Community Capital 10QSB for 06/30/2005

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB


x
QUARTERLY REPORT UNDER SECTION 13 AND 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended June 30, 2005

o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 1934
    For the transition period from _______ to _______

Commission File Number: 000-25345

Community Capital Bancshares, Inc.
(Exact name of registrant as specified in its charter)

Georgia
58-2413468
(State or other jurisdiction of
(IRS Employer
Incorporation or organization)
Identification No.)

P.O. Drawer 71269, Albany, Georgia 31708
(Address of principal executive offices)

(229) 446-2265
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
x
No
o


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of August 5, 2005: 2,913,365 shares

Transitional Small Business Disclosure Format (check one):
Yes
o
No
x
 
 
Page No.
   
 
   
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4
   
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14
   
14
   
14
   
14
   
14
   
14


 
and Subsidiaries
  
Consolidated Balance Sheets
 
(Dollars in thousands)
  
           
   
June 30, 2005
(unaudited)
 
December 31, 2004
  
Assets
          
Cash and due from banks
  
$
10,583
  
$
5,515
  
Federal funds sold
    
19
    
1,363
  
Securities available for sale
    
39,866
    
42,518
  
Restricted equity securities
    
2,339
    
2,019
  
Loans
    
170,435
    
127,185
  
Less allowance for loan losses
    
1,883
    
1,528
  
Loans, net
    
168,552
    
125,657
  
Premises and equipment
    
7,744
    
6,150
  
Goodwill
    
2,334
    
2,334
  
Core deposit premium
    
306
    
330
  
Other assets
    
10,103
    
9,404
  
Total Assets 
  
$
241,846
  
$
195,290
  
               
Liabilities and Shareholders' Equity
              
Deposits
              
Non-interest bearing
  
$
19,806
  
$
16,316
  
Interest bearing
   
159,052
    
122,723
  
Total deposits
    
178,858
    
139,039
  
Other borrowings
    
31,480
    
25,153
  
Guaranteed preferred beneficial interests in junior subordinated debentures
    
4,124
    
4,124
  
Other liabilities
    
1,151
    
1,142
  
Total Liabilities
    
215,613
    
169,458
  
               
Shareholders' equity
              
Preferred stock, par value not stated; 2,000,000 shares authorized;
              
no shares issued
  
$
- -
  
$
- -
  
Common stock, $1.00 par value, 10,000,000 shares authorized;
              
2,968,471 and 2,946,476 shares issued
    
2,968
    
2,946
  
Capital surplus
    
22,190
    
22,046
  
Retained earnings
    
1,961
    
1,589
  
Accumulated other comprehensive (loss)
    
(482
)
  
(329
)
Less cost of treasury stock, 57,047 and 58,921 shares as of June 30, 2005 and December 31, 2004, respectively
    
(404
)
  
(420
)
Total shareholders' equity
    
26,233
    
25,832
  
Total Liabilities and Shareholders' Equity
  
$
241,846
  
$
195,290
  
 
3

Community Capital Bancshares, Inc.
and Subsidiaries
Consolidated Statements of Income (unaudited)
For the three and six months ended June 30, 2005 and 2004
(Dollars in thousands, except earnings per share)
 
  
   
Three months ended
  
Six months ended
  
   
June 30, 2005
  
June 30, 2004
  
June 30, 2005
  
June 30, 2004
  
Interest Income
                  
Loans
    
2,848
  
$
1,878
    
5,215
    
3,884
  
Taxable securities
    
423
    
277
    
876
    
593
  
Tax exempt securities
    
9
    
15
    
18
    
30
  
Deposits in banks
    
2
    
1
    
8
    
2
  
Federal funds sold
    
36
    
15
    
60
    
25
  
Total interest income
    
3,318
    
2,186
    
6,177
    
4,534
  
Interest expense
Deposits
    
946
    
540
    
1,646
    
1,072
  
Other borrowed money
    
313
    
204
    
547
    
360
  
Total interest expense
    
1,259
    
744
    
2,193
    
1,432
  
Net interest income
    
2,059
    
1,442
    
3,984
    
3,102
  
Provision for loan losses
    
250
    
- -
    
430
    
15
  
Net interest income after provision for loan losses
    
1,809
    
1,442
    
3,554
    
3,087
  
Other income
Service charges on deposit accounts
    
254
    
234
    
470
    
420
  
Financial service fees
    
40
    
31
    
69
    
52
  
Mortgage origination fees
    
49
    
58
    
84
    
93
  
Gain on sale of investment securities
    
-
    
13
    
-
    
15
  
Loss on sale of foreclosed properties
    
(1
)
  
(18
)
  
(10
)
  
(29
)
Bank owned life insurance
    
59
    
29
    
121
    
29
  
Other income
    
39
    
41
    
85
    
34
  
Total other income
    
440
    
388
    
819
    
614
  
Other expenses
Salaries and employee benefits
    
888
    
777
    
1,750
    
1,529
  
Equipment and occupancy expense
    
286
    
235
    
563
    
453
  
Marketing expense
    
43
    
51
    
98
    
106
  
Data processing expense
    
160
    
132
    
306
    
252
  
Stationary and supply expense
    
47
    
36
    
91
    
79
  
Administrative expenses
    
235
    
181
    
502
    
347
  
Other operating expenses
    
217
    
145
    
382
    
338
  
Total other expenses
    
1,876
    
1,558
    
3,692
    
3,104
  
Income before income taxes
    
373
    
272
    
681
    
597
  
Income tax expense
    
96
    
89
    
190
    
192
  
Net Income
   
277
    
183
    
491
    
405
  
                           
Net income per common share
  
$
0.10
  
$
0.10
  
$
0.17
  
$
0.23
  
Diluted net income per common share
  
$
.0.09
  
$
0.09
  
$
0.16
  
$
0.21
  
Weighted average shares outstanding
    
2,911,318
    
1,720,196
    
2,904,428
    
1,690,613
  
Diluted average shares outstanding
    
3,060,125
    
1,895,605
    
3,068,801
    
1,872,824
  
4
 
and Subsidiaries
Consolidated Statements of Comprehensive Income
(unaudited)
 
  
Three and six months ended June 30, 2004 and 2005
(Dollars in thousands)
  
                   
   
Three Months Ended
  
Six Months Ended
  
   
June 30, 2005
  
June 30, 2004
  
June 30, 2005
  
June 30, 2004
  
                   
Net Income
  
$
277
  
$
183
  
$
491
  
$
405
  
Other comprehensive income (loss)
                          
Net unrealized holding gains (losses) arising during period
    
597
    
(1,174
)
  
(232
)
  
(674
)
Tax benefit (expense) on unrealized holding gains
    
(203
)
  
399
    
79
    
229
  
Reclassification adjustment for gains included in net income, net of income taxes of $3.
   
- -
    
(10
)
  
- -
    
(10
)
 Comprehensive income (loss)
  
$
671
  
$
(602
)
$
338
  
$
(79
)

5
 
and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Six Months ended June 30, 2005 and 2004
(Dollars in thousands)
 
   
2005
  
2004
  
Cash Flows from operating activities:
          
Net income
  
$
491
  
$
405
  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
              
Depreciation
    
217
    
196
  
Amortization of Core Deposit Premium
    
24
    
22
  
Provision for loan losses
    
430
    
15
  
Provision for deferred taxes
    
37
    
(195
)
(Increase) decrease in interest receivable
    
(154
)
  
69
  
Net gain on sale of investments available for sale
    
--
   
(15
)
Other operating activities
    
(726
)
  
(5,922
)
Net cash provided by (used in) operating activities
    
319
    
(5,425
)
               
Cash Flows from Investing Activities:
Purchase of property and equipment
    
(1,811
)
  
(199
)
Net decrease in federal funds sold
    
1,344
    
1,358
  
Net increase in loans
    
(43,325
)
  
(4,688
)
Proceeds from maturities of securities available for sale
    
906
    
2,913
  
Proceeds from sale of securities
    
1,980
    
5,475
  
Purchase of securities available for sale
    
(554
)
  
(7,736
)
               
Net cash used in investing activities
    
(41,460
)
  
(2,877
)
               
Cash Flows from Financing Activities:
Net increase in deposits
    
39,819
    
5,050
  
Dividends paid to shareholders
    
(119
)
  
(67
)
Increase in federal funds purchased
    
480
    
2,271
  
Proceeds from exercise of stock warrants
    
162
    
195
  
Net increase in other borrowings
    
5,848
    
1,067
  
Treasury stock transactions, net
    
20
    
27
  
Net cash provided by financing activities 
    
46,209
    
8,543
  
Net increase in cash
    
5,068
    
241
  
Cash and due from banks at beginning of period
    
5,515
    
4,285
  
Cash and due from banks at end of period 
    
10,583
  
$
4,526
  
               
Supplemental Disclosure
Cash paid for interest
  
$
2,120
  
$
1,455
  
Cash paid for income taxes
  
$
- -
  
$
30
  
               
Non-Cash Transaction
Unrealized losses on securities available for sale
  
$
232
  
$
674
  
 
6

Community Capital Bancshares, Inc.
and Subsidiary
Notes to Financial Statements

Note 1. Organization and Summary of Significant Accounting Policies

Nature of Business

Community Capital Bancshares, Inc. (the “Company”) is a multi-bank holding company whose principal activity is the ownership and management of its wholly-owned bank subsidiaries, Albany Bank and Trust, N.A, and AB & T National Bank, N. A., collectively referred to as “the Banks.” Albany Bank and Trust’s main office is located in Albany, Dougherty County, Georgia, with two full service branches in Albany and one full service branch in Lee County, Georgia and a loan production office in Charleston, South Carolina. AB&T National Bank’s main office is located in Dothan, Houston County, Alabama and has a full service branch located in Auburn, Alabama. The Banks provide a full range of banking services to individual and corporate customers in their primary market areas of Dougherty and Lee Counties, Georgia and Houston and Lee Counties, Alabama.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany transactions and accounts are eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of foreclosed real estate and deferred taxes.

The interim financial statements included herein are unaudited but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the interim period presented. All such adjustments are of a normal recurring nature. The results of operations for the three and six months ended June 30, 2005 are not necessarily indicative of the results of a full year’s operations, and should be read in conjunction with the Company’s annual report as filed on Form 10-KSB.

The accounting principles followed by the Company and the methods of applying these principles conform with accounting principles generally accepted in the United States of America (GAAP) and with general practices within the banking industry.

Income Taxes

Deferred income tax assets and liabilities are determined using the balance sheet method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax basis of the various balance sheet assets and liabilities and gives current recognition to changes in the tax rates and laws.

The Company and its subsidiaries file a consolidated income tax return. Each entity provides for income taxes based on its contribution to the income taxes (benefits) of the consolidated group.
 
7
 
 
Stock Compensation Plans

At June 30, 2005, the Company had two stock-based employee compensation plans, which are described in more detail in the 2004 annual report. The Company accounts for those plans under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying stock on the date of grant. In addition, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure in December 2002. SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of SFAS No. 123 to require prominent disclosure about the effects on reported net income of an entity's accounting policy decisions with respect to stock-based employee compensation. The Company has not elected to adopt the recognition provisions of this Statement for stock-based employee compensation and has elected to continue with accounting methodology in Opinion No. 25 as permitted by SFAS No. 123.

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of these statements:

   
Three months Ended June 30,
  
Six Months Ended June 30,
  
   
2005
  
 2004
  
2005
  
 2004
  
Net income, as reported
  
$
277,000
  
$
183,000
  
$
491,000
  
$
405,000
  
Deduct: Total stock-based employee compensation
                          
expense determined under fair value based
                          
method for all awards, net of related tax effects
    
(22,000
)
  
(63,000
)
  
(44,000
)
  
(86,000
)
Pro forma net income
  
$
255,000
  
$
120,000
  
$
447,000
  
$
319,000
  
Earnings per share:
                          
Basic - as reported
  
$
.10
  
$
.10
  
$
.17
  
$
.23
  
Basic - pro forma
  
$
.09
  
$
.07
  
$
.15
  
$
.18
  
Diluted - as reported
  
$
.09
  
$
.09
  
$
.16
  
$
.21
  
Diluted - pro forma
  
$
.08
  
$
.06
  
$
.15
  
$
.17
  

Accounting Standards
 
In December 2003 the American Institute of Certified Public Accountants issued Statement of Position (“SOP”) 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer.  This SOP addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. It includes such loans acquired in purchase business combinations and applies to all nongovernmental entities, including not-for-profit organizations. This SOP does not apply to loans originated by the entity. This SOP limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest, and other cash flows (cash flows expected at acquisition to be collected) over the investor’s initial investment in the loan. This SOP requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield, loss accrual, or valuation allowance. This SOP prohibits investors from displaying accretable yield and nonaccretable difference in the balance sheet. Subsequent increases in cash flows expected to be collected generally should be recognized prospectively through adjustment of the loan’s yield over its remaining life. Decreases in cash flows expected to be collected should be recognized as impairment.
 
8
 
 
This SOP prohibits “carrying over” or creation of valuation allowances in the initial accounting of all loans acquired in a transfer that are within the scope of this SOP. The prohibition of the valuation allowance carryover applies to the purchase of an individual loan, a pool of loans, a group of loans, and loans acquired in a purchase business combination.
 
This SOP is effective for loans acquired in fiscal years beginning after December 15, 2004.  The changes required by this SOP are not expected to have a material impact on results of operations, financial position, or liquidity of the Company.

In the first quarter of 2005, the Financial Accounting Standards Board delayed the effective date of Statement No. 123R, Share-Based Payment, a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation, until the beginning of the first interim or annual reporting period that begins after December 15, 2005. This Statement applies to all awards granted or vesting after the required effective date and to awards modified, repurchased or cancelled after that date.

 
9
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion is intended to assist in an understanding of the Company's financial condition and results of operations. This analysis should be read in conjunction with the financial statements and related notes appearing in Item 1 of the June 30, 2005 Form 10-QSB and Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company's Form 10-KSB for the year ended December 31, 2004.

Financial Condition

As of June 30, 2005 the Company’s total assets were $241,846,000 representing an increase of $46,556,000 or 23.84% from December 31, 2004. Earning assets consist of Federal funds sold, investment securities and loans. These assets provide the majority of the Company’s earnings. The mix of earning assets (87% of total assets) is a reflection of management’s philosophy regarding earnings versus risk.
 
Federal funds sold represent an overnight investment of funds and can be converted immediately to cash. At June 30, 2005, federal funds sold were $19,000. At December 31, 2004, the Company had $1,363,000 in federal funds sold.
 
Investment securities consist of U.S. Government and Agency securities and municipal bonds. These investments are used to provide fixed maturities and as collateral for advances and large public fund deposits. From December 31, 2004 to June 30, 2005, investment securities decreased by $2,332,000. All securities are classified as available for sale, and are carried at current market values.
 
The loan portfolio is the largest earning asset and is the primary source of earnings for the Company. At June 30, 2005 net loans were $168,552,000. The loan portfolio increased $42,895,000 or 34.14% over the year-end amount. At June 30, 2005, the allowance for loan losses was $1,883,000 or 1.10% of total loans. Management believes this is an adequate but not excessive amount based upon the composition of the current loan portfolio and current economic conditions. The relationship of the allowance to total loans will vary over time based upon management’s evaluation of the loan portfolio. Management evaluates the adequacy of the allowance on a monthly basis and adjusts it accordingly by a monthly charge to earnings using the provision for loan losses. During the first two quarters of 2005, the provision for potential loan losses was $430,000 as compared to $15,000 for the same period in 2004. The increase in provision for 2005 is primarily due to the loan growth of the Company. At June 30, 2005, the net charge-offs were $91,000.
 
Non-earning assets consist of premises and equipment, and other assets. Premises and equipment increased during the year as a result of expenditures for the recently opened South Carolina loan production office. Other assets consist primarily of bank-owned life insurance, other real estate owned, accrued interest receivable and prepaid expenses. Bank-Owned Life Insurance and other real estate owned increased $109,000 and $143,000 respectively. Accrued interest receivable increased $154,000 during the second quarter as a result of a larger loan portfolio upon which to accrue interest. Prepaid expenses increased to $401,000 as compared to the year end amount of $228,000.
 
The Company funds its assets primarily through deposits from customers. The Company must pay interest on the majority of these funds and attempts to price these funds competitively in the market place but at a level that it can safely re-invest the funds profitably. At June 30, 2005, total deposits were $178,858,000 as compared to the year-end amount of $139,039,000. This is an increase of $39,819,000 or 28.64% and of this increase, brokered certificates of deposit comprised $9,841,000. The opening of the two new locations in 2004 has also contributed to the overall deposit growth. Additionally, the Company borrows funds from other sources to provide longer term fixed rate funding for its assets.
 
10
 
 
Interest bearing deposits are comprised of the following categories:
 
   
June 30, 2005
  
December 31, 2004
  
Interest bearing demand and savings
  
$
51,696,000
  
$
47,865,000
  
Certificates of deposit in denominations of $100,000 or greater
    
54,741,000
    
27,335,000
  
Other Certificates of deposit
    
52,615,000
    
47,523,000
  
Total
  
$
159,052,000
  
$
122,723,000
  

 
Other borrowings consist primarily of Federal Home Loan Bank advances and are secured by investment securities and loans of the Company. No new advances were obtained during the current quarter. The Company also has borrowings from a correspondent bank and debt incurred through the issuance of Trust preferred securities.

 
Capital Adequacy
 
The following table presents the Company’s regulatory capital position as of June 30, 2005.

Tier 1 Capital to risk weighted assets
      
Ratio, actual
    
15.71
%
Tier 1 Capital minimum requirement
    
4.00
%
         
Tier 2 Capital to risk weighted assets
        
Ratio, actual
    
16.77
%
Tier 2 Capital minimum requirement
    
8.00
%
         
Tier 1 Leverage Ratio
    
12.23
%
Tier 1 Leverage Ratio minimum requirement
    
4.00
%
 
The Company’s ratios are well above the required regulatory minimums and provide a sufficient basis to support future growth of the Company.
 
 
Results of operations

Net income for the six months ended June 30, 2005 was $491,000 as compared to $405,000 for the same period in 2004. Although net interest income increased by $882,000 or 28% in 2005 as compared to the first six months of 2004, non-interest expense increased $588,000 or 19% in 2005 as compared to the first six months of 2004.

Total interest income increased $1,643,000 for the six months ended June 30 2005 or 36.24% from the same period in the previous year. This was the result of increased interest income on loans, which increased $1,331,000 and investment income, which increased $312,000 over the same period in the previous year. The increase in interest income was the direct result of the larger loan portfolio in the current year. In addition, a larger investment portfolio over the same period last year contributed to the increase in interest income.
 
11
 
Interest expense for the six months ended June 30, 2005 was $2,193,000. This is the major expense item for the Company and increased $761,000 from the previous year. This increase is the direct result of the growth in interest bearing deposits.

Net interest income after the provision for loan losses was $3,554,000 for the six months ended June 30, 2005 as compared to the 2004 amount of $3,087,000. This is an increase of $467,000 or 15.13%. This increase is the result of the increased level of earning assets and offset in part by the larger provision for loan losses during the current year.

Other income increased $205,000 to $819,000 for the six months ended June 30, 2005 as compared to the same period in 2004. Service charges on deposit accounts increased $50,000 or 12% due to the larger number of deposit accounts and increases in fees charged to customers. Bank owned life insurance income increased $121,000 as compared to the same period in the previous year.

Non-interest expense increased $588,000 to $3,692,000 for the six months ended June 30, 2005 as compared to the same period in 2004. This is an increase of 18.94%. The largest area of increase was in the salary and employee benefits category. This expense item was $1,750,000 for the six months ended June 30, 2005 as compared to $1,529,000 for the same period in the previous year. This is an increase of $221,000 or 14.45%. The growth in this expense item is due to the increased staffing required to properly serve the Company’s customers and slightly higher levels of pay during the current year.

Equipment and Occupancy expenses increased $110,000 or 24.28% for the six months ended June 30, 2005 from the same period in 2004. The increase is due to the expansion of the Albany Bank and the addition of Auburn branch. Administrative expenses increased $155,000 to $502,000 in the current year. The majority of this increase is the result of increased legal, accounting and other professional costs.

Diluted earnings per share for the six months ended June 30, 2005 were $0.16 and decreased $0.05 or 24% as compared to the first six months of the previous year. The reason for this decrease is the increased number of outstanding shares for the current year due to the stock offering completed in August, 2004.

Off-Balance Sheet Arrangements

To meet the financing needs of its customers, the Company is a party to financial instruments with off-balance sheet risk in the normal course of business. In the event of nonperformance by the other party to the off-balance sheet financial instrument, the Company’s exposure to credit loss is the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments. A summary of the contractual amounts of the Company’s financial instruments with off-balance sheet risk at June 30, 2005 follows:
 

Commitments to extend credit
  
$
17,828,000
  
Unused lines of credit
    
14,262,000
  
Standby letters of credit
    
2,162,000
  
         
   
$
34,252,000
  
 
12
 
Forward-Looking Statements

This document contains statements that constitute “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933, as amended, and Sections 21E of the Securities Exchange Act of 1934, as amended. The words “believe”, “estimate”, “expect”, “intend”, “anticipate” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates that they were made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Users are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that the actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Users are therefore cautioned not to place undue reliance on these forward-looking statements.


ITEM 3. CONTROLS AND PROCEDURES

As of June 30, 2005 the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) that is required to be included in the Company’s periodic filings with the Securities and Exchange Commission. There have been no changes in the Company's internal control over financial reporting or, to management’s knowledge, in other factors that could significantly affect those internal controls subsequent to the date of such evaluation, and there have been no corrective actions with respect to significant deficiencies or material weaknesses.
 
13
 
PART II

ITEM 1. Legal Proceedings
None
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
        (a)   None
        (b)   None
(c)   None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 25, 2005, the Company held its annual meeting of shareholders at which the following director nominees were elected to a three-year term by the votes indicated:
 
Directors
  
Votes For
  
Votes Withheld
Robert M. Beauchamp
  
2,743,235
  
2,263
Glenn A. Dowling
  
2,743,235
  
2,263
Mary Helen Dykes
  
2,743,235
  
2,263
Mark M. Shoemaker
  
2,743,235
  
2,263
Lawrence B. Willson
  
2,743,235
  
2,263
 
The following directors whose three year terms expire in 2007 continued on the Board: C. Richard Langley, Bennett D. Cotten, Jr., Jane Anne D. Sullivan, John P. Ventulett, Jr., James D. Woods. The following directors whose three year terms expire in 2006, continued on the Board: Charles M. Jones, III, Van Cise Knowles, Robert E. Lee, William F. McAfee.
 

ITEM 5.  OTHER INFORMATION
     None

ITEM 6.  Exhibits and Reports on Form 8-K
(a)  
Reports on Form 8-K
(1)  
Form 8-K filed on May 2, 2005 regarding first quarter earnings (Item 12). The information provided in this report is not deemed “filed” for purposes of liability under Section 18 of the Securities Exchange Act of 1934, as amended.
(2)  
Form 8-K filed on June 1, 2005 regarding the opening of a loan production office in Charleston, South Carolina (Item 7.01). The information provided in this report is not deemed “filed” for purposes of liability under Section 18 of the Securities Exchange Act of 1934, as amended.
 

(b)
Exhibits

 


SIGNATURES
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Community Capital Bancshares, Inc.
 
August 9, 2005
 
/s/ Robert E. Lee
 
Date
 
Robert E. Lee,
 
 
 
President
 


August 9, 2005
 
/s/ David J. Baranko
 
Date
 
David J. Baranko
 
 
 
Chief Financial Officer
 
 
 
(Duly authorized officer and
 
 
 
principal financial / accounting
 
 
 
officer)
 
 
 
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