Edgar Filing: COMMUNITY CAPITAL BANCSHARES INC

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB

(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For fiscal year ended DECEMBER 31, 2003
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[X] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the transition period from ___________ to ____________

Commission file number 000-25345
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COMMUNITY CAPITAL BANCSHARES, INC.
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(Name of Small Business Issuer in Its Charter)

GEORGIA 58-2413468
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

2815 MEREDYTH DRIVE, ALBANY, GEORGIA 31707
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(Address of Principal Executive Offices) (Zip Code)

(229) 446-2265
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(Issuer's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR
VALUE $1.00

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 past 90 days. Yes X No
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Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year: $8,333,000.

Aggregate market value of the voting stock held by non-affiliates computed by
reference to the price at which the stock was sold, or the average bid and asked
prices of such stock, as of a specified date within the past 60 days: THE
AGGREGATE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK HELD BY NON-AFFILIATES
AS OF MARCH 11, 2004 WAS 1,202,361. THE AGGREGATE MARKET VALUE OF THESE SHARES
AS OF MARCH 11, 2004 WAS $15,005,000 BASED ON THE NASDAQ SMALLCAP MARKET CLOSING
PRICE OF $12.48 ON MARCH 11, 2004.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 1,677,422 AS OF MARCH 15,
2004.

Transitional Small Business Disclosure format (check one): Yes No X
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DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the fiscal year ended December
31, 2003, are incorporated by reference into Parts I and II. Portions of the
Proxy Statement for the Annual Meeting of Shareholders, scheduled to be held
April 26, 2004, are incorporated by reference into Part III.

TABLE OF CONTENTS

PAGE
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PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 1. DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 1
ITEM 2. DESCRIPTION OF PROPERTIES . . . . . . . . . . . . . . . . . . . .15
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . .15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . .15

PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . .15
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . .16
ITEM 7. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . .16
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . .16
ITEM 8A. CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . 16

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT. . . . . . . . . . . . . . . . . . . . . . . . . . .17
ITEM 10. EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . .17
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . .17
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . .20
ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K . . . . . . . . . . . . .20
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. . . . . . . . . . . . . .21

PART I

ITEM 1. DESCRIPTION OF BUSINESS

COMMUNITY CAPITAL

Community Capital Bancshares, Inc. was incorporated as a Georgia business
corporation on August 19, 1998, to serve as a bank holding company for Albany
Bank & Trust, N.A. Albany Bank & Trust began operations in April 1999 and is
the sole subsidiary of Community Capital. On November 13, 2003, the Company
acquired First Bank of Dothan.

Community Capital's principal business is the ownership and management of
its subsidiary banks. Community Capital was organized to facilitate Albany Bank
& Trust's ability to serve its customers' requirements for financial services.
The holding company structure provided the flexibility for expansion of
Community Capital's banking business through the acquisition of other financial
institutions and the provision of additional capital to these subsidiaries. For
example, we may assist the subsidiaries in maintaining their required capital
ratios by borrowing money and contributing the proceeds of that debt to the
subsidiary as primary capital.

SUBSIDIARY BANKING OPERATIONS

GENERAL

Albany Bank & Trust was chartered as a national bank under the laws of the
United States and began business as a full-service commercial bank on April 28,
1999. First Bank of Dothan was acquired by the Company on November 13, 2003,
and is charted under the laws of the State of Alabama. Since the acquisition,
the Company has attempted to manage First Bank of Dothan as a community bank
emphasizing prompt, personalized service to its customers, and to instill its
overall sales and service culture to the directors and employees of First Bank
of Dothan. The banks' lending services include consumer loans to individuals,
commercial loans to small- to medium-sized businesses and professional concerns
and real estate-related loans. The banks offers a broad array of competitively
priced deposit services including demand deposits, regular savings accounts,
money market deposits, certificates of deposit and individual retirement
accounts. To complement our lending and deposit services, we also provide cash
management services, safe-deposit boxes, travelers checks, direct deposit,
automatic drafts, and courier services to commercial customers. We offer our
services through a variety of delivery systems including our three full service
locations, one loan production office, automated teller machines, telephone
banking, and Internet banking.

PHILOSOPHY

The banks operate as community banks emphasizing prompt, personalized
customer service to the residents and businesses located in Dougherty and Lee
Counties, Georgia and Houston County, Alabama. We strive to provide responsive
delivery of quality products and services to business customers and
competitively priced consumer products to individual customers seeking a higher
level of personalized service than that provided by larger regional banks. We
have adopted this philosophy in order to attract customers and acquire market
share controlled by other financial institutions in these market areas. We
believe that Albany Bank & Trust and First Bank of Dothan offer residents in
their market areas the benefits associated with a locally owned and managed
bank. The banks' active call program allows its officers and directors to
promote the banks by personally describing the products, services and philosophy
of the banks to both existing customers and new business prospects. In
addition, the chief executive officer, chief lending officer and chief financial
officer of Albany Bank & Trust have

substantial banking experience in Dougherty and Lee Counties, which facilitates
Albany Bank & Trust's efforts to provide products and services designed to meet
the needs of our customer base. Albany Bank & Trust's directors are active
members of the business communities in Albany and around Dougherty and Lee
Counties, and their continued active community involvement provides them with an
opportunity to promote Albany Bank & Trust and its products and services.

MARKET AREAS AND COMPETITION

Albany Bank & Trust is located in Albany, Georgia, and its primary market
area is the ten-mile radius surrounding its main office. Albany Bank & Trust
draws a majority of its business from its primary market area which includes the
majority of Dougherty County and the Southern portion of Lee County. Albany
Bank & Trust competes for deposits and loan customers with other financial
institutions whose resources are equal to or greater than those available to
Albany Bank & Trust and Community Capital. According to information provided by
the FDIC, as of June 30, 2003, Dougherty County was served by ten commercial
banks with a total of 29 offices in Dougherty County. As of June 30, 2003, the
total deposits within Dougherty County for these institutions was approximately
$1.15 billion, of which approximately $94.1 million was held by Albany Bank &
Trust. At December 31, 2003, Albany Bank & Trust's total deposits were $99
million. We believe our local ownership and management as well as our focus on
personalized service helps us to compete with these institutions and to attract
deposits and loans in our market area.

First Bank of Dothan is located in Dothan, Alabama. Its primary market area
is the ten-mile radius surrounding its office. First Bank of Dothan draws a
majority of its business from its primary market area of Houston County.
According to information provided by the FDIC, as of June 30, 2003, Houston
County was served by 12 commercial banks with a total of 35 offices in Houston
County. As of June 30, 2003, the total deposits within Houston County for these
institutions was approximately 1.29 billion, of which approximately $23.2
million were held by First Bank of Dothan. At December 31, 2003, First Bank of
Dothan's total deposits were $24.3 million. Like Albany Bank & Trust, First Bank
of Dothan must compete with the larger institutions by promoting prompt,
personalized service to its customers.

LOAN PORTFOLIOS

LENDING POLICY. The subsidiary banks aggressively seek creditworthy loans
within a limited geographic area. The banks' primary lending functions include
consumer loans to individuals and commercial loans to small- and medium-sized
businesses and professional concerns. In addition, they make real
estate-related loans, including construction loans for residential and
commercial properties, and primary and secondary mortgage loans for the
acquisition or improvement of personal residences. The overall policy is to
avoid concentrations of loans to a single industry or based on a single type of
collateral.

REAL ESTATE LOANS. The banks make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include commercial loans where they take a security interest in real
estate out of an abundance of caution and not as the principal collateral for
the loan, but exclude home equity loans, which are classified as consumer loans.

- COMMERCIAL REAL ESTATE. Commercial real estate loan terms generally
are limited to five years or less, although payments may be structured
on a longer amortization basis. Interest rates may be fixed or
adjustable, but generally are not fixed for a period exceeding 60
months. Albany Bank & Trust and First Bank of Dothan normally charge
an origination fee on these loans. We attempt to reduce credit risk on
our commercial real estate loans by emphasizing loans on
owner-occupied office and retail buildings where the ratio of the loan

principal to the value of the collateral as established by independent
appraisal does not exceed 80% and net projected cash flow available
for debt service equals 120% of the debt service requirement. In
addition, from time to time the banks require personal guarantees from
the principal owners of the property supported by a review of the
principal owners' personal financial statements. Risks associated with
commercial real estate loans include fluctuations in the value of real
estate, new job creation trends, tenant vacancy rates and the quality
of the borrower's management. Community Capital attempts to limit its
risk by analyzing borrowers' cash flow and collateral value on an
ongoing basis.

- CONSTRUCTION AND DEVELOPMENT LOANS. Construction and development loans
are made both on a pre-sold and speculative basis. If the borrower has
entered into an agreement to sell the property prior to beginning
construction, then the loan is considered to be on a pre-sold basis.
If the borrower has not entered into an agreement to sell the property
prior to beginning construction, then the loan is considered to be on
a speculative basis. Construction and development loans are generally
made with a term of nine months and interest is paid quarterly. The
ratio of the loan principal to the value of the collateral as
established by independent appraisal generally does not exceed 80%.
Speculative loans are based on the borrower's financial strength and
cash flow position. Loan proceeds are disbursed based on the
percentage of completion and only after the project has been inspected
by an experienced construction lender or appraiser. Risks associated
with construction loans include fluctuations in the value of real
estate and new job creation trends.

- RESIDENTIAL REAL ESTATE. The banks' residential real estate loans
consist of residential first and second mortgage loans and residential
construction loans. We offer fixed and variable rates on our mortgages
with the amortization of first mortgages generally not to exceed 15
years and the rates not to be fixed for over 60 months. These loans
are made consistent with the banks' appraisal policies and with the
ratio of the loan principal to the value of collateral as established
by independent appraisal not to exceed 90%. We believe these loan to
value ratios are sufficient to compensate for fluctuations in real
estate market value and to minimize losses that could result from a
downturn in the residential real estate market.

The banks also offer conventional mortgages to their customers. These
loans are pre-qualified for sale in the secondary market prior to
closing. These loans are not retained on the banks' books. The banks
retain a portion of the closing costs and fees as compensation for
originating the loan.

COMMERCIAL LOANS. Loans for commercial purposes in various lines of
businesses are one of the primary components of our loan portfolios. The terms
of these loans vary by purpose and by type of underlying collateral, if any. The
banks typically make equipment loans for a term of five years or less at fixed
or variable rates, with the loan fully amortized over the term. Equipment loans
generally are secured by the financed equipment, and the ratio of the loan
principal to the value of the financed equipment or other collateral is
generally 80% or less. Loans to support working capital typically have terms not
exceeding one year and usually are secured by accounts receivable, inventory or
personal guarantees of the principals of the business. For loans secured by
accounts receivable or inventory, principal is typically repaid as the assets
securing the loan are converted into cash, and for loans secured with other
types of collateral, principal is typically due at maturity. The quality of the
commercial borrower's management and its ability both to evaluate properly
changes in the supply and demand characteristics affecting its markets for
products and services and to respond effectively to such changes are significant
factors in a commercial borrower's creditworthiness.

CONSUMER LOANS. Albany Bank & Trust and First Bank of Dothan make a variety
of loans to individuals for personal, family and household purposes, including
secured and unsecured installment

and term loans, home equity loans and lines of credit. Consumer loan repayments
depend upon the borrower's financial stability and are more likely to be
adversely affected by divorce, job loss, illness and personal hardships. Because
many consumer loans are secured by depreciable assets such as boats, cars, and
trailers the loan should be amortized over the useful life of the asset. To
minimize the risk that the borrower cannot afford the monthly payments, all
fixed monthly obligations should not exceed 38% of the borrower's gross monthly
income. The borrower should also be employed for at least 12 months prior to
obtaining the loan. The loan officer reviews the borrower's past credit history,
past income level, debt history and, when applicable, cash flow and determines
the impact of all these factors on the ability of the borrower to make future
payments as agreed.

INVESTMENTS. In addition to loans, the banks make other investments
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States, other taxable securities and other
obligations of states and municipalities. As of December 31, 2003, investment
securities comprised approximately 20% of the Company's assets, with net loans
comprising approximately 69%. Both subsidiary banks also engage in Federal
funds transactions with their principal correspondent banks and primarily acts
as a net seller of funds. The sale of Federal funds amounts to a short-term
loan from the subsidiary bank to another bank.

Community Capital's investment policy specifies that the investment
portfolio's primary objective is to assist in the management of the bank's asset
/ liability management. Investment purchases are used to maximize the return on
available funds while matching investment maturities with maturities of interest
bearing liabilities. Under the policy, the subsidiary banks may invest in U.S.
Government, federal agency, municipal and corporate bonds. Rated bonds must be
rated "BAA" or higher and in-state bonds must be "A" or higher. Purchases of
non-rated out-of-state municipal bonds are prohibited. Other bonds may be
purchased after an evaluation of the creditworthiness of the issuer. These
investment securities are kept in safekeeping accounts at correspondent banks.
While the sale of investment securities is permitted to improve quality of
yields or to restructure the portfolio, the investment officer is prohibited
from maintaining a trading account or speculation in bonds on behalf of the
subsidiary banks.

All purchases and sales are reviewed by the individual subsidiary bank's
Board of Directors on a monthly basis. The Asset and Liability Management
Committee implements the investment policy and reviews it on an annual basis.

DEPOSITS. Albany Bank & Trust and First Bank of Dothan offer a wide range
of commercial and consumer deposit accounts, including checking accounts, money
market accounts, a variety of certificates of deposit, and individual retirement
accounts. The primary sources of deposits are residents of, and businesses and
their employees located in, our primary market areas. Deposits are obtained
through personal solicitation by officers and directors, direct mail
solicitations and advertisements published in the local media. To attract
deposits the subsidiary banks offer a broad line of competitively priced deposit
products and services.

FINANCIAL SERVICES. Albany Bank & Trust offers customers a variety of
non-deposit investment products such as trust services, stocks, mutual funds and
annuities that are not FDIC insured. These products give customers an
opportunity to diversify their holdings. Primary sources of customers are
residents of the Albany Bank & Trust market area.

OTHER BANKING SERVICES. Community Capital's other banking services include
ATM and MasterCard check cards, direct deposit, travelers checks, cash
management services, courier service for commercial customers, bank-by-mail,
bank-by-telephone, Internet banking, wire transfer of funds, night depositories
and safe deposit boxes.

ASSET AND LIABILITY MANAGEMENT. The Asset and Liability Management
Committee manages the Community Capital's assets and liabilities and strives to
provide an optimum and stable net interest margin, a profitable after-tax return
on assets and return on equity and adequate liquidity. The committee conducts
these management functions within the framework of written loan and investment
policies that the subsidiary banks have adopted. The committee attempts to
maintain a balanced position between rate sensitive assets and rate sensitive
liabilities. Specifically, it charts assets and liabilities on a matrix by
maturity, effective duration and interest adjustment period and attempts to
manage any gaps in maturity ranges.

EMPLOYEES

At December 31, 2003, Community Capital and its subsidiaries employed 60
full-time employees and 5 part-time employees. Community Capital considers its
relationship with its employees to be excellent.

SUPERVISION AND REGULATION

Community Capital and its banking subsidiaries, Albany Bank & Trust and
First Bank of Dothan, are subject to extensive state and federal banking
regulations that impose restrictions on and provide for general regulatory
oversight of their operations. These laws are generally intended to protect
depositors and not shareholders. The following discussion describes the
material elements of the regulatory framework that applies to us.

COMMUNITY CAPITAL

Community Capital is a bank holding company under the federal Bank Holding
Company Act of 1956 and, as a result, is primarily subject to the supervision,
examination, and reporting requirements of the Bank Holding Company Act and the
regulations of the Federal Reserve.

ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank
holding company to obtain the Federal Reserve's prior approval before:

- Acquiring direct or indirect ownership or control of any voting shares
of any bank if, after the acquisition, the bank holding company will
directly or indirectly own or control more than 5% of the bank's
voting shares;

- Acquiring all or substantially all of the assets of any bank; or

- Merging or consolidating with any other bank holding company.

Additionally, the Bank Holding Company Act provides that the Federal
Reserve may not approve any of these transactions if it would result in or tend
to create a monopoly or, substantially lessen competition or otherwise function
as a restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is
also required to consider the financial and managerial resources and future
prospects of the bank holding companies and banks concerned and the convenience
and needs of the community to be served. The Federal Reserve's consideration of
financial resources generally focuses on capital adequacy, which is discussed
below.

Under the Bank Holding Company Act, if adequately capitalized and
adequately managed, Community Capital or any other bank holding company located
in Georgia or Alabama may purchase a bank located outside Georgia or Alabama.
Conversely, an adequately capitalized and adequately managed bank holding
company located outside Georgia or Alabama may

purchase a bank located inside Georgia or Alabama. In each case, however,
restrictions may be placed on the acquisition of a bank that has only been in
existence for a limited amount of time or will result in specified
concentrations of deposits. For example, Georgia law prohibits a bank holding
company from acquiring control of a financial institution until the target
financial institution has been incorporated for three years. Alabama law
prohibits a bank holding company from acquiring control of a financial
institution until the target financial institution has been incorporated for
five years. These limitations do not apply to our banking subsidiaries because
they have been in existence for the applicable time periods.

CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is rebuttably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:

- The bank holding company has registered securities under Section 12 of
the Securities Act of 1934; or

- No other person owns a greater percentage of that class of voting
securities immediately after the transaction.

Our common stock is registered under the Securities Exchange Act of 1934.
The regulations provide a procedure for challenging the rebuttable presumption
of control.

PERMITTED ACTIVITIES. Bank holding companies are generally prohibited
under the Bank Holding Company Act, from engaging in or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
any activity other than:

- Banking or managing or controlling banks; and

- An activity that the Federal Reserve determines to be so closely
related to banking as to be a proper incident to the business of
banking.

Activities that the Federal Reserve has found to be so closely related to
banking as to be a proper incident to the business of banking include:

- Factoring accounts receivable;

- Making, acquiring, brokering or servicing loans and usual related
activities;

- Leasing personal or real property;

- Operating a non-bank depository institution, such as a savings
association;

- Trust company functions;

- Financial and investment advisory activities;

- Conducting discount securities brokerage activities;

- Underwriting and dealing in government obligations and money market
instruments;

- Providing specified management consulting and counseling activities;

- Performing selected data processing services and support services;

- Acting as agent or broker in selling credit life insurance and other
types of insurance in connection with credit transactions; and

- Performing selected insurance underwriting activities.

Despite prior approval, the Federal Reserve may order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its ownership or control of any subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
it or any of its bank subsidiaries.

Generally, if Community Capital qualifies and elects to become a financial
holding company, it may engage in activities that are financial in nature or
incidental or complementary to financial activity. The Bank Holding Company Act
expressly lists the following activities as financial in nature:

- Lending, trust and other banking activities;

- Insuring, guaranteeing, or indemnifying against loss or harm, or
providing and issuing annuities, and acting as principal, agent, or
broker for these purposes, in any state;

- Providing financial, investment, or advisory services;

- Issuing or selling instruments representing interests in pools of
assets permissible for a bank to hold directly;

- Underwriting, dealing in or making a market in securities;

- Other activities that the Federal Reserve may determine to be so
closely related to banking or managing or controlling banks as to be a
proper incident to managing or controlling banks;

- Foreign activities permitted outside of the United States if the
Federal Reserve has determined them to be usual in connection with
banking operations abroad;

- Merchant banking through securities or insurance affiliates; and

- Insurance company portfolio investments.

To qualify to become a financial holding company, each depository
institution subsidiary of Community Capital must be well capitalized and well
managed and must have a Community Reinvestment Act rating of at least
satisfactory. Additionally, Community Capital must file and election with the
Federal Reserve to become a financial holding company and must provide the
Federal Reserve with 30 days' written notice prior to engaging in a permitted
financial activity. Although we are eligible to elect to become a financial
holding company, we currently have no plans to make such an election.

SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy, Community
Capital is expected to act as a source of financial strength its banking
subsidiaries and to commit resources to support the banks. This support may be
required at times when, without this Federal Reserve policy, Community Capital
might not be inclined to provide it. In addition, any capital loans made by
Community Capital to its banking subsidiaries will be repaid only after its
deposits and various other obligations are repaid in full. In the unlikely event
of Community Capital's bankruptcy, any commitment by it to a federal bank
regulatory agency to maintain the capital of Albany Bank & Trust or First Bank
of Dothan will be assumed by the bankruptcy trustee and entitled to a priority
of payment.

OUR BANKING SUBSIDIARIES

Since Albany Bank & Trust is chartered as a national bank, it is primarily
subject to the supervision, examination and reporting requirements of the
National Bank Act and the regulations of the Office of the Comptroller of the
Currency. The Office of the Comptroller of the Currency regularly examines
Albany Bank & Trust's operations and has the authority to approve or disapprove
mergers, the establishment of branches and similar corporate actions. The
Office of the Comptroller of the Currency also has the power to prevent the
continuance or development of unsafe or unsound banking practices or other
violations of law.

Since First Bank of Dothan is chartered under the laws of the State of
Alabama, it is primarily subject to the supervision, examination and reporting
requirements of the FDIC and the Alabama State Banking Department. The FDIC and
Alabama State Banking Department regularly examine First Bank of Dothan's
operations and have the authority to approve or disapprove mergers, the
establishment of branches and similar corporate actions. Both regulatory
agencies have the power to prevent the continuance or development of unsafe or
unsound banking practices or other violations of law.

Additionally, Albany Bank & Trust's and First Bank of Dothan's deposits are
insured by the FDIC to the maximum extent provided by law. The banks are also
subject to numerous state and federal statutes and regulations that affect their
business, activities and operations.

BRANCHING. National banks are required by the National Bank Act to adhere
to branching laws applicable to state banks in the states in which they are
located. Under current Georgia law, Albany Bank & Trust may open branch offices
throughout Georgia with the prior approval of the Office of the Comptroller of
the Currency. In addition, with prior regulatory approval, Albany Bank & Trust
may acquire branches of existing banks located in Georgia. Albany Bank & Trust
and any other national or state-chartered bank generally may branch across state
lines by merging with banks in other states if allowed by the applicable states'
laws. Georgia law, with limited exceptions, currently permits branching across
state lines through interstate mergers.

Under current Alabama law, First Bank of Dothan may open branch offices
throughout Alabama with the prior approval of the Alabama State Banking
Department. In addition, with prior regulatory approval, First Bank of Dothan
may acquire branches of existing banks located in Alabama. First Bank of Dothan
and any other national or state-chartered bank generally may branch across state
lines by merging with banks in other states if allowed by the applicable states'
laws. Alabama law, with limited exceptions, currently permits branching across
state lines through interstate mergers.

Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, neither Georgia nor Alabama has opted-in to this
provision. Therefore, interstate merger is the only method through which a bank
located outside of these states may branch into either of these states. This
provides a limited barrier of entry into the Georgia and Alabama banking
markets, which protects us from an important segment of potential competition.
However, because Georgia and Alabama have elected not to opt-in, our ability to
establish a new start-up branch in another state may be limited. Many states
that have elected to opt-in have done so on a reciprocal basis, meaning that an
out-of-state bank may establish a new start-up branch only if their home state
has also elected to opt-in. Consequently, until Georgia or Alabama changes its
election, the only way we will be able to branch into states that have elected
to opt-in on a reciprocal basis will be through interstate merger.

PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation
Improvement Act of 1991 establishes a system of prompt corrective action to
resolve the problems of undercapitalized

financial institutions. Under this system, the federal banking regulators have
established five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) in which all institutions are placed. Federal banking
regulators are required to take various mandatory supervisory actions and are
authorized to take other discretionary actions with respect to institutions in
the three undercapitalized categories. The severity of the action depends upon
the capital category in which the institution is placed. Generally, subject to a
narrow exception, the banking regulator must appoint a receiver or conservator
for an institution that is critically undercapitalized. The federal banking
agencies have specified by regulation the relevant capital level for each
category. At December 31, 2003, we qualified for the well-capitalized category.

An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to various limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets at the
time it became undercapitalized or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making acquisitions,
establishing any branches or engaging in any new line of business, except under
an accepted capital restoration plan or with FDIC approval. The regulations also
establish procedures for downgrading an institution to a lower capital category
based on supervisory factors other than capital.

FDIC INSURANCE ASSESSMENTS. The FDIC has adopted a risk-based assessment
system for insured depository institutions that takes into account the risks
attributable to different categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (1) well capitalized; (2) adequately capitalized; and (3)
undercapitalized. These three categories are substantially similar to the
prompt corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 1.54 cents per $100 of
deposits for the first quarter of 2004.

The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.

COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate-income neighborhoods. These facts are also considered in
evaluating mergers, acquisitions, and applications to open a branch or facility.
Failure to adequately meet these criteria could impose additional requirements
and limitations on Albany Bank & Trust. Since our aggregate assets are not more
than $250 million, under the Gramm-Leach-Bliley Act, we are subject to a
Community Reinvestment Act examination only once every 60 months if we receive
an "outstanding" rating, once every 48 months if we receive a "satisfactory"
rating and as needed if our rating is "less than satisfactory." Additionally,
we must publicly disclose the terms of various Community Reinvestment
Act-related agreements.

OTHER REGULATIONS. Interest and other charges collected or contracted for
by Albany Bank & Trust and First Bank of Dothan are subject to state usury laws
and federal laws concerning interest rates. For example, under the Soldiers' and
Sailors' Civil Relief Act of 1940, a lender is generally prohibited from
charging an annual interest rate in excess of 6% on any obligation for which the
borrower is a person on active duty with the United States military. Albany Bank
& Trust's and First Bank of Dothan's loan operations are also subject to federal
laws applicable to credit transactions, such as the:

- federal Truth-In-Lending Act, governing disclosures of credit terms to
consumer borrowers;

- Home Mortgage Disclosure Act of 1975, requiring financial institutions
to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligation
to help meet the housing needs of the community it serves;

- Equal Credit Opportunity Act, prohibiting discrimination on the basis
of race, creed or other prohibited factors in extending credit;

- Fair Credit Reporting Act of 1978, governing the use and provision of
information to credit reporting agencies;

- Fair Debt Collection Act, governing the manner in which consumer debts
may be collected by collection agencies;

- Soldiers' and Sailors' Civil Relief Act of 1940, governing the
repayment terms of, and property rights underlying, secured
obligations of persons in military service; and

- rules and regulations of the various federal agencies charged with the
responsibility of implementing these federal laws.

In addition to the federal and state laws noted above, the Georgia Fair
Lending Act ("GAFLA") imposes restrictions and procedural requirements on most
mortgage loans made in Georgia, including home equity loans and lines of credit.
On August 5, 2003, the Office of the Comptroller of the Currency issued a formal
opinion stating that the entirety of GAFLA is preempted by federal law for
national banks and their operating subsidiaries. As a result, Albany Bank &
Trust is exempt from the requirements of GAFLA. GAFLA contains a provision that
preempts GAFLA as to state banks in the event that the Office of the Comptroller
of the Currency preempts GAFLA as to national banks. Therefore, First Bank of
Dothan is also exempt from the requirements of GAFLA.

The deposit operations of Albany Bank & Trust and First Bank of Dothan are
subject to:

- The Right to Financial Privacy Act, which imposes a duty to maintain
confidentiality of consumer financial records and prescribes
procedures for complying with administrative subpoenas of financial
records; and

- The Electronic Funds Transfer Act and Regulation E issued by the
Federal Reserve to implement that act, which govern automatic deposits
to and withdrawals from deposit accounts and customers' rights and
liabilities arising from the use of automated teller machines and
other electronic banking services.

CAPITAL ADEQUACY

Community Capital, Albany Bank & Trust and First Bank of Dothan are
required to comply with the capital adequacy standards established by the
Federal Reserve, in the case of Community Capital, the Office of the Comptroller
of the Currency, in the case of Albany Bank & Trust, and the FDIC, in the case

of First Bank of Dothan. The Federal Reserve has established a risk-based and a
leverage measure of capital adequacy for bank holding companies. Albany Bank &
Trust and First Bank of Dothan are subject to risk-based and leverage capital
requirements adopted by the Office of the Comptroller of the Currency and the
FDIC, respectively, which are substantially similar to those adopted by the
Federal Reserve for bank holding companies.

The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items,
such as letters of credit and unfunded loan commitments, are assigned to broad
risk categories, each with appropriate risk weights. The resulting capital
ratios represent capital as a percentage of total risk-weighted assets and
off-balance-sheet items.

The minimum guideline for the ratio of total capital to risk-weighted
assets is 8%. Total capital consists of two components, Tier 1 Capital and Tier
2 Capital. Tier 1 Capital generally consists of common stock, minority
interests in the equity accounts of consolidated subsidiaries, noncumulative
perpetual preferred stock, and a limited amount of qualifying cumulative
perpetual preferred stock, less goodwill and other specified intangible assets.
Tier 1 Capital must equal at least 4% of risk-weighted assets. Tier 2 Capital
generally consists of subordinated debt, other preferred stock, and a limited
amount of loan loss reserves. The total amount of Tier 2 Capital is limited to
100% of Tier 1 Capital. At December 31, 2003 our ratio of total capital to
risk-weighted assets was 14.34% and our ratio of Tier 1 Capital to risk-weighted
assets was 11.96%.

In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. At December 31, 2003, our leverage ratio was 7.89%. The guidelines
also provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without reliance on intangible assets. The
Federal Reserve considers the leverage ratio and other indicators of capital
strength in evaluating proposals for expansion or new activities.

Failure to meet capital guidelines could subject a bank or bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and certain other restrictions on its business. As
described above, significant additional restrictions can be imposed on
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "-Prompt Corrective Action."

PAYMENT OF DIVIDENDS

Community Capital is a legal entity separate and distinct from Albany Bank
& Trust and First Bank of Dothan. The principal sources of Community Capital's
cash flow, including cash flow to pay dividends to its shareholders, are
dividends that Albany Bank & Trust and First Bank of Dothan pay to their sole
shareholder, Community Capital. Statutory and regulatory limitations apply to
Albany Bank & Trust's and First Bank of Dothan's payment of dividends to
Community Capital as well as to Community Capital's payment of dividends to its
shareholders.

Albany Bank & Trust is required by federal law to obtain prior approval of
the Office of the Comptroller of the Currency for payments of dividends if the
total of all dividends declared by our board of directors in any year will
exceed (1) the total of Albany Bank & Trust's net profits for that year, plus
(2) Albany Bank & Trust's retained net profits of the preceding two years, less
any required transfers to surplus.

First Bank of Dothan may not declare or pay a dividend in excess of 90% of
its net earnings until First Bank of Dothan's surplus is equal to 20% of its
capital. First Bank of Dothan is also required by state law to obtain prior
approval of the Alabama State Banking Department for payments of dividends if
the total of all dividends in any year will exceed (1) the total of First Bank
of Dothan's net earnings for that year, plus (2) First Bank of Dothan's retained
net earnings for the preceding two years, less any required transfers to
surplus.

The payment of dividends by Community Capital, Albany Bank & Trust and
First Bank of Dothan may also be affected by other factors, such as the
requirement to maintain adequate capital above regulatory guidelines. If, in the
opinion of its federal bank regulatory agency, Albany Bank & Trust or First Bank
and Dothan were engaged in or about to engage in an unsafe or unsound practice,
the federal bank regulatory agency could require, after notice and a hearing,
that the bank stop or refrain engaging in the practice. The federal bank
regulatory agencies have indicated that paying dividends that deplete a
depository institution's capital base to an inadequate level would be an unsafe
and unsound banking practice. Under the Federal Deposit Insurance Corporation
Improvement Act of 1991, a depository institution may not pay any dividend if
payment would cause it to become undercapitalized or if it already is
undercapitalized. Moreover, the federal agencies have issued policy statements
that provide that bank holding companies and insured banks should generally only
pay dividends out of current operating earnings. See "-Prompt Corrective Action"
above.

RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES

Community Capital, Albany Bank & Trust and First Bank and Dothan are
subject to the provisions of Section 23A of the Federal Reserve Act. Section
23A places limits on the amount of:

- A bank's loans or extensions of credit to affiliates;

- A bank's investment in affiliates;

- Assets a bank may purchase from affiliates, except for real and
personal property exempted by the Federal Reserve;

- Loans or extensions of credit to third parties collateralized by the
securities or obligations of affiliates; and

- A bank's guarantee, acceptance or letter of credit issued on behalf of
an affiliate.

The total amount of the above transactions is limited in amount, as to any
one affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus. In addition to the limitation
on the amount of these transactions, each of the above transactions must also
meet specified collateral requirements. Albany Bank & Trust and First Bank of
Dothan must also comply with other provisions designed to avoid the taking of
low-quality assets.

Community Capital, Albany Bank & Trust and First Bank of Dothan are also
subject to the provisions of Section 23B of the Federal Reserve Act which, among
other things, prohibit an institution from engaging in the above transactions
with affiliates unless the transactions are on terms substantially the same, or
at least as favorable to the institution or its subsidiaries, as those
prevailing at the time for comparable transactions with nonaffiliated companies.

Albany Bank & Trust and First Bank of Dothan are also subject to
restrictions on extensions of credit to its executive officers, directors,
principal shareholders and their related interests. These extensions of credit
(1) must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
third parties, and (2) must not involve more than the normal risk of repayment
or present other unfavorable features.

PRIVACY

Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing nonpublic personal financial
information with nonaffiliated third parties except under narrow circumstances,
such as the processing of transactions requested by the consumer or when the
financial institution is jointly sponsoring a product or service with a
nonaffiliated third party. Additionally, financial institutions generally may
not disclose consumer account numbers to any nonaffiliated third party for use
in telemarketing, direct mail marketing or other marketing to consumers.

CONSUMER CREDIT REPORTING

On December 4, 2003, the President signed the Fair and Accurate Credit
Transactions Act (the FAIR Act), amending the federal Fair Credit Reporting Act
(the FCRA). These amendments to the FCRA (the FCRA Amendments) will become
effective as early as February 2004, but more likely in the third or fourth
quarter of 2004, depending on implementing regulations to be issued by the
Federal Trade Commission and the federal bank regulatory agencies.

The FCRA Amendments include, among other things:

- new requirements for financial institutions to develop policies
and procedures to identify potential identity theft and, upon the
request of a consumer, place a fraud alert in the consumer's
credit file stating that the consumer may be the victim of
identity theft or other fraud;

- new consumer notice requirements for lenders that use consumer
report information in connection with risk-based credit pricing
programs;

- for entities that furnish information to consumer reporting
agencies (which includes our banking subsidiaries) , new
requirements to implement procedures and policies regarding the
accuracy and integrity of the furnished information, and
regarding the correction of previously furnished information that
is later determined to be inaccurate; and

- a new requirement for mortgage lenders to disclose credit scores
to consumers.

Prior to the effective date of the FCRA Amendments, Community Capital and
its affected subsidiaries will implement policies and procedures to comply with
the new rules.

The FCRA Amendments also will prohibit a business that receives consumer
information from an affiliate from using that information for marketing purposes
unless the consumer is first provided a notice and an opportunity to direct the
business not to use the information for such marketing purposes (the "opt-out"),
subject to certain exceptions. Community Capital and its subsidiaries also will
implement procedures to comply with these new rules prior to the effective date
of the rules. We do not plan to share consumer information among our affiliated
companies for marketing purposes, except as

may be allowed under exceptions to the notice and opt-out requirements. This
will limit the Community Capital's cross-marketing possibilities as compared to
prior years.

ANTI-TERRORISM LEGISLATION

The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, signed
by the President on October 26, 2001, imposed new requirements and limitations
on specified financial transactions and account relationships, intended to guard
against money laundering and terrorism. Most of these requirements and
limitations took effect in 2002. Additional "know your customer" rules became
effective in June 2003, requiring our banking subsidiaries to establish a
customer identification program under Section 326 of the USA PATRIOT Act.
Community Capital and its subsidiaries implemented procedures and policies to
comply with those rules prior to the effective date of each of the rules.

PROPOSED LEGISLATION AND REGULATORY ACTION

New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of financial institutions operating and doing business in the
United States. We cannot predict whether or in what form any proposed
regulation or statute will be adopted or the extent to which our business may be
affected by any new regulation or statute.

EFFECT OF GOVERNMENTAL MONETARY POLICES

Our earnings are affected by domestic economic conditions and the monetary
and fiscal policies of the United States government and its agencies. The
Federal Reserve Bank's monetary policies have had, and are likely to continue to
have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb inflation or combat a recession. The monetary policies of the Federal
Reserve affect the levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of the discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject. We cannot predict the nature or
impact of future changes in monetary and fiscal policies.

SELECTED STATISTICAL INFORMATION

The responses to this section of Item I are included in the Company's
Annual Report to Shareholders under the heading "Selected Information and
Statistical Data" at pages 10 through 16, and are incorporated herein by
reference.

ITEM 2. DESCRIPTION OF PROPERTIES

Community Capital's executive offices and Albany Bank & Trust is located at
2815 Meredyth Drive in Albany, Georgia in Dougherty County. On November 20,
1998, Community Capital purchased approximately two acres of land at 2815
Meredyth Drive at a purchase price of $315,000. Construction of the permanent
bank building was complete in March 2000. The total construction costs for the
building were approximately $1.4 million. The bank building is a two-story,
Colonial style building consisting of approximately 10,700 square feet, four
drive-up widows and one automated teller machine.

First Bank of Dothan is located at 1479 W. Main Street. It is a one story
brick building consisting of approximately 6,000 square feet, three drive-up
windows, one automated teller machine and a night depository.

In 2002, Albany Bank & Trust opened two loan production offices. These
locations provide new accounts, loans, night depository services and ATMs. Both
locations are approximately 1,500 square feet and are leased under five-year
operating leases. In 2003, the Lee County loan production office was upgraded
to a full-service branch. The Company also leases approximately 7,500 square
feet which is used as its operations center under a five-year operating lease.
These offices are located at the following addresses:

Branch Office Loan Production Office Operations Center
------------- ---------------------- -----------------
1533-B Highway 19 S 1529 Moultrie Road 2722 Dawson Road, Suite 1
Leesburg, Georgia 31763 Albany, Georgia 31705 Albany, Georgia 31707

Other than normal real estate commercial lending activities of Albany Bank
& Trust and First Bank of Dotham, Community Capital generally does not invest in
real estate, interests in real estate, real estate mortgages, or securities of
or interests in persons primarily engaged in real estate activities.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which Community Capital
is a party or of which any of its properties are subject; nor are there material
proceedings known to Community Capital to be contemplated by any governmental
authority; nor are there material proceedings known to Community Capital,
pending or contemplated, in which any director, officer or affiliate or any
principal security holder of Community Capital or any associate of any of the
foregoing, is a party or has an interest adverse to Community Capital.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The response to this Item is partially included in Community Capital's
Annual Report to Shareholders at page 49 and is incorporated herein by
reference.

On November 13, 2003, Community Capital acquired First Bank of Dothan
pursuant to the terms of an Agreement and Plan of Merger by and between First
Bank of Dothan and Community Capital. Under the terms of the agreement and as
of November 13, 2003, 150,000 outstanding shares of First Bank of Dothan common
stock were converted into the right to receive an aggregate of 216,000 shares of
Community Capital common stock. Additionally, 100,000 outstanding shares of
First Bank of Dothan common stock were converted into the right to receive cash
equal to $18.72 per share. The shares of Community Capital common stock issued
to First Bank of Dothan shareholders were issued to accredited investors and no
more than 35 unaccredited investors. The shares were issued in a private
placement exempted from registration under Rule 506 of the Securities Act of
1933.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The response to this Item is included in Community Capital's Annual Report
to Shareholders under the heading, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," at pages 1 through 9, and is
incorporated herein by reference.

ITEM 7. FINANCIAL STATEMENTS

The following financial statements are included in Community Capital's
Annual Report to Shareholders at pages 17 through 47, and are incorporated
herein by reference.

- Independent Auditors' Report

- Consolidated balance sheets as of December 31, 2003 and 2002

- Consolidated statements of income for the years ended December 31,
2003 and 2002

- Consolidated statements of comprehensive income for the years ended
December 31, 2003 and 2002

- Consolidated statements of stockholders' equity for the years ended
December 31, 2003 and 2002

- Consolidated statements of cash flows for the years ended December 31,
2003 and 2002

- Notes to consolidated financial statements

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 8A. CONTROLS AND PROCEDURES

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as of the end of
the period covered by this report, our management, including our Chief Executive
Officer and Chief Financial Officer, reviewed and evaluated the effectiveness of
the design and operation of our disclosure controls and procedures under
Exchange Act Rule 13a-15(b). Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that such disclosure controls and
procedures are adequate to ensure that material information relating to the
Company, including its consolidated subsidiaries, that is required to be
included in its periodic filings with the Securities and Exchange Commission, is
timely

made know to them. During the quarter ended December 31, 2003, there were no
changes in the Company's internal controls that materially affected, or are
reasonably likely to materially affect, the Company's control over financial
reporting.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The responses to this Item are included in Community Capital's Proxy
Statement for the Annual Meeting of Shareholders to be held April 26, 2004,
under the following headings, and are incorporated herein by reference.

Proposal One: Election of Directors -Class II Nominated Directors,
-Continuing Class III Directors and -Continuing Class I Directors" at pages
3 through 4;

"Executive Officers," at page 6;

"Section 16(a) Beneficial Ownership Reporting Compliance," at page 11.

The Company has a Code of Ethics that applies to the Company's Chief
Executive Officer and Principal Financial and Accounting Officer. The Company
will provide a copy of the Code of Ethics free of charge to any shareholder upon
written request to the Company.

ITEM 10. EXECUTIVE COMPENSATION

The responses to this Item are included in Community Capital's Proxy
Statement for the Annual Meeting of Shareholders to be held April 26, 2004,
under the heading, "Compensation" at pages 7 through 9, and are incorporated
herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The response to this Item is partially included in Community Capital's
Proxy Statement for the Annual Meeting of Shareholders to be held April 26,
2004, under the headings "Security Ownership of Certain Beneficial Owners," at
pages 9 through 11, and is incorporated herein by reference.

EQUITY COMPENSATION PLANS

The table below sets forth information regarding shares of Community
Capital common stock authorized for issuance under the following Community
Capital equity compensation plans and agreements:

- Community Capital Bancshares, Inc. 1998 Stock Incentive Plan

- Community Capital Bancshares, Inc. 2000 Outside Directors' Stock
Option Plan

- Community Capital Bancshares, Inc. Non-qualified Stock Option
Agreement with Charles M. Jones, III

- Community Capital Bancshares, Inc. Non-qualified Stock Option
Agreement with Richard Bishop

- Community Capital Bancshares, Inc. Restated Employee Stock Purchase
Plan

- Community Capital Bancshares, Inc. Non-qualified Stock option
agreements with David Baranko, David Guillebeau, Paul Joiner, Rosa
Ramsey, and LaDonna Urick.

The Stock Incentive Plan was approved by shareholders on March 11, 1999.
None of the other equity compensation plans or agreements listed above has been
approved by Community Capital's shareholders. Each of those plans or agreements
is described below.

Number of securities
remaining available for
future issuance under
the equity
Number of securities Weighted-average compensation plans
to be issued upon exercise price of (excluding shares
exercise of outstanding outstanding options subject to outstanding
options and warrants and warrants options)
----------------------------------------------------------------------------------------------------------------------

Equity compensation plans approved by security
holders 147,853 8.22 155,721

Equity compensation plans not approved by
security holders 368,872 7.50 12,725

Total 516,725 7.70 168,446

2000 OUTSIDE DIRECTORS' STOCK OPTION PLAN. The 2000 Outside Directors'
Stock Option Plan was adopted by the Board of Directors on April 24, 2000. This
plan is not subject to the Employment Retirement Income Security Act of 1974,
nor is it qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended. The 2000 Outside Directors' Stock Option Plan provides for the
issuance of nonqualified stock options to members of the Board of Directors who
are not employees of Community Capital or any of its affiliates and the Chairman
of the Board of Directors, regardless of whether he is an employee of Community
Capital. Community Capital has reserved up to 21,429 shares of Community
Capital's common stock for issuance under this plan upon exercise of an option.
This number may change in the event of future stock dividends, stock splits,
recapitalizations and similar events. If an option expires or terminates
without being exercised, the shares subject to the unexercised portion of the
option may again be available for awards under the 2000 Outside Directors' Stock
Option Plan. The purpose of this plan is to promote in its non-employee
directors personal interest in the welfare of Community Capital and provide
incentives to the individuals who are primarily responsible for shaping and
carrying out the long-term plans of Community Capital.

The 2000 Outside Directors' Stock Option Plan provides for an annual grant
of an option to purchase 142 shares of Community Capital's common stock to the
existing non-employee directors and an option to purchase 285 shares of
Community Capital's common stock to the Chairman of the Board as of the date of
each annual shareholders' meeting. Options granted pursuant to this plan are
generally nontransferrable except by will or the laws of descent and
distribution unless otherwise permitted by the Board of Directors. These options
are fully vested and exercisable immediately, subject to any restriction imposed
by the primary federal regulator of Community Capital. The exercise price of
these options must be equal to the fair market value of the common stock on the
date the option is granted. The term of the options may not exceed ten years
from the date of grant. If a participant ceases to be a director of Community
Capital or any affiliate, the options expire, terminate and become unexercisable
no later than 90 days after the date the participant ceases to provide such
services.

NON-QUALIFIED STOCK OPTION AGREEMENT WITH CHARLES M. JONES, III. On
November 15, 1999, Mr. Jones was granted an option to purchase 21,429 shares of
Community Capital's common stock at an exercise price of $7.35 per share, as
adjusted to reflect Community Capital's ten-for-seven stock split effective in
January 2001. This option vests in 20% equal increments over five years
beginning on the first anniversary of the grant date for so long as Mr. Jones
serves as a director of Community Capital or any of its affiliates. The option
will be come fully vested if Mr. Jones retires on or after he reaches age 65 or
upon a change in control of Community Capital. The option will expire on the
tenth anniversary of the grant date or, if earlier, 90 days after Mr. Jones
ceases to be a director of Community Capital or any affiliate.

NON-QUALIFIED STOCK OPTION AGREEMENT WITH RICHARD BISHOP. On April 11,
2000, Mr. Bishop was granted an option to purchase 12,143 shares of Community
Capital's common stock at an exercise price of $7.00 per share, as adjusted to
reflect Community Capital's ten-for-seven stock split effective in January 2001.
This option vests in 20% equal increments over five years beginning on the first
anniversary of the grant date for so long as Mr. Bishop serves as an employee of
Community Capital or any of its affiliates. The option will be come fully
vested if Mr. Bishop retires on or after he reaches age 65 or upon a change in
control of Community Capital. The option will expire on the tenth anniversary
of the grant date or, if earlier, 90 days after Mr. Bishop ceases to be employee
of Community Capital or any affiliate.

NON-QUALIFIED STOCK OPTION AGREEMENT WITH MEMBERS OF MANAGEMENT. On
February 23,2003, Community Capital granted five members of management options
to purchase an aggregate of 50,000 shares of Community Capital's common stock at
an exercise price of $10.18 per share. These options vest in 20% equal
increments over five years beginning on the first anniversary of the grant date
for so long as the individual serves as an employee of Community Capital or any
of its affiliates. The options will become fully vested if there is a change in
control of Community Capital. The options will expire on the tenth anniversary
of the grant date or, if earlier, 90 days after the optionee ceases to be
employee of Community Capital or any affiliate. Since the options were only
granted to officers of Community Capital and the Bank, the option grants did not
involve a public offering, and therefore were exempt from registration under
Section 4(2) of the Securities Act of 1933.

RESTATED EMPLOYEE STOCK PURCHASE PLAN. The Employee Stock Purchase Plan
enables eligible employees to purchase shares of Community Capital common stock
through payroll deductions. An employee is eligible to participate in the
Employee Stock Purchase Plan if that employee is a resident of Georgia and is
employed in a position that customarily requires at least 20 hours of work per
week. Under the Employee Stock Purchase Plan, employee payroll deductions are
combined with matching contributions made by Community Capital and used to
purchase shares of Community Capital common stock on behalf of the employee at
the end of each calendar quarter. The shares are purchased in the open market at
prevailing prices at the time of the purchase or may be purchased from Community
Capital at fair market value. Fair market value is determined by Community
Capital in good faith based on all relevant facts and circumstances as of the
date of purchase. If an employee terminates employment with Community Capital or
any affiliate or the employee no longer satisfies the eligibility requirements,
the employee's payroll deductions made under the Employee Stock Purchase Plan
that have not been used to purchase shares of Community Capital's common stock
will be returned to that employee and any matching credits will be forfeited.

WARRANT AGREEMENTS WITH EACH OF COMMUNITY CAPITAL'S DIRECTORS. On March 11,
1999, Community Capital issued its directors warrants to purchase an aggregate
of 302,420 shares of Community Capital's common stock at $7.00 per share, as
adjusted to reflect Community Capital's ten-for-seven stock split effective in
January 2001. The warrants become exercisable in 20% annual increments beginning
on the first anniversary of the issuance date. Exercisable warrants will remain
exercisable for the ten-year period following the date of issuance or for 90
days after the warrant holder

ceases to be a director of Community Capital, whichever is shorter. The exercise
price of each warrant is subject to adjustment for stock splits,
recapitalizations or other similar events. Additionally, if the Bank's capital
falls below the minimum level, as determined by the Office of the Comptroller of
the Currency, Community Capital may be directed to require the directors to
exercise or forfeit their warrants.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The responses to this Item are included in Community Capital's Proxy
Statement for the Annual Meeting of Shareholders to be held April 26, 2004,
under the headings, "Relationships and Related Transactions," at page 11, and
"Compensation" at pages 7 through 9, and are incorporated herein by reference.

ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
Number Exhibit
------ -------

3.1 Articles of Incorporation./1

3.2 Bylaws./1

4.1 Instruments Defining the Rights of Security Holders. See Articles of
Incorporation at Exhibit 3.1 hereto and Bylaws at Exhibit 3.2 hereto.

4.2 Amended and Restated Declaration of Trust./2

4.3 Indenture Agreement. /2

4.4 Guarantee Agreement. /2

10.3* Amended and Restated Employment Agreement dated August 19, 1998, among
Albany Bank & Trust, N.A. (In Organization), Community Capital
Bancshares, Inc. and Robert E. Lee/1 and the Form of Amendment
thereto./1

10.4* Employment Agreement dated October 1, 1998, among Albany Bank & Trust,
N.A. (In Organization), Community Capital Bancshares, Inc. and David
C. Guillebeau, as amended November 9, 1998/1 and the Form of Second
Amendment thereto./1

10.5 Form of Community Capital Bancshares, Inc. Organizers' Warrant
Agreement./3

10.6* Community Capital Bancshares, Inc. Amended and Restated 1998 Stock
Incentive Plan./4

10.7* Form of Community Capital Bancshares, Inc. Incentive Stock Option
Award./1

10.8* Community Capital Bancshares, Inc. 2000 Outside Directors' Stock
Option Plan./5

10.9* Community Capital Bancshares, Inc. Non-Qualified Stock Option
Agreement with Charles Jones, dated November 15, 1999./5

10.10* Community Capital Bancshares, Inc. Non-Qualified Stock Option
Agreement with Richard Bishop, dated April 11, 2000./5

10.11* First Amendment to the Community Capital Bancshares, Inc. 1998 Stock
Incentive Plan. /6

10.12* First Amendment to the Community Capital Bancshares, Inc. 2000 Outside
Directors' Stock Option Plan. /6

10.13* Community Capital Bancshares, Inc. Restated Employee Stock Purchase
Plan. /6

10.14 Agreement and Plan of Merger by and between First Bank of Dothan, Inc.
and Community Capital Bancshares, Inc., dated as of July 2, 2003./7

10.15 First Amendment to the Agreement and Plan of Merger by and between
First Bank of Dothan, Inc. and Community Capital Bancshares, Inc.,
dated August 6, 2003./8

10.16 Second Amendment to the Agreement and Plan of Merger by and Between
First Bank of Dothan, Inc. and Community Capital Bancshares, Inc.,
dated September 24, 2003./9

13.1 Community Capital Bancshares, Inc. 2003 Annual Report to Shareholders.
Except with respect to those portions specifically incorporated by
reference into this Report, Community Capital's 2003 Annual Report to
Shareholders is not deemed to be filed as part of this Report.

22.1 Subsidiaries of Community Capital Bancshares, Inc.

23.1 Consent of Mauldin & Jenkins, LLC

24.1 Power of Attorney (appears on the signature pages to this Annual
Report on 10-KSB).

31.1 Certification of the Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

31.2 Certification of the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002

32.1 Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002

_______________________________
* Compensatory plan or arrangement.

1 Incorporated herein by reference to exhibit of same number in Community
Capital's Registration Statement on Form SB-2, Registration No. 333-68307,
filed December 3, 1998.

2 Incorporated herein by reference to exhibit of the same number in Community
Capital's Quarterly Report on Form 10-QSB for the period ended March 31,
2003 (File no. 000-25345), filed May 15, 2003.

3 Incorporated herein by reference to exhibit of same number in Commuity
Capital's Amendment No. 1 to Registration Statement on Form SB-2,
Registration No. 333-68307, filed February 2, 1999

4 Incorporated by reference to exhibit of same number in Community Capital's
Amendment No. 2 to Registration Statement on Form SB-2, Registration No.
333-68307, filed February 2, 1999.

5 Incorporated by reference to exhibit of same number in Community Capital's
Quarterly Report on Form 10-QSB for the quarterly period ended September
30, 2000 (File no. 000-25345), filed November 14, 2000.

6 Incorporated by referece to exhibit of same number in Community Capital's
Form 10-KSB (File no. 000-25345), filed March 26, 2002.

7 Incorporated by reference to Exhibit 99.1 in Community Capital's Current
Report on Form 8-K (File no. 000-25345), filed July 7, 2003.

8 Incorporated by reference to exhibit of the same number in Community
Capital's Quarterly Report on Form 10-QSB for the quarterly period ended
June 30, 2003 (File no. 000-25345), filed August 14, 2003.

9 Incorporated by reference to Exhibit 99.3 in Community Capital's
Registration Statement on Form S-3, Registration No. 333-111323, filed
December 18, 2003.

(b) Reports on Form 8-K filed in the fourth quarter of 2003:

Report on Form 8-K (Item 12) filed on November 6, 2003 announcing third
quarter 2003 earnings.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The responses to this Item are included in the Company's Proxy Statement
for the Annual Meeting of Shareholders to be held April 26, 2004, under the
heading, "Independent Public Accountant," at pages 11 through 12.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

COMMUNITY CAPITAL BANCSHARES, INC.

By: /s/ Robert E. Lee
--------------------------------------
Robert E. Lee
President

Date: March 29, 2004

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears on the
signature page to this Report constitutes and appoints Robert E. Lee and Charles
M. Jones, III, and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
amendments to this Report, and to file the same, with all exhibits hereto, and
other documents in connection herewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Robert M. Beauchamp Director March 29, 2004
--------------------------
Robert M. Beauchamp

/s/ Bennett D. Cotten, Jr. Director March 29, 2004
--------------------------
Bennett D. Cotten, Jr.

/s/ Glenn A. Dowling Director March 29, 2004
--------------------------
Glenn A. Dowling

Director March 29, 2004
--------------------------
Mary Helen Dykes

/s/ Charles M. Jones, III Chairman of the Board March 29, 2004
-------------------------- and Chief Executive Officer
Charles M. Jones, III

/s/ Van Cise Knowles Director March 29, 2004
--------------------------
Van Cise Knowles

/s/ C. Richard Langley Director March 29, 2004
--------------------------
C. Richard Langley

/s/ Robert E. Lee Director and President March 29, 2004
-------------------------- (Principal Executive
Robert E. Lee Officer)

/s/ Corinne C. Martin Director March 29, 2004
--------------------------
Corinne C. Martin

/s/ William F. McAfee Director March 29, 2004
--------------------------
William F. McAfee

/s/ Mark M. Shoemaker Director March 29, 2004
--------------------------
Mark M. Shoemaker

/s/ Jane Anne D. Sullivan Director March 29, 2004
--------------------------
Jane Anne D. Sullivan

/s/ John P. Ventulett, Jr. Director March 29, 2004
--------------------------
John P. Ventulett, Jr.

/s/ Lawrence B. Willson Director March 29, 2004
--------------------------
Lawrence B. Willson

/s/ James D. Woods Director March 29, 2004
--------------------------
James D. Woods

/s/ David J. Baranko Chief Financial Officer March 29, 2004
-------------------------- (Principal Financial and
David J. Baranko Accounting Officer)

EXHIBIT INDEX
-------------