-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EPcgTsTx7ll81NQovdojn3bNNsm2+XsoB28nLVbG4KDCjRkkrqLURI5m1jIPDOPJ 6+eGNauq4+UmHQC7qRW3zA== 0000931763-02-002839.txt : 20020814 0000931763-02-002839.hdr.sgml : 20020814 20020814133629 ACCESSION NUMBER: 0000931763-02-002839 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABC BANCORP CENTRAL INDEX KEY: 0000351569 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 581456434 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13901 FILM NUMBER: 02733984 BUSINESS ADDRESS: STREET 1: 24 2/ND/ AVENUE CITY: MOULTRIE STATE: GA ZIP: 31768 BUSINESS PHONE: 9128901111 MAIL ADDRESS: STREET 1: PO BOX 1500 CITY: MOULTRIE STATE: GA ZIP: 31776 FORMER COMPANY: FORMER CONFORMED NAME: ABC HOLDING CO DATE OF NAME CHANGE: 19870119 10-Q 1 d10q.txt FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2002 -------------- OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-16181 ABC BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) GEORGIA 58-1456434 ------------------------ --------------------- (State of incorporation) (IRS Employer ID No.) 24 SECOND AVE., SE MOULTRIE, GA 31768 ------------------------------------- (Address of principal executive offices) (229) 890-1111 -------------- (Registrant's telephone number) 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 --- --- There were 9,854,279 shares of Common Stock outstanding as of June 30, 2002. ABC BANCORP QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2002 TABLE OF CONTENTS PART I - FINANCIAL INFORMATION Item Page - ---- ---- 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Income and Comprehensive Income 4 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 3. Quantitative and Qualitative Disclosures about Market Risk 12 PART II - OTHER INFORMATION 4. Submission of Matters to a Vote of Securities Holders 13 6. Exhibits and Reports on Form 8-K 13 Signature 14 2 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------------------- June 30 Dec. 31 2002 2001 ---------- ---------- Assets - ------ Cash and due from banks $ 65,468 $ 157,475 Securities available for sale, at fair value 176,494 156,835 Federal funds sold 136 44 Loans 828,511 805,076 Less allowance for loan losses 14,061 14,944 ---------- ---------- Loans, net 814,450 790,132 ---------- ---------- Premises and equipment, net 27,030 26,821 Intangible assets 5,256 6,074 Goodwill 19,240 19,240 Other assets 18,971 20,265 ---------- ---------- $1,127,045 $1,176,886 ========== ========== Liabilities and Stockholders' Equity - ------------------------------------ Deposits Noninterest-bearing demand 112,487 125,522 Interest-bearing demand 240,336 254,301 Savings 64,072 62,536 Time, $100,000 and over 151,786 156,562 Other time 312,969 332,235 ---------- ---------- Total deposits 881,650 931,156 Federal funds purchased & securities sold under agreements to repurchase 3,250 3,792 Other borrowings 93,272 95,293 Other liabilities 8,409 7,997 Trust preferred securities 34,500 34,500 ---------- ---------- Total liabilities 1,021,081 1,072,738 ---------- ---------- Stockholders' equity - -------------------- Common stock, par value $1; 30,000,000 shares authorized; 10,790,969 and 10,790,369 shares issued, respectively 10,791 10,790 Capital surplus 45,616 45,616 Retained earnings 56,276 53,584 Accumulated other comprehensive income 1,889 1,034 Unearned compensation (422) (656) ---------- ---------- 114,150 110,368 Less cost of shares acquired for the treasury, 936,690 and 790,982 shares (8,186) (6,220) ---------- ---------- Total stockholders' equity 105,964 104,148 ---------- ---------- $1,127,045 $1,176,886 ========== ==========
See Notes to Consolidated Financial Statements. 3 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME THREE MONTHS ENDED JUNE 30, 2002 AND 2001 (Dollars in Thousands) (Unaudited)
- ---------------------------------------------------------------------------------------------------------- 2002 2001 ---------- ---------- Interest income Interest and fees on loans $ 16,460 $ 15,566 Interest on taxable securities 2,225 2,180 Interest on nontaxable securities 44 229 Interest on deposits in other banks 193 197 Interest on federal funds sold 12 28 ---------- ---------- 18,934 18,200 ---------- ---------- Interest expense Interest on deposits 5,021 7,564 Interest on federal funds purchased and securities sold under agreements to repurchase 30 34 Interest on other borrowings 1,842 726 ---------- ---------- 6,893 8,324 ---------- ---------- Net interest income 12,041 9,876 Provision for loan losses 774 723 ---------- ---------- Net interest income after provision for loan losses 11,267 9,153 ---------- ---------- Other income Service charges on deposit accounts 2,566 1,670 Other service charges, commissions and fees 723 570 Other 102 116 Loss on sale of securities (4) - ---------- ---------- 3,387 2,356 ---------- ---------- Other expense Salaries and employee benefits 5,758 4,542 Equipment and occupancy expense 1,219 1,147 Other operating expenses 3,363 2,590 ---------- ---------- 10,340 8,279 ---------- ---------- Income before income taxes 4,314 3,230 Applicable income taxes 1,431 1,040 ---------- ---------- Net income $ 2,883 $ 2,190 ---------- ---------- Other comprehensive income, net of tax: Unrealized holding gains (losses) arising during period, net of tax $ 1,774 $ 240 ---------- ---------- Comprehensive income $ 4,657 $ 2,430 ========== ========== Income per common share-Basic $ 0.29 $ 0.25 ========== ========== Income per common share-Diluted $ 0.29 $ 0.25 ========== ========== Average shares outstanding 9,874,639 8,707,075 ========== ==========
See Notes to Consolidated Financial Statements. 4 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Dollars in Thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------ 2002 2001 ---------- ---------- Interest income Interest and fees on loans $ 32,924 $ 30,750 Interest on taxable securities 4,386 4,406 Interest on nontaxable securities 97 460 Interest on deposits in other banks 538 352 Interest on federal funds sold 24 28 ---------- ---------- 37,969 35,996 ---------- ---------- Interest expense Interest on deposits 10,898 14,905 Interest on federal funds purchased and securities sold under agreements to repurchase 74 88 Interest on other borrowings 3,548 1,576 ---------- ---------- 14,520 16,569 ---------- ---------- Net interest income 23,449 19,427 Provision for loan losses 1,733 1,216 ---------- ---------- Net interest income after provision for loan losses 21,716 18,211 ---------- ---------- Other income Service charges on deposit accounts 4,807 3,247 Other service charges, commissions and fees 1,595 1,139 Other 209 146 Gain (Loss) on sale of securities 22 (1) ---------- ---------- 6,633 4,531 ---------- ---------- Other expense Salaries and employee benefits 11,589 8,965 Equipment and occupancy expense 2,424 2,267 Other operating expenses 6,793 4,891 ---------- ---------- 20,806 16,123 ---------- ---------- Income before income taxes 7,543 6,619 Applicable income taxes 2,488 2,131 ---------- ---------- Net income $ 5,055 $ 4,488 ---------- ---------- Other comprehensive income, net of tax: Unrealized holding gains arising during period, net of tax $ 855 $ 1,665 ---------- ---------- Comprehensive income $ 5,910 $ 6,153 ========== ========== Income per common share-Basic $ 0.51 $ 0.52 ========== ========== Income per common share-Diluted $ 0.51 $ 0.52 ========== ========== Average shares outstanding 9,899,474 8,553,466 ========== ==========
See Notes to Consolidated Financial Statements. 5 ABC BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (Dollars in Thousands) (Unaudited)
- -------------------------------------------------------------------------------------------------------------- 2002 2001 -------- -------- OPERATING ACTIVITIES Net Income $ 5,055 $ 4,488 -------- -------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,151 929 Provision for loan losses 1,733 1,216 Amortization of intangible assets 818 469 Other prepaids, deferrals and accruals, net 1,521 710 -------- -------- Total adjustments 5,223 3,324 -------- -------- Net cash provided by operating activities 10,278 7,812 -------- -------- INVESTING ACTIVITIES Proceeds from maturities of investment securities 39,256 46,394 Purchase of investment securities (58,655) (22,757) Proceeds from sales of securities available for sale 1,015 40 Decrease in federal funds sold (92) Increase in loans (26,051) (46,085) Net cash received from acquisitions - 17,911 Purchase of premises and equipment (1,360) (317) -------- -------- Net cash used in investing activities (45,887) (4,814) -------- -------- FINANCING ACTIVITIES Net increase (decrease) in deposits (49,506) 2,140 Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase (542) 2,269 Increase (decrease) in other borrowings (130) 2,264 Dividends paid (2,367) (2,060) Purchase of treasury stock (1,962) - -------- -------- Net cash used in financing activities (54,507) 4,613 -------- -------- Net increase (decrease) in cash and due from banks $(92,007) $ 7,611 Cash and due from banks at beginning of period 157,475 43,363 -------- -------- Cash and due from banks at end of period $ 65,468 $ 50,974 ======== ========
See Notes to Consolidated Financial statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of ABC Bancorp and subsidiaries ("the Company") conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. The interim consolidated financial statements included herein are unaudited, but reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All adjustments reflected in the interim financial statements are of a normal, recurring nature. Such financial statements should be read in conjunction with the financial statements and notes thereto and the report of independent auditors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. The results of operations for the six months ended June 30, 2002 are not necessarily indicative of the results to be expected for the full year. NOTE 2. RECENTLY ADOPTED ACCOUNTING STANDARDS In June 2001, the Financial Accounting Standards Board issued two new accounting standards: Statement of Financial Standards ("SFAS") No 141, "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets." SFAS No 141, which was effective immediately, requires that all business combinations consummated after June 30, 2001 be accounted for by the purchase method unless the combination was initiated on or prior to that date and it meets the conditions to be accounted for by the pooling-of-interests method in accordance with AFB Opinion No. 16, "Business Combinations." Under SFAS No. 142, goodwill and intangible assets that management concludes have indefinite useful lives will no longer be amortized, but will be subject to impairment tests performed at least annually. The Company was required to adopt SFAS No. 142 on January 1, 2002. During the quarter ended June 30, 2002, the Company performed the first of the required impairment tests of goodwill and indefinite-lived intangible assets. The test results indicated that there was no impairment of goodwill and indefinite-lived intangible assets. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Liquidity management involves the matching of the cash flow requirements of customers, who may be either depositors desiring to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs, and the ability of ABC Bancorp and its subsidiaries (the "Company") to meet those needs. The Company strives to maintain an adequate liquidity position by 7 managing the balances and maturities of interest-earning assets and interest-bearing liabilities so that the balance it has in short-term investments at any given time will adequately cover any reasonably anticipated immediate need for funds. Additionally, the subsidiary Banks (the "Banks") maintain relationships with correspondent banks which could provide funds to them on short notice, if needed. The liquidity and capital resources of the Company are monitored continuously by the Company's Board-authorized Asset and Liability Management Committee, and on a periodic basis by state and federal regulatory authorities. As determined under guidelines established by these regulatory authorities, the Company's and the Banks' liquidity ratios at June 30, 2002 were considered satisfactory. At that date, the Banks' short-term investments were adequate to cover any reasonably anticipated immediate need for funds. The Company is aware of no events or trends likely to result in a material change in liquidity. During the six months ended June 30, 2002, total capital increased $1,816,000 to $105,964,000. Of this change, $2,692,000 resulted from the retention of earnings (net of $2,367,000 dividends paid to shareholders), plus $235,000 for the accrual for grants of restricted shares as incentive to certain employees, plus $855,000 in other comprehensive income, net of taxes, less $1,966,000 for the purchase of Treasury Stock. At June 30, 2002, ABC had binding commitments for capital expenditures of approximately $200,000. The Company anticipates that approximately $500,000 will be required for capital expenditures during the remainder of 2002. Additional expenditures may be required for other mergers and acquisitions. Results of Operations The Company's results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income and to control noninterest expense. Since interest rates are determined by market forces and economic conditions beyond the control of the Company, the ability to generate net interest income is dependent upon the Banks' ability to obtain an adequate spread between the rate earned on interest-earning assets and the rate paid on interest-bearing liabilities. Thus, the key performance measure for net interest income is the interest margin or net yield, which is taxable-equivalent net interest income divided by average earning assets. The primary component of consolidated earnings is net interest income, or the difference between interest income on interest-earning assets and interest paid on interest-bearing liabilities. The net interest margin is net interest income expressed as a percentage of average interest-earning assets. Interest-earning assets consist of loans, investment securities and Federal funds sold. Interest-bearing liabilities consist of deposits and borrowings, such as Federal funds purchased, securities sold under repurchase agreements and Federal Home Loan Bank advances. A portion of interest income is earned on tax-exempt investments, such as state and municipal bonds, and on loans to states and municipalities. This tax-exempt income and its resultant yields are stated on a taxable-equivalent basis in order to be comparable to taxable investments and loans. 8 Comparison of Statements of Income The net interest margin on a taxable-equivalent basis was 4.53% and 5.02% during the six months ended June 30, 2002 and 2001, respectively, a decrease of 49 basis points. These variances are attributable to fluctuations in the average rates charged and fees earned on loans and the average rates paid on deposit accounts. Several decreases in key interest rates by the Federal Reserve Bank during the last half of 2001 also attributed to the decrease in net interest margin, because the rate of yield on certain variable-rate assets decreased immediately, whereas most interest-bearing liabilities are fixed-rate, and thus rates could not be decreased until maturity. Net interest income was $23.4 million as compared to $19.4 million during the six months ended June 30, 2002 and 2001, respectively, representing an increase of 20.62%. This increase of $4 million was largely attributable to the new acquisitions which contributed $3.6 million of this increase. The provision for loan losses is a charge to earnings in the current period to replenish the allowance for loan losses and maintain it at the level management determines is adequate. The provision for loan losses charged to earnings amounted to $1,733,000 and $1,216,000 during the six months ended June 30, 2002 and 2001. This $517,000 increase in 2002 over 2001 was primarily attributable to replenishing the reserve for loan losses to an adequate level due to $2.6 million in charge offs, net of recoveries, for the first six months and also for the 3.08% growth in the loan portfolio. Charge offs, net of recoveries, for the first six months of 2001 amounted to a net recovery of $179,000. The comparatively high net charge offs for the first six months of 2002 resulted in part from anticipated charge offs against reserves established in connection with two acquisitions made during 2001, and in part from an aggressive effort during the first two quarters of 2002 to resolve a number of small non-performing loans on the books of the subsidiary banks. The allowance for loan losses represents a reserve for potential losses in the loan portfolio. The adequacy of the allowance for loan losses is evaluated quarterly based on a review of all significant loans, with a particular emphasis on non-accruing, past due and other loans that management believes require attention. Another factor used in determining the adequacy of the reserve is management's judgment about factors affecting loan quality and assumptions about the local and national economy. The allowance for loan losses totaled $14.06 million and $14.94 million as of June 30, 2002 and December 31, 2001, respectively. The allowance for loan losses as a percentage of total loans was 1.70% and 1.86% as of June 30, 2002 and December 31, 2001, respectively. Non-performing assets were $10.2 million and $13.2 as of June 30, 2002 and December 31, 2001, respectively. The ratio of non-performing assets as a percentage of the loan loss reserve was 72.6% and 88.4% as of June 30, 2002 and December 31, 2001, respectively. Management considers the allowance for loan losses as of June 30, 2002 adequate to cover potential losses in the loan portfolio. 9 Following is a comparison of noninterest income for the six months ended June 30, 2002 and 2001 (dollars in thousands). Six months Ended June ------------------ 2002 2001 ------ ------ Service charges on deposits $4,807 $3,247 Other service charges, commissions and fees 1,595 1,139 Other income 209 146 Gain (Loss) on sale of securities 22 (1) ------ ------ Total noninterest income $6,633 $4,531 ====== ====== Total noninterest income for the six months ended June 30, 2002 was $2,102,000 higher than during the same period in 2001. Three recent acquisitions are reflected in 2002's results, but not 2001. Approximately $688,000 of the increase is attributable to these acquisitions. Approximately 90% of the remaining increase is attributable to three retail-related initiatives: (1) an increase in mortgage loan fees; (2) an increase in credit life insurance premiums; and (3) a new program to increase overdraft fees on deposit accounts. Additionally insufficient fund charges on checking deposit accounts in all other subsidiary banks increased $1,253,000 during the six months ended June 30, 2002 as compared to the same period last year. This increase is mostly attributable to an increase in the per item charge for overdrafts. Other service charges, commissions and fees increased because of enhanced income from the Company's retail division, particularly mortgage financing. Of the $456,000 increase, 70% or $317,000 was attributable to mortgage financing. Following is an analysis of noninterest expense for the six months ended June 30, 2002 and 2001 (dollars in thousands). Six months Ended June -------------------- 2002 2001 ------- ------- Salaries and employee benefits $11,589 $ 8,965 Occupancy and equipment expense 2,424 2,267 Other expense 6,793 4,891 ------- ------- Total noninterest expense $20,806 $16,123 ======= ======= Total noninterest expense for the six months ended June 30, 2002 was $4,683,000 higher than during the same period in 2001. 10 Salaries and employee benefits for the six months ended June 30, 2002 were $2,624,000 or 29.27% higher than during the same period in 2001. The new acquisitions accounted for approximately $1,567,000 of the increase and the remaining $1,057,000 related to normal increases in salaries and employee benefits, and an increase in the number of employees throughout the company. Of the $1,902,000 million increase in other expense $496,000 is attributable to an increase in amortization expense as a result of acquisitions made during the last three quarters of 2001, $836,000 is attributable to other expenses of the acquired banks, and $102,000 is attributable to systems conversion expenses of the acquired banks. Following is a condensed summary of net income during the six months ended June 30, 2002 and 2001 (dollars in thousands). Six months Ended June 30, -------------------- 2002 2001 ------- ------- Net interest income $23,449 $19,427 Provision for loan losses 1,733 1,216 Other income 6,633 4,531 Other expense 20,806 16,123 ------- ------- Income before income taxes 7,543 6.619 Applicable income taxes 2,488 2,131 ------- ------- Net income $ 5,055 $ 4,488 ======= ======= Net income increased $567,000 or 12.63% to $5,055,000 for the six months ended June 30, 2002 as compared to $4,488,000 for the six months ended June 30, 2001. Net interest income of ABC and its subsidiaries increased $4,022,000, the provision for loan losses increased by $517,000 and all other noninterest expense increased by $4,683,000. Comparison of Balance Sheets Total assets decreased by $50 million, or 4.25% to $1,127 million at June 30, 2002 from $1,177 million at December 31, 2001. Total earning assets decreased by $33 million, or 3.09%, to $1,035 million at June 30, 2002 from $1,068 million at December 31, 2001. Loans, net of the allowance for loan losses, increased by $24 million, or 3.08% to $814 million at June 30, 2002 from $790 million at December 31, 2001. 11 Total deposits decreased by $49 million, or 5.26% to $882 million at June 30, 2002 from $931 million at December 31, 2001. Approximately 12.75% and 13.53% of deposits were noninterest-bearing as of June 30, 2002 and December 31, 2001, respectively. The decrease in total assets and deposits was due to an intentional reduction in non-core deposits. Retaining maturing deposits would have required paying higher rates than were desired because of current market pressures. Given the Company's current loan funding projections and alternative funding sources available, a significant amount of maturing deposits were not renewed. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed only to U. S. dollar interest rate changes and, accordingly, the Company manages exposure by considering the possible changes in the net interest margin. The Company does not have any trading instruments nor does it classify any portion of the investment portfolio as held for trading. The Company does not engage in any hedging activities or enter into any derivative instruments with a higher degree of risk than mortgage backed securities which are commonly pass through securities. Finally, the Company has no exposure to foreign currency exchange rate risk, commodity price risk, and other market risks. Interest rates play a major part in the net interest income of a financial institution. The sensitivity to rate changes is known as "interest rate risk." The repricing of interest earning assets and interest-bearing liabilities can influence the changes in net interest income. As part of the Company's asset/liability management program, the timing of repriced assets and liabilities is referred to as Gap management. It is the policy of the Company to maintain a Gap ratio in the one-year time horizon of .80 to 1.20. The Company uses simulation analysis to monitor changes in net interest income due to changes in market interest rates. The simulation of rising, declining and flat interest rate scenarios allows management to monitor and adjust interest rate sensitivity to minimize the impact of market interest rate swings. The analysis of the impact on net interest income over a twelve month period is subjected to a gradual 200 basis point increase or decrease in market rates on net interest income and is monitored on a quarterly basis. The most recent simulation model projects net interest income would increase 5.30% if rates rise gradually over the next year. On the other hand, the model projects net interest income to decrease 7.34% if rates decline over the next year. 12 Part II. Other Information Item 4. Submission of Matters to a Vote of Securities Holders The Annual Meeting of the Shareholders of the Company was held on May 14, 2002. At this meeting proxies were solicited under Regulation 14a of the Securities and Exchange Act of 1934. Total shares outstanding, net of 911,690 shares held for the treasury amounted to 9,878,679. A total of 6,886,395 shares were represented by shareholders in attendance or by proxy. Director nominees were elected by a vote of 6,773,135 shares for, and 113,260 withholding authority, representing 69% in favor of the following directors elected to serve as Class II directors, until the annual meeting to be held in 2005. J. Raymond Fulp Robert P. Lynch J. Thomas Whelchel Henry C. Wortman Ratification of the appointment of Mauldin & Jenkins, Certified Public Accountants and Consultants, LLC, as the Company's independent accountants for the fiscal year ended December 31, 2001, by a vote of 6,853,362 for, 18,520 against, and 14,513 abstaining, representing 69% in favor. Item 6. Exhibits and Reports on Form 8-K Exhibit 99.1 Section 906 Certification Exhibit 99.2 Section 906 Certification 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the Undersigned thereunto duly authorized: ABC BANCORP 8/13/02 /s/ W. EDWIN LANE, JR. - ----------------- -------------------------------------- Date W. EDWIN LANE, JR. EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Duly authorized officer and principal financial/accounting officer) 14 EX-99.1 3 dex991.txt SECTION 906 CERTIFICATION Exhibit 99.1 SECTION 906 CERTIFICATION I, Kenneth J. Hunnicutt, Chief Executive Officer of ABC Bancorp (the "Company"), do hereby certify, in accordance with 18 U.S.C. (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The Quarterly Report on Form 10-Q of the Company for the period ending June 30, 2002 (the "Periodic Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 13, 2002 /s/ KENNETH J. HUNNICUTT --------------------------------------------- KENNETH J. HUNNICUTT, Chief Executive Officer EX-99.2 4 dex992.txt SECTION 906 CERTIFICATION Exhibit 99.2 SECTION 906 CERTIFICATION I, W. Edwin Lane, Jr., Chief Financial Officer of ABC Bancorp (the "Company"), do hereby certify, in accordance with 18 U.S.C. (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The Quarterly Report on Form 10-Q of the Company for the period ending June 30, 2002 (the "Periodic Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 13, 2002 /s/ W. EDWIN LANE, JR. ------------------------------------------- W. EDWIN LANE, JR., Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----