3.30 3.85 3.64 3.37 3.25 Noninterest Income as % of Operating Revenues 52.32 33.92 35.79 38.41 40.78 Efficiency Ratio 70.43 72.40 77.05 80.50 85.34 Asset Quality: Allowance for Credit Losses ("ACL") $ 23,816 $ 13,905 $ 14,210 $ 13,307 $ 13,431 ACL to Loans Held for Investment ("HFI") 1.19 % 0.75 % 0.80 % 0.80 % 0.86 % Nonperforming Assets ("NPAs") 6,679 5,425 9,101 11,100 19,171 NPAs to Total Assets 0.18 0.18 0.31 0.38 0.67 NPAs to Loans HFI plus OREO 0.33 0.29 0.51 0.67 1.21 ACL to Non-Performing Loans 405.66 310.99 206.79 185.87 157.40 Net Charge-Offs to Average Loans HFI 0.12 0.13 0.12 0.14 0.09 Capital Ratios: Tier 1 Capital 16.19 % 17.16 % 16.36 % 16.33 % 15.51 % Total Capital 17.30 17.90 17.13 17.10 16.28 Common Equity Tier 1 Capital 13.71 14.47 13.58 13.42 12.61 Tangible Common Equity (4) 6.25 8.06 7.58 7.09 6.90 Leverage 9.33 11.25 10.89 10.47 10.23 Equity to Assets 8.45 10.59 10.23 9.80 9.67 Dividend Pay-Out 30.32 26.23 20.78 37.50 24.64 Averages for the Year: Loans Held for Investment $ 1,957,576 $ 1,811,738 $ 1,711,635 $ 1,610,127 $ 1,530,260 Earning Assets 3,083,675 2,697,098 2,561,884 2,502,231 2,432,392 Total Assets 3,391,071 2,987,056 2,857,148 2,816,096 2,752,309 Deposits 2,844,347 2,537,489 2,422,973 2,371,871 2,282,785 Shareowners’ Equity 337,313 317,072 294,864 283,404 278,335 Year-End Balances: Loans Held for Investment $ 2,006,427 $ 1,835,929 $ 1,774,225 $ 1,653,492 $ 1,561,289 Earning Assets 3,475,904 2,806,913 2,658,539 2,582,922 2,520,053 Total Assets 3,798,071 3,088,953 2,959,183 2,898,794 2,845,197 Deposits 3,217,560 2,645,454 2,531,856 2,469,877 2,412,286 Shareowners’ Equity 320,837 327,016 302,587 284,210 275,168 Other Data: Basic Average Shares Outstanding 16,784,711 16,769,507 17,029,420 16,951,663 16,988,747 Diluted Average Shares Outstanding 16,821,950 16,827,413 17,072,329 17,012,637 17,061,186 Shareowners of Record (5) 1,201 1,243 1,312 1,389 1,489 Banking Locations (5) Full-Time Equivalent Associates (5)(6) (1) Includes $2.5 million gain from sale of trust preferred securities in 2016. |
Non-GAAP Reconciliation - Selected Financial Data (Dollars in Thousands, except per share data) Shareowners' Equity (GAAP) $ 320,837 $ 327,016 $ 302,587 $ 284,210 $ 275,168 Less: Goodwill (GAAP) 89,095 84,811 84,811 84,811 84,811 Tangible Shareowners' Equity (non-GAAP) A 231,742 242,205 217,776 199,399 190,357 Total Assets (GAAP) 3,798,071 3,088,953 2,959,183 2,898,794 2,845,197 Less: Goodwill (GAAP) 89,095 84,811 84,811 84,811 84,811 Tangible Assets (non-GAAP) B $ 3,708,976 $ 3,004,142 $ 2,874,372 $ 2,813,983 $ 2,760,386 Tangible Common Equity Ratio (non-GAAP) A/B 6.25% 8.06% 7.58% 7.09% 6.90% Actual Diluted Shares Outstanding (GAAP) C 16,844,997 16,855,161 16,808,542 17,071,107 16,949,359 Tangible Book Value per Diluted Share (non-GAAP) A/C 13.76 14.37 12.96 11.68 11.23 Non-GAAP Reconciliation - Quarterly Financial Data (Dollars in Thousands, except per share data) Fourth Third Second First Fourth Third Second First Shareowners' Equity (GAAP) $ 320,837 $ 339,425 $ 335,057 $ 328,507 $ 327,016 $ 321,562 $ 314,595 $ 308,986 Less: Goodwill (GAAP) 89,095 89,095 89,095 89,275 84,811 84,811 84,811 84,811 Tangible Shareowners' Equity (non-GAAP) A 231,742 250,330 245,962 239,232 242,205 236,751 229,784 224,175 Total Assets (GAAP) 3,798,071 3,587,041 3,499,524 3,086,523 3,088,953 2,934,513 3,017,654 3,052,051 Less: Goodwill (GAAP) 89,095 89,095 89,095 89,275 84,811 84,811 84,811 84,811 Tangible Assets (non-GAAP) B $ 3,708,976 $ 3,497,946 $ 3,410,429 $ 2,997,248 $ 3,004,142 $ 2,849,702 $ 2,932,843 $ 2,967,240 Tangible Common Equity Ratio (non-GAAP) A/B 6.25% 7.16% 7.21% 7.98% 8.06% 8.31% 7.83% 7.56% Actual Diluted Shares Outstanding (GAAP) C 16,844,997 16,800,563 16,821,743 16,845,462 16,855,161 16,797,241 16,773,449 16,840,496 Tangible Book Value per Diluted Share (non-GAAP) A/C 13.76 14.90 14.62 14.20 14.37 14.09 13.70 13.31 Item 7. |
Below are summary highlights that impacted our performance for the year: ● Operating revenues (excluding mortgage fees) held firm as unfavorable asset re-pricing was offset by SBA PPP loan fees and higher other fee revenues ● Loan balances buoyed by SBA PPP loan originations which totaled $190 million - Core loan balances (excluding SBA PPP) held firm due to stronger loan production in the fourth quarter ● Reserve build of $6.6 million (loan HFI provision of $9.0 million less net charge-offs of $2.4 million) in response to potential credit losses related to the pandemic - Allowance coverage ratio (excluding SBA PPP) was 1.30% at year-end ● Deposits grew $572 million (period-end) and $307 million (average) and reflected stimulus inflows as well as strong core deposit growth ● Acquired 51% ownership in Brand Mortgage, LLC on March 1, 2020 (renamed CCHL) - contributed $0.52 per share In 2020, despite pressure from the economic effects of the COVID-19 pandemic and a 150 basis point emergency Federal Open Market Committee rate reduction in March, our earnings held firm and came in slightly above 2019. |
RESULTS OF OPERATIONS A condensed earnings summary for the last three years is presented in Table 1 below: Table 1 CONDENSED SUMMARY OF EARNINGS (Dollars in Thousands, Except Per Share Data) Interest Income $ 106,197 $ 112,836 $ 99,395 Taxable Equivalent Adjustments Total Interest Income (FTE) 106,627 113,362 100,049 Interest Expense 4,871 9,493 6,891 Net Interest Income (FTE) 101,756 103,869 93,158 Provision for Credit Losses 9,645 2,027 2,921 Taxable Equivalent Adjustments Net Interest Income After Provision for Credit Losses 91,681 101,316 89,583 Noninterest Income 111,165 53,053 51,565 Noninterest Expense 149,962 113,609 111,503 Income Before Income Taxes 52,884 40,760 29,645 Income Tax Expense 10,230 9,953 3,421 Pre-Tax Income Attributable to Noncontrolling Interests (11,078) - - Net Income Attributable to Common Shareowners $ 31,576 $ 30,807 $ 26,224 Basic Net Income Per Share $ 1.88 $ 1.84 $ 1.54 Diluted Net Income Per Share $ 1.88 $ 1.83 $ 1.54 Net Interest Income Net interest income represents our single largest source of earnings and is equal to interest income and fees generated by earning assets, less interest expense paid on interest bearing liabilities. |
Table 2 AVERAGE BALANCES AND INTEREST RATES (Taxable Equivalent Basis - Dollars in Thousands) Average Balance Interest Average Rate Average Balance Interest Average Rate Average Balance Interest Average Rate ASSETS Loans Held for Sale (1)(2) $ 81,125 $ 2,895 3.57 % $ 10,349 $ 4.55 % $ 6,713 $ 5.21 % Loans Held for Investment (1)(2) 1,957,576 92,261 4.71 1,811,738 94,191 5.20 1,711,635 84,200 4.92 Taxable Investment Securities 574,199 10,176 1.77 612,541 13,123 2.14 641,120 12,083 1.88 Tax-Exempt Investment Securities (2) 5,123 2.42 24,471 1.60 67,037 1,006 1.50 Funds Sold 465,652 1,171 0.25 237,999 5,187 2.18 135,379 2,410 1.78 Total Earning Assets 3,083,675 106,627 3.46 % 2,697,098 113,362 4.20 % 2,561,884 100,049 3.91 % Cash & Due From Banks 68,386 52,453 51,222 Allowance for Credit Losses (20,690) (14,622) (13,993) Other Assets 259,700 252,127 258,035 TOTAL ASSETS $ 3,391,071 $ 2,987,056 $ 2,857,148 LIABILITIES NOW Accounts $ 826,280 $ 0.11 % $ 805,134 $ 5,502 0.68 % $ 781,026 $ 3,152 0.40 % Money Market Accounts 235,931 0.09 235,845 0.40 251,175 0.27 Savings Accounts 423,529 0.05 370,430 0.05 351,341 0.05 Time Deposits 104,393 0.18 113,499 0.19 131,860 0.18 Total Interest Bearing Deposits 1,590,133 1,548 0.10 % 1,524,908 6,840 0.45 % 1,515,402 4,243 0.29 % Short-Term Borrowings 69,119 1,690 2.44 9,275 1.19 10,992 0.99 Subordinated Notes Payable 52,887 1,472 2.74 52,887 2,287 4.26 52,887 2,167 4.04 Other Long-Term Borrowings 5,304 3.03 7,393 3.48 12,387 3.00 Total Interest Bearing Liabilities 1,717,443 4,871 0.28 % 1,594,463 9,493 0.60 % 1,591,668 6,891 0.45 % Noninterest Bearing Deposits 1,254,214 1,012,581 907,571 Other Liabilities 72,400 62,940 63,045 TOTAL LIABILITIES 3,044,057 2,669,984 2,562,284 Temporary Equity 9,701 - - TOTAL SHAREOWNERS’ EQUITY 337,313 317,072 294,864 TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREOWNERS' EQUITY $ 3,391,071 $ 2,987,056 $ 2,857,148 Interest Rate Spread 3.18 % 3.61 % 3.46 % Net Interest Income $ 101,756 $ 103,869 $ 93,158 Net Interest Margin (3) 3.30 % 3.85 % 3.64 % (1) Average balances include net loan fees, discounts and premiums, and nonaccrual loans. |
Table 3 RATE/VOLUME ANALYSIS (1) 2020 vs. 2019 2019 vs. 2018 (Taxable Equivalent Basis - Dollars in Thousands) Increase (Decrease) Due to Change In Increase (Decrease) Due to Change In Total Calendar (3) Volume Rate Total Volume Rate Earnings Assets: Loans Held for Sale (2) $ 2,452 $ $ 3,222 $ (771) $ $ $ (69) Loans Held for Investment (2) $ (1,958) $ $ 7,773 $ (9,989) $ 9,991 $ 4,914 $ 5,077 Taxable (2,947) (857) (2,126) 1,040 (539) 1,579 Tax-Exempt (2) (266) (309) (616) (641) Funds Sold (4,016) 4,948 (8,978) 2,777 1,827 Total (6,735) 14,777 (21,822) 13,313 5,751 7,562 Interest Bearing Liabilities: NOW Accounts (4,572) (4,717) 2,350 2,253 Money Market Accounts (723) - (726) (41) Savings Accounts - - Time Deposits (22) (18) (5) (34) (40) Short-Term Borrowings 1,581 (1) (19) Subordinated Notes Payable (815) - (821) - Other Long-Term Borrowings (96) (73) (24) (114) (150) Total (4,622) (5,429) 2,602 (143) 2,745 Changes in Net Interest Income $ (2,113) $ $ 13,998 $ (16,393) $ 10,711 $ 5,894 $ 4,817 (1) This table shows the change in taxable equivalent net interest income for comparative periods based on either changes in average volume or changes in average rates for interest earning assets and interest bearing liabilities. |
Table 5 LOANS HFI BY CATEGORY (Dollars in Thousands) Commercial, Financial and Agricultural $ 393,930 $ 255,365 $ 233,689 $ 218,166 $ 216,404 Real Estate - Construction 135,831 115,018 89,527 77,966 58,444 Real Estate - Commercial Mortgage 648,393 625,556 602,061 535,707 503,978 Real Estate - Residential 352,543 361,450 342,215 311,906 281,508 Real Estate - Home Equity 205,479 197,360 210,111 229,513 236,512 Consumer 270,250 281,180 296,622 280,234 264,443 Total Loans HFI , Net of Unearned Income $ 2,006,426 $ 1,835,929 $ 1,774,225 $ 1,653,492 $ 1,561,289 Table 6 LOANS HFI MATURITIES Maturity Periods (Dollars in Thousands) One Year or Less Over One Through Five Years (2) Over Five Years Total Commercial, Financial and Agricultural $ 38,500 $ 309,124 $ 46,306 $ 393,930 Real Estate - Construction 75,009 33,506 27,316 135,831 Real Estate - Commercial Mortgage 39,333 89,138 519,922 648,393 Real Estate - Residential 20,153 62,853 269,537 352,543 Real Estate - Home Equity 5,165 26,925 173,389 205,479 Consumer (1) 5,709 217,848 46,693 270,250 Total $ 183,869 $ 739,394 $ 1,083,163 $ 2,006,426 Total Loans HFI with Fixed Rates $ 106,087 $ 562,810 $ 180,969 $ 849,866 Total Loans HFI with Floating or Adjustable Rates 77,782 176,584 902,194 1,156,560 Total $ 183,869 $ 739,394 $ 1,083,163 $ 2,006,426 (1) Demand loans and overdrafts are reported in the category of one year or less. |
Table 7 RISK ELEMENT ASSETS (Dollars in Thousands) Nonaccruing Loans: Commercial, Financial and Agricultural $ $ $ $ $ Real Estate - Construction - Real Estate - Commercial Mortgage 1,412 1,434 2,860 2,370 3,410 Real Estate - Residential 3,130 1,392 2,119 1,938 2,330 Real Estate - Home Equity 1,748 1,774 Consumer Total Nonaccruing Loans (“NALs”) (1) 5,871 4,472 6,872 7,159 8,533 Other Real Estate Owned 2,229 3,941 10,638 Total Nonperforming Assets (“NPAs”) 6,679 5,425 9,101 11,100 19,171 Past Due Loans 30 - 89 Days 4,594 4,871 4,757 4,543 6,438 Past Due Loans 90 Days or More (accruing) - - - - Performing Troubled Debt Restructurings 13,887 16,888 22,084 32,164 38,233 Classified Loans $ 17,631 $ 20,847 $ 22,888 $ 31,002 $ 41,507 Nonaccruing Loans/Loans 0.29 % 0.24 % 0.39 % 0.43 % 0.54 % Nonperforming Assets/Total Assets 0.18 0.18 0.31 0.38 0.67 Nonperforming Assets/Loans Plus OREO 0.33 0.29 0.51 0.67 1.21 Allowance/Nonaccruing Loans 405.66 % 310.99 % 206.79 % 185.87 % 157.40 % (1) Nonaccruing TDRs totaling $0.5 million, $0.7 million, and $2.6 million are included in NALs at December 31, 2020, December 31, 2019 and December 31, 2018, respectively. |
Table 9 ANALYSIS OF ALLOWANCE FOR CREDIT LOSSES (Dollars in Thousands) Balance at Beginning of Year $ 13,905 $ 14,210 $ 13,307 $ 13,431 $ 13,953 Impact of Adopting ASC 326 (CECL) 3,269 - - - - Charge-Offs: Commercial, Financial and Agricultural 1,357 Real Estate - Construction - - - Real Estate - Commercial Real Estate - Residential Real Estate - Home Equity Consumer 2,785 2,878 2,395 2,193 2,127 Overdrafts (1) 2,257 - - - - Total Charge -Offs 6,160 4,971 4,674 4,836 4,686 Recoveries: Commercial, Financial and Agricultural Real Estate - Construction - - Real Estate - Commercial Real Estate - Residential 1,231 Real Estate - Home Equity Consumer 1,219 1,112 1,125 Overdrafts (1) 1,471 - - - - Total Recoveries 3,767 2,639 2,656 2,497 3,345 Net Charge-Offs 2,393 2,332 2,018 2,339 1,341 Provision for Credit Losses - HFI 9,035 2,027 2,921 2,215 Balance at End of Year - HFI (2) $ 23,816 $ 13,905 $ 14,210 $ 13,307 $ 13,431 Net Charge-Offs to Average Loans HFI 0.12 % 0.13 % 0.12 % 0.14 % 0.09 % Allowance for Credit Losses as a Percent of Loans HFI at End of Year 1.19 % 0.75 % 0.80 % 0.80 % 0.86 % Allowance for Credit Losses as a Multiple of Net Charge-Offs 9.95 x 5.96 x 7.04 x 5.69 x 10.02 x (1) Prior to 2020, overdraft losses were reflected in noninterest income (deposit fees) (2) Provision of $0.6 million in 2020 for unfunded loan commitments - balance of $1.6 million recorded in other liabilities at 12/31/20 Table 10 ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES (Dollars in Thousands) ACL Amount Percent of Loans to Total Loans ACL Amount Percent of Loans to Total Loans ACL Amount Percent of Loans to Total Loans ACL Amount Percent of Loans to Total Loans ACL Amount Percent of Loans to Total Loans Commercial, Financial and Agricultural $ 2,204 19.6 % $ 1,675 13.9 % $ 1,434 13.1 % $ 1,191 13.2 % $ 1,198 13.8 % Real Estate: Construction 2,479 6.8 6.2 5.0 4.7 3.7 Commercial 7,029 32.3 3,416 33.9 4,181 33.8 4,346 32.3 4,315 32.1 Residential 5,440 17.6 3,128 20.1 3,400 19.6 3,206 19.1 3,445 18.6 Home Equity 3,111 10.2 2,224 10.7 2,301 11.8 2,506 13.8 2,297 15.0 Consumer 3,553 13.5 3,092 15.2 2,614 16.7 1,936 16.9 2,008 16.8 Total $ 23,816 100.0 % $ 13,905 100.0 % $ 14,210 100.0 % $ 13,307 100.0 % $ 13,431 100.0 % Investment Securities Our average investment portfolio balance decreased $57.7 million, or 9.1%, in 2020 and decreased $71.1 million, or 10.1%, in 2019. |
Table 12 MATURITY DISTRIBUTION OF INVESTMENT SECURITIES Within 1 year 1 - 5 years 5 - 10 years After 10 years Total (Dollars in Thousands) Amount WAY (3) Amount WAY (3) Amount WAY (3) Amount WAY (3) Amount WAY (3) Available for Sale U.S. Government Treasury $ 99,408 2.20 % $ 5,111 1.70 % $ - - % $ - - % $ 104,519 2.19 % U.S. Government Agency 8,802 0.52 195,183 1.49 4,546 1.16 - - 208,531 1.45 States and Political Subdivisions 1,833 3.01 1,799 3.11 - - - - 3,632 3.06 Mortgage-Backed Securities (1) 0.61 4.96 3.46 - - 4.24 Other Securities (2) - - - - - - 7,673 5.24 7,673 5.24 Total $ 110,116 2.09 % $ 202,499 1.52 % $ 4,582 1.18 % $ 7,673 5.24 % $ 324,870 1.78 % Held to Maturity U.S. Government Treasury $ 5,001 1.90 % $ - 1.90 % $ - - % $ - - % $ 5,001 1.90 % Mortgage-Backed Securities (1) 4,754 (0.39) 154,558 1.81 5,626 2.92 - - 164,938 1.79 Total $ 9,755 0.78 % $ 154,558 1.81 % $ 5,626 2.92 % $ - - % $ 169,939 1.79 % Total Investment Securities $ 119,871 1.99 % $ 357,057 1.65 % $ 10,208 2.14 % $ 7,673 5.24 % $ 494,809 1.78 % (1) Based on weighted-average maturity. |
Financial Statements and Supplementary Data Table 16 QUARTERLY FINANCIAL DATA (Unaudited) (Dollars in Thousands, Except Per Share Data) Fourth Third Second First Fourth Third Second First Summary of Operations: Interest Income $ 26,154 $ 26,166 $ 26,512 $ 27,365 $ 28,008 $ 28,441 $ 28,665 $ 27,722 Interest Expense 1,181 1,044 1,054 1,592 1,754 2,244 2,681 2,814 Net Interest Income 24,973 25,122 25,458 25,773 26,254 26,197 25,984 24,908 Provision for Credit Losses 1,342 1,308 2,005 4,990 (162) Net Interest Income After Provision for Credit Losses 23,631 23,814 23,453 20,783 26,416 25,421 25,338 24,141 Noninterest Income 30,523 34,965 30,199 15,478 13,828 13,903 12,770 12,552 Noninterest Expense 41,348 40,342 37,303 30,969 29,142 27,873 28,396 28,198 Income Before Income Taxes 12,806 18,437 16,349 5,292 11,102 11,451 9,712 8,495 Income Tax Expense 2,833 3,165 2,950 1,282 2,537 2,970 2,387 2,059 (Income) Loss Attributable to NCI (1) (2,227) (4,875) (4,253) - - - - Net Income Attributable to CCBG 7,746 10,397 9,146 4,287 8,565 8,481 7,325 6,436 Net Interest Income (Tax Equivalent) $ 25,082 $ 25,233 $ 25,564 $ 25,877 $ 26,378 $ 26,333 $ 26,116 $ 25,042 Per Common Share: Basic Net Income $ 0.46 $ 0.62 $ 0.55 $ 0.25 $ 0.51 $ 0.51 $ 0.44 $ 0.38 Diluted Net Income 0.46 0.62 0.55 0.25 0.51 0.50 0.44 0.38 Cash Dividends Declared 0.15 0.14 0.14 0.14 0.13 0.13 0.11 0.11 Diluted Book Value 19.05 20.20 19.92 19.50 19.40 19.14 18.76 18.35 Diluted Tangible Book Value (2) 13.76 14.90 14.62 14.20 14.37 14.09 13.70 13.31 Market Price: High 26.35 21.71 23.99 30.62 30.95 28.00 25.00 25.87 Low 18.14 17.55 16.16 15.61 25.75 23.70 21.57 21.04 Close 24.58 18.79 20.95 20.12 30.50 27.45 24.85 21.78 Selected Average Balances: Loans Held for Investment $ 1,993,470 $ 2,005,178 $ 1,982,960 $ 1,847,780 $ 1,834,085 $ 1,824,685 $ 1,814,401 $ 1,772,967 Earning Assets 3,337,409 3,223,838 3,016,772 2,751,880 2,694,700 2,670,081 2,719,217 2,704,802 Total Assets 3,652,436 3,539,332 3,329,226 3,038,788 2,982,204 2,959,310 3,010,662 2,996,511 Deposits 3,066,136 2,971,277 2,783,453 2,552,690 2,524,951 2,495,755 2,565,431 2,564,715 Shareowners’ Equity 343,674 340,073 333,515 331,891 326,904 320,273 313,599 307,262 Common Equivalent Average Shares: Basic 16,763 16,771 16,797 16,808 16,750 16,747 16,791 16,791 Diluted 16,817 16,810 16,839 16,842 16,834 16,795 16,818 16,819 Performance Ratios: Return on Average Assets 0.84 % 1.17 % 1.10 % 0.57 % 1.14 % 1.14 % 0.98 % 0.87 % Return on Average Equity 8.97 12.16 11.03 5.20 10.39 10.51 9.37 8.49 Net Interest Margin (FTE) 3.00 3.12 3.41 3.78 3.89 3.92 3.85 3.75 Noninterest Income as % of Operating Revenue 55.00 58.19 54.26 37.52 34.50 34.67 32.95 33.51 Efficiency Ratio 74.36 67.01 66.90 74.89 72.48 69.27 73.02 75.01 Asset Quality: Allowance for Credit Losses $ 23,816 $ 23,137 $ 22,457 $ 21,083 $ 13,905 $ 14,319 $ 14,593 $ 14,120 Allowance for Credit Losses to Loans HFI 1.19 % 1.16 % 1.11 % 1.13 % 0.75 % 0.78 % 0.79 % 0.78 % Nonperforming Assets ("NPA's") 6,679 6,732 8,025 6,337 5,425 5,454 6,632 6,949 NPA’s to Total Assets 0.18 0.19 0.23 0.21 0.18 0.19 0.22 0.23 NPA’s to Loans plus ORE 0.33 0.34 0.40 0.34 0.29 0.30 0.36 0.39 Allowance to Non-Performing Loans HFI 405.66 420.30 322.37 432.61 310.99 290.55 259.55 279.77 Net Charge-Offs to Average Loans HFI 0.09 0.11 0.05 0.23 0.05 0.23 0.04 0.20 Capital Ratios: Tier 1 Capital 16.19 % 16.77 % 16.59 % 16.12 % 17.16 % 16.83 % 16.36 % 16.34 % Total Capital 17.30 17.88 17.60 17.19 17.90 17.59 17.13 17.09 Common Equity Tier 1 Capital 13.71 14.20 14.01 13.55 14.47 14.13 13.67 13.62 Leverage 9.33 9.64 10.12 10.81 11.25 11.09 10.64 10.53 Tangible Common Equity (2) 6.25 7.16 7.21 7.98 8.06 8.31 7.83 7.56 (1) Acquired 51% membership interest in Brand Mortgage Group, LLC re-named Capital City Home Loans on March 1, 2020 - fully consolidated (1) Diluted tangible book value and tangible common equity ratio are non-GAAP financial measures. |
Tallahassee, Florida March 1, 2021 CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION As of December 31, (Dollars in Thousands) ASSETS Cash and Due From Banks $ 67,919 $ 60,087 Federal Funds Sold and Interest Bearing Deposits 860,630 318,336 Total Cash and Cash Equivalents 928,549 378,423 Investment Securities, Available for Sale, at fair value 324,870 403,601 Investment Securities, Held to Maturity (fair value of $ 175,175 and $ 241,429 ) 169,939 239,539 Total Investment Securities 494,809 643,140 Loans Held For Sale, at fair value 114,039 9,509 Loans, Held for Investment 2,006,426 1,835,929 Allowance for Credit Losses (23,816) (13,905) Loans Held for Investment, Net 1,982,610 1,822,024 Premises and Equipment, Net 86,791 84,543 Goodwill 89,095 84,811 Other Real Estate Owned Other Assets 101,370 65,550 Total Assets $ 3,798,071 $ 3,088,953 LIABILITIES Deposits: Noninterest Bearing Deposits $ 1,328,809 $ 1,044,699 Interest Bearing Deposits 1,888,751 1,600,755 Total Deposits 3,217,560 2,645,454 Short-Term Borrowings 79,654 6,404 Subordinated Notes Payable 52,887 52,887 Other Long-Term Borrowings 3,057 6,514 Other Liabilities 102,076 50,678 Total Liabilities 3,455,234 2,761,937 Temporary Equity 22,000 - SHAREOWNERS’ EQUITY Preferred Stock, $ .01 par value; 3,000,000 shares authorized; no shares issued and outstanding - - Common Stock, $ .01 par value; 90,000,000 shares authorized; 16,790,573 and 16,771,544 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively Additional Paid-In Capital 32,283 32,092 Retained Earnings 332,528 322,937 Accumulated Other Comprehensive Loss, Net of Tax (44,142) (28,181) Total Shareowners’ Equity 320,837 327,016 Total Liabilities, Temporary Equity, and Shareowners’ Equity $ 3,798,071 $ 3,088,953 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME For the Years Ended December 31, (Dollars in Thousands, Except Per Share Data) INTEREST INCOME Loans, including Fees $ 94,752 $ 94,215 $ 84,117 Investment Securities: Taxable 10,176 13,122 12,081 Tax Exempt Funds Sold 1,171 5,187 2,410 Total Interest Income 106,197 112,836 99,395 INTEREST EXPENSE Deposits 1,548 6,840 4,243 Short-Term Borrowings 1,690 Subordinated Notes Payable 1,472 2,287 2,167 Other Long-Term Borrowings Total Interest Expense 4,871 9,493 6,891 NET INTEREST INCOME 101,326 103,343 92,504 Provision for Credit Losses 9,645 2,027 2,921 Net Interest Income After Provision for Credit Losses 91,681 101,316 89,583 NONINTEREST INCOME Deposit Fees 17,800 19,472 20,093 Bank Card Fees 13,044 11,994 11,378 Wealth Management Fees 11,035 10,480 8,711 Mortgage Banking Revenues 63,344 5,321 4,735 Other 5,942 5,786 6,648 Total Noninterest Income 111,165 53,053 51,565 NONINTEREST EXPENSE Compensation 96,280 66,352 63,921 Occupancy, Net 22,659 18,436 18,503 Other Real Estate Owned, Net (442) Other 30,919 28,275 29,521 Total Noninterest Expense 149,962 113,609 111,503 INCOME BEFORE INCOME TAXES 52,884 40,760 29,645 Income Tax Expense 10,230 9,953 3,421 NET INCOME $ 42,654 $ 30,807 $ 26,224 Pre-Tax Income Attributable to Noncontrolling Interests (11,078) - - NET INCOME ATTRIBUTABLE TO COMMON SHAREOWNERS $ 31,576 $ 30,807 $ 26,224 BASIC NET INCOME PER SHARE $ 1.88 $ 1.84 $ 1.54 DILUTED NET INCOME PER SHARE $ 1.88 $ 1.83 $ 1.54 Average Basic Common Shares Outstanding 16,785 16,770 17,029 Average Diluted Common Shares Outstanding 16,822 16,827 17,072 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, (Dollars in Thousands) NET INCOME $ 31,576 $ 30,807 $ 26,224 Other comprehensive income (loss), before tax: Investment Securities: Change in net unrealized gain (loss) on securities available for sale 2,437 3,790 (409) Amortization of unrealized losses on securities transferred from available for sale to held to maturity Total Investment Securities 2,473 3,833 (354) Derivative: Change in net unrealized gain (loss) on effective cash flow derivative - - Benefit Plans: Reclassification adjustment for amortization of prior service cost (880) Reclassification adjustment for amortization of net loss 4,391 4,623 5,299 Current year actuarial loss (27,924) (7,642) (815) Total Benefit Plans (24,413) (3,004) 4,683 Other comprehensive (loss) income, before tax: (21,366) 4,329 Deferred tax benefit (expense) related to other comprehensive income 5,405 (195) (1,100) Other comprehensive (loss) income, net of tax (15,961) 3,229 TOTAL COMPREHENSIVE INCOME $ 15,615 $ 31,441 $ 29,453 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY Accumulated Other Comprehensive (Loss) Income, Net of Taxes (Dollars in Thousands, Except Per Share Data) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Total Balance, January 1, 2018 16,988,951 $ $ 36,674 $ 279,410 $ (32,044) $ 284,210 Net Income - - 26,224 - 26,224 Other Comprehensive Loss, Net of Tax - - - 3,229 3,229 Cash Dividends ($ 0.32 per share) - - (5,457) - (5,457) Stock Based Compensation - 1,421 - - 1,421 Stock Compensation Plan Transactions, net 83,061 - - - Repurchase of Common Stock (324,441) (3) (8,027) - - (8,030) Balance, December 31, 2018 16,747,571 31,058 300,177 (28,815) 302,587 Net Income - - - 30,807 - 30,807 Other Comprehensive Income, Net of Tax - - - - Cash Dividends ($ 0.48 per share) - - - (8,047) - (8,047) Stock Based Compensation - - 1,569 - - 1,569 Stock Compensation Plan Transactions, net 100,973 1,270 - - 1,271 Repurchase of Common Stock (77,000) - (1,805) - - (1,805) Balance, December 31, 2019 16,771,544 32,092 322,937 (28,181) 327,016 Impact of Adopting ASC 326 (CECL) - - - (3,095) - (3,095) Net Income - - - 31,576 - 31,576 Reclassification to Temporary Equity (1) - - - (9,323) - (9,323) Other Comprehensive Income, Net of Tax - - - - (15,961) (15,961) Cash Dividends ($ 0.57 per share) - - - (9,567) - (9,567) Stock Based Compensation - - - - Stock Compensation Plan Transactions, net 118,981 1,340 - - 1,341 Repurchase of Common Stock (99,952) (1) (2,041) - - (2,042) Balance, December 31, 2020 16,790,573 $ $ 32,283 $ 332,528 $ (44,142) $ 320,837 (1) Adjustments to redemption value for non-controlling interest in CCHL The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CAPITAL CITY BANK GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, (Dollars in Thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 31,576 $ 30,807 $ 26,224 Adjustments to Reconcile Net Income to Cash From Operating Activities: Provision for Credit Losses 9,645 2,027 2,921 Depreciation 7,230 6,253 6,453 Amortization of Premiums, Discounts, and Fees, net 7,533 5,206 6,698 Originations of Loans Held-for-Sale (606,337) (232,259) (177,742) Proceeds From Sales of Loans Held-for-Sale 565,151 234,940 180,425 Net Gain From Sales of Loans Held-for-Sale (63,344) (5,321) (4,735) Net Additions for Capitalized Mortgage Servicing Rights (2,792) - - Change in Valuation Provision for Mortgage Servicing Rights - - Stock Compensation 1,569 1,421 Net Tax Benefit from Stock Compensation (84) (14) (41) Deferred Income Taxes (53) 1,225 4,837 Net Change in Operating Leases (156) - Net Loss (Gain) on Sales and Write-Downs of Other Real Estate Owned (393) (935) Impairment Loss on Premises (Hurricane Damage) - - (1,213) Proceeds From Insurance Claim for Operating Loss - - Loss on Disposal of Premises and Equipment - Net (Increase) Decrease in Other Assets (38,353) 9,830 7,168 Net Increase (Decrease) in Other Liabilities 40,624 (1,176) (16,942) Net Cash (Used In) Provided By Operating Activities (48,611) 53,689 34,626 CASH FLOWS FROM INVESTING ACTIVITIES Securities Held to Maturity: Purchases (32,250) (92,186) (102,428) Payments, Maturities, and Calls 99,251 68,185 100,131 Securities Available for Sale: Purchases (108,728) (119,685) (132,895) Payments, Maturities, and Calls 186,499 162,260 161,332 Purchase of Loans Held for Investment (43,804) (25,256) (26,070) Net Increase in Loans (130,020) (39,608) (98,068) Net Cash Paid for Brand Acquisition (2,405) - - Proceeds From Insurance Claims on Premises - Proceeds From Sales of Other Real Estate Owned 2,835 2,360 4,774 Purchases of Premises and Equipment, net (9,738) (3,759) (1,458) Noncontrolling Interest Contributions 5,766 - - Net Cash Used In Investing Activities (32,594) (46,875) (94,019) CASH FLOWS FROM FINANCING ACTIVITIES Net Increase in Deposits 572,106 113,598 61,979 Net Increase (Decrease) in Short-Term Borrowings 73,156 (7,497) 2,551 Repayment of Other Long-Term Borrowings (3,363) (1,694) (1,889) Dividends Paid (9,567) (8,047) (5,457) Payments to Repurchase Common Stock (2,042) (1,805) (8,030) Issuance of Common Stock Under Compensation Plans 1,041 1,054 Net Cash Provided By Financing Activities 631,331 95,609 49,951 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 550,126 102,423 (9,442) Cash and Cash Equivalents at Beginning of Year 378,423 276,000 285,442 Cash and Cash Equivalents at End of Year $ 928,549 $ 378,423 $ 276,000 Supplemental Cash Flow Disclosures: Interest Paid $ 4,841 $ 9,521 $ 6,879 Income Taxes Paid $ 9,171 $ 6,255 $ Noncash Investing and Financing Activities: Loans and Premises Transferred to Other Real Estate Owned $ 2,297 $ 1,298 $ 2,140 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
Amortize d Unrealize d Unrealize d Market Amortize d Unrealize d Unrealize d Market (Dollars in Thousands) Cost Gains Losses Value Cost Gain Losses Value Available for Sale U.S. Government Treasury $ 103,547 $ $ - $ 104,519 $ 231,996 $ $ $ 232,778 U.S. Government Agency 205,972 2,743 208,531 155,706 156,078 States and Political Subdivisions 3,543 - 3,632 6,310 - 6,319 Mortgage-Backed Securities - - Equity Securities (1) 7,673 - - 7,673 7,653 - - 7,653 Total $ 321,191 $ 3,863 $ $ 324,870 $ 402,358 $ 1,635 $ $ 403,601 Held to Maturity U.S. Government Treasury $ 5,001 $ $ - $ 5,014 $ 20,036 $ $ $ 20,042 States and Political Subdivisions - - - - 1,376 - - 1,376 Mortgage-Backed Securities 164,938 5,223 - 170,161 218,127 2,064 220,011 Total $ 169,939 $ 5,236 $ - $ 175,175 $ 239,539 $ 2,079 $ $ 241,429 Total Investment Securities $ 491,130 $ 9,099 $ $ 500,045 $ 641,897 $ 3,714 $ $ 645,030 (1) Includes Federal Home Loan Bank and Federal Reserve Bank recorded at cost of $ 2.9 million and $ 4.8 million, respectively, at December 31, 2020 and December 31, 2019. |
` Commercial , Real Estate Financial, Real Estate Commercial Real Estate Real Estate (Dollars in Thousands) Agricultural Construction Mortgage Residential Home Equity Consumer Total Beginning Balance $ 1,675 $ $ 3,416 $ 3,128 $ 2,224 $ 3,092 $ 13,905 Impact of Adopting ASC 1,458 1,243 (596) 3,269 Provision for Credit Losses 1,757 1,865 3,409 9,035 Charge-Offs (789) - (28) (150) (151) (5,042) (6,160) Recoveries 2,690 3,767 Net Charge-Offs (537) (2,352) (2,393) Ending Balance $ 2,204 $ 2,479 $ 7,029 $ 5,440 $ 3,111 $ 3,553 $ 23,816 Beginning Balance $ 1,434 $ $ 4,181 $ 3,400 $ 2,301 $ 2,614 $ 14,210 Provision for Credit Losses (1,129) (301) 2,244 2,027 Charge-Offs (768) (281) (214) (400) (430) (2,878) (4,971) Recoveries - 1,112 2,639 Net Charge-Offs (423) (281) (255) (1,766) (2,332) Ending Balance $ 1,675 $ $ 3,416 $ 3,128 $ 2,224 $ 3,092 $ 13,905 Beginning Balance $ 1,191 $ $ 4,346 $ 3,206 $ 2,506 $ 1,936 $ 13,307 Provision for Credit Losses (223) 2,109 2,921 Charge-Offs (644) (7) (315) (780) (533) (2,395) (4,674) Recoveries 2,656 Net Charge-Offs (185) (137) (342) (1,431) (2,018) Ending Balance $ 1,434 $ $ 4,181 $ 3,400 $ 2,301 $ 2,614 $ 14,210 On January 1, 2020, we adopted ASC 326 and recorded a pre-tax cumulative effect transition adjustment of $ 3.3 million. |
The following table presents the aging of the amortized cost basis in accruing past due loans by class of loans at December 31, 30-59 60-89 90 + Total Total Nonaccrual Total (Dollars in Thousands) DPD DPD DPD Past Due Current Loans Loans Commercial, Financial and Agricultural $ $ $ - $ $ 393,451 $ $ 393,930 Real Estate - Construction - - 134,935 135,831 Real Estate - Commercial Mortgage - - 646,688 1,412 648,393 Real Estate - Residential - 348,508 3,130 352,543 Real Estate - Home Equity - 204,321 205,479 Consumer 1,556 - 1,898 268,058 270,250 Total Past Due Loans $ 2,743 $ 1,851 $ - $ 4,594 $ 1,995,961 $ 5,871 $ 2,006,426 Commercial, Financial and Agricultural $ $ $ - $ $ 254,239 $ $ 255,365 Real Estate - Construction - 114,708 - 115,018 Real Estate - Commercial Mortgage - 623,890 1,434 625,556 Real Estate - Residential - 359,233 1,392 361,450 Real Estate - Home Equity - 196,388 197,360 Consumer 2,000 - 2,649 278,128 281,180 Total Past Due Loans $ 3,721 $ 1,150 $ - $ 4,871 $ 1,826,586 $ 4,472 $ 1,835,929 Nonaccrual Loans . |
Term Loans by Origination Year Revolving (Dollars in Thousands) Prior Loans Total Commercial, Financial, Agricultural: Pass $ 231,805 $ 45,651 $ 35,866 $ 15,212 $ 13,321 $ 10,051 $ 41,214 $ 393,120 Special Mention - - - - Substandard Total $ 231,817 $ 45,850 $ 36,183 $ 15,357 $ 13,371 $ 10,129 $ 41,223 $ 393,930 Real Estate - Construction: Pass $ 71,173 $ 51,634 $ 7,369 $ 1,592 $ - $ - $ 2,635 $ 134,403 Substandard - 1,428 - - - - - 1,428 Total $ 71,173 $ 53,062 $ 7,369 $ 1,592 $ - $ - $ 2,635 $ 135,831 Real Estate - Commercial Mortgage: Pass $ 156,011 $ 93,424 $ 131,180 $ 78,474 $ 45,507 $ 88,397 $ 19,933 $ 612,926 Special Mention 4,165 8,932 9,249 6,172 29,538 Substandard 2,687 1,883 5,929 Total $ 160,746 $ 102,486 $ 140,566 $ 81,405 $ 45,914 $ 96,452 $ 20,824 $ 648,393 Real Estate - Residential: Pass $ 100,704 $ 66,893 $ 42,884 $ 40,205 $ 19,231 $ 66,119 $ 6,706 $ 342,742 Special Mention - 1,148 Substandard 1,257 1,800 1,377 2,492 - 8,653 Total $ 102,102 $ 68,717 $ 44,387 $ 41,217 $ 20,357 $ 69,057 $ 6,706 $ 352,543 Real Estate - Home Equity: Performing $ 1,385 $ $ $ $ $ 2,238 $ 199,591 $ 204,784 Nonperforming - - - - - - Total $ 1,385 2,238 200,286 205,479 Consumer: Performing $ 105,551 $ 69,941 $ 51,513 $ 24,613 $ 10,639 $ 2,472 $ 5,227 $ 269,956 Nonperforming - - Total $ 105,612 70,050 51,562 24,613 10,647 2,539 5,227 270,250 Note 4 MORTGAGE BANKING ACTIVITIES Pursuant to the Brand acquisition on March 1, 2020, the Company’s mortgage banking activities at its subsidiary Capital City Homes Loans have expanded to include mandatory delivery loan sales, forward sales contracts used to manage residential loan pipeline price risk, utilization of warehouse lines to fund secondary market residential loan closings, and residential mortgage servicing. |
Note 9 OTHER REAL ESTATE OWNED The following table presents other real estate owned activity at December 31, (Dollars in Thousands) Beginning Balance $ $ 2,229 $ 3,941 Additions 2,297 1,298 2,140 Valuation Write-Downs (792) (300) (1,046) Sales (1,650) (2,274) (2,793) Other - - (13) Ending Balance $ $ $ 2,229 Net expenses applicable to other real estate owned for the three years ended December 31, was as follows: (Dollars in Thousands) Gains from the Sale of Properties $ (1,218) $ (244) $ (2,288) Losses from the Sale of Properties Rental Income from Properties - (4) (12) Property Carrying Costs Valuation Adjustments 1,046 Total $ $ $ (442) Note 10 DEPOSITS The composition of the Company's interest bearing deposits at December 31 was as follows: (Dollars in Thousands) NOW Accounts $ 1,046,408 $ 902,499 Money Market Accounts 266,649 217,839 Savings Deposits 474,100 374,396 Time Deposits 101,594 106,021 Total Interest Bearing Deposits $ 1,888,751 $ 1,600,755 At December 31, 2020 and 2019, $ 0.7 million and $ 1.6 million, respectively, in overdrawn deposit accounts were reclassified as loans. |
At December 31, the scheduled maturities of time deposits were as follows: (Dollars in Thousands) $ 83,989 10,282 3,812 1,674 2025 and thereafter 1,837 Total $ 101,594 Interest expense on deposits for the three years ended December 31, was as follows: (Dollars in Thousands) NOW Accounts $ $ 5,502 $ 3,152 Money Market Accounts Savings Deposits Time Deposits < $250,000 Time Deposits > $250,000 Total $ 1,548 $ 6,840 $ 4,243 Note 11 SHORT-TERM BORROWINGS Short-term borrowings included the following: (Dollars in Thousands) Federal Funds Purchased Securities Sold Under Repurchase Agreements (1) Other Short-Term Borrowings (2) Balance at December 31 $ - $ 4,851 $ 74,803 Maximum indebtedness at any month end - 5,922 94,071 Daily average indebtedness outstanding 5,384 63,733 Average rate paid for the year 2.56 % 0.10 % 4.36 % Average rate paid on period-end borrowings - % 0.04 % 3.00 % Balance at December 31 $ - $ 6,065 $ Maximum indebtedness at any month end - 9,141 3,746 Daily average indebtedness outstanding 6,180 3,047 Average rate paid for the year 2.85 % 0.91 % 1.73 % Average rate paid on period-end borrowings - % 0.46 % 4.11 % Balance at December 31 $ - $ 10,092 $ 3,449 Maximum indebtedness at any month end - 10,092 10,044 Daily average indebtedness outstanding 7,951 3,021 Average rate paid for the year 2.41 % 0.49 % 2.31 % Average rate paid on period-end borrowings - % 0.88 % 1.61 % (1) Balances are fully collateralized by government treasury or agency securities held in the Company's investment portfolio. |
Note 13 INCOME TAXES The provision for income taxes reflected in the statements of comprehensive income is comprised of the following components: (Dollars in Thousands) Current: Federal $ 8,625 $ 8,481 $ (1,617) State 1,658 10,283 8,728 (1,416) Deferred: Federal (143) (680) 3,620 State 1,913 1,285 Change in Valuation Allowance (40) (8) (68) (53) 1,225 4,837 Total: Federal 8,482 7,801 2,003 State 1,788 2,160 1,486 Change in Valuation Allowance (40) (8) (68) Total $ 10,230 $ 9,953 $ 3,421 Income taxes provided were different than the tax expense computed by applying the statutory federal income tax rate of % to pre-tax income as a result of the following: (Dollars in Thousands) Tax Expense at Federal Statutory Rate $ 11,106 $ 8,560 $ 6,225 Increases (Decreases) Resulting From: Tax-Exempt Interest Income (341) (425) (494) 2017 Provision to Return - Impact of Federal Tax Reform - - (3,590) State Taxes, Net of Federal Benefit 1,413 1,342 1,174 Other Change in Valuation Allowance (40) (8) (68) Tax-Exempt Cash Surrender Value Life Insurance Benefit (173) (175) (174) Expense Due to Reduction of Florida Corporate Income Tax Rate - - Noncontrolling Interest (2,336) - - Actual Tax Expense $ 10,230 $ 9,953 $ 3,421 In connection with filing its 2017 income tax returns, the Company recorded a permanent net income tax benefit of $ 3.6 million. |
The net deferred tax asset and the temporary differences comprising that balance at December 31, 2020 and 2019 are as follows: (Dollars in Thousands) Deferred Tax Assets Attributable to: Allowance for Loan Losses $ 6,037 $ 3,525 Accrued Pension/SERP 16,052 9,863 State Net Operating Loss and Tax Credit Carry-Forwards 2,335 2,834 Other Real Estate Owned 1,066 Accrued SERP Liability 2,104 2,094 Lease Liability 2,581 Other 2,637 2,485 Total Deferred Tax Assets $ 32,812 $ 22,395 Deferred Tax Liabilities Attributable to: Depreciation on Premises and Equipment $ 4,408 $ 3,870 Deferred Loan Fees and Costs 2,824 2,445 Intangible Assets 3,290 3,290 Accrued Pension Liability 4,723 4,585 Right of Use Asset 2,411 Investments Other 1,165 Total Deferred Tax Liabilities 19,290 15,384 Valuation Allowance 1,640 1,680 Net Deferred Tax Asset $ 11,882 $ 5,331 In the opinion of management, it is more likely than not that all of the deferred tax assets, with the exception of certain state net operating loss carry-forwards and certain state tax credit carry-forwards expected to expire prior to utilization, will be realized. |
(Dollars in Thousands) Change in Projected Benefit Obligation: Benefit Obligation at Beginning of Year $ 180,830 $ 149,347 $ 165,084 Service Cost 5,828 6,114 6,884 Interest Cost 5,612 6,178 5,661 Actuarial Loss (Gain) 32,172 25,715 (16,349) Benefits Paid (11,677) (6,255) (11,686) Expenses Paid (260) (269) (247) Special/Contractual Termination Benefits - - Projected Benefit Obligation at End of Year $ 212,566 $ 180,830 $ 149,347 Change in Plan Assets: Fair Value of Plan Assets at Beginning of Year $ 161,646 $ 134,535 $ 129,719 Actual Return (Loss) on Plan Assets 17,066 28,635 (6,251) Employer Contributions 5,000 5,000 23,000 Benefits Paid (11,677) (6,255) (11,686) Expenses Paid (260) (269) (247) Fair Value of Plan Assets at End of Year $ 171,775 $ 161,646 $ 134,535 Funded Status of Plan and Accrued Liability Recognized at End of Year: Other Liabilities $ 40,791 $ 19,184 $ 14,812 Accumulated Benefit Obligation at End of Year $ 177,362 $ 156,327 $ 130,477 Components of Net Periodic Benefit Costs: Service Cost $ 5,828 $ 6,114 $ 6,884 Interest Cost 5,612 6,178 5,661 Expected Return on Plan Assets (10,993) (9,527) (9,564) Amortization of Prior Service Costs Special/Contractual Termination Benefits - - Net Loss Amortization 3,933 3,862 3,673 Net Periodic Benefit Cost $ 4,456 $ 6,642 $ 6,853 Weighted-Average Assumptions Used to Determine Benefit Obligation: Discount Rate 2.88% 3.53% 4.43% Rate of Compensation Increase (1) 4.00% 4.00% 4.00% Measurement Date 12/31/20 12/31/19 12/31/18 Weighted-Average Assumptions Used to Determine Benefit Cost: Discount Rate 3.53% 4.43% 3.71% Expected Return on Plan Assets 7.00% 7.25% 7.25% Rate of Compensation Increase (1) 4.00% 4.00% 3.25% Amortization Amounts from Accumulated Other Comprehensive Income: Net Actuarial Loss (Gain) $ 26,098 $ 6,606 $ (533) Prior Service Cost (15) (15) (199) Net Loss (3,933) (3,862) (3,673) Deferred Tax (Benefit) Expense (5,615) (694) 1,118 Other Comprehensive Loss (Gain), net of tax $ 16,535 $ 2,035 $ (3,287) Amounts Recognized in Accumulated Other Comprehensive Income: Net Actuarial Losses $ 59,400 $ 37,235 $ 34,491 Prior Service Cost Deferred Tax Benefit (15,066) (9,451) (8,757) Accumulated Other Comprehensive Loss, net of tax $ 44,369 $ 27,834 $ 25,800 (1) The Company utilized an age-graded approach that varies the rate based on the age of the participants. |
(Dollars in Thousands) Change in Projected Benefit Obligation: Benefit Obligation at Beginning of Year $ 10,244 $ 8,860 $ 7,285 Service Cost - - Interest Cost Actuarial Loss 1,826 1,035 1,348 Plan Amendments - - Projected Benefit Obligation at End of Year $ 13,402 $ 10,244 $ 8,860 Funded Status of Plan and Accrued Liability Recognized at End of Year: Other Liabilities $ 13,402 $ 10,244 $ 8,860 Accumulated Benefit Obligation at End of Year $ 12,339 $ 8,778 $ 7,557 Components of Net Periodic Benefit Costs: Service Cost $ $ - $ - Interest Cost Amortization of Prior Service Cost - - Net Loss Amortization 1,626 Net Periodic Benefit Cost $ 1,182 $ 1,110 $ 1,853 Weighted-Average Assumptions Used to Determine Benefit Obligation: Discount Rate 2.38% 3.16% 4.23% Rate of Compensation Increase (1) 4.00% 4.00% 4.00% Measurement Date 12/31/20 12/31/19 12/31/18 Weighted-Average Assumptions Used to Determine Benefit Cost: Discount Rate 3.16% 4.23% 3.53% Rate of Compensation Increase (1) 3.50% 3.50% 3.25% Amortization Amounts from Accumulated Other Comprehensive Income: Net Actuarial Loss $ 1,826 $ 1,035 $ 1,348 Prior Service Cost - - Net Loss (458) (761) (1,626) Deferred Tax (Benefit) Expense (573) (70) Other Comprehensive Loss (Gain), net of tax $ 1,690 $ $ (207) Amounts Recognized in Accumulated Other Comprehensive Income: Net Actuarial Loss $ 2,991 $ 1,622 $ 1,348 Prior Service Cost - - Deferred Tax Benefit (985) (411) (341) Accumulated Other Comprehensive Loss, net of tax $ 2,901 $ 1,211 $ 1,007 (1) The Company utilized an age-graded approach that varies the rate based on the age of the participants. |
To Be Well - Capitalized Under Required Prompt For Capital Corrective Actual Adequacy Purposes Action Provisions (Dollars in Thousands) Amount Ratio Amount Ratio Amount Ratio Common Equity Tier 1: CCBG $ 281,494 13.71% $ 92,424 4.50% * * CCB 302,147 14.75% 92,177 4.50% $ 133,145 6.50% Tier 1 Capital: CCBG 332,494 16.19% 123,232 6.00% * * CCB 302,147 14.75% 122,903 6.00% 163,870 8.00% Total Capital: CCBG 355,338 17.30% 164,310 8.00% * * CCB 324,991 15.87% 163,870 8.00% 204,838 10.00% Tier 1 Leverage: CCBG 332,494 9.33% 142,560 4.00% * * CCB 302,147 8.49% 142,280 4.00% 177,850 5.00% Common Equity Tier 1: CCBG $ 273,676 14.47% $ 85,131 4.50% * * CCB 304,340 16.14% 84,867 4.50% $ 122,585 6.50% Tier 1 Capital: CCBG 324,676 17.16% 113,509 6.00% * * CCB 304,340 16.14% 113,156 6.00% 150,874 8.00% Total Capital: CCBG 338,582 17.90% 151,345 8.00% * * CCB 318,245 16.87% 150,874 8.00% 188,593 10.00% Tier 1 Leverage: CCBG 324,676 11.25% 115,459 4.00% * * CCB 304,340 10.57% 115,168 4.00% 143,960 5.00% * Not applicable to bank holding companies. |
The following table summarizes the tax effects for each component of other comprehensive income (loss) and includes separately the reclassification adjustment for investment securities and benefit plans: Before Tax Net of Tax (Expense) Tax (Dollars in Thousands) Amount Benefit Amount Investment Securities: Change in net unrealized gain (loss) on securities available for sale $ 2,437 $ (628) $ 1,809 Amortization of losses on securities transferred from available for sale to held to maturity (9) Total Investment Securities 2,473 (637) 1,836 Derivative: Change in net unrealized gain (loss) on effective cash flow hedge $ $ (146) $ Benefit Plans: Reclassification adjustment for amortization of prior service cost (880) (657) Reclassification adjustment for amortization of net loss 4,391 (1,113) 3,278 Current year actuarial loss (27,924) 7,078 (20,846) Total Benefit Plans (24,413) 6,188 (18,225) Total Other Comprehensive Loss $ (21,366) $ 5,405 $ (15,961) Investment Securities: Change in net unrealized gain (loss) on securities available for sale $ 3,790 $ (950) $ 2,840 Amortization of losses on securities transferred from available for sale to held to maturity (11) Total Investment Securities 3,833 (961) 2,872 Benefit Plans: Reclassification adjustment for amortization of prior service cost (4) Reclassification adjustment for amortization of net loss 4,623 (1,170) 3,453 Current year actuarial loss (7,642) 1,940 (5,702) Total Benefit Plans (3,004) (2,238) Total Other Comprehensive Income $ $ (195) $ Investment Securities: Change in net unrealized gain (loss) on securities available for sale $ (409) $ $ (306) Amortization of losses on securities transferred from available for sale to held to maturity (14) Total Investment Securities (354) (265) Benefit Plans: Reclassification adjustment for amortization of prior service cost (50) Reclassification adjustment for amortization of net loss 5,299 (1,346) 3,953 Current year actuarial loss (815) (608) Total Benefit Plans 4,683 (1,189) 3,494 Total Other Comprehensive Income $ 4,329 $ (1,100) $ 3,229 Accumulated other comprehensive loss was comprised of the following components: Accumulated Securities Other Available Interest Rate Retirement Comprehensive (Dollars in Thousands) for Sale Swap Plans Loss Balance as of January 1, 2020 $ $ - $ (29,045) $ (28,181) Other comprehensive income (loss) during the period 1,836 (18,225) (15,961) Balance as of December 31, 2020 $ 2,700 $ $ (47,270) $ (44,142) Balance as of January 1, 2019 $ (2,008) $ - $ (26,807) $ (28,815) Other comprehensive income (loss) during the period 2,872 - (2,238) Balance as of December 31, 2019 $ $ - $ (29,045) $ (28,181) Balance as of January 1, 2018 $ (1,743) $ - $ (30,301) $ (32,044) Other comprehensive (loss) income during the period (265) - 3,494 3,229 Balance as of December 31, 2018 $ (2,008) $ - $ (26,807) $ (28,815) Note 19 RELATED PARTY TRANSACTIONS At December 31, 2020 and 2019, certain officers and directors were indebted to the Company’s bank subsidiary in the aggregate amount of $ 4.3 million and $ 7.7 million, respectively. |
Note 23 PARENT COMPANY FINANCIAL INFORMATION The following are condensed statements of financial condition of the parent company at December 31: Parent Company Statements of Financial Condition (Dollars in Thousands, Except Per Share Data) ASSETS Cash and Due From Subsidiary Bank $ 39,718 $ 28,924 Investment in Subsidiary Bank 342,958 359,577 Other Assets 6,530 5,884 Total Assets $ 389,206 $ 394,385 LIABILITIES Long-Term Borrowings $ $ 1,500 Subordinated Notes Payable 52,887 52,887 Other Liabilities 14,582 12,982 Total Liabilities 68,369 67,369 SHAREOWNERS’ EQUITY Common Stock, $ .01 par value; 90,000,000 shares authorized; 16,790,573 and 16,771,544 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively Additional Paid-In Capital 32,283 32,092 Retained Earnings 332,528 322,937 Accumulated Other Comprehensive Loss, Net of Tax (44,142) (28,181) Total Shareowners’ Equity 320,837 327,016 Total Liabilities and Shareowners’ Equity $ 389,206 $ 394,385 The operating results of the parent company for the three years ended December 31 are shown below: Parent Company Statements of Operations (Dollars in Thousands) OPERATING INCOME Income Received from Subsidiary Bank: Administrative Fees $ 6,068 $ 6,517 $ 5,700 Dividends 21,000 19,000 15,000 Other Income Total Operating Income 27,261 25,720 20,871 OPERATING EXPENSE Salaries and Associate Benefits 3,418 3,928 3,679 Interest on Subordinated Notes Payable 1,514 2,381 2,286 Professional Fees 1,079 1,196 1,210 Advertising Legal Fees Other 1,673 1,711 2,170 Total Operating Expense 8,280 9,764 9,617 Earnings Before Income Taxes and Equity in Undistributed Earnings of Subsidiary Bank 18,981 15,956 11,254 Income Tax (Benefit) Expense (406) (632) (901) Earnings Before Equity in Undistributed Earnings of Subsidiary Bank 19,387 16,588 12,155 Equity in Undistributed Earnings of Subsidiary Bank 12,189 14,219 14,069 Net Income $ 31,576 $ 30,807 $ 26,224 The cash flows for the parent company for the three years ended December 31 were as follows: Parent Company Statements of Cash Flows (Dollars in Thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 31,576 $ 30,807 $ 26,224 Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: Equity in Undistributed Earnings of Subsidiary Bank (12,189) (14,219) (14,069) Stock Compensation 1,569 1,421 (Increase) Decrease in Other Assets (217) (445) (327) Increase in Other Liabilities 1,900 1,557 1,579 Net Cash Provided By Operating Activities 21,962 19,269 14,828 CASH FROM FINANCING ACTIVITIES: Repayment of Long-Term Borrowings (600) (600) (600) Dividends Paid (9,567) (8,047) (5,457) Issuance of Common Stock Under Compensation Plans 1,041 1,054 Payments to Repurchase Common Stock (2,042) (1,805) (8,030) Net Cash Used In Financing Activities (11,168) (9,398) (13,290) Net Increase in Cash 10,794 9,871 1,538 Cash at Beginning of Year 28,924 19,053 17,515 Cash at End of Year $ 39,718 $ 28,924 $ 19,053 Item 9. |
The EGRRCPA, among other things: (i) allows smaller banks (with up to $10 billion in assets) to offer certain qualified residential mortgages that are not subject to the ability-to-repay requirements; (ii) exempts from appraisal requirements certain transactions involving real estate in rural areas that is valued at less than $400,000; (iii) amends the Home Mortgage Disclosure Act of 1975 to exempt from certain disclosure requirements banks that originate fewer than 500 closed-end mortgage loans and fewer than 500 open-end lines of credit in each of the last two calendar years; (iv) clarifies that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC's brokered-deposit regulations; (v) expands the examination cycle for certain banks with less than $3 billion in assets so that on-site examinations must occur not less than once during each 18-month period; (vi) directs federal banking agencies to develop a community bank leverage ratio of not less than 8% and not more than 10% for qualifying community banks, which has been initially established at 9%; (vii) exempts banks with less than $10 billion in total consolidated assets and with trading assets and liabilities less than or equal to 5% of total consolidated assets from the requirements of the Volcker Rule; and (viii) directs the Federal Reserve Board to expand the definition of a small bank holding company under the Small Bank Holding Company Policy Statement to include banks that, among other conditions, have less than $3 billion in assets. |
EGRRCPA, among other things: (i) allows smaller banks (with up to $10 billion in assets) to offer certain qualified residential mortgages that are not subject to the ability-to-repay requirements; (ii) exempts from appraisal requirements certain transactions involving real estate in rural areas that is valued at less than $400,000; (iii) amends the Home Mortgage Disclosure Act of 1975 to exempt from certain disclosure requirements banks that originate fewer than 500 closed-end mortgage loans and fewer than 500 open-end lines of credit in each of the last two calendar years; (iv) clarifies that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC's brokered-deposit regulations; (v) expands the examination cycle for certain banks with less than $3 billion in assets so that on-site examinations must occur not less than once during each 18-month period; (vi) directs federal banking agencies to develop a community bank leverage ratio of not less than 8% and not more than 10% for qualifying community banks; (vii) exempts banks with less than $10 billion in total consolidated assets and with trading assets and liabilities less than or equal to 5% of total consolidated assets from the requirements of the Volcker Rule; and (viii) directs the Federal Reserve Board to expand the definition of a small bank holding company under the Small Bank Holding Company Policy Statement to include banks that, among other conditions, have less than $3 billion in assets. |
CAPITAL CITY BANK GROUP, INC. CONSOLIDATED FINANCIAL STATEMENTS PAGE Report of Independent Registered Certified Public Accounting Firm Consolidated Statements of Financial Condition Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Shareowners’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Ernst & Young LLP One Tampa City Center Suite 2400 201 North Franklin Street Tampa, Florida 33602 Tel: +1 813 225 4800 Fax: +1 813 225 4711 ey.com Report of Independent Registered Certified Public Accounting Firm To the Shareowners and Board of Directors of Capital City Bank Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Capital City Bank Group, Inc. (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, changes in shareowners’ equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). |
ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. |
ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. |
ASU 2016-1, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. |
Financial Statements and Supplementary Data Table QUARTERLY FINANCIAL DATA (Unaudited) CAPITAL CITY BANK GROUP, INC. CONSOLIDATED FINANCIAL STATEMENTS PAGE Report of Independent Registered Certified Public Accounting Firm Consolidated Statements of Financial Condition Consolidated Statements of Operations Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Shareowners’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Ernst & Young LLP One Tampa City Center Suite 2400 201 North Franklin Street Tampa, Florida 33602 Tel: +1 813 225 4800 Fax: +1 813 225 4711 ey.com Report of Independent Registered Certified Public Accounting Firm The Board of Directors and Shareowners of Capital City Bank Group, Inc. We have audited the accompanying consolidated statements of financial condition of Capital City Bank Group, Inc. as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, changes in shareowners’ equity, and cash flows for each of the three years in the period ended December 31, 2014. |
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