SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 1, 1996
CAPITAL CITY BANK GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 0-13358 59-2273542
(State of Incorporation) (Commission File Number) (IRS Employer Identification
No.)
217 North Monroe Street, Tallahassee, Florida 32301
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (904) 671-0610
CAPITAL CITY BANK GROUP, INC.
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
On July 1, 1996, Capital City Bank Group, Inc. (the "Company"), consummated its
merger with First Financial Bancorp, Inc., a Florida corporation ("First
Financial"), parent company to First Federal Bank, Tallahassee, Florida. The
unaudited pro forma consolidated financial information set forth herein has
been prepared for the purpose of complying with Regulation S-X promulgated by
the Securities and Exchange Commission in connection with the filing of the
Form 8-K by the Company relating to the acquisition of First Financial on July
1, 1996.
(a) Financial Statements of Business Acquired:
Filed as part of this report are the financial statements of First Finaqncial
for the periods required by Rule 3-05(b) of Regulation S-X.
FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30,
Assets 1995 1994
Cash $ 4,458,715 4,060,729
Interest-bearing deposits 2,388,774 791,688
Cash and cash equivalents 6,847,489 4,852,417
Securities purchased under agreement to resell 2,000,000 -
Investment securities:
Available-for-sale, at market 12,507,971 14,856,236
Held-to-maturity, at cost (market value
of $524,531) - 525,000
Mortgage-backed securities held-to-maturity,
at cost (market value of $31,628,331 and
$32,743,421, respectively) 31,658,567 34,117,200
Loans receivable, net 163,386,088 127,412,389
Loans held-for-sale 1,546,739 -
Accrued interest receivable:
Investment securities and securities
purchased under agreement to resell 251,248 168,691
Mortgage-backed securities 153,758 126,356
Loans receivable 1,000,273 721,297
Real estate owned:
Acquired by foreclosure 134,643 549,350
In-substance foreclosed loans 381,176 149,505
Premises and equipment, net 7,884,587 5,101,530
Federal Home Loan Bank stock, at cost 1,280,100 1,119,600
Prepaid expenses and other assets 591,694 415,667
Total $ 229,624,333 190,115,238
Liabilities and Stockholders' Equity
Deposit accounts 200,786,987 166,325,919
Accrued interest payable 113,828 87,332
Federal Home Loan Bank advances 11,000,000 8,000,000
Advance payments by borrowers for taxes
and insurance 1,922,648 1,613,823
Deferred income taxes 374,361 118,292
Other liabilities and accrued expenses 635,391 514,816
Total liabilities 214,833,215 176,660,182
Commitments (Note 12)
Stockholders' equity:
Common stock, no par value, 4,000,000 shares authorized,
865,133 in 1995 and 852,481 in 1994 shares issued
and outstanding - -
Additional paid-in capital 7,033,133 5,610,585
Retained earnings, substantially restricted 7,894,624 8,140,678
Unrealized loss on investment securities
available-for-sale (136,639) (296,207)
Total stockholders' equity 14,791,118 13,455,056
Total $ 229,624,333 190,115,238
See accompanying Notes to Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
Year Ended September 30,
1995 1994 1993
Interest income:
Interest on loans receivable $ 12,641,552 10,790,576 10,981,335
Interest on mortgage-backed securities 1,851,064 735,925 398,764
Interest and dividends on investment
securities 996,034 965,485 1,435,234
Other interest-earning assets 380,958 363,699 634,053
Total interest income 15,869,608 12,855,685 13,449,386
Interest expense:
Deposit accounts 8,623,303 6,145,948 6,725,674
Borrowed funds 683,383 417,464 374,979
Total interest expense 9,306,686 6,563,412 7,100,653
Net interest income 6,562,922 6,292,273 6,348,733
Provision (credit) for loan losses (41,258) (311,689) 565,021
Net interest income after provision
(credit) for loan losses 6,604,180 6,603,962 5,783,712
Noninterest income:
Fees and service charges 605,369 600,735 540,581
Gain on sale of mortgage-backed
securities held-for-sale - 3,977 213,602
(Loss) gain on sale of investment
securities available-for-sale (14,429) (76,472) 110,095
Unrealized loss on investment securities
held-for-sale - (96,395) -
Gain on sale of loans 235,171 491,563 656,345
Gain on sale of loan servicing - 246,407 412,825
Gain on sale of real estate owned 36,868 164,886 250,767
Other 465,052 416,598 532,902
Total noninterest income 1,328,031 1,751,299 2,717,117
Noninterest expense:
Salaries and employee benefits 2,537,420 2,345,180 2,425,435
Occupancy and equipment 780,286 683,172 606,390
Insurance 536,592 536,041 533,441
Advertising and promotion 221,719 146,925 142,855
Provision for losses on real estate owned 56,405 166,595 429,054
Data processing 293,386 265,264 267,349
Legal 28,382 69,545 239,508
Consultants' fees 56,214 197,705 162,188
Real estate owned 152,463 258,795 240,221
Other 810,928 862,181 841,131
Total noninterest expense 5,473,795 5,531,403 5,887,572
Earnings before provision for income
taxes and cumulative effect of
change in accounting principle 2,458,416 2,823,858 2,613,257
Provision for income taxes 917,699 1,055,300 974,401
Earnings before cumulative effect of
change in accounting principle 1,540,717 1,768,558 1,638,856
Cumulative effect of change in accounting
principle - 60,247 -
Net earnings $ 1,540,717 1,828,805 1,638,856
Earnings per share:
Earnings before cumulative effect of
change in accounting principle $ 1.70 1.95 1.93
Cumulative effect of change in
accounting principle - .06 -
Earnings per share $ 1.70 2.01 1.93
Weighted average number of shares
outstanding 906,152 909,930 851,320
See accompanying Notes to Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Ended September 30,
1995 1994 1993
Operating activities:
Net earnings $ 1,540,717 1,828,805 1,638,856
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Depreciation 280,676 278,645 245,947
Provision (credit) for loan losses (41,258) (311,689) 565,021
Provision for losses on real estate
owned 56,405 166,595 429,054
Accretion of unearned interest and
deferred loan fees (399,856) (337,387) (259,197)
Provision (credit) for deferred
income taxes 160,329 63,494 (41,452)
(Increase) decrease in other assets (176,027) 68,425 433,075
(Increase) decrease in loans
held-for-sale (1,546,739) 3,385,739 151,978
Increase (decrease) in accrued
interest payable and other
liabilities 147,071 (1,027,610) 295,020
(Increase) decrease in accrued
interest receivable (388,935) 42,905 258,033
Gain on sale of mortgage-backed
securities - (3,977) (213,602)
Loss (gain) on sale of investment
securities 14,429 76,472 (110,095)
Gain on sale of loans (235,171) (491,563) (656,345)
Gain on sale of real estate owned (36,868) (164,886) (250,767)
Net cash (used in) provided by
operating activities (625,227) 3,573,968 2,485,526
Investing activities:
Proceeds from maturity of securities
purchased under agreements to resel 52,000,000 14,000,000 11,000,000
Securities purchased under agreements
to resell (54,000,000) - (20,000,000)
Proceeds from maturities of investment
securities 1,525,000 3,773,000 21,612,000
Proceeds from sales of investment
securities 3,576,377 21,775,562 7,174,719
Purchase of investment securities (1,987,233) (14,423,420)(23,853,481)
Proceeds from sales of mortgage-backed
securities - 1,715,551 5,676,506
Purchase of mortgage-backed securities - (23,464,275)(18,169,597)
Principal repayments on mortgage-backed
securities 2,458,633 2,273,125 1,708,971
Sales of loans 14,077,598 30,566,690 27,277,082
Net increase in loans (49,378,259) (46,027,702)(20,824,708)
Proceeds from sales of real estate
owned, net of additions to real
estate owned 166,746 1,840,557 3,982,283
Capital expenditures, net (3,063,733) (2,730,949) (446,521)
Purchase of Federal Home Loan Bank
stock (160,500) (231,600) -
Net cash (used in) provided by
investing activities (34,785,371) (10,933,461) (4,862,746)
FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
Year Ended September 30,
1995 1994 1993
Financing activities:
Net decrease in demand deposits,
NOW accounts and savings accounts (6,672,645) (1,993,142) (5,324,540)
Net increase (decrease) in certificates
of deposit 41,133,713 9,783,457 (8,519,207)
Increase in advances by borrowers for
taxes and insurance 308,825 268,906 148,727
Proceeds from Federal Home Loan Bank
advances 36,000,000 11,000,000 1,000,000
Repayment of Federal Home Loan Bank
advances (33,000,000) (9,000,000) -
Net proceeds from issuance of common
stock 67,838 1,799 10,200
Purchase of treasury stock - - (2,400)
Cash dividend paid (432,061) (556,249) (192,581)
Net cash provided by (used in)
financing activities 37,405,670 9,504,771 (12,879,801)
Net increase (decrease) in cash and cash
equivalents 1,995,072 2,145,278 (15,257,021)
Cash and cash equivalents at beginning
of year 4,852,417 2,707,139 17,964,160
Cash and cash equivalents at end of
year $ 6,847,489 4,852,417 2,707,139
Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
Loans foreclosed and loans foreclosed
in-substance and transferred to
real estate owned $ 548,147 1,280,259 2,318,722
Loans originated for the sale of
real estate owned $ 544,900 1,302,430 2,901,991
Loans foreclosed in-substance and
reclassified to loans $ - 1,024,731 1,117,985
Cash paid during year for:
Interest on deposits and
borrowings $ 9,280,190 6,552,071 7,155,787
Income taxes $ 666,457 1,405,000 684,040
See accompanying Notes to Consolidated Financial Statements.
Consolidated Statements of Stockholders' Equity
Unrealized
Loss on
Retained Investment
Additional Earnings, Securities Total
Common Paid-In Substantially Available- Treasury Stockholders'
Shares Capital Restricted For-Sale Stock Equity
Balance, September
30, 1992 642,806 $ 3,440,473 7,614,360 - (32,000) 11,022,833
Exercise of stock
options 1,710 10,200 - - - 10,200
Net earnings - - 1,638,856 - - 1,638,856
Cash dividends paid - - (192,581) - - (192,581)
Purchase of treasury
stock - - - - (2,400) (2,400)
Stock dividend 64,381 917,429 (917,429) - - -
Balance, September
30, 1993 708,897 4,368,102 8,143,206 - (34,400) 12,476,908
Exercise of stock
options 330 1,799 - - - 1,799
Net earnings - - 1,828,805 - - 1,828,805
Cash dividends paid - - (556,249) - - (556,249)
Unrealized loss on
investment
securities
available-for-sale - - - (296,207) - (296,207)
Stock dividend 65,756 1,240,684 (1,275,084) - 34,400 -
Balance, September
30, 1994 774,983 5,610,585 8,140,678 (296,207) - 13,455,056
Net earnings - - 1,540,717 - - 1,540,717
Cash dividends paid - - (432,061) - - (432,061)
Decrease in unrealized
loss on investment
securities available-
for-sale - - - 159,568 - 159,568
Stock dividend 77,412 1,354,710 (1,354,710) - - -
Exercise of stock
options 12,738 67,838 - - - 67,838
Balance, September
30, 1995 865,133 $ 7,033,133 7,894,624 (136,639) - 14,791,118
See accompanying Notes to Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1995, 1994 and 1993
(1) Summary of Significant Accounting Policies
First Financial Bancorp, Inc. (the "Corporation") was incorporated under
Florida law on November 30, 1990 as a unitary savings and loan holding
company. On July 8, 1991, each share of common stock of First Federal
Bank (the "Savings Bank") was exchanged, on a one-for-one basis, for
642,806 shares of common stock, no par value, of the Corporation and the
Corporation became the parent company of the Savings Bank. In August,
1994, the Corporation formed Community Financial Services, Inc. (a wholly-
owned subsidiary), primarily for the purpose of leasing space to an
investment company to sell investment securities at two of the Savings
Bank's branch locations. The investment company began selling securities
at the two branch locations in September 1994 and as of September 30, 1995
had ceased activity. The investment company had minimal activity in
fiscal 1995.
The Savings Bank opened for business in 1960 as a federally chartered
mutual savings and loan association. The Savings Bank converted to a
stock savings bank on March 31, 1988.
The consolidated financial statements include the accounts of the
Corporation and its wholly-owned subsidiaries, the Savings Bank and
Community Financial Services, Inc. (collectively "the Company").
Significant intercompany balances and transactions have been eliminated in
consolidation.
The accounting and reporting policies of the Company conform to generally
accepted accounting principles and to general practices within the thrift
industry. The following summarizes the more significant of these policies
and practices:
Cash Equivalents. Cash equivalents consist of Federal funds sold and
funds due from banks for purposes of the statements of cash flows. The
Company considers all highly liquid debt instruments with original
maturities when purchased of three months or less to be cash equivalents.
Investment and Mortgage-Backed Securities. On September 30, 1994, the
Company adopted Statement of Financial Accounting Standards No. 115 ("SFAS
No. 115"). This Statement requires securities that the Company has the
positive intent and ability to hold to maturity to be classified as held-
to-maturity securities and reported at cost, adjusted for amortization of
premiums and accretion of discounts which are recognized in interest
income using the interest method over the period to maturity. Securities
that are held principally for selling them in the near term are to be
classified as trading securities and reported at fair value, with
unrealized gains and losses included in earnings. Securities not
classified as either held-to-maturity securities or trading securities are
to be classified as available-for-sale securities and reported at fair
value, with unrealized gains and losses excluded from earnings and
reported in a separate component of stockholders' equity. At September
30, 1995, the Company has securities in both the held-to-maturity and
available-for-sale classifications. Gains or losses on securities sold
are recognized based on the specific identification method.
Prior to September 30, 1994 investment and mortgage-backed securities held
to maturity were carried at cost, adjusted for amortization of premiums
and accretion of discounts and were not adjusted to the lower of cost or
market because management had the intent and ability to hold them to
maturity. Investment and mortgage-backed securities held-for-sale which
included investments in mutual funds, were carried at the lower of cost or
market value in the aggregate. Net unrealized losses on held-for-sale
securities were recognized in a valuation allowance through charges to
operations.
(1) Summary of Significant Accounting Policies, Continued
Allowance for Loan Losses. The allowance for loan losses is maintained at
a level believed adequate by management to absorb potential losses in the
loan portfolio. Management's determination of the adequacy of the
allowance is based on an evaluation of the loan portfolio, past loan loss
experience, current economic conditions, volume, growth and composition of
the loan portfolio, and other relevant factors. The allowance is
increased by provisions for loan losses which are charged against
earnings. While management uses the best information available to make
such determinations, additional provisions for potential loan losses may
be required to be established in the future should economic or other
conditions change substantially.
Interest on Loans. Interest on loans is recognized in income as earned.
Uncollectible interest on loans that are contractually past due is charged
off, or an allowance is established based on management's periodic
evaluation. The allowance is established by a charge to interest income
equal to all interest previously accrued, and income is subsequently
recognized only to the extent that cash payments are received until, in
management's judgement, the borrower's ability to make periodic interest
and principal payments is back to normal, in which case the loan is
returned to accrual status.
Loans Held for Sale. Certain fixed-rate residential mortgage loans
originated are intended for sale and are carried at the lower of cost or
estimated market value in the aggregate. Net unrealized losses are
recognized in a valuation allowance by charges to operations. At
September 30, 1995, market value approximated book value.
Premises and Equipment. Premises and equipment are carried at cost less
accumulated depreciation. Depreciation is computed on the straight-line
method over the estimated useful lives of the related assets. Maintenance
and repairs are charged to expense and improvements are capitalized. The
cost and accumulated depreciation applicable to assets, retired or
otherwise disposed of, are eliminated from the related accounts and gains
or losses on sales are credited or charged to operations.
Real Estate Owned and In-Substance Foreclosed Loans. In-substance
foreclosed loans and property acquired by foreclosure or deed in-lieu of
foreclosure are recorded at the lower of the loan balance or estimated
fair value of the property minus estimated costs to sell at the time the
loan is foreclosed or deemed foreclosed in-substance. Costs relating to
the development and improvement of property are capitalized, whereas those
relating to maintaining the property are charged to expense. Valuations
are periodically performed by management and an allowance for losses is
established by a charge to operations if the carrying value of a property
exceeds its estimated fair value.
Loans foreclosed in-substance consist of loans accounted for as foreclosed
property even though actual foreclosure has not occurred. Although the
collateral underlying these loans has not been repossessed, the borrower
has no equity in the collateral at its current estimated fair value,
proceeds for repayment are expected to come only from the operation or
sale of the collateral, and either the borrower has abandoned control of
the project or it is doubtful that the borrower will rebuild equity in the
collateral or repay the loan by other means in the foreseeable future.
The amounts the Company could ultimately recover from loans foreclosed in-
substance and real estate owned could differ materially from the amounts
used in arriving at the net carrying value of the assets because of future
market factors beyond the Company's control or changes in the Company's
strategy for recovering its investment.
(1) Summary of Significant Accounting Policies, Continued
Loan Origination Fees and Costs. The Company defers all loan origination
fees and certain specific loan origination costs. Such costs consist
primarily of salaries and other expenses related to successful loan
origination efforts. Net deferred loan origination fees or costs are
amortized using the interest method over the contractual lives of the
related loans.
Income Taxes. The Company follows Statement of Financial Accounting
Standards No. 109 ("SFAS 109") relating to the method of accounting for
income taxes. SFAS 109 requires companies to take into account changes in
tax rates when valuing the deferred income tax amounts they carry on their
balance sheets (the "Liability Method"). SFAS 109 also requires that
deferred income taxes be provided for all temporary differences between
financial statement income and taxable income. However, a deferred tax
liability is not recognized for bad debt reserves of savings institutions
that arose in tax years beginning before December 31, 1987 (base year
reserves).
The Corporation and its subsidiaries file a consolidated income tax
return. Income taxes are allocated proportionally to the Corporation and
its subsidiaries as though separate income tax returns were filed.
Retirement Benefits. The Company has a noncontributory defined benefit
pension plan covering all employees who meet certain eligibility
requirements. Pension costs are computed based on the provisions of
Statement of Financial Accounting Standards No. 87, "Employers' Accounting
for Pensions", ("SFAS No. 87").
Earnings Per Common Share. Earnings per common share were computed by
dividing the net earnings for the year by the weighted average number of
shares outstanding. Stock options granted to directors, officers and
employees (as discussed in Note 15) are common stock equivalents. For the
years ended September 30, 1995 and 1994, the weighted average number of
shares outstanding includes common stock equivalents (stock options)
computed using the treasury stock method. These common stock equivalents
did not have a material dilutive effect on earnings per share for the year
ended September 30, 1993. Earnings per share for 1993 and 1994 have been
adjusted to reflect the 1994 and 1995 stock dividends. The following
table presents information necessary to calculate earnings per share:
For the Year Ended September 30,
1995 1994 1993
Average common shares outstanding 856,538 852,358 851,320
Common shares assumed outstanding to
reflect the dilutive effect of
common stock options 49,614 57,572 -
Weighted average shares 906,152 909,930 851,320
(1) Summary of Significant Accounting Policies, Continued
Future Accounting Requirements. The Financial Accounting Standards Board
("FASB") has issued Statements of Financial Accounting Standards No. 114
and No. 118 which address the accounting by creditors for impairment of
certain loans. It requires that impaired loans that are within the scope
of these Statements be measured based on the present value of expected
future cash flows discounted at the loan's effective interest rate or, as
a practical expedient, at the loan's observable market price or the fair
value of the collateral if the loan is collateral dependent. These
Statements apply to the Company's financial statements for the 1996 fiscal
year. Management does not anticipate these Statements will have a
material impact on the Company.
In May, 1995, the FASB issued Statement of Financial Accounting Standards
No. 122 ("SFAS 122") which requires mortgage banking enterprises that
acquire mortgage servicing rights through either the purchase or
origination of mortgage loans and sells or securitizes those loans with
servicing rights retained to allocate the total cost of the mortgage loans
to the mortgage servicing rights and the loans based on their relative
fair values. Mortgage banking enterprises include commercial banks and
thrift institutions that conduct operations substantially similar to the
primary operations of a mortgage banking enterprise. This Statement is
effective for fiscal years beginning after December 15, 1995. Management
is in the process of evaluating this Statement and is currently unable to
determine the future impact on the financial statements of the Company.
Reclassifications. Certain amounts for 1994 and 1993 have been
reclassified to conform with the current financial statement presentation.
(2) Securities Purchased Under Agreements to Resell
At September 30,
1995 1994
Mortgage-backed certificates with a market value of
2 ,000,000 $ 2,000,000 -
The Company enters into purchases of securities under agreements to resell
(repurchase agreements). The amounts advanced under these repurchase
agreements represent short-term loans and are reflected as a receivable in
the consolidated balance sheets. The securities underlying the repurchase
agreements are book-entry securities. During the period of the agreement,
the securities are delivered by appropriate entry into a third-party
custodian's account designated by the Company under a written custodial
agreement that explicitly recognizes the Company's interest in the
securities. The repurchase agreements relating to mortgage-backed
certificates are agreements to resell identical securities. Based on month-
end balances, securities purchased under agreements to resell averaged
$2,907,000, $1,344,000 and $4,769,000 during the years ended September 30,
1995, 1994 and 1993, respectively. The maximum amount outstanding at any
month-end under such agreements during the fiscal years ended September 30,
1995, 1994 and 1993 was $10,000,000, $11,000,000 and $14,000,000,
respectively.
(3) Investment Securities
Investment securities are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
At September 30, 1995:
Investment securities
available-for-sale:
U.S. Government and agency
obligations $ 11,640,144 6,597 (225,875) 11,420,866
Marketable equity securities 1,086,450 655 - 1,087,105
Securities available-for-sale $ 12,726,594 7,252 (225,875) 12,507,971
At September 30, 1994:
Investment securities
held-to-maturity-
U.S. Government and agency
obligations $ 525,000 - (469) 524,531
Investment securities
available-for-sale:
U.S. Government and agency
obligations 13,639,423 - (406,669) 13,232,754
Marketable equity securities 1,565,744 - (59,137) 1,506,607
Other investments 125,000 - (8,125) 116,875
Securities available-for-
sale $ 15,330,167 - (473,931) 14,856,236
The amortized cost and estimated market value of investment securities at
September 30, 1995, by contractual maturity are shown below. Expected
maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
Available-for-Sale
Estimated
Amortized Market
Cost Value
Due in one year or less $ 5,517,965 5,489,609
Due after one year through five years 4,625,020 4,535,057
Due after five years through ten years 1,497,159 1,396,200
Equity securities 1,086,450 1,087,105
Total $ 12,726,594 12,507,971
(3) Investment Securities, Continued
At September 30, 1994, prior to the adoption of SFAS No. 115, the Company
had investment securities held-for-sale which had an unrealized loss of
$96,395. This amount, net of a tax benefit of $36,148, was recognized in
the consolidated statement of earnings during fiscal 1994. On September 30,
1994, the Company adopted SFAS No. 115 and classified investment securities
as either held-to-maturity or available-for-sale. The effect on the
consolidated financial statements of implementing this Statement was to
realize a $60,247 increase in earnings which is reflected as a cumulative
effect of a change in accounting principle in the fiscal 1994 consolidated
statement of earnings. Also, for investment securities classified as
available-for-sale, an unrealized loss of $296,207, which is net of a tax
benefit of $177,724, was recorded in the stockholders' equity section of
the consolidated balance sheet.
Securities sales transactions are summarized as follows:
Year Ended September 30,
1995 1994 1993
Proceeds from sales $ 3,576,377 21,775,562 7,174,719
Gross gains 24,536 122,254 110,095
Gross losses (38,965) (198,726) -
Net gains (losses) $ (14,429) (76,472) 110,095
(4) Mortgage-Backed Securities
The carrying values and estimated market values of mortgage-backed securities
are summarized as follows:
Estimated
Principal Unamortized Unearned Carrying Market
Balance Premiums Discounts Value Value
At September 30, 1995:
Mortgage-backed securities
held-to-maturity:
FHLMC pass-through
certificates $ 7,245,826 5,958 (74,006) 7,177,778 7,098,056
GNMA pass-through
certificates 21,845,024 12,521 (77,815) 21,779,730 21,861,215
FNMA pass-through
certificates 755,453 23,714 - 779,167 757,810
FHLMC collateralized
mortgage obligations 1,000,000 2,870 - 1,002,870 990,466
Privately insured
collateralized
mortgage obligations 902,458 16,564 - 919,022 920,784
Mortgage-backed
securities held-to-
maturity $ 31,748,761 61,627 (151,821) 31,658,567 31,628,331
At September 30, 1994:
Mortgage-backed securities
held-to-maturity:
FHLMC pass-through
certificates $ 8,128,511 6,169 (93,242) 8,041,438 7,781,975
GNMA pass-through
certificates 23,043,633 12,982 (80,565) 22,976,050 21,948,737
FNMA pass-through
certificates 831,131 24,558 - 855,689 825,456
FHLMC collateralized
mortgage obligations 1,000,000 3,012 - 1,003,012 963,750
Privately insured
mortgage-backed
certificates 1,215,168 25,843 - 1,241,011 1,223,503
Mortgage-backed
securities held-to-
maturity $ 34,218,44 372,564 (173,807) 34,117,200 32,743,421
The amortized cost and estimated market values of mortgage-backed securities
are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
At September 30, 1995:
Mortgage-backed securities
held-to-maturity:
FHLMC pass-through
certificates $ 7,177,778 28,009 (107,731) 7,098,056
GNMA pass-through
certificates 21,779,730 159,427 (77,942) 21,861,215
FNMA pass-through
certificates 779,167 - (21,357) 757,810
FHLMC collateralized mortgage
obligations 1,002,870 - (12,404) 990,466
Privately insured
collateralized
mortgage obligations 919,022 8,148 (6,386) 920,784
Mortgage-backed securities
held-to-maturity $ 31,658,567 195,584 (225,820) 31,628,331
At September 30, 1994:
Mortgage-backed securities held-
to-maturity:
FHLMC pass-through
certificates $ 8,041,438 12,694 (272,157) 7,781,975
GNMA pass-through
certificates 22,976,050 - (1,027,313) 21,948,737
FNMA pass-through
certificates 855,689 - (30,233) 825,456
FHLMC collateralized
mortgage obligations 1,003,012 - (39,262) 963,750
Privately insured
collateralized mortgage
obligations 1,241,011 3,880 (21,388) 1,223,503
Mortgage-backed securities held-
to-maturity $ 34,117,200 16,574 (1,390,353) 32,743,421
At September 30, 1994, the Company adopted SFAS No. 115. The adoption of
this Statement in connection with mortgage-backed securities had no effect
on the consolidated financial statements of the Company.
Mortgage-backed securities sales transactions are summarized as follows:
Year Ended September 30,
1995 1994 1993
Proceeds from sales $ - 1,715,551 5,676,506
Gross gains - 3,977 213,602
Gross losses - - -
Net gains $ - 3,977 213,602
(5) Loans Receivable, Net
The Portfolio. Loans receivable consists of the following:
At September 30,
1995 1994
First mortgage loans:
One-to-four-family units $ 106,582,611 87,193,113
Multi-family units 3,618,672 3,186,653
Commercial real estate 15,659,084 13,393,835
Land 7,705,928 2,100,950
Construction:
Residential 19,606,392 10,659,176
Commercial 3,006,908 1,336,800
Total first mortgage loans 156,179,595 117,870,527
Consumer and other loans 17,655,933 16,667,929
Savings account loans 1,137,234 1,022,135
Home improvement loans 462,772 208,493
Mobile home loans 720,566 981,332
Total loans 176,156,100 136,750,416
Undisbursed portion of loans in process (10,758,324) (7,211,503)
Deferred loan fees (584,168) (556,384)
Allowance for loan losses (1,427,520) (1,570,140)
Total (12,770,012) (9,338,027)
Loans receivable, net $ 163,386,088 127,412,389
Loans to Directors and Officers. Loans to directors and officers of the
Company, which were made at market rates, were made in the ordinary course
of business and did not involve more than normal risk of collectibility or
present other unfavorable features. Activity in loans to directors and
officers for the years ended September 30, 1995 and 1994 are as follows:
For the Year
Ended September 30,
1995 1994
Beginning balance $ 1,032,620 995,827
Officers added 47,583 103,891
Officers deleted (140,778) -
Loans originated 133,687 125,710
Principal payments (237,806) (192,808)
Ending balance $ 835,306 1,032,620
(5) Loans Receivable, Net, Continued
Credit Risk and Loan Losses. The Company grants primarily construction
and long-term real estate loans collateralized by single family residences
and other residential properties and installment loans throughout the
state. The majority of the Company's loans are in Leon, Taylor, Madison,
Pasco and Hernando Counties. Although the Company has a diversified loan
portfolio, a significant portion of its debtors' ability to honor their
contracts is dependent upon the economy of these counties. The activity
in the allowance for loan losses was as follows:
For the Year Ended
September 30,
1995 1994 1993
Balance, beginning of year $ 1,570,140 1,546,536 2,203,578
Provision (credit) charged against
earnings (41,258) (311,689) 565,021
Charge-offs (135,625) (137,337) (1,246,102)
Recoveries 34,263 472,630 24,039
Balance, end of year $ 1,427,520 1,570,140 1,546,536
Nonaccrual loans for which interest has been reduced totaled approximately
$174,000 at September, 1993. There were no nonaccrual loans at September
30, 1995 or 1994. Interest income that would have been recorded under the
original terms of such loans and the interest income actually recognized
are summarized below:
For the Year Ended
September 30,
1993
Interest income that would
have been recorded $ 15,000
Interest income recognized 7,000
Interest income foregone $ 8,000
(6) Loan Servicing
Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets. The unpaid principal balances of these
mortgage loans are summarized as follows:
At September 30,
1995 1994 1993
Mortgage loan portfolios serviced for:
FHLMC $ 5,962,000 7,254,000 60,893,000
FNMA 815,000 900,000 1,484,000
Other investors 1,699,000 1,305,000 974,000
$ 8,476,000 9,459,000 63,351,000
Custodial escrow balances maintained in connection with the foregoing
loans serviced were approximately $185,000, $197,000 and $1,053,000 at
September 30, 1995, 1994 and 1993, respectively.
(7) Premises and Equipment
Premises and equipment are summarized as follows:
At September 30,
1995 1994
Land $ 3,588,314 2,911,196
Buildings and improvements 1,779,884 2,027,655
Furniture and equipment 2,008,129 1,689,387
Construction in progress 2,309,923 110,565
Total, at cost 9,686,250 6,738,803
Accumulated depreciation (1,801,663) (1,637,273)
Premises and equipment, net $ 7,884,587 5,101,530
At September 30, 1995, the Company had outstanding construction
commitments of approximately $252,000 in connection with the construction
of the Company's new headquarters in Tallahassee, Florida.
(8) Real Estate Owned
Activity in the allowance for losses on real estate owned is as follows:
For the Year Ended September 30,
1995 1994 1993
Beginning balance $ 24,599 11,189 253,731
Provision for losses on real
estate owned 56,405 166,595 429,054
Charge-offs (74,722) (153,185) (671,596)
Ending balance $ 6,282 24,599 11,189
(9) Deposit Accounts
Deposit accounts are summarized as follows:
Weighted
Average Rate
At September 30, At September 30,
1995 1995 1994
Passbook and statement savings accounts 2.89% $17,460,563 22,620,631
NOW accounts 2.69% 14,451,253 10,450,142
Money market accounts 3.16% 12,499,135 18,718,910
Noninterest-bearing demand accounts - 4,003,672 3,297,585
2.66% 48,414,623 55,087,268
Certificate accounts by interest rates:
2.01% - 3.00% 210,573 337,964
3.01% - 4.00% 2,595,804 27,076,124
4.01% - 5.00% 23,236,792 47,990,247
5.01% - 6.00% 69,181,545 24,037,536
6.01% - 7.00% 49,164,889 9,062,052
7.01% - 8.00% 7,942,490 845,849
8.01% - 9.00% 40,271 1,888,879
Total certificate accounts 5.76% 152,372,364 111,238,651
Total 5.01% $ 200,786,987 166,325,919
The aggregate amount of short-term jumbo certificates of deposit with a
minimum denomination of $100,000 was approximately $23.6 million and
$17.2 million at September 30, 1995 and 1994, respectively.
The following table presents, by various interest rate categories, the
amounts of certificate accounts at September 30, 1995 maturing during
the periods reflected below:
For the Year Ending September 30,
1996 1997 1998 1999 2000 Total
2.01%-3.00% $ 210,573 - - - - 210,573
3.01%-4.00% 2,299,016 294,788 2,000 - - 2,595,804
4.01%-5.00% 21,978,275 667,304 35,203 556,010 - 23,236,792
5.01%-6.00% 52,634,006 7,800,288 6,751,081 258,484 1,737,686 69,181,545
6.01%-7.00% 35,685,118 10,924,098 754,326 37,297 1,764,050 49,164,889
7.01%-8.00% 7,828,468 103,653 1,749 8,620 - 7,942,490
8.01%-9.00% 40,271 - - - - 40,271
$120,675,727 19,790,131 7,544,359 860,411 3,501,736 152,372,364
(9) Deposit Accounts, Continued
Interest expense on deposit accounts is summarized as follows:
For the Year Ended September 30,
1995 1994 1993
NOW and money market
deposit accounts $ 773,823 798,491 834,497
Passbook accounts 555,007 663,151 788,467
Certificate accounts 7,294,473 4,684,306 5,102,710
$ 8,623,303 6,145,948 6,725,674
(10) Federal Home Loan Bank Advances
Maturities and interest rates of advances from the Federal Home Loan Bank
at September 30, 1995 and 1994 consisted of the following:
Year Ending Interest At September 30,
September 30, Rate 1995 1994
1995 5.95% $ - 2,000,000
1996 5.90% 5,000,000 -
1997 6.99% 5,000,000 5,000,000
1998 5.49% 1,000,000 1,000,000
Total $ 11,000,000 8,000,000
The Company is required by its Blanket Floating Lien Agreement with the
Federal Home Loan Bank of Atlanta to maintain qualifying collateral for its
advances in an amount at least equal to, when discounted at 65% of the
unpaid principal balances, 100% of such advances. The Company was in
compliance with this agreement at September 30, 1995. The Company's stock
in the Federal Home Loan Bank of Atlanta is also pledged as collateral for
these advances.
(11) Income Taxes
If certain conditions are met in determining taxable income, the Company is
allowed a special bad debt deduction based on a percentage of taxable
income (presently 8 percent) or on specified experience formulas. The 1987
base year bad debt reserves are included in taxable income of later years
only if they are used for purposes other than to absorb bad debt losses.
Because the Company does not intend to use the base year reserves for
purposes other than to absorb losses, no deferred income taxes have been
provided. The unrecorded deferred income tax liability on the base year
bad debt reserves of $1,493,000 was approximately $560,000 at September 30,
1995.
(11) Income Taxes, Continued
The Company's effective income tax rate differs from the statutory Federal
income tax rate for the following reasons:
For the Year Ended September 30,
1995 1994 1993
Tax at Federal statutory tax rate $ 835,861 960,112 888,507
Increase (decrease) resulting from:
State income tax (net of Federal
income tax benefit) 79,413 102,506 91,080
Other 2,425 (7,318) (5,186)
Total $ 917,699 1,055,300 974,401
The provision for income taxes consisted of the following:
For the Year Ended September 30,
1995 1994 1993
Current:
Federal $ 660,482 856,857 881,440
State 96,888 134,949 134,413
Total current 757,370 991,806 1,015,853
Deferred:
Federal 136,895 54,232 (45,039)
State 23,434 9,262 3,587
Total deferred 160,329 63,494 (41,452)
Total provision for income
taxes $ 917,699 1,055,300 974,401
(11) Income Taxes, Continued
The tax effect of temporary differences that give rise to deferred tax
assets and deferred tax liabilities at September 30, 1995 and 1994, are
presented below:
At September 30,
1995 1994
Deferred tax liabilities:
Loan fees $ 588,863 504,113
FHLB stock dividends 131,712 132,169
Depreciation 129,739 78,722
Other 8,803 36,999
Gross deferred tax liabilities 859,117 752,003
Deferred tax assets:
Allowance for losses on loans and real
estate owned 356,805 369,704
Unrealized loss 81,983 177,724
Other 45,968 86,283
Gross deferred tax assets 484,756 633,711
Valuation allowance for
deferred assets - -
Net deferred tax assets 484,756 633,711
Net deferred tax liability $ 374,361 118,292
(12) Commitments
The Company is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
borrowers. These financial instruments consist of loan commitments to
extend credit and unused lines of credit. These instruments may, but not
necessarily, involve, to varying degrees, elements of credit and interest
rate risk in excess of the amount recognized in the balance sheet. The
contract amounts of these instruments reflect the extent of involvement
the Company has in these financial instruments. The Company's exposure to
credit loss in the event of nonperformance by the other party to the
financial instrument for commitments to extend credit is represented by
the contractual amount of those instruments. The Company uses the same
credit policies in making commitments as it does for on-balance-sheet
loans receivable. Loan commitments whose contract amounts represent
credit and interest rate risk are as follows:
At September 30,
1995 1994
Outstanding mortgage loan commitments,
exclusive of loans in process:
At fixed rates $ 618,000 164,000
At variable rates 1,167,000 70,000
Total mortgage loan commitments $ 1,785,000 234,000
Unused lines of Credit $ 2,636,000 2,497,000
(12) Commitments, Continued
Commitments to extend credit are agreements to lend monies to a customer
as long as there is no violation of any condition established in the
contract. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since some of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements.
The Company evaluates each customer's credit worthiness on a case-by-case
basis. The amount of collateral obtained, if deemed necessary by the
Company upon extension of credit, is based on management's credit
evaluation of the borrower.
(13) Regulatory Matters
In connection with the insurance of deposit accounts, the Saving Bank is
required to maintain certain minimum regulatory capital requirements. This
is not a valuation allowance and has not been created by charges against
earnings. It represents a restriction on stockholders' equity. The
following is a summary of the regulatory capital requirements, as well as,
the Savings Bank's regulatory capital and the amounts in excess of such
required capital as of September 30, 1995:
Tangible Core Risk-Based
(Dollars in thousands)
% of
Risk-
% of % of Weighted
Amount Assets Amount Assets Amount Assets
Regulatory capital $ 14,806 6.45% $ 14,806 6.45% $ 15,731 12.10%
Requirement 3,444 1.50 6,888 3.00 10,398 8.00
Excess $ 11,362 4.95% $ 7,918 3.45% $ 5,333 4.10%
In order to grant a priority to eligible savings account holders in the
event of future liquidation, the Savings Bank, at the time of conversion,
established a special liquidation account in an amount equal to its total
regulatory retained earnings of approximately $3,520,000 as of December
31, 1987, adjusted as described below. In the event of future liquidation
of the converted Savings Bank (and only in such event) an eligible account
holder who continued to maintain their deposit account shall be entitled
to receive a distribution from the special liquidation account. The total
amount of the special liquidation account will be decreased as the
balances of eligible account holders have been or will be reduced on
annual determination dates each December 31. No dividends may be paid to
the stockholders if such dividends reduce the capital of the Savings Bank
below the amount required for the special account. At September 30, 1995
the special liquidation account was approximately $1,063,000 (unaudited).
Earnings appropriated to bad debt reserves and deducted for federal income
tax purposes are not available for payment of cash dividends or other
distributions to stockholders, including distributions on redemption,
dissolution, or liquidation without payment of taxes by the Company on the
amount of earnings removed from the reserves for such distribution at the
then current tax rate. Under applicable Code provisions, the amount which
would be deemed removed from such reserves by the Company, in the event of
any such distribution to stockholders, and which would be subject to
taxation at the Company level at the normal tax rate would approximate one
hundred and fifty percent (150%) of the net amount actually distributed to
the stockholders. At September 30, 1995, the Company had approximately
$5,977,000 in tax earnings and profits available for dividends
distribution to its stockholders without the imposition of any tax at the
Company level. During the year ended September 30, 1995, cash dividends
totalling $432,061 were paid to stockholders.
(13) Regulatory Matters, Continued
The FDIC has proposed a one-time assessment on all SAIF-insured deposits,
in the range of 85 cents to 90 cents per $100 of domestic deposits, held
as of March 31, 1995. This one-time assessment is intended to
recapitalize the SAIF to the required level of 1.25% of insured deposits,
and could be payable in the fourth quarter of 1995 or early 1996. If the
assessment is made at the proposed rate, the effect on the Company would
be a pretax charge of approximately $1,615,000 (0.85% on deposits of $190
million at March 31, 1995), or $1,050,000 after tax (35% assumed tax
rate).
(14) Pension Plan
The Company has a noncontributory defined benefit pension plan (the
"Plan") covering substantially all of its employees meeting certain
requirements. All employees who have reached the age of 21 and have 1,000
hours of service in a 12 month period are covered under the Plan. The
benefits are based on years of service and the employee's compensation
during the last five years of employment. The Company's funding policy is
to contribute annually the maximum amount that can be deducted for federal
income tax purposes. Contributions are intended to provide not only for
benefits attributed to service to date but also for those expected to be
earned in the future. Plan assets consist principally of money market
accounts and certificates of deposit.
The following table sets forth the funded status and amounts recognized in
the Company's financial statements at September 30, 1995 and 1994:
At September 30,
1995 1994
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested
benefits of $1,020,317 and $809,115, respectively $ 1,153,089 872,279
Projected benefits obligation for service
rendered to date 1,546,871 1,191,826
Plan assets at fair value 1,286,889 1,310,078
Funded (unfunded) projected benefit obligation (259,982) 118,252
Unrecognized net loss 630,899 159,569
Unrecognized prior service cost at
September 30, 1995 and 1994 being recognized
over 17.93 years 41,253 58,604
Unrecognized net assets at September 30, 1995 and
1994 being recognized over 16.74 years (124,520) (138,767)
Prepaid pension cost $ 287,650 197,658
At September 30, 1995 and 1994 the weighted-average discount rate used in
determining the actuarial present value of the projected benefit
obligation were 7% and 8%, respectively. At September 30, 1995 and 1994
the rate of increase in future compensation levels and expected long-term
rate of return on assets was 5%.
Net periodic pension cost included the following components:
For the Year Ended
September 30,
1995 1994 1993
Service cost benefits earned during the period $ 68,112 74,276 68,433
Interest cost on projected benefit obligation 94,874 88,727 78,159
Actual return on Plan assets (net of expenses) (78,767) (63,331) (58,614)
Net amortization and deferral (22,341) (8,867) (28,324)
Net pension cost $ 61,878 90,805 59,654
(14) Pension Plan, Continued
Accumulated Plan benefits and Plan net assets at September 30, 1995 and
1994, as of the most recent benefit information date are summarized as
follows:
At September 30,
1995 1994
Actuarial present value of accumulated Plan
benefits:
Vested $ 834,521 832,651
Nonvested 94,524 67,927
Total $ 929,045 900,578
Net assets available for benefits $ 1,310,078 1,152,726
The assumed rate of return used in determining the actuarial present value
of accumulated Plan benefits for the years ended September 30, 1995 and
1994 was 7%.
Effective October 1, 1995, the Company established a 401(k) retirement
plan covering all employees who have reached age twenty-one (21).
(15) Stock Option Plan
Under the Company's stock option plan, 64,130 shares of capital stock were
reserved for issuance to directors, officers and other key employees from
time to time under the stock option plan.
Pursuant to the stock option plan, and as a result of stock dividends paid
in 1995, 1994 and 1993, 56,563 options granted can be exercised through
April 12, 1998 at a price of $4.51 per share, 8,427 options granted can be
exercised through September 10, 1999 at a price of $6.95 per share and
2,932 option granted can be exercised through November 15, 2003 at a price
of $13.23 per share. At September 30, 1995, there were options for eight
shares available for grant. A summary of the options granted and activity
for the years ended September 30, 1995 and 1994 are as follows:
Exercise Price Total
$ 4.51 6.95 13.23
Options outstanding at September 30, 1993 54,151 10,448 - 64,599
Options granted - - 2,424 2,424
Exercised (330) - - (330)
Effect of 10% stock dividend, at May 31, 1994 5,375 1,044 242 6,661
Options outstanding at September 30, 1994 59,196 11,492 2,666 73,354
Effect of 10% stock dividend, at
January 31, 1995 5,891 1,149 266 7,306
Exercised (8,524) (4,214) - (12,738)
Options outstanding at September 30, 1995 56,563 8,427 2,932 67,922
(16) Stock Dividends
On January 19, 1995, April 20, 1994 and May 18, 1993, the Company's Board
of Directors declared a 10% stock dividend which was distributed on
February 15, 1995, May 31, 1994 and June 30, 1993, respectively.
Accordingly, the Company capitalized approximately 1,355,000, 1,275,000
and 917,000, respectively, of retained earnings which represents 77,412,
70,838 and 64,381 shares at the $17.50, $18.00 and $14.25 market price of
the stock on the dates of record.
(17) Parent Company Only Financial Statements
Condensed financial statements of the Corporation (parent company) are
presented below. Amounts shown as investment in wholly-owned subsidiaries
and equity in earnings of subsidiaries are eliminated in consolidation.
Condensed Balance Sheets
September 30, 1995 and 1994
Assets 1995 1994
Cash $ 122,621 56,716
Investment in wholly-owned subsidiaries 14,668,497 13,398,340
Total $14,791,118 13,455,056
Stockholders' Equity
Stockholders' equity $14,791,118 13,455,056
Condensed Statements of Earnings
For Each of the Years in the Three Year Period Ended September 30, 1995
1995 1994 1993
Income
Equity in undistributed earnings
of subsidiaries $ 1,540,717 1,828,805 1,638,856
(17) Parent Company Only Financial Statements, Continued
Condensed Statements of Cash Flows
For Each of the Years in the Three Year Period Ended September 30, 1995
1995 1994 1993
Cash flows from operating activities:
Net earnings $ 1,540,717 1,828,805 1,638,856
Adjustments to reconcile net earning
to net cash used by operations-
Equity in earnings of subsidiaries (1,540,717) (1,828,805) (1,638,856)
Net cash provided by operating activities - - -
Cash flows from investing activities:
Cash dividends from subsidiary 430,128 554,725 191,732
Cash flows from financing activities:
Cash dividend paid (432,061) (556,249) (192,582)
Purchase of treasury stock - - (2,400)
Proceeds from exercise of stock options 67,838 11,999 -
Other - (1) -
Net cash used in financing activities (364,223) (544,251) (194,982)
Net increase (decrease) in cash 65,905 10,474 (3,250)
Cash at beginning of year 56,716 46,242 49,492
Cash at end of year $ 122,621 56,716 46,242
(18) Disclosures about Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to
estimate that value:
Cash and Cash Equivalents. For those short-term instruments, the
carrying amount is a reasonable estimate of fair value.
Securities Purchased Under Agreements to Resell. For those short term
investments, the carrying value is a reasonable estimate of fair value.
Investment Securities. For investment securities, fair value equals
quoted market price, if available. If a quoted market price is not
available, fair value is estimated using quoted market prices for
similar securities.
(18) Disclosures about Fair Value of Financial Instruments, Continued
Mortgage-backed Securities. For mortgage-backed securities, fair value
equals quoted market price, if available. If a quoted market price is
not available, fair value is estimated using quoted market prices for
similar securities.
Loans Receivable. The fair value of loans is estimated by discounting
the future cash flows using the current rates at which similar loans
would be made to borrowers with similar credit ratings and for the same
remaining maturities.
Deposit Accounts. The fair value of NOW accounts, savings accounts,
and certain money market deposits is the amount payable on demand at
the reporting date. The fair value of fixed maturity certificates of
deposit accounts is estimated using the rates currently offered for
deposits of similar remaining maturities.
Borrowed Funds. Rates currently available to the Company for debt with
similar terms and remaining maturities are used to estimate fair value
of existing debt.
Commitments to Extend Credit. The fair value of commitments is
estimated using the fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements
and the present creditworthiness of the counterparties. For fixed-rate
loan commitments, fair value also considers the difference between
current levels of interest rates and the committed rates.
The estimated fair values of the Company's financial instruments as of
September 30, 1995 and 1994 are as follows:
At September 30, 1995 At September 30, 1994
Carrying Fair Carrying Fair
Value Value Value Value
Financial assets:
Cash and cash equivalents $ 6,847,489 6,847,489 4,852,417 4,852,417
Securities purchased under
agreements to resell $ 2,000,000 2,000,000 - -
Investments $ 12,507,971 12,507,971 15,381,236 15,380,767
Mortgage-backed
securities $ 31,658,567 31,628,331 34,117,200 32,743,421
Loans receivable 164,813,608 128,982,529 1,427,520 1,570,140
Less - allowance for
loan losses
$ 163,386,088 163,056,461 127,412,389 126,110,579
Financial liabilities:
Deposit accounts $ 200,786,987 201,244,104 166,325,919 165,464,000
Borrowed funds $ 11,000,000 11,070,000 8,000,000 7,913,000
Unrecognized financial
instruments:
Commitments to
extend credit $ 1,785,000 1,785,000 233,600 233,600
Unused lines of
credit $ 2,636,000 2,636,000 2,497,000 2,497,000
(19) Selected Quarterly Financial Data (Unaudited)
Summarized quarterly financial data follows ($ in thousands, except per
share figures):
First Second Third Fourth
Quarter Quarter Quarter Quarter
For the Year Ended September 30, 1995:
Interest income $ 3,450 3,817 4,194 4,409
Interest expense 1,831 2,154 2,592 2,730
Net interest income 1,619 1,663 1,602 1,679
(Credit) provision for loan losses (5) - (41) 5
Net interest income after (credit)
provision for loan losses 1,624 1,663 1,643 1,674
Noninterest income 301 266 375 386
Noninterest expense 1,244 1,346 1,443 1,441
Earnings before income taxes 681 583 575 619
Provision for income taxes 254 216 214 234
Net earnings $ 427 367 361 385
Earnings per share $ .47 .40 .40 .43
For the Year Ended September 30, 1994:
Interest income $ 3,264 3,034 3,189 3,369
Interest expense 1,647 1,537 1,650 1,729
Net interest income 1,617 1,497 1,539 1,640
Credit for loan losses (71) (78) (80) (82)
Net interest income after credit
for loan losses 1,688 1,575 1,619 1,722
Noninterest income 370 493 592 296
Noninterest expense 1,207 1,407 1,408 1,509
Earnings before income taxes and
cumulative effect of change in
accounting principle 851 661 803 509
Provision for income taxes 318 247 300 190
Earnings before cumulative effect of
change in accounting principle 533 414 503 319
Cumulative effect of change in
accounting principle - - - 60
Net earnings $ 533 414 503 379
Earnings per share:
Earnings before cumulative effect of
change in accounting principle .63 .42 .55 .35
Cumulative effect of change in
accounting principle - - - .06
Net earnings $ .63 .42 .55 .41
FIRST FINANCIAL BANCORP, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, September 30,
Assets 1996 1995
(unaudited)
Cash $ 5,469,346 4,458,715
Interest-bearing deposits - 2,388,774
Cash and cash equivalents 5,469,346 6,847,489
Securities purchased under agreements to resell - 2,000,000
Investment securities available-for-sale, at market 7,588,235 12,507,971
Mortgage-backed securities:
Available-for-sale, at market 27,805,684 -
Held-to-maturity, at cost (market value of
$1,461,620 and $31,628,331) 1,487,288 31,658,567
Loans receivable, net 185,042,992 163,767,264
Loans held-for-sale - 1,546,739
Premises and equipment, net 8,863,221 7,884,587
Real estate owned 134,992 134,643
Accrued interest receivable 1,373,273 1,405,279
Federal Home Loan Bank stock, at cost 1,488,100 1,280,100
Current taxes refundable 231,776 -
Other assets 894,410 591,694
Total $ 240,379,317 229,624,333
Liabilities and Stockholders' Equity
Deposits 210,003,763 200,786,987
Federal Home Loan Bank advances 13,000,000 11,000,000
Advance payments by borrowers for taxes and
insurance 1,158,107 1,922,648
Deferred income taxes 464,207 374,361
Accrued interest payable 132,656 113,828
Other liabilities 357,552 635,391
Total liabilities 225,116,285 214,833,215
Stockholders' equity:
Common stock (no par value; 4,000,000 shares
authorized; 893,902 and 865,133 shares issued
and outstanding) - -
Additional paid-in capital 7,173,119 7,033,133
Retained earnings, substantially restricted 8,196,781 7,894,624
Unrealized loss on securities available-for-sal e (106,868) (136,639)
Total stockholders' equity 15,263,032 14,791,118
Total $ 240,379,317 229,624,333
See accompanying Notes to Condensed Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC.
Condensed Consolidated Statements of Earnings
Three Months Six Months
Ended March 31, Ended March 31,
1996 1995 1996 1995
(unaudited) (unaudited)
Interest Income:
Loans $ 3,875,688 3,052,541 7,589,859 5,801,101
Mortgage-backed securities 461,154 482,889 941,970 932,501
Investment securities and
other interest earning assets 170,338 281,352 393,270 532,961
Total interest income 4,507,180 3,816,782 8,925,099 7,266,563
Interest Expense:
Regular savings accounts 123,827 141,105 250,497 299,877
NOW and money market accounts 193,242 190,807 395,289 387,970
Certificate accounts 2,230,296 1,649,496 4,433,515 3,018,950
Borrowings 194,559 172,709 348,013 278,075
Total interest expense 2,741,924 2,154,117 5,427,314 3,984,872
Net interest income 1,765,256 1,662,665 3,497,785 3,281,691
Provision (credit) for loan losses 119,491 (466) 152,042 (5,836)
Net interest income after provision
(credit) for loan losses 1,645,765 1,663,131 3,345,743 3,287,527
Noninterest income:
Gain on sale of loans 175,492 36,957 302,037 68,888
Gain (loss) on sale of investments 3,709 (18,229) 5,903 (18,601)
Service fees on loans sold 10,887 9,069 21,769 18,802
NOW overdraft charges 162,338 138,676 315,971 282,116
Gain (loss) on sale of real
estate owned (10,607) - 32,729 14,531
Other 134,048 99,942 296,032 201,476
Total noninterest income 475,867 266,415 974,441 567,212
Noninterest expense:
Salaries and employee benefits 752,723 586,098 1,477,123 1,100,803
Occupancy and equipment 303,359 201,747 560,012 399,639
Insurance 153,041 128,336 305,581 264,291
Advertising and promotion 28,696 67,972 144,757 101,653
(Credit) provision for losses on
real estate owned - (941) - 8,000
Data processing 69,808 69,180 139,536 135,288
Legal 68,448 7,715 113,581 18,638
Real estate owned 12,522 17,387 25,861 76,882
Other 325,839 268,771 652,934 484,576
Total noninterest expense 1,714,436 1,346,265 3,419,385 2,589,770
Earnings before income taxes 407,196 583,281 900,799 1,264,969
Provision for income taxes 150,669 216,030 334,786 470,280
Net earnings $ 256,527 367,251 566,013 794,689
Earnings per common share $ .28 .40 .63 .88
Dividends per common share $ .15 .114 .29 .228
Weighted average shares
outstanding 917,730 907,795 905,475 907,956
See Accompanying Notes to Condensed Consolidated Financial Statements
FIRST FINANCIAL BANCORP, INC.
Condensed Consolidated Statement of Stockholders' Equity
For the Six-Month Period Ended March 31, 1996
Unrealized
Retained Loss on
Additional Earnings, Securities
Common Paid-in Substantially Available
Stock Capital Restricted For-Sale Total
Balance,
September 30, 1995 $ - 7,033,133 7,894,624 (136,639) 14,791,118
Net earnings for the six
months ended
March 31, 1996 - - 566,013 - 566,013
Decrease in unrealized
loss on securities
available-for-sale
(unaudited) - - - 29,771 29,771
Dividends at $.30
per share (unaudited) - - (263,856) - (263,856)
Issuance of 28,769 shares
of common stock under
stock option plan
(unaudited) - 139,986 - - 139,986
Balance,
March 31, 1996 $ - 7,173,119 8,196,781 (106,868) 15,263,032
See accompanying Notes to Condensed Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC.
Condensed Consolidated Statements of Cash Flows
Six Months Ended
March 31,
1996 1995
(unaudited)
Cash flows from Operating Activities:
Net earnings $ 566,013 794,689
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 227,980 140,617
Provision (credit) for loan losses 152,042 (5,836)
Provision for losses on real estate owned - 8,000
Accretion of unearned interest and deferred
loan fees (202,297) (201,870)
Decrease (increase) in accrued interest
receivable 32,006 (162,800)
Increase in other assets (302,716) (139,606)
Increase in current taxes refundable (231,776) -
Sales of loans originated for sale 15,532,551 3,870,886
Origination of loans for sale (13,683,775) (3,801,998)
(Decrease) increase in accrued interest
payable and other liabilities (259,011) 99,296
Increase (decrease) in deferred income taxes 71,331 (14,211)
Gain on sale of loans (302,037) (68,888)
Gain on sale of real estate owned (32,729) (14,531)
(Gain) loss on sale of investments (5,903) 18,601
Net cash provided by operating activities 1,561,679 522,349
Cash flows from Investing Activities:
Proceeds from maturity of securities purchased under
agreements to resell 16,000,000 -
Securities purchased under agreements to resell (14,000,000) (8,000,000)
Proceeds from maturities of investment
securities 2,000,000 525,000
Proceeds from sales of investment securities 3,102,339 2,405,804
Purchase of investment securities (104,830) (922,500)
Purchase of Federal Home Loan Bank stock (208,000) (160,500)
Principal repayments on mortgage-backed
securities 2,342,011 1,023,471
Net increase in loans (21,257,046) (20,426,857)
Proceeds from sales of real estate owned,
net of additions to real estate owned 63,953 34,990
Capital expenditures (1,206,614) (810,733)
Proceeds from sale of premises and equipment - 424,708
Net cash used in investing activities (13,268,187) (25,906,617)
Cash flows from Financing Activities:
Net increase in deposit accounts 9,216,776 23,688,602
Net proceeds from FHLB advances 2,000,000 3,000,000
Decrease in advance payments by borrowers for
taxes and insurance (764,541) (535,451)
Net proceeds from issuance of common stock 139,986 1,200
Cash dividend paid (263,856) (195,712)
Net cash provided by financing activities 10,328,365 25,958,639
Net (decrease) increase in cash and cash
equivalents (1,378,143) 574,371
Cash and cash equivalents at beginning of period 6,847,489 4,852,417
Cash and cash equivalents at end of period $ 5,469,346 5,426,788
Supplemental disclosure of cash
flow information:
Cash paid during period for:
Interest on deposits and borrowings $ 5,408,486 3,961,165
Income taxes $ 536,000 435,000
Noncash investing and financing activities:
Loans foreclosed and transferred to real
estate owned $ 194,547 500,000
Loans made to facilitate the sale of real
estate owned $ 162,974 158,600
Decrease in unrealized loss on securities
available-for-sale, net of income tax
benefit $ 29,771 17,187
See Accompanying Notes to Condensed Consolidated Financial Statements.
FIRST FINANCIAL BANCORP, INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
1. General. In the opinion of the management of First Financial Bancorp, Inc.
(the "Company"), the accompanying condensed consolidated financial statements
contain all adjustments (consisting principally of normal recurring accruals)
necessary to present fairly the financial position at March 31, 1996, and the
results of operations and cash flows for the threeand six-month periods ended
March 31, 1996 and 1995. The results of operations for the three-and six-months
ended March 31, 1996 are not necessarily indicative of the results to be
expected for the full year.
The Company's condensed consolidated financial statements include the accounts
of First Federal Bank (the "Savings Bank"), its wholly owned thrift subsidiary
and Community Financial Services, Inc., an inactive subsidiary. All significant
intercompany accounts and transactions have been eliminated in consolidation.
2. Merger. On December 10, 1995 the Company entered into an Agreement and
Plan of Merger (the "Agreement") to be acquired by Capital City Bank Group,
Inc., Tallahassee, Florida. Under the terms of the Agreement each share of the
Company's common stock is to be exchanged for $22.
3. Dividends. It is the Board's intention to pay cash dividends if and when
determined appropriate by the Board of Directors of the Company, subject to
the Savings Bank's earnings and approval by the Office of Thrift Supervision
("OTS"). The following table presents a history of dividends paid:
Declared Record Date Payable Date Dividend
01/18/96 01/31/96 02/12/96 $ .150
10/17/95 10/31/95 11/10/95 .150
06/20/95 07/28/95 08/10/95 .150
04/18/95 04/28/95 05/10/95 .150
01/19/95 01/31/95 02/10/95 .125
10/18/94 10/31/94 11/15/94 .114
07/19/94 08/01/94 08/15/94 .114
04/20/94 05/02/94 05/16/94 .104
01/20/94 01/31/94 02/15/94 .104
10/18/93 11/15/93 11/30/93 .330
10/20/92 11/16/92 11/30/92 .150
10/20/92 11/16/92 11/30/92 .075
10/15/91 11/15/91 11/30/91 .150
10/16/90 11/15/90 11/30/90 .150
On April 16, 1996, the Board of Directors declared a cash dividend of $.15 per
common share outstanding to stockholders of record on April 30, 1996, payable
on May 10, 1996.
4. Loan Impairment and Losses. On October 1, 1995, the Company adopted
Statements of Financial Accounting Standards No. 114 and 118 ("SFAS 114 and
118"). These Statements address the accounting by creditors for impairment of
certain loans. The Statements generally require the Company to identify loans
for which the Company probably will not receive full repayment of principal and
interest, as impaired loans. The Statements require that impaired loans be
valued at the present value of expected future cash flows, discounted at the
loan's effective interest rate, or at the observable market price of the loan,
or the fair value of the underlying collateral if the loan is collateral
dependent. The Company has implemented the Statements by modifying its review
of the adequacy of the allowance for loan losses to also identify and value
impaired loans in accordance with guidance in the Statements. The adoption of
the Statements did not have any material effect on the results of operations
for the six months ended March 31, 1996.
Management considers a variety of factors in determining whether a loan is
impaired, including (i) any notice from the borrower that the borrower will be
unable to repay all principal and interest amounts contractually due under the
loan agreement, (ii) any delinquency in the principal and interest payments
(other than minimum delays or shortfalls in payments), and (iii) other
information known by management which would indicate that full repayment of the
principal and interest is not probable. In evaluating loans for impairment,
management generally considers delinquencies of (60 days or less) to be minimum
delays, and accordingly does not consider such delinquent loans to be impaired
in the absence of other indications of impairment.
Management evaluates smaller balance, homogenous loans for impairment and
adequacy of allowance for loan losses collectively, and evaluates other loans
for impairment individually, on a loan-by-loan basis. For this purpose, the
Company considers its portfolio of first mortgage, singlefamily residential
loans with outstanding balances less than $500,000 and its consumer loan
portfolio to be smaller balance, homogenous loans. The Company evaluates each
of these loan portfolios for impairment on an aggregate basis, and utilizes its
own historical charge-off experience, as well as the charge-off experience of
its peer group and industry statistics to evaluate the adequacy of the
allowance for loan losses. For all other loans, the Company evaluates loans for
impairment on a loan by loan basis.
The Company evaluates all nonaccrual loans as well as any accruing loans
exhibiting collateral or other credit deficiencies for impairment. With
respect to impaired, collateral-dependant loans, any portion of the recorded
investment in the loan that exceed the fair value of the collateral is charged-
off.
The following summarizes the September 30, 1995 amounts that were reclassified
as a result of the Company adopting SFAS 114 and 118 on October 1, 1995:
September 30,
1995
Insubstance foreclosures reclassified to loans receivable $ 381,000
Allowance for loss on insubstance foreclosures
reclassified to allowance for losses $ -
The following summarizes the amount of impaired loans:
At
March 31, September 30,
1996 1995
Loans identified as impaired:
Gross loans with no related allowance
for losses $ 583,000 20,000
Gross loans with related allowance for
losses recorded - -
Less: Allowance for losses - -
Net investment in impaired loans $ 583,000 20,000
The average net investment in impaired loans and interest income recognized and
received on impaired loans is approximately as follows:
For the Three Months For the Six Months
Ended March 31, Ended March 31,
1996 1995 1996 1995
Average investment in impaired
loans $ 313,000 - 243,000 -
Interest income recognized on
impaired loans $ 4,000 - 8,000 -
Interest income received on
impaired loans $ 4,000 - 8,000 -
The activity in the allowance for loan losses is as follows:
For the Three Months For the Six Months
Ended March 31, Ended March 31,
1996 1995 1996 1995
Balance beginning of period $ 1,436,496 1,555,577 1,427,520 1,570,140
Provision (credit) added to
earnings 119,491 (466) 152,042 (5,836)
Charge-offs, net of recoveries 18,140 (35,179) (5,435) (44,372)
Balance, end of period $ 1,574,127 1,519,932 1,574,127 1,519,932
5. Uncollected Interest. The Company places loans on nonaccrual status when
the loan is more than 90 days past due or if management believes the collection
of interest is doubtful. If the ultimate collectibility of principal and
interest due according to the contractual terms of the loan agreement is in
doubt, the loan is considered impaired, and interest is credited to income when
collected.
6. Per Share Amounts. Earnings per common share were computed by dividing
the net earnings by the weighted average number of shares outstanding during the
period. The weighted average number of shares outstanding includes common
stock equivalents (stock options) computed using the treasury stock method. The
following table presents information necessary to calculate earnings per share:
For the Three Months For the Six Months
Ending March 31, Ending March 31,
1996 1995 1996 1995
Average common shares outstanding 888,844 852,602 876,924 852,485
Common shares assumed outstanding
to reflect the dilutive effect
of common stock options 28,886 55,193 28,552 55,471
Weighted average shares 917,730 907,795 905,475 907,956
7. Regulatory Capital. The Savings Bank is required to maintain certain
minimum regulatory capital requirements. The following is a summary of the
regulatory capital requirements, the Savings Bank's capital and the amounts in
excess of such required capital as of March 31, 1996 on both a dollar and
percentage basis:
Tangible Core Risk-Based
($ in thousands) % of
Risk-
% of % of Weighted
Amount Assets Amount Assets Amount Assets
Regulatory capital $ 15,108 6.2% $ 15,108 6.2% $ 15,925 10.8%
Requirement 3,671 1.5 7,341 3.0 11,744 8.0
Excess $ 11,437 4.7% $ 7,767 3.2% $ 4,181 2.8%
8. Reclassifications. The Financial Accounting Standards Board offered
entities a one-time opportunity from November 15, 1995 to December 31, 1995 to
reclassify their investment and mortgage-backed securities among its three
categories (trading, available-for-sale and held-to-maturity) in conjunction
with adopting a new implementation guide. Such transfers were permitted to be
made during this period without tainting other held-tomaturity securities.
Accordingly, the Company reclassified mortgage-backed securities with a book
and market value of $28,854,000 and $29,038,000, respectively from held-to-
maturity to available-for-sale. The effect of the reclassification was to
decrease the unrealized loss on securities availablefor-sale in stockholders'
equity by $114,000, net of tax effect on the date of transfer representing the
unrealized market appreciation on such date.
(b) Pro Forma Financial Information:
Filed as part of this report is the requisite unaudited pro forma combined
statement of financial condition as of June 30, 1996 and the unaudited pro
forma condensed combined statement of income for the six months ended June 30,
1996 and the year ended December 31, 1995.
On July 1, 1996, Capital City Bank Group, Inc. acquired First Financial Bancorp
for $20.3 million in cash and the transaction was accounted for as a purchase.
The following proforma financial statements include a pro forma combined balance
sheet as of June 30, 1996, a pro forma statement of income for the six months
ended June 30, 1996, and a pro forma statement of income for the twelve months
ended December 31, 1995. The pro forma adjustments for the balance sheet are as
of June 30, 1996, and the pro forma adjustments for each respective statement of
income were calculated as though the acquisition was consummated on January 1,
1995. The proforma results may not be indicative of the results of operations
had the acquisition actually taken place on January 1, 1995 (or of future
results of operations had the acquisition actually taken place on January 1,
1995 (or of future results of the combined companies).
CAPITAL CITY BANK GROUP, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1996
(UNAUDITED)
CAPITAL CITY FIRST PROFORMA ADJUSTMENTS (8) CON/ELM CON/ELM PRO FORMA
ASSETS BANK GROUP FINANCIAL DEBIT CREDIT DEBIT CREDIT COMBINED
CASH 15,099,976 947,714 15,000,000(1) 20,314,795(1) 10,732,895
DUE FROM BANKS 41,454,390 991,717 42,446,107
CASH ITEMS 3,084,782 6,411 3,091,193
TOTAL CASH & DFB 59,639,148 1,945,842 15,000,000 20,314,795 0 0 56,270,195
INT. BEAR. DEP. WITH BANKS 1,982,503 2,552,932 4,535,435
FEDERAL FUNDS SOLD 53,100,000 0 53,100,000
U.S. SECURITIES-HTM
U.S. SECURITIES-AFS 115,769,533 5,993,157 121,762,690
MORTGAGE BACKED SEC.-HTM 0 0 0
MORTGAGE BACKED SEC.-AFS 4,026,815 27,627,911 31,654,726
MUNICIPAL SECURITIES-HTM 0 0 0
MUNICIPAL SECURITIES-AFS 73,602,108 104,686 73,706,794
OTHER SECURITIES-HTM 0 0 0
OTHER SECURITIES-AFS 3,953,000 1,488,154 5,441,154
TOTAL SECURITIES 197,351,456 35,213,908 0 0 232,565,364
COMMERCIAL LOANS 44,578,251 13,249,130 57,827,381
REAL ESTATE LOANS 297,863,379 168,938,684 1,314,778(1&3) 468,116,841
CONSUMER LOANS 102,098,774 9,760,822 111,859,596
BANKERS ACCEPTANCES 0 0 0
COMM. PAPER & CORP. NOTES 0 0 0
MASTER CARD & VISA 15,652,414 0 15,652,414
OVERDRAFTS 6,356,798 59,636 6,416,434
TOTAL LOANS 466,549,616 192,008,272 1,314,778 0 0 0 659,872,666
LESS LOAN LOSS RESERVE (6,408,783) (1,846,187) 51,795(3) (8,306,765)
NET LOANS 460,140,833 190,162,085 1,314,778 51,795 0 0 651,565,901
BANK PREMISES 20,806,984 7,434,091 946,086(1) 150,000(1) 29,037,161
FURNITURE, FIXTURES & EQU. 6,024,660 1,364,366 7,389,026
OTHER REAL ESTATE 1,079,967 1,284,151 1,155,005(3) 1,209,113
INTANGIBLES 1,011,003 0 6,973,515(1) 7,984,518
INTEREST RECEIVABLE 6,889,622 1,555,529 8,445,151
OTHER ASSETS 7,891,585 1,953,879 21,747,868(1) 1,573,120(1) 20,665,608(2) 9,354,604
TOTAL ASSETS 815,917,761 243,466,783 45,982,247 23,244,715 0 20,665,608 1,061,456,468
LIABILITIES
NONINTEREST BEARING 175,775,748 6,380,268 182,156,016
NOW ACCOUNTS 110,260,688 16,528,706 126,789,394
MONEY MARKET ACCOUNT 86,605,526 11,238,930 97,844,456
REGULAR SAVINGS 77,001,811 17,194,682 94,196,493
CERTIFICATES OF DEPOSITS 250,396,703 153,761,911 404,158,614
TOTAL DEPOSITS 700,040,476 205,104,497 0 0 0 905,144,973
FEDERAL FUNDS PURCHASED 20,780,701 0 20,780,701
OTHER BORROWED FUNDS 1,931,215 0 1,931,215
LONG TERM DEBT 1,926,925 20,000,000 0 15,000,000(1) 36,926,925
ACCRUED INTEREST 2,127,533 111,596 2,239,129
ACCRUED EXP. & OTHER LIAB. 5,700,558 2,934,307 2,388,307(1) 11,023,172
DIVIDENDS PAYABLE 0 0
TOTAL LIABILITIES 732,507,408 228,150,400 17,388,307 978,046,115
CAPITAL
COMMON STOCK 28,623 1,000 1,000(2) 28,623
SURPLUS 4,162,912 3,439,473 1,406,061(1) 6,553,269(1) 8,586,681(2) 4,162,912
UNREALIZED GAINS/LOSSES (833,163) (202,017) 202,017(1) (833,163)
RETAINED EARNINGS 80,051,981 12,077,927 12,077,927(2) 80,051,981
TREASURY STOCK 0 0
TOTAL CAPITAL 83,410,353 15,316,383 1,406,061 6,755,286 20,665,608 0 83,410,353
TOTAL CAPITAL & LIAB. 815,917,761 243,466,783 1,406,061 24,143,593 20,665,608 0 1,061,456,468
CAPITAL CITY BANK GROUP, INC.
PRO FORMA CONDENSED COLSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
INTEREST & FEES ON LOANS 21,459,014 8,389,536 (7,713)(4) 29,840,837
INTEREST ON SECURITIES 5,815,298 725,209 6,540,507
OTHER INTEREST INCOME 1,028,461 49,024 1,077,485
TOTAL INTEREST INCOME 28,302,773 9,163,769 (7,713) 37,458,829
INTEREST ON DEPOSITS 9,361,728 4,957,159 14,318,887
INTEREST ON S/T BORROWINGS 562,148 0 562,148
INTEREST ON LONG TERM 59,036 459,252 540,000(6) 1,058,288
TOTAL INTEREST EXPENSE 9,982,912 5,416,411 540,000 15,939,323
NET INTEREST INCOME 18,319,861 3,747,358 (547,713) 21,519,506
PROVISION FOR LOAN LOSS 523,382 315,852 839,234
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSS 17,796,479 3,431,506 (547,713) 20,680,272
NONINTEREST INCOME 7,384,027 827,149 8,211,176
NONINTEREST EXPENSE 17,630,055 3,115,520 299,283(5) 21,044,858
INCOME BEFORE TAXES 7,550,451 1,143,135 (846,996) 7,846,590
INCOME TAXES 2,200,976 425,239 (244,524)(7) 2,381,691
NET INCOME 5,349,475 717,896 (602,472) 5,464,899
EARNINGS PER SHARE 1.87 0.79 1.91
AVERAGE SHARES OUTSTANDING 2,861,136 905,475 2,861,136
SEE BELOW FOR EXPLANATORY FOOTNOTES
CAPITAL CITY BANK GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATION STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1995(a)
(UNAUDITED)
INTEREST & FEES ON LOANS 40,826,246 12,641,552 (15,426)(4) 53,452,372
INTEREST ON SECURITIES 11,149,105 2,847,098 13,996,203
OTHER INTEREST INCOME 2,501,964 380,958 2,882,922
TOTAL INTEREST INCOME 54,477,315 15,869,608 (15,426) 70,331,497
INTEREST ON DEPOSITS 19,382,006 8,623,303 28,005,309
INTEREST ON S/T BORROWINGS 1,105,799 0 1,105,799
INTEREST ON LONG TERM 0 683,383 1,080,000(6) 1,763,383
TOTAL INTEREST EXPENSE 20,487,805 9,306,686 1,080,000 30,874,491
NET INTEREST INCOME 33,989,510 6,562,922 (1,095,426) 39,457,006
PROVISION FOR LAON LOSS 293,321 (41,258) 252,063
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSS 33,696,189 6,604,180 (1,095,426) 39,204,943
NONINTEREST INCOME 13,170,446 1,328,031 14,498,477
NONINTEREST EXPENSE 33,466,263 5,473,795 598,557(5) 39,538,615
INCOME BEFORE TAXES 13,400,372 2,458,416 (1,693,983) 14,164,805
INCOME TAXES 3,878,225 917,699 (488,925)(7) 4,306,999
NET INCOME 9,522,147 1,540,717 (1,205,058) 9,857,806
EARINGS PER SHARE 3.34 1.70 3.45
AVERAGE SHARES OUTSTANDING 2,853,234 906,152 2,853,234
(a) THE ABOVE STATEMENTS REFLECT INCOME AND EXPENSES FOR THE TWELVE MONTHS OF
EACH COMPANY'S RESPECTIVE FISCAL YEAR. CAPTIAL CITY BANK GROUP'S STATEMENT OF
INCOME REFLECTS THE TWELVE MONTHS ENDED DECEMBER 31, 1995 AND FIRST FINANCIAL'S
STATEMENT OF INCOME REFLECTS THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995.
(b) THESE STATEMENTS WERE DERIVED FROM THE RESPECTIVE AUDITED FINANCIAL
STATEMENTS OF EACH ENITY.
CAPITAL CITY BANK GROUP, INC.
EXPLANATORY FOOTNOTES TO PRO FORMA FINANCIAL STATEMENTS
(1) TO RECORD THE INITIAL ACQUISITION OF FIRST FINANCIAL BANKCORP, INCLUDING (a)
ESTABLISHING RESERVES TO COVER FUTURE COSTS DIRECTLY ASSOCIATED WITH THE
ACQUISITION, (b) ADJUS