10-Q 1 d10q.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10Q [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 2001 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________________ to ________________________ Commission File Number: 0-26254 ------- Century South Banks, Inc. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Georgia 58-1455591 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2325 Lakeview Parkway, Suite 450, Alpharetta, Georgia 30004-1976 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (678) 624-1366 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- (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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. CLASS OUTSTANDING AS OF APRIL 27, 2001 ------------------------------------------------------------------------------- Common stock, $1.00 par value 13,671,171 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES Form 10Q

2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited)

See accompanying notes to consolidated financial statements. 3 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES Consolidated Statements of Income (Unaudited)

See accompanying notes to consolidated financial statements. 4 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited)

See accompanying notes to consolidated financial statements. 5 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation --------------------- The unaudited consolidated financial statements include the accounts of Century South Banks, Inc. ("the Parent Company") and its wholly owned subsidiaries, Century South Bank of Dahlonega, Century South Bank of Ellijay, Century South Bank of Polk County, Century South Bank of Northeast Georgia, N.A., Century South Bank of Fannin County, N.A., Century South Bank of Dawsonville, Century South Bank of Lavonia, Century South Bank of Danielsville, Century South Bank of Central Georgia, N.A., Century South Bank of the Coastal Region, N.A., Century South Bank of Alabama and Century South Bank of the Carolinas (collectively "the Company"). These accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and notes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. All adjustments consisting of normal recurring accruals which, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods covered by this report have been included. (2) Statement No. 130 "Reporting Comprehensive Income" -------------------------------------------------- Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130") establishes standards for reporting and displaying comprehensive income and its components in a full set of general purpose financial statements. SFAS No. 130 requires all items that are required to be recognized under accounting standards as components of comprehensive income be reported in a financial statement that is displayed in equal prominence with the other financial statements. The term "comprehensive income" is used in the statement to describe the total of all components of comprehensive income including net income. "Other comprehensive income" for the Company consists of items recorded directly in shareholders' equity under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Total comprehensive income for the three months ended March 31, 2001 was $6,313,000 compared to $5,222,000 for the three months ended March 31, 2000. (3) Long-Term Debt and Short-Term Borrowings ---------------------------------------- On May 31, 2000, the Company renewed a $15,000,000 revolving line of credit with a bank which is payable on demand and matures on May 31, 2002. The line of credit accrues interest at the Prime Lending Rate minus 1.5% or the LIBOR rate plus 1.25% at the Company's option, as defined in the agreement, and such interest is due quarterly. The line of credit is secured by 100% of the outstanding common stock of three of the Company's subsidiaries. As of March 31, 2001, there were no advances under this line of credit. 6 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Certain of the Company's subsidiaries have invested in Federal Home Loan Bank stock for the purpose of establishing credit lines with the Federal Home Loan Bank. At March 31, 2001, the total advances under these lines approximated $83.0 million. Of the total advances outstanding, $79.0 million is short-term with a maturity of January 14, 2002, with the remaining maturing at various dates through 2008. During the first quarter of 2001, $1.0 million matured. The purpose of these advances was to replace short-term deposits with longer term funds. In addition to these advances, the subsidiaries have additional credit available on their credit lines with the Federal Home Loan Bank. All lines with the Federal Home Loan Bank are secured by a blanket lien on certain real estate loans of each of the respective subsidiaries. (4) Business Combinations --------------------- On February 15, 2000, the Company completed a merger with Lanier Bankshares, Inc. ("LBI") and its subsidiary bank, Lanier National Bank, located in Gainesville, Georgia. The Company issued 1,766,021 shares of its common stock in exchange for all issued and outstanding shares of LBI. The acquisition was accounted for as a pooling of interests and, accordingly, all financial information preceding the date of acquisition has been restated to include the financial position and results of operations of the acquired entity. Effective February 15, 2000, the Company acquired all of the issued and outstanding shares of Haywood Bancshares, Inc. ("Haywood"), a one-bank holding company in western North Carolina for a purchase price of approximately $26,854,000 which included 626,469 shares of the Company's common stock at $22.0043 per share, approximately $2,000 of cash in lieu of fractional shares, approximately $13,264,000 in cash and other acquisition costs of approximately $224,000. The acquisition was accounted for using the purchase method of accounting and, hence, the results of operations of Haywood have been included in the consolidated financial statements from the aforementioned effective date. The assets and liabilities of Haywood, including purchase accounting adjustments, as of the date of acquisition were as follows:

7 CENTURY SOUTH BANKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Unaudited) Goodwill of $6.1 million arising from the transaction is being amortized on a straight-line basis over an expected life of 20 years. During the first quarter 2001, the Company recorded, by charges to operations, approximately $76,000 of goodwill amortization relating to the Haywood transaction. (5) Recent Accounting Pronouncements -------------------------------- Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133") establishes accounting and reporting standards for derivative instruments and for hedging activities. The provisions of SFAS No. 133, as amended, are effective for all fiscal quarters of fiscal years beginning after June 15, 2000. The Company adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did not have a material impact on the Company's consolidated financial statements. In September 2000, SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, was issued. SFAS No. 140 is effective for all transfers and servicing of financial assets and extinguishments of liabilities after March 31, 2001. SFAS No. 140 is effective for recognition and reclassification of collateral and disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The Company adopted SFAS No. 140 effective January 1, 2001. The adoption of SFAS No. 140 did not have a material impact on the Company's consolidated financial statements. (6) Merger Agreement with BB&T Corporation -------------------------------------- On December 4, 2000, the Company entered into an Agreement and Plan of Reorganization with BB&T Corporation ("BB&T"), a regional bank holding company with approximately $56.7 billion in assets. Under the agreement, each share of common stock of the Company outstanding at the effective time will be converted into the right to receive 0.93 of a share of common stock of BB&T, plus cash in lieu of any fractional share of BB&T common stock. The merger, which is subject to the approval of the Company's shareholders and banking regulators, is expected to be completed in the second quarter of 2001. The transaction is expected to be accounted for as a pooling of interests. 8 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL ------- The following is a discussion of the Company's financial condition at March 31, 2001, compared to December 31, 2000, and results of operations for the three month period ended March 31, 2001, compared to the three month period ended March 31, 2000. This discussion should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes appearing elsewhere in this report. On February 15, 2000, the Company acquired Haywood Bancshares, Inc., a bank holding company located in Waynesville, North Carolina, and its savings bank subsidiary, Haywood Savings Bank. Also, on February 15, 2000, the Company completed the acquisition of Lanier Bankshares, Inc., a bank holding company located in Gainesville, Georgia, and its bank subsidiary, Lanier National Bank. FINANCIAL CONDITION ------------------- During the first three months of 2001, total assets increased $15.4 million or approximately 1.0%, primarily due to increases in deposits of $43.7 million offset by decreases in net loans and investment securities of $10.7 million and $18.2 million, respectively. The amortized cost, gross unrealized gains and losses, and estimated fair value of available for sale and held to maturity securities by type at March 31, 2001 were as follows:

9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND INTEREST RATE SENSITIVITY --------------------------------------- Liquidity management involves the matching of the cash flow requirements of customers, either depositors withdrawing funds or borrowers needing loans, and the ability of the Company to meet those requirements. Management monitors and maintains appropriate levels of assets and liabilities so that maturities of assets are such that adequate funds are provided to meet estimated customer withdrawals and loan requests. The Company's liquidity position depends primarily upon the liquidity of its assets relative to its need to respond to short-term demand for funds caused by withdrawals from deposit accounts and loan funding commitments. Primary sources of liquidity are scheduled payments on the Company's loans and interest on and maturities of its investments. Occasionally, the Company will sell investment securities available for sale in connection with the management of its income tax position, its liquidity position, and its interest sensitivity gap. The Company may also utilize its cash and due from banks, interest-earning deposits in other banks, and federal funds sold to meet liquidity requirements as needed. At March 31, 2001, the Company's cash and due from banks was $47.5 million, its federal funds sold were $50.3 million, its interest-earning deposits in other banks were $4.7 million, and its investment securities designated as available for sale were $257.5 million. All of the above could be converted to cash on relatively short notice. The Company also has the ability, on a short-term basis, to purchase federal funds from other financial institutions. Presently, the Company has made arrangements with commercial banks for short-term unsecured advances of up to approximately $83.8 million, in addition to credit, which is available in the form of Federal Home Loan Bank advances. Also, the Company has a secured revolving line of credit with a bank of $15,000,000 of which $15,000,000 was available at March 31, 2001. The relative interest rate sensitivity of the Company's assets and liabilities indicates the extent to which the Company's net interest income may be affected by interest rate movements. The Company's ability to reprice assets and liabilities in the same dollar amounts and at the same time minimizes interest rate risks. One method of measuring the impact of interest rate changes on net interest income is to measure, in a number of time frames, the interest sensitivity gap, by subtracting interest-sensitive liabilities from interest- sensitive assets, as reflected in the following table. Such interest sensitivity gap represents the risk, or opportunity, in repricing. If more assets than liabilities are repriced at a given time in a rising rate environment, net interest income improves; in a declining rate environment, net interest income deteriorates. Conversely, if more liabilities than assets are repriced while interest rates are rising, net interest income deteriorates; if interest rates are falling, net interest income improves. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Company's strategy in minimizing interest rate risk is to minimize the impact of short-term interest rate movements on its net interest income while managing its middle and long-term interest sensitivity gap in light of overall economic trends in interest rates. The following table illustrates the relative sensitivity of the Company to changing interest rates as of March 31, 2001.

The Company's strategy is to maintain a ratio of interest sensitive assets to interest sensitive liabilities in the range of .80 to 1.20 at the less than one year time frame. At March 31, 2001, the Company was slightly below this range. However, this slight deviation is not considered significant due to the nature of sensitivity. For example, the ratio in the one-year time frame is significantly impacted by the classification of all interest bearing demand and savings deposits as immediately rate sensitive for purpose of this analysis. These accounts are generally less sensitive to short-term interest rate movements. Derivative financial instruments, consisting primarily of interest rate swaps and purchased floors, are components of the Company's interest risk management profile. The Company uses these instruments to limit its sensitivity to changes in interest rates and thus limit the volatility of net interest income. Management currently believes its interest sensitivity position is such that short-term interest rate movements would not materially impact its net interest income. RESULTS OF OPERATIONS --------------------- Net Interest Income ------------------- The Company's net interest income is its principal source of income. Interest- earning assets for the Company include loans, federal funds sold, interest- earning deposits in other banks, and investment securities. The Company's interest-bearing liabilities include its deposits, federal funds purchased, Federal Home Loan Bank advances, other short-term borrowings, and long-term debt. Net interest income for the three months ended March 31, 2001 increased $236,000 or 1.34% over the same period of 2000. The average yield earned on interest- earning assets, on a tax equivalent basis, increased to 9.28% for the three months ended March 31, 2001 from 9.11% for the three months ended March 31, 2000 and the average rate paid on interest-bearing liabilities increased to 5.24% for the three months ended March 31, 2001 from 4.76% for the three months ended March 31, 2000. The Company's interest rate differential decreased to 4.04% from 4.35% and its net interest margin (net interest income divided by average interest-earning assets) decreased to 4.82% for the first three months of 2001 from 5.11% for the same period of 2000. This continues a trend of tightening net interest margin resulting from competitive and market pressures on loan pricing and deposit cost. 11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Allowance for Loan Losses ------------------------- The Company maintains an allowance for loan losses appropriate for the quality of the loan portfolio and sufficient to meet anticipated future loan losses. The Company utilizes a comprehensive loan review and risk identification process and the analysis of affiliate Banks' financial trends to determine the adequacy of the allowance. Many factors are considered when evaluating the allowance. The Company's quarterly analysis is based on historical loss trends; migration trends in criticized and classified loans in the portfolio; trends in past due and nonaccrual loans; trends in portfolio volume, composition, maturity, and concentrations; changes in local and regional economic market conditions; the accuracy of the loan review and risk identification system; and the experience, ability, and depth of lending personnel and management. In determining the appropriate level of the allowance for each affiliate bank, the Company relies primarily on analysis of the major components of the loan portfolio such as commercial loans, commercial real estate loans, consumer loans, construction loans, residential real estate loans, and all other loans and unfunded commitments. The Company has established a minimum loss factor for certain problem loan grade categories and for general categories of all other loans. All significant problem loans are reviewed individually to establish either the minimum loss factor (formula) or a specific reserve higher than the formula. All significant non-problem loans are reserved at the greater of the minimum loss rate for the category of loans or the weighted average historical loss rate over a defined loss horizon as computed from the migration analysis. Other homogenous loan pools such as the consumer loans, construction loans, and residential mortgage loans are reserved at the greater of the minimum loss rate or the weighted average historical loss rate as computed in the migration analysis. Management evaluates the allowance on a quarterly basis. The provision for loan losses for each bank is adjusted based on the methodology described above. A substantial portion of the Company's loan portfolio is secured by real estate in markets in northern, middle and coastal Georgia, southeastern Tennessee, southwestern North Carolina and eastern Alabama. The ultimate collectibility of a substantial portion of the Company's loan portfolio is dependent on or susceptible to changes in economic conditions in these markets. The allowance for loan losses approximated 1.50% of outstanding loans at March 31, 2001 as compared to 1.49% at December 31, 2000 and 1.46% at March 31, 2000. The allowance was $18,345,000 at March 31, 2001 compared to $18,396,000 at December 31, 2000 and $17,023,000 at March 31, 2000. The provision for loan losses increased to $2,176,000 for the three months ended March 31, 2001 from $683,000 for the three months ended March 31, 2000, primarily due to an increase in charge offs for the three months ended March 31, 2001 as compared to the three months ended March 31, 2000. Net loan charge offs for the three months ended March 31, 2001 were $2,227,000 as compared to $221,000 for the three months ended March 31, 2000. Net loans charged off as a percentage of average loans was 0.74% (annualized) for the three months ended March 31, 2001 as compared to 0.08% (annualized) for the three months ended March 31, 2000. The increased net charge offs are reflective of a softening economy, increased bankruptcies, and rising delinquencies. 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The table below summarizes the changes in the allowance for loan losses for the three months ended March 31, 2001 and the year ended December 31, 2000.

Nonperforming Loans, Nonperforming Assets, and Underperforming Loans -------------------------------------------------------------------- Nonperforming loans include nonaccrual loans. The Company has not restructured any loans of significance through March 31, 2001. Nonperforming assets include nonperforming loans, real estate acquired through foreclosure, securities that are in default, and other repossessed assets. Underperforming loans consist of loans that are past due with respect to principal or interest more than 90 days and still accruing interest. Accrual of interest on a loan is discontinued when reasonable doubt exists as to the full, timely collection of interest or principal or it becomes contractually in default for 90 days or more as to either interest or principal unless it is both well secured and in the process of collection. When a loan is placed on nonaccrual status, previously accrued and uncollected interest for the year in which the loan is placed on nonaccrual status is charged to interest income unless management believes the accrued interest is recoverable through the liquidation of collateral. 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Management is not aware of any loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been disclosed below which 1) represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity, or capital resources, or 2) represent material credits about which management is aware of any information which causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms. The table below provides information concerning nonperforming loans, underperforming loans, nonperforming assets, and certain asset quality ratios at March 31, 2001 and December 31, 2000.

Noninterest Income ------------------ Noninterest income for the first quarter of 2001 increased $1,306,000 or 39.2% as compared to the same period of 2000. This increase was primarily due to an increase in service charges on deposit accounts of $603,000. This resulted primarily from the introduction of a new demand deposit account by the Company in mid-year 2000. Other increases included an increase in mortgage loan origination fees of $478,000 and debit card income of $61,000 which are partially offset by a decrease in net securities gains of $59,000. In addition, the Company recognized a $216,000 gain as a result of marking its derivative instruments to fair value upon adoption of SFAS No. 133. The Company's derivative instruments were structured to protect the Company's net interest income in the event of declining interest rates, which occurred with Federal Reserve Bank actions. 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Noninterest Expense ------------------- Noninterest expense increased $1,613,000 for the first quarter of 2001 compared to the first quarter of 2000. This increase was due primarily to an increase in salaries and benefits expense of $1,142,000. Also, computer related fees increased approximately $141,000 and amortization expense increased approximately $94,000 for the first three months of 2001 compared to the same period of 2000. These increases were directly impacted by the acquisition of Haywood in February 2000. Salaries and benefits expense was also impacted by growth of the Company, normal salary increases, and rising health insurance cost. Income Tax Expense ------------------ The first quarter 2001 income tax expense was approximately $1,928,000, or an effective rate of 32.7%, as compared to $2,425,000 for the first quarter of 2000, or an effective rate of 32.5%. The effective income tax rate increased slightly in 2001 as a result of an expected decrease in tax exempt income as a percentage of total income due to the unavailability of high yielding bank qualified tax exempt investments. In 1999, three of the subsidiary banks formed captive Real Estate Investment Trusts ("REITs") for various business purposes. Because of the taxation requirements of REITs, the Company has experienced a positive impact on its overall effective income tax rate from this initiative, partially offsetting the income mix factor discussed in the preceding paragraph. Net Income ---------- The Company's first quarter 2001 net earnings were $0.29 per diluted share or $3,962,000 as compared to $0.37 per diluted share or $5,029,000 for the first quarter of 2000, representing a decrease in net earnings per share of 21.6%. This decrease was primarily attributable to the increase in the provision for loan losses in the first quarter of 2001. Performance Ratios ------------------ Performance of banks is often measured by various ratio analyses. Two widely recognized performance indicators are return on average equity and return on average assets. The return on average equity for the three months ended March 31, 2001 was 10.09% (annualized) as compared to 13.87% (annualized) for the three months ended March 31, 2000. The Company's return on average assets was 0.99% (annualized) and 1.35% (annualized) for the three month periods ended March 31, 2001 and 2000, respectively. 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Capital Resources ----------------- The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company on a consolidated basis, and the Parent company and subsidiary banks individually, to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital, (as defined in the regulations), to risk-weighted assets (as defined) and of Tier 1 capital to average assets. Management believes, as of March 31, 2001 that the Company meets all capital adequacy requirements to which it is subject. The Company's actual capital amounts and ratios are presented below on a consolidated basis:

The Company continues to maintain a level of capital well in excess of regulatory requirements and available for supporting future growth. The Company's level of capital can be measured by its average shareholders' equity to average assets ratio of 9.77% and its ratio of shareholders' equity to assets of 9.79% at March 31, 2001. Inflation --------- Inflation impacts the growth in total assets in the banking industry and causes a need to increase equity capital at higher than normal rates to meet capital adequacy requirements. The Company copes with the effects of inflation through effectively managing its interest rate sensitivity gap position, by periodically reviewing and adjusting its pricing of services to consider current costs, and through managing its dividend payout policy relative to its level of net income. The impact of inflation has been minimal to the Company in recent years. 16 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Year 2000 --------- The Year 2000 issue refers generally to the data structure problem that prevents systems from properly recognizing dates after the year 1999. Even if the systems that process date-sensitive data are Year 2000 compliant, a Year 2000 problem may exist to the extent that the data that such systems process is not. In addition to evaluating the Year 2000 issues relative to its own systems, companies must also assess the ability of the third parties upon which they rely to function on January 1, 2000, and thereafter. Overall, the Company's Year 2000 program was successful. No disruption of business occurred due to the Year 2000 issue. However, there are several dates that have been and will be closely monitored for the coming year and in the future. All software and computer related components will continue to be required to undergo Year 2000 testing and/or certification. ITEM 3 - MARKET RISK DISCLOSURE The information called for concerning market risk of the Company is not included as there have not been any significant changes in the market rate table as shown in the Company's 2000 Annual Report filed on Form 10-K. PART II. OTHER INFORMATION Item 6. Exhibits and Report on Form 8-K (a) Exhibits The following exhibits are attached: Exhibit 11 Computation of Per Share Earnings (b) There were no reports filed on Form 8-K for the quarter ended March 31, 2001. 17 Signatures 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. Century South Banks, Inc. DATE: April 30, 2001 By: /s/ Joseph W. Evans -------------- ------------------------ Joseph W. Evans President and Chief Executive Officer DATE: April 30, 2001 By: /s/ Stephen W. Doughty -------------- ------------------------ Stephen W. Doughty Chief Risk Management Officer and Chief Financial Officer 18

CENTURY SOUTH BANKS INC 10-Q