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The Dodd-Frank Act includes provisions that, among other things: §change the assessment base for federal deposit insurance from the amount of insured deposits to total consolidated assets less average tangible capital, eliminate the ceiling on the size of the federal deposit insurance fund, and increase the floor of the size of the federal deposit insurance fund; §centralize responsibility for promulgating regulations under and enforcing federal consumer financial protection laws in a new bureau of consumer financial protection; §require the FDIC to seek to make its capital requirements for banks countercyclical; §implement corporate governance revisions, including with regard to executive compensation and proxy access by shareholders, that apply to all public companies, not just financial institutions; §establish new rules and restrictions regarding the origination of mortgages; and §permit the Federal Reserve to prescribe regulations regarding interchange transaction fees, and limit them to an amount reasonable and proportional to the cost incurred by the issuer for the transaction in question. |
The Dodd-Frank Act includes provisions that, among other things: § change the assessment base for federal deposit insurance from the amount of insured deposits to total consolidated assets less average tangible capital, eliminate the ceiling on the size of the federal deposit insurance fund, and increase the floor of the size of the federal deposit insurance fund; § repeal the federal prohibitions on the payment of interest on demand deposits, thereby generally permitting the payment of interest on all deposit accounts; § centralize responsibility for promulgating regulations under and enforcing federal consumer financial protection laws in a new bureau of consumer financial protection; § require the FDIC to seek to make its capital requirements for banks countercyclical; § implement corporate governance revisions, including with regard to executive compensation and proxy access by shareholders, that apply to all public companies, not just financial institutions; § establish new rules and restrictions regarding the origination of mortgages; and § permit the Federal Reserve to prescribe regulations regarding interchange transaction fees, and limit them to an amount reasonable and proportional to the cost incurred by the issuer for the transaction in question. |
The Dodd-Frank Act includes provisions that, among other things: § change the assessment base for federal deposit insurance from the amount of insured deposits to total consolidated assets less average tangible capital, eliminate the ceiling on the size of the federal deposit insurance fund, and increase the floor of the size of the federal deposit insurance fund; § repeal the federal prohibitions on the payment of interest on demand deposits, thereby generally permitting the payment of interest on all deposit accounts; § centralize responsibility for promulgating regulations under and enforcing federal consumer financial protection laws in a new bureau of consumer financial protection; § require the FDIC to seek to make its capital requirements for banks countercyclical; § implement corporate governance revisions, including with regard to executive compensation and proxy access by shareholders, that apply to all public companies, not just financial institutions; § establish new rules and restrictions regarding the origination of mortgages; and § permit the Federal Reserve to prescribe regulations regarding interchange transaction fees, and limit them to an amount reasonable and proportional to the cost incurred by the issuer for the transaction in question. |
/s/ William G. Smith, Jr. - ---------------------------------- William G. Smith, Jr. Chairman, President and Chief Executive Officer (Principal Executive Officer) /s/ J. Kimbrough Davis - ---------------------------------- J. Kimbrough Davis Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Directors: /s/ DuBose Ausley /s/ McGrath Keen, Jr. - ---------------------------------- ---------------------------------- DuBose Ausley McGrath Keen, Jr. /s/ Thomas A. Barron - ---------------------------------- ---------------------------------- Thomas A. Barron Lina S. Knox /s/ Frederick Carroll, III /s/ Ruth A. Knox - ---------------------------------- ---------------------------------- Frederick Carroll, III Ruth A. Knox /s/ Cader B. Cox, III - ---------------------------------- ---------------------------------- Cader B. Cox, III Henry Lewis III /s/ J. Everitt Drew /s/ William G. Smith, Jr. - ---------------------------------- ---------------------------------- J. Everitt Drew William G. Smith, Jr. /s/ John K. Humphress - ---------------------------------- John K. Humphress |
* The strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio and allowance for loan losses; * Worldwide political and social unrest, including acts of war and terrorism; * The effects of harsh weather conditions, including hurricanes; * The effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; * Inflation, interest rate, market and monetary fluctuations; * Adverse conditions in the stock market and other capital markets and the impact of those conditions on our capital markets and capital management activities, including our investment and wealth management advisory businesses and brokerage activities; * Changes in U.S. foreign or military policy; * The timely development of competitive new products and services by us and the acceptance of those products and services by new and existing customers; * The willingness of customers to accept third-party products marketed by us; * The willingness of customers to substitute competitors' products and services for our products and services and vice versa; * The impact of changes in financial services laws and regulations (including laws concerning taxes, banking, securities and insurance); * Technological changes; * Changes in consumer spending and saving habits; * The growth and profitability of our noninterest or fee income being less than expected; * Unanticipated regulatory or judicial proceedings; * The impact of changes in accounting policies by the Securities and Exchange Commission; * Adverse changes in the financial performance and/or condition of our borrowers, which could impact the repayment of those borrowers' outstanding loans; and * Our success at managing the risks involved in the foregoing. |
/s/ William G. Smith, Jr. - ---------------------------------- William G. Smith, Jr. Chairman, President and Chief Executive Officer (Principal Executive Officer) /s/ J. Kimbrough Davis - ---------------------------------- J. Kimbrough Davis Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Directors: /s/ DuBose Ausley - ---------------------------------- DuBose Ausley /s/ Thomas A. Barron - ---------------------------------- Thomas A. Barron /s/ Frederick Carroll, III - ---------------------------------- Frederick Carroll, III /s/ Cader B. Cox, III - ---------------------------------- Cader B. Cox, III /s/ J. Everitt Drew - ---------------------------------- J. Everitt Drew /s/ John K. Humphress - ---------------------------------- John K. Humphress /s/ McGrath Keen, Jr. - ---------------------------------- McGrath Keen, Jr. /s/ Lina S. Knox - ---------------------------------- Lina S. Knox /s/ Ruth A. Knox - ---------------------------------- Ruth A. Knox /s/ Henry Lewis III - ---------------------------------- Henry Lewis III /s/ John R. Lewis - ---------------------------------- John R. Lewis /s/ William G. Smith, Jr. - ---------------------------------- William G. Smith, Jr. |
The following factors, among others, could cause our financial performance to differ materially from what is contemplated in those forward-looking statements: * The strength of the United States economy in general and the strength of the local economies in which we conduct operations may be different than expected resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio and allowance for loan losses; * The effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; * Inflation, interest rate, market and monetary fluctuations; * Adverse conditions in the stock market and other capital markets and the impact of those conditions on our capital markets and capital management activities, including our investment and wealth management advisory businesses and brokerage activities; * Changes in U.S. foreign or military policy; * The timely development of competitive new products and services by us and the acceptance of those products and services by new and existing customers; * The willingness of customers to accept third-party products marketed by us; * The willingness of customers to substitute competitors' products and services for our products and services and vice versa; * The impact of changes in financial services laws and regulations (including laws concerning taxes, banking, securities and insurance); * Technological changes; * Changes in consumer spending and saving habits; * The effect of corporate restructuring, acquisitions or dispositions, including the actual restructuring and other related charges and the failure to achieve the expected gains, revenue growth or expense savings from such corporate restructuring, acquisitions or dispositions; * The growth and profitability of our noninterest or fee income being less than expected; * Unanticipated regulatory or judicial proceedings; * The impact of changes in accounting policies by the Securities and Exchange Commission; * Adverse changes in the financial performance and/or condition of our borrowers, which could impact the repayment of those borrowers' outstanding loans; and * Our success at managing the risks involved in the foregoing. |
/s/ William G. Smith, Jr. - ------------------------------ William G. Smith, Jr. Chairman, President and Chief Executive Officer (Principal Executive Officer) /s/ J. Kimbrough Davis - ------------------------------ J. Kimbrough Davis Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Directors: /s/ DuBose Ausley - ------------------------------ DuBose Ausley /s/ Thomas A. Barron - ------------------------------ Thomas A. Barron /s/ Frederick Carroll, III - ------------------------------ Frederick Carroll, III /s/ Cader B. Cox, III - ------------------------------ Cader B. Cox, III /s/ J. Everitt Drew - ------------------------------ J. Everitt Drew /s/ John K. Humphress - ------------------------------ John K. Humphress /s/ Lina S. Knox - ------------------------------ Lina S. Knox /s/ Ruth A. Knox - ------------------------------ Ruth A. Knox /s/ Henry Lewis III - ------------------------------ Henry Lewis III /s/ John R. Lewis - ------------------------------ John R. Lewis /s/ William G. Smith, Jr. - ------------------------------ William G. Smith, Jr. |
During the years ended December 31, 2001 and 2000 and through May 29, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principles or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersen's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements for such years; and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. During the years ended December 31, 2001 and 2000, the Company did not consult KPMG with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, or any other matters or reportable events as set forth in Items 301(a)(2)(i) and (ii) of Regulation S-K. During the year ended December 31, 2002, there were no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to KPMG's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements included herein. |
During the years ended December 31, 2001 and 2000 and through May 29, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principles or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersen's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements for such years; and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. During the years ended December 31, 2001 and 2000, the Company did not consult KPMG with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, or any other matters or reportable events as set forth in Items 301(a)(2)(i) and (ii) of Regulation S-K. During the year ended December 31, 2002, there were no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to KPMG's satisfaction, would have caused them to make reference to the subject matter in connection with their report on the Company's consolidated financial statements included herein. |
Note 3 INVESTMENT SECURITIES The amortized cost and related market value of investment securities available-for-sale at December 31, were as follows: -------------------------------------------------- Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ------------------------------------------------------------------------------ U.S. Treasury $ 10,016 $ 5 $ - $ 10,021 U.S. Government Agencies and Corporations 69,683 49 516 69,216 States and Political Subdivisions 85,744 192 695 85,241 Mortgage-Backed Securities 73,741 134 1,126 72,749 Other Securities 40,058 7 453 39,612 -------- ---- ------ -------- Total Investment Securities $279,242 $387 $2,790 $276,839 ======== ==== ====== ======== -------------------------------------------------- Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ------------------------------------------------------------------------------ U.S. Treasury $ 20,047 $ 4 $ 70 $ 19,981 U.S. Government Agencies and Corporations 79,181 - 2,557 76,624 States and Political Subdivisions 104,312 74 1,895 102,491 Mortgage-Backed Securities 85,040 88 3,728 81,400 Other Securities 42,372 - 1,676 40,696 -------- ---- ------ -------- Total Investment Securities $330,952 $166 $9,926 $321,192 ======== ==== ====== ======== The total proceeds from the sale of investment securities and the gross realized gains and losses from the sale of such securities for each of the last three years are as follows: (Dollars in Thousands) Total Gross Gross Year Proceeds Realized Gains Realized Losses - ------------------------------------------------------------- 2000 $37,096 $ 2 $ - 1999 $86,213 $ 1 $13 1998 $46,861 $117 $30 Total proceeds include principal reductions in mortgage-backed securities and proceeds from securities which were called of $13.7 million, $18.0 million, and $27.2 million in 2000, 1999, and 1998, respectively. |
Interest expense on deposits for the three years ended December 31, was as follows: (Dollars in Thousands) 2000 1999 1998 - ---------------------------------------------------------------- NOW Accounts $ 4,444 $ 3,134 $ 2,223 Money Market Accounts 6,673 5,766 2,562 Savings Accounts 2,446 2,453 2,243 Other Time Deposits 26,896 26,962 25,091 ------- ------- ------- Total $40,459 $38,315 $32,119 ======= ======= ======= Note 8 SHORT-TERM BORROWINGS Short-term borrowings included the following at December 31: Securities Federal Sold Under Other Funds Repurchase Short-Term (Dollars in Thousands) Purchased Agreements Borrowings - -------------------------------------------------------------------------------- Balance $ 7,225 $44,478 $31,769 Maximum indebtedness at any month end 39,975 60,283 61,269 Daily average indebtedness outstanding 18,612 44,908 22,599 Average rate paid for the year 6.47% 4.95% 6.83% Average rate paid on period-end borrowings 4.88% 4.32% 6.84% Balance $28,050 $36,439 $ 1,786 Maximum indebtedness at any month end 28,050 41,114 1,786 Daily average indebtedness outstanding 12,997 27,923 1,397 Average rate paid for the year 4.87% 4.02% 4.31% Average rate paid on period-end borrowings 4.20% 3.53% 4.22% Note 9 LONG-TERM DEBT Long-term debt included the following at December 31: (Dollars in Thousands) 2000 1999 - ------------------------------------------------------------------------------ Federal Home Loan Bank Note Due on October 10, 2001, fixed rate of 5.00% $ 286 $ 324 Due on December 16, 2004, fixed rate of 6.52% 250 313 Due on December 16, 2004, fixed rate of 6.52% 138 172 Due on December 19, 2005, fixed rate of 6.04% 1,432 1,542 Due on December 13, 2006, fixed rate of 6.20% 936 1,002 Due on April 24, 2007, fixed rate of 7.30% 362 419 Due on March 14, 2013, fixed rate of 6.13% - 938 Due on March 18, 2013, fixed rate of 6.37% 898 - Due on September 20, 2013, fixed rate of 5.64% 1,277 1,334 Due on January 26, 2014, fixed rate of 5.79% 1,463 1,499 Due on May 27, 2014, fixed rate of 5.92% 683 720 Due on December 17, 2018, fixed rate of 6.33% 1,895 1,949 Due on December 24, 2018, fixed rate of 6.29% 837 857 IBM Note Payable Due on December 31, 2000, fixed rate of 3.77% - 189 Revolving credit note, Due on November 16, 2004, variable rate of 6.68% 1,250 3,000 ------- ------- Total outstanding $11,707 $14,258 ======= ======= The contractual maturities of long-term debt for the five years succeeding December 31, 2000, are as follows: 2001 $ 286 2002 - 2003 - 2004 1,638 2005 and thereafter 9,783 ------- $11,707 ======= The Federal Home Loan Bank advances are collateralized with U.S. Treasury Securities and 1-4 family mortgages. |
Note 10 INCOME TAXES The provision for income taxes reflected in the statement of income is comprised of the following components: (Dollars in Thousands) 2000 1999 1998 - ---------------------------------------------------------------------- Current: Federal $8,172 $6,880 $7,185 State 1,570 824 851 Deferred: Federal (245) (189) 117 State (48) (36) 16 ------ ------ ------ Total $9,449 $7,479 $8,169 ====== ====== ====== The net deferred tax asset and the temporary differences comprising that balance at December 31, 2000 and 1999, are as follows: (Dollars in Thousands) 2000 1999 - -------------------------------------------------------------------- Deferred Tax Asset attributable to: Allowance for Loan Losses $2,841 $2,909 Unrealized Losses on Investment Securities 881 3,570 Stock Incentive Plan 875 682 Interest on Nonperforming Loans 57 169 Acquired Deposits 392 76 Acquisition Integration Costs 111 - Other 392 306 ------ ------ Total Deferred Tax Asset $5,549 $7,712 Deferred Tax Liability attributable to: Associate Benefits $1,347 $1,291 Premises and Equipment 1,421 1,189 Deferred Loan Fees 291 370 Securities Accretion 210 249 Other 167 104 ------ ------ Total Deferred Tax Liability 3,436 3,203 ------ ------ Net Deferred Tax Asset $2,113 $4,509 ====== ====== Income taxes provided were less than the tax expense computed by applying the statutory federal income tax rates to income. |
(Dollars in Thousands) 2000 1999 1998 - ------------------------------------------------------------------------------- Change in Benefit Obligation: Benefit Obligation at Beginning of Year $18,980 $22,211 $21,159 Service Cost 2,255 2,015 1,678 Interest Cost 1,777 1,477 1,478 Actuarial Loss/(Gain) 3,019 (4,411) 1,350 Amendments to Plan(1) 2,099 - - Benefits Paid (1,119) (2,021) (3,186) Expenses Paid (200) (291) (268) ------- ------- ------- Benefit Obligation at End of Year $26,811 $18,980 $22,211 ------- ------- ------- Change in Plan Assets: Fair Value of Plan Assets at Beginning of Year $32,521 $29,248 $25,826 Actual Return on Plan Assets (798) 4,824 5,382 Employer Contribution 915 761 1,494 Benefits Paid (1,119) (2,021) (3,186) Expenses Paid (200) (291) (268) ------- ------- ------- Fair Value of Plan Assets at End of Year $31,319 $32,521 $29,248 ------- ------- ------- Funded Status $ 4,508 $13,541 $ 7,037 Unrecognized Net Actuarial Gain (797) (9,675) (2,919) Unrecognized Prior Service Cost (232) (468) (704) ------- ------- ------- Prepaid Benefit Cost $ 3,479 $ 3,398 $ 3,414 ======= ======= ======= Weighted-Average Assumptions: Discount Rate 7.50% 7.75% 6.50% Expected Return on Plan Assets 8.25% 8.25% 8.25% Rate of Compensation Increase 5.50% 5.50% 5.50% Components of Net Periodic Benefit Costs: Service Cost $ 2,255 $ 2,015 $ 1,678 Interest Cost 1,777 1,477 1,478 Expected Return on Plan Assets (2,643) (2,401) (2,103) Amortization of Prior Service Cost 343 164 164 Transition Asset Recognition (236) (236) (236) Recognized Net Actuarial Gain (663) (242) (131) ------- ------- ------- Net Periodic Benefit Cost $ 833 $ 777 $ 850 ======= ======= ======= (1) The amendments to the plan are a result of prior year acquisitions and the IRS regulation regarding the change from the PBGC mortality table to the GATT mortality table. |
A summary of actual, required, and capital levels necessary to be considered well-capitalized for Capital City Bank Group, Inc. consolidated and its banking subsidiary, Capital City Bank, as of December 31, 2000 and December 31, 1999 are shown below: (Dollars in Thousands) To Be Well- Required Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provisions ------------------------------------------------------------ Amount Ratio Amount Ratio Amount Ratio - ------------------------------------------------------------------------------- As of December 31, 2000: Tier I Capital: CCBG $126,836 11.87% $42,753 4.00% * * CCB 108,474 11.00% 39,451 4.00% 59,177 6.00% Total Capital: CCBG 137,400 12.86% 85,507 8.00% * * CCB 117,440 11.91% 78,902 8.00% 98,628 10.00% Tier I Leverage: CCBG 126,836 8.30% 32,065 3.00% * * CCB 108,474 7.59% 29,589 3.00% 49,314 5.00% As of December 31, 1999: Tier I Capital: CCBG $107,076 11.23% $38,138 4.00% * * CCB 91,832 10.65% 34,490 4.00% 51,736 6.00% Total Capital: CCBG 117,005 12.27% 76,276 8.00% * * CCB 100,351 11.64% 68,981 8.00% 86,226 10.00% Tier I Leverage: CCBG 107,076 7.92% 28,604 3.00% * * CCB 91,832 7.39% 25,868 3.00% 43,113 5.00% *Non-applicable to bank holding companies. |
Note 19 PARENT COMPANY FINANCIAL INFORMATION The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 2000 1999 1998 - ------------------------------------------------------------------------------- OPERATING INCOME Income Received from Subsidiary Banks: Dividends $ 8,713 $ 7,285 $ 7,190 Overhead Fees 2,373 2,595 4,007 ------- ------- ------- Total Operating Income 11,086 9,880 11,197 ------- ------- ------- OPERATING EXPENSE Salaries and Associate Benefits 1,715 1,926 2,171 Interest on Debt 147 430 832 Professional Fees 332 232 527 Advertising 100 109 711 Legal Fees 67 77 115 Other 341 257 696 ------- ------- ------- Total Operating Expense 2,702 3,031 5,052 ------- ------- ------- Income Before Income Taxes and Equity in Undistributed Earnings of Subsidiary Banks 8,384 6,849 6,145 Income Tax Benefit (121) (198) (394) ------- ------- ------- Income Before Equity in Undistributed Earnings of Subsidiary Banks 8,505 7,047 6,539 Equity in Undistributed Earnings of Subsidiary Banks 9,648 8,205 8,755 ------- ------- ------- Net Income $18,153 $15,252 $15,294 ======= ======= ======= The following are condensed statements of financial condition of the parent company at December 31: Parent Company Statements of Financial Condition (Dollars in Thousands) 2000 1999 - ---------------------------------------------------------------------------- ASSETS Cash and Due From Group Banks $ 187 $ 2,020 Investment in Subsidiary Banks 148,412 134,105 Other Assets 1,454 520 -------- -------- Total Assets $150,053 $136,645 ======== ======== LIABILITIES Long-Term Debt $ 1,250 $ 3,000 Other Liabilities 1,196 1,429 -------- -------- Total Liabilities 2,446 4,429 -------- -------- 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; 10,108,454 and 10,190,069 shares issued and outstanding 101 102 Additional Paid-in Capital 7,369 9,249 Retained Earnings 141,659 129,055 Accumulated Other Comprehensive Loss, Net of Tax (1,522) (6,190) -------- -------- Total Shareowners' Equity 147,607 132,216 -------- -------- Total Liabilities and Shareowners' Equity $150,053 $136,645 ======== ======== The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 2000 1999 1998 - ------------------------------------------------------------------------------ Cash Flows From Operating Activities: Net Income $18,153 $15,252 $15,294 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Equity in Undistributed Earnings of Subsidiary Banks (9,648) (8,205) (8,755) Non-Cash Compensation 101 260 868 Amortization of Goodwill - - 25 (Increase) Decrease in Other Assets (925) (40) 1,155 (Decrease) Increase in Other Liabilities (233) 292 (357) ------- ------- ------- Net Cash Provided by Operating Activities 7,448 7,559 8,230 ------- ------- ------- Cash From Financing Activities: Borrowings of Long-Term Debt 500 - - Repayments of Long-Term Debt (2,250) (5,000) (5,000) Payment of Dividends (5,549) (5,718) (4,328) Repurchase of Common Stock (2,667) - - Issuance of Common Stock 685 428 1,148 ------- ------- ------- Net Cash Used in Financing Activities (9,281) (10,290) (8,180) ------- ------- ------- Net (Decrease) Increase in Cash (1,833) (2,729) 50 Cash at Beginning of Period 2,020 4,749 4,699 ------- ------- ------- Cash at End of Period $ 187 $ 2,020 $ 4,749 ======= ======= ======= Note 20 COMPREHENSIVE INCOME SFAS No. |
Comprehensive income for 2000, 1999 and 1998 was calculated as follows: (Dollars in Thousands) 2000 1999 1998 - -------------------------------------------------------------------------------- Net Unrealized Gains (Losses) Recognized in Other Comprehensive Income: Before Tax $ 7,357 $(10,566) $ 109 Less Income Tax 2,689 (3,698) 38 ------- -------- ------- Net of Tax 4,668 (6,868) 71 Amounts Reported in Net Income: Gain (Loss) On Sale of Securities 2 (12) 87 Net Amortization 1,368 1,417 758 ------- -------- ------- Reclassification Adjustment 1,370 1,405 845 Less: Income Tax Expense 480 492 296 ------- -------- ------- Reclassification Adjustment, Net of Tax 890 913 549 Amounts Reported in Other Comprehensive Income: Unrealized (Loss) Gain Arising During the Period, Net of Tax 5,558 (5,955) 620 Net Unrealized Losses Recognized in Reclassification Adjustments, Net of Tax (890) (913) (549) ------- -------- ------- Other Comprehensive Income 4,668 (6,868) 71 Net Income 18,153 15,252 15,294 ------- -------- ------- Total Comprehensive Income $22,821 $ 8,384 $15,365 ======= ======== ======= Item 9. |
Table 1 CONDENSED SUMMARY OF EARNINGS (Dollars in Thousands, Except Per Share Data)(1) For the Years Ended December 31, 1999 1998 1997 --------------------------------- Interest Income $ 99,685 $89,010 $84,981 Taxable Equivalent Adjustments 1,761 1,402 1,610 -------- ------- ------- Total Interest Income (FTE) 101,446 90,412 86,591 Interest Expense 41,247 35,248 32,688 -------- ------- ------- Net Interest Income (FTE) 60,199 55,164 53,903 Provision for Loan Losses 2,440 2,439 2,328 Taxable Equivalent Adjustments 1,761 1,402 1,610 -------- ------- ------- Net Interest Income After Provision for Loan Losses 55,998 51,323 49,965 Noninterest Income 24,761 22,584 19,484 Noninterest Expense 58,028 50,444 47,836 -------- ------- ------- Income Before Income Taxes 22,731 23,463 21,613 Income Taxes 7,479 8,169 7,212 -------- ------- ------- Net Income $ 15,252 $15,294 $14,401 ======== ======= ======= Basic Net Income Per Share $ 1.50 $ 1.51 $ 1.44 ======== ======= ======= Diluted Net Income Per Share $ 1.50 $ 1.50 $ 1.43 ======== ======= ======= (1) All share and per share data have been restated to reflect the pooling-of-interests of Grady Holding Company and its subsidiaries and adjusted to reflect the 2-for-1 stock split effective April 1, 1997, and the 3-for-2 stock split effective June 1, 1998. |
Table 7 ANALYSIS OF ALLOWANCE FOR LOAN LOSSES (Dollars in Thousands) For the Years Ended December 31, --------------------------------------------- 1999 1998 1997 1996 1995 --------------------------------------------- Balance at Beginning of Year $9,827 $9,662 $9,450 $7,522 $8,412 Acquired Reserves - - - 1,769 - Charge-Offs: Commercial, Financial and Agricultural 480 127 568 594 601 Real Estate - Construction - 15 31 - - Real Estate - Mortgage 354 1,011 485 119 139 Real Estate - Residential(1) 251 - - - - Consumer 2,113 2,004 1,978 1,691 1,310 ------ ------ ------ ------ ------ Total Charge-Offs 3,198 3,157 3,062 2,404 2,050 ------ ------ ------ ------ ------ Recoveries: Commercial, Financial and Agricultural 142 72 378 235 204 Real Estate - Construction - 142 - 3 - Real Estate - Mortgage 84 176 83 - 10 Real Estate - Residential(1) 11 - - - - Consumer 623 493 485 462 413 ------ ------ ------ ------ ------ Total Recoveries 860 883 946 700 627 ------ ------ ------ ------ ------ Net Charge-Offs 2,338 2,274 2,116 1,704 1,423 ------ ------ ------ ------ ------ Provision for Loan Losses 2,440 2,439 2,328 1,863 533 ------ ------ ------ ------ ------ Balance at End of Year $9,929 $9,827 $9,662 $9,450 $7,522 ====== ====== ====== ====== ====== Ratio of Net Charge-Offs to Average Loans Outstanding .26% .28% .28% .27% .29% ====== ====== ====== ====== ====== Allowance for Loan Losses as a Percent of Loans at End of Year 1.07% 1.16% 1.25% 1.27% 1.47% ====== ====== ====== ====== ====== Allowance for Loan Losses as a Multiple of Net Charge-Offs 4.25x 4.32x 4.57x 5.55x 5.29x ====== ====== ====== ====== ====== (1) Real Estate - Residential Charge-off and recovery information included in Real Estate - Mortgage category for 1998, 1997, 1996 and 1995. |
Table 9 RISK ELEMENT ASSETS (Dollars in Thousands) As of December 31, ------------------------------------------- 1999 1998 1997 1996 1995 ------------------------------------------- Nonaccruing Loans $2,965 $4,996 $1,403 $2,811 $3,151 Restructured 26 195 224 262 1,686 ------ ------ ------ ------ ------ Total Nonperforming Loans 2,991 5,191 1,627 3,073 4,837 Other Real Estate 934 1,468 1,244 1,489 1,001 ------ ------ ------ ------ ------ Total Nonperforming Assets $3,925 $6,659 $2,871 $4,562 $5,838 ====== ====== ====== ====== ====== Past Due 90 Days or More $ 781 $1,124 $ 994 $ 638 $ 317 ====== ====== ====== ====== ====== Nonperforming Loans to Loans .32% .61% .21% .41% .95% ====== ====== ====== ====== ====== Nonperforming Assets to Loans, Plus Other Real Estate .42% .79% .37% .61% 1.14% ====== ====== ====== ====== ====== Nonperforming Assets to Capital(1) 2.76% 4.80% 2.28% 4.06% 5.81% ====== ====== ====== ====== ====== Reserve to Nonperforming Loans 331.96% 189.31% 593.85% 307.52% 155.51% ======= ======= ======= ======= ======= (1) For computation of this percentage, "capital" refers to shareowners' equity plus the allowance for loan losses. |
Table 10 MATURITY DISTRIBUTION OF INVESTMENT SECURITIES As of December 31, 1999 ------------------------------------------------ Weighted (Dollars in Thousands) Amortized Cost Market Value Average Yield(1) - -------------------------------------------------------------------------------- U. S. GOVERNMENTS Due in 1 year or less $ 23,388 $ 23,197 5.33% Due over 1 year thru 5 years 75 840 73,408 5.46 Due over 5 years thru 10 years - - - Due over 10 years - - - -------- -------- ---- TOTAL 99,228 96,605 5.43 STATE & POLITICAL SUBDIVISIONS Due in 1 year or less 19,217 19,227 6.57 Due over 1 year thru 5 years 47,147 46,546 6.18 Due over 5 years thru 10 years 37,373 36,190 6.09 Due over 10 years 575 528 - -------- -------- ---- TOTAL 104,312 102,491 6.19 MORTGAGE-BACKED SECURITIES(2) Due in 1 year or less 146 143 6.17 Due over 1 year thru 5 years 78,436 75,106 5.71 Due over 5 years thru 10 years 6,458 6,151 6.32 Due over 10 years - - - -------- -------- ---- TOTAL 85,040 81,400 5.75 OTHER SECURITIES Due in 1 Year or less 2,000 1,998 5.25 Due over 1 year thru 5 years 34,584 32,597 5.72 Due over 5 years thru 10 years 500 496 6.12 Due over 10 years(3) 5,288 5,605 6.90 -------- -------- ---- TOTAL 42,372 40,696 5.58 -------- -------- ---- Total Investment Securities $330,952 $321,192 5.81% ======== ======== ==== (1) Weighted average yields are calculated on the basis of the amortized cost of the security. |
Table 11 SOURCES OF DEPOSIT GROWTH (Average Balances - Dollars in Thousands) 1998 to Percentage 1999 of Total Components of Total Deposits Change Change 1999 1998 1997 -------------------------------------------------------- Noninterest Bearing Deposits $ 54,358 21.5% 21.3% 21.3% 21.1% NOW Accounts 36,450 14.4 12.6 12.1 12.5 Money Market Accounts 69,350 27.5 12.6 8.8 9.2 Savings 14,782 5.9 9.4 10.2 10.3 Other Time Deposits 77,346 30.7 44.1 47.6 46.9 -------- ----- ----- ----- ----- Total Deposits $252,286 100.0% 100.0% 100.0% 100.0% ======== ===== ===== ===== ===== Table 12 MATURITY DISTRIBUTION OF CERTIFICATES OF DEPOSIT $100,000 OR OVER (Dollars in Thousands) December 31, 1999 ----------------------------------------- Time Certificates of Deposit Percent ----------------------------------------- Three months or less $ 48,199 47.4% Over three through six months 46,838 46.0 Over six through twelve months 4,392 4.3 Over twelve months 2,313 2.3 -------- ----- Total $101,742 100.0% ======== ===== LIQUIDITY AND CAPITAL RESOURCES Liquidity for a banking institution is the availability of funds to meet increased loan demand and/or excessive deposit withdrawals. |
9,313 3,879 5,590 States and Political Subdivisions 4,371 3,028 3,235 Other Securities 2,486 649 386 Funds Sold & Interest Bearing Deposits 3,558 3,576 1,614 ------- ------- ------- Total Interest Income 99,685 89,010 84,981 INTEREST EXPENSE Deposits 38,315 32,119 29,430 Short-Term Borrowings 1,816 1,904 1,974 Long-Term Debt 1,116 1,225 1,284 ------- ------- ------- Total Interest Expense 41,247 35,248 32,688 ------- ------- ------- Net Interest Income 58,438 53,762 52,293 Provision for Loan Losses 2,440 2,439 2,328 ------- ------- ------- Net Interest Income After Provision for Loan Losses 55,998 51,323 49,965 ------- ------- ------- NONINTEREST INCOME Service Charges on Deposit Accounts 9,973 8,541 8,994 Data Processing 2,861 3,523 3,160 Income from Fiduciary Activities 2,227 1,761 1,202 Securities Transactions (12) 87 (15) Other 9,712 8,672 6,143 ------- ------- ------- Total Noninterest Income 24,761 22,584 19,484 ------- ------- ------- NONINTEREST EXPENSE Salaries and Associate Benefits 28,969 26,597 25,602 Occupancy, Net 4,466 3,530 3,214 Furniture and Equipment 5,647 5,280 5,030 Merger Expense 1,361 115 655 Other 17,585 14,922 13,335 ------- ------- ------- Total Noninterest Expense 58,028 50,444 47,836 ------- ------- ------- Income Before Income Taxes 22,731 23,463 21,613 Income Taxes 7,479 8,169 7,212 ------- ------- ------- NET INCOME $15,252 $15,294 $14,401 ======= ======= ======= BASIC NET INCOME PER SHARE $ 1.50 $ 1.51 $ 1.44 ======= ======= ======= DILUTED NET INCOME PER SHARE $ 1.50 $ 1.50 $ 1.43 ======= ======= ======= Basic Average Common Shares Outstanding 10,175 10,146 10,031 ======= ======= ======= Diluted Average Common Shares Outstanding 10,196 10,168 10,061 ======= ======= ======= (1) All share and per share data have been restated to reflect the pooling-of-interests of Grady Holding Company and its subsidiaries and adjusted to reflect the 3-for-2 stock split effective June 1, 1998. |
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in Thousands, Except Per Share Data)(1) As of December 31, 1999 1998 ASSETS ----------------------------- Cash and Due From Banks $ 79,454 $ 68,398 Funds Sold 13,618 72,625 Investment Securities, Available-for-Sale 321,192 371,597 Loans, Net of Unearned Interest 928,486 844,217 Allowance for Loan Losses (9,929) (9,827) ---------- ---------- Loans, Net 918,557 834,390 Premises and Equipment 37,834 37,171 Intangibles 25,149 28,772 Other Assets 34,716 30,722 ---------- ---------- Total Assets $1,430,520 $1,443,675 ========== ========== LIABILITIES Deposits: Noninterest Bearing Deposits $ 253,140 $ 287,904 Interest Bearing Deposits 949,518 965,649 ---------- ---------- Total Deposits 1,202,658 1,253,553 Short-Term Borrowings 66,275 25,199 Long-Term Debt 14,258 18,746 Other Liabilities 15,113 17,315 ---------- ---------- Total Liabilities 1,298,304 1,314,813 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; 10,190,069 and 10,163,919 shares issued and outstanding 102 102 Additional Paid-In Capital 9,249 8,561 Retained Earnings 129,055 119,521 Accumulated Other Comprehensive Income, Net of Tax (6,190) 678 ---------- ---------- Total Shareowners' Equity 132,216 128,862 ---------- ---------- Total Liabilities and Shareowners' Equity $1,430,520 $1,443,675 ========== ========== (1) All share and per share data have been restated to reflect the pooling-of-interests of Grady Holding Company and its subsidiaries and adjusted to reflect the 3-for-2 stock split effective June 1, 1998. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) For the Years Ended December 31, 1999 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: -------- -------- -------- Net Income $ 15,252 $ 15,294 $ 14,401 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Loan Losses 2,440 2,439 2,328 Depreciation 3,708 3,565 3,404 Net Securities Amortization 1,417 758 695 Amortization of Intangible Assets 2,833 1,191 856 (Gain) on Sale of Investment Securities 12 (87) 15 Non-Cash Compensation 260 869 563 Deferred Income Taxes (225) 133 213 Net (Increase) in Other Assets (230) (11,019) (1,710) Net (Decrease) Increase in Other Liabilities (1,000) 3,125 1,572 -------- -------- -------- Net Cash Provided by Operating Activities 24,467 16,268 22,337 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITES: Proceeds from Payments/Maturities of Investment Securities Available-for-Sale 104,189 84,524 69,569 Purchase of Investment Securities Available-for-Sale (66,031) (123,537) (10,488) Net Increase in Loans (86,608) (26,388) (34,812) Net Cash Received From (Used In) Acquisitions - 36,726 - Purchase of Premises & Equipment (4,471) (4,323) (2,192) Sales of Premises & Equipment 100 407 1,379 -------- -------- -------- Net Cash (Used in) Provided By Investing Activities (52,821) (32,591) 23,456 -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITES: Net (Decrease) Increase in Deposits (50,895) 55,082 (30,011) Net Increase (Decrease) in Short-Term Borrowings 41,076 (20,914) 10,156 Borrowing from Long-Term Debt 2,262 8,241 2,210 Repayment of Long-Term Debt (6,750) (7,600) (2,951) Dividends Paid(1) (5,718) (4,281) (3,726) Issuance of Common Stock 428 1,148 1,126 -------- -------- -------- Net Cash (Used in) Provided By Financing Activities (19,597) 31,676 (23,197) -------- -------- -------- Net (Decrease) Increase in Cash and Cash Equivalents (47,951) 15,353 22,596 Cash and Cash Equivalents at Beginning of Year 141,023 125,670 103,074 -------- -------- -------- Cash and Cash Equivalents at End of Year $ 93,072 $141,023 $125,670 ======== ======== ======== Supplemental Disclosures: Interest Paid on Deposits $ 38,822 $ 31,179 $ 31,147 ======== ======== ======== Interest Paid on Debt $ 2,849 $ 3,128 $ 3,258 ======== ======== ======== Taxes Paid $ 6,137 $ 8,470 $ 7,308 ======== ======== ======== Loans Transferred To Other Real Estate $ 1,344 $ 2,011 $ 2,701 ======== ======== ======== (1) Dividend amount includes a special one-time distribution paid to Grady Holding Company shareowners of approximately $563,000. |
Note 3 INVESTMENT SECURITIES The amortized cost and related market value of investment securities available-for-sale at December 31, were as follows: Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ----------------------------------------------------------------------------- U.S. Treasury $ 20,047 $ 4 $ 70 $ 19,981 U.S. Government Agencies and Corporations 79,181 - 2,557 76,624 States and Political Subdivisions 104,312 74 1,895 102,491 Mortgage-Backed Securities 85,040 88 3,728 81,400 Other Securities 42,372 - 1,676 40,696 -------- ---- ------ -------- Total Investment Securities $330,952 $166 $9,926 $321,192 Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ----------------------------------------------------------------------------- U.S. Treasury $ 30,618 $ 203 $ - $ 30,821 U.S. Government Agencies and Corporations 74,035 247 319 73,963 States and Political Subdivisions 94,917 1,159 24 96,052 Mortgage-Backed Securities 93,183 205 443 92,945 Other Securities 77,770 159 113 77,816 -------- ------ ---- -------- Total Investment Securities $370,523 $1,973 $899 $371,597 ======== ====== ==== ======== The total proceeds from the sale of investment securities and the gross realized gains and losses from the sale of such securities for each of the last three years is as follows: (Dollars in Thousands) Total Gross Gross Year Proceeds Realized Gains Realized Losses - --------------------------------------------------------------- 1999 $86,213 $ 1 $13 1998 $46,861 $117 $30 1997 $37,964 $ 18 $33 Total proceeds include principal reductions in mortgage-backed securities and proceeds from securities which were called of $17,992,000, $27,236,000, and $29,091,000 in 1999, 1998, and 1997, respectively. |
Interest expense on deposits for the three years ended December 31, was as follows: (Dollars in Thousands) 1999 1998 1997 - ---------------------------------------------------------------- NOW Accounts $ 3,134 $ 2,223 $ 1,978 Money Market Accounts 5,766 2,562 2,510 Savings Accounts 2,453 2,243 2,008 Other Time Deposits 26,962 25,091 22,934 ------- ------- ------- Total $38,315 $32,119 $29,430 ======= ======= ======= Note 8 SHORT-TERM BORROWINGS Short-term borrowings included the following at December 31: Securities Federal Sold Under Other Funds Repurchase Short-Term (Dollars in Thousands) Purchased Agreements Borrowings - -------------------------------------------------------------------------------- Balance $28,050 $36,439 $1,786 Maximum indebtedness at any month end 28,050 41,114 1,786 Daily average indebtedness outstanding 12,997 27,923 1,397 Average rate paid for the year 4.87% 4.02% 4.31% Average rate paid on period-end borrowings 4.20% 3.53% 4.22% Balance $ 6,120 $17,042 $2,037 Maximum indebtedness at any month end 29,255 18,770 2,037 Daily average indebtedness outstanding 22,159 15,635 1,190 Average rate paid for the year 5.19% 4.43% 5.23% Average rate paid on period-end borrowings 3.79% 6.15% 3.88% Note 9 LONG-TERM DEBT Long-term debt included the following at December 31: (Dollars in Thousands) 1999 1998 - ------------------------------------------------------------------------------ Federal Home Loan Bank Note Due on December 19, 2005, fixed rate of 6.04% $ 1,542 $ 1,652 Due on December 13, 2006, fixed rate of 6.20% 1,002 1,068 Due on March 14, 2013, fixed rate of 6.13% 938 975 Due on September 20, 2013, fixed rate of 5.64% 1,334 1,387 Due on December 17, 2018, fixed rate of 6.33% 1,949 2,000 Due on December 24, 2018, fixed rate of 5.34% 857 875 Due on January 26, 2014, fixed rate of 5.75% 1,499 - Due on May 27, 2014, fixed rate of 5.92% 720 - Due on December 16, 2004, fixed rate of 6.52% 313 1,000 Due on December 16, 2004, fixed rate of 6.52% 172 361 Due on April 24, 2007, fixed rate of 7.30% 419 581 Due on October 10, 2001, fixed rate of 5.00% 324 475 IBM Note Payable Due on December 31, 2000, fixed rate of 3.77% 189 372 Revolving credit note, Due on November 16, 2001, current rate of 6.50% 3,000 8,000 ------- ------- Total outstanding $14,258 $18,746 ======= ======= The contractual maturites of long-term debt for the five years succeeding December 31, 1999, are as follows: 2000 $ 3,189 2001 324 2002 - 2003 - 2004 and thereafter 10,745 ------- $14,258 ======= The Federal Home Loan Bank advances are collateralized with U.S. Treasury Securities and 1-4 family mortgages. |
Note 10 INCOME TAXES The provision for income taxes reflected in the statement of income is comprised of the following components: (Dollars in Thousands) 1999 1998 1997 - ------------------------------------------------------------- Current: Federal $6,880 $7,185 $6,076 State 824 851 923 Deferred: Federal (189) 117 182 State (36) 16 31 ------ ------ ------ Total $7,479 $8,169 $7,212 ====== ====== ====== The net deferred tax asset and the temporary differences comprising that balance at December 31, 1999 and 1998, are as follows: (Dollars in Thousands) 1999 1998 - -------------------------------------------------------------------- Deferred Tax Asset attributable to: Allowance for Loan Losses $2,909 $2,806 Unrealized Losses on Investment Securities 2,892 - Stock Incentive Plan 682 491 Interest on Nonperforming Loans 169 144 Acquired Deposits 76 - Other 306 95 ------ ------ Total Deferred Tax Asset $7,034 $3,536 Deferred Tax Liability attributable to: Associate Benefits $1,291 $1,298 Premises and Equipment 1,189 888 Deferred Loan Fees 370 336 Unrealized Gains on Investment Securities - 395 Acquired Deposits - 127 Securities Accretion 249 89 Other 104 84 ------ ------ Total Deferred Tax Liability 3,203 3,217 ------ ------ Net Deferred Tax Asset $3,831 $ 319 ====== ====== Income taxes provided were less than the tax expense computed by applying the statutory federal income tax rates to income. |
A summary of actual, required, and capital levels necessary to be considered well-capitalized for Capital City Bank Group, Inc. ("CCBG, Inc.") consolidated and its banking subsidiaries, Capital City Bank ("CCB") and First National Bank of Grady County ("FNB"),as of December 31, 1999 and December 31, 1998 are shown below: (Dollars in Thousands) To Be Well- Required Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provisions ------------------------------------------------------------ Amount Ratio Amount Ratio Amount Ratio ------------------------------------------------------------ As of December 31, 1999: Tier I Capital: CCBG, Inc. $107,076 11.23% $38,138 4.00% $ 57,207 6.00% CCB 91,832 10.65% 34,490 4.00% 51,736 6.00% Total Capital: CCBG, Inc. 117,005 12.27% 76,276 8.00% 95,345 10.00% CCB 100,351 11.64% 68,981 8.00% 86,226 10.00% Tier I Leverage: CCBG, Inc. - 7.92% - 3.00% - 5.00% CCB - 7.39% - 3.00% - 5.00% As of December 31, 1998: Tier I Capital: CCBG, Inc. $ 99,473 10.14% $41,262 4.00% $ 61,893 6.00% CCB 87,355 9.73% 35,929 4.00% 53,894 6.00% Total Capital: CCBG, Inc. 108,977 11.11% 82,525 8.00% 103,156 10.00% CCB 95,814 10.67% 71,859 8.00% 89,823 10.00% Tier I Leverage: CCBG, Inc. - 7.84% - 3.00% - 5.00% CCB - 7.62% - 3.00% - 5.00% Note 14 DIVIDEND RESTRICTIONS Substantially all the Company's retained earnings are undistributed earnings of its banking subsidiary, which are restricted by various regulations administered by Federal and state bank regulatory authorities. |
Note 19 PARENT COMPANY FINANCIAL INFORMATION The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 1999 1998 1997 - ------------------------------------------------------------------------------ OPERATING INCOME Income Received from Subsidiary Banks: Dividends $ 7,285 $ 7,190 $ 6,870 Overhead Fees 2,595 4,007 3,868 ------- ------- ------- Total Operating Income 9,880 11,197 10,738 ------- ------- ------- OPERATING EXPENSE Salaries and Associate Benefits 1,926 2,171 2,445 Interest on Debt 430 832 988 Professional Fees 232 527 617 Advertising 109 711 597 Restructuring Charge - - 338 Legal Fees 77 115 126 Other 257 696 526 ------- ------- ------- Total Operating Expense 3,031 5,052 5,637 ------- ------- ------- Income Before Income Taxes and Equity in Undistributed Earnings of Subsidiary Banks 6,849 6,145 5,101 Income Tax Benefit (198) (394) (670) ------- ------- ------- Income Before Equity in Undistributed Earnings of Subsidiary Banks 7,047 6,539 5,771 Equity in Undistributed Earnings of Subsidiary Banks 8,205 8,755 8,630 ------- ------- ------- Net Income $15,252 $15,294 $14,401 ======= ======= ======= The following are condensed statements of financial condition of the parent company at December 31: Parent Company Statements of Financial Condition (Dollars in Thousands) 1999 1998 - -------------------------------------------------------------------- ASSETS Cash and Due From Group Banks $ 2,020 $ 4,749 Investment in Subsidiary Banks 134,105 132,727 Other Assets 520 512 -------- -------- Total Assets $136,645 $137,988 ======== ======== LIABILITIES Long-Term Debt $ 3,000 $ 8,000 Other Liabilities 1,429 1,126 -------- -------- Total Liabilities 4,429 9,126 -------- -------- 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; 10,190,069 and 10,163,919 shares issued and outstanding 102 102 Additional Paid-in Capital 9,249 8,561 Retained Earnings 129,055 119,521 Accumulated Other Comprehensive Income, Net of Tax (6,190) 678 -------- -------- Total Shareowners' Equity 132,216 128,862 -------- -------- Total Liabilities and Shareowners' Equity $136,645 $137,988 ======== ======== The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 1999 1998 1997 - -------------------------------------------------------------------------- Cash Flows From Operating Activities: Net Income $15,252 $15,294 $14,401 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Equity in undistributed earnings of Subsidiary Banks (8,205) (8,755) (8,630) Non-Cash Compensation 260 868 563 Amortization of Goodwill - 25 25 (Increase) Decrease in Other Assets (40) 1,155 (295) Net Increase (Decrease) in Other Liabilities 292 (357) 299 ------- ------- ------- Net Cash Provided by Operating Activities 7,559 8,230 6,363 ------- ------- ------- Cash From Financing Activities: Acquisition of Interest-Bearing Deposits - - (141) Repayment of Long-Term Debt (5,000) (5,000) (2,000) Payment of Dividends (5,718) (4,328) (3,727) Issuance of Common Stock, Net 428 1,148 1,040 ------- ------- ------- Net Cash Used in Financing Activities (10,290) (8,180) (4,828) ------- ------- ------- Net (Decrease) Increase in Cash (2,729) 50 1,535 Cash at Beginning of Period 4,749 4,699 3,164 ------- ------- ------- Cash at End of Period $ 2,020 $ 4,749 $ 4,699 ======= ======= ======= Note 20 CORPORATE REORGANIZATION On October 18, 1997, the Company consolidated its three remaining bank affiliates, Levy County State Bank, Farmers & Merchants Bank of Trenton and Branford State Bank into Capital City Bank. |
Comprehensive income for 1998, 1997 and 1996 was calculated as follows: (Dollars in Thousands) 1999 1998 1997 - -------------------------------------------------------------------------- Net Unrealized Gains (Losses) Recognized in Other Comprehensive Income: Before Tax $(10,566) $ 109 $ 802 Less Income Tax (3,698) 38 281 -------- ------- ------- Net of Tax (6,868) 71 521 Amounts Reported in Net Income: (Loss) Gain On Sale of Securities (12) 87 (15) Net Amortization 1,417 758 695 -------- ------- ------- Reclassification Adjustment 1,405 845 680 Less Income Tax Expense 492 296 238 -------- ------- ------- Reclassification Adjustment, Net of Tax 913 549 442 Amounts Reported in Other Comprehensive Income: Unrealized (Loss) Gain Arising During the Period, Net of Tax (5,955) 620 963 Net Unrealized (Losses) Recognized in Reclassification Adjustments, Net of Tax (913) (549) (442) -------- ------- ------- Other Comprehensive Income (6,868) 71 521 Net Income 15,252 15,294 14,401 -------- ------- ------- Total Comprehensive Income $ 8,384 $15,365 $14,922 ======== ======= ======= Item 9. |
9,313 3,879 5,590 States and Political Subdivisions 4,371 3,028 3,235 Other Securities 2,486 649 386 Funds Sold & Interest Bearing Deposits 3,558 3,576 1,614 ------- ------- ------- Total Interest Income 99,685 89,010 84,981 INTEREST EXPENSE Deposits 38,315 32,119 29,430 Short-Term Borrowings 1,816 1,904 1,974 Long-Term Debt 1,116 1,225 1,284 ------- ------- ------- Total Interest Expense 41,247 35,248 32,688 ------- ------- ------- Net Interest Income 58,438 53,762 52,293 Provision for Loan Losses 2,440 2,439 2,328 ------- ------- ------- Net Interest Income After Provision for Loan Losses 55,998 51,323 49,965 ------- ------- ------- NONINTEREST INCOME Service Charges on Deposit Accounts 9,973 8,541 8,994 Data Processing 2,861 3,523 3,160 Income from Fiduciary Activities 2,227 1,761 1,202 Securities Transactions (12) 87 (15) Other 9,712 8,672 6,143 ------- ------- ------- Total Noninterest Income 24,761 22,584 19,484 ------- ------- ------- NONINTEREST EXPENSE Salaries and Associate Benefits 28,969 26,597 25,602 Occupancy, Net 4,466 3,530 3,214 Furniture and Equipment 5,647 5,280 5,030 Merger Expense 1,361 115 655 Other 17,585 14,922 13,335 ------- ------- ------- Total Noninterest Expense 58,028 50,444 47,836 ------- ------- ------- Income Before Income Taxes 22,731 23,463 21,613 Income Taxes 7,479 8,169 7,212 ------- ------- ------- NET INCOME $15,252 $15,294 $14,401 ======= ======= ======= BASIC NET INCOME PER SHARE $ 1.50 $ 1.51 $ 1.44 ======= ======= ======= DILUTED NET INCOME PER SHARE $ 1.50 $ 1.50 $ 1.43 ======= ======= ======= Basic Average Common Shares Outstanding 10,175 10,146 10,031 ======= ======= ======= Diluted Average Common Shares Outstanding 10,196 10,168 10,061 ======= ======= ======= (1) All share and per share data have been restated to reflect the pooling-of-interests of Grady Holding Company and its subsidiaries and adjusted to reflect the 3-for-2 stock split effective June 1, 1998. |
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in Thousands, Except Per Share Data)(1) As of December 31, 1999 1998 ASSETS ----------------------------- Cash and Due From Banks $ 79,454 $ 68,398 Funds Sold 13,618 72,625 Investment Securities, Available-for-Sale 321,192 371,597 Loans, Net of Unearned Interest 928,486 844,217 Allowance for Loan Losses (9,929) (9,827) ---------- ---------- Loans, Net 918,557 834,390 Premises and Equipment 37,834 37,171 Intangibles 25,149 28,772 Other Assets 34,716 30,722 ---------- ---------- Total Assets $1,430,520 $1,443,675 ========== ========== LIABILITIES Deposits: Noninterest Bearing Deposits $ 253,140 $ 287,904 Interest Bearing Deposits 949,518 965,649 ---------- ---------- Total Deposits 1,202,658 1,253,553 Short-Term Borrowings 66,275 25,199 Long-Term Debt 14,258 18,746 Other Liabilities 15,113 17,315 ---------- ---------- Total Liabilities 1,298,304 1,314,813 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; 10,190,069 and 10,163,919 shares issued and outstanding 102 102 Additional Paid-In Capital 9,249 8,561 Retained Earnings 129,055 119,521 Accumulated Other Comprehensive Income, Net of Tax (6,190) 678 ---------- ---------- Total Shareowners' Equity 132,216 128,862 ---------- ---------- Total Liabilities and Shareowners' Equity $1,430,520 $1,443,675 ========== ========== (1) All share and per share data have been restated to reflect the pooling-of-interests of Grady Holding Company and its subsidiaries and adjusted to reflect the 3-for-2 stock split effective June 1, 1998. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) For the Years Ended December 31, 1999 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: -------- -------- -------- Net Income $ 15,252 $ 15,294 $ 14,401 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Loan Losses 2,440 2,439 2,328 Depreciation 3,708 3,565 3,404 Net Securities Amortization 1,417 758 695 Amortization of Intangible Assets 2,833 1,191 856 (Gain) on Sale of Investment Securities 12 (87) 15 Non-Cash Compensation 260 869 563 Deferred Income Taxes (225) 133 213 Net (Increase) in Other Assets (230) (11,019) (1,710) Net (Decrease) Increase in Other Liabilities (1,000) 3,125 1,572 -------- -------- -------- Net Cash Provided by Operating Activities 24,467 16,268 22,337 -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITES: Proceeds from Payments/Maturities of Investment Securities Available-for-Sale 104,189 84,524 69,569 Purchase of Investment Securities Available-for-Sale (66,031) (123,537) (10,488) Net Increase in Loans (86,608) (26,388) (34,812) Net Cash Received From (Used In) Acquisitions - 36,726 - Purchase of Premises & Equipment (4,471) (4,323) (2,192) Sales of Premises & Equipment 100 407 1,379 -------- -------- -------- Net Cash (Used in) Provided By Investing Activities (52,821) (32,591) 23,456 -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITES: Net (Decrease) Increase in Deposits (50,895) 55,082 (30,011) Net Increase (Decrease) in Short-Term Borrowings 41,076 (20,914) 10,156 Borrowing from Long-Term Debt 2,262 8,241 2,210 Repayment of Long-Term Debt (6,750) (7,600) (2,951) Dividends Paid(1) (5,718) (4,281) (3,726) Issuance of Common Stock 428 1,148 1,126 -------- -------- -------- Net Cash (Used in) Provided By Financing Activities (19,597) 31,676 (23,197) -------- -------- -------- Net (Decrease) Increase in Cash and Cash Equivalents (47,951) 15,353 22,596 Cash and Cash Equivalents at Beginning of Year 141,023 125,670 103,074 -------- -------- -------- Cash and Cash Equivalents at End of Year $ 93,072 $141,023 $125,670 ======== ======== ======== Supplemental Disclosures: Interest Paid on Deposits $ 38,822 $ 31,179 $ 31,147 ======== ======== ======== Interest Paid on Debt $ 2,849 $ 3,128 $ 3,258 ======== ======== ======== Taxes Paid $ 6,137 $ 8,470 $ 7,308 ======== ======== ======== Loans Transferred To Other Real Estate $ 1,344 $ 2,011 $ 2,701 ======== ======== ======== (1) Dividend amount includes a special one-time distribution paid to Grady Holding Company shareowners of approximately $563,000. |
Note 3 INVESTMENT SECURITIES The amortized cost and related market value of investment securities available-for-sale at December 31, were as follows: Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ----------------------------------------------------------------------------- U.S. Treasury $ 20,047 $ 4 $ 70 $ 19,981 U.S. Government Agencies and Corporations 79,181 - 2,557 76,624 States and Political Subdivisions 104,312 74 1,895 102,491 Mortgage-Backed Securities 85,040 88 3,728 81,400 Other Securities 42,372 - 1,676 40,696 -------- ---- ------ -------- Total Investment Securities $330,952 $166 $9,926 $321,192 Amortized Unrealized Unrealized Market (Dollars in Thousands) Cost Gains Losses Value - ----------------------------------------------------------------------------- U.S. Treasury $ 30,618 $ 203 $ - $ 30,821 U.S. Government Agencies and Corporations 74,035 247 319 73,963 States and Political Subdivisions 94,917 1,159 24 96,052 Mortgage-Backed Securities 93,183 205 443 92,945 Other Securities 77,770 159 113 77,816 -------- ------ ---- -------- Total Investment Securities $370,523 $1,973 $899 $371,597 ======== ====== ==== ======== The total proceeds from the sale of investment securities and the gross realized gains and losses from the sale of such securities for each of the last three years is as follows: (Dollars in Thousands) Total Gross Gross Year Proceeds Realized Gains Realized Losses - --------------------------------------------------------------- 1999 $86,213 $ 1 $13 1998 $46,861 $117 $30 1997 $37,964 $ 18 $33 Total proceeds include principal reductions in mortgage-backed securities and proceeds from securities which were called of $17,992,000, $27,236,000, and $29,091,000 in 1999, 1998, and 1997, respectively. |
Interest expense on deposits for the three years ended December 31, was as follows: (Dollars in Thousands) 1999 1998 1997 - ---------------------------------------------------------------- NOW Accounts $ 3,134 $ 2,223 $ 1,978 Money Market Accounts 5,766 2,562 2,510 Savings Accounts 2,453 2,243 2,008 Other Time Deposits 26,962 25,091 22,934 ------- ------- ------- Total $38,315 $32,119 $29,430 ======= ======= ======= Note 8 SHORT-TERM BORROWINGS Short-term borrowings included the following at December 31: Securities Federal Sold Under Other Funds Repurchase Short-Term (Dollars in Thousands) Purchased Agreements Borrowings - -------------------------------------------------------------------------------- Balance $28,050 $36,439 $1,786 Maximum indebtedness at any month end 28,050 41,114 1,786 Daily average indebtedness outstanding 12,997 27,923 1,397 Average rate paid for the year 4.87% 4.02% 4.31% Average rate paid on period-end borrowings 4.20% 3.53% 4.22% Balance $ 6,120 $17,042 $2,037 Maximum indebtedness at any month end 29,255 18,770 2,037 Daily average indebtedness outstanding 22,159 15,635 1,190 Average rate paid for the year 5.19% 4.43% 5.23% Average rate paid on period-end borrowings 3.79% 6.15% 3.88% Note 9 LONG-TERM DEBT Long-term debt included the following at December 31: (Dollars in Thousands) 1999 1998 - ------------------------------------------------------------------------------ Federal Home Loan Bank Note Due on December 19, 2005, fixed rate of 6.04% $ 1,542 $ 1,652 Due on December 13, 2006, fixed rate of 6.20% 1,002 1,068 Due on March 14, 2013, fixed rate of 6.13% 938 975 Due on September 20, 2013, fixed rate of 5.64% 1,334 1,387 Due on December 17, 2018, fixed rate of 6.33% 1,949 2,000 Due on December 24, 2018, fixed rate of 5.34% 857 875 Due on January 26, 2014, fixed rate of 5.75% 1,499 - Due on May 27, 2014, fixed rate of 5.92% 720 - Due on December 16, 2004, fixed rate of 6.52% 313 1,000 Due on December 16, 2004, fixed rate of 6.52% 172 361 Due on April 24, 2007, fixed rate of 7.30% 419 581 Due on October 10, 2001, fixed rate of 5.00% 324 475 IBM Note Payable Due on December 31, 2000, fixed rate of 3.77% 189 372 Revolving credit note, Due on November 16, 2001, current rate of 6.50% 3,000 8,000 ------- ------- Total outstanding $14,258 $18,746 ======= ======= The contractual maturites of long-term debt for the five years succeeding December 31, 1999, are as follows: 2000 $ 3,189 2001 324 2002 - 2003 - 2004 and thereafter 10,745 ------- $14,258 ======= The Federal Home Loan Bank advances are collateralized with U.S. Treasury Securities and 1-4 family mortgages. |
Note 10 INCOME TAXES The provision for income taxes reflected in the statement of income is comprised of the following components: (Dollars in Thousands) 1999 1998 1997 - ------------------------------------------------------------- Current: Federal $6,880 $7,185 $6,076 State 824 851 923 Deferred: Federal (189) 117 182 State (36) 16 31 ------ ------ ------ Total $7,479 $8,169 $7,212 ====== ====== ====== The net deferred tax asset and the temporary differences comprising that balance at December 31, 1999 and 1998, are as follows: (Dollars in Thousands) 1999 1998 - -------------------------------------------------------------------- Deferred Tax Asset attributable to: Allowance for Loan Losses $2,909 $2,806 Unrealized Losses on Investment Securities 2,892 - Stock Incentive Plan 682 491 Interest on Nonperforming Loans 169 144 Acquired Deposits 76 - Other 306 95 ------ ------ Total Deferred Tax Asset $7,034 $3,536 Deferred Tax Liability attributable to: Associate Benefits $1,291 $1,298 Premises and Equipment 1,189 888 Deferred Loan Fees 370 336 Unrealized Gains on Investment Securities - 395 Acquired Deposits - 127 Securities Accretion 249 89 Other 104 84 ------ ------ Total Deferred Tax Liability 3,203 3,217 ------ ------ Net Deferred Tax Asset $3,831 $ 319 ====== ====== Income taxes provided were less than the tax expense computed by applying the statutory federal income tax rates to income. |
A summary of actual, required, and capital levels necessary to be considered well-capitalized for Capital City Bank Group, Inc. ("CCBG, Inc.") consolidated and its banking subsidiaries, Capital City Bank ("CCB") and First National Bank of Grady County ("FNB"),as of December 31, 1999 and December 31, 1998 are shown below: (Dollars in Thousands) To Be Well- Required Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Provisions ------------------------------------------------------------ Amount Ratio Amount Ratio Amount Ratio ------------------------------------------------------------ As of December 31, 1999: Tier I Capital: CCBG, Inc. $107,076 11.23% $38,138 4.00% $ 57,207 6.00% CCB 91,832 10.65% 34,490 4.00% 51,736 6.00% Total Capital: CCBG, Inc. 117,005 12.27% 76,276 8.00% 95,345 10.00% CCB 100,351 11.64% 68,981 8.00% 86,226 10.00% Tier I Leverage: CCBG, Inc. - 7.92% - 3.00% - 5.00% CCB - 7.39% - 3.00% - 5.00% As of December 31, 1998: Tier I Capital: CCBG, Inc. $ 99,473 10.14% $41,262 4.00% $ 61,893 6.00% CCB 87,355 9.73% 35,929 4.00% 53,894 6.00% Total Capital: CCBG, Inc. 108,977 11.11% 82,525 8.00% 103,156 10.00% CCB 95,814 10.67% 71,859 8.00% 89,823 10.00% Tier I Leverage: CCBG, Inc. - 7.84% - 3.00% - 5.00% CCB - 7.62% - 3.00% - 5.00% Note 14 DIVIDEND RESTRICTIONS Substantially all the Company's retained earnings are undistributed earnings of its banking subsidiary, which are restricted by various regulations administered by Federal and state bank regulatory authorities. |
Note 19 PARENT COMPANY FINANCIAL INFORMATION The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 1999 1998 1997 - ------------------------------------------------------------------------------ OPERATING INCOME Income Received from Subsidiary Banks: Dividends $ 7,285 $ 7,190 $ 6,870 Overhead Fees 2,595 4,007 3,868 ------- ------- ------- Total Operating Income 9,880 11,197 10,738 ------- ------- ------- OPERATING EXPENSE Salaries and Associate Benefits 1,926 2,171 2,445 Interest on Debt 430 832 988 Professional Fees 232 527 617 Advertising 109 711 597 Restructuring Charge - - 338 Legal Fees 77 115 126 Other 257 696 526 ------- ------- ------- Total Operating Expense 3,031 5,052 5,637 ------- ------- ------- Income Before Income Taxes and Equity in Undistributed Earnings of Subsidiary Banks 6,849 6,145 5,101 Income Tax Benefit (198) (394) (670) ------- ------- ------- Income Before Equity in Undistributed Earnings of Subsidiary Banks 7,047 6,539 5,771 Equity in Undistributed Earnings of Subsidiary Banks 8,205 8,755 8,630 ------- ------- ------- Net Income $15,252 $15,294 $14,401 ======= ======= ======= The following are condensed statements of financial condition of the parent company at December 31: Parent Company Statements of Financial Condition (Dollars in Thousands) 1999 1998 - -------------------------------------------------------------------- ASSETS Cash and Due From Group Banks $ 2,020 $ 4,749 Investment in Subsidiary Banks 134,105 132,727 Other Assets 520 512 -------- -------- Total Assets $136,645 $137,988 ======== ======== LIABILITIES Long-Term Debt $ 3,000 $ 8,000 Other Liabilities 1,429 1,126 -------- -------- Total Liabilities 4,429 9,126 -------- -------- 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; 10,190,069 and 10,163,919 shares issued and outstanding 102 102 Additional Paid-in Capital 9,249 8,561 Retained Earnings 129,055 119,521 Accumulated Other Comprehensive Income, Net of Tax (6,190) 678 -------- -------- Total Shareowners' Equity 132,216 128,862 -------- -------- Total Liabilities and Shareowners' Equity $136,645 $137,988 ======== ======== The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 1999 1998 1997 - -------------------------------------------------------------------------- Cash Flows From Operating Activities: Net Income $15,252 $15,294 $14,401 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Equity in undistributed earnings of Subsidiary Banks (8,205) (8,755) (8,630) Non-Cash Compensation 260 868 563 Amortization of Goodwill - 25 25 (Increase) Decrease in Other Assets (40) 1,155 (295) Net Increase (Decrease) in Other Liabilities 292 (357) 299 ------- ------- ------- Net Cash Provided by Operating Activities 7,559 8,230 6,363 ------- ------- ------- Cash From Financing Activities: Acquisition of Interest-Bearing Deposits - - (141) Repayment of Long-Term Debt (5,000) (5,000) (2,000) Payment of Dividends (5,718) (4,328) (3,727) Issuance of Common Stock, Net 428 1,148 1,040 ------- ------- ------- Net Cash Used in Financing Activities (10,290) (8,180) (4,828) ------- ------- ------- Net (Decrease) Increase in Cash (2,729) 50 1,535 Cash at Beginning of Period 4,749 4,699 3,164 ------- ------- ------- Cash at End of Period $ 2,020 $ 4,749 $ 4,699 ======= ======= ======= Note 20 CORPORATE REORGANIZATION On October 18, 1997, the Company consolidated its three remaining bank affiliates, Levy County State Bank, Farmers & Merchants Bank of Trenton and Branford State Bank into Capital City Bank. |
Comprehensive income for 1998, 1997 and 1996 was calculated as follows: (Dollars in Thousands) 1999 1998 1997 - -------------------------------------------------------------------------- Net Unrealized Gains (Losses) Recognized in Other Comprehensive Income: Before Tax $(10,566) $ 109 $ 802 Less Income Tax (3,698) 38 281 -------- ------- ------- Net of Tax (6,868) 71 521 Amounts Reported in Net Income: (Loss) Gain On Sale of Securities (12) 87 (15) Net Amortization 1,417 758 695 -------- ------- ------- Reclassification Adjustment 1,405 845 680 Less Income Tax Expense 492 296 238 -------- ------- ------- Reclassification Adjustment, Net of Tax 913 549 442 Amounts Reported in Other Comprehensive Income: Unrealized (Loss) Gain Arising During the Period, Net of Tax (5,955) 620 963 Net Unrealized (Losses) Recognized in Reclassification Adjustments, Net of Tax (913) (549) (442) -------- ------- ------- Other Comprehensive Income (6,868) 71 521 Net Income 15,252 15,294 14,401 -------- ------- ------- Total Comprehensive Income $ 8,384 $15,365 $14,922 ======== ======= ======= Item 9. |
ARTHUR ANDERSEN LLP Jacksonville, Florida January 28, 1998 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (1) (Dollars in Thousands, Except Per Share Data) As of December 31, 1997 1996 ASSETS Cash and Due From Banks $ 61,270 $ 62,863 Federal Funds Sold 49,200 21,300 Interest Bearing Deposits in Other Banks 3,319 4,743 Investment Securities Available-for-Sale 148,514 207,189 Loans 699,206 674,675 Unearned Interest (1,480) (2,479) Allowance for Loan Losses (8,322) (8,179) ---------- ---------- Loans, Net 689,404 664,017 Premises and Equipment 31,613 34,006 Accrued Interest Receivable 6,293 6,877 Intangibles 7,703 8,398 Other Assets 12,357 12,006 ---------- ---------- Total Assets $1,009,673 $1,021,399 ========== ========== LIABILITIES Deposits: Noninterest Bearing Deposits $ 191,797 $ 196,486 Interest Bearing Deposits 643,015 670,210 ---------- ---------- Total Deposits 834,812 866,696 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 44,622 28,697 Other Short-Term Borrowings 1,492 7,260 Long-Term Debt 15,896 18,072 Other Liabilities 12,401 11,174 ---------- ---------- Total Liabilities 909,223 931,899 SHARE OWNERS' EQUITY Preferred Stock; $.01 par value, 3,000,000 shares authorized; no shares issued and outstanding - - Common Stock, $.01 par value; 60,000,000 shares authorized; 5,850,723 and 5,778,360 shares issued and outstanding 58 58 Additional Paid In Capital 6,537 4,934 Retained Earnings 93,288 84,426 Net Unrealized Gain on Available- for-Sale Investment Securities, net of tax 567 82 ---------- ---------- Total Share Owners' Equity 100,450 89,500 Total Liabilities and Share Owners' Equity $1,009,673 $1,021,399 ========== ========== ========== ========== (1) All share and per share data have been adjusted to reflect the two-for-one stock split effective April 1, 1997. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) For the Years Ended December 31, 1997 1996 1995 Cash Flow From Operating Activities: Net Income $ 12,438 $ 11,360 $ 9,522 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Loan Losses 1,788 1,463 293 Depreciation and Amortization 3,243 4,336 2,613 (Gain) on Sale of Properties (275) (40) (83) (Gain) on Sale of Mortgage Loans (803) (194) - Non-Cash Compensation 563 589 206 Deferred Income Taxes 213 1,043 893 Net (Increase) Decrease in Interest Receivable 584 (2,018) (1,793) Net (Increase) Decrease in Other Assets (563) 3,403 1,450 Net Increase in Other Liabilities 1,226 4,198 3,817 ------- ------- ------- Net Cash Provided by Operating Activities 18,414 24,140 16,918 -------- ------- ------- Cash Flows From Investing Activities: Proceeds from Payments/Maturities of Investment Securities Held-to-Maturity - - 32,486 Proceeds from Payments/Maturities of Investment Securities Available-for-Sale 62,453 74,113 48,529 Proceeds from Sales of Investment Securities Available-for-Sale 293 1,139 - Purchase of Investment Securities Held-to-Maturity - - (27,000) Purchase of Investment Securities Available-for-Sale (2,925) (54,356) (24,539) Net Increase in Loans (26,372) (36,558) (83,621) Purchase of Premises & Equipment (1,921) (2,550) (4,482) Proceeds From Sales of Premises & Equipment 1,379 1,570 89 Net Cash Used to Fund Acquisition - (16,167) - -------- -------- -------- Net Cash Provided By (Used in) Investing Activities 32,907 (32,809) (58,538) -------- -------- -------- Cash Flows From Financing Activities: Net Increase (Decrease) in Deposits (31,884) (37,988) 51,405 Net Increase in Federal Funds Purchased 15,925 11,330 3,403 Net Increase (Decrease) in Other Short-Term Borrowings (5,768) 10,340 1,401 Borrowings of Long-Term Debt - 17,180 1,982 Repayment of Long-Term Debt (2,176) (1,090) - Dividends Paid (3,576) (5,721) (2,590) Issuance of Common Stock 1,040 461 15 -------- -------- -------- Net Cash Provided by (Used in) Financing Activities (26,438) (5,488) 55,616 -------- -------- -------- Net Increase (Decrease) in Cash and Cash Equivalents 24,883 (14,157) 13,996 Cash and Cash Equivalents at Beginning of Year 88,906 103,063 89,067 -------- -------- -------- Cash and Cash Equivalents at End of Year $113,789 $ 88,906 $103,063 ======== ======== ======== Supplemental Disclosures: Interest on Deposits $ 27,844 $ 25,959 $ 18,441 ======== ======== ======== Interest Paid on Debt $ 3,145 $ 2,339 $ 1,106 ======== ======== ======== Taxes Paid $ 6,309 $ 3,722 $ 2,868 ======== ======== ======== Investment Securities Transferred from Held-to-Maturity To Available-for-Sale $ - $ - $122,630 ======== ======== ======== Loans Transferred To Other Real Estate $ 2,687 $ 2,192 $ 647 ======== ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
Note 10 INCOME TAXES The provision for income taxes reflected in the statement of income is comprised of the following components: (Dollars in Thousands) 1997 1996 1995 Current: Federal $5,054 $3,494 $2,646 State 857 453 339 Deferred: Federal 182 891 762 State 31 152 131 ------ ------ ------ Total $6,124 $4,990 $3,878 ====== ====== ====== The net deferred tax asset and the temporary differences comprising that balance at December 31, 1997 and 1996, are as follows: (Dollars in Thousands) 1997 1996 Deferred Tax Asset attributable to: Allowance for Loan Losses $2,514 $2,506 Stock Incentive Plan 764 383 Write down of Real Estate Held for Sale - 196 Other 158 142 ------ ------ Total Deferred Tax Asset $3,436 $3,227 Deferred Tax Liability attributable to: Employee Benefits $1,055 $ 693 Premises and Equipment 883 705 Deferred Loan Fees 392 382 Unrealized Gains on Investment Securities 328 50 Acquired Deposits 177 225 Securities Accretion 94 154 Other 143 163 ------ ------ Total Deferred Tax Liability 3,072 2,372 ------ ------ Net Deferred Tax Asset $ 364 $ 855 ====== ====== Income taxes provided were less than the tax expense computed by applying the statutory federal income tax rates to income. |
(Dollars in Thousands) 1997 1996 1995 Components of Pension Expense: Service Cost $ 1,517 $ 1,241 $ 774 Interest Cost 1,331 1,156 983 Actual Return on Plan Assets (4,458) (2,781) (3,029) Net Amortization and Deferral 2,780 1,532 2,173 ------- ------ ------ Total $ 1,170 $ 1,148 $ 901 ======= ======= ====== Actuarial Present Value of Benefit Obligations: Accumulated Benefit Obligations: Vested $12,831 $10,753 $ 8,353 Nonvested 1,982 1,816 1,695 ------- ------- ------- $14,813 $12,569 $10,048 ======= ======= ======= Plan Assets at Fair Value (primarily listed stocks and bonds, U.S. Government securities and interest bearing deposits) $25,826 $20,041 $15,946 Projected Benefit Obligation (21,159) (17,551) (14,565) Plan Assets in Excess of Projected Benefit Obligation 4,667 2,490 1,381 Unrecognized Net (Gain) Loss (957) 852 1,636 Unrecognized Net Asset (940) (1,176) (1,412) -------- -------- -------- Prepaid Pension Cost $ 2,770 $ 2,166 $ 1,605 ======== ======= ======= Major Assumptions: Discount Rate 7.00% 7.50% 7.50% ======= ======= ======= Rate of Increase in Compensation Levels 5.50% 5.50% 5.50% ======= ======= ======= Expected Long-Term Rate of Return on Plan Assets 8.25% 8.25% 7.50% ======= ======= ======= In 1996, the Company adopted a Supplemental Employee Retirement Plan covering selected executives. |
Note 19 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) 1997 1996 ASSETS Cash and Due From Group Banks $ 4,167 $ 2,622 Investment in Subsidiary Bank 109,799 102,362 Other Assets 967 704 -------- -------- Total Assets $114,933 $105,688 ======== ======== LIABILITIES Long-Term Debt $ 13,000 $ 15,000 Other Liabilities 1,483 1,188 ------- ------- Total Liabilities 14,483 16,188 ------- ------- SHARE OWNERS' EQUITY Preferred Stock; $.01 par value, 3,000,000 shares authorized; no shares issued and outstanding - - Common Stock, $.01 par value; 60,000,000 shares authorized; 5,850,723 and 5,778,366 shares issued and outstanding 58 58 Additional Paid in Capital 6,537 4,934 Retained Earnings 93,288 84,426 Net Unrealized Gain on Investment Securities Available-for-Sale, Net of Tax 567 82 ------- ------- Total Share Owners' Equity 100,450 89,500 ------- ------- Total Liabilities and Share Owners' Equity $114,933 $105,688 ======== ======== The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 1997 1996 1995 OPERATING INCOME Income Received from Subsidiary Banks: Dividends $ 6,600 $ 9,600 $3,884 Overhead Fees 3,845 3,106 2,702 Total Operating Income 10,445 12,706 6,586 OPERATING EXPENSE Salaries and Employee Benefits 2,445 2,353 2,064 Interest on Debt 988 523 - Professional Fees 617 332 243 Advertising 597 430 391 Restructuring Charge 338 - - Legal Fees 126 85 48 Other 515 471 354 ------ ------ ------ Total Operating Expense 5,626 4,194 3,100 ------ ------ ------ Income Before Income Taxes and Equity in Undistributed earnings of Group Banks 4,819 8,512 3,486 Income Tax Benefit (675) (380) (135) ------ ------ ------ Income Before Equity in Undistributed Earnings of Subsidiary Banks 5,494 8,892 3,621 Equity in Undistributed Earnings of Group Banks 6,944 2,468 5,901 ------- ------- ------- Net Income $12,438 $11,360 $9,522 ======= ======= ======= The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 1997 1996 1995 Cash Flows From Operating Activities: Net Income $12,438 $11,360 $9,522 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Equity in undistributed earnings of Subsidiary Bank (6,944) (2,468) (5,901) Non-Cash Compensation 563 589 206 Amortization of Goodwill 25 29 52 (Increase) Decrease in Other Assets (295) (477) 140 Net Increase in Other Liabilities 294 137 114 ------ ------ ------ Net Cash Provided by Operating Activities 6,081 9,170 4,133 ------ ------ ------ Cash From Financing Activities: Borrowings of Long-Term Debt - 15,000 - Acquisition of First Financial - (20,666) - Repayment of Long-Term Debt (2,000) - - Payment of Dividends (3,576) (5,721) (2,590) Issuance of Common Stock, Net 1,040 461 15 -------- -------- ------- Net Cash Used in Financing Activities (4,536) (10,926) (2,575) -------- -------- ------- Net Increase in Cash 1,545 (1,756) 1,558 Cash at Beginning of Period 2,622 4,378 2,820 ------- ------- ------- Cash at End of Period $ 4,167 $ 2,622 $ 4,378 ======= ======= ======= Note 20 CORPORATE REORGANIZATION On October 18, 1997, the Company consolidated its three remaining bank affiliates, Levy County State Bank, Farmers & Merchants Bank of Trenton and Branford State Bank into Capital City Bank. |
ARTHUR ANDERSEN LLP Jacksonville, Florida January 28, 1998 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (1) (Dollars in Thousands, Except Per Share Data) As of December 31, 1997 1996 ASSETS Cash and Due From Banks $ 61,270 $ 62,863 Federal Funds Sold 49,200 21,300 Interest Bearing Deposits in Other Banks 3,319 4,743 Investment Securities Available-for-Sale 148,514 207,189 Loans 699,206 674,675 Unearned Interest (1,480) (2,479) Allowance for Loan Losses (8,322) (8,179) ---------- ---------- Loans, Net 689,404 664,017 Premises and Equipment 31,613 34,006 Accrued Interest Receivable 6,293 6,877 Intangibles 7,703 8,398 Other Assets 12,357 12,006 ---------- ---------- Total Assets $1,009,673 $1,021,399 ========== ========== LIABILITIES Deposits: Noninterest Bearing Deposits $ 191,797 $ 196,486 Interest Bearing Deposits 643,015 670,210 ---------- ---------- Total Deposits 834,812 866,696 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 44,622 28,697 Other Short-Term Borrowings 1,492 7,260 Long-Term Debt 15,896 18,072 Other Liabilities 12,401 11,174 ---------- ---------- Total Liabilities 909,223 931,899 SHARE OWNERS' EQUITY Preferred Stock; $.01 par value, 3,000,000 shares authorized; no shares issued and outstanding - - Common Stock, $.01 par value; 60,000,000 shares authorized; 5,850,723 and 5,778,360 shares issued and outstanding 58 58 Additional Paid In Capital 6,537 4,934 Retained Earnings 93,288 84,426 Net Unrealized Gain on Available- for-Sale Investment Securities, net of tax 567 82 ---------- ---------- Total Share Owners' Equity 100,450 89,500 Total Liabilities and Share Owners' Equity $1,009,673 $1,021,399 ========== ========== ========== ========== (1) All share and per share data have been adjusted to reflect the two-for-one stock split effective April 1, 1997. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) For the Years Ended December 31, 1997 1996 1995 Cash Flow From Operating Activities: Net Income $ 12,438 $ 11,360 $ 9,522 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Provision for Loan Losses 1,788 1,463 293 Depreciation and Amortization 3,243 4,336 2,613 (Gain) on Sale of Properties (275) (40) (83) (Gain) on Sale of Mortgage Loans (803) (194) - Non-Cash Compensation 563 589 206 Deferred Income Taxes 213 1,043 893 Net (Increase) Decrease in Interest Receivable 584 (2,018) (1,793) Net (Increase) Decrease in Other Assets (563) 3,403 1,450 Net Increase in Other Liabilities 1,226 4,198 3,817 ------- ------- ------- Net Cash Provided by Operating Activities 18,414 24,140 16,918 -------- ------- ------- Cash Flows From Investing Activities: Proceeds from Payments/Maturities of Investment Securities Held-to-Maturity - - 32,486 Proceeds from Payments/Maturities of Investment Securities Available-for-Sale 62,453 74,113 48,529 Proceeds from Sales of Investment Securities Available-for-Sale 293 1,139 - Purchase of Investment Securities Held-to-Maturity - - (27,000) Purchase of Investment Securities Available-for-Sale (2,925) (54,356) (24,539) Net Increase in Loans (26,372) (36,558) (83,621) Purchase of Premises & Equipment (1,921) (2,550) (4,482) Proceeds From Sales of Premises & Equipment 1,379 1,570 89 Net Cash Used to Fund Acquisition - (16,167) - -------- -------- -------- Net Cash Provided By (Used in) Investing Activities 32,907 (32,809) (58,538) -------- -------- -------- Cash Flows From Financing Activities: Net Increase (Decrease) in Deposits (31,884) (37,988) 51,405 Net Increase in Federal Funds Purchased 15,925 11,330 3,403 Net Increase (Decrease) in Other Short-Term Borrowings (5,768) 10,340 1,401 Borrowings of Long-Term Debt - 17,180 1,982 Repayment of Long-Term Debt (2,176) (1,090) - Dividends Paid (3,576) (5,721) (2,590) Issuance of Common Stock 1,040 461 15 -------- -------- -------- Net Cash Provided by (Used in) Financing Activities (26,438) (5,488) 55,616 -------- -------- -------- Net Increase (Decrease) in Cash and Cash Equivalents 24,883 (14,157) 13,996 Cash and Cash Equivalents at Beginning of Year 88,906 103,063 89,067 -------- -------- -------- Cash and Cash Equivalents at End of Year $113,789 $ 88,906 $103,063 ======== ======== ======== Supplemental Disclosures: Interest on Deposits $ 27,844 $ 25,959 $ 18,441 ======== ======== ======== Interest Paid on Debt $ 3,145 $ 2,339 $ 1,106 ======== ======== ======== Taxes Paid $ 6,309 $ 3,722 $ 2,868 ======== ======== ======== Investment Securities Transferred from Held-to-Maturity To Available-for-Sale $ - $ - $122,630 ======== ======== ======== Loans Transferred To Other Real Estate $ 2,687 $ 2,192 $ 647 ======== ======== ======== The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
Note 10 INCOME TAXES The provision for income taxes reflected in the statement of income is comprised of the following components: (Dollars in Thousands) 1997 1996 1995 Current: Federal $5,054 $3,494 $2,646 State 857 453 339 Deferred: Federal 182 891 762 State 31 152 131 ------ ------ ------ Total $6,124 $4,990 $3,878 ====== ====== ====== The net deferred tax asset and the temporary differences comprising that balance at December 31, 1997 and 1996, are as follows: (Dollars in Thousands) 1997 1996 Deferred Tax Asset attributable to: Allowance for Loan Losses $2,514 $2,506 Stock Incentive Plan 764 383 Write down of Real Estate Held for Sale - 196 Other 158 142 ------ ------ Total Deferred Tax Asset $3,436 $3,227 Deferred Tax Liability attributable to: Employee Benefits $1,055 $ 693 Premises and Equipment 883 705 Deferred Loan Fees 392 382 Unrealized Gains on Investment Securities 328 50 Acquired Deposits 177 225 Securities Accretion 94 154 Other 143 163 ------ ------ Total Deferred Tax Liability 3,072 2,372 ------ ------ Net Deferred Tax Asset $ 364 $ 855 ====== ====== Income taxes provided were less than the tax expense computed by applying the statutory federal income tax rates to income. |
(Dollars in Thousands) 1997 1996 1995 Components of Pension Expense: Service Cost $ 1,517 $ 1,241 $ 774 Interest Cost 1,331 1,156 983 Actual Return on Plan Assets (4,458) (2,781) (3,029) Net Amortization and Deferral 2,780 1,532 2,173 ------- ------ ------ Total $ 1,170 $ 1,148 $ 901 ======= ======= ====== Actuarial Present Value of Benefit Obligations: Accumulated Benefit Obligations: Vested $12,831 $10,753 $ 8,353 Nonvested 1,982 1,816 1,695 ------- ------- ------- $14,813 $12,569 $10,048 ======= ======= ======= Plan Assets at Fair Value (primarily listed stocks and bonds, U.S. Government securities and interest bearing deposits) $25,826 $20,041 $15,946 Projected Benefit Obligation (21,159) (17,551) (14,565) Plan Assets in Excess of Projected Benefit Obligation 4,667 2,490 1,381 Unrecognized Net (Gain) Loss (957) 852 1,636 Unrecognized Net Asset (940) (1,176) (1,412) -------- -------- -------- Prepaid Pension Cost $ 2,770 $ 2,166 $ 1,605 ======== ======= ======= Major Assumptions: Discount Rate 7.00% 7.50% 7.50% ======= ======= ======= Rate of Increase in Compensation Levels 5.50% 5.50% 5.50% ======= ======= ======= Expected Long-Term Rate of Return on Plan Assets 8.25% 8.25% 7.50% ======= ======= ======= In 1996, the Company adopted a Supplemental Employee Retirement Plan covering selected executives. |
Note 19 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) 1997 1996 ASSETS Cash and Due From Group Banks $ 4,167 $ 2,622 Investment in Subsidiary Bank 109,799 102,362 Other Assets 967 704 -------- -------- Total Assets $114,933 $105,688 ======== ======== LIABILITIES Long-Term Debt $ 13,000 $ 15,000 Other Liabilities 1,483 1,188 ------- ------- Total Liabilities 14,483 16,188 ------- ------- SHARE OWNERS' EQUITY Preferred Stock; $.01 par value, 3,000,000 shares authorized; no shares issued and outstanding - - Common Stock, $.01 par value; 60,000,000 shares authorized; 5,850,723 and 5,778,366 shares issued and outstanding 58 58 Additional Paid in Capital 6,537 4,934 Retained Earnings 93,288 84,426 Net Unrealized Gain on Investment Securities Available-for-Sale, Net of Tax 567 82 ------- ------- Total Share Owners' Equity 100,450 89,500 ------- ------- Total Liabilities and Share Owners' Equity $114,933 $105,688 ======== ======== The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 1997 1996 1995 OPERATING INCOME Income Received from Subsidiary Banks: Dividends $ 6,600 $ 9,600 $3,884 Overhead Fees 3,845 3,106 2,702 Total Operating Income 10,445 12,706 6,586 OPERATING EXPENSE Salaries and Employee Benefits 2,445 2,353 2,064 Interest on Debt 988 523 - Professional Fees 617 332 243 Advertising 597 430 391 Restructuring Charge 338 - - Legal Fees 126 85 48 Other 515 471 354 ------ ------ ------ Total Operating Expense 5,626 4,194 3,100 ------ ------ ------ Income Before Income Taxes and Equity in Undistributed earnings of Group Banks 4,819 8,512 3,486 Income Tax Benefit (675) (380) (135) ------ ------ ------ Income Before Equity in Undistributed Earnings of Subsidiary Banks 5,494 8,892 3,621 Equity in Undistributed Earnings of Group Banks 6,944 2,468 5,901 ------- ------- ------- Net Income $12,438 $11,360 $9,522 ======= ======= ======= The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 1997 1996 1995 Cash Flows From Operating Activities: Net Income $12,438 $11,360 $9,522 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Equity in undistributed earnings of Subsidiary Bank (6,944) (2,468) (5,901) Non-Cash Compensation 563 589 206 Amortization of Goodwill 25 29 52 (Increase) Decrease in Other Assets (295) (477) 140 Net Increase in Other Liabilities 294 137 114 ------ ------ ------ Net Cash Provided by Operating Activities 6,081 9,170 4,133 ------ ------ ------ Cash From Financing Activities: Borrowings of Long-Term Debt - 15,000 - Acquisition of First Financial - (20,666) - Repayment of Long-Term Debt (2,000) - - Payment of Dividends (3,576) (5,721) (2,590) Issuance of Common Stock, Net 1,040 461 15 -------- -------- ------- Net Cash Used in Financing Activities (4,536) (10,926) (2,575) -------- -------- ------- Net Increase in Cash 1,545 (1,756) 1,558 Cash at Beginning of Period 2,622 4,378 2,820 ------- ------- ------- Cash at End of Period $ 4,167 $ 2,622 $ 4,378 ======= ======= ======= Note 20 CORPORATE REORGANIZATION On October 18, 1997, the Company consolidated its three remaining bank affiliates, Levy County State Bank, Farmers & Merchants Bank of Trenton and Branford State Bank into Capital City Bank. |
Selected Financial And Other Data For the Years Ended December 31, 1995 1994 1993 1992 1991 (Dollars in Thousands, Except Per Share Data) Interest Income $ 54,477 $ 47,891 $ 46,395 $ 48,306 $54,801 Net Interest Income 33,989 33,166 31,555 29,775 28,195 Provision for Loan Losses 293 1,246 960 1,216 1,817 Income Before Accounting Change 9,522 8,825 8,728 8,376 7,272 Net Income 9,522 8,825 8,244 8,376 7,272 Per Common Share: Income Before Accounting Change $ 3.34 $ 3.10 $ 2.99 $ 2.86 $ 2.46 Net Income 3.34 3.10 2.82 2.86 2.46 Cash Dividends Declared 1.00 .91 .83 .78 .73 Book Value 28.44 25.44 23.56 21.59 19.55 Based on Net Income: Return on Average Assets Before Accounting Change 1.25% 1.18% 1.21% 1.27% 1.15% Return on Average Assets 1.25 1.18 1.14 1.27 1.15 Return on Average Equity Before Accounting Change 12.32 12.51 13.15 13.71 13.07 Return on Average Equity 12.32 12.51 12.43 13.71 13.07 Dividend Payout Ratio 29.94 29.34 29.44 27.25 29.65 Averages for the Year: Loans, Net of Unearned Interest $432,313 $406,873 $381,807 $358,876 $368,555 Earning Assets 681,186 666,919 651,042 598,127 571,165 Assets 763,697 745,334 722,286 662,150 633,963 Deposits 657,384 647,254 630,324 573,162 546,291 Long-Term Debt 71 1,144 1,381 3,156 5,555 Shareholders' Equity 77,259 70,563 66,328 61,078 55,635 Year-End Balances: Loans, Net of Unearned Interest $443,973 $420,804 $399,424 $369,911 $364,773 Earning Assets 716,170 645,832 675,273 619,929 568,720 Assets 813,659 742,630 762,335 686,966 639,540 Deposits 699,579 648,174 662,745 597,497 555,092 Long-Term Debt 1,982 - 1,900 2,000 4,000 Shareholders' Equity 81,158 72,400 67,140 63,169 57,723 Equity to Assets Ratio 9.97% 9.75% 8.81% 9.20% 9.03% Other Data: Average Shares Outstanding 2,853,234 2,847,492 2,924,022 2,932,123 2,958,920 Shareholders of Record* 933 761 754 748 731 Banking Locations* 30 29 30 27 27 Full-Time Equivalent Employees* 503 489 476 466 469 *As of March 1st of the following year. |
Table 1 CONDENSED SUMMARY OF EARNINGS (Dollars in Thousands, Except Per Share Data) For the Years Ended December 31, 1995 1994 1993 Interest Income $54,477 $47,891 $46,395 Taxable Equivalent Adjustments 1,591 1,657 1,663 Total Interest Income 56,068 49,548 48,058 Interest Expense 20,488 14,725 14,840 Net Interest Income 35,580 34,823 33,218 Provision for Loan Losses 293 1,246 960 Taxable Equivalent Adjustments 1,591 1,657 1,663 Net Interest Income After Provision for Loan Losses 33,696 31,920 30,595 Noninterest Income 13,170 13,009 12,478 Noninterest Expense 33,466 32,711 31,036 Income Before Income Taxes 13,400 12,218 12,037 Income Taxes 3,878 3,393 3,309 Income Before Accounting Change 9,522 8,825 8,728 Cumulative Effect of Accounting Change - - (484) Net Income $ 9,522 $ 8,825 $ 8,244 Income Per Share Before Accounting Change $ 3.34 $ 3.10 $ 2.99 Net Income Per Share $ 3.34 $ 3.10 $ 2.82 Net Interest Income Net interest income represents the Company's 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 7 ANALYSIS OF ALLOWANCE FOR LOAN LOSSES (Dollars in Thousands) For the Years Ended December 31, 1995 1994 1993 1992 1991 Balance at Beginning of Year $7,551 $7,594 $7,585 $7,670 $7,526 Charge-Offs: Commercial, Financial and Agricultural 520 575 556 511 724 Real Estate-Construction - - - 33 - Real Estate-Mortgage 139 315 81 460 175 Consumer 1,237 865 884 929 1,263 Total Charge-Offs 1,896 1,755 1,521 1,933 2,162 Recoveries: Commercial, Financial and Agricultural 157 104 198 231 177 Real Estate - Construction - - - - Real Estate - Mortgage - 12 8 7 18 Consumer 369 350 364 394 294 Total Recoveries 526 466 570 632 489 Net Charge-Offs 1,370 1,289 951 1,301 1,673 Provision for Loan Losses 293 1,246 960 1,216 1,817 Balance at End of Year $6,474 $7,551 $7,594 $7,585 $7,670 Ratio of Net Charge-Offs During Year to Average Loans Out- standing, Net of Unearned Interest .32% .32% .25% .36% .45% Allowance for Loan Losses as a Percente of Loans, Net of Un- earned Interest, at End of Year 1.46% 1.79% 1.90% 2.05% 2.10% Allowance for Loan Losses as a Multiple of Net Charge-Offs 4.73x 5.86x 7.99x 5.83x 4.58x Risk Element Assets Risk element assets consist of nonaccrual loans, renegotiated loans, other real estate, loans past due 90 days or more, potential problem loans and loan concentrations. |
Table 10 DISTRIBUTION OF INVESTMENT SECURITIES (Dollars in Thousands) Amortized Unrealized Unrealized Market Available-For-Sale Cost Gains Losses Value U.S. Treasury $ 72,289 $ 470 $ 54 $72,705 U.S. Government Agencies and Corporations 70,883 264 96 71,051 States and Political Subdivisions 75,986 1,037 143 76,880 Mortgage Backed Securities 5,965 47 26 5,986 Other Securities 4,107 19 1 4,125 Total Investment Securities $229,230 $1,837 $320 $230,747 Table 11 MATURITY DISTRIBUTION OF INVESTMENT SECURITIES (Dollars in Thousands) As of December 31, 1995 Weighted Amortized Cost Market Value Average Yield(1) U. S. GOVERNMENTS Due in 1 year or less $ 64,543 $ 64,604 5.45% Due over 1 year thru 5 years 78,629 79,152 5.76% Due over 5 years thru 10 years - - - Due over 10 years - - - TOTAL 143,172 143,756 5.92% STATE & POLITICAL SUBDIVISIONS Due in 1 year or less 7,803 7,781 8.13% Due over 1 year thru 5 years 47,146 47,796 6.65% Due over 5 years thru 10 years 18,847 19,102 6.01% Due over 10 years 2,190 2,201 7.53% TOTAL 75,986 76,880 6.68% MORTGAGE BACKED SECURITIES Due in 1 year or less 444 451 6.98% Due over 1 year thru 5 years 4,083 4,100 6.51% Due over 5 years thru 10 years 582 594 7.68% Due over 10 years 856 841 6.30% TOTAL 5,965 5,986 6.62% OTHER SECURITIES Due in 1 Year or less 1,354 1,365 5.98% Due over 1 year thru 5 years 149 179 5.59% Due over 5 years thru 10 years 252 229 5.68% Due over 10 years* 2,352 2,352 6.81% TOTAL 4,107 4,125 6.40% Total Investment Securities $229,230 $230,747 6.20% *Federal Home Loan Bank Stock and Federal Reserve Bank Stock do not have a stated maturities. |
ARTHUR ANDERSEN LLP Atlanta, Georgia January 26, 1996 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in Thousands) As of December 31, 1995 1994 ASSETS Cash and Due From Banks (Note 7) $ 61,613 $63,327 Federal Funds Sold 41,150 25,740 Interest Bearing Deposits in Other Banks 300 - Investment Securities Held-to-Maturity (market value of $145,003 in 1994) (Note 3) - 150,441 Investment Securities Available-for-Sale (Note 3) 230,747 48,847 Loans (Notes 4 and 5) 447,779 426,013 Unearned Interest (3,806) (5,209) Allowance for Loan Losses (6,474) (7,551) Loans, Net 437,499 413,253 Premises and Equipment (Note 6) 26,240 24,292 Accrued Interest Receivable 7,339 5,546 Intangibles (Note 1) 1,129 1,379 Other Assets 7,642 9,805 Total Assets $813,659 $742,630 LIABILITIES Deposits: Noninterest Bearing Deposits $168,566 $167,711 Interest Bearing Deposits (Note 7) 531,013 480,463 Total Deposits 699,579 648,174 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 17,367 13,964 Other Short-Term Borrowings (Note 8) 2,400 999 Long-Term Debt (Note 8) 1,982 - Other Liabilities 11,173 7,093 Total Liabilities 732,501 670,230 SHAREHOLDERS' EQUITY Common Stock, $.01 par value; 4,000,000 shares authorized; 3,105,243 issued 31 31 Additional Paid In Capital 5,868 5,852 Retained Earnings 80,658 73,989 Treasury Stock: 251,527 shares in 1995 and 259,428 shares in 1994, at cost (6,367) (6,588) Net Unrealized Gain (Loss) on Available- for-Sale Securities 968 (884) Total Shareholders' Equity 81,158 72,400 Total Liabilities and Shareholders' Equity $813,659 $742,630 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CONSOLIDATED STATEMENTS OF INCOME (Dollars In Thousands, Except Per Share Data) For the Years Ended December 31, 1995 1994 1993 INTEREST INCOME Interest and Fees on Loans $40,826 $35,490 $33,554 Investment Securities: U.S. Treasury 4,205 4,967 5,564 U.S. Government Agencies and Corporations 3,500 1,991 1,621 States and Political Subdivisions 3,444 3,461 3,492 Other Securities 261 313 210 Deposits in Other Banks 2 17 119 Federal Funds Sold 2,239 1,652 1,835 Total Interest Income 54,477 47,891 46,395 INTEREST EXPENSE Deposits (Note 7) 19,382 13,990 14,213 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 1,053 650 548 Other Short-Term Borrowings (Note 8) 49 31 23 Long-Term Debt (Note 8) 4 54 56 Total Interest Expense 20,488 14,725 14,840 Net Interest Income 33,989 33,166 31,555 Provision for Loan Losses (Note 5) 293 1,246 960 Net Interest Income After Provision for Loan Losses 33,696 31,920 30,595 NONINTEREST INCOME Service Charges on Deposit Accounts 5,649 5,408 5,601 Data Processing 2,608 2,434 2,380 Income from Fiduciary Activities 942 680 643 Securities Transactions (Note 3) 8 (147) 28 Other (Note 13) 3,963 4,634 3,826 Total Noninterest Income 13,170 13,009 12,478 NONINTEREST EXPENSE Salaries and Employee Benefits (Note 10) 17,959 17,087 16,183 Occupancy, Net 2,538 2,343 2,183 Furniture and Equipment 3,346 2,910 2,909 Other (Note 13) 9,623 10,371 9,761 Total Noninterest Expense 33,466 32,711 31,036 Income Before Income Taxes and Accounting Change 13,400 12,218 12,037 Income Taxes (Note 9) 3,878 3,393 3,309 Income Before Accounting Change 9,522 8,825 8,728 Cumulative Effect of a Change in Accounting Method (Note 1) - - (484) NET INCOME $ 9,522 $ 8,825 $ 8,244 Net Income Per Share Before Accounting Change $ 3.34 $ 3.10 $ 2.99 Net Income Per Share $ 3.34 $ 3.10 $ 2.82 Average Common Shares Outstanding 2,853 2,847 2,924 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) For the Years Ended December 31, 1995 1994 1993 Net Income $ 9,522 $ 8,825 $ 8,244 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Provision for Loan Losses 293 1,246 960 Depreciation 2,363 1,916 1,881 Net Loss on Sale of Properties 83 812 144 Amortization of Intangible Assets 250 341 338 Non-Cash Compensation 206 70 - Deferred Income Taxes 893 101 74 Cumulative Effect of Accounting Change - - 484 Net (Increase) Decrease in Interest Receivable (1,793) (79) (339) Net (Increase) Decrease in Other Assets 1,284 (79) (1,537) Net Increase (Decrease) in Other Liabilities 3,817 604 319 Net Cash Provided by Operating Activities 16,918 13,757 10,568 Cash Flows Used in Investing Activities: Proceeds from Payments/Maturities of Investment Securities Held-To-Maturity 48,529 77,324 82,541 Proceeds from Payments/Maturities of Investment Securities Available-for-Sale 32,486 17,389 - Purchase of Investment Securities Held to Maturity (27,000) (64,865) (114,726) Purchase of Investment Securities Available for Sale (83,621) (11,398) - Net Increase in Loans (24,539) (22,669) (17,235) Purchase of Premises & Equipment (4,482) (6,065) (6,952) Sales of Premises & Equipment 89 279 1,008 Cash Acquired in Bank Acquisitions - - 28,811 Net Cash Used in Investing Activities (58,538) (10,005) (26,553) Cash Flows Provided by (Used in) Financing Activities: Net Increase (Decrease) in Deposits 51,405 (14,571) 21,150 Net Increase (Decrease) in Federal Funds Purchased 3,403 (9,300) 5,703 Net Increase (Decrease) in Other Short-Term Borrowings 1,401 (202) (20) Addition to Long-Term Debt 1,982 - 1,400 Repayment of Long-Term Debt - (1,900) (1,500) Dividends Paid (2,590) (2,447) (2,282) Sale (Purchase) of Treasury Stock 15 (156) (1,846) Net Cash Provided by (Used in) Financing Activities 55,616 (28,576) 22,605 Net Increase (Decrease) in Cash and Cash Equivalents 13,996 (24,824) 6,620 Cash and Cash Equivalents at Beginning of Year 89,067 113,891 107,271 Cash and Cash Equivalents at End of Year $103,063 $ 89,067 $113,891 Supplemental Disclosures: Interest on Deposits $ 18,441 $14,381 $14,944 Interest on Debt 1,106 $ 735 $ 627 Taxes Paid $ 2,868 $ 3,614 $ 3,013 Securities Transferred from Held-To-Maturity To Available-for-Sale $122,630 $ - $ - Loans Transferred To Other Real Estate $ 647 $ 453 $ 910 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. |
The amortized cost and related market value of investment securities at December 31, were as follows: (Dollars in Thousands) Amortized Unrealized Unrealized Market Available-for-Sale Cost Gains Losses Value U.S. Treasury $ 72,289 $ 470 $ 54 $72,705 U.S. Government Agencies and Corporations 70,883 264 96 71,051 States and Political Subdivisions 75,986 1,037 143 76,880 Mortgaged Backed Securities 5,965 47 26 5,986 Other Securities 4,107 19 1 4,125 Total Investment Securities $229,230 $1,837 $320 $230,747 Amortized Unrealized Unrealized Market Held-To-Maturity Cost Gains Losses Value U.S. Treasury $ 72,979 $ 1 $1,681 $ 71,299 U.S. Government Agencies and Corporations 23,018 2 1,415 21,605 States and Political Subdivisions 49,125 134 2,026 47,233 Mortgage Backed Securities 3,005 2 183 2,824 Other Securities 2,314 - 272 2,042 Total Investment Securities $150,441 $ 139 $5,577 $145,003 Amortized Unrealized Unrealized Market Available-for-Sale Cost Gains Losses Value U.S. Treasury $ 18,634 $ - $ 180 $ 18,454 U.S. Government Agencies and Corporations 7,041 3 443 6,601 States and Political Subdivisions 19,641 77 805 18,913 Mortgage Backed Securities 2,932 - 32 2,900 Other Securities 1,981 - 2 1,979 Total Investment Securities $ 50,229 $80 $1,462 $ 48,847 The total proceeds from the sale of investment securities and the gross realized gains and losses from the sale of such securities for each of the last three years is presented below: (Dollars in Thousands) Total Gross Gross Year Proceeds Realized Gains Realized Losses 1995 $25,296 $11 $ 3 1994 $11,476 $13 $160 1993 $31,681 $70 $ 42 Total proceeds include principal reductions in mortgage backed securities and proceeds from securities which were called of $22,546,000, $4,033,000, and $31,581,000, in 1995, 1994, and 1993, respectively. |
Note 9 INCOME TAXES The provision for income taxes reflected in the statement of income was comprised of the following components: (Dollars in Thousands) 1995 1994 1993 Currently Payable: Federal $2,646 $2,894 $2,848 State 339 398 387 Deferred: Federal 762 87 59 State 131 14 15 Total $3,878 $3,393 $3,309 The net deferred tax asset and liability and the temporary differences comprising those balances at December 31, 1995 and 1994, are as follows: (Dollars in Thousands) 1995 1994 Deferred Tax Asset: Allowance for Loan Losses $2,438 $2,842 Deferred Loan Fees - 338 Unrealized Losses on Investment Securities - 497 Stock Incentive Plan 261 206 Writedown of Real Estate Held for Sale 25 38 Other 81 140 Total Deferred Tax Asset $2,805 $4,061 Deferred Tax Liability: Premises and Equipment $ 851 $ 845 Employee Benefits 593 374 Unrealized Gains on Investment Securities 549 - FDIC Premiums - 254 Deferred Loan Fees 109 - Other 84 30 Total Deferred Tax Liability 2,186 1,503 Net Deferred Tax Asset $ 619 $2,558 Income taxes amounted to less than the tax expense computed by applying the statutory federal income tax rates to income. |
(Dollars in Thousands) 1995 1994 1993 Components of Pension Expense: Service Cost $ 774 $ 764 $ 685 Interest Cost 983 848 845 Actual Return on Plan Assets (3,029) (318) (525) Net Amortization and Deferral 2,173 (406) (331) Total $ 901 $ 888 $ 674 Actuarial Present Value of Projected Benefit Obligations: Accumulated Benefit Obligations: Vested $ 8,353 $6,861 $6,896 Nonvested 1,695 1,097 1,067 $10,048 $7,958 $7,963 Plan Assets at Fair Value (primarily listed stocks and bonds, U.S. Government Secur- ities and interest bearing deposits) $ 15,946 $ 12,156 $ 10,898 Projected Benefit Obligation (14,565) (11,672) (11,825) Plan Assets in Excess of Projected Benefit Obligation 1,381 484 (927) Unrecognized Net Loss 1,636 2,187 3,466 Unrecognized Net Asset (1,412) (1,648) (1,884) Prepaid Pension Cost $ 1,605 $ 1,023 $ 655 Major Assumptions: Discount Rate 7.50% 8.25% 7.50% Rate of Increase in Compensation Levels 5.50% 5.50% 5.50% Expected Long-Term Rate of Return on Plan Assets 7.50% 7.50% 7.50% The Company has a stock incentive plan under which shares of the Company's stock are issued as incentive awards to selected participants. |
Note 16 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) 1995 1994 ASSETS Cash and Due from Group Banks $ 4,378 $ 2,820 Investment in Group Banks 80,143 72,442 Other Assets 227 351 Total Assets $84,748 $75,613 LIABILITIES Dividends Payable $ 2,539 $ 2,277 Long-Term Debt (Note 8) - - Other Liabilities 1,051 936 Total Liabilities 3,590 3,213 SHAREHOLDERS' EQUITY Common Stock, $.01 par value; 4,000,000 shares authorized; 3,105,243 issued 31 31 Additional Paid in Capital 5,868 5,852 Retained Earnings 80,658 73,989 Treasury Stock: 251,527 shares in 1995 and 259,428 shares in 1994, at cost (6,367) (6,588) Net Unrealized Gain (Loss) on Available-for- Sale Securities 968 (884) Total Shareholders' Equity 81,158 72,400 Total Liabilities and Shareholders' Equity $84,748 $75,613 The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income (Dollars in Thousands) 1995 1994 1993 OPERATING INCOME Income Received from Group Banks: Dividends (Note 12) $3,884 $4,615 $4,675 Group Overhead Fees 2,702 2,311 1,986 Total Operating Income 6,586 6,926 6,661 OPERATING EXPENSE Salaries and Employee Benefits 2,064 1,565 1,617 Legal Fees 48 74 63 Professional Fees 243 157 171 Advertising 391 594 433 Travel and Entertainment 52 72 63 Amortization of Excess of Purchase Price Over Book Value of Net Assets Acquired 52 52 52 Interest on Debt - 54 56 Dues and Memberships 46 49 42 Other 204 361 180 Total Operating Expense 3,100 2,978 2,677 Income Before Income Taxes and Equity in Undistributed Earnings of Group Banks 3,486 3,948 3,984 Income Tax Benefit (135) (233) (230) Income Before Equity in Undistributed Earnings of Group Banks 3,621 4,181 4,214 Equity in Undistributed Earnings of Group Banks 5,901 4,644 4,030 Net Income $9,522 $8,825 $8,244 The cash flows for the parent company for the three years ended December 31, were as follows: Parent Company Statements of Cash Flows 1995 1994 1993 Net Income $9,522 $8,825 $8,244 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Equity in undistributed Earnings of Group Banks (5,901) (4,644) (4,030) Non-Cash Compensation 206 70 - Amortization of Excess of Purchase Price Over Book Value of Net Assets Acquired 52 52 51 (Increase) Decrease in Other Assets 140 3 (189) Net Increase in Other Liabilities 114 228 333 Net Cash Provided by Operating Activities 4,133 4,534 4,409 Cash Flows Used in Financing Activities: Addition to Long-Term Debt - - 1,400 Repayment of Long-Term Debt - (1,900) (1,500) Payment of Dividends (2,590) (2,447) (2,282) Sale (Purchase) of Treasury Stock, Net 15 (156) (1,846) Net Cash Used in Financing Activities (2,575) (4,503) (4,228) Net Increase in Cash 1,558 31 181 Cash at Beginning of Period 2,820 2,789 2,608 Cash at End of Period $4,378 $2,820 $ 2,789 Note 17 CORPORATE REORGANIZATION On July 25, 1994, Capital City First National Bank, Capital City Second National Bank, Industrial National Bank, City National Bank, Havana State Bank, First National Bank of Jefferson County and Gadsden National Bank, each being wholly-owned subsidiaries of Capital City Bank Group, Inc., entered into a "Plan of Merger and Merger Agreement" under which the six national banks where merged into and with Havana State Bank, a state banking corporation. |
ARTHUR ANDERSEN LLP Atlanta, Georgia January 27, 1995 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION As of December 31, 1994 1993 ASSETS Cash and Due From Banks (Note 7) $ 63,327,189 $ 56,664,688 Interest Bearing Deposits in Other Banks - 1,256,516 Investment Securities Held to Maturity (market value $145,003,164 and $221,273,916 in 1994 and 1993) (Note 3) 150,441,260 218,622,520 Investment Securities Available for Sale (Note 3) 48,847,145 - Federal Funds Sold 25,740,000 55,970,000 Loans (Notes 4 and 5) 426,012,721 406,566,731 Unearned Interest (5,208,716) (7,142,943) Allowance for Loan Losses (7,551,025) (7,594,101) Loans, Net 413,252,980 391,829,687 Premises and Equipment (Note 6) 24,292,288 20,820,473 Accrued Interest Receivable 5,546,092 5,467,174 Intangibles (Note 2) 1,378,408 1,719,491 Other Assets 9,804,822 9,984,232 Total Assets $742,630,184 $762,334,781 LIABILITIES Deposits: Noninterest Bearing Deposits $167,710,491 $171,984,693 Interest Bearing Deposits (Note 7) 480,463,376 490,760,129 Total Deposits 648,173,867 662,744,822 Federal Funds Purchased and Securities Sold Under Repurchase Agreements 13,964,450 23,264,047 Short-Term Borrowings 999,176 1,201,565 Long-Term Debt (Note 8) - 1,900,000 Other Liabilities 7,092,599 6,084,592 Total Liabilities 670,230,092 695,195,026 SHAREHOLDERS' EQUITY Common Stock, $.01 par value; 4,000,000 shares authorized; 3,105,243 issued 31,052 31,052 Surplus 5,852,157 5,856,794 Retained Earnings 73,989,093 67,753,475 Treasury Stock: 259,428 shares in 1994 and 255,927 shares in 1993, at cost (6,587,956) (6,501,566) Net Unrealized Loss on Available for Sale Securities (884,254) - Total Shareholders' Equity 72,400,092 67,139,755 Total Liabilities and Shareholders' Equity $742,630,184 $762,334,781 The accompanying Notes to Financial Statements are an integral part of these statements. |
CONSOLIDATED STATEMENTS OF CASH FLOW For the Years Ended December 31, 1994 1993 1992 Net Income $8,825,309 $8,243,711 $8,376,536 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Provision for Loan Losses 1,245,900 960,114 1,215,868 Depreciation 1,915,771 1,881,207 1,862,930 Net Gain (Loss) on Sale of Properties 812,238 143,914 189,653 Amortization of Intangible Assets 341,083 337,994 259,171 Deferred Income Taxes 101,301 74,585 (143,529) Cumulative Effect of Accounting Change - 484,495 - Net (Increase) Decrease in Interest Receivable (78,918) (339,456) 68,761 Net (Increase) Decrease in Other Assets (79,463) (1,537,096) (421,002) Net Increase (Decrease) in Other Liabilities 604,322 318,515 (1,183,076) Net Cash from Operating Activities 13,687,543 10,567,983 10,225,312 Cash Flows from Investing Activities: Proceeds from Sales/Maturities of Investment Securities 94,713,053 82,540,933 31,163,153 Purchase of Investment Securities (76,263,192) (114,725,989) (79,694,258) Net (Increase) Decrease in Loans (22,669,193) (17,234,818) (6,438,547) Purchase of Premises & Equipment (6,064,334) (6,952,279) (1,337,346) Sales of Premises & Equipment 278,718 1,007,775 31,744 Cash Acquired in Bank Acquisitions - 28,811,166 - Net Cash from Investing Activities (10,004,948) (26,553,212) (56,275,254) Cash Flows from Financing Activities: Net Increase (Decrease) in Deposits (14,570,955) 21,150,418 42,405,239 Net Increase (Decrease) in Federal Funds Purchased (9,299,597) 5,702,833 2,648,874 Net Increase (Decrease) in Other Borrowed Funds (202,389) (19,558) (19,247) Addition to Long-Term Debt - 1,400,000 - Repayment of Long-Term Debt (1,900,000) (1,500,000) (2,000,000) Dividends Paid (2,447,279) (2,282,200) (2,153,230) Sale (Purchase) of Treasury Stock (86,390) (1,845,988) (648,000) Net Cash from Financing Activities (28,506,610) 22,605,505 40,233,636 Net Increase (Decrease) in Cash and Cash Equivalents (24,824,015) 6,620,276 (5,816,306) Cash and Cash Equivalents at Beginning of Year 113,891,204 107,270,928 113,087,234 Cash and Cash Equivalents at End of Year $ 89,067,189 $113,891,204 $107,270,928 Supplemental Disclosures: Interest on Deposits $14,380,539 $14,943,964 $19,213,697 Interest on Debt $ 735,134 $ 626,872 $ 746,352 Taxes Paid $ 3,613,716 $ 3,013,311 $ 2,763,567 Loans Transferred To Other Real Estate $ 453,543 $ 910,228 $ 2,311,826 The accompanying Notes to Financial Statements are an integral part of these statements. |
Note 9 INCOME TAXES The provision for income taxes reflected in the statement of income was comprised of the following components: 1994 1993 1992 Currently Payable: Federal $2,893,317 $2,846,900 $2,903,663 State 397,853 387,129 404,207 Deferred: Federal 87,154 59,198 (129,880) State 14,147 15,387 (13,649) Total $3,392,471 $3,308,614 $3,164,341 The net deferred tax asset and liability and the temporary differences comprising those balances at December 31, 1994 and 1993, are as follows: 1994 1993 Deferred Tax Asset: Allowance for Loan Losses $2,842,496 $2,857,660 Deferred Loan Fees 337,532 313,883 Unrealized Losses on Investment Securities 497,411 - Stock Incentive Plan 205,690 - Writedown of Real Estate Held for Sale 37,622 22,495 Other 140,141 72,369 Total Deferred Tax Asset $4,060,892 $3,266,407 Deferred Tax Liability: Premises and Equipment 845,168 839,327 Employee Benefits 374,046 235,616 FDIC Premiums 254,132 - Other 30,011 30,039 Total Deferred Tax Liability 1,503,357 1,104,982 Net Deferred Tax Asset $2,557,535 $2,161,425 Income taxes amounted to less than the tax expense computed by applying the statutory federal income tax rates to income. |
1994 1993 1992 Components of Pension Expense: Service Cost $ 763,581 $685,449 $674,980 Interest Cost 847,555 845,301 763,211 Actual Return on Plan Assets (317,556) (525,422) (363,931) Net Amortization and Deferral (405,608) (330,861 (492,809) Total $887,972 $674,467 $581,451 Actuarial Present Value of Projected Benefit Obligations: Accumulated Benefit Obligations: Vested $6,860,413 $6,896,007 $ 5,833,309 Nonvested 1,097,247 1,066,503 935,972 $7,957,660 $7,962,510 $ 6,769,281 Plan Assets at Fair Value (primarily listed stocks and bonds, U.S. Government secur- ities and interest bearing deposits) $12,156,448 $10,898,324 $10,144,450 Projected Benefit Obligation (11,672,264) (11,824,763) (10,616,298) Plan Assets in Excess of Projected Benefit Obligation 484,184 (926,439) (471,848) Unrecognized Net Loss 2,186,862 3,465,697 2,926,291 Unrecognized Net Asset (1,648,241) (1,884,324) (2,120,407) Prepaid Pension Cost $1,022,805 $ 654,934 $ 334,036 Major Assumptions: Discount Rate 8.25% 7.50% 8.00% Rate of Increase in Compensation Levels 5.50% 5.50% 6.00% Expected Long-Term Rate of Return on Plan Assets 7.50% 7.50% 8.50% The Company has a stock incentive plan under which shares of the Company's stock are issued as incentive awards to selected participants. |
Note 16 PARENT COMPANY FINANCIAL INFORMATION The following is a condensed statement of financial condition of the parent company at December 31: Parent Company Statements of Financial Condition 1994 1993 ASSETS Cash and Due from Group Banks $ 2,820,449 $ 2,788,987 Investment in Group Banks 72,441,604 68,733,692 Other Assets 351,150 358,919 Total Assets $75,613,203 $71,881,598 LIABILITIES Dividends Payable $ 2,276,652 $ 2,134,240 Long-Term Debt (Note 8) - 1,900,000 Other Liabilities 936,459 707,603 Total Liabilities 3,213,111 4,741,843 SHAREHOLDERS' EQUITY Common Stock, $.01 par value; 4,000,000 shares authorized; 3,105,243 issued 31,052 31,052 Surplus 5,852,157 5,856,794 Retained Earnings 73,989,093 67,753,475 Treasury Stock: 259,428 shares in 1994 and 255,927 shares in 1993, at cost (6,587,956) (6,501,566) Net Unrealized Loss on Available for Sale Securities held by Group Banks (884,254) -- Total Shareholders' Equity 72,400,092 67,139,755 Total Liabilities and Shareholders' Equity $75,613,203 $71,881,598 The accompanying Notes to Financial Statements are an integral part of these statements. |
The operating results of the parent company for the three years ended December 31, are shown below: Parent Company Statements of Income 1994 1993 1992 OPERATING INCOME Income Received from Group Banks: Dividends (Note 12) $4,615,000 $4,675,000 $4,800,000 Group Overhead Fees 2,310,980 1,985,566 2,017,566 Total Operating Income 6,925,980 6,660,566 6,817,566 OPERATING EXPENSE Salaries and Employee Benefits 1,564,825 1,617,059 1,138,963 Legal Fees 74,357 63,458 47,936 Professional Fees 156,883 171,291 137,393 Advertising 594,391 432,978 304,886 Travel and Entertainment 72,057 62,481 49,783 Amortization of Excess of Purchase Price Over Book Value of Net Assets Acquired 52,025 51,617 56,818 Interest on Debt 53,703 56,009 178,619 Dues and Memberships 49,150 41,601 44,598 Other 360,642 180,176 239,705 Total Operating Expense 2,978,033 2,676,670 2,198,701 Income Before Income Taxes and Equity in Undistributed Earnings of Group Banks 3,947,947 3,983,896 4,618,865 Income Tax Benefit (233,171) (229,736) (81,497) Income Before Equity in Undistributed Earnings of Group Banks 4,181,118 4,213,632 4,700,362 Equity in Undistributed Earnings of Group Banks 4,644,191 4,030,079 3,676,174 Net Income $8,825,309 $8,243,711 $8,376,536 The cash flows for the parent company for the three years ended December 31 were as follows: Parent Company Statements of Cash Flows 1994 1993 1992 Net Income $8,825,309 $8,243,711 $8,376,536 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Equity in undistributed Earnings of Group Banks (4,644,191) (4,030,079) (3,676,174) Amortization of Excess of Purchase Price Over Book Value of Net Assets Acquired 52,025 51,038 56,818 (Increase) Decrease in Other Assets 3,132 (187,857) 163,945 Net Increase (Decrease) in Other Liabilities 228,856 332,613 (54,215) Net Cash from Operating Activities (4,465,131) (4,409,426) 4,866,910 Cash Flows from Financing Activities: Addition to Long-Term Debt - 1,400,000 - Repayment of Long-Term Debt (1,900,000) (1,500,000) (2,000,000) Payment of Dividends (2,447,279) (2,282,200) (2,153,230) Sale (Purchase) of Treasury Stock, Net (86,390) (1,845,988) (648,000) Net Cash from Financing Activities (4,433,669) (4,228,188) (4,801,230) Net Increase (Decrease) in Cash 31,462 181,238 65,680 Cash at Beginning of Period 2,788,987 2,607,749 2,542,069 Cash at End of Period $2,820,449 $ 2,788,987 $2,607,749 Note 17 CORPORATE REORGANIZATION On July 25, 1994, Capital City First National Bank, Capital City Second National Bank, Industrial National Bank, City National Bank, Havana State Bank, First National Bank of Jefferson County and Gadsden National Bank, each being wholly- owned subsidiaries of Capital City Bank Group, Inc., entered into a "Plan of Merger and Merger Agreement" under which the six national banks where merged into and with Havana State Bank, a state banking corporation. |
These factors include the following: • many of the Company’s competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy, which may limit the Company’s ability to maintain or increase freight rates, may require the Company to reduce its freight rates or may limit its ability to maintain or expand its business; • some shippers, including the USPS, have reduced or may reduce the number of carriers they use by selecting core carriers as approved service providers and in some instances the Company may not be selected; • many customers, including the USPS, periodically solicit bids from multiple carriers for their shipping needs, which may depress freight rates or result in a loss of business to competitors; • the continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources and other competitive advantages, and the Company may have difficulty competing with them; • advances in technology may require the Company to increase investments in order to remain competitive, and its customers may not be willing to accept higher freight rates to cover the cost of these investments; • the Company may have higher exposure to litigation risks as compared to smaller carriers; and • smaller carriers may build economies of scale with procurement aggregation providers, which may improve the smaller carriers’ abilities to compete with the Company. |
COVID-19 or another similar outbreak could negatively impact our business in numerous ways, including, but not limited to, the following: • our revenue may be reduced due to a decrease in demand for our services or the transportation markets in general as a result of the global economic downturn; • our operations may be disrupted or impaired if a significant portion of our drivers or other employees are unable to work due to illness; • the pandemic has increased volatility and caused negative pressure in the capital markets, we may experience difficulty accessing the capital or financing needed to fund our operations on satisfactory terms or at all; • customers, suppliers and other third parties may argue that their non-performance under our contracts with them is permitted as a result of force majeure or other reasons; • we may experience a loss of business resulting from supply chain disruptions and changing transportation needs caused by the nationwide emergency response to the pandemic; • we may experience workforce issues and incur severance payments as a result of adjusting our workforce to market conditions, and we may subsequently experience retention issues and driver shortages when market conditions improve; • our management may be distracted as they are focused on mitigating the effects of COVID-19 on our business operations while protecting the health of our workforce, which has required, and will continue to require, a large investment of time and resources; and • we may be at greater risk for cybersecurity issues, as digital technologies may become more vulnerable and experience a higher rate of cyberattacks in the current environment of remote connectivity. |
The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses were: • The Company had not fully implemented the necessary internal controls under the COSO (2013 Framework) to design, test and evaluate the operating effectiveness of its internal control over financial reporting; • The Company’s management and board of directors had insufficient oversight of the design and operating effectiveness of the Company’s disclosure controls and internal control over financial reporting; • The Company had insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements; • The Company failed to maintain effective controls over the period-end financial reporting process, including controls with respect to identification of unrecorded liabilities; revenue reconciliations to ensure appropriate revenue recognition; payroll reconciliations; preparation and disclosure of provision for income taxes; and account-level reconciliations in the general ledger, resulting in numerous adjusting entries identified by the Company and identified through audit procedures; • The Company failed to maintain effective controls over the recording of business combinations to ensure purchase accounting was properly reconciled in the general ledger; • The Company did not have sufficient internal personnel resources to review the financial statements and notes to the financial statements prepared by external consultants and professionals to ensure accuracy and completeness; and • The Company failed to maintain effective controls over journal entries, both recurring and nonrecurring, and did not maintain proper segregation of duties. |
Based solely on a review of the copies of such forms furnished to the Company, or written representations that no applicable filings were required, the Company believes that all such filings were filed on a timely basis for the fiscal year ended December 31, 2019, except that (i) Sheehy Enterprises, Inc. failed to file any Forms 3 or 4 reporting one transaction; (ii) Antara Capital Master Fund L.P. failed to timely file a Form 3 reporting one transaction and misreported the number of securities involved, which subsequently was corrected in Form 3/A filing; (iii) Danny Cuzick failed to file any Forms 3 or 4 reporting two transactions; (iv) Thomas J. Abood failed to file two Forms 4 reporting two transactions; (v) Eugene Putnam failed to file a Form 4 reporting one transaction; (vi) Scott C. Smith failed to file a Form 4 reporting one transaction; (vii) Arthur B. Laffer failed to file a Form 4 reporting one transaction; (viii) Mark Anderson failed to file a Form 4 reporting one transaction; and (ix) R. Scott Wheeler failed to file a Form 4 reporting one transaction. |
The Administrator will have full power and authority to administer and interpret the Amended 2018 Plan, to make and amend rules, regulations and guidelines for administering the Amended 2018 Plan, to prescribe the form and conditions of the respective Agreements evidencing each award (which may vary from Participant to Participant), to amend or revise Agreements evidencing any award (to the extent the amended terms would be permitted by the Amended 2018 Plan and provided that no such revision or amendment, except as is authorized in Section 14 of the Amended 2018 Plan, may impair the terms and conditions of any award that is outstanding on the date of such revision or amendment to the material detriment of the Participant in the absence of the consent of the Participant), and to make all other determinations necessary or advisable for the administration of the Amended 2018 Plan (including to correct any defect, omission or inconsistency in the Amended 2018 Plan or any Agreement, to the extent permitted by law and the Amended 2018 Plan). |
Change of Control Unless otherwise provided in the terms of an award, upon a change of control of the Company, as defined in the Amended 2018 Plan, the Administrator may provide for one or more of the following: (i) the acceleration of the exercisability, vesting, or lapse of the risks of forfeiture of any or all awards (or portions thereof); (ii) the complete termination of the Amended 2018 Plan and the cancellation of any or all awards (or portions thereof) that have not been exercised, have not vested, or remain subject to risks of forfeiture, as applicable in each case as of the effective date of the change of control; (iii) that the entity succeeding the Company by reason of such change of control, or the parent of such entity, must assume or continue any or all awards (or portions thereof) outstanding immediately prior to the change of control or substitute for any or all such awards (or portions thereof) a substantially equivalent award with respect to the securities of such successor entity, as determined in accordance with applicable laws and regulations; or (iv) that participants holding outstanding awards will become entitled to receive, with respect to each share of common stock subject to such award (whether vested or unvested, as determined by the Administrator pursuant to the Amended 2018 Plan) as of the effective date of any such change of control, cash in an amount equal to (1) for participants holding options or stock appreciation rights, the excess of the fair market value of such common stock on the date immediately preceding the effective date of such change of control over the exercise price per share of options or stock appreciation rights, or (2) for participants holding awards other than options or stock appreciation rights, the fair market value of such common stock on the date immediately preceding the effective date of such change of control. |
Exhibit Description 2.1 Articles of Merger of Minn Shares Inc. (a Minnesota corporation) and Minn Shares Inc. (a Delaware corporation) (1) 2.2 Certificate of Merger of Minn Shares Inc. (a Minnesota corporation) into Minn Shares Inc. (a Delaware corporation) (1) 2.3 Agreement and Plan of Securities Exchange, dated November 22, 2016, by and among Minn Shares Inc., Titan CNG LLC and the members of Titan CNG LLC (2) 2.4 Agreement and Plan of Merger, dated November 23, 2016, by and between Shock, Inc. and Minn Shares Inc. (2) 2.5 Agreement and Plan of Securities Exchange, dated January 11, 2017, by and among EVO CNG, LLC, Environmental Alternative Fuels, LLC, Danny R. Cuzick, Damon R. Cuzick, Theril H. Lund, Thomas J. Kiley and Minn Shares Inc. (3) 2.6 Equity Purchase Agreement dated June 1, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (13) 2.7 Acquisition Option Agreement dated September 5, 2018 between EVO Transportation & Energy Services, Inc., Sheehy Enterprises, Inc., Sheehy Mail Contractors, Inc., John Sheehy, and Robert Sheehy (18) 2.8 Agreement and Plan of Merger dated December 15, 2018 between EVO Transportation & Energy Services, Inc., Ursa Major Corporation, EVO Merger Sub, Inc., John Lampsa and Ursula Lampsa (21) 2.9 Stock Purchase Agreement dated December 15, 2018 between EVO Equipment Leasing, LLC, John Lampsa and Ursula Lampsa (21) 2.10 Amendment to Agreement and Plan of Merger dated February 1, 2019 between EVO Transportation & Energy Services, Inc., EVO Merger Sub, Inc., Ursa Major Corporation, John Lampsa, and Ursula Lampsa (24) 2.11 Amendment to Stock Purchase Agreement dated February 1, 2019 between EVO Equipment Leasing, LLC, John Lampsa, and Ursula Lampsa (24) 2.12 Stock Purchase and Exchange dated July 15, 2019 between EVO Transportation & Energy Services, Inc., James C. Finkle, Jr., and Clifford Finkle IV (28) 2.13 Stock Exchange Agreement dated September 16, 2019, between EVO Transportation & Energy Services, Inc., EVO Holding Company, LLC, Matthew Ritter, and Michael Ritter (29) 2.14 Stock Purchase Agreement dated September 16, 2019, between EVO Transportation & Energy Services, Inc., EVO Holding Company, LLC, Matthew Ritter, and Michael Ritter (29) 2.15 Membership Interest Purchase Agreement dated September 16, 2019, among EVO Transportation & Energy Services, Inc., EVO Holding Company, LLC, Matthew Ritter, and Michael Ritter (29) 3.1 Certificate of Incorporation (1) 3.2 Certificate of Amendment to Certificate of Incorporation (8) 3.3 Certificate of Amendment to Certificate of Incorporation (10) 3.4 Certificate of Designation of Rights and Preferences of Series A Preferred Stock of EVO Transportation & Energy Services, Inc. (14) 3.5 Bylaws (1) 3.6 Certificate of Designation of Rights and Preferences of Series B Preferred Stock of EVO Transportation & Energy Services, Inc. (36) 4.1 Loan Agreement, dated as of December 31, 2014, by and between Titan El Toro, LLC and FirstCNG LLC and Tradition Capital Bank (2) 4.2 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of the Alpeter Family Limited Partnership (2) 4.3 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Brian and Renae Clark (2) 4.4 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Falcon Capital LLC (2) 4.5 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Honour Capital LP (2) Exhibit Description 4.6 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of James Jackson (2) 4.7 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of John Honour (2) 4.8 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Keith and Janice Clark (2) 4.9 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Kirk Honour (2) 4.10 Junior Bridge Note, dated January 1, 2016, by Titan CNG LLC in favor of Stephen and Jayne Clark (2) 4.11 Secured Bridge Note, dated February 29, 2016, by Titan CNG LLC in favor of Red Ocean Consulting, LLC (2) 4.12 Secured Bridge Note, dated February 29, 2016, by Titan CNG LLC in favor of Thomas J. Abood Revocable Trust u/a dated August 17, 2012 (2) 4.13 Secured Bridge Note, dated February 29, 2016, by Titan CNG LLC in favor of James Jackson (2) 4.14 Secured Bridge Note, dated February 29, 2016, by Titan CNG LLC in favor of Alpeter Family Limited Partnership (2) 4.15 Secured Bridge Note, dated February 29, 2016, by Titan CNG LLC in favor of David M. Leavenworth (2) 4.16 Secured Bridge Note, dated September 26, 2016, by Titan CNG LLC in favor of Red Ocean Consulting, LLC (2) 4.17 First Amendment to Senior Bridge Loan Documents, dated July 26, 2016, by and among Titan CNG LLC, Titan Blaine, LLC, Titan El Toro, LLC, Titan Diamond Bar, LLC, Thomas J. Abood Revocable Trust U/A Dated August 17, 2012 As Amended, James Jackson, David M. Leavenworth, Alpeter Family Limited Partnership, Bonita Beach Blues, Inc., Red Ocean Consulting, LLC, Scott Honour and Kirk Honour (2) 4.18 Secured Bridge Note, dated July 26, 2016, by Titan CNG LLC in favor of Bonita Beach Blues, Inc. (2) 4.19 Second Amendment to Senior Bridge Loan Documents, dated September 26, 2016, by and among Titan CNG LLC, Titan Blaine, LLC, Titan El Toro, LLC, Titan Diamond Bar, LLC, Thomas J. Abood Revocable Trust U/A Dated August 17, 2012 As Amended, James Jackson, David M. Leavenworth, Alpeter Family Limited Partnership, Bonita Beach Blues, Inc., Red Ocean Consulting, LLC, Scott Honour and Kirk Honour (2) 4.20 Convertible Promissory Note, dated November 22, 2016, by Minn Shares Inc. in favor of Joseph H. Whitney (2) 4.21 Convertible Promissory Note, dated November 22, 2016, by Minn Shares Inc. in favor of The Globe Resources Group, LLC (2) 4.22 Convertible Promissory Note, dated November 22, 2016, by Minn Shares Inc. in favor of Richard E. Gilbert (2) 4.23 Secured Bridge Note, dated January 31, 2017, by Titan CNG LLC in favor of the Richard H. Enrico Revocable Trust Dated June 9, 1998 (4) 4.24 Convertible Promissory Note, dated February 1, 2017, by Minn Shares Inc. in favor of Danny R. Cuzick (4) 4.25 Convertible Promissory Note, dated February 1, 2017, by Minn Shares Inc. in favor of Damon R. Cuzick (4) 4.26 Convertible Promissory Note, dated February 1, 2017, by Minn Shares Inc. in favor of Theril H. Lund (4) 4.27 Convertible Promissory Note, dated February 1, 2017, by Minn Shares Inc. in favor of Thomas J. Kiley (4) 4.28 Senior Promissory Note, dated February 1, 2017, by Minn Shares Inc. in favor of Danny R. Cuzick (4) 4.29 Working Capital Note, dated February 1, 2017, by Minn Shares in favor of Danny R. Cuzick (4) 4.30 Working Capital Note, dated February 1, 2017, by Minn Shares in favor of Damon R. Cuzick (4) 4.31 Working Capital Note, dated February 1, 2017, by Minn Shares in favor of Theril H. Lund (4) 4.32 Working Capital Note, dated February 1, 2017, by Minn Shares in favor of Thomas J. Kiley (4) 4.33 Promissory Note, dated February 1, 2017, by Environmental Alternative Fuels, LLC in favor of Danny R. Cuzick (4) 4.34 Amendment to Promissory Note, dated April 2, 2018, between EVO Transportation & Energy Services, Inc. and Danny R. Cuzick (14) 4.35 Covenant Waiver Letter, dated February 21, 2019, from Tradition Capital Bank (25) 4.36 Financing Agreement, dated September 16, 2019, among EVO Transportation & Energy Services, Inc., each subsidiary of EVO Transportation & Energy Services, Inc., various lenders from time to time party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent (29) 4.37 Forbearance Agreement and Incremental Amendment to Financing Agreement, dated February 27, 2020, among EVO Transportation & Energy Services, Inc., each subsidiary of EVO Transportation & Energy Services, Inc., various lenders from time to time party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent (35) Exhibit Description 4.38 Amendment to Forbearance Agreement and Second Incremental Amendment to Financing Agreement, dated March 24, 2020, among EVO Transportation & Energy Services, Inc., each subsidiary of EVO Transportation & Energy Services, Inc., various lenders from time to time party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent (36) 4.39 Second Amendment to Forbearance Agreement and Omnibus Amendment to Loan Documents dated October 20, 2020 between EVO Transportation & Energy Services, Inc., each subsidiary of EVO Transportation & Energy Services, Inc., various lenders from time to time party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent. |
(39) 4.40 Loan Agreement dated December 14, 2020 between EVO Holding Company, LLC, Ritter Transport, Inc., John W. Ritter Trucking, Inc., Johmar Leasing Company, LLC, Ritter Transportation Systems, Inc., as the Borrowers, EVO Transportation & Energy Services, Inc., as Guarantor, and Commerce Bank of Arizona, Inc. (40) 4.41 Second Omnibus Amendment to Loan Documents dated December 14, 2020 between EVO Transportation & Energy Services, Inc., each subsidiary of EVO Transportation & Energy Services, Inc., various lenders from time to time party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent (40) 4.42 Modification Agreement dated December 22, 2020 between EVO Holding Company, LLC, Ritter Transport, Inc., John W. Ritter Trucking, Inc., Johmar Leasing Company, LLC, Ritter Transportation Systems, Inc., as the Borrowers, EVO Transportation & Energy Services, Inc., as Guarantor, and Commerce Bank of Arizona, Inc. (40) 4.43 Second Modification Agreement dated December 23, 2020 between EVO Holding Company, LLC, Ritter Transport, Inc., John W. Ritter Trucking, Inc., Johmar Leasing Company, LLC, Ritter Transportation Systems, Inc., as the Borrowers, EVO Transportation & Energy Services, Inc., as Guarantor, and Commerce Bank of Arizona, Inc. (40) 10.1+ Employment Agreement, dated November 1, 2016, between Minn Shares Inc. (as successor in interest to Shock Inc.) and Kirk Honour (2) 10.2+ Employment Agreement, dated November 1, 2016, between Minn Shares Inc. (as successor in interest to Shock Inc.) and John Yeros (2) 10.3+ Employment Agreement, dated November 1, 2016, between Minn Shares Inc. (as successor in interest to Shock Inc.) and Randy Gilbert (2) 10.4+ Employment Agreement, dated February 1, 2017, between Minn Shares Inc. and Damon R. Cuzick (4) 10.5 Compressed Natural Gas Fuel Station Agreement, dated June 28, 2016, by and between Titan Blaine, LLC, Walters’ Recycling & Refuse, Inc. and Walters’ Investments, LLC (2) 10.6 Lease Agreement, dated February 24, 2014, between Grace Whisler Trust and Whisler Holdings LLC and FirstCNG LLC (2) 10.7 First Amendment to Lease, dated June 9, 2014, between Grace Whisler Trust and Whisler Holdings LLC and FirstCNG LLC (2) 10.8 Lease Contract, effective December 19, 2015, between South Coast Air Quality Management District and Titan Diamond Bar LLC (2) 10.9 Lease Agreement, dated December 20, 2013, between Central Freight Lines and EVO CNG, LLC. |
(8) 10.10 Amended and Restated Limited Liability Company Agreement of Titan CNG LLC, effective as of January 1, 2016 (2) 10.11 Limited Liability Company Agreement of Environmental Alternative Fuels, LLC dated May 3, 2012 (8) 10.12 Line Extension Contract, dated April 3, 2014, between Southern California Gas Company and EVO CNG, LLC (8) 10.13 Fuel Purchase Agreement, dated April 12, 2013, between Environmental Alternative Fuels, LLC and Central Freight Lines, Inc. (8) 10.14 Incremental Natural Gas Facilities Agreement, dated February 24, 2014, between Southwest Gas Corporation and Environmental Alternative Fuels, LLC (8) 10.15 Service Agreement for Transportation of Customer Secured Natural Gas dated October 2, 2014 by and between Southwest Gas Corporation and Environmental Alternative Fuels, LLC (8) 10.16 Fuel Purchase Agreement, dated January 11, 2013, between Environmental Alternative Fuels, LLC and Sheehy Mail Contractors, Inc. (8) Exhibit Description 10.17 Master Retail Gas Sales Agreement, dated November 1, 2013, between Integrys Energy Services - Natural Gas, LLC and EVO CNG, LLC (8) 10.18 Fuel Purchase Agreement, dated October 1, 2013, between EAF and Central Freight Lines, Inc. (8) 10.19 Natural Gas Service and Pipeline Agreement, dated November 12, 2014, between EAF and LDC, llc (8) 10.20 Form of Subscription Agreement (9) 10.21 Form of Warrant (9) 10.22 Separation Agreement, dated October 9, 2017, between EVO Transportation & Energy Services, Inc. and Kirk Honour (11) 10.23 Form of Junior Bridge Note Conversion Subscription Agreement (12) 10.24 Subscription Agreement, dated March 2, 2018, between EVO Transportation & Energy Services, Inc. and Jerry Moyes (14) 10.25 Form of Senior Bridge Note Conversion Subscription Agreement (14) 10.26 Share Escrow Agreement, dated March 20, 2018, between EVO Transportation & Energy Services, Inc. and the shareholders party thereto. |
(14) 10.27 EVO Transportation & Energy Services, Inc. 2018 Stock Incentive Plan (17) 10.28 Form of EVO Transportation & Energy Services, Inc. Option Agreement (17) 10.29 Form of Subscription Agreement (15) 10.30 Promissory Note dated June 1, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (13) 10.31 Stock Pledge Agreement dated June 1, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (13) 10.32 Security Agreement dated June 1, 2018 between EVO Transportation & Energy Services, Inc., Thunder Ridge Transport, Inc., and Billy (Trey) Peck Jr. (13) 10.33+ Employment Agreement dated June 1, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (13) 10.34 Subscription Agreement dated June 1, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (13) 10.35 Warrant dated June 1, 2018 issued to Billy (Trey) Peck Jr. ($3.00) (13) 10.36 Warrant dated June 1, 2018 issued to Billy (Trey) Peck Jr. ($5.00) (13) 10.37 Warrant dated June 1, 2018 issued to Billy (Trey) Peck Jr. ($7.00) (13) 10.38 Secured Convertible Promissory Note dated July 20, 2018 between EVO Transportation & Energy Services, Inc. and Dan Thompson II LLC. |
(20) 10.51 Equipment Lease Agreement dated January 2, 2019 between Sheehy Enterprises, Inc. and Sheehy Mail, Inc. (22) 10.52 Subscription Agreement dated January 2, 2019 between EVO Transportation & Energy Services, Inc. and Sheehy Enterprises, Inc. (22) 10.53+ Employment Agreement dated January 2, 2019 between EVO Transportation & Energy Services, Inc. and John Sheehy (22) 10.54 Promissory Note dated February 1, 2019 between EVO Equipment Leasing, LLC, John Lampsa, and Ursula Lampsa (24) 10.55+ Employment Agreement dated February 1, 2019 between EVO Transportation & Energy Services, Inc. and John Lampsa (24) 10.56 Subscription Agreement dated February 1, 2019 between EVO Transportation & Energy Services, Inc. and Ursula Lampsa (24) 10.57 Subscription Agreement dated February 1, 2019 between EVO Transportation & Energy Services, Inc. and John Lampsa (24) 10.58 Amendment to Equipment Lease Agreement dated April 15, 2019 between Sheehy Enterprises, Inc. and Sheehy Mail Contractors, Inc. (25) 10.59 Promissory Note dated January 2, 2019 between EVO Transportation & Energy Services, Inc. and Sheehy Enterprises, Inc. (25) 10.60 Amendment to Equity Purchase Agreement dated December 26, 2018 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (25) 10.61 Amendment to Equity Purchase Agreement dated February 28, 2019 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (25) 10.62 Amendment to Equity Purchase Agreement dated April 12, 2019 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (25) 10.63 Amendment to Promissory Note, dated April 22, 2019, between EVO Transportation & Energy Services, Inc. and Danny R. Cuzick (25) 10.64 Amendment to Promissory Note, dated April 22, 2019, between EVO Transportation & Energy Services, Inc. and Danny R. Cuzick on behalf of Damon R. Cuzick (25) 10.65 Amendment to Promissory Note, dated April 22, 2019, between EVO Transportation & Energy Services, Inc. and Danny R. Cuzick on behalf of Theril H. Lund (25) 10.66 Amendment to Promissory Note, dated April 22, 2019, between EVO Transportation & Energy Services, Inc. and Danny R. Cuzick on behalf of Thomas J. Kiley (25) 10.67 Amendment to Equity Purchase Agreement dated April 30, 2019 between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (25) 10.68 Form of Subscription Agreement (26) 10.69 Form of Warrant (26) 10.70 Separation Agreement and Release, dated July 11, 2019, between EVO Transportation & Energy Services, Inc. and Michael Zientek (27) 10.71 Employment Agreement dated July15, 2019 between EVO Transportation & Energy Services, Inc. and Clifford Finkle IV (28) 10.72 Employment Agreement dated July15, 2019 between EVO Transportation & Energy Services, Inc. and James C. Finkle Jr. (28) 10.73 Subscription Agreement dated July15, 2019 between EVO Transportation & Energy Services, Inc. and Clifford Finkle IV (28) 10.74 Subscription Agreement dated July15, 2019 between EVO Transportation & Energy Services, Inc. and James C. Finkle Jr. (28) 10.75 Employment Agreement dated July22, 2019 between EVO Transportation & Energy Services, Inc. and Eugene S. Putnam, Jr. (28) Exhibit Description 10.76 Employment Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Matthew Ritter (29) 10.77 Employment Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Michael Ritter (29) 10.78 Director Nomination Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Antara Capital Master Fund LP (29) 10.79 Side Letter Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Antara Capital LP (29) 10.80 Subordination Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc., Danny Cuzick, and Cortland Capital Market Services LLC (29) 10.81 Subordination Agreement, dated September 16, 2019, between Environmental Alternative Fuels, LLC, Danny Cuzick, and Cortland Capital Market Services LLC (29) 10.82 Amendment to Promissory Note, dated August 30, 2019, between John Lampsa and Ursula Lampsa and EVO Equipment Leasing, LLC (29) 10.83 Extension of the Original Equity Purchase Agreement and Amendments Thereto, dated August 30, 2019, between EVO Transportation & Energy Services, Inc. and Billy (Trey) Peck Jr. (29) 10.84 Warrant, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Antara Capital Master Fund LP (29) 10.85 Warrant, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Danny Cuzick (29) 10.86 Subscription Agreement, dated September 16, 2019, between EVO Transportation & Energy Services, Inc., Matthew Ritter and Michael Ritter (29) 10.87 Employment Agreement, dated September 23, 2019, between EVO Transportation & Energy Services, Inc. and Thomas J. Abood (30) 10.90 Option Agreement, dated September 23, 2019, between EVO Transportation & Energy Services, Inc. and Thomas J. Abood (30) 10.91 Option Agreement, dated July 22, 2019, between EVO Transportation & Energy Services, Inc. and Eugene S. Putnam, Jr. (30) 10.92 Separation Agreement and Release, dated October 17, 2019, between EVO Transportation & Energy Services, Inc. and John Yeros (31) 10.93 Intercompany Debt Repayment and Settlement Agreement dated November 7, 2019 between EVO Transportation & Energy Services, Inc., Sheehy Mail Contractors, Inc., John Sheehy, Sheehy Enterprises Inc., and North American Dispatch Systems (32) 10.94 Warrant, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Corbin ERISA Opportunity Fund Ltd. (33) 10.95 Warrant, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Antara Capital Master Fund LP (34) 10.96 Warrant, dated September 16, 2019, between EVO Transportation & Energy Services, Inc. and Corbin ERISA Opportunity Fund Ltd. (34) 10.97 Warrant, dated February 27, 2020, between EVO Transportation & Energy Services, Inc. and Antara Capital Master Fund LP (35) 10.98 Form of Subscription Agreement, dated February 27, 2020 (35) 10.99 Redemption Agreement, dated March 24, 2020, between EVO Transportation & Energy Services, Inc. and Danny Cuzick (36) 10.100 Redemption Agreement, dated March 24, 2020, between EVO Transportation & Energy Services, Inc. and R. Scott Wheeler (36) 10.101 Subscription Agreement, dated March 24, 2020, between EVO Transportation & Energy Services, Inc. and Danny Cuzick (36) 10.102 Waiver and Warrant Agreement, dated March 26, 2020, between EVO Transportation & Energy Services, Inc. and Danny Cuzick (36) 10.103 Waiver and Agreement to Issue Warrant, dated March 31, 2020, between EVO Transportation & Energy Services, Inc. and Antara Capital Master Fund LP (37) 10.104 Note dated April 15, 2020 issued by EVO Transportation & Energy Services, Inc. to BOKF, N.A. |
(dba Bank of Oklahoma) (38) Exhibit Description 10.105+ Amended and Restated Executive Employment Agreement dated April 10, 2020 between EVO Transportation & Energy Services, Inc. and Thomas J. Abood (38) 10.106 Settlement Agreement and Releases dated March 12, 2021 between EVO Transportation & Energy Services, Inc., Midwest Bank, Dan Thompson II, LLC, Antara Capital LP, Antara Capital Master Fund LP, Antara Capital GP, LLC, Antara Capital Fund GP LLC, CEOF Holdings, LP and Himanshu Gulati, and Danny R. Cuzick, individually and as Holders’ Representative on behalf of Damon R. Cuzick, Theril H. Lund, and Thomas J. Kiley (41) 10.107 Warrant Agreement dated March 17, 2021 between EVO Transportation & Energy Services, Inc. and Midwest Bank (41) 10.108 Warrant Agreement dated March 17, 2021 between EVO Transportation & Energy Services, Inc. and Dan Thompson II, LLC ($2.50) (41) 10.109 Warrant Agreement dated March 17, 2021 between EVO Transportation & Energy Services, Inc. and Dan Thompson II, LLC ($0.01) (41) 10.110* Office Lease dated November 27, 2019 between EVO Transportation & Energy Services, Inc. and LPC Corridors, LLC 10.111* Commercial Lease Agreement dated November 1, 2019 between Thunder Ridge Transport, Inc. and Apple Moving, Inc. 10.112* Lease dated February 1, 2019 between Ursa Major Corporation and Ursa Group, LLC 10.113* Lease dated February 1, 2019 between Ursa Major Corporation and Ursa Oak Creek LLC 10.114* Lease Agreement dated September 30, 2018 between Thunder Ridge Transport, Inc. and ST Equity Properties, LLC 10.115* Lease - Business Property dated January 29, 2018 between Sheehy Mail Contractors, Inc. and Penta Partners, LLC 10.116* Ground Lease Agreement dated March 27, 2019 between Transport Leasing Inc. and 1230 McCarter Highway, LLC 10.117* Storage Parking Lease dated March 1, 2012 between John W. Ritter Trucking Incorporated and Allen Robinson 10.118* First Amendment to Commercial Lease Agreement dated February 4, 2021 between EVO Transportation, Inc. and Anne Arundel Development Group, LLC 10.119* Lease dated October 31, 2019 between EVO Transportation & Energy Services, Inc. and Ailanthus L.L.C. |
10.120* Assignment, Assumption and Consent to Assignment of Lease and Subleases dated May 26, 2021 by and among HP Lumina, LLC, Atlantic Postal Services, Inc., and EVO Transportation & Energy Services, Inc. 10.121* Lease Agreement dated April 26, 2015 between HP Lumina, LLC and Edwards Mail Service, Inc. 10.122*+ Employment Agreement dated June 21, 2021 between EVO Transportation & Energy Services, Inc. and Patrick Seul 14.1 Code of Conduct for Officers and Directors (5) 16.1 Letter from Lurie, LLP to the Securities and Exchange Commission dated February 7, 2017 (6) 16.2 Letter from Lurie, LLP to the Securities and Exchange Commission dated April 17, 2017 (7) 16.3 Letter from EKS&H LLLP to the Securities Exchange Commission dated October 2, 2018 (19) 16.4 Letter from Plante & Moran, PLLC to the Securities Exchange Commission dated January 11, 2019 (23) 21.1* Subsidiaries of EVO Transportation & Energy Services, Inc. 31.1* Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s annual report on Form 10-K for the year ended December 31, 2019 31.2* Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s annual report on Form 10-K for the year ended December 31, 2019 32.1* Certification of the Company’s Principal Executive Officer pursuant to 18 U.S.C. |
These factors include the following: ● many of the Company’s competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy, which may limit the Company’s ability to maintain or increase freight rates, may require the Company to reduce its freight rates or may limit its ability to maintain or expand its business; ● some shippers, including the USPS, have reduced or may reduce the number of carriers they use by selecting core carriers as approved service providers and in some instances the Company may not be selected; ● many customers, including the USPS, periodically solicit bids from multiple carriers for their shipping needs, which may depress freight rates or result in a loss of business to competitors; ● the continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources and other competitive advantages, and the Company may have difficulty competing with them; ● advances in technology may require the Company to increase investments in order to remain competitive, and its customers may not be willing to accept higher freight rates to cover the cost of these investments; ● the Company may have higher exposure to litigation risks as compared to smaller carriers; and ● smaller carriers may build economies of scale with procurement aggregation providers, which may improve the smaller carriers’ abilities to compete with the Company. |
Note 8 - Long-Term Debt Long-term debt consists of: EVO TRANSPORTATION & ENERGY SERVICES, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2018 and 2017 Note 8 - Long-Term Debt (continued) EVO TRANSPORTATION & ENERGY SERVICES, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2018 and 2017 Note 8 - Long-Term Debt (continued) EVO TRANSPORTATION & ENERGY SERVICES, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2018 and 2017 Note 8 - Long-Term Debt (continued) Maturities of long-term obligations are as follows: EVO TRANSPORTATION & ENERGY SERVICES, INC. Notes to the Consolidated Financial Statements For the Years Ended December 31, 2018 and 2017 Note 8 - Long-Term Debt (continued) Amortization of debt issuance and debt discount costs are as follows: Note 9 - Stockholders’ Deficit On March 2, 2018, the Company issued 1,000,000 Units (the “Units”) at a price of $2.50 per Unit for an aggregate purchase price of $2,500,000 pursuant to the terms of a subscription agreement between the Company and an investor. |
The Administrator will have full power and authority to administer and interpret the Amended 2018 Plan, to make and amend rules, regulations and guidelines for administering the Amended 2018 Plan, to prescribe the form and conditions of the respective Agreements evidencing each award (which may vary from Participant to Participant), to amend or revise Agreements evidencing any award (to the extent the amended terms would be permitted by the Amended 2018 Plan and provided that no such revision or amendment, except as is authorized in Section 14 of the Amended 2018 Plan, may impair the terms and conditions of any award that is outstanding on the date of such revision or amendment to the material detriment of the Participant in the absence of the consent of the Participant), and to make all other determinations necessary or advisable for the administration of the Amended 2018 Plan (including to correct any defect, omission or inconsistency in the Amended 2018 Plan or any Agreement, to the extent permitted by law and the Amended 2018 Plan). |
Change of Control Unless otherwise provided in the terms of an award, upon a change of control of the Company, as defined in the Amended 2018 Plan, the Administrator may provide for one or more of the following: (i) the acceleration of the exercisability, vesting, or lapse of the risks of forfeiture of any or all awards (or portions thereof); (ii) the complete termination of the Amended 2018 Plan and the cancellation of any or all awards (or portions thereof) that have not been exercised, have not vested, or remain subject to risks of forfeiture, as applicable in each case as of the effective date of the change of control; (iii) that the entity succeeding the Company by reason of such change of control, or the parent of such entity, must assume or continue any or all awards (or portions thereof) outstanding immediately prior to the change of control or substitute for any or all such awards (or portions thereof) a substantially equivalent award with respect to the securities of such successor entity, as determined in accordance with applicable laws and regulations; or (iv) that participants holding outstanding awards will become entitled to receive, with respect to each share of common stock subject to such award (whether vested or unvested, as determined by the Administrator pursuant to the Amended 2018 Plan) as of the effective date of any such change of control, cash in an amount equal to (1) for participants holding options or stock appreciation rights, the excess of the fair market value of such common stock on the date immediately preceding the effective date of such change of control over the exercise price per share of options or stock appreciation rights, or (2) for participants holding awards other than options or stock appreciation rights, the fair market value of such common stock on the date immediately preceding the effective date of such change of control. |
Change of Control Unless otherwise provided in the terms of an award, upon a change of control of the Company, as defined in the 2018 Plan, the Administrator may provide for one or more of the following: (i) the acceleration of the exercisability, vesting, or lapse of the risks of forfeiture of any or all awards (or portions thereof); (ii) the complete termination of the 2018 Plan and the cancellation of any or all awards (or portions thereof) that have not been exercised, have not vested, or remain subject to risks of forfeiture, as applicable in each case as of the effective date of the change of control; (iii) that the entity succeeding the Company by reason of such change of control, or the parent of such entity, must assume or continue any or all awards (or portions thereof) outstanding immediately prior to the change of control or substitute for any or all such awards (or portions thereof) a substantially equivalent award with respect to the securities of such successor entity, as determined in accordance with applicable laws and regulations; or (iv) that participants holding outstanding awards will become entitled to receive, with respect to each share of common stock subject to such award (whether vested or unvested, as determined by the Administrator pursuant to the 2018 Plan) as of the effective date of any such change of control, cash in an amount equal to (1) for participants holding options or stock appreciation rights, the excess of the fair market value of such common stock on the date immediately preceding the effective date of such change of control over the exercise price per share of options or stock appreciation rights, or (2) for participants holding awards other than options or stock appreciation rights, the fair market value of such common stock on the date immediately preceding the effective date of such change of control. |
In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors: (a) Potential for growth, indicated by new technology, anticipated market expansion or new products; (b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c) Strength and diversity of management, either in place or scheduled for recruitment; (d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; (e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials; (f) The extent to which the business opportunity can be advanced; (g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and (h) The impact whether financial or otherwise on the Company with respect to compliance with any federal or state regulations as required in order to complete a business combination. |
In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors: (a)Potential for growth, indicated by new technology, anticipated market expansion or new products; (b)Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c)Strength and diversity of management, either in place or scheduled for recruitment; (d)Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; (e)The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials; (f)The extent to which the business opportunity can be advanced; (g)The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and (h) The impact whether financial or otherwise on the Company with respect to compliance with any federal or state regulations as required in order to complete a business combination. |
In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors: (a) Potential for growth, indicated by new technology, anticipated market expansion or new products; (b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c) Strength and diversity of management, either in place or scheduled for recruitment; (d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; (e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials; (f) The extent to which the business opportunity can be advanced; (g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and (h) The impact whether financial or otherwise on the Company with respect to compliance with any federal or state regulations as required in order to complete a business combination. |
In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors: (a) Potential for growth, indicated by new technology, anticipated market expansion or new products; (b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c) Strength and diversity of management, either in place or scheduled for recruitment; (d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; (e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials; (f) The extent to which the business opportunity can be advanced; (g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and (h) The impact whether financial or otherwise on the Company with respect to compliance with any federal or state regulations as required in order to complete a business combination. |
In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors: (a) Potential for growth, indicated by new technology, anticipated market expansion or new products; (b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; (c) Strength and diversity of management, either in place or scheduled for recruitment; (d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; (e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials; (f) The extent to which the business opportunity can be advanced; (g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and (h) The impact whether financial or otherwise on the Company with respect to compliance with any federal or state regulations as required in order to complete a business combination. |
The impacts may include, but would not be limited to: •Decreased availability and/or increased cost of supplies due to increased demand around essential cleaning supplies including disinfecting agents, personal protective equipment (“PPE”), and food and food-related products due to increased global demand and disruptions along the global supply chains of these manufactures and distributors; •Disruption to operations due to the unavailability of employees due to illness, quarantines, risk of illness, travel restrictions or factors that limit our existing or potential workforce; •Limitations to the availability of our key personnel due to travel restrictions and access restrictions to our customers' facilities; •Our ability to meet more stringent, medically-required procedures, and infection control requirements at customer facilities; •Elevated employee turnover which may impact our facility level performance and/or increase payroll expense and recruiting-related expenses; •Decreased census in the nursing home and long-term care industry, which could impact the financial health of our customers and thereby increasing our associated credit risk with customers and increased pressures to modify our contractual terms; and •Significant disruption of global financial markets, which could negatively impact us or our customers’ ability to access capital in the future. |
The Company’s internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that: 1.Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company; 2.Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and 3.Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
The Company’s internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles in the United States and includes those policies and procedures that: 1Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company; 2Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and 3Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Such risks and uncertainties include, but are not limited to, risks arising from our providing services exclusively to the health care industry, primarily providers of long-term care; credit and collection risks associated with this industry; one client accounting for approximately 9% of revenues for the year then ended December 31, 2011; our claims experience related to workers’ compensation and general liability insurance; the effects of changes in, or interpretations of laws and regulations governing the industry, our workforce and services provided, including state and local regulations pertaining to the taxability of our services; and the risk factors described in Part I in this report under “Government Regulation of Clients,” “Competition” and “Service Agreements/Collections,” and under Item IA “Risk Factors.” Many of our clients’ revenues are highly contingent on Medicare, Medicaid and other payors’ reimbursement funding rates, which Congress and related agencies have affected through the enactment of a number of major laws and regulations during the past decade, including the March 2010 enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. |
Such risks and uncertainties include, but are not limited to, risks arising from our providing services exclusively to the health care industry, primarily providers of long-term care; proposed legislation to reform the U.S. healthcare system in an effort to contain healthcare costs; credit and collection risks associated with this industry; one client accounting for approximately 12% of revenues in 2009-(see notes 1 and 12, “Major Client” in the accompanying Notes to Consolidated Financial Statements); risks associated with our acquisition of Contract Environmental Services, Inc., including integration risks and costs, or such business not achieving expected financial results or synergies or failure to otherwise perform as expected; our claims experience related to workers’ compensation and general liability insurance; the effects of changes in, or interpretations of laws and regulations governing the industry, including state and local regulations pertaining to the taxability of our services; and the risk factors described in Part I in this report under “Government Regulation of Clients”, “Competition”, “Service Agreements/Collections”, and under Item IA “Risk Factors”. |
Such risks and uncertainties include, but are not limited to, risks arising from our providing services exclusively to the health care industry, primarily providers of long-term care; credit and collection risks associated with this industry; one client accounting for approximately 18% of revenues in 2006 (such client completed its previously announced merger on March 14, 2006- see Note 1, “Major Client” in the following Notes to Consolidated Financial Statements); risks associated with our acquisition of Summit Services Group, Inc., including integration risks and costs, or such business not achieving expected financial results or synergies or failure to otherwise perform as expected; our claims experience related to workers’ compensation and general liability insurance; the effects of changes in, or interpretations of laws and regulations governing the industry, including state and local regulations pertaining to the taxability of our services; and the risk factors described in Part I in this report under “Risk Factors”, “Government Regulation of Clients”, “Competition” and “Service Agreements/Collections”. |
Such risks and uncertainties include, but are not limited to, risks arising from our providing services exclusively to the health care industry, primarily providers of long-term care; credit and collection risks associated with this industry; one client accounting for approximately 19% of revenues in 2005 (the client entered into a merger agreement on August 16, 2005 and the transaction is expected to close in the first quarter of 2006- see Note 1, "Major Client" in the following Notes to Consolidated Financial Statements); our claims experience related to workers' compensation and general liability insurance; the effects of changes in, or interpretations of laws and regulations governing the industry, including state and local regulations pertaining to the taxability of our services; and the risk factors described in our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2005 and in Part I thereof under "Government Regulation of Clients", "Competition" and "Service Agreements/Collections". |
Impaired Notes Receivable --------------------------------------------------------- Balance Balance Beginning End of of Year Additions Deductions Year ------------ ------------ ------------ ------------ 2004 $ 3,900,000 $ 1,600,000 $ 3,000,000 $ 2,500,000 ============ ============ ============ ============ 2003 $ 5,800,000 $ 100,000 $ 2,000,000 $ 3,900,000 ============ ============ ============ ============ 2002 $ 7,700,000 $ - $ 1,900,000 $ 5,800,000 ============ ============ ============ ============ Reserve for Impaired Notes Receivable --------------------------------------------------------- Balance Balance Beginning End of of Year Additions Deductions Year ------------ ------------ ------------ ------------ 2004 $ 1,900,000 $ 1,300,000 $ 2,700,000 $ 500,000 ============ ============ ============ ============ 2003 $ 2,500,000 $ 1,250,000 $ 1,850,000 $ 1,900,000 ============ ============ ============ ============ 2002 $ 3,200,000 $ 1,000,000 $ 1,700,000 $ 2,500,000 ============ ============ ============ ============ We follow an income recognition policy on notes receivable that does not recognize interest income until cash payments are received. |
Significant components of our federal and state deferred tax assets and liabilities are as follows: Year Ended December 31, ---------------------------- 2004 2003 ------------ ------------ Net current deferred assets: Allowance for doubtful accounts $ 765,000 $ 1,383,000 Accrued insurance claims- current 1,705,000 1,206,000 Expensing of housekeeping supplies (2,013,000) (1,922,000) Other 117,000 8,000 ------------ ------------ $ 574,000 $ 675,000 ============ ============ Net noncurrent deferred tax assets: Deferred compensation $ 1,883,000 $ 1,341,000 Non-deductible reserves 462,000 296,000 Depreciation of property and equipment (1,077,000) (869,000) Accrued insurance claims- noncurrent 4,183,000 3,620,000 Other 112,000 88,000 ------------ ------------ $ 5,563,000 $ 4,476,000 ============ ============ A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate to income before income taxes is as follows: Year Ended December 31, ---------------------------------------------- 2004 2003 2002 ------------- ------------- ------------- Tax expense computed at statutory rate $ 8,297,000 $ 5,955,000 $ 4,850,000 Increases (decreases) resulting from: State income taxes, net of federal tax benefit 1,386,000 1,128,000 996,000 Federal jobs credits (641,000) (578,000) (433,000) Tax exempt interest (102,000) (73,000) (98,000) Other, net 67,000 223,000 319,000 ------------- ------------- ------------- $ 9,007,000 $ 6,655,000 $ 5,634,000 ============= ============= ============= Income taxes paid were $7,256,000, $4,728,000 and $7,308,000 during 2004, 2003 and 2002, respectively. |
President - Moss Associates John M. Briggs Certified Public Accountant OFFICERS AND CORPORATE MANAGEMENT Daniel P. McCartney Chief Executive Officer Thomas A. Cook President & Chief Operating Officer Curt Barringer Southeast Divisional Vice President Thomas B. Carpenter General Counsel and Assistant Secretary James L. DiStefano Chief Financial Officer and Treasurer Michael Hammond Western Regional Vice President Michael Harder Vice President - Credit Administration Richard W. Hudson Vice President - Finance and Secretary John D. Kelly Western Divisional Vice President Nicholas R. Marino Human Resources Director Michael E. McBryan Mid-Atlantic Divisional Vice President Bryan D. McCartney Mid-Atlantic Divisional Vice President Joseph F. McCartney Northeast Divisional Vice President Kevin McCartney Northeast Divisional Vice President David Smigel Western Divisional Vice President James P. O'Toole Mid-Atlantic Regional Vice President Brian M. Waters Vice President - Operations MARKET MAKERS As of the end of 2004, the following firms were making a market in the shares of Healthcare Services Group, Inc.: UBS Capital Markets, L.P. Goldman, Sachs & Co. Jefferies & Company, Inc. Morgan Stanley & Co., Inc. C.L. |
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